Process Improvement - PDF

PROCESS IMPROVEMENT 16/10/2024 MELINDA KÖNYVES DEPARTMENT OF MANAGEMENT AND BUSINESS ECONOMICS FACULTY OF ECONOMIC AND SOCIAL SCIENCES BUDAPEST UNIVERSITY OF TECHNOLOGY AND ECONOMICS [email protected] 1  Aims and objectives Getting students acquaint...

PROCESS IMPROVEMENT 16/10/2024 MELINDA KÖNYVES DEPARTMENT OF MANAGEMENT AND BUSINESS ECONOMICS FACULTY OF ECONOMIC AND SOCIAL SCIENCES BUDAPEST UNIVERSITY OF TECHNOLOGY AND ECONOMICS [email protected] 1  Aims and objectives Getting students acquainted with the basics of quality management and forming their attitude towards (quality) management topics Main topics: – Defining quality – The evolution of quality management – Principles of Total Quality Management – Quality Management Systems – Process improvement tools and methods – Basics of Statistical Quality Control 2  Agenda for today What is „quality”? How can be the term defined and interpreted? What have been the main stages in the evolution of quality management? Quality Management Schools 3 What does it mean, quality? 4  Quality management A set of coordinated activities to direct and control an organization in order to continually meet customers’ requirements, improve the effectiveness and efficiency of its performance. NOT ONLY some feature of a product/service 5 The development of the interpretation of quality E= compliance with corporate culture, environmental and social expectations D= compliance with the customer’s hidden expectations C= compliance with the customer’s needs B= compliance with practical needs A= compliance with the standard 6  QM activities Analyzing customers’ needs Designing to meet them Clear instructions Ensuring punctual delivery Defect-free production Effective support services (internal & external) Feedback of customer satisfaction 7  Q Quality=meeting the customers’ requirements every time Quality management = actions taken to offer quality 8  Why is it important to pay attention to quality? Determinants of market competition – value for customers: price – cheaper time – faster quantity – more Price quality – better Quality Time  Schools of Quality Cultural, economic and political circumstances influencing the evolution of Quality Management Different groups, the spread of philosophy, features and key elements 10  European School of Quality Strongly formalized – Documentation, monitoring – Execution of pre-stated duties – Standardized systems with independent third-party certification Importance of middle management – Production and technology management approach 11  American School of Quality After the appearance of competitors from the far east Strong top management Top-down strategy Developing responsibilities down the hierarchy 12  The Japanese Way Bottom-up approach Strong cultural influence Quality circles Widespread application of simple, graphical methods for process improvement 13 Features of different schools of quality Features Japanese American European Spread Multitudinous, Top-down, Production and bottom-up snowball technology principle management Group Quality circles Top management Middle management Specialities Totality, basic, Management Standardization, simple tools and environment, regulation techniques different focus Key elements Quality circles Management Documented climate monitoring, shadowing 14  THE EVOLUTION OF QUALITY MANAGEMENT SYSTEMS  Evolution of QM systems Total Quality Management (TQM) --------------------------------------------------------------- Quality assurance and quality management systems (Statistical) quality control Quality inspection 16  1. Quality inspection Beginning of XIX. Century – Taylor: Scientific management Dedicated staff to judge every product (100% inspection) Improving quality by stricter inspection Disadvantages – End-of-the event Without feedback Extra costs, time-consuming – Disagreement between workers and inspectors – Lack of management attention 17  Quality Inspection Feature Quality inspection Primary concern Detection of defects View of quality A problem to be solved Emphasis Product uniformity Methods Gauging and measurement Role of quality professionals Inspection, sorting, counting, grading Responsible for quality Inspection department Philosophy Good quality can be inspected into the product 18  2. (Statistical) Quality Control 1924 Walter A. Shewhart Measures through the manufacturing process – Random sample instead of controlling every product – Preventing the nonconformities Controlling and regulating the processes Production and engineering departments are responsible for the quality 19  Quality control Feature Statistical quality control Primary concern Control View of quality A problem to be solved Emphasis Product uniformity with reduced inspection Methods Statistical tools and techniques Role of quality Troubleshooting, application of statistical professionals methods Responsible for quality Manufacturing and engineering departments 20  3. Quality assurance and quality assurance systems Broader scope – Co-operation between several departments Managing the whole QMS and reaching an operational optimum Co-working with other organizations The emphasis is on the design and manufacturing Preventive actions ISO 9001 Third-party certification 21  QA & QAS Feature Quality assurance systems Primary concern Coordination View of quality A problem to be solved with proactivity Emphasis The entire production chain, from design to market, and the contribution of all functional groups, especially designers, to prevent quality failures Methods Programs and systems Role of quality professionals Planning, program designing Responsible for quality All departments, top management is only peripherally involved in designing, planning and executing quality policies 22  4. Total Quality Management Quality as a business strategy – Meeting customers’ always-changing needs Continuous improvement with the active participation of all employees QM principles and tools used everywhere in the organization 23  Goal TQM Customer Process Principles focus improvement Total involvement Supportive Leadership Communication structure Supporting elements Education and