1、CHAPTER 8PROCESS MANAGEMENT: LEAN PRODUCTION & SIX SIGMA QUALITY ISSUES IN SUPPLY CHAIN MANAGEMENT,Principles of Supply Chain Management: A Balanced Approach Prepared by Daniel A. Glaser-Segura, PhD, 2009 South-Western, a division of Cengage Learning,2,Learning Objectives,You should be able to: List

2、 & discuss the major elements of lean production & Six Sigma quality. Describe why lean production & Six Sigma quality are integral parts of SCM. Discuss the Toyota Production System & its association with lean production. Discuss the linkage between lean production & environmental protection. Descr

3、ibe the historical developments of lean production & Six Sigma. Describe & use the various tools of Six Sigma. Understand the importance of statistical process control for improving quality., 2009 South-Western, a division of Cengage Learning,3,Chapter Eight Outline,Introduction Lean Production & th

4、e Toyota Production System Lean Production & Supply Chain Management The Elements of Lean Production Lean Production & the Environment The Origins of Six Sigma Quality Six Sigma & Lean Production Six Sigma & Supply Chain Management The Elements of Six Sigma The Statistical Tools of Six Sigma, 2009 S

5、outh-Western, a division of Cengage Learning,4,Introduction,In 1990s, supply chain management combined: Quick response (QR)- speed & flexibility Efficient Consumer Response (ECR)- speed & flexibility JIT Continuous reduction of waste Keiretsu Relationships- Including suppliers in JIT/TQM efforts The

6、se approaches have emerged as philosophies & practices known as Lean Production (or Lean Manufacturing) & Six Sigma, 2009 South-Western, a division of Cengage Learning,5,Lean Production & the Toyota Production System,JIT emphasizes: Reduction of waste Continuous improvement Synchronization of materi

7、al flows within the organization Channel integration- extending partnerships in the supply chain Stage 1- Firm is internally focused & functions managed separately. Silo effect is reactive & short-term goal oriented. Stage 2- Firm integrates efforts & resources among internal functions. Stage 3- Fir

8、m links suppliers/customers with firms processes. Stage 4- Firm broadens supply chain influence beyond immediate or first-tier suppliers & customers., 2009 South-Western, a division of Cengage Learning,6,Lean Production & the Toyota Production System (cont.),Lean Production- operating philosophy of

9、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 Key concepts incorporated in TPS: Muda- waste in all aspects of production Kanban- signal

10、card & part of JIT SPC as part of TQM efforts Poka-Yoke- error or mistake-proofing, 2009 South-Western, a division of Cengage Learning,7,Lean Production & Supply Chain Management,Supply chain management (SCM) seeks to incorporate Lean elements using: cross-training, satisfying internal customer dema

11、nd quickly moving products in the production system communicating demand forecasts & production schedules up the supply chain optimizing inventory levels across the supply chain Channel integration- extending alliances to suppliers suppliers & customers customers The silo effect works against channe

12、l integration, 2009 South-Western, a division of Cengage Learning,8,Lean Production & Supply Chain Management (Cont.),Stages of SCM Evolution (Table 8.1), 2009 South-Western, a division of Cengage Learning,9,The Elements of Lean Production,The Elements of Just-in-Time Waste Reduction Lean Supply Cha

13、in Relationships Lean Layouts Inventory & Setup Time Reduction Small Batch Scheduling Continuous Improvement Workforce Empowerment, 2009 South-Western, a division of Cengage Learning,10,The Elements of Lean Production (Cont.),Waste (Muda) Reduction Firms reduce costs & add value by eliminating waste

14、 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 (See Table 8.3), 2009 South-Western, a division of Cengage Learning,11,The Elements of Lean

15、Production (Cont.),Waste (Muda) Reduction (Cont.),The Seven Wastes (Table 8.3), 2009 South-Western, a division of Cengage Learning,12,The Elements of Lean Production (Cont.),Waste (Muda) Reduction (Cont.),The Five-Ss (Table 8.4), 2009 South-Western, a division of Cengage Learning,13,The Elements of

16、Lean Production (Cont.),Lean Supply Chain Relationships Suppliers & customers work to remove waste, reduce cost, & improve quality & customer service. JIT purchasing includes delivering smaller quantities, at right time, delivered to the right location, in the right quantities. Firms develop lean su

