prod techniques old

8/2/2019 Prod Techniques Old

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PRODUCTIVITY

TECHNIQUES


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PRODUCTIVITYTECHNIQUES


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MEANING OF PRODUCTIVITY

PRODUCTIVITY IS OFTEN ASSOCIATED WITHPRODUCTION

HIGHER PRODUCTION IS NOT HIGHER

PRODUCTIVITY INCREASE IN PRODUCTION CAN BE ACHIEVED

BY INCREASING QUANTUM OF INPUT BUT THATDOES NOT INCREASE PRODUCTIVITY

HIGHER PRODUCTIVITY RESULTS IF

PRODUCTION PER EMPLOYEE OR PER MACHINEINCREASES ALONGSIDE WITH QUALITY

PRODUCTIVITY IS CREATING SURPLUS THRUPRODUCTIVE OPERATIONS WHERE OUTPUT ISALWAYS GT INPUT

PRODUCTIVITY IS DEFINED AS OUTPUT WITHINDEFINED TIME AND AS PER QLTY NORMS/INPUT


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MEANING OF PRODUCTIVITY

BOTH OUTPUT AND INPUT SHOULD BEQUANTIFIED IN TANGIBLE MONETARYTERMS

PRODUCTIVITY CAN BE IMPROVED BY-INCREASING OUTPUT WITH SAME INPUT-INCREASING OUTPUT MORE THAN THEINCREASE IN INPUT

-DECREASING INPUT FOR THE SAMEAMOUNT OF OUTPUT-INCREASING OUTPUT WHILEDECREASING INPUT

PRODUCTIVITY IMPLIES EFFECTIVENESS

AND EFFICIENCY IN INDIVIDUAL AND


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DEFINITION OF

PRODUCTIVITY PRODUCTIVITY IS THE RATIO BETWEEN OUTPUT

OF WEALTH TO THE INPUT OF RESOURCES USED

IN THE PROCESS OF MFG

PRODUCTIVITY = OUTPUT OF WEALTH/INPUT OF

RESOURCES

INPUTS ARE MATERIAL , MONEY , MACHINES ,

PEOPLE

ANOTHER PARAMETER OFTEN USED IS

PERFORMANCE WHICH IS (ACTUAL

ACHIEVEMENT IN TERMS OF EFFECTIVE WORK

DONE)/(STANDARD TARGET OF ACHIEVEMENT) *

100


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DEFINITION OF

PRODUCTIVITY PERFORMANCE IS EXPRESSED AS PERFORMANCE INDEX

WHICH IS % OF STANDARD TARGET OR EFFECTIVENESS OF

PRODUCTIVITY .PRODUCTIVITY = OUTPUT/INPUT

= PERFORMANCE ACHIEVED/RESOURCES CONSUMED= EFFECTIVENESS/EFFICIENCY

PRODUCTIVITY CAN BE APPLIED TO MATERIAL ,

EQUIPMENT,MEN,CAPITAL

MATRL = 1 TONNE OF HOT ROLLED STEEL PRODUCES 0.8

TONNE OF COLD ROLLED STEEL REST IS SCRAP.PRODUCTIVITY WAS 80%. THE ENGINEERS AT TISCO

STUDIED THE PROCESS AND THRU METHOD STUDY

INCREASED PRODUCTIVITY TO 90% BY REDUCING SCRAP


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DEFINITION OF

PRODUCTIVITY MACHINE = RATED THROUGHPUT OF POWER

PLANT WAS 100 MWH. ACTUAL

THROUGHPUT(PLF) WAS 72% WHICH MEANT THE

POWER PLANT HAD 28% LOSSES.AFTER

STUDYING HEAT LOSSES AND INSTALLING

PREHEATERS AND REGENERATORS THE HEAT

LOSS WAS REDUCED BY 8%.HENCE

PRODUCTIVITY OF POWER PLANT ROSE TO 80% MAN = STANDARD OUTPUT OF TRAINED 1 YEAR

EXPERIENCED ORACLE PROGRAMMER IS 80

DEBUGGED LINES OF CODE PER DAY. ON A

PARTICULAR DAY MR X PRODUCED 60 LINES. HISPRODUCTIVITY WAS 75%


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MYTHS IN PRODUCTIVITY

PRODUCTION IMPROVEMENT MEANS

PRODUCTIVITY IMPROVEMENT

EFFICIENCY IMPROