070904 managing production

8/3/2019 070904 Managing Production

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05/04/12

Chapter 12

Managing Production Operations



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D e c i s i o n

P l a n n i n

O r g a n i z

L e a d i n

C o n t r o l

M a n a g e m e

R e s e a r

D e s i g n

P r o d u c t

Q u a l i t y

M a r k e t i

P r o j e c t M

M a n a g i n g

T i m e M a n

E t h i c s

C a r e e r

P e r s o n a l T

M a n a g i n g E n g i n e e r

Advanced Organizer



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Chapter Objectives

• Explain and be able to use the

statistics of quality

• Describe the quality revolution

• Recognize the methods of work

measurement



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Definitions of Quality

Fitness for use, or customer satisfaction

• Quality of design

• Quality of conformance ( or Qualityof production)



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What Is Quality?

• “The degree of excellence of athing” (Webster’s Dictionary)

• “The totality of features andcharacteristics that satisfy needs”

( ASQC)

• Fitness for use



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Dimensions Of Product Quality (Garvin)

1. Performance –basic operating characteristics

2. Features

–“extra” items added to basic features

3. Reliability

–probability product will operate over time

4. Conformance

–meeting pre-established standards

5. Durability

–life span before replacement


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6. Serviceability

–ease of getting repairs, speed & competenceof repairs

7. Aesthetics

–look, feel, sound, smell or taste8. Safety

–freedom from injury or harm

9. Other perceptions –subjective perceptions based on brand name,

advertising, etc



Service Quality

1. Time & Timeliness

–customer waiting time, completed on time

2. Completeness –customer gets all they asked for

3. Courtesy

–treatment by employees



4. Consistency

–same level of service for all customers

5. Accessibility & Convenience

–ease of obtaining service6. Accuracy

–performed right every time

7. Responsiveness –reactions to unusual situations



Quality Of Conformance

• Ensuring product or service

produced according to design

• Depends on –design of production process

–performance of machinery

–materials –training



The Meaning of Quality

The Meaning of Quality

Producer’s Perspective

Quality of Conformance• Conformance to Spec.

• Cost

Quality of Design• Quality Char.

• Price

Consumer’sPerspective

Fitness for ConsumerUse

Production Marketing



Cost Of Quality

• Cost of achieving good quality

–Prevention

–Appraisal

• Cost of poor quality

–Internal failure costs –External failure costs



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The Cost of Quality•The Cost of Achieving Good

Quality– Prevention costs

•Quality planning costs

•Product design costs•Process costs

•Training costs

• Information costs

– Appraisal costs• Inspection and testing

•Test equipment costs

•Operator costs



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The Cost of Quality• The Cost of Poor Quality

– Internal failure costs•Scrap costs

•Rework costs

•Process failure costs (Diagnostic)

•Process downtime costs•Price-downgrading costs

– External failure costs•Customer complaint costs

•Product return costs•Warranty claims costs

•Product liability costs

•Lost sales costs



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Quality Control Approaches

• Statistical process control (SPC)

– Monitors production process to

prevent poor quality

• Acceptance sampling

–Inspects random sample of products todetermine if a lot is acceptable



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Statistical Process Control

• Take periodic samples from process

• Plot sample points on control chart

• Determine if process is within limits• Prevent quality problems



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Variation

• Common Causes –Variation inherent in a process

–Can be eliminated only through

improvements in the system

• Special Causes

–Variation due to identifiable factors –Can be modified through operator or management action



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Probability Distribution

• Central tendency

– mean, mode, median

• Dispersion – std. deviation, variance

• Frequency function

– Normal, binomial, Poisson



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Types Of Data

• Attribute data• Product characteristic evaluated with a

discrete choice

– Good/bad, yes/no

• Variable data• Product characteristic that can be

measured – Length, size, weight, height, time, velocity



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SPC Applied To Services

• Nature of defect is different in

services

• Service defect is a failure to meet

customer requirements

• Monitor times, customer satisfaction



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Service Quality Examples

• Hospitals

–timeliness, responsiveness, accuracy

•Grocery Stores –Check-out time, stocking, cleanliness

• Airlines

–luggage handling, waiting times, courtesy

• Fast food restaurants

–waiting times, food quality, cleanliness



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Control Charts

Commonly based on µ ±

3σ(standard deviations)

