Chapter 8 Process Management: Lean Production and Six Sigma Quality Issues in Supply Chain Management TRUE/FALSE 1. Lean production is an operating philosophy or mindset that essentially attempts to minimize the impact of system variability and flaws in forecasting through the use of high safety stock inventories. 2. Lean production and Six Sigma quality are essentially two terms that mean the same thing. 3. Channel integration is a supply chain term which refers to how a manufacturing firm within a supply chain attempts to create strategic alliances not only with their immediate suppliers but also with the suppliers' suppliers and in the other direction not only reaching out to its immediate customers but also the customer's customers. 4. Manufacturing layouts for an organization practicing lean manufacturing principles seek to maximize operator visibility, maintain an effective and efficient flow of people and materials, and minimize the distance that work in process must travel from one processing center to another processing center. 5. Organizations practicing lean production often increase their inventory levels in the long-run in order to create a cushion against variability so that they can investigate and eliminate the weaknesses of their system. 6. The objective of the Deming Prize is to stimulate quality and productivity improvement among US firms. 7. W. Edwards Deming and Shigeo Shingo were two of the notables who helped Toyota develop the Toyota Production System. 8. When designing a manufacturing or service process, or even during the reengineering of such a process, a Pareto chart would be an essential tool for evaluating the process in terms of its action elements, waiting periods, and process flow. 9. Statistical process control uses control charts to monitor the outputs of a process to identify variations due to assignable causes from variations due to common causes.
10. The five S's refer to various safety activities practiced by Toyota. 11. The primary design objective with lean layouts is to reduce wasted movements of workers, customers, and/or work-in-process 12. Carbon neutral organizations do not produce any carbon emissions. 13. Six Sigma is a quality improvement concept developed by Motorola. 14. Deming's 14 points actually conflict with many Six Sigma concepts. 15. For a certain loaf of bread it was found that it measured 16 inches in length, 4 inches in height, and 4 inches across, it was also found to weigh 1 pound; all of these measures can be considered attribute data. 16. Acceptance sampling is a statistical technique that enables a reject or accept decision to be made based on information obtained from a representative sample drawn from the population. MULTIPLE CHOICE 1. Modern supply chains simultaneously pursue the goals of high-quality, fast response, and low cost because customers nowadays want both high levels of quality and responsiveness. A key manufacturing philosophy that emphasizes waste elimination and minimizing inventories to expose problems is: a. Just-in-time b. Quick Response c. Efficient Consumer Response d. Total Quality Management ANS: A 2. Japanese manufacturing firms sometimes create cooperative coalitions with their suppliers in order to provide the suppliers with a certain degree of financial support. What are these cooperative coalitions called? a. Jidoka Networks b. Keiretsu Networks c. Kanban Networks
d. Kaizen Networks 3. Which of the following are among the most important elements of the lean production philosophy? a. Quality inspections and a standardized product line b. Fully automated assembly lines and a large supplier base c. Large inventories and quality inspections d. Waste reduction and value enhancement ANS: D 4. Which company probably played the largest role in the development of the Toyota Production System? a. General Motors b. Ford c. Chrysler d. Boeing 5. Lean production systems are sometimes referred to as pull systems because demand from customers activates the production actions of the manufacturing facilities. In order for this demand to be communicated to everyone in the supply chain/manufacturing facility a signal must be passed from downstream processing centers to the upstream processing centers. This system of relaying signals is referred