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Inputs:

• Men
• Materials
• Machines
• Information
• Capital

Transformation Process:

• Product Design
• Product Planning
• Production Control
• Maintenance

Outputs:

• Product
• Services

Continuous:

• Inventory
• Quality
• Cost

Environment

Feedback Information

Fig. 1.1 Schematic Production System

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Production System

The production system of an organization is that part, which produces products of an organization. It is that activity whereby resources, flowing within a defined system, are combined and transformed in a controlled manner to add value in accordance with the policies communicated by management. A simplified production system is shown above.

The production system has the following characteristics:

1. Production is an organized activity, so every production system has an objective.

2. The system transforms the various inputs to useful outputs.

3. It does not operate in isolation from the other organization system.

4. There exists a feedback about the activities, which is essential to control and improve system performance.

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Production systems can be classified as Job Shop, Batch, Mass and Continuous Production systems.

Production / Operations Volume

Output / Product Variety

Projects

Mass Production

Batch

Production

Job-Shop

Production

Fig. 1.2 Classification of Production Systems

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1) Job Shop Production

Job shop production are characterised by manufacturing of one or few quantity of products designed and produced as per the specification of customers within prefixed time and cost. The distinguishing feature of this is low volume and high variety of products.

examples

• machine shop, which may make parts for local industrial machinery, farm machinery and implements, boats and ships

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Characteristics

• low volume.
• Use of general purpose machines and facilities.
• Highly skilled operators who can take up each job as a challenge because of uniqueness.
• Large inventory of materials, tools, parts.
• Detailed planning is essential for sequencing the requirements of each product, capacities for each work centre and order priorities.

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Advantages

• High expansion flexibility (machines are easily added or substituted)
• High production volume elasticity (due to small increments to productive capacity)
• Low obsolescence (machines are typically multipurpose)

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Limitations

• Very hard scheduling due to high product variability and twisted production flow
• Low capacity utilization

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2) Batch Production

Batch production is defined by American Production and Inventory Control Society (APICS) “as a form of manufacturing in which the job passes through the functional departments in lots or batches and each lot may have a different routing.” It is characterised by the manufacture of limited number of products produced at regular intervals and stocked awaiting sales.

example

• Batch production is most common in bakeries and in the manufacture of sports shoes, pharmaceutical, inks, paints and adhesives.

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Characteristics

1. there is shorter production runs.
2. it can reduce initial capital outlay .

3 useful for small businesses who cannot afford to run continuous production lines..

4. useful for a factory that makes seasonal items, products for which it is difficult to forecast demand

​

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Limitations

equipment must be stopped, re-configured, and its output tested before the next batch can be produced

Advantages

1. Better utilisation of plant and machinery.

2. Cost per unit is lower as compared to job order production.

3 Lower investment in plant and machinery.

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3) Mass Production

Manufacture of discrete parts or assemblies using a continuous process are called mass production. This production system is justified by very large volume of production. The machines are arranged in a line or product layout. Product and process standardisation exists and all outputs follow the same path.

examples

• The manufacturing of cars, guns and fast food are examples of mass production.

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Mass production of Consolidated B-32 Dominator airplanes at Consolidated Aircraft Plant No. 4, near Fort Worth, Texas, during World War II.

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Characteristics

1. Standardisation of product and process sequence.
2. Dedicated special purpose machines having higher production capacities and output rates.
3. Large volume of products.
4. Output of one operation become the input of subsequent operation.
5. Flow of materials, components and parts is continuous

6 Production planning and control is easy.

7 Material handling can be completely automatic.

​

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Limitations

1. Breakdown of one machine will stop an entire production line.

2. Line layout needs major change with the changes in the product design.

3. High investment in production facilities.

4. The cycle time is determined by the slowest operation.

Advantages

1. Higher rate of production

2. Higher capacity utilisation due to line balancing.

3. Less skilled operators are required.

4 Manufacturing cost per unit is low.

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4) Projects

Such products are never made in large number. Manpower facilities and other resources centre around such products. Each such product can therefore be treated as a project, requiring sequencing of certain activities either in series or concurrently.

PERT/CPM is a useful technique to plan and control such projects.

​

example

• Manufacturing of ship

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Characteristics

1. Dedicated plant and equipment with zero flexibility.
2. Material handling is fully automated.
3. Process follows a predetermined sequence of operations.