• Sample mean: x-bar-charts• Sample range: R-charts

• Sample std. deviation: s-charts

• Fraction defective: p-charts• Number of defects: c-charts



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Process Control Chart

1 2 3 4 5 6 7 8 9 10

Sample number

Upper

control

limit

Process

average

Lower

controllimit



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A Process Is In Control If

• No sample points outside limits

• Most points near process average

• About equal number of points above& below centerline

• Points appear randomly distributed



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Development Of Control Chart

• Based on in-control data

• If non-random causes present,discard data

• Correct control chart limits



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Control Charts For Attributes

• p Charts

–Calculate percent defectives in sample

• c Charts

–Count number of defects in item



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p-Chart

sizesample=n

sampleindefective%average

)1(

=

−=

−=

+=

p

n

p p

z p LCL

z pUCL

p

p

p

σ

σ

σ



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The Normal Distribution

µ=0 1σ 2σ 3σ

95%95%

99.74%99.74%

-1σ-2σ-3σ



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Control Chart Z Values

• Smaller Z values make more

sensitive charts

• Z = 3.00 is standard• Compromise between sensitivity

and errors



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p-Chart Example

20 samples of 100 pairs of jeans

Sample # # Defects

ProportionDefective

1 6 0.06

2 0 0.00

3 4 0.04

…. …. ….

20 18 0.18

200 0.10



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p-Chart Calculations

p= totaldefectivestotal sample observations

=200

20(100)

= 0.10

111.1111

)11.11(11.1111.1

)1(

111.1

111

)11.11(11.1111.1

)1(

=−

−=−

−=

=−

+=−

+=

n

p p z p LCL

n

p p z pUCL



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Example p-Chart

0

0.02

0.04

0.06

0.08

0.10.12

0.14

0.16

0.18

0.2

0 2 4 6 8 1 0

1 2

1 4

1 6

1 8

2 0

Sample number

P

r

o

p

o

r

t

i

o

n

D

e

f e

c

t

i

v

e



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c-Chart

Process average = c = Total #defects

# samples

Sample standard deviation= cσ = c

UCL = c +z cσ

LCL = c -z cσ



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c-Chart Example

Count # of defects in 15 rolls of denim fabric

Sample # # Defects

1 12

2 8

3 16

…. …

15 15190



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c-Chart Calculations

c =111

11

=11.11

UCL = c +z cσ =11.11+1 11.11= 11.11

LCL = c -z cσ =11.11−1 11.11=1.11



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Example c-Chart

0

3

6

9

1215

18

21

24

0 2 4 6 8 1 0

1 2

1 4

Sample number

N u m b e r o f d e f e c t s



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Control Charts For Variables

• Mean chart (X-Bar Chart)

–Uses average of a sample

• Range chart (R-Chart)

–Uses amount of dispersion in a sample



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Range (R) Chart

samplesof number =k

sampleeachof rangeR

1

1

=

=

=

=

∑k

R R

R D LCL

R DUCL



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R-Chart Example

Slip-ring diameter (cm)

Sample 1 2 3 4 5 x R

1 5.02 5.01 4.94 4.99 4.96 4.98 0.08

2 5.01 5.03 5.07 4.95 4.96 5.00 0.12

3 4.99 5.00 4.93 4.92 4.99 4.97 0.08

… … … … … … … …

10 5.01 4.98 5.08 5.07 4.99 5.03 0.10

50.09 1.15



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3σ Control Chart Factors

Sample size -chart R-chart

n A2 D3 D4

2 1.88 0 3.27

3 1.02 0 2.57

4 0.73 0 2.28

5 0.58 0 2.116 0.48 0 2.00

7 0.42 0.08 1.92

8 0.37 0.14 1.86

X



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R-Chart Calculations

1)111.1(1

111.1)111.1(11.1

111.1

11

11.1

1

1

===

===

===∑

R D LCL

R DUCLk

R R



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Example R-Chart

R-Chart

.111

.111

.111

.111

.111

.111

.111

1 1 1 1 1 1 1 1 1 11

Sample

R a n g e

R

CL(R)