Reward and Measurement training recognitions 24  TQM Feature Total Quality Management Primary concern Strategic impact View of quality A competitive opportunity Emphasis Market and consumer needs Methods Strategic planning, goal setting, mobilizing the organization Role of quality professionals Education and training, goal setting, consultative work with other departments, program design Responsible for quality Everyone in the organization with top management exercising strong leadership 25  Supporting elements 1. Leadership: role of senior managers as advocates, teachers, and leaders Education and training: quality is based on the skills of every employee and his or her understanding of what is required Supportive structure: senior managers may require support to bring about the change necessary to implement a quality strategy Consultants, small support staff 26  Supporting elements 2. Communication: communicate to all employees a sincere commitment to change, a way to overcome resistance to change Bottom-up flow of information Reward and recognition: teams and individuals who successfully apply the quality process must be recognized and possibly rewarded Examples and role models for others Measurement: the use of data becomes topmost in installing a quality management process 27 Process Improvement QUALITY MANAGEMENT_2 21/10/2024 MELINDA KÖNYVES DEPARTMENT OF MANAGEMENT AND BUSINESS ECONOMICS BUDAPEST UNIVERSITY OF TECHNOLOGY AND ECONOMICS [email protected] 1  Agenda TQM Quality Management Systems ISO 9001 + Standards – Origin, Principles  Goal TQM Customer Process Principles focus improvement Total involvement Supportive Leadership Communication structure Supporting elements Education and Reward and Measurement training recognitions 3  1. Customer Focus Organizations depend on their customers and therefore should understand current and future customer needs, meet customer requirements, and strive to exceed customer expectations It requires more money to attract a new customer than it requires to keep the actual customers KEEP the present customer HAPPY  Bedzsula Bálint 4 4  The identification of customer needs and expectations require systematic thorough and continuous COMMUNICATION The most critical aspect of this process is to LISTEN to the customer Once customer needs are identified, these needs must be MONITORED continuously to ensure that the product or service still satisfies them Aim: continuously meet customer expectations and provide value 5  Key questions Who is our customer exactly? What customers expect from the organization? What do they want? What level of performance is needed to meet their expectations? What is the relative importance of the different characteristics? How well do organizations provide the services customers have requested? How satisfied are the customers with the current level of performance? 6  Internal and external customer Output: The specific products or services that we produce as part of our work process, and that we pass to others, who use them in their work process. Internal customer: uses our output as an input in her/his work process External customer: final user 7  Total Quality Management 1. Customer focus Understanding the customers’ requirements 3rd level Characteristics and properties Rapture! that bring added value; the customer does not expect them (LATENT) Latent 2nd level Options and compromises; the customer can choose Specification from them and needs (EXPRESSED) 1st level Minimum performance level; Basic which's presence is always requirements assumed (UNSPOKEN) 8  2. Total Commitment, Empowerment Leaders establish unity of purpose, direction, and the internal environment of the organization; they fully involve people in achieving the organization’s objectives The difference between an average and an outstanding company is the LEADERSHIP they have 2024. 10. 20. 9 9  Employee Involvement People are the essence of an organization and their full involvement enables their knowledge and experiences to be used for the organization’s benefit Employees are a company’s greatest asset Quality comes from within; it comes from the hearts and the minds of the people  Creating autonomy Alignment Performance Trust Performance: Providing materials, methods, machines and the right ability, skills, knowledge. 11  Empowerment dimensions Alignment – Knowledge and support of the vision, the values, goals and objectives – Build up motivation Mutual trust – Employees need to trust management and feel that management trusts them 12  Empowerment matrix Bureaucracy Empowerment Alignment Paralysis Chaos Without alignment and trust, Trust we will suffer from paralysis, bureaucracy or chaos Innovatív vállalkozások indítása és működtetése  3. Continuous Improvement The desired result is achieved more effectively when related resources and activities are managed as a PROCESS – Continuous improvement is a permanent objective of the organization In the race for quality, there is no finish line Bedzsula Bálint 14 14  Process A process is a sequential integration of people, materials, methods and machines in an environment to produce value-added outputs for customers. 20 15  Participants Four groups of people are involved in the operation and improvement of processes: 1. Customers: the people to whom the output (product or service) is made 2. Workgroup: the people who work in the process to produce and deliver the desired output 3. Supplier: the people who provide input for the work process. 4. Owner: the person who is responsible for the operation of the process AND its improvement 21 16  Classification of processes Management processes Main processes Supporting processes (IT, HR, QC) Key (important) processes - affect the success 22 17  Aims of process improvement 1. to create reliable processes in the sense that in each case we get the desired without any difference 2. the second step is to redesign the process to create an output that can (better outcome) 23 18  Quality Management System The QMS is composed of all organization’s policies, procedures, plans, resources, processes and determination of responsibility and authority, all aimed at achieving product or service quality levels consistent with customer specification and the organization’s objectives. When these policies, procedures, plans and so forth are taken together, they define how the organization works and how quality is managed.  