Ben Ward, PhDLecture 2

ENGR 101

Traditional Manufacturing (Mass Production)

High Volume / Low Variety High Direct Labor Organized around continuous or large batch operations High inventory (raw materials, WIP, finished goods (Working

Capital)) Long lead times Focus on individual labor and machine efficiency Quality measured by inspection and rework – not prevention Strong functional organizations – “Silos”

2

Relative Market Shares (USA and Canada) GM vs. Toyota

0

10

20

30

40

50

60

1975 1985 1995 2010

% S

hare

Source: Ward’s Automotive Yearbook

GM Share Toyota Share

3

Lean ManufacturingToyota Production System (TPS)

Feature Ford Toyota Benefit

One piece flow Only in assembly Processing and assembly

Shorter cycles, reduced finished goods & inventory, reduced work-in-progress (WIP)

Lot Size Large Small WIP reduction, order-based production

Product flow Single product –few models

Mixed flow – many models

Reduced WIP, adjusts to change, load balancing

4

S. Shingo: A Study of the Toyota Production System from an Industrial Engineering Point of View (1981)

Essence of TPS Treat the process as a Science rather than Art Continuously conduct experiments on the production process Changes are not made unless specific outcomes are expected

and validated TPS stimulates workers and managers to conduct experiments

leading to a learning organization

Managers ask questions How do you do this work? How do you know it is being done correctly? How do you know the outcome is defect free? How do you respond to a problem

5

Spear & Bowen, “Decoding the DNA of the Toyota Production System”, Harvard Business Review, Sept-Oct 1999

TPS

Adopt a Long-Term Philosophy The right Process produces the right Results

Prefer continuous process flow Level scheduling Culture of continuous improvement Standardize tasks Use reliable and tested technology

Develop your people Leadership People and teams Partners

Find and solve the “root cause” See for yourself Decide slowly implement fast Be a learning organization via reflection and continuous improvement

6

Lean

Focus on flow improve by systematic elimination of waste Material, people, systems, bureaucracy Systematic part of daily work – not a project or program Eliminate waste permanently removed Waste anything that does not add value

Create systems for immediate recognition and response Focus on Rapid Change

Kaizen process: Compress activity to 2-5 days Immediate implementation

7

8

9

Design / Process Economics

10

Recognition of problem to be solved

Preferred AlternativeSpecification

Definition of Problem

Analysis

ID Possible Solutions

Gather Information

Completely Specified Solution

You (the engineer) are responsible for understanding and presenting economic and cost data, and alternatives for your project

Terminology

Fixed Costs Not affected by changes in activity or production rate Insurance, taxes, SAR (sales/administration/research), interest,

depreciation

Variable (or Direct) Cost Varies with output or activity level Production Operators, Raw Materials

Indirect Cost Varies somewhat with output Maintenance, tools, electricity, QC laboratories

11

W. Sullivan, E. Wicks, P. Koelling, Engineering Economy (26th ed), Pearson (New York)

Fixed and Variable Cost Problem

Choice of site for Asphalt Plant, Site Spider or Site Ram

Job requires 50,000 Cubic Yards asphalt Job requires 17 weeks (@ 5 days/week) Return haul cost negligible

12

Cost Factor Site Spider Site Ram

Average hauling distance 4 miles 3 miles

Monthly site rental $2,000 $7,000

Cost of setup and removal $15,000 $50,000

Hauling Expense $2.75/yd3-mile $2.75/yd3-mile

Flag Person Not Required $150/day

W. Sullivan, E. Wicks, P. Koelling, Engineering Economy (26th ed), Pearson (New York)

Fixed and Variable Cost Problem

Compare the 2 sites in terms of fixed, variable and total costs Which is the better site? For the selected site: If the contractor is paid $12/yd3

delivered to the job location, how many cubic yards of asphalt must be delivered for the contractor to make a profit?

