Principles Of Supply Chain Management (5e) PDF

Principles of Supply Chain Management (5e) LO4 Examine Lean and Six sigma Operating systems Wisner, J. D., Tan, K. C., & Leo...

Principles of Supply Chain Management (5e) LO4 Examine Lean and Six sigma Operating systems Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain management: A balanced approach. Cengage Learning. Chapter 8 © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) LEARNING STEPS 1. Discuss and compare the major elements of lean and Six Sigma. 2. Describe why Lean and six Sigma are integral parts of SCM. 3. Calculate the Defects per Million Opportunities (DPMO) using Six Sigma Methodology. 4. Compute the require number of Kanban. 5. Apply the statistical tools of Sis Sigma (Pareto chart, cause and effect Diagrams pareto charts, check sheets). 6. Apply statistical Process Control for improving quality © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) Introduction In 1990s, supply chain management combined: Quick response (QR) - speed and flexibility Efficient Consumer Response (ECR) - speed and flexibility Just-in-Time (JIT) - Continuous reduction of waste Keiretsu Relationships – partnership arrangements These approaches have emerged as philosophies and practices known as Lean Production (or Lean Manufacturing) or simply Lean Thinking © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) Lean Production & the Toyota Production System, Part 1 Lean Production an operating philosophy of waste reduction & value enhancement & was originally created as Toyota Production System (TPS) by key Toyota executives Early versions were based on Ford assembly plants & U.S. supermarket distribution systems © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) Lean Production & the Toyota Production System, Part 2 Key concepts incorporated in TPS are – Muda - waste in all aspects of production Kanban - signal card & part of JIT Statistical process control (SPC) as part of TQM efforts Poka-Yoke - error or mistake-proofing Yokoten – sharing of best practices © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) Lean Production & the Toyota Production System, Part 3 Lean Production emphasizes – Reduction of waste Continuous improvement Synchronization of material flows within the organization Channel integration- extending partnerships in the supply chain © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) Lean Thinking and Supply Chain Management ▪ Supply chain management (SCM) seeks to incorporate Lean elements using – cross-training, satisfying internal customer demand quickly moving products in the production system communicating demand forecasts & production schedules up the supply chain optimizing inventory levels across the supply chain © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Lean, Part 1 The Elements of Lean Waste Elimination Lean Supply Chain Relationships Lean Layouts Inventory & Setup Time Reduction Small Batch Production Scheduling Continuous Improvement Workforce Empowerment © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Lean, Part 2 Waste (Muda) Reduction Firms reduce costs & add value by eliminating waste from the productive system. Waste encompasses wait times, inventories, material & people movement, processing steps, variability, any other non-value-adding activity. Taiichi Ohno described the seven wastes © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Lean, Part 3 The Seven Wastes (Table 8.2) Wastes Description Overproducing Unnecessary production to maintain high utilizations Waiting Excess idle machine & operator & inventory wait time Transportation Excess movement of materials & multiple handling Overprocessing Non-value adding manufacturing & other activities Excess Inventory Storage of excess inventory Excess movement Unnecessary movements of employees Scrap & Rework Scrap materials & rework due to poor quality © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Lean, Part 4 The Five-S’s Japanese S-Term English English S-Term Translation Used 1. Seiri Organization Sort 2. Seiton Tidiness Set in order 3. Seiso Purity Sweep 4. Seiketsu Cleanliness Standardize 5. Shitsuke Discipline Self-discipline (Table 8.3) © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Lean, Part 5 Lean Supply Chain Relationships Suppliers & customers work to remove waste, reduce cost, & improve quality & customer service Lean Thinking includes delivering smaller quantities, more frequently, to point of use Firms develop lean supply chain relationships with key customers. Mutual dependency & benefits occur among these partners. Locate production or warehousing facilities close to key customers © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Lean, Part 6 Lean Layouts Move people & materials when & where needed, ASAP Lean layouts are very visual (lines of visibility are unobstructed) with operators at one processing center able to monitor work at another Manufacturing cells ▪ Process similar parts or components saving duplication of equipment & labor ▪ Are often U-shaped to facilitate easier operator & material movements © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Lean, Part 7 U-shaped work cell (Fig. 8.1) © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Lean, Part 