17、pply chain relationships with key customers. Mutual dependency & benefits occur among these partners., 2009 South-Western, a division of Cengage Learning,14,The Elements of Lean Production (Cont.),Lean Layouts Move people & materials when & where needed, ASAP. Lean layouts are very visual (lines of

18、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., 2009 South-Western, a division

19、 of Cengage Learning,15,The Elements of Lean Production (Cont.),Inventory & 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 inve

20、stment., 2009 South-Western, a division of Cengage Learning,16,JIT & Supply Chain Management (Cont.),Small Batch 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 batche

21、s are accomplished with the use of kanbans. Kanbans generate demand for parts at all stages of production creating a “pull” system., 2009 South-Western, a division of Cengage Learning,17,JIT & Supply Chain Management- Cont.,Small Batch Scheduling (Cont.),A Kanban Pull System (Figure 8.3), 2009 South

22、-Western, a division of Cengage Learning,18,JIT & Supply Chain Management (Cont.),Continuous Improvement (Kaizen) Continuous approach to reduce process, delivery, & quality problems, such as machine breakdown problems, setup problems, & internal quality problems. Workforce Commitment Managers must s

23、upport Lean Production by providing subordinates with the skills, tools, time, & other necessary resources to identify problems & implement solutions., 2009 South-Western, a division of Cengage Learning,19,Lean Production & the Environment,Lean green practices: Reduce the cost of environmental manag

24、ement Lead to improved environmental performance. Increase the possibility that firms will adopt more advanced environmental management Carbon-neutral- offsetting the carbon footprint of a firms operations, 2009 South-Western, a division of Cengage Learning,20,The Origins of Six Sigma Quality,Six Si

25、gma Near quality perfection (the statistical likelihood of non-defects 99.99966% of the time) Pioneered by Motorola in 1987 A statistics-based decision-making framework designed to make significant quality improvements in value-adding processes, 2009 South-Western, a division of Cengage Learning,21,

26、The Origins of Six Sigma Quality,Six Sigma Metrics (Table 8.5),Note: standard deviations include 1.5 sigma “drift”, 2009 South-Western, a division of Cengage Learning,22,Six Sigma & Lean Production,Lean Six Sigma (Lean Six) Describes the melding of lean production and Six Sigma quality practices. Bo

27、th 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, 2009 South-Western, a division of Cengage Learning,23,Six Sigma & Supply Chain Management,Process integration & communicati

28、on 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, 2009 S

29、outh-Western, a division of Cengage Learning,24,Elements of Six Sigma,Create constancy of purpose to improve product & service. Adopt the new philosophy. Cease dependence on inspection to improve quality. End the practice of awarding business on the basis of price. Constantly improve the production

30、& service system. Institute training on the job.,Institute leadership. Drive out fear. Break down barriers between departments. Eliminate slogans & exhortations. Eliminate quotas. Remove barriers to pride of workmanship. Institute program of self-improvement Put everyone to work to accomplish the tr

31、ansformation,Demings Way, 2009 South-Western, a division of Cengage Learning,25,Elements of Six Sigma (Cont.),Crosbys Way Four Absolutes of Quality The definition of quality is conformance to requirements The system of quality is prevention. Performance standard is zero defects. The measure of quali

32、ty is the price of nonconformance, 2009 South-Western, a division of Cengage Learning,26,Elements of Six Sigma (Cont.),Jurans Way Quality Planning- Identify internal/external customers & their needs, develop products that satisfy those needs. Mangers set goals, priorities, & compare results Quality

33、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., 2009 South-Western, a

34、division of Cengage Learning,27,Elements of Six Sigma (Cont.),Objectives Stimulate firms to improve Recognize firms for quality achievements, Establish guidelines so that organizations can evaluate their improvement & provide guidance to others,Categories Measured Leadership Strategic planning Custo

35、mer & market focus Information & analysis Human resource focus Process management Business Results,Malcolm Baldrige National Quality Award, 2009 South-Western, a division of Cengage Learning,28,Elements of Six Sigma (Cont.),ISO 9000 and ISO 14000 Families of Management Standards International Organi

36、zation for Standardization (ISO) located in Switzerland has 155 member countries. ISO 9000 and 14000 govern quality and environmental certification standards of production, respectively. The ISO 9000 standards were adopted in the US by ANSI and ASQC., 2009 South-Western, a division of Cengage Learning,29,Elements of Six Sigma (Cont.),The DMAIC Imp