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What happens if capacity is insufficient in meeting demand?
- To low: sales lost, customers dissatisfied, *services - long lines and quality may suffer
- To high: unnecessary costs are incurred, jeopardizing the long term viability of a business.
Activity. Represents operations that add value. Resources carry out activities. Activities have capacity, measured by throughput. (process time ex 15 min/batch
Inventory/Buffers. Represent a storage or buffer area. They do not have capacity, but there could be a limited number of units that can be placed in a buffer.
Arrows indicate the direction of flow entities in the system.
Effective Processing Time
When multiple process (rectangles) are added reducing the cycle time
- The successive time between successive batches. *Process time total
- The average time between the completion of successive units or batches, or the average time between units “dropping off’ the end of a production line.
- represents the maximum output of a process
- measured in units per time period.
- Process capacity = minimum (capacity of resource 1, capacity of resource 2, capacity of resource 3, . . .)
- (avg)flow rate/resource (process) capacity
- Measures the percentage of time that a resource is used to complete the assigned step of a process.
- Process Capacity/Capacity of Resource
time per unit or time per batch
- ¢units per time period or batches per time period
- For each step
- For the process
Flow Time (throughput time)
total time from start to finish
the step or resource that limits capacity
- 60 mins/Effective processing time
- The capacity of each resource or process step, measured in units per time period.
- Average Inventory level = Average Flow Rate x Average Flow Time
- Average Inventory Level = average number of entities in the system, measured in physical units, often referred to as WIP
- Average Flow Rate = average rate at which entities are processed by the system (entities/time period)
- Average Flow Time = the average time it takes for an entity to move from the beginning to the end of a system (time)
Can be less (excess capacity) than or greater than capacity.
- customer demand (requested)/resource capacity
- Exceeds process capacity.
- Specifies the % increase resources needed at each step to meet customer demand.
A diagram that represents a production process. It depicts the flow of products from the beginning to the end of the process, using symbols to denote activities, inventory buffers, and direction of flow.
The process step that has the smallest capacity.
Average flow rate
- Rate at which entities are processed by a system
- Average flow rate = minimum (process capacity, customer demand)
Average flow time
Average time for an entity to move from the beginning to the end of a system
Average Flow rate/Process capacity
time spent cleaning equipment, arranging tools, changing ingredients.
time actually spent making an item or providing a service.
represents the start up conditions before the system is completely full of product.
System in stead state
- When one product is complete in the process after the transient phase
Variability introduced into system
- capacity is reduced.
- system performance tends to erode.
A efficient business, low cost producer, their capacity strategy will strive for:
High capacity (throughput), low WIP, and high utilization, resulting lower average cost per unit.
A responsive firm will strive for
short cycle times and be less concerned about high utilization. Shorter cycle times provide products to cust quickly and usually capacity available to adjust schedules to better meet customer needs. May carry high WIP. Allows customization of products before they are shipped to custs w/o long processing times.
What is the difference between flow time and cycle time
Flow time is the total time between start and finish. Cycle time is the time between batches.
How does variability in processing time affect work in process? Explain?
When variability is introduced into the system, cycle time (process time) and work in process both increase. In many cases, simply reducing variability can result in better system performance.
What is the relationship between the bottleneck, utilization, and process capacity?
Bottlenecks limit process capacity, thereby limiting utilization. Utilization is the average flow rate divided by the process capacity.
What is the difference between utilization and implied utilization? Under what conditions are both of these the same?
Utilization measures the percentage of time that a resource is used to complete the assigned step of a process. Implied is the percentage increase in resources needed at each step to meet customer demand. Both are the same when demand is below capacity.
arrival process is characterized by:
characterized by the size of the population, the behavior of arrivals, and the statistical distribution of arrivals.
- finite: restaurant for exclusive members only, a tool crib for a manufacturing facility that is used by employees only, copy machines in a business
- infinitely large (the one we work with): are finite: populations in large quantities. ATM customers, students waiting to order food, members of discount warehouses waiting to purchase.
lines in banks, resturants, student unions, call centers, and retail stores.
- assumes that the arriving population is well behaved.
