TOPIC 9 - TOTAL QUALITY MANAGEMENT (TQM) iv.

occur after delivery (liabilities, warranty, sued by

customer)
Quality Management
New attitude towards quality using Three Philosophies
i. be able to understand modern concepts of quality and i. Continuous improvement “KAIZEN”
dimensions of quality ii. Involvement of everyone in the organization
ii. be able to discuss employee involvement and JIT in iii. Customer satisfaction
Total Quality Management
iii. be able to describe basic quality tools Elements of TQM
i. Utilizes education & training everyone
QUALITY is the ability of a product or service to consistently meet ii. Encourages empowerment of the employees in the
or exceed customer expectations. work place, team approach
iii. Promote understanding & fulfilling the needs of
customers
iv. Define quality in term of customer requirement
v. Use statistical reasoning with data to solve problems &
to improve
vi. View quality improvement as never ending quest to
improve the process

Employee Involvement

i. In every step of production process, involve directly

with the system
Dimension of Quality ii. Everyone must be responsible on their work
iii. Build communication network, employees with
i. Performance – main characteristics supervisor (open minded, supportive)
ii. Special Features – extra characteristics
iii. Conformance – how well corresponds to expectation Relationship between TQM and Just-In-Time
iv. Reliability – consistency of performance without i. JIT emphasizes continuous improvement & enforces
breakdown problem solving since design to production stage;
v. Durability – useful life time deliver just as needed
vi. Safety – safe to use as directed ii. Target less inventory, less scrap, rework, reduce cost
vii. Aesthetics – nice to look at iii. Limits potential sources of error, give early warning,
viii. Service After Sale – handling of complaints, help lines produce in small batches
and checking customer satisfaction
TQM Lead to Lower Production Cost
Consequences of Poor Quality
i. Emphasize the quality from supplier & distributor
i. Reputation & image will suffer ii. Reduce prevention cost ( less potential for defective
ii. Pay special attention to potential liability due to injury, parts from employees)
damage or even death iii. Reduce cost of inspection
iii. Rework have to be done, slow the process to iv. Reduce cost of rework, replacement
accommodate rework, high scraps
iv. Increase cost of rework, scrap, repair & replacement, Obstacles to Implementing TQM
legal expenses  Company-wide definition of quality
 Strategic plan for change
Responsibility for Quality  Customer focus
 Top management  Real employee empowerment
 Design  Emphasis on short-term financial results
 Procurement  Time to devote to quality initiatives
 Production/operations  Leadership
 Quality assurance  View of quality as a “quick fix”
 Packaging and shipping
 Marketing and sales The Process Improvement Cycle
 Customer service
i. Select aprocess
Cost of Quality ii. Study/document
iii. Seek ways toImprove it
Internal Cost iv. Design an Improved process
v. Implement the Improved process
i. Failure cost: results from production of defective parts vi. Evaluate
before delivery (rework, scrap, downtime) vii. Document
ii. Appraisal cost: evaluating products (lab testing,
inspector) Basic Quality Tools
iii. Prevention cost: reducing potential for defective
(training, awareness program) i. Flowcharts
External cost ii. Check sheets
iii. Histograms
 iv. Pareto Charts
v. Scatter diagrams
vi. Control charts
vii. Cause-and-effect diagrams

Benchmarking Process

i. Identify a critical process that needs improving

ii. Identify an organization that excels in this process
iii. Contact that organization
iv. Analyze the data
v. Improve the critical process
 Topic 5 – Production Planning and Control  MPS is established in terms of specific products
 Schedule must be followed for a reasonable length of time
AGGREGATE PLANNING  The MPS is quite often fixed or frozen in the near term part
 An AP means combining the appropriate resources into of the plan
general, or overall terms.  The MPS is a rolling schedule
 It is concerned with determining the quantity and timing of  The MPS is a statement of what is to be produced, not a
production for immediate future. forecast of demand

