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Process Design and Capacity Planning, Study notes of Nursing

Cheyney University of Pennsylvania Nursing

An overview of key concepts in process design and capacity planning. It covers topics such as measuring process capability, capacity planning and location analysis, different types of production processes, facility layout design, job design and work measurement. The document highlights the importance of efficient process design and capacity planning in ensuring that a company can meet customer demand while optimizing resource utilization. It discusses various tools and techniques used in these areas, such as process flow analysis, production strategies, and performance metrics. The information presented could be useful for students studying operations management, industrial engineering, or related fields to understand the fundamental principles and best practices in process design and capacity planning.

Typology: Study notes

2023/2024

Available from 07/21/2024

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C215 OM Study Guide BEST

VERSION 2024 2025

Chapter 5. TQM

OA Hints:

Define TQM and identify the costs of quality

Key Points:

1. The evolution of TQM

2. Quality awards and standards

3. TQM philosophy

4. Tools for identifying and solving quality problems

Quality Definitions:

•Conformance to Specifications- measures how well the product of service meets the targets

and tolerances determined by designers

o Most common definition for manufacturing

•Fitness of use- how well the product preforms its intended function or use

•Value for price paid- definition of quality that consumers often use for product or

service usefulness

•Support Services- product judged by support services, i.e. Speed of paperwork processing

•Psychological Criteria- subjective judgmental evaluation of what constitutes product of

service quality

Total Quality Management (TQM)

Definition:

•system of management based on the principle that every staff member must be committed

to maintain high standards of work in every aspect of a company’s operations

•build quality into the process. Identify and correct causes of quality problems

•focuses on identifying the root cause of the problem and correcting them at the source

as opposed to inspecting the product after it has been made

•Customer Driven and encompasses the entire company

•Different from the old concept of quality because its focus is on serving customers identifying

the causes of quality problems and building quality into the production process. No

inspections

Philosophy – 7 concepts:

•Customer focus- identify and meet customer needs

•Continuous improvement- also known as kaizen in Japanese

•Employee Empowerment- employees seek out, identify and correct quality problems

•Use of Quality Tools- ongoing employee training on tools

•Product Design- designed to meet customer expectations

•Process Management- quality should be built into the process, sources of quality

problems should be identified and corrected

•Managing Supplier Quality- quality concepts must extend to a company’s suppliers

Discover Study notes of Nursing Cheyney University of Pennsylvania

Partial preview of the text

Download Process Design and Capacity Planning and more Study notes Nursing in PDF only on Docsity!

C215 OM Study Guide BEST

VERSION 2024 2025

Chapter 5. TQM

OA Hints: Define TQM and identify the costs of quality

Key Points:

The evolution of TQM
Quality awards and standards
TQM philosophy
Tools for identifying and solving quality problems

Quality Definitions:

Conformance to Specifications- measures how well the product of service meets the targets and tolerances determined by designers o Most common definition for manufacturing
Fitness of use- how well the product preforms its intended function or use
Value for price paid- definition of quality that consumers often use for product or service usefulness
Support Services- product judged by support services, i.e. Speed of paperwork processing
Psychological Criteria- subjective judgmental evaluation of what constitutes product of service quality

Total Quality Management (TQM)

Definition:

system of management based on the principle that every staff member must be committed to maintain high standards of work in every aspect of a company’s operations
build quality into the process. Identify and correct causes of quality problems
focuses on identifying the root cause of the problem and correcting them at the source as opposed to inspecting the product after it has been made
Customer Driven and encompasses the entire company
Different from the old concept of quality because its focus is on serving customers identifying the causes of quality problems and building quality into the production process. No inspections

Philosophy – 7 concepts:

Customer focus- identify and meet customer needs
Continuous improvement- also known as kaizen in Japanese
Employee Empowerment- employees seek out, identify and correct quality problems
Use of Quality Tools- ongoing employee training on tools
Product Design- designed to meet customer expectations
Process Management- quality should be built into the process, sources of quality problems should be identified and corrected
Managing Supplier Quality- quality concepts must extend to a company’s suppliers