UCL(R)

LCL(R)



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X-bar Chart Calculations

( )( )

( )( )

valuerangeaverage

meanssampleof average

11.1111.11.111.1

11.1111.11.111.1

11.1

11

11.11

1

1

11

=

=

=−=−=

=+=+=

==

+++

=

R

x

R A x LCL

R A xUCL

cm

k

xx x x k



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X-bar Chart Example

11.1)111.1)(11.1(11.1

11.1)111.1)(11.1(11.1

11.111

11.11

1

1

=−=

−=

=+=

+=

===∑

R A x LCL

R A xUCL

cmk

x x



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Using X-bar and R-Charts Together

• Each measures process

differently

• Process average and variability

must be in control



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Example X-bar Chart

X-bar Chart

.1111

.1111

.1111

.1111

.1111

.1111

1 1 1 1 1 1 1 1 1 11

Sample

X - b a r

x-bar

CL(x-bar)

UCL(x-bar)

LCL(x-bar)



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Indication of “Process out of Control”

• Sample data fall outside control limits• Theory of runs

– 2 out of 3 beyond the warning limits

– 4 out of 5 beyond the 1σ limits – 8 consecutive on one side

• Patterns



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UCL

LCL LCL

UCL

Sample observations

consistently below thecenter line

Sample observations

consistently above thecenter line

Control Chart Patterns



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LCL LCL

UCL UCL

Sample observations

consistently increasing

Sample observations

consistently decreasing



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UCL

LCL LCL

UCL

Sample observations

consistently below the

center line

Sample observations

consistently above the

center line



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Zones For Pattern Tests

UCL

LCL

Zone A

Zone B

Zone C

Zone C

Zone B

Zone A

R A x sigma 11 +=

( ) R A x sigma 1

1

11 +=

( ) R A x sigma 1

111 +=

x

5.08

5.05

5.03

5.01

4.98

4.965

4.94

Values for example

( ) R A x sigma 1

1

11 −=

( ) R A x sigma 1

1

11 −=

R A x sigma 11 −=



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1. 8 consecutive points on one side of thecenter line.

2. 8 consecutive points up or down across

zones.3. 14 points alternating up or down.

4. 2 out of 3 consecutive points in zone Abut still inside the control limits.

5. 4 out of 5 consecutive points in zone A or B.



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Inspection & Sampling

• 100% inspection – only with automated inspection

• Sampling inspection

– Single sampling

– Double sampling

– Multiple sampling



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Acceptance Sampling

• Accept/reject entire lot based on

sample results

• Not consistent with TQM of Zero

Defects

• Measures quality in percent defective



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Sampling Plan

• Guidelines for accepting lot• Single sampling plan

–N = lot size

–n = sample size (random) –c = acceptance number

–d = number of defective items insample

• If d <= c, accept lot; else reject



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Producer’s & Consumer’s Risk

• TYPE I ERROR = P(reject good lot)

α or producer’s risk

–5% is common

• TYPE II ERROR = P(accept bad lot)

β or consumer’s risk –10% is typical value



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Quality Definitions

• Acceptance quality level (AQL)

–Acceptable fraction defective in a lot

• Lot tolerance percent defective (LTPD)

–Maximum fraction defective accepted in a

lot

Operating Characteristic (OC)



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Operating Characteristic (OC)

Curve

• Shows probability of lot acceptance

• Based on

–sampling plan

–quality level of lot

• Indicates discriminating power of

plan

O ti Ch t i ti C



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Operating Characteristic Curve