4 Planning and scheduling is a routine action.

​

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Production Management

E.S. Buffa defines production management as, “Production management deals with decision making related to production processes so that the resulting goods or services are produced according to specifications, in the amount and by the schedule demanded and out of minimum cost.”

Objectives of Production Management

The objective of the production management is ‘to produce goods services of right quality and quantity at the right time and right manufacturing cost’.

1. Right Quality
2. Right Quantity
3. Right Time
4. Right Manufacturing Cost

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Operating System

Operating system converts inputs in order to provide outputs which are required by a customer. It converts physical resources into outputs, the function of which is to satisfy customer wants i.e., to provide some utility for the customer. In some of the organization the product is a physical good (hotels) while in others it is a service (hospitals). Bus and taxi services, tailors, hospital and builders are the examples of an operating system.

Everett E. Adam & Ronald J. Ebert define operating system as, “An operating system ( function) of an organization is the part of an organization that produces the organization’s physical goods and services.”

Ray Wild defines operating system as, “An operating system is a configuration of resources combined for the provision of goods or services.”

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Operations Management

A Framework for Managing Operations

PLANNING

Activities that establishes a course of action and guide future decision-making is planning. The operations manager defines the objectives for the operations subsystem of the organization, and the policies, and procedures for achieving the objectives. This stage includes clarifying the role and focus of operations in the organization’s overall strategy. It also involves product planning, facility designing and using the conversion process.

ORGANIZING

Activities that establishes a structure of tasks and authority. Operation managers establish a structure of roles and the flow of information within the operations subsystem. They determine the activities required to achieve the goals and assign authority and responsibility for carrying them out.

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CONTROLLING

Activities that assure the actual performance in accordance with planned performance. To ensure that the plans for the operations subsystems are accomplished, the operations manager must exercise control by measuring actual outputs and comparing them to planned operations management. Controlling costs, quality, and schedules are the important functions here.

BEHAVIOUR

Operation managers are concerned with how their efforts to plan, organize, and control affect human behaviour. They also want to know how the behaviour of subordinates can affect management’s planning, organizing, and controlling actions. Their interest lies in decision-making behaviour.

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Objectives of Operations Management

Objectives of operations management can be categorised into customer service and resource utilisation.

Customer Service

The first objective of operating systems is the customer service to the satisfaction of customer wants. Therefore, customer service is a key objective of operations management. The operating system must provide something to a specification which can satisfy the customer in terms of cost and timing. Thus, primary objective can be satisfied by providing the ‘right thing at a right price at the right time’.

These aspects of customer service—specification, cost and timing—are described for four functions in Table 1.2. They are the principal sources of customer satisfaction and must, therefore, be the principal dimension of the customer service objective for operations managers.

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TABLE 1.2 Aspects of customer service

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TABLE 1.3 The twin objectives of operations management

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Scope of Production and Operations Management

Production and operations management concern with the conversion of inputs into outputs, using physical resources, so as to provide the desired utilities to the customer while meeting the other organizational objectives of effectiveness, efficiency and adoptability. It distinguishes itself from other functions such as personnel, marketing, finance, etc., by its primary concern for ‘conversion by using physical resources.’ Following are the activities which are listed under production and operations management functions:

​

1. Production Planning

2. Production Control

3. Inventory control

4. Quality Control

5. Maintenance & Replacement

6. Cost Reduction & Control

Operations Management = OM

• Management of ANY activities/process that create goods and provide services
• Exemplary Activities: Forecasting, Scheduling, Quality management
• Why to study OM
• At a typical manufacturing company

​

​

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The management of systems or processes that create goods and/or provide services

The distinct –active- role of operations:

Inputs become Outputs after some Transformation

Operations Management = OM

Operations example in Manufacturing: �Food Processing

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Operations example in service:

Health care

Inputs

Processing

Outputs

Types of Operations

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Why OM?

• Core of all business organizations
• Many areas interrelated with OM activities
• Management of operations is critical to create and maintain competitive advantages

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Responsibilities of Operations Management

• Planning
• Capacity, utilization
• Location
• Choosing products or services
• Make or buy
• Layout
• Projects
• Scheduling
• Market share
• Plan for risk reduction, plan B?
• Forecasting

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Operations Managers (Cotd..)