8 Inventory and Setup Time Reduction Excess inventory is a waste Reducing inventory levels causes production problems Once problems are detected, they can be solved. The end result is a smoother running organization with less inventory investment. Reduce purchase order quantities and production lot sizes © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Lean, Part 9 Relationship between Order Quantity, Lot Size, and Average Inventory (Fig. 8.2) © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Lean, Part 10 Small Batch Production Scheduling Small batch scheduling drives down costs by – ▪ Reducing purchased, WIP, & finished goods inventories ▪ Makes the firm more flexible to meet customer demand Small production batches are accomplished with the use of kanbans Kanbans generate demand for parts at all stages of production creating a “pull” system © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Lean, Part 11 Small Lot Sizes Increase Flexibility (Fig. 8.3) © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Lean, Part 12 A Kanban Pull System (Fig. 8.4) © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Lean, Part 13 To determine the number of containers or kanban card sets: Where: D = the demand rate of the assembly line; T = the time for a container to make an entire circuit through the system, from being filled, moving, being emptied, and returning to be filled again; C = the container size, in number of parts; and S = the safety stock factor, from 0 to 100 percent. © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Lean, Part 14 Ex. 8.1 Calculating the Number of Containers in a Kanban System Mejza Manufacturing has an assembly line with a demand of twenty Part 1’s per hour at Work cell B. The container used for this part holds five Part 1’s. If it takes two hours for a container to make a circuit from Work cell B to the next assembly area and back again, and if it is desired to carry 10 percent excess of Part 1 in the system, then the number of containers needed in the system is: The maximum Part 1 inventory for this system would then be the total number of containers times the container size, or 9  5 = 45 units. © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Lean, Part 15 Continuous Improvement (Kaizen) Continuous approach to reduce process, delivery, & quality problems, such as machine breakdown problems, setup problems, & internal quality problems Kaizen Blitz -- rapid improvement event or workshop, to find big improvements quickly Workforce Commitment Managers must support Lean Production by providing subordinates with the skills, tools, time, & other necessary resources to identify problems & implement solutions © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) Lean Systems and the Environment Lean green practices – Reduce waste Reduce the cost of environmental management Lead to improved environmental performance. Increase the possibility that firms will adopt more advanced environmental management systems © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Origins of Six Sigma Quality, Part 1 Six Sigma ▪ Near quality perfection (the statistical likelihood of non-defects 99.99966% of the time) ▪ Or 3.4 defects/million observations ▪ Pioneered by Motorola in 1987 ▪ A statistics-based decision-making framework designed to make significant quality improvements in value-adding processes © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Origins of Six Sigma Quality, Part 2 Six Sigma DPMO Metrics (Table 8.4) # of std dev above the % of defect-free DPMO mean output 2 69.15 308,537 2.5 84.13 158,686 3 93.32 66,807 3.5 97.73 22,750 4 99.38 6,210 4.5 99.865 1,350 5 99.977 233 5.5 99.9968 32 6 99.99966 3.4 Note: standard deviations include 1.5 sigma “drift” © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Origins of Six Sigma Quality, Part 3 Calculating the DPMO Where: DPMO = Defects per million observations OFD = Opportunities for a defect to occur © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Origins of Six Sigma Quality, Part 4 Ex. 8.2 Calculating the DPMO for Blakester’s Speedy Pizza Blake Roberts, owner of Blakester’s Speedy Pizza, keeps track of customer complaints. For each pizza delivery, there are three possible causes of complaints: a late delivery, a cold pizza, or an incorrect pizza. Each week, Blake tracks the delivery “defects” for pizza deliveries, and then uses this information to determine his company’s Six Sigma quality level. During the past week, his company delivered 620 pizzas. His drivers received sixteen late delivery complaints, nineteen cold pizza complaints, and five incorrect pizza complaints. Blake’s defects per million opportunities is: From Table 8.4, Blakester’s is operating at slightly better than 3.5 Sigma. © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) Comparing Six Sigma & Lean Lean Six Sigma (or Lean Six) ▪ Describes the melding of lean production and Six Sigma quality practices. ▪ Both use – ▪ High quality input materials, WIP, and finished goods ▪ Continuous Improvement (Kaizen) ▪ Lean and Six Sigma use complementary tool sets and are not competing philosophies © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) Six Sigma & Supply Chain Management ▪ Process integration & communication lead to fewer negative chain reactions along the supply chain, such as greater levels of safety stock, lost time & less productivity ▪ Six Sigma is an enterprise and supply chain-wide philosophy, that emphasizes a commitment toward excellence & encompasses suppliers employees, and customers © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Six Sigma, Part 1 Deming’s 14 Points 8. Drive out fear. 1. Create constancy of purpose 9. Break down barriers between to improve product & service. departments. 