13

W. Sullivan, E. Wicks, P. Koelling, Engineering Economy (26th ed), Pearson (New York)

Fixed / Variable Cost Answer

Cost Fixed Variable Spider Ram

Rent F $8,000 $28,000

Setup/Removal F $15,000 $50,000

Flagperson F $0 5(17)($150)=$2,750

Hauling V 4(50,000)($2.75)=$550,000 3(50,000)$2.75=$412,500

Total $573,000 $503,250

14

• Site Ram has higher fixed cost but lower total cost• Profit begins where total revenue = total cost as function of asphalt delivered• 3($2.75) = $8.25 in variable cost per cubic yard delivered• Total cost = total revenue (@the break even point)• $90,750 + $8.25x = 12.00x• x = 24,200 yd3 delivered (break even point)

W. Sullivan, E. Wicks, P. Koelling, Engineering Economy (26th ed), Pearson (New York)

Time Value of MoneyNet Present Value

NPV Spreadsheet

15

William J. Stevenson

Production planning and control

Quality Control

9th edition

Courtesy Jian Xiang – DuPont Nomex Spruance Site

Quality Control Quality control is a process that measures output relative to

standard, and takes action when output doesn't meet standard. The purpose: assure that processes are performing in an

acceptable manner. Companies accomplish quality control by monitoring process

output using statistical techniques.

Phases of Quality Assurance

Acceptancesampling

Processcontrol

Continuousimprovement

Inspection Before / after production

Inspection and corrective action during production

Quality built into the process

The leastprogressive

The mostprogressive

Inspection

Inspection compares goods or services to a standard Inspection before and after production involves acceptance

sampling Monitoring during production referred to as process control

Inputs Transformation Outputs

Acceptancesampling

Processcontrol

Acceptancesampling

Figure 10.2

InspectionBasic Issues

How much to inspect and how often? Where in the process should inspection occur? Centralized or on-site location?

How much to inspect and how often

Ranges from none to inspection of each item many times. Low-cost, high volume items (paper clips) require minimal

inspection Cost associated with passing defective items is low or Production process is highly reliable, so defects are rare

High-cost, low volume items (airplanes, space vehicles) require extensive inspection High cost associated with passing defective items Reliability of production process low or not established

Majority of quality control applications falls somewhere in the middle

Cos

t

Optimal Inspection Frequency

Inspection Costs

Cost of inspection

Cost of passingdefectives

Total Cost

Where to Inspect in the Process

Inspection always adds to the cost of the product Restrict inspection efforts to the points where they can do the

most good Typical inspection points are:

Raw materials and purchased parts Finished goods Before a costly operation Before an irreversible process

Examples of Inspection PointsType ofbusiness

Inspectionpoints

Characteristics

Fast Food CashierCounter areaEating areaBuildingKitchen

AccuracyAppearance, productivityCleanlinessAppearanceHealth regulations

Hotel/motel Parking lotAccountingBuildingMain desk

Safe, well lightedAccuracy, timelinessAppearance, safetyWaiting times

Supermarket CashiersDeliveries

Accuracy, courtesyQuality, quantity

Centralized versus on-site inspection Some situations require that inspections be performed on site

such as inspecting the hull of a ship for cracks.

Some situations require specialized tests to be performed in a lab such as medical tests, analyzing food samples, testing metals for hardness, running viscosity tests on lubricants.

Statistical Process ControlSPC

Quality control is concerned with the conformance of a process: Does the output of a process conform to the intent of design (specifications)?

Statistical Process Control: Statistical evaluation of the output of a process during production

Conformance: A product or service conforms to specifications Variations and Control

Random variation: Natural variations in process dependent process variables

Assignable variation: A special variation whose source can be identified (it can be assigned to a specific cause)

Control Chart

Control Chart: an important tool in SPC Purpose: to monitor process output to see if it is random (in control)

or not (out of control). A time ordered plot of representative sample statistics obtained

from an on going process (e.g. sample means). Upper and lower control limits define the range of acceptable

variation.

Basic Control Chart

28

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

UCL

LCL

Sample number

Mean

Out ofcontrol

Upper Action Limit

Lower Action Limit

Control Chart

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

UCL

LCL

Sample number

Mean

Out ofcontrol

Normal variationdue to chance

Abnormal variationdue to assignable sources

Abnormal variationdue to assignable sources

Statistical Process Control

The Control Process includes Define what is to be controlled

Independent Variables (inputs)Dependent Variables (outputs)

Measure and Compare with the standard Evaluate if the process in control or out of control Correct only when a process is judged out of control (Nelson Rules) Monitor results to ensure that corrective action is effective

Nelson Rules

31

One sample (two shown in this case) is grossly out of control.