to as a: a. Kanban Pull System b. Semaphore System c. Keiretsu Network d. TQM Network ANS: A 6. Which of the following is NOT consistent with the lean philosophy? a. Cross-training employees to increase processing flexibility b. Developing a culture of continuous improvement within the organization c. Increasing batch size to take advantage of economies of scale d. Positioning WIP inventories near each processing center ANS: C 7. Which of the following is NOT one of Toyota's seven wastes? a. Excess inventories b. Environmental waste c. Waiting time d. Scrap and rework 8. Which of the following best describes the five S's? a. These were originally Japanese words relating to industrial housekeeping b. Five ways to reduce inventories on the shop floor c. These are five different kinds of manufacturing layouts d. Refer to methods for reducing setup times ANS: A
9. While the philosophy of Six Sigma means different things to different people and is practiced differently in different companies, according to the textbook, two of the more important and agreedupon elements of Six Sigma are: a. Minimizing inventories and increasing material flow b. Focusing on the customer and workforce involvement c. Rewarding employees and keeping defect rates below 2% d. Minimizing inventories and keeping defect rates below 1% 10. Calculate the number of inventory containers required, given the following: Demand rate = 10 parts per hour, Safety stock required = 15% Container size = 5 parts, Time to cycle through entire system = 6 hours a. 12 b. 13 c. 14 d. 15 ANS: C 11. Calculate the inventory container size required given the following: Demand rate = 10 parts per hour, Safety stock required = 15% Number of containers = 14, Time to cycle through entire system = 6 hours a. 2 parts b. 3 parts c. 4 parts d. 5 parts ANS: D 12. Calculate the defects per million opportunities (DPMO) given the following: Blake, owner of Blakester's T-shirt Shoppe, keeps track of customer complaints. For each T-shirt sold, there are four possible complaints: T-shirt shrinks, poor quality, design wears off, and doesn't fit right. Each week, Blake calculates the rate of T-shirt "defects" per total T-shirts sold, and then uses this information to determine his company's DPMO. During the past week, his company sold 1200 T- shirts. His company received 22 customer shrinkage complaints, 16 poor quality complaints, 12 design wears off complaints, 8 doesn't fit right complaints. Calculate his firm's DPMO. a. 69,600 b. 0.193 c. 58 10 6 d. 12,083 ANS: D 13. Which of the following quality gurus believed that companies should strive for zero defects and that quality was, in a sense, free since quality improvement programs invariably paid for themselves? a. Juran b. Deming c. Baldrige d. Crosby
ANS: D 14. The ISO certification standard for environmental management is: a. ISO 9000 b. ISO 9005 c. ISO 14000 d. ISO 19000 ANS: C 15. A company that produces 8 pound bags of rice gathered 5 samples of 6 bags each. The weights of each bags' contents are listed below. Bag Number Sample 1 2 3 4 5 6 1 7.98 8.34 8.02 7.94 8.44 7.68 2 8.33 8.22 8.08 8.51 8.41 8.28 3 7.89 7.77 7.91 8.04 8 7.89 4 8.24 8.18 7.83 8.05 7.9 8.16 5 7.87 8.13 7.92 7.99 8.1 7.81 What would you plot on the x-bar chart for sample 2? a. All of the following numbers: 8.33, 8.22, 8.08, 8.51, 8.41, 8.28 b. All of the following numbers: 8.34, 8.22, 7.77, 8.18, 8.13 c. Only 8.130 d. Only 8.305 ANS: D 16. A company sells eggs in boxes with 12 cartons and 12 eggs in each carton, thus there are 144 eggs in each box. The organization wants to construct a P-chart to track the proportion of broken eggs in each sample. If the company used one box of eggs in each sample in the dataset, what would be the centerline, upper control limit(ucl), and lower control limit(lcl) for the appropriate P-chart? (Use z = 3.) Choose the closest answer. Sample Eggs Sample Eggs Sample Eggs 1 3 8 6 15 5 2 5 9 4 16 0 3 3 10 9 17 2 4 4 11 2 18 6 5 2 12 6 19 2 6 4 13 5 20 1 7 2 14 1 TOTAL 72 a. Centerline = 0.50, UCL = 0.625, LCL = 0.375 b. Centerline = 0.025, UCL = 0.64, LCL = 0 c. Centerline = 0.30, UCL = 0.70, LCL = 0 d. Centerline = 0.083, UCL = 0.152, LCL = 0.014 SHORT ANSWER 1. Why is the workforce considered such an important element of lean production?