AQL LTPD

β = 0.10

α = 0.05

P r o b a b i l i t y o f a c

c e p t a n c e ,

P a

{

0.60

0.40

0.20

0.02 0.04 0.06 0.08 0.10 0.12 0.14 0.16 0.18 0.20

0.80

{

Proportion defective

1.00

OC curve for n and c

Average Outgoing Quality



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Average Outgoing Quality

(AOQ)

• Expected number of defective items

passed to customer

• Average outgoing quality limit

(AOQL) is

–maximum point on AOQ curve



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AOQ Curve

0.015

0.010

0.005

0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.10

AOQL

Average

Outgoing

Quality

(Incoming) Percent Defective

AQL LTPD



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Double Sampling Plans

• Take small initial sample –If # defective < lower limit, accept

–If # defective > upper limit, reject

–If # defective between limits, takesecond sample

• Accept or reject based on 2 samples

• Less costly than single-samplingplans

Multiple (Sequential) Sampling



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Multiple (Sequential) Sampling

Plans

• Uses smaller sample sizes

• Take initial sample

–If # defective < lower limit, accept

–If # defective > upper limit, reject

–If # defective between limits, resample

• Continue sampling until accept or

reject lot based on all sample data



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Choosing a Sampling Method

• An economic decision

• Single sampling plans

–high sampling costs• Double/Multiple sampling plans

–low sampling costs



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Taguchi Methods• Deviation from ideal value => “loss of

society”L = k (y – T)2

• Use ANOVA to identify the sources of variation

Loss

y



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Total Quality Management

• Evolution of Total QualityManagement– W. Edwards Deming

– Joseph M. Juran,

– Philip Crosby, and

– Armand V. Feigenbaum

• TQM and Continuous ProcessImprovement

• Principles of Total Quality

Management

Deming's 14 points



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Deming s 14 points

1. Create a constancy of purpose toward product

improvement to achieve long-termorganizational goals.

2. Adopt a philosophy of preventing poor-qualityproducts instead of acceptable levels of poor

quality as necessary to compete internationally.3. Eliminate the need for inspection to achieve

quality by relying instead on statistical qualitycontrol to improve product and process design.

4. Select a few suppliers or vendors based onquality commitment rather than competitiveprices.

Deming's 14 points



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Deming s 14 points

5. Constantly improve the production process by

focusing on the two primary sources of qualityproblems, the system and workers, thusincreasing productivity and reducing costs.

6. Institute worker training that focuses on the

prevention of quality problems and the use of statistical quality control techniques.

7. Instill leadership among supervisors to helpworkers perform better.

8. Encourage employee involvement byeliminating the fear of reprisal for askingquestions or identifying quality problems.

Deming's 14 points



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Deming s 14 points

9. Eliminate barriers between

departments, and promote cooperationand a team approach for workingtogether.

10.Eliminate slogans and numericaltargets that urge workers to achievehigher performance levels without firstshowing them how to do it.

11.Eliminate numerical quotas thatemployees attempt to meet at any costwithout regard for quality.

Deming's 14 points



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Deming s 14 points

12. Enhance worker pride, artisanry and self-

esteem by improving supervision and theproduction process so that workers canperform to their capabilities.

13. Institute vigorous education and training

programs in methods of quality improvementthroughout the organization, from topmanagement down, so that continuousimprovement can occur.

14. Develop a commitment from topmanagement to implement the previousthirteen points.

Deming Wheel (PDCA Cycle)



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Deming Wheel (PDCA Cycle)

. Plan1

Identify the

problem &

develop the

plan for

improvement

. Do1

Implement the

Plan on a

test basis

. Study/Check 1

Assess the plan;

Is it working?

. Act1

Institutionalize

improvement;

continue the

cycle.