Quality Management System provides a basis for documenting processes that are used to control and improve operations, and achieve:  higher product conformity and less variation;  fewer defects, waste, rework, and human error;  improved productivity, efficiency, and effectiveness;  drive innovation.  Main features of QA Systems Regulating the production system Provides a stable, reliable and reproducible product to meet customer needs Not a product, but a system standard The standard sets out general requirements. The organization develops its unique system. Certification 21  QMS evolution ISO TS 16949 QS 9000 ISO Requirements 9000:2000 ISO 9000 kritériumok Comenius HACCP AS 2000 (ISO 22000) 9000 CAF World-class No QA QA TL9000 GMP ISO 14000 VDA 6.1 EFQM Military Standards ISO/IEC ISO 9000 17025 ISO 17799 MEES Six sigma additional 22 ISO.ORG 23  ISO 9000 The best known QMS – accepted worldwide isos = equal International Organization for Standardization 1987, 1994, 2000, 2008, 2015 – interpretation Technical specifications and criteria to be used as rules, guidelines, or definitions of characteristics to ensure that materials, products, processes, and services are fit for their purpose.  ISO 9000 designed as a minimum quality standard Does not:  specify HOW the requirements are to be implemented  replace the product, safety, regulatory requirements or standards Highest quality = technical product specifications + management system standards (ISO provides only the last one)  The ISO 9000 family of standards ISO 9000:2015 – Fundamentals and vocabulary  background information, the definition of key terms ISO 9001:2015 – Requirements  structure for a basic QMS, demonstrate compliance ISO 9004:2018 – Guidance to achieve sustained success  guidelines to assist organizations in improving and sustaining their QMS Where is 9002, 9003?  ISO 9001 logic The standard specifies the issues to be regulated auditor Define and document rules for our own operation auditor Let us apply our own rules 28  Auditing Systematic checking method, how the company can meet the standard Types: 1st party – internal audit 2nd party – supplier, customer audit 3rd party – independent, external audit Third party certification (and audits) in every 3 years – competitive advantage  Documentation requirements Everyone should be able Level 1: defines how the QMS to work from valid documents, operates all the time Quality MANUAL Level 2: defines who, what, when Quality PROCEDURES Level 3: answers how Job INSTRUCTIONS Level 4: shows that the Quality records, reports, forms system is operating 30  ISO 9001 principles 1. Customer focus 2. Leadership 3. Process approach 4. Improvement 5. Involvement of Employees 6. Evidence-based decision making 7. Relationship management TQM has almost the same principles? What is the difference?  ISO 9001 clauses 0. Introduction 1. Scope 2. Normative reference 3. Terms and definitions 4. Context of the organisation 5. Leadership 6. Planning 7. Support 8. Operation 9. Performance evaluation 10. Improvement  Thank you for your attention Melinda Könyves [email protected] 34 PROCESS IMPROVEMENT QUALITY MANAGEMENT_3 METHODS 28/10/2024 MELINDA KÖNYVES DEPARTMENT OF MANAGEMENT AND BUSINESS ECONOMICS BUDAPEST UNIVERSITY OF TECHNOLOGY AND ECONOMICS [email protected] 1  Goal TQM Customer Process Principles focus improvement Total involvement Supportive Leadership Communication structure Supporting elements Education and Reward and Measurement training recognitions 2  Documentation requirements Everyone should be able Level 1: defines how the QMS to work from valid documents, operates all the time Quality MANUAL Level 2: defines who, what, when Quality PROCEDURES Level 3: answers how Job INSTRUCTIONS Level 4: shows that the Quality records, reports, forms system is operating 3  Injection moulding https://www.youtube.com/watch?v=b1U 9W4iNDiQ https://www.youtube.com/watch?v=8U_ ELHOzfUk 4  Quality tools Classification: – According to streght (mathematical background) – According to application field Process modelling Idea collection Problem solving SPC Other 5 Flowchart (process modelling) 6 Flowchart - example  Flowchart a tool to describe processes A flowchart enables – the identification of the participants in the process – providing all participants in the process with a shared understanding both of all steps in the process and of their roles – identification of inefficient, wasteful and redundant steps – offering a framework for defining process measurements 8  Flowchart – basic symbols Oval: the beginning of the process or the result of the process Rectangle: process steps or activities Responsible Diamond: the decision point of the process, yes / no answer or a Question Yes decision is needed, or branching of the process No Arrow: the flow direction of the process 9  How to use a flowchart? Define the boundaries of the process Define the steps of the process Draw the figure Check the completeness of it – Correct? – Are logical lines closed? – Do the stakeholders justify it? Evaluation (development opportunity, process discipline, ideal flow) 10  Type 1: high-level flowchart Suitable for a general overview of the process It is made up of sub-processes, which consist of more activities and decision points Customer Product Contracting Production need design 11  Type 2: detailed flowchart Can be made in different detail levels It contains all activities and decision points New yes Record Customer customer? customer need data no Check Record customer customer data needs 12  2. Idea collection TEAMWORK Creativity, ideas Support for other techniques Brainstorming, Affinity chart  Brainstorming Rules: – 15-20min – Team + moderator – All ideas will collected – No individual idea – No comment, or feedback – Nothing can be wrong – Quantity instead of quality  Affinity diagram Ideas and cause-effect connection Idea collection and categorization Ranking Team and individual work also More time than Brainstorming Affinity chart  3. Problem solving One of the most important area Usage: – Process improvement – Failure analysis – Example: Ishikawa, 5Why, Pareto.  