• Controlling
• Inventory
• Quality
• Costs
• Organization
• Degree of standardization
• Subcontracting
• Process selection
• Staffing
• Hiring/lay off
• Use of overtime
• Incentive plans
• Job assignments

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• Operations Management includes:
• Forecasting
• Capacity planning
• Scheduling
• Managing inventories
• Assuring quality
• Motivating employees
• Deciding where to locate facilities
• And more . . .

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Scope of Operations Management

Historical Evolution of Operations Management

• Industrial revolution (1770’s)
• Scientific management (1911)
• Mass production
• Interchangeable parts
• Division of labor
• Human relations movement (1920-60)
• Unemployment insurance
• Pension plans
• Decision models (1915, 1960-70’s)
• Influence of Japanese manufacturers (1970-1990)

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THANK YOU

I

N

D

U

S

T

R

I

E

4.0

INDUSTRY 4.0

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��Major trends in industrial evolution

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“Industry 4.0 is more than just a flashy catchphrase. A confluence of trends and technologies promises to reshape the way things are made.”

The Impact of Information and Communication Technology

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Web

Web 1.0

Web 2.0

Web 3.0

Web A.B

World Wide Web

Java, UML, XML

Web Services

App Technologies

IoT, IoS, IoP

The term Industry 4.0 refers to the combination of several major innovations in digital technology, all coming to maturity right now, all poised to transform the energy and manufacturing sectors. These technologies include advanced robotics and artificial intelligence; sophisticated sensors; cloud computing; the Internet of Things; data capture and analytics; digital fabrication (including 3D printing); software-as-a-service and other new marketing models; smartphones and other mobile devices; platforms that use algorithms to direct motor vehicles (including navigation tools, ride-sharing apps, delivery and ride services, and autonomous vehicles); and the embedding of all these elements in an interoperable global value chain, shared by many companies from many countries.

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Industry 4.0 Workgroups

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Co-chair

Henning Kagermann

Co-chair

Siegfried Dais

WG 1 – The Smart Factory:

Manfred Wittenstein

WG 2 – The Real Environment:

Siegfried Russwurm

WG 3 – The Economic Environment:

Stephan Fischer

WG 4 – Human Beings and Work:

Wolfgang Wahlster

WG 5 – The Technology Factor:

Heinz Derenbach

The Industry 4.0 workgroup members are recognized as the founding fathers and driving force behind Industry 4.0.

How German is industry 4.0?

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Design Principles

Internet of Things (IoT)

Internet of People (IoP)

Digital plant models

virtual copy of the physical world

The ability of cyber physical systems to physically support humans by conducting a range of tasks.

The ability of cyber physical systems to make decisions on their own and to perform their tasks as autonomous as possible.

Industry 4.0 related research streams

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Source: Brettel, M., Friederichsen, N., Keller, M., & Rosenberg, M. (2014). How virtualization, decentralization and network building change the manufacturing landscape: An industry 4.0 perspective. International Journal of Mechanical, Industrial Science and Engineering, 8(1), 37-44.

The numbers underneath the topics illustrate the assigned articles.

Prof Dr-Ing Dieter Wegener

Siemens AG, Digital Factory Division,

“Industry 4.0” Coordinator

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​

• The essence of the Industry 4.0 vision, the “Internet of Things”, is the ubiquitous connection of people, things and machines. This connection is intended to produce a variety of new goods and services.

​

• Products, means of transport or tools are expected to “negotiate” within a virtual marketplace regarding which production elements could best accomplish the next production step. This would create a seamless link between the virtual world and the physical objects within the real world.

​

• Examples of factories in which the production processes are digitally supported throughout already exist – however, these processes still have a low level of complexity. A “digital company” with a continuous digital value chain not only digitally integrates the shop floor, but also the development and sales departments from the office floor.

​

Today’s factory VS. Industry 4.0

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Source: Lee, J., Bagheri, B., & Kao, H. A. (2015). A cyber-physical systems architecture for industry 4.0-based manufacturing systems. Manufacturing Letters, 3, 18-23.

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Quantitative repercussions on the number of employees

47% of Americans have a high risk of further digitalization and automation of their workplace.

The impact on employees is not jet quantifiable. Some see the digitalization as part of the future job market, others fear the loss of jobs.