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Total Quality Management

1. Customer defined quality

2. Top management leadership

3. Quality as a strategic issue

4. All employees responsible for quality

5. Continuous improvement

6. Shared problem solving

7. Statistical quality control

8. Training & education for all employees

TQM Throughout The



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TQM Throughout TheOrganization

• Marketing, sales, R&D

• Engineering

• Purchasing• Personnel

• Management

• Packing, storing, shipping• Customer service

f



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Strategic Implications Of TQM

• Quality is key to effective strategy

• Clear strategic goal, vision, mission

• High quality goals• Operational plans & policies

• Feedback mechanism

• Strong leadership



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TQM In Service Companies

• Inputs similar to manufacturing

• Processes & outputs are different

• Services tend to be labor intensive• Quality measurement is harder

• Timeliness is important measure

• TQM principles apply to services

P d ti it



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Productivity

Output produced per unit of resources

Q li A d P d i i



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Quality And Productivity

• Productivity

= Output produced per unit ofresources

= output / input• Fewer defects increase output

• Quality improvement reducesinputs

T d N E i US M f



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Toward a New Era in US Manuf.

• Rapid spread of manuf. capabilities =>intense competition on a global scale.

• Advanced manuf. Tech. => changesboth products & processes

• Changes in traditional management & labor practices, organizational

structures, & decision making criteria.

Work Measurement



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Work Measurement• “Fair day’s work” concept

– The amount of work that can be producedby a qualified operator working at a normalpace and effectively using his/her timewhen the work is not restricted by process

limitations.• Time Standard

– The time required for a qualified employeeworking at a normal pace under capable

supervision experiencing normal fatigue anddelay to do a defined amount of work of specified quality when following theprescribed method.

Uses of Time Standards



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– Estimating costs

– Estimating equipment needs

– Scheduling – Line Balancing

– Capacity Analysis

– Evaluating automation costs

– Planning staffing level – Methods comparison

– Pricing

– Revealing production problems

– Evaluating employees – Setting piece rates

– Compliance with contractual requirements

Work Measurement



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Work MeasurementInformal Time Standards

– Estimates and educated guesses

– Historical Data

– Time of one whole cycle

– Work Sampling• Observe an operation to determine

frequencies of work components

• Measure actual output

• Determine performance standard

Work Measurement



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Work MeasurementEngineered Time Standards

– Basic Time-Study Method• Define work cycle

• Take time measurements

• Apply rating & allowance

– Methods-time Measurement (MTM)

Work Measurement



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Work Measurement

Criticism: – Direct labor only

– Productivity, not quality

Maintenance



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Maintenance

Types of Maintenance

• Corrective maintenance

• Preventive maintenance

• Predictive maintenance

– preventive maintenance that use sensitiveinstruments to predict trouble

Total Productive Maintenance (TPM)



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Total Productive Maintenance (TPM)

1. Promotes the overall effectiveness and

efficiency of equipment in the factory.2. Establishes a complete preventive maintenance

program for factory equipment based on life-cycle criteria.

3. ”Team" basis involving various departments toinclude engineering, production operations, andmaintenance.

4. Involves every employee in the company, from

the top management to the workers on the shopfloor. Even equipment operators are responsiblefor maintenance of the equipment they operate.

5. Based on the promotion of preventivemaintenance through "motivational management"

Human Resources Management



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Human Resources Management

• Recruiting & employment

• Equal Employment Opportunity

• Industrial relations

• Compensation

• Education & training

• Employee benefits

Safety Engineer



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Safety Engineer

• Identify & analyze hazards

• Recommend protective devices &warning signs

• Provide safety training

• Interpret OSHA (Occupational Safety &Health Act) codes

• Involve in workers’ compensation

insurance activities

Purchasing Engineer



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Purchasing Engineer• Recognition of need

• Description of requirement• Selection of possible source of supply

• Determination of price & availabil ity

• Placement of the order• Follow-up and expediting of the order

• Verification of the invoice

• Processing of discrepancies & rejections

• Closing of completed orders• Maintenance of records & files

Packaging Engineering



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Packaging Engineering

• Material & form

• Specification

• Machinery

• Methods of unitizing secondary tertiarypackaging

• Delivery system

Materials Management



Materials Management

• Purchasing

• Inventory Control

• Traffic & Transportation

• Receiving – Warehousing

– Production control

070904 managing production

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