Cause&effect/Ishikawa diagram Identifies, explores and graphically represents all the possible causes related to a problem to discover its root causes. Helps the team to focus on the causes in increasing detail, not on the symptoms. Reveals the key relationships Se co nd ar yc au se cau dary se con Se 20  Ishikawa diagram Main causes: 4M-5M-9M Main cause Main cause  Machine  Material  Method  Man Problem  Measurement  Maintenance  Money Main cause Main cause  Millieu  Motivation 22 23  5Why Reaching the rootcause 5 times why? 5Why?  Pareto/ABC diagram Basis: Vilfredo Pareto’s 80/20 rule Formal statistical technique Powerful and useful tool in continuous improvement 80/20 rule (rule of thumb) vital few vs trivial many  ABC for error types Disturbance Grouping error types (causes, products): ratio A – critical errors, vital few B – could turn into ‚A’ C – their effect, their weight is not significant Defining error types, defect categories, observing and counting the occurrences of mistakes Disturbances in descending order  Pareto/ABC diagram Bar graph: The lengths of the bars represent frequency or cost (time or money) with the longest bars on the left and the shortest to the right Used for a selection of a limited number of task that reduce the significant overall effect Helps to identify the top portion of causes that need to be addressed to resolve the majority of the problems Displays the relative importance of problems in a simple, visual format 31  Example – train delay Cause of the delay Number of Cumulative count occurrences percentage temporary speed limits 440 0,44 waiting for coming trains 360 0,8 signal breakdown 65 0,865 waiting for connections 60 0,925 track maintenance 20 0,945 weather 15 0,96 waiting for train staff 15 0,975 failure of the locomotive 10 0,985 delay from abroad 10 0,995 accidents 5 1 SUM 1000 32  500 1 450 Vital few 0.9 Cumulative count percentage 400 0.8 Number of occurrences 350 0.7 300 0.6 250 Trivial many 0.5 200 0.4 150 0.3 100 0.2 50 0.1 0 0 Number of occurence Cumultative count Percentage 80% line 33  Thank you for your attention Melinda Könyves [email protected] 34 PROCESS IMPROVEMENT QUALITY MANAGEMENT_4 30/10/2024 MELINDA KÖNYVES DEPARTMENT OF MANAGEMENT AND BUSINESS ECONOMICS FACULTY OF ECONOMIC AND SOCIAL SCIENCES BUDAPEST UNIVERSITY OF TECHNOLOGY AND ECONOMICS [email protected] 1  Risk ISO 9001:2015 risk-based thinking ISO 31000:2018 (2015) Risk management — Guidelines ISO 31010:2010 Risk management — Risk assessment techniques 2  Risk Risk is the effect of uncertainty, and any uncertainty can have positive or negative effects. A positive deviation from a risk can lead to opportunity, but not all positive effects of risk lead to opportunities. Negative - risk Positive - opportunity 3 Risk analysis methods 4  FMEA aims & usage Target Error analysis, mapping, elimination of the most significant errors Risk analysis Increase reliability Review of control processes When New product, process Risk analysis Safety 5  Types of FMEA Design FMEA Process FMEA 6  FMEA new approach - steps 1. Planning 2.System analysis 3.Function analysis 4.Failure analysis 5.Risk analysis 6.Optimalization 7.Documentation 7 Old example 8 1. Planning a. Legal requirements b. Lépései Customer requirements c. BOM (Bill of Material) d. Drawings, models e. Previous FMEA f. Coversheet g. Baseline 9 2. System analysis/3. Function analysis a. Customer identification b. System sturcture c. Components vs processes d. What is the function? e. Customer requirements f. Parameters g. Special characteristics(PFMEA)) 10  4. Failure analysis a. Possible effect, mode, cause definition 11 Rootcause analysis Probléma Gyökérok 12  5. Risk analysis Severity Effect of the failure 13  Occurrence Efficiency of preventive actions 14  Detection Efficiency of the checking method 15  Measurement RPN (Risk Priority Number) – S*O*D (1-1000) – Limit AP (Action Priority) 16 Old example 17 New example 18  6. Optimalization/7. Documentation Introduction of promotions based on limit values to reduce risk Determination of deadline and responsible for measures reduction Reassessment Documentation 19 PROCESS IMPROVEMENT QUALITY MANAGEMENT_5 METHODS 04/11/2024 MELINDA KÖNYVES DEPARTMENT OF MANAGEMENT AND BUSINESS ECONOMICS BUDAPEST UNIVERSITY OF TECHNOLOGY AND ECONOMICS [email protected] 1  Requirements Standards Customer specific requirement Customer requirement – Product specific requirements – Drawing Flowchart FMEA Control Plan 5 6  Thank you for your attention Melinda Könyves [email protected] 7 PROCESS IMPROVEMENT QUALITY MANAGEMENT 06/11/2024 MELINDA KÖNYVES DEPARTMENT OF MANAGEMENT AND BUSINESS ECONOMICS FACULTY OF ECONOMIC AND SOCIAL SCIENCES BUDAPEST UNIVERSITY OF TECHNOLOGY AND ECONOMICS [email protected]  Reminder: Tools According to application field: – Idea collection Brainstorming, Affinity chart – Process modelling Flowchart – Problem solving Ishikawa, 5 Why?, FMEA – Other Poka-Yoke, 5S, 8D report – SPC Control chart, capability study 2  Complaint A complaint is feedback that the given product does not meet the specifications Types: Customer – Directly from customer – From final customer – Field Internal – e.g. high scrap 8D report: Standard method Predifined structure 3 4  0. Complaint information Information from the customer Official information – defined platform – Email, portal Picture, partnumber, name… - identification 5  1. Estalish a team Crossfunctional team From ALL affected area Quality Logistic Production Engineering Purchasing Production planning Effective team 6  2. Problem description Source of the issue: When? Where? Who? How many? Picture or failed part investigation 7  3. Immediate action Ensure the business continuity at customer side Checking the stock at our side Checking the stock at customer side Checking the running production Inform the affected parties about the issue (Q-alarm) Deviation request – rework of the parts 8  4. Rootcause analysis