The Planning Process MRP

Long Range Planning  Material Requirement Planning is a tool geared specifically
● Covers a period of 5 years and made up of : to assembled operations
□ Product & Market Planning  MRP provides answers for several questions for the
□ Financial Planning suppliers:
□ Resource Planning  What items are required?
Medium Range Planning  How many are required?
● Covers 6 – 8 months and made up of :  When are required ?
□ Aggregate Planning
□ Item Forecasting Dependent Demand
□ Master Production Schedule (MPS)  The demand for one item is related to the demand for
□ Capacity Planning another item
Short Range Planning  Given a quantity for the end item, the demand for all parts
●Covers from 1 day to a few weeks and consists of : and components can be calculated
 Material Requirement Planning (MRP)  In general, used whenever a schedule can be established for
(Specify when production and purchase orders must be made) an item
 Capacity Requirement Planning  MRP is the common technique
(Provide detailed schedule when each operation is to be run
on each work center and how long it will take to process). Effective use of dependent demand inventory models requires the
 Final Assembly Scheduling following
(Operations required to put product in its final form). 1. Master production schedule
 Production Planning and Control 2. Specifications or bill of material
(Scheduling and shop-floor control activities). 3. Inventory availability
 Purchase Planning and Control 4. Purchase orders outstanding
(Acquisition and control of purchased items). 5. Lead times
Benefits of MRP.
Phases of Aggregate Planning 1. Better response to customer orders
1. Prepare an aggregate demand forecast. 2. Faster response to market changes
2. Specify organization policies for smoothing capacity 3. Improved utilization of facilities and labor
utilization. 4. Reduced inventory levels
3. Determine feasible production alternatives :
 Changing production rate (same work force) Material Resource Planning II (MRP II)
 Changing production rate (changing the size of work force). • Expanded MRP with emphasis placed on integration
 Absorbing demand through inventories.  Financial planning
 Absorbing demand through back ordering.  Marketing
 Absorbing demand through subcontract.  Engineering
 Using part-time workers.  Purchasing
4. Determination of optimal production strategy.  Manufacturing

Graphical or Charting Methods  Once an MRP system is in place, inventory data can be
1. Popular – they are easy to understand and use. augmented by other useful information
2. They are trial-and-error approaches that do not guarantee an  Labor hours
optimal plan.  Material costs
3. The five steps involved are:  Capital costs
 Determine the demand in each period.  Virtually any
 Determine the capacity for regular, OT, hired resource
workers and subcontracting for each period.  System is generally called MRP II or Material Resource
 Find production costs, hiring and layoff costs, Planning
and inventory holding costs.
 Consider company policy on workers and stock
levels.
 Develop alternative plans, examine their total
costs and select the best plan (lowest total cost).

Master Production Schedule (MPS)

 Specifies what is to be made and when
 Must be in accordance with the aggregate production plan
 Inputs from financial plans, customer demand, engineering,
supplier performance
 As the process moves from planning to execution, each step
must be tested for feasibility
 The MPS is the result of the production planning process
 Topic 5 – Short Term Scheduling Limitations
 Rules do not look beyond due dates. May be two work
 Scheduling: Establishing the timing of the use of equipment, centers at the same due date. Which one is important
facilities and human activities in an organization  Rules do not look upstream or downstream. Idle resources &
 Effective scheduling can yield bottleneck resources may be not recognized.
i. Cost savings
ii. Increases in productivity

 Sequencing: Determine the order in which jobs at a work

center will be processed.
 Workstation: An area where one person works, usually with
special equipment, on a specialized job.

Sequencing Jobs
 Specifies the order in which jobs should be performed at work
centers
 Priority rules are used to dispatch or sequence jobs
 FCFS: First come, first served
 SPT: Shortest processing time
 EDD: Earliest due date
 LPT: Longest processing time

 Average completion time = Total flow time/Number of jobs

 Utilization =Total job work time/Total flow time

 Average number of jobs in the system

=Total flow time/Total job work time

 Average job lateness = Total late days/Number of jobs

Comparison of Sequencing Rules

 No one sequencing rule excels on all criteria

 SPT does well on minimizing flow time and number of jobs in
the system
 But SPT moves long jobs to the end which may result
in dissatisfied customers
 FCFS does not do especially well (or poorly) on any criteria
but is perceived as fair by customers
 EDD minimizes lateness

Critical Ratio (CR)

 An index number found by dividing the time remaining until
the due date by the work time remaining on the job
 Jobs with low critical ratios are scheduled ahead of jobs with
higher critical ratios
 Performs well on average job lateness criteria

CR =Time remaining Due date - Today’s date

Workdays remaining Work (lead) time remaining

Critical Ratio Technique

1. Helps determine the status of specific jobs
2. Establishes relative priorities among jobs on a common basis
3. Relates both stock and make-to-order jobs on a common
basis
4. Adjusts priorities automatically for changes in both demand
and job progress
5. Dynamically tracks job progress

Johnson’s Rule
1. List all jobs and times for each work center
2. Choose the job with the shortest activity time. If that time is
in the first work center, schedule the job first. If it is in the
second work center, schedule the job last.
3. Once a job is scheduled, it is eliminated from the list
4. Repeat steps 2 and 3 working toward the center of the
sequence