Industry 4.0 requires comprehensive digitization of the horizontal and vertical value chains

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Some of improvements may result from the digitization of processes and value chains:

​

• Focusing on core areas in the individual value chain • Reduction of redundancies in processes
• Minimizing quality losses
• Making processes more flexible and coherent

Industry 4.0: Value Chain

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Results of a study on Industry 4.0 – Opportunities and Challenges of the Industrial Internet, based on a survey of 235 German industrial companies by the market research institution TNS Emnid.

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Degree of digitization of the value chain

Horizontal value chain

Vertical value chain

Industry 4.0 investments broken down by steps of the value chain

Source: Klaus Helmrich, Member of the Managing Board of Siemens AG, Hannover Messe 2015

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An example of use case in combining industry 4.0 with lean production

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Source: Kolberg, D., & Zühlke, D. (2015). Lean automation enabled by industry 4.0 technologies. IFAC-PapersOnLine, 48(3), 1870-1875.

Dr Daniel Hug

Bosch Software Innovations GmbH,

Head of Vertical Industry & Logistics

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​

• From the perspective of Bosch and its customers, we emphasize the great significance of Industry 4.0 applications for the entire industry of producing companies, including logistics departments.

​

• Bosch is the leading consumer of Industry 4.0 applications with more than 260 manufacturing plants worldwide.

​

• The great potential of Industry 4.0 lies in data and particularly in the efficient use of newly gained opportunities.

​

• Analysis algorithms and refined policies for large data volumes help to selectively realize applications that are tailored to the respective needs of the end customers.

​

• We must focus on automation. Both simple and complex business processes can be initiated and monitored with the new applications: from simple notifications by e-mail, text message or app to automatically initiated ordering of spare parts and monitoring of maintenance orders.

​

What will come next?

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Meysam Maleki

maleki@fct.unl.pt

Quality gurus

Quality

“The quality of a product

(article or service)

is its ability to satisfy

the needs and expectations

of the customers”

​

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What is a quality guru?�

• A guru, by definition, is a good person, a wise person and a teacher.
• A quality guru should be all of these, plus have a concept and approach to quality within business that has made a major and lasting impact.

​

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The gurus

• There have been three groups of gurus since the 1940’s:

​

• Early 1950’s - Americans who took the messages of quality to Japan
• Late 1950’s - Japanese who developed new concepts in response to the Americans
• 1970’s-1980 - Western gurus who followed the Japanese industrial success

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The Americans who went to Japan

• W. Edwards Deming

Dr. W. Edwards Deming is known as the father of the Japanese post-war industrial revival and was regarded by many as the leading quality guru in the United States.

​

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• regarded by the Japanese as the chief architect of their industrial success
• “all processes are vulnerable to loss of quality through variation: if levels of variation are managed, they can be decreased and quality raised”
• quality is about people, not products

​

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Quality Philosophy

• “A product or service possesses quality if it helps somebody and enjoys a good and sustainable market.”
• Variation is the cause of poor quality
• The Process
• Product/service design
• Manufacture/service delivery
• Test
• Sales
• Market surveys
• Redesign and improvement

​

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Deming’s 14 Points

1. Create a vision and demonstrate commitment
1. Long-term vision
2. Companies purpose is to serve their customers and employees, not simply for profit
3. Invest in innovation, training, research
4. Improve competitive position
5. Top management is responsible for this
6. Effective leadership begins with commitment

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14 Points

2. Learn the New Philosophy

• Quota-driven, adversarial management won’t work
• That ignores importance of quality improvement
• Labor and management have to cooperate to improve the customers’ satisfaction
• Keep training people – turnover does exist

3. Understand Inspection

• Routine inspection – let someone else fix it
• Increases costs in the end (no rework in services)
• Inspect your own work and fix it

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4. Don’t Buy on the Cost per Part Basis

• Don’t buy from several for competition
• Increases variability
• Work with suppliers in long-term relationships
• Improve quality with your suppliers
• Also get volume discounts, fewer setups
• Supplier-customer bond

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5. Improve Constantly and Forever

• Reduce causes of variation
• Engage all employees
• How to do jobs more efficiently
• More effectivelye
• Continuous Process Improvement now is mandatory

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6. Institute Training

• People are a valuable resource and want to do a good job
• They need training to know how to do a good job
• Invest in their future
• Training should include tools for
• Diagnosing
• Analyzing
• Solving quality problems
• Identify improvement opportunities