2. Adopt the new philosophy. 10.Eliminate slogans & 3. Cease dependence on mass exhortations. inspection. 11.Eliminate quotas. 4. End the practice of awarding 12.Remove barriers to pride of business on the basis of price. workmanship. 5. Constantly improve the 13.Institute program of self- production & service system. improvement. 6. Institute training on the job. 14.Put everyone to work to 7. Institute leadership. accomplish the transformation. © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Six Sigma, Part 2 Crosby’s Contributions Table 8.6 Crosby’s Four Absolutes of Quality Absoluteof Qu ali ty Desc ript ion 1. The definition of quality is Adopt a do-it-right-the-first-time attitude. Never sell a faulty conformance to requirements. product to a customer. 2. The system of quality is Use SPC as part of the prevention system. Make corrective prevention. changes when problems occur. Take preventative action. 3. The performance standard is Insist on zero defects from suppliers and workers. Education, zero defects. training, and commitment will eliminate defects. 4. The measure of quality is the The price of nonconformance is the cost of poor quality. price of nonconformance. Implementing a prevention program will eliminate this. © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Six Sigma, Part 3 Juran’s Contributions Table 8.7 Juran’s Quality Trilogy ▪ Quality Planning- Identify internal/external customers & their needs, develop products that satisfy those needs. Mangers set goals, priorities, & compare results ▪ Quality Control- Determine what to control, establish standards of performance, measure performance, interpret the difference, & take action ▪ Quality Improvement- Show need for improvement, identify projects for improvement, implement remedies, provide control to maintain improvement. © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Six Sigma, Part 4 Malcolm Baldrige National Quality Award Objectives Categories Measured Stimulate firms to improve 1. Leadership Recognize firms for 2. Strategic planning quality achievements 3. Customer & market focus Establish guidelines so 4. Information & analysis organizations can evaluate their 5. Human resource focus improvement & provide 6. Process management guidance to others 7. Business Results © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Six Sigma, Part 5 ISO 9000 and ISO 14000 Families of Management Standards ▪ Over 19,000 standards ▪ International Organization for Standardization (ISO) located in Switzerland has 162 member countries. ▪ ISO 9000 and 14000 govern quality and environmental certification standards of production, respectively. ▪ ISO standards are voluntary © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Six Sigma, Part 6 ISO 9000 and ISO 14000 Families of Management Standards ▪ ISO requires review of its standards at least every five years. ▪ Worldwide reputation as “generic management system standards” ▪ The ISO 9000 standards were adopted in the US by ANSI and ASQC. © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Six Sigma, Part 7 The DMAIC Improvement Cycle (Fig. 8.5) © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Six Sigma, Part 8 The DMAIC Improvement Cycle 1. Define Identify customers service or product requirements critical to achieving customer satisfaction 2. Measure Prepare a data-collection plan. Determine what to measure for each process gap and how to measure it. 3. Analyze Perform a process analysis.Use Pareto charts and fishbone diagrams to identify the root causes of the process variations or defects. 4. Improve Design an improvement plan. Remove the causes of process variation by implementing the improvement plan. 5. Control Monitor the process to assure that performance levels are maintained. If performance gaps are identified, repeat Steps 1–5. © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Elements of Six Sigma, Part 9 Six Sigma Training Levels (Table 8.9) Levels Description Yellow Belt Basic understanding of Six Sigma Methodology and tools in the DMAIC problem solving process. Team member on process improvement project. Green Belt A trained team member allowed to work on small, carefully defined Six Sigma projects, requiring less than a Black Belt’s full-time commitment. Black Belt Thorough knowledge of Six Sigma philosophies and principles. Coaches successful project teams. Identifies projects and selects project team members. Master Black A proven mastery of process variability reduction, waste reduction Belt and growth principles and can effectively present raining at all levels. © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Statistical