Plan, Do, Study, Act (PDSA) Cycle

Describes the activities a company needs to perform in order to incorporate continuous improvement in its operation. Also referred to as the Shewhart cycle or Deming Wheel Plan- managers must evaluate current process and make plans based on any problems they find. Document all current procedures, collect data, identify problems. And use this info to develop a plan for improvement as well as specific measures to evaluate performance Do- next step in the cycle is implementing the plan, document all changes made, and collect data for evaluation Study- study the data collected in “Do” phase. The data is evaluated to see if the plan is achieving goals made in “Plan” stage Act- last phase of the cycle is to act on the basis of the results of the 1 st^3 phases. Implement the procedure if it has been successful Benchmarking- study business practices of those that have been considered “best in class”. Does not have to be same business as long as it excels at something that the company wished to emulate

7 Tools of Quality Control

Cause & Effect Diagram
Flowchart- schematic of the sequences of steps
Checklist
Control Chart- evaluate whether a process is operating within expectations relative to some measure value like weight, width, volume
Scatter Diagram
Pareto Chart (Analysis)- identify quality problems based on degree of importance
Histogram

Quality Awards & Standards

Malcom Baldridge National Quality Award (MBNQA) o 1987 act passed by congress intended to reward and stimulate quality incentives
Deming Prize o Japanese award given to recognize company effort in quality improvement o 1989 – first American company to receive award was Florida Power & Light
ISO 9000 Standards o Universal standards of quality control published in 1987 o International o Focused mainly on quality of conformance
ISO 14000 Standards o Standards evaluating a company’s environmental responsibility, sustainability o 3 areas of focus ▪ Management systems ▪ Operations

Usually established by design engineers or product design specialists
Based on how to product will be used or what customer expectations are

Measuring process capability

process must be capable and in control before production begins
Measured by process capability index or Cp
Cp = specification width/process width = USL-LSL/6o
Most process measurement (99.74%) falls within +/- 3 standard deviations which equals a total of 6o
3 ranges for Cp o Cp = 1 means that the process variability just meets specifications. Would say that the process is minimally capable ▪ Means that 99.74% of products will fall within specification limits (.26 %) will not o Cp>1 means the process variability is tighter than specifications and the process exceeds minimal capability o Cp<1 means the process variability is outside the range of specification. The process is not capable of producing within specification and must be improved

Six Sigma

Coined by Motorola company in 1980s
Sigma stands for the number of standard deviations of the process
Remember that +/- 3 sigma means that 2600 ppm (parts per million) are defective
+/- 6 sigma = 3.4 ppm defective
2 aspects to implementing six sigma o Use of technical tools to identify and eliminate causes of quality problems ▪ Relies heavily on quantitative and data driven technical tools o People involvement- all employees have the training to use technical tools and are responsible for rooting out quality problems
Black belts and master black belts are individuals who have extensive training o Lead the search for quality problems
Green belts- have sufficient training in technical tools 5 step plan known as DMAIC: Study

Define- the quality problem of the process
Measure- the current performance of process
Analyze – process to identify the root cause of the problem Change
Improve- process by eliminating the root causes of problem
Control- the process to ensure the improvements continue Successful implementation requires commitment from top company leaders

Must promote process

Eliminate barriers
Ensure availability of proper resources

Highlights

Control charts for variables include: o X -bar charts- monitor the mean value of a product characteristic o R- chart – monitor the range or dispersion of the values of a product characteristic o P-chart- monitor the proportion of defects in a sample o C-chart- monitor the actual number of defects in a sample
Six sigma indicates a level of quality in which the number of defects in no more than 3.4 ppm Chapter 9. Capacity Planning, Location Analysis

Key Points:

Capacity planning and location analysis
The relationship between capacity planning and location analysis
The steps involved in above
Decision support tools used in location analysis Capacity – maximum output rate that can be achieved by a facility Capacity planning – process of establishing the output rate that can be achieved by a facility
Incorrect planning can result in not meeting customer demands or too much capacity sitting idle
Important if a company wants to grow and take full advantage of demand
Costly to change capacity commitments
Long-term and strategic Types of measure Input measures of capacity:
Labor hours
Available space
Worker hours
Ops hours
Floor space Output:
Product per shift
of patents
of product per day
Revenues per day When a comp measures different kinds of products, input measures work best

Develop capacity alternatives – once capacity requirements have been identified, the company needs to develop a set of alternatives that would enable it to meet future capacity needs
- Do nothing
- Expand large now
- Expand small now, with option to add later
Evaluate capacity alternatives – select the one alternative that will best meet the company’s requirements
- Decision support aids
- Decision tree Decision Tree – diagram that models the alternative being considered and the possible outcomes