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7. Institute Leadership

• The job of management is leadership, not supervision.
• If supervisors don’t know the job, they can’t lead
• Focus on getting product “out the door”
• Good supervisors are coaches, not prison guards

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8. Drive Out Fear

• Managers and workers must have mutual respect
• Pointing out quality problems will miss quotas
• Deming story about not fixing a machine
• Auto plant: workers knew more than the “experts”

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9. Optimize the Efforts of Teams

• People have to understand what customers want
• Union vs. Management
• Management trying to exploit workers
• Unions keeping to piece-rate known systems
• Hillerich & Bradsby

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10. Eliminate Exhortations

• Do you work better with a poster on the wall?
• Slogans assume quality problems caused by people
• Deming thinks the system is responsible for problems
• Workers demoralized when they cannot fix defects, and yet are held accountable
• Workers’ attempts to fix problems only cause more variation

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11. Eliminate Numeric Quotas

• They do not encourage improvement
• If you do improve it, they’ll just raise the quota
• Risk of missing quotas
• Once you meet the standard, why try harder?
• Arbitrary goals are demoralizing without a plan of how you can reach those goals
• Variability in system year-to-year

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12. Remove Barriers to Pride in Workmanship

• People are treated like a commodity
• Work nights to make up for cut positions
• Don’t make your people compete against each other
• Behavior driven by what boss wants, not Quality

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13 Education & Self-Improvement

• Not job-specific
• Many benefits, some specific to job, others broader

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14. Take Action

• Accomplish the Transformation
• Start the cultural change with top management
• People will be skeptical until they start to see change

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PDCA Cycle

• Plan what is needed
• Do it
• Check that it works
• Act to correct any problems or

improve performance

• It is a universal improvement methodology, the idea being to constantly improve, and thereby reduce the difference between the requirements of the customers and the performance of the process.
• The cycle is about learning and ongoing improvement, learning what works and what does not in asystematic way; and the cycle repeats; after one cycle is complete, another is started.

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Joseph Juran

• Joined Western Electric in 1920s.
• 1951 – Quality contol handbook
• Taught quality principles to Japanese in 1950s
• Quality directed by senior management
• Train whole mgt hierarchy in quality
• Strive for evolutionary changes in Quality
• Report progress to executive levels
• Involve the workforce in quality
• Quality part of reward/recognition structure

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Views of Quality “Fitness for Use”

• Quality is related to:
• Product performance that results in customer satisfaction
• Freedom from product deficiencies, which avoids customer dissatisfaction
• The mission of the firm is to:
• Achieve high design quality
• The mission of each department is to:
• Achieve high conformance quality

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Quality Trilogy

• Quality Planning
• Preparing to meet quality goals
• Quality control
• Meeting quality goals during operations
• Quality improvement
• Breaking through to unprecedented levels of performance

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PLAN

CONTROL

IMPROVE

Juran’s Detailed Program

• Prove the need for improvement
• Identify projects for improvement
• Organize support for the projects
• Diagnose the causes
• Provide remedies for the causes
• Prove remedies are effective under operating conditions
• Provide control to maintain improvements

​

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Armand v feigenbaum

• Originator of “total quality control”, often referred to as total quality.
• He defined it as:

“An effective system for integrating quality development, quality maintenance and quality improvement efforts of the various groups within an organization, so as to enable production and service at the most economical levels that allow full customer satisfaction”.

• He saw it as a business method and proposed three steps to quality:

• Quality leadership

• Modern quality technology

• Organizational commitment

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The Japanese:

Dr Kaoru Ishikawa

​

• made many contributions to quality, the most noteworthy being his total quality viewpoint, company wide quality control, his emphasis on the human side of quality, the Ishikawa diagram and the assembly and use of the “seven basic tools of quality”:

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• Pareto analysis which are the big problems?

• Cause and effect diagrams what causes the problems?

• Stratification how is the data made up?

• Check sheets how often it occurs or is done?

• Histograms what do overall variations look like?

• Scatter charts what are the relationships between factors?

• Process control charts which variations to control and how?

​

He believed these seven tools should be known widely, if not by everyone, in an organisation and used to analyse problems and develop improvements. Used together they form a powerful kit.