Problem solving tools Longest part of the 8D report Problem Rootcause 9  5. Identify long-term corrective action Rootcauses: occurrance detection Management Action according to result of the 5Why analysis 10  6. Implementation of long-term corrective action/ checking the efectiveness Can the action solve the issue? Can the action cause another isse or failure? Checking bigger production batch Chekcing the effectiveness of the training 11  7. Identify preventive actions Aim: eliminate or prevent systemtic/repeating issues Checking of the similar products or processes FMEA review Lessons learned 12  8. Team recognition 8D report evaluation Teamwork – common evaluation Managment aproval, 8D closing 13  5S Japanese method Quality of work and work culture Ensuring optimal conditions for work, storage, movement, identification, traceability and protection of the product during the work process 14  5S Steps: 1. Sort (Seiri) 2. Set in order (Seiton) 3. Shine (Seiro) 4. Standardize (Seiketsu) 5. Sustain (Shitsuke) 15 5S – in practice 16  Poka-Yoke principle Japanese method – Poka: human failure, operator mistake – Yoke: prevent, elimination, avoid Interpretation: avoid unexpected surprises, „mistake-proof" or "fool-proof” 17  Poka-Yoke principle Methods: – Clarity, simplicity of the tools, equipments, machines etc; – Ensure to be visible asap the failure Avoid: – Mixing the tools – Missing the process step – Not proper sequence of the working steps 18 Poke-Yoke principle – in practice 19  Thank you for your attention Melinda Könyves [email protected] 20 PROCESS IMPROVEMENT QUALITY MANAGEMENT_7 11/11/2024 MELINDA KÖNYVES DEPARTMENT OF MANAGEMENT AND BUSINESS ECONOMICS FACULTY OF ECONOMIC AND SOCIAL SCIENCES BUDAPEST UNIVERSITY OF TECHNOLOGY AND ECONOMICS [email protected]  Memo – Quality Control Mass production – Shewhart: 1924 Bell Labs Measures conducted during the manufacturing process on an appropriate sample Main aim to control and regulate the processes, to prevent defective products 2  SPC methods to be learned Control charts – Detecting problems within the process Process capability indices – The process’ ability to meet the customers’ requirements 3  SPC methods Control charts – Achieving process stability – Checking whether the parameters are stable over time – Detecting deviations in the production process that would lead to nonconforming units Process capability analysis – Evaluating the process performance – Reducing the variability in order to continuously meet customers’ requirements – Predicting the number of defective items 4  Common and special causes Common causes (in-control process) – Cumulative effect of many, small, unavoidable causes – Always assumed to be present in the process – Humidity, temperature…. 5  Common and special causes Special causes (out-of-control process) – Occasionally present – Result in an unacceptable level of process performance – Defective raw material, improperly adjusted machines, operator errors 6  Objective of control charts Distinguish common and special causes Detect the occurrence of special causes – Operator action is necessary to eliminate them Prevent the production of flawful product 7  Mathematical background Normal distribution – Central limit theorem – Natural tolerance limits at is standard deviation - spread around the mean; the shape of the curve is the expected value - the center of the distribution 8  Processes in- and out-of control Out-of-control process In-control process Special causes Only shift the common process causes, mean/variability parameters and many nonconforming are stable units are over time produced 9 10 Control charts 11  Establishing the control charts m samples of size n: R-chart for monitoring the standard deviation of the process -chart to monitor the expected value The control limits are dependent on the sampling distribution of the quality characteristics 12  Performance of control charts Due to sampling error Type I error, -risk – In-control process is thought to be out-of control (false alarm) – Normally distributed process: – Unnecessary process adjustments Type II error, -risk – Out-of-control process is thought to be in- control – Not detecting a process shift 13  Phase I and II application of Control Charts Phase I. – Retrospective analysis Based on 20-25 samples – Trial control limits – Bringing the process into the state of statistical control Phase II. – Monitoring process performance – OCAP: Out-of-control Action Plan Actions necessary to eliminate the special causes 14  Control charts for and m samples of size n: Range of the sample: Average range: Control limits for the R chart – – – 15  Control charts for and Average of the i-th sample: Grand average (average of the averages): Control limits for the chart: – Process variability must be in-control (check the R chart!) – – – 16  Benefits of control chart application Improving productivity Preventing defects Avoiding unnecessary process adjustments Providing diagnostic information Estimating process capability 17  Monitoring the process’ performance m samples of size n 18  Establishing the control limits R chart (standard deviation of the process) – – – chart (process’ mean) – – – 19 Estimating the parameters (example)- data sheet 20  Upper control Range of the first R-chart limit sample R Chart 1 ,0 UCL=1,004 0,8 Range of the last sample Sample Range 0,6 _ R=0,475 0,4 0,2 Lower control limit 0,0 LCL=0 1 3 5 7 9 11 13 15 17 19 Sample 21  chart Xbar Chart 16,6 UCL=16,542 16,5 16,4 Sample Mean 16,3 __ X=16,268 16,2 16,1 16,0 LCL=15,994 1 3 5 7 9 11 13 15 17 19 Sample 22  Process capability analysis Only for in-control process Analyzing the process’ variability relative to product requirements Main objectives: – Predicting the number of nonconformities – Selecting between suppliers – Reducing the variability of the process Meeting customers’ expectations Decreasing the number of nonconforming products 23  Capability of our process Not capable Capable 24  Histograms Visual impression of the process performance 25  Histograms Possible causes of poor process performance – Poorly located center (shift in the mean) – Excess variability 26  