- People do not change lines or avoid getting in lines because it is too long.
if someone gets in line and then gets out of line
- If someone is going to get in line, but changes their mind.
- They never enter the queue
Assumption of statistical distribution of the arriving population
Poisson distribution. Arrivals can be described in terms of arrival per time period or the time between arrivals.
average number of arrivals per time period
Waiting line can be limited or unlimited
Assume unlimited waiting line. Plenty of room for a waiting population. Drive thru lines can be limited.
FIFO, LIFO, or another priority system. ER rooms are other. FIFO used in class.
- range from single phase, single channel, multiple phase, multiple channel.
- The # of steps in a service process
the # of steps in the service process
the # of servers assigned to a queue
Single phase, single channel
when a machine that dispenses soft drinks is placed in a lobby. Automatic teller machine
Multiple phase - multiple channel system
DMV, steps depend on the service provided. Provided when one person providing service for the line in which a customer is waiting.
Single phases, multiple channel
post offices and banks
Multiple phases, single channel
fast food drive thru with two windows.
average number of customers served per time period
Poison and exponential distribution relationship
- they are inverses of each other.
- Poisson is discrete
- Exponential is continuous
- A specifies the distribution for the time between arrivals.
- S specifies the distribution for service times.
- m specifies the number of servers.
- N specifies any restrictions on the system capacity.
- K is the size of the calling population.
- Z is the queue discipline.
- ***The last three of the symbols are usually excluded if there are no restrictions
- ***class only uses M/M/1 and M/M/m, where m will vary.
M/M/1 and M/M/m
- In queuing, the M refers to the Exponential, or Markovian distribution.
- However when the arrival process was discussed, it was assumed that arrivals followed the Poisson distribution, yet the designation does not contain a “P” for Poisson, but “M” for Markovian. This is due to the inverse relationship between the Poisson and exponential (Markovian) distribution.
- Similarly, an average service time of 5 minutes (exponential distribution) is the same as a service rate of 12 per hour (Poisson distribution).
- To keep things as simple as possible, the models will ALWAYS use arrival rates (units arriving per time period) and service rates (units served per time period) in analyzing waiting line systems. Furthermore, it is assumed that the arrival rate follows the Poisson distribution and that the service time is exponentially distributed.
performance characteristics of waiting lines
- 1. Average waiting time in line
- 2. Average waiting time in the system
- 3. Average number of units waiting in line
- 4. Average number of units in the system
- 5. System utilization
- 6. Probability of k or more units in the system
Average waiting time in line:
Average waiting time in the system
Average number in line
Average number in the system
Probability that the number of units in the system, n is greater than k
The Multiple Server Model: M/M/M
- The only difference in notation between the single and multiple server model is the last designation, the “m,” which represents the number of servers that serve a single line
- The multiple server model is based on the assumption that one line is served by several servers, acting independently.
- One other point worth noting is that the overall service rate must exceed the arrival rate. This means that mµ must be greater than λ.
- Describes most service processes
- Continuous distribution
- Inverse of Poisson Distribtution
Components of a waiting line
- Arrival Process
- Waiting Line
- Service Process
Product quality dimensions
- Manufacturing Based
- Value Based
Quality is intuitively understood but difficult to communicate
Quality is comprised of the components and attributes of a product
The customer defines quality and if the customer is satisfied, the product has good quality
If a product conforms to design specifications the product has good quality
If a product delivers good value for the price, it has good quality
8 dimension of quality of a product
- Perceived Quality
- The extent that a product achieves its intended purpose
- Cell phone: range of service network
- Food Processor: ability to perform a wide variety of functions - slice mix, puree, blend dough
- The attributes of a product that may enhance its performance or desirability
- Cell Phone - Ability to talk and surf web
- Food Processor - ability to adjust external blade for slicing thickness.
- The ability of a product consistently perform
- Cell Phone: Dropped calls
- Food Processor: Performs the same every time
- The extent to which a product conforms to specifications
- Cell Phone: meets production standards such as screen resolution
- Food Performance: meets production standards such as rpm for motor.
- The extent to which a product can withstand rough handling, trauma or other environmental and physical abuses.