Tools of Six Sigma, Part 1 ▪ Flow Diagrams - Annotated boxes representing process to show the flow of products or customers. ▪ Check Sheets - to determine frequencies for specific problems. ▪ Pareto Charts - for presenting data in an organized fashion, indicating process problems from most to least severe. ▪ Cause and Effect Diagrams (Fishbone or Ishikawa diagrams) - used to aid in brainstorming & isolating the causes of a problem. © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Statistical Tools of Six Sigma, Part 2 Flow Diagram or Process Map for a Restaurant (Figure 8.6) © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Statistical Tools of Six Sigma, Part 3 Figure 8.7 Check Sheet for Problems at a Restaurant Problem Monday Tuesday Wednesday Thursday Friday Saturday Sunday Totals % of Total long wait 6 5 8 6 9 10 4 48 26.5 empty cold food cell 2 1 1 3 2 empty cell 9 5.0 bad food 2 1 3 empty cell 1 4 empty cell 11 6.1 wrong food 5 2 1 2 5 3 1 19 10.5 bad server 3 2 5 1 6 2 1 24 13.3 empty bad table cell 1 2 empty cell 1 3 1 8 4.4 Empty Empty room temp. cell Empty cell 2 3 5 5 cell 15 8.3 expensive 1 2 1 1 3 3 Empty cell 11 6.1 Empty no parking cell Empty cell 2 Empty cell 5 7 Empty cell 14 7.7 Empty Empty wrong change 6 1 4 cell 4 3 cell 18 9.9 Empty Other cell 1 2 Empty cell Empty cell 1 Empty cell 4 2.2 Totals 26 18 31 14 42 43 7 181 100 © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Statistical Tools of Six Sigma, Part 4 Pareto Chart for Restaurant Problems in Fig. 8.7 (Fig. 8.8) © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Statistical Tools of Six Sigma, Part 5 Pareto Chart for Daily Restaurant Problems (Fig. 8.8) © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Statistical Tools of Six Sigma, Part 6 Cause and Effect Diagram for the Long Wait Problem (Fig. 8.9) © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Statistical Tools of Six Sigma, Part 7 Statistical Process Control ▪ Allows firms to – visually monitor process performance compare the performance to desired levels or standards take corrective action ▪ Firms – gather process performance data create control charts to monitor process variability then collect sample measurements of the process over time and plot on charts. © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Statistical Tools of Six Sigma, Part 8 Statistical Process Control Natural variations expected and random (can’t control) Assignable variations have a specific cause (can control) Variable data continuous (e.g., weight, length, time) Attribute data indicates some attribute such as color & satisfaction, or beauty (yes/no, good/bad) © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) Statistical Tools of Six Sigma, Part 9 Statistical Process Control Variable Control Charts (2 types): x-bar chart tracks central tendency of sample means R-chart tracks sample ranges Steps – 1. Gather data when the process is in control. 2. Calculate the mean & the range for each sample. 3. Calculate the overall mean and average range of all the samples. Use the x- means to calculate the upper & lower control limits. 4. Use the means & control limits to construct x-bar and R control charts. 5. Collect samples over time and plot. © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Statistical Tools of Six Sigma, Part 10 Formulas © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Statistical Tools of Six Sigma, Part 11 Statistical Process Control © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Statistical Tools of Six Sigma, Part 12 Statistical Process Control © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Statistical Tools of Six Sigma, Part 13 Statistical Process Control Attribute Data Control Charts P charts monitor the percent defective in each sample C charts count the number of defects per unit of output © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Statistical Tools of Six Sigma, Part 14 Attribute Data Control Charts Sample standard deviation for the P chart Upper and lower control limits for the P chart z – number of standard deviations from the mean n - size of each sample p- standard deviation of the sampling distribution © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Statistical Tools of Six Sigma, Part 15 Attribute Data Control Charts © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Statistical Tools of Six Sigma, Part 16 Attribute Data Control Charts C Charts © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.  Principles of Supply Chain Management (5e) The Statistical Tools of Six Sigma, Part 17 Acceptance Sampling ▪ When shipments are received from suppliers, samples are taken and measured against the quality acceptance standard. The shipment is assumed to have the same quality. ▪ Sampling is less time-consuming than testing every unit but can result in errors Producer’s risk- A buyer rejects a shipment of good quality units because the sample quality level did not meet standards (type I error) Consumer’s risk- Buyer accepts a shipment of poor-quality units because the sample falsely provides a positive answer (type II error) © 2019 Cengage Learning. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learning management system for classroom use.