Process has likely shifted.

A trend exists. Monitor carefully

This much oscillation is beyond noise – process problem

Caution: there may be a budding problem

Caution: there is a non-random event

Source: GMcGlinn~commonswiki (talk | contribs)

Process Capability

Tolerances or specifications Range of acceptable values established by engineering design or

customer requirements

Process variability Natural variability in a process

Process capability Process variability relative to specification

Capability analysis

Capability analysis: is variability inherent in a process output within the acceptable range of variability allowed by the design specification?

Yes: process is “capable.” No: correct the situation. Cannot automatically assume that a process in control

provides the desired output. A process should be both in control and within specifications

before production begins.

Process Capability

LowerSpecification

UpperSpecification

A. Good: Process variability matches specifications

LowerSpecification

UpperSpecification

B. Excellent: Process variability well within specifications Lower

SpecificationUpperSpecification

C. Poor: process variability exceeds specifications

Capability Analysis

If the product doesn’t meet specifications (not capable) consider: Process redesign Find an alternative process Retain the current process but attempt to eliminate

unacceptable output using 100% inspection. Examine the specifications Are they necessary? Can thy be relaxed without adversely affecting customer

satisfaction?

Process Capability Ratio

Process capability ratio, Cp = specification widthprocess width

Upper specification – lower specification6σ

Cp =

Calculate the capability and compare it to specification width. If the capability is less than the specification width, the process is capable.

Where: Capability = 6σ; where σ is the process SD

Or calculate

The process is capable if Cp is at least 1.33, this ratio implies only about 30 parts per million can be expected to not be within the specification

Capability analysisExample: You have the option of using any one of three machines for a job. The machines and their standard deviations are listed below. Determine which machines are capable if the specifications are 10 mm (min) and 10.8 mm (max).

Machine Standard deviation (mm)

A 0.13B 0.08C 0.16

Capability analysis Solution Capability = 6σ

Machine Standard deviation (mm)

Machine capability

Capable

A 0.13 0.78 YesB 0.08 0.48 YesC 0.16 0.96 No

It is clear that machine A and machine B are capable, since the capability is less than the specification width (10.8 – 10 = 0.8)

Capability ratio Example: Compute the process capability ratio for each

machine in the previous exampleMachine Standard

deviation (mm)

Machine capability 6σ

Cp Capable

A 0.13 0.78 0.8/0.78= 1.03 No

B 0.08 0.48 0.8/0.48 = 1.67 Yes

C 0.16 0.96 0.8/0.96 = 0.83 No

Only machine B is capable because its ratio exceeds 1.33

Processmean

Lowerspecification

Upperspecification

1350 ppm 1350 ppm

1.7 ppm 1.7 ppm

+/- 3 Sigma

+/- 6 Sigma

3 Sigma and 6 Sigma Quality

Cpk ratio

If a process is not centered (the mean of the process is not in the center of the specification), a more appropriate measure of process capability is the Cpk ratio, because it does take the process mean into account.

The Cpk is equal the smaller ofUpper specification – process mean

3σAndProcess mean – lower specification

3 σ

Cpk RatioExample: A process has a mean of 9.2 grams and a standard deviation 0f 0.3 grams. The lower specification limit is 7.5 grams and upper specification limit is 10.5 grams. Compute Cpk

Solution1. Compute the ratio for the lower specification:

2. Compute the ratio for the upper specification:89.1

9.07.1

)3(.35.72.9

==−

44.19.3.1

)3.0(32.95.10

==− The smaller of the two ratios is 1.44

(greater than 1.33), so this is the Cpk . Therefore, the process is capable

Improving Process Capability

Simplify the process Standardize the process Mistake-proof Upgrade equipment Automate

Improving Process CapabilityMethod Examples

Simplify Eliminate steps, reduce number of parts

Standardize use standard parts, standard procedure

Make mistake-proof

Design parts that can only be assembled the correct way; have simple checks to verify a procedure has been performed correctly

Upgrade equipment

Replace worn-out equipment; take advantage of technological improvements

Automate Substitute processing for manual processing