- Lasts for expected time frame, at least as long as the warranty or extended warranty
- The ease of repairing the product
- Ease of obtaining service, return and or repair
- The sensory characteristics of a product: feel, smell, visual appeal, taste, and sound
- Cell phone: size, appearance, feel of screen
- Food processor: color
- The customer's perception of the quality of a product.
- Certain brands may be considered superior to others based on reputation and past experience: iphone fore cell phones and kitchenaid for food processors
5 service dimensions widely recognized
- The overall appearance of the service facility and the personnel, including equipment, supplies, and materials
- Dentist: cleanliness, appearance of waiting area, availability of reading material, music
- Fast food drive thru: adequate room for cars, easily accessible service windows
- The extent that the service is performed accurately
- Dentist: procedure is performed accurately, so there's no need to follow up to have problem fixed
- Fast Food Drive thru: Order is accurately filled
- The extent that the service is provided promptly
- Dentist: waiting time is of reasonable length. This includes waiting time to obtain an appointment and time spent waiting at the office.
- Fast Food Drive Thru: waiting in line is reasonable
- The knowledge and courtesy of the employees, or their ability to assure the customers that the service provider is competent
- Dentist: Receptionists are courteous and staff is ready for patients. Staff and dentists are trained in the procedures they perform.
- Fast food drive thru: courteous Greeting, repeats order to ensure its accuracy. know "secret" menu and accommodates special requests.
- The extent that the customer feels that the service provider cares about the customer
- Dentist: staff and dentist understand patient needs and work with them to accommodate needs such as work schedule and pain management
- Fast food drive thru: Employee is willing to explain menu choices, assist customers with requests and payment options.
Quality theory and the leading contributors
*W. Edward Deming
Most influential person on quality management in the world. Died 1993. Helped Japanese renovate manufacturing industry in 70's. Known for the "red bead experiment" and statistical use
- Basis for transforming and industry:
- 1. Create a constancy of purpose.
- 2. Adopt a new philosophy.
- 3. Management must lead to promote change.
- 4. Eliminate mass inspection.
- 5. Build quality into the product.
- 6. Eliminate the practice of awarding business on price tag.
- 7. Build long-term relationships and minimize total cost.
- 8. Constantly improve the production and service systems.
- 9. Train employees.
- 10. Improve leadership.
- 11. Drive out fear.
- 12. Break down barriers between departments.
- 13. Eliminate slogans and targets for the work force because these create antagonist relationships.
- 14. Causes of poor quality are a result of the system, not the work force.
- 15. Eliminate barriers that rob workers of their pride in their work.
- 16. Focus on quality, not numbers.
- 17. Eliminate barriers that rob managers of their pride in their work.
- 18. Eliminate merit rating and ranking systems.
- 19. Causes of poor quality stem from the system.
- 20. Institute education and self-improvement.
- 21. Put everyone to work to achieve the transformation.
developed the statistical control chart when he work for bell. Distinguished between assignable-cause and chance cause variation for finding quality problems and making improvements.
- Plan. Establish objectives and expectations.Do.
- Implement the plan. Collect data.
- Check. Study the results and compare to the plan.
- Act. Take corrective action if necessary. If no corrective is warranted, refine the PDCA scope and go the next iteration of the cycle or focus on a different part of the process.
Improved quality in language of management-money. 80/20 applied separating vital few from the trivial many
- Juran Trilogy -
- 3 processes to improve quality
quality is free. 14 steps, popularizing the zero defects approach to quality management. Believed quality was a source of profit for an org.
*Shigeo Shingo (waste) 7
- Identified seven wastes that should be addressed with Toyota:
- 1. waste of overproduction
- 2. waste of waiting
- 3. waste of transportation
- 4. Waste that results from the production process
- 5. Waste of stocks (raw material not stored right)
- 6. Waste of motion (small movement of hands/people)
- 7. waste of making defective products
Hiroyuki Hirano 5S
- developed 5S's.
- Sort (seiri) - sort the necessary from the unnecessary items. The work area should contain only those items necessary to do the job such as parts, tools, and instructions.
- Set in Order (seiton) - Make sure everything is in its place. Have a designated spot for all necessary items.