ANS: Lean production is a philosophy that centers upon the ideals of eliminating waste and continuously improving. Employees are the keys to identifying and developing waste reduction programs and building a culture of continuous improvement in a flexible production environment. But here are some ways employees contribute to eliminating waste, creating a flexible production system, and improving the organization: a. Cross trained employees add processing flexibility b. Employees are capable of inspecting quality throughout the processing stages c. Employees not only identify problems, but are empowered to fix problems d. Skilled and well trained employees are more equipped to identify and fix high-level problems e. An intelligent workforce is more capable of supporting a strong program of continuous improvement 2. Provide a very brief overview of the beliefs of each of the following quality professionals: W. E. Deming, Philip Crosby, and Joseph Juran: ANS: a. W. E. Deming: since managers developed a system used by an organization, managers are ultimately responsible for the organization's problems. Management should fix problems by using the right tools and resources, demonstrating employee encouragement, program commitment, and facilitating cultural change. Deming also developed the 14 points for management that are similar to the principles of TQM. b. Philip Crosby: Strive for zero defects. Quality is free quality programs invariably paid for themselves. Developed four absolutes of quality conform to requirements, practice prevention, zero defects, the measure of quality is the price of nonconformance. Crosby also emphasized management's commitment, prevention systems, employee education and training, and continuous assessment. Crosby also developed the 14 steps to quality improvement. c. Joseph Juran: Advocated the determination of costs of quality, and the use of statistical methods. He felt costs caught the attention of managers, and statistics caught the attention of workers. Juran created the quality trilogy: quality planning, quality control, and quality improvement. 3. Discuss the linkages between lean production and environmental sustainability. ANS:
Since lean production is ultimately concerned with waste reduction throughout the firm and its supply chains, the linkage between lean production and environmental sustainability should seem clear. Many organizations have realized the positive impact lean production can have on their environmental performance adopting lean practices reduces the cost of environmental management and then leads to improved environmental performance. Further, lean production increases the possibility that firms will adopt more advanced environmental management systems, leading to yet further improvements in environmental performance. 4. Briefly describe SPC and Acceptance Sampling. What is the key difference between the two? ANS: a. SPC SPC stands for statistical process control. SPC is a statistical quality control method. SPC monitors quality during production through the use of statistical methods. In other words, it is a way to monitor the quality being output by a process using statistical methods. SPC allows firms to visually monitor performance, compare the performance to desired levels or standards, and take corrective steps quickly before major errors are made and/or reach the customer. b. Acceptance Sampling Acceptance sampling is also a statistical quality control method. Acceptance sampling determines the quality of a finished batch of product based upon statistical methods using a sample of finished batch. DIFFERENCE: While both SPC and acceptance sampling are statistical quality control methods, SPC monitors quality during production in the hopes of detecting defects early in the process and preventing continued production of defective product. Acceptance sampling, on the other hand, measures quality of finished products. Acceptance sampling is utilized only after processing is complete. In some cases, though, it may be the only statistical quality control method option, especially if the organization is purchasing product rather than producing it. ESSAY 1. What are the TWO primary techniques/philosophies discussed in Chapter 8 that are used to manage processes in the supply chain such that they'll meet the needs of customers today. Provide the prime objectives for each of the two techniques/philosophies. Also, for each technique, provide three elements used to achieve the prime objectives. ANS: 1. Lean production a. The prime objectives of lean production are to employ a program of continuous improvement in order to minimize/eliminate waste. b. The elements of lean used to achieve the prime objectives are: i. Waste reduction ii. Close supplier and customer relationships iii. Effective and efficient layouts iv. Inventory reduction programs v. Effective and efficient scheduling
vi. vii. viii. Developing and promoting programs of continuous improvement within the organization and throughout the supply chain Exemplifying a commitment to the workforce JIT II/supplier co-location supplier representative housed in a buyer facility 2. Six Sigma a. The prime objectives of Six Sigma are to understand, meet, and then strive to exceed customer expectations. In essence, Six Sigma is all about pleasing the customer. Six Sigma programs attempt to make a firm capable of satisfying customers in the present as well is in the future. b. The elements of Six Sigma are: i. Focus on the Customer ii. Workforce Involvement iii. The philosophies of Deming iv. The philosophies of Crosby v. The philosophies of Juran vi. The guidelines of the Malcolm Baldrige National Quality Award vii. viii. The guidelines/standards required to become ISO 9000 certified Utilization of Six Sigma tools: flow diagrams, check sheets, Pareto charts, cause-and-effect diagrams, SPC, acceptance sampling