Transcript Class 15 - ULisboa

Operations Management & Performance Modeling
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2
3
4
5
Operations Strategy
Process Analysis
Lean Operations
Supply Chain Management
Capacity Management in Service
6 Quality Management
– Class 7b: Quality & the Voice of the Customer
» The Goal: summary
» What is Quality?
» Hank Kolb
» Voice of the Customer
7 Business Process Reengineering
OM&PM/Class 7b
1
Levers for Reducing Flow Time
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“is to decrease the work content of (only ?) critical activities”,
and/or move it to non critical activities.
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Reduce waiting time:
– reduce variability
» arrivals & service requests
» synchronize flows within the process
– increase safety capacity
» lower utilization
» Pooling
– Match resource availability with flows in and out of process
OM&PM/Class 7b
2
E.g.: Analysis of Service Systems
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Divide day into blocks based on arrival rates
For each block evaluate performance measures given current staffing
Quantify financial impact of each action
– Workforce training: reduces mean and variability of service time
– Work flexibility from workforce: pools available capacity
– Time flexibility from workforce: better synchronization
S
– Retain experienced employees: increased safety capacity
– Additional workforce: Increases safety capacity
– Improved Scheduling: better synchronization
– Incentives to affect arrival patterns: better synchronization
– Decrease product variety: reduces variability of service time
D
– Increase maximum queue capacity
– Consignment program, fax, e-mail etc.
OM&PM/Class 7b
3
Framework for Process Flow Management
Flow Chart Process
mean
Identify Bottlenecks
Identify Critical Path
Maximal Flow Rate
Minimal Flow Time
Macro Average
Performance
Demand
Pattern
variability
Process
Re-Design
No
Demand &
Supply Mgt
Competitive?
Yes
Micro Variability
Performance
Competitive?
Yes
OM&PM/Class 7b
No
Continuous
Improvement
4
Dimensions of Quality

Performance

Features

Reliability
 Conformance
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Durability

Serviceability
 Aesthetics

Perceived Quality
OM&PM/Class 7b
5
Elements of TQM
 Management
by fact
 Cross-functional (process) approach
 Culture and leadership
– Customer focus
– Employee focus
– High performance focus
» Continuous improvement
» Benchmarking

External alliances - the value chain
Source: Eitan Zemel
OM&PM/Class 7b
6
Malcolm Baldrige National Quality Award
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
1 Leadership 110
2 Strategic Planning 80
– Strategy Development Process
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3 Customer and Market Focus 80
4 Information and Analysis 80
5 Human Resource Development and Management
100
6 Process Management 100
– Product and Service Processes
– Support Processes
– Supplier and Partnering Processes
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7 Business Results 450
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OM&PM/Class 7b
TOTAL POINTS 1000
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Malcolm Baldridge Award Winners
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Ames Rubber Corporation (1993)
Armstrong World Industries Building
Products Operations (1995)
AT&T Consumer Communications
Services (1994)
AT&T Network Systems Group (1992)
AT&T Universal Card Services (1992)
Cadillac Motor Car Company (1990)
Corning Telecommunications Products
Division (1995)
Eastman Chemical Company (1993)
Federal Express Corporation (1990)
Globe Metallurgical Inc. (1988)
Granite Rock Company (1992)
GTE Directories Corporation (1994)
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IBM Rochester (1990)
Marlow Industries (1991)
Milliken & Company (1989)
Motorola Inc. (1988)
The Ritz-Carlton Hotel Company (1992)
Solectron Corporation (1991)
Texas Instruments Incorporated Defense Systems & Electronics Group
(1992)
Wainwright Industries, Inc. (1994)
Wallace Co., Inc. (1990)
Westinghouse Electric Corporation Commerical Nuclear Fuel Division
(1988)
Xerox Corporation - Business Products
& Systems (1989)
Zytec Corporation (1991)
Last Updated: November 8, 1996
OM&PM/Class 7b
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ISO 9000

Series of standards agreed upon by the International Organization for
Standardization (ISO)
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Adopted in 1987
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More than 100 countries
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A prerequisite for global competition?
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ISO 9000: “document what you do and then do as you documented.”
Design
Procurement
Production
Final test
Installation
Servicing
ISO 9003
ISO 9002
Source: Adapted from Chase & Aquilano
OM&PM/Class 7b
ISO 9001
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Costs of Quality
 Cost
Quality Lever
Benefits of Building Q in Early
of Conformance
– Cost of Appraisal
Product
Design
Process
Design
Production
– Cost of Prevention
Improve
Product
100:1

Cost of Non-Conformance
10:1
1:1
– Cost of Internal Failure
– Cost of External Failure
OM&PM/Class 7b
Low Visibility
Reward
Time
High Visibility
Reward
10
Components of Quality