- Shine (Seiso) - clean everything up. At the end of the shift make sure all is restored to its place. Dirty workplaces hide problems such as leaks and spills.
- Standardize (Seiketsu) - Everyone should know what they need to do to comply with the first 3S's. Work should be standardized.
- Sustain (shitsuke) - Make the 5S method a habit. Do not allow a fradual decline. As new ideas surface for improving the 4S's, implement them.
4 categories that cost of quality
- Internal Quality Improvement
- Prevention costs: preventing defects (training, documentation, calibration of equipment, supplier assessment, and quality planning)
- Appraisal costs: costs of measuring quality. (inspection, testing activities, supplier monitoring and assessment, and evaluation of materials)
- External Result of Poor Quality:
- Internal failure costs: incurred when a product fails prior to customer possession. (scrap, rework, re-inspection, corrective action, process waster and lost productivity)
- External failure costs: incurred when product fails after customer takes possession. (warranty costs, cost of corrective action, and complaint handling and replacement)
7 Basic Tools of Quality
- Process maps: same as flow diagram (time function map) *useful for changes in process. Overall picture of process.
- Check Sheets: keep tally of defects, customer complaints, or other quality problems.1st step in the data collection process. Shows frequency of errors,
- Pareto Charts: bar chart, ordered from most to least frequently occurring.
- Cause and Effect Diagrams: aka fishbone diagram. effect or problem at the far right and possible causes listed by category: methods, machine, materials, and manpower.
- Histograms: shows distribution of data. Frequency and relative frequency is on the vertical axis and the data itself, divided into classes, is represented on the horizontal axis. (oil changes)
- Scatter Diagrams: relationships between variables. Test scores vs hw scores
- Control Charts: used to monitor processes over time. track continuous or discrete.
Designing Quality products and services
Quality function Deployment:
Relates customers and technical requirements
QFD helps to identify customer wants and to translate these into technical product attributes. Helps to determine where to direct the quality efforts or an organization. House of quality diagram. Customer info on the left, technical info on the top, middle and the roof contain symbols that show relationships between customer and technical requirements.
Appropriately used, QFD spans the design and production process, all the way to quality planning with the “voice of the customer” taken into account throughout the entire process.
Can be used for services but service blue printing is designed for it
Steps for creating and completing the house of quality
- Step 1. List customer requirements. These are obtained through focus groups, surveys, and interviews and reflect the “voice of the customer.”
- Step 2. Obtain importance ratings from customers, with 5 being the highest priority. It is possible that other importance ratings may be used, such as a scale from 1-10. Rankings may also be used. These are also obtained directly from customers.
- Step 3. List the technical requirements. The design elements affect customer requirements.
- Step 4. Identify the relationships between customer requirements and technical requirements. In this example, three possible relationships have been identified: a strong relationship, some relationship and a weak relationship. These have also been given values of 9, 3, and 1, respectively. It is possible that other values may be assigned such as 5, 3, and 1.
- Step 5. Identify correlations between the design elements in the roof of the house. To keep this example simple, the relationships used to assess customer and technical requirements are the same in the roof of the house. It is possible, however, that an organization may choose to use a different rating system, which may also include other possibilities such as strong negative relationships.
- Step 6. Compute the importance ratings for our product:
- Step 7. Evaluate competitors’ products. A panel may be assigned to assess the characteristics and/or product information used to evaluate customer products. For this example products have been rated as being good (G), fair (F), or poor (P).
- Step 8. Determine the target values, your performance, and competitors’ performance. In this example, the target values of 90 percent and 50 percent for high impact plastic and modular design represent the percentage of the total product that should consist of high impact plastic and be modular. The ergonomic design should be good and the motor should have suction power of 120 air watts.
- Next: construct a second house relating the design attributes toproduction processes
- Lastly: the final house of quality depicts the relationship between the production process and quality plans
- Created by GL Shostack.
- A special type of flow chart that shows different levels of provider -service interaction and identifies potential failure points where the service itself or the service product is flawed.
- Begins with customer arrival and ends with customer departure. Circles with F's identify failure points. Chart of F's provide description of potential failure, an remedy.