Help by giving structure to a series of decisions and providing an objective way of evaluating alternatives
Decision points – these are the points in time when decisions are made represented by squares, called nodes
Decision alternatives – branches or arrows leaving a decision point
Chance events – events that affect the value of a decision with a probability of happening
Outcomes listed to each possible alternative
Drawn from left to right to solve work right to left

Location analysis

Facility location – determining the best geographic location for a company’s facility
Important for 2 reasons:
1. Long term commitments in buildings and facilities. Mistakes can be difficult to correct
1. Require sizable financial investments and can have a large impact on operating costs and revenues
Poor location can result in high transportation costs, inadequate supplies of raw material and labor loss of competitive advantages and financial loss Factors affecting location decisions
Proximity to sources of supply
Necessary – like faming
Determined by perishable nature of goods
Avoid high transport costs
Proximity to customers
Accessible to customers
Perishable nature
Transport cost
Proximity to source of labor
Availability of type of labor and specialists
Local wages
Local unions

Attitudes of local workers Community Considerations
Community acceptance
Site considerations
Utility costs
Taxes, zoning
Climate
Quality of life issues
Company’s employees
Good schools
Low crime rate Globalization – process of locating facilities around the world
Advantages – take advantage of foreign markets o Reduces stigma of buying imports o Reduction of trade barriers o EV and MAFTA o Cheap labor
Disadvantages o Political risks o Share tech o Local employees o Local infrastructure
Issues of globalization o Culture differences o Language barriers o Different laws and regulations

Making location decisions

Steps
1. Identify dominant location factor – requires managerial judgment and knowledge
2. Develop location alternatives
3. Evaluate location alternatives – make final selection based on a set of factors Procedures for evaluating location alternatives – decision support tools
- Factor Rating – importance is highly subjective, used to evaluate multiple alternatives based on a
  of selected factors.
  a. Usually uses a 5-point scale with assigned weight
- The load distance model – procedure for evaluating location alternatives based on distance. a. Objective is to select a location that minimizes the total amount of loads moved weighted by distance traveled

Process Selection

Types of Processes- 2 broad categories

Intermittent operations – used to produce a variety of products with different processing requirements in lower volumes ▪ Ex. Auto body shop, healthcare facility o No standard route that all products take through the facility o Resources are grouped by function o Product is routed to each resource as needed o Labor intensive, automation is less o Skilled & semi-skilled workers o Volume of goods produced is directly tied to the number of customer orders o Project Process (ex. Tailoring, construction) ▪ Used to make one of a kind products exactly to customer specification ▪ High customization, low product volume o Batch Process ▪ used to produce small quantities of products in groups or batches based on customer orders or product specifications ▪ small volume, opportunity for medium to high customization
Repetitive Operations- used to produce one of a few standardized products in high volume ▪ Ex. Cafeteria, car wash o Often arranged in a line o Capital intensive, mass production o Relies on automation and tech o Volume produced based on forecast o Lack of product variety o Line process ▪ Designed to produce a large volume of standardized product for mass production

Also known as flow shops, flow lines, assembly lines ▪ High volume, little to no customization o Continuous process ▪ Operate continually to produce a very high volume of a fully standardized product
Usually continually produce products like liquid or gas
Single input, limited number of outputs
Highly capital intensive and automated Differences in processes are volume and degree of customization

Designing Process

Process Flow Analysis - technique used for evaluating a process in terms of the sequence of steps from inputs to outputs with the goal of improving its design Process Flow Chart- most important tool

Used for viewing the sequence of steps involved in producing the product and the flow of the product through the process o Useful for seeing the totality of the operation & for identifying potential problem areas o No exact format o Typical symbols used are arrows, triangle, rectangles Bottleneck- when production capacity holds up the speed of a process

Production Strategies:

Make to stock
Assemble to order
Make to order

Process Performance Metrics

Measurements of different process characteristics that tell us how a process is performing

Throughput time- avg amount of time product takes to move through the system o Lower throughput time means more products move through the system
Process velocity = throughput time/value added time o Measure of wasted time
Productivity= output/input o How well company uses its resources
Utilization= time a resource used/time a resource available
Efficiency = actual output/standard output

Highlights

Intermittent operations provide great flexibility but have high material handling costs and challenge scheduling resources
Repetitive operations are highly efficient but not flexible
Flowchart is a useful tool for seeing the totality if the operation and for identifying potential problem areas. Chapter 10. Facility Layout

Key Points

Different types of layouts
Steps to designing process layouts
Improper design of process layout can result in costly inefficiencies

Four Basic Layout Types

Process layout
- Group resources based on similar processes or functions
- Seen in companies with intermittent processing systems
- Seen where large variety of items are produced in a low volume
- More efficient to group resources based on function, minimize waste of movement
- Characteristics: a.Resources used are general purpose

3 steps to designing process layouts.