Voice of the customer
– Customer Needs
– Quality of Design
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Voice of the process
– Quality of Conformance
– Process Capability

Process Control and Improvement
OM&PM/Class 7b
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Voice of the Customer: Linking
Customer Needs to Business Processes
Business Process
Product (30%)
Sales (30%)
Overall Quality
Installation (10%)
Repair (15%)
Billing (15%)
Source: Kordupleski et al., CMR ‘93.
OM&PM/Class 7b
Customer Need
Internal Metric
Reliability (40 %)
% Repair Call
Easy to Use (20%)
% Calls for Help
Features/Functions (40%)
Function Performance Test
Knowledge (30%)
Supervisor Observations
Response (25%)
% Proposals Mad on Time
Follow-Up (10%)
% Follow-Up Made
Delivery Interval (30%)
Average Order Interval
Does Not Break (25%)
% Repair Reports
Installed When Promised
% Installed on Due Date
No Repeat Trouble (30%)
% Repeat Reports
Fixed Fast (25%)
Average Speed of Repair
Kept Informed (10%)
% Customers Informed
Accuracy, No Surprise (45%)
% Billing Inquiries
Response on First Call (35%)
% Respolved First Call
Easy to Understand (10%)
% Billing Inquiries
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Voice of the Customer:
Quality Function Deployment
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What do customers want?
Are all preferences equally important?
Will delivering perceived needs deliver a competitive
advantage?
How can we change the product?
How do engineering characteristics influence customer
perceived quality?
How does one engineering attribute affect another?
What are the appropriate targets for the engineering
characteristics?
OM&PM/Class 7b
13
Correlation:
Strong positive
X
House of Quality
Positive
X
X
Easy to close
7
Stays open on a hill
5
Easy to open
3
Doesn’t leak in rain
3
No road noise
2
Water resistance
*
Accoust. Trans.
Window
Energy needed
to open door
Check force on
level ground
Door seal
resistance
Customer
Requirements
Energy needed
to close door
Engineering
Characteristics
Negative
Strong negative
X
X
X
Competitive evaluation
X = Ours
A = Comp. A
B = Comp. B
(5 is best)
1
2
3
4
AB
X
X
5
X AB
XAB
A XB
X A
Importance weighting
10
6
6
9
2
3
B
Relationships:
Technical evaluation
(5 is best)
5
4
3
2
1
B
A
X
BA
X
B
B
A
X
X
A
BXA
Maintain
current level
Maintain
current level
Reduce energy
to 7.5 ft/lb.
Reduce force
to 9 lb.
Target values
Maintain
current level
Reduce energy
level to 7.5 ft/lb
Strong = 9
Medium = 3
Small = 1
BA
X
Source: Hauser and Clausing 1988
Linked Houses From Customer To
Manufacturing
House of
Quality
OM&PM/Class 7b
Parts
Deployment
III
Process
Planning
Production
Characteristics
Key Process
Characteristics
II
Key Process
Characteristics
Parts
Characteristics
I
Parts
Characteristics
Engineering
Characteristics
Customer Attributes
Engineering
Characteristics
IV
Production
Planning
15
Benefits of QFD
Startup and Preproduction costs
at Toyota Auto Body
Japanese automaker with QFD made fewer
changes than US company without QFD
Design
Changes
US
Japan
Before QFD
After QFD
90% of total Japanese
changes complete
(39% of preQFD costs)
Job # 1
t
20 - 24
months
14 - 17
months
1 - 3 Job # 1
months
1-3
months
time
Source: Hauser and Clausing 1988
OM&PM/Class 7b
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More New Product Development Tools

Value analysis / Value engineering
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Design for manufacturability
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Robust design
OM&PM/Class 7b
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Value Analysis/Value Engineering
 Achieve
equivalent or better performance at a lower
cost while maintaining all functional requirements
defined by the customer
– Does the item have any design features that are not
necessary?
– Can two or more parts be combined into one?
– How can we cut down the weight?
– Are there nonstandard parts that can be eliminated?
OM&PM/Class 7b
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Robust Quality: Taguchi’s View of Cost
of Variability
Non-conformance to
design cost
$$$
0
Lower
Tolerance
Design
Spec
Upper
Tolerance
Traditional View
OM&PM/Class 7b
Actual
value
Lower
Tolerance
Design
Spec
Upper
Tolerance
Taguchi’s View
19
Class 7b: Key Learning Objectives
 Elements
of TQM / Baldridge / ISO 9000

Costs of Quality

Components of Quality

Voice of the Customer
– Linking business processes to customer needs
– Product Design Methodologies:
» Convert customer needs to product and process specifications: QFD
» Value Engineering
OM&PM/Class 7b
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