Process capability ratio As decreases, the increases The higher the value of , the less nonconforming units are produced USL  LSL Cp  6 27  Process capability ratio Requirements and process fallout Sigma level ppm ( ) (process fallout) 1,00 2700 1,33 63,5 Standard minimum value in most industries 1,67 0,57 Parameters related to safety 2,00 0,002 Word-class organizations, SixSigma 28  Process capability indices USL  LSL Cp  6  The Cp index does not take into account whether the process is centered at the midpoint of the specification interval or not Cp = 1 Cp = 1 29 Cpk index – off-center process   LSL USL     Cpk  min Cpl ,Cpu   3  ;  3  min USL- -LSL 30  Relationship between Cp and Cpk Cpk: Current capability of the process Cp: Potential capability of the process – Can be achieved by centering the process USL CL-Target LSL 31  Control vs. specification limits Control limits – Determined based on the current variability of the process – A point outside the control limit indicates that there is a shift in the process mean / standard deviation, that is, the process is NOT stable over time – In-control process: its parameters are stable over time Specification limits – Determined externally – The 3 sigma deviation of the process is compared to the specification limits – The area outside of the specification limits is proportional to the process fallout – A capable process: able to meet the customers’ requirements 32  MSA – Measurement System Analysis Measurement system: the totality of the measuring devices, environment, measuring persons, measurement method, procedure and measured component. Features: – Accuracy: if the mean value of the measured value is the same as the true value of the measured characteristic – Resolution: the smallest difference that the measurement system can consistently detect – Display resolution: the smallest difference that that the measuring device can display – Stability: if the measurements are repeated at different intervals, the same result is obtained – Repeatability: inherent fluctuation in measurement results in the case of a measuring person – Reproducibility: inherent fluctuation in measurement results in the case of several measuring persons 33 R&R Evaluation Not Not acceptable acceptable Partly acceptable Acceptable 34 Thank you for your attention. Melinda Könyves 35 PROCESS IMPROVEMENT_7 13/11/2024 MELINDA KÖNYVES [email protected] 1 ASPICE - Automotive Software Process Improvement and Capability dEtermination 2  Process Assessment A method for measuring process capability Analysis of processes Understanding the current situation Comparison with best practices, identify risks Achieving long-term efficiency and product quality 3  Planning What? (ASPICE, ISO...) – what is the goal? – what do we want to do and why? – what are the technical parameters? How? (V-model, tools...) – Tools, systems, best practices, methods, metrics, processes, actors, competence Do – tailoring 4  Process Audit assessment ASPICE, ISO/IEC 330xx, IATF 16949, ISO ISO/IEC 15504 900x Product development Focus on the entire in focus company Analyzes in detailed The goal is more of development processes a general overview Assessment according There is a certificate, to 6 CLs, no certificate you can fail Variable target areas The target area is given 5 Forrás: https://www.tuleap.org/resources/success-stories/jtekt-achieving-automotive-spice/ 6 7 Forrás: https://www.slideshare.net/snavali09/introduction-to-aspice 8 Evaluation 9  Structure BP: Best practice – 1. CL (PA.1.1.) – Process specific questions GP: Generic practice – From 2. CL – Generic, same questions 10  Evaluation BP-GPPALevel Based on evidences Rules 11  Assessment structure Assessor team: – Lead assessor – Co-assessor – Interviewee Felkészülési csapat: – Coordinator – Consultant – Interviewee 12  Assessment structure Planning – Project selection and training of team members – What are the target areas? – Appointment of target area managers – Schedule Preparation of an assessment plan – Agenda Assessment – Assessment team introduction, opening – Presentation of team and project – Evaluation of processes – Feedback presentation – Assessment report (weaknesses, strengths, tips, evaluation) 13  Assessment „types” Self assessment – Consultation, no assessor Gap Analysis – Organized, with assessors – Target to prepare the team for the assessment Internal Assessment Externl Assessment – Customer presence/communicate the result – Independent assessor team 14 PAM – Process Assessment Model https://www.kuglermaag.de/fileadmin/0 5_CONTENT_PDF/literature_automotive- spice_pocketguide.pdf 15 Management paradigms in production (Total Productive Maintenance) LEAN management SIX SIGMA AIM AIM Efficiency Quality improvement improvement All refer to the (same) process! 16 LEAN TQM TPM Industry 4.0 17 LEAN 18  World Classic Manufacturing - WCM The WCM targets: 1. optimizing plant performance 2. optimizing product quality 3. optimization of management and administration processes 4. improving the quality of the work process 5. systemic development of the employees concerned 6. strengthening labor protection 7. improving health and environmental protection IT support Industry 4.0 19 THANK YOU FOR YOUR ATTENTION KÖNYVES MELINDA [email protected] 20 Process Improvement Operations management Melinda Könyves Department of Management and Business Economics [email protected]  Introduction Management: planning, organizing, controlling and leading resources for gaining company targets efficiently and effectively Operations management: efficient operation of resources directly related to production  functional area based on analytical methods, operations research Production systems: convert input resources into products/services, using different components and tools inputs transformation outputs tools 2  Operation measures For evaluating decisions related to production management 1. Production rate: – number of products made in a period 2. Amount of inventories – raw materials, components, products production rate – costs! 