- Ex: one decision that needs to be made in the service design is who will be giving tours. If its a personal trainer, they may be very helpful to potential clients who are interested in finding out more about personal training programs and fitness classes that are offered.
Quality Programs, Awards, and Certifications
Improve their own quality as well as their visibility and reputation.
Six Sigma DMAIC
- Define the project goals
- Measure the current process and collect data.
- Analyze the data and identify the root cause of the defect under investigation.
- Improve the current process.
- Control the future process performance.
- Reduces defects to 3.4 defects per million. 1.5 standard deviations.
- Natural limits lie between a set upper and lower limit using a z-score.
- P(x>24) = P[z>(24-18)/1] = P(z.6) = 0.00000000099 x's by 1 million and the probablility is almost 0.
Malcolm Baldrige Award
Open to manufacturing, health care, education and services. Compete in their own categories. Self assessment quality tool that includes several categories used to assess overall quality
- 1. leadership*
- 2. Strategy*
- 3. Customer Focus
- 4. Measurement and analysis
- 5. Workforce focus
- 6. Process management
- 7. Documentation
Certification: ISO 9000
- is a European quality standard. Focuses on the documentation of quality systems through series of manuals and is guided by eight principles.
- 1. Leadership
- 2. Involvement of people
- 3. Focus of Cust
- 4. Process approach
- 5. Management approach
- 6. Continuous improvement
- 7. Decision making approach
- 8. Supplier relations
- Many get the cert because they can not be suppliers to other companies without it.
- An international consensus on good quality management practices.
ISO 14000: Standards for environmental compliance
Mu, service data
Parallel servers affect
Lambda, arrival rate
TC = [M $ earned/time period] + [Lq x $ value of cust time/time period]
Psychology of waiting
- 1. unoccupied times feels longer than occupied time
- 2. pre-service waiting feels longer than in-service waiting
- 3. Anxiety makes waiting seem longer
- 4. Uncertain waiting is longer than known, finite waiting.
- 5. Unexplained waiting is longer than explained waiting
- 6. Unfair waiting is longer than fair waiting.
- 7. Solo waiting is longer than group waiting
- 8. The more valuable the service, the longer it is worth waiting for.
- Flow charts
- Time function maps (loan processing)
- Service blueprints
- Many different types of process maps have been developed for specific applications and "renamed"
Cause and Effect diagram
- Not properly trained
- equipment doesn't work properly
Fishbone diagram (looks like a fish bones)
Shigeo Shingo identified 7 types of waste. Which of these is NOT a type of waste created by processes?
The purpose of identifying failure points in a service blueprint is
To develop recovery strategies before problems occur
Scrap and repair are examples of
· internal failure costs
Conformance to design specifications is an example of which definition of product quality?
Training and documentation are examples of
Capable processes usually have a Cpk index of at least
A production manager at a textile factory has noticed that about 60 percent of defects result from defects in raw materials; 20 percent from human error; 10 percent from equipment problems; and 10 percent from other causes. This manager is most likely using
An airline ticket counter, with several agents for one line of customers, is an example of a
Multiple channel, single phase system
In the basic queuing model (M/M/1), service times are described by
Exponential Probability distribution
The shopper who says to himself, “I’ve waited too long in this line. I don’t really need to buy this product today,” and leaves the store is an illustration of which element of arrival behavior?
The potential restaurant customer who says to her husband, “The line looks too long; let's eat somewhere else,” is an illustration of which element of queue discipline?
A waiting line meeting the assumptions of M/M/1 has average arrival rate of 3 customers per hour and an average service time of 10 minutes per customer. The average number of customers waiting in line is approximately
In the basic queuing model (M/M/1), arrival rates are distributed by
A bottleneck in a process
has the lowest capacity
- Specification width
- process width
- min = USL - X, X - LSL
- 3o 3o
Which much be larger mµ or λ?
One other point worth noting is that the overall service rate must exceed the arrival rate. This means that mµ must be greater than λ.
Ws = Ls/λ
- Ls = Lq + λ
- Wq = Lq = Ws - 1
- λ µ
Littes law is there flow time = WIP/Flow rate