​

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• One of the most widely known of these is the Ishikawa (or fishbone or cause and effect) diagram.
• Like other tools, it assists groups in quality improvements. The diagram systematically represents and analyses the real causes behind a problem or effect.
• It organizes the major and minor contributing causes leading to one effect (or problem), defines the problem, identifies possible and probable causes by narrowing down the possible ones. It also helps groups to be systematic in the generation of ideas and to check that it has stated the direction of causation correctly. The diagrammatic format helps when presenting results to others.

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Dr Genichi Taguchi

• believed it is preferable to design product that is robust or insensitive to variation in the manufacturing process, rather than attempt to control all the many variations during actual manufacture.
• To put this idea into practice, he took the already established knowledge on experimental design and made it more usable and practical for quality professionals.
• His message was concerned with the routine optimisation of product and process prior to manufacture rather than quality through inspection.
• Quality and reliability are pushed back to the design stage where they really belong, and he broke down off-line quality into three stages:

​

• System design

• Parameter design

• Tolerance design

​

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• “Taguchi methodology” is fundamentally a prototyping method that enables the designer to identify the optimal settings to produce a robust product that can survive manufacturing time after time, piece afterpiece, and provide what the customer wants. Today, companies see a close link between Taguchi methods,

which can be viewed along a continuum, and quality function deployment (QFD).

​

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Shigeo Shingo

• is strongly associated with Just-in-Time manufacturing,
• Poka-Yoke (mistake proofing) system. In Poka Yoke, defects are examined, the production system stopped and immediate feedback given so that the root causes of the problem may be identified and prevented from occurring again. The addition of a checklist recognises that humans can forget or make mistakes!

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• He distinguished between “errors”, which are inevitable, and “defects”, which result when an error reaches a customer, and the aim of Poka-Yoke is to stop errors becoming defects.
• Defects arise because errors are made and there is a cause and effect relationship between the two.
• Zero quality control is the ideal production system and this requires both Poka-Yoke and source inspections. In the latter, errors are looked at before they become defects, and the system is either stopped for correction or the error condition automatically adjusted to prevent it from becoming a defect

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• Leaders must have
• a dream (vision and shared goals)
• strength of will and tenacity of purpose
• ability to win the support of followers
• ability to do more than their followers,� without interfering when they can do it alone
• successes
• ability to give the right advice

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Western Gurus:

• Philip B Crosby: is known for the concepts of “Quality is Free” and “Zero Defects”, and his quality improvement process is based on his four absolutes of quality:

• Quality is conformance to requirements

• The system of quality is prevention

• The performance standard is zero defect

• The measurement of quality is the price of non-conformance

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fourteen steps to quality improvement

• Management is committed to a formalised quality policy
• Form a management level quality improvement team (QIT) with responsibility for quality improvement process planning and administration
• Determine where current and potential quality problems lie
• Evaluate the cost of quality and explain its use as a management tool to measure waste
• Raise quality awareness and personal concern for quality amongst all employees
• Take corrective actions, using established formal systems to remove the root causes of problems
• Establish a zero defects committee and programme

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• Train all employees in quality improvement
• Hold a Zero Defects Day to broadcast the change and as a management recommitment and employee commitment
• Encourage individuals and groups to set improvement goals
• Encourage employees to communicate to management any obstacles they face in attaining their improvement goals
• Give formal recognition to all participants
• Establish quality councils for quality management information sharing
• Do it all over again – form a new quality improvement team

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Tom Peters

• identified leadership as being central to the quality improvement process, discarding the word “Management” for “Leadership”.
• The new role is of a facilitator, and the basis is “Managing by walking about” (MBWA), enabling the leader to keep in touch with customers, innovation and people, the three main areas in the pursuit of excellence.
• He believes that, as the effective leader walks, at least 3 major activities are happening:

• Listening suggests caring

• Teaching values are transmitted

• Facilitating able to give on-the-spot help

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conclusion

• There are many other management “gurus” whose philosophies and ideas fill whole books on their own, and several of these are important to quality management. The ones included in this section are those whose reputation is primarily for their work in quality and excellence.
• When embarking on, or continuing along, a quality journey within your organisation it is advisable to take note of the messages from all of the prominent quality gurus, who have most influenced the path of quality in the last 50 – 60 years.
• However, be aware that there are contradictions between the gurus’ approaches, as well as many common features. It is imperative that the approach you take is purpose built and tailored to suit your organisation and its current and future needs.

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