3. Direct operation costs the bigger – influenced by production management the area, – no marketing cost the better! inventories operation costs 3  Why do we have to determine the amount of capacity available? To decide about: – which orders to accept? (production planning) – when to raise or lower inventory levels? (inventory management) – where to increase or reduce capacity? (investment decisions, resource allocation) Resource capacity: the amount of products or services that can be produced in a given time. Measures: units per month, tonnes per year, customers per day, etc. 4 Capacity  I.a. Capacity indices 1. Design capacity: the maximum output of a resource under ideal conditions in a given period. total available time NDSH Design capacity (DC) =  unit production time M M 1/ P N – number of parallel resources having equivalent properties D – number of days available S – number of shifts per day H – number of hours worked during one shift M – time to make one unit of product or service (hours/unit) P – production rate (units/hour) 6  I.a. Capacity indices 2. Effective capacity: the maximum output that a resource can be expected to produce in a given period when it works in an actual operating schedule (actual working hours). real available time NDSH (1  ) Effective capacity (EC) =  unit production time M 0 ≤ ξ ≤ 1 when expressed in percentages can be expressed in hours also (see Bottling line example) represents the expected time loss  time lost due to maintenance, scheduled rest periods, setup times design capacity & effective capacity  absolute indices 7  I.a. Capacity indices 3. Capacity utilization refers to the proportion of the design capacity that is actually used. Actual output Capacity utilization (CU) = Design capacity 4. Efficiency refers to the proportion of the capacity actually used under normal operating conditions. Actual output Efficiency (EF) = Effective capacity capacity utilization & efficiency  relative indices (actual output produced compared to the maximum values) 8  Example 1. A machine works for one eight-hour shift on five days a week. When working, it can produce 100 units an hour. 10% of its time is needed for maintenance and setups. The output of the machine was 3,000 units in a particular week. TASK Determine absolute and relative capacity indices! N=1, S=1, H=8, D=5, P=100 u/h, ξ=0.1 AO=3000  M=1/P=1/100 h/u 9  Example 1. 1. Design capacity = NDSH  1518  58100  4000 M 1 100 2. Effective capacity = NDSH (1)  1 518(1 0.1)  58100 0.9  3600 M 1 100 Actual output 3000 3. Capacity utilization =   0.75 75% Design capacity 4000 Actual output 3000 4. Efficiency =   0.833 83.3% Effective capacity 3600 10  Demand management The aim of demand management is to redirect demand from periods of capacity shortage to periods of spare capacity. Typical ways: Changing the price: price reductions, ”happy hour” Producing for stock in periods of spare capacity Changing the order lead time – Lead time: the time passing between placing and receiving an order Taking orders: customers are asked to place an order or to make an appointment in advance 21  Capacity management Changing the data used in the formula for calculating effective capacity: NDSH (1 ) M Typical ways: Hiring sub-contractors, leasing equipment (N) Increasing the number of shifts (S) Working overtime (D, H) Rescheduling maintenance (ξ) Making the customer perform certain operations (M) 22  Formula used in short-term capacity planning NDSH (1  ) Q M This formula expresses that the effective capacity must be sufficient to perform the required task (Q). 23  Example A bank has forecasted that an average of 500 customers a week will want to open a newly introduced type of account in a given period. One front-office employee can deal on average with three customers an hour, but the associated back-office paperwork takes an average of 40 minutes per customer. Employees spend 20% of their time on other activities, such as meetings. A standard working day is from 9 am to 4 pm, on five days a week, with a one-hour lunch break at noon. TASKS How many employees are needed on average (in a week) to perform the task? Calculate absolute capacity indices and relative capacity indices on a day when 90 customers are dealt with. 24 We need to determine the number of employees (N). Using the above inequality, the following condition must be met: QM N DSH (1  ) Q = 500 customers/week M = 60/3 + 40 minutes  1 hour ξ = 20% = 0.2 S=1 D=5 H = 16-9 = 7 hours (with 1 hour lunch break!) 25  5001 N N  20.83 51 (7 1)  (1 0.2) 21 employees are needed to perform the task! Absolute capacity indices of the system: Design capacity = 2151 7  735 customers/week 1 21 51 (7 1)  (1 0.2) Effective capacity =  504 customers/week 1 Relative indices on a day when 90 customers are dealt with: 90 Capacity utilization =  0.6122 61.22% 735 / 5 90 Efficiency =  0.8928 89.28% 504 / 5 26 Operation measures production rate direct inventories operating costs 17  Inventories Supplies of goods and materials that are held by an organization Types of inventories: – Raw materials, – Work-in-progress  semi-finished goods – Finished goods – Spare parts – Consumables oil, fuel, paper, etc. 18  Inventories Benefits of holding inventories: – Stabil and smooth workflows within the production system – Protection against shutdowns (long blackout) delivery delays of suppliers, uncertain demand – Taking advantage of low prices – price discounts on large orders Drawback of holding inventories: COSTS! 19  Inventory Control Inventory control is the effort to maintain inventory levels and costs within acceptable limits. Decisions related to the operation of inventory systems: 1. How should the inventory be operated? (inventory mechanism) 2. How much should be ordered? (economic order quantity) 3. When should an order be placed? (reorder level, lead time) 20  Classic inventory control mechanisms Q1: how to order? Define two things: a) the event or events that must occur for an order to be placed b) and the principles for calculating the amount to be ordered. There are essentially two groups according to the type of inventory review: continuous or periodic. 