Gather information
Identify space needed
Identify available space – best seen using a block plan (schematic that shows the placement of department in a facility)
Determine the best location of departments relative to one another
1. Identify closeness measures
A from to matrix is a table that shows the # of trips or units of product moved between any pair of departments
REL or relationship chart – tool that reflects opinions of managers with regard to the importance of having any two departments close together
Used when communication, face to face contact, or customer access is required Develop a block plan
Using trial and error
Typically use a rectilinear distance (shortest distance using only north to south & east to west movements)
Using decision support tools
Two most popular ALDEP & CRAFT
Use as a starting point
ALDEP uses a REL chart
CRAFT uses a from-to matrix Develop a detailed layout
Also focus on specific worker elements like disks
Tools include drawings, 3D models and temp graphics software Highlights
Process layouts provide much flexibility and allow for the production of many products with different characteristics. Product layouts on the other hand provide great efficiency when producing one type of product
The steps in designing a process layout are: a.Gathering information about space needs b.space availability c. closeness requirements of departments
Developing a block plan or schematic of the layout
Developing a detailed layout Chapter 11. Work System Design Work system provides structure for the productivity of the company.
Includes: o Job design o Work measurement

o Worker compensation

Job Design

Specifies the work activities if an individual or a group in support of an org’s objectives

Questions for job design: o Description of job o Purpose? o Where is the job done? o Who does the job?
Factors in job design (2) o Technical feasibility- the degree to which an individual or group of individuals is physically and mentally able to do the job. ▪ The more demanding the job, the smaller the applicant pool. ▪ Good job design eliminates unreasonable requirements o Economic Feasibility- degree to which the value of a job adds and the cost of having the job done create profit for the company ▪ If a job costs more that the value added then it is not economically feasible o Behavioral Feasibility- degree to which an employee derives intrinsic satisfaction from doing the job ▪ The challenge is to design a job so the worker feels good about doing the job and adds value by doing it ▪ Presents 2 problems: - What motivates in worker may not motivate another - Someone has to do the boring jobs ▪ Solution: - Provide a fun work environment

Machines vs People

Should the job be automated? Level of Labor Specialization- the higher the level of specialization, the narrower the employee’s scope of expertise

Ex. Medicine, law
Intrinsic factor (worker satisfaction) is one reason for specialization Specialization from a Manager Perspective:
Advantages o Readily available labor o Minimal training needed o Reasonable wag coast o High productivity
Disadvantages

o Identify the op to be analyzed o Gather all relevant info about the op o Speak with employees who use the Op o Chart the Cp o Evaluate each step in existing op o Revise as needed o Put new op into effect and then follow up Work environment- worker safety primary concern

OSHA 1970

Work Measurement

Way of determining how long it should take to complete a job
Used to set a standard time
Standard time- the time it should take a qualified operator working at a sustainable pace and using appropriate tools and processes to do the job o Used for costing, evaluation and planning Costing
Labor is included when costing a product

Compensation

Based on the following systems: o Time Based – used when measuring output per employee is not possible ▪ Hourly ▪ Pay is steady o Output based ▪ Linked to Taylor’s theory that humans are money motivated ▪ Reward workers form output ▪ Profit Sharing- employees rewarded with bonus if company meets profit levels ▪ Gain sharing- emphasizes on the costs of output

Highlights

Work system design involves job design, methods analysis, and work measurement a. Job design specifies the work activities of an individual or group in support of org obj.
Method analysis is concerned with how the employee does the job a. Can be used to improve operation efficiency
Standard times are used for product costing, for process and material evaluation, and for planning work loads and staffing a. Standard times are usually based on studies b. Work sampling is used to estimate the proportion of the time spent on an activity
Work sampling involves random observations of worker
Standard times are developed with either times studies, elemental time data, or pre- determined time data

Standards are used to compare alternate processes, evaluate new materials or components, evaluate worker performance a. Also allow you to determine the time a job should take
Learning curves show the rate of learning that occurs when an employee repeats the same task. Chapter 7 JIT Philosophy of JIT (Just in Time)