21  Continuous Review System I. The inventory level is monitored continuously and an order is placed when it drops to a specified value. Also called fix ordered quantity system or (s;Q) system Ordering policy: placing an order for Q whenever the inventory level reaches s. – when the inventory level reaches the reorder level (s), an order for quantity Q is placed. – when the order lead time (L) ends, the ordered amount arrives, raising the inventory level that has dropped below s in the meantime. 22  Continuous Review System II. Inventory level Q s T1 T2 Q Time L L 23 https://youtu.be/rPZdWuOPaHY 24 https://youtu.be/TF8HAhUN_p4 25  Periodic Review System I. Orders are placed at regular intervals to raise the inventory level to a specified value. Also called fix ordering period system or (R;S) system Ordering policy: placing orders at regular intervals R for amounts that bring up the inventory level to S. – when it is time to review the inventory level, an order is placed for the amount that brings the inventory on hand up to the target inventory level (S). – the ordered amount (Qi) arrives at the end of the order lead time (L). – since the inventory level continues to fall during this time, the ordered amount will bring the inventory level up to a value that is less than S. 26  Periodic Review System II. Inventory level S Q2 Q1 Q3 L L L Time R R 27  Differences between inventory review systems Continuous review systems are able to respond more flexibly to changes in demand  lower risk of stocking out. Periodic review systems are exposed to shortages during the order interval as well as during the lead time (R + L)  the probability of stocking out is greater. Periodic inventory reviews are easier to organize, continuous review requires checking if the inventory level has already dropped to s each time an item is removed from inventory. 28  Costs of keeping inventory I. Unit purchasing cost – The price of a product (charged by the supplier) – OR the cost of manufacturing one Order cost – The cost of placing an order – Setup cost, resetting cost, cost of administration/ transportation, etc. 29  Costs of keeping inventory II. Unit holding cost – The cost of holding one unit of an item in stock for a unit period of time – Generally is calculated as percentages of unit cost  holding cost rate – Damages, amortization, opportunity cost, etc. Shortage cost – Occurs when an item is needed but cannot be supplied – Cost of customer lost, loss of goodwill, loss of future sales, etc. 30  Economic Order Quantity (EOQ) Q2: how much to order at a time? Optimizing method used for determining order quantity and reorder points and minimizing inventory costs. Six assumptions: 1. Demand is known and constant over a given period. 2. Lead time is zero. 3. The quantity ordered arrives at once. 4. All demand is met, shortages are not allowed. 5. Ordering and setup costs are fixed and constant (independent of the order size). 6. Holding costs are proportional to unit (item) costs. 31  Relation between EOQ and total cost Large infrequent orders give high holding cost and low order cost; small frequent orders give low holding cost and high order cost Sum of these costs gives a U-shaped curve. The minimum of this curve shows the optimal order size TC Cost s HC P C O EOQ QuantityC 32  Nomination in the model D – demand (known and constant) v – unit cost or value of an item A – ordering cost or ”administration cost” r – holding cost rate (percentage - %) Q – ordered quantity EOQ – economic order quantity Iavg – average inventory level 33  Calculating total costs of a period Total costs = purchasing costs + ordering costs + holding costs D TC{Q}  Dv  A  I Avg vr Q At some points an order of size Q arrives, which is used at a constant rate until no stock is left  the inventory level varies between Q and 0, so the average level is Q I Avg  2 So the formula of total costs is D Q TC{Q}  Dv  A  vr Q 2 34  Calculating the EOQ The minimum of the total cost curve is the optimal lot size So we derivate total cost with respect to Q, equate it with 0 and after some transformations we get the economic order quantity (EOQ) 2AD QOPT  EOQ  vr Principle of equilibrium: holding cost and ordering cost are equal D Q A  vr Q 2 35  Cycle time and order numbers How long will the ordered quantity last?  cycle time If EOQ is ordered: EOQ TEOQ  D Q and D are given in years, but we usually need T in days  conversion! How many times must orders be placed in a year? D N EOQ 36 Example Let the demand for a product be an average of 3,600 units per year. The cost of one order is HUF 12,000. The purchase cost of one piece is HUF 2,500, and the annual inventory holding rate is 60%. Let's count on approximately 300 working days per year a)How much the Economic order quantity? b)How much is the cost of inventory politic? c)How much time passes between two orders ? d)What cost increase does ordering every six months cause?  Example D = 3600 parts/year r = 60% (0,6) A = 12000 HUF 300 days v = 2500 HUF/parts a) 2 AD 2 12 000  3 600 EOQ    240 darab parts b) vr 2 500  0,6 3600 240 TC {240}  3600  2500  12 000  TK   2500  0, 6  240 2 c)  9 000 000 Ft  180 000 Ft  180 000 Ft  9360 000 Ft. EOQ 240 TEOQ    0, 0667 év year  20 nap days D 3600  Example d) Ordered quantity: D Q   1 800 darab parts 2 Cost: 3600 1800 TK 1800   3600  2500  12 000  TC   2500  0, 6  1800 2  9 000 000 Ft  24 000 Ft  1350 000 Ft  10 374 000 Ft The cost change: TK TC  TK TC 1800 TC TK 240  0,1083 10,83% TK 240 TC  Calculation of the reorder level Q3: When to place an order? (if L≠0) Assumption: demand is still known and constant! Objective: order placements should be timed in such a way to ensure that the order is delivered when the inventory level hits zero  We have to determine reorder inventory level (and not the time!) 40  The lead time How long will you have to wait before the new stock arrives?  lead time Two cases: 1. The order placed in a cycle arrives in the same cycle  the lead time is shorter than the cycle time 2. If the lead time is longer than the length of a cycle, then the ordered amount arrives in a subsequent cycle full cycles don’t affect the reorder level, we need to consider the remaining fraction of a cycle (modified lead time: L’) 41 42 THANK YOU FOR YOUR ATTENTION!