Originated in Japan in 1970s at Toyota
Taiichi Ohno
Widely adopted in lots of industries
Benefits include: o Reductions in op costs o Improved quality o Increased customer responsiveness
Central belief in JIT is elimination of waste o Waste is anything that does not add value ▪ Excess inventory ▪ Time ▪ Space ▪ Energy
Broad view of the org- all work toward the same goal
Simplicity- the simpler, the better
Continuous improvement- Kaizen o When has JIT been fully implemented? Never o Org is never perfect o Kaizen blitz- 2- or 3-day marathon problem solving session
Visibility- make all waste visible
Flexibility- adapt to changes in the environment and demand Elements of JIT

Just in Time Manufacturing a. Focus on value added processes in the production system b. Schedule is leveled, developed so that the same amount of each product is produced in the same order every day i. Repetition in the schedule day to day ii. Constant demand on suppliers and work centers iii. Some quantity of every item is produced every day in accordance to what is needed c. Referred to as a Pull system i. Pulled by Kanban (signal cards) d. Efficient at reducing setup costs and setup times e. Ultimate goal of JIT is to produce items in lot size of 1 f. Views inventory as a waste that needs to be eliminated

a. Pull system b. Kanban c. Small lot sizes d. Quick setup e. Leveling f. Flexible resources g. Streamlined layout

Jit success is dependent on inter-functional coordination and effort Chapter 15 Scheduling Work Loading:

Infinite Loading- used according to a proposed master production schedule (MPS) o Identifies uneven workloads & bottlenecks o Schedules work without regard to capacity limits
Finite Loading- an operation schedule with start and finish times for each activity o Does not allow you to load more work than can be done with the available capacity o Prioritized Work Scheduling:
Forward Scheduling- process starts immediately when a job comes in, regardless of due date o Allows you to determine the jobs earliest completion date o Disadv. Inventory buildup
Backward Scheduling- you begin scheduling the jobs last activity for completion right in due date o Start with due date and work backward Theory of Constraint (TOC):
A system’s output is determined by 3 kinds of constraints:

Internal resource constraint- the classic bottleneck
Market constraint- market demand is less than production capacity
Policy constraint- specific policy dictates the rate of production TOC expands into a philosophy of continuous improvement Chapter 4 Supply Chain Supply Chain

Network of activities that delivers a finished product or service to the customer a. Includes ▪ Souring raw materials & parts ▪ Manufacturing & assembling products ▪ Warehousing ▪ Order entry and tracking

▪ Distribution through he channels ▪ Delivery to the customer b. Facilitated by an information system that allows relevant information to be shared among members of supply chain c. Basic supply chain ▪ Suppliers > manufacturers > wholesalers/warehouses > retailers Supply Chain management

Vital business function that coordinates & manages all the activities of the supply chain a. Coordinating the movement of goods through the supply chain from supplier to manufactures to distributors to the final customer b. Sharing relevant information such as sales forecasts, sale data, & promotional campaigns among members of the chain c. Provides company with a sustainable competitive advantage Supply Chain Components

External Suppliers a. Tier 1- any supplier that provides materials directly to processing facility b. Tier 2- directly supply tier 1 c. Tier 3- supplies raw materials to tier 2
Internal Function a. Processing b. Purchasing c. Production planning & control d. QA e. Shipping
External Distributors a. Transport finished product to the appropriate locations for sale to customers Logistics- movement of products between locations Traffic management- selection and monitoring of external carriers or internal fleet carriers Distribution management- packaging, storing, handling of products @ receiving docks, warehouses and retail outlets The Bullwhip Effect

Send inaccurate or distorted information down the supply chain
Results in: a. Excessive inventory investment b. Poor customer service c. Ineffective transportation use d. Misused manufacturing capacity e. Lost revenues
Causes:

Process Design and Capacity Planning, Study notes of Nursing

Related documents

Partial preview of the text

Download Process Design and Capacity Planning and more Study notes Nursing in PDF only on Docsity!

C215 OM Study Guide BEST

VERSION 2024 2025

Chapter 5. TQM

Key Points:

Quality Definitions:

Total Quality Management (TQM)

Definition:

Philosophy – 7 concepts:

Plan, Do, Study, Act (PDSA) Cycle

7 Tools of Quality Control

Quality Awards & Standards

Measuring process capability

Six Sigma

Highlights

Key Points:

of patents

of product per day

Location analysis

Making location decisions

of selected factors.

Process Selection

Designing Process

Production Strategies:

Process Performance Metrics

Highlights

Key Points

Four Basic Layout Types

Job Design

Machines vs People

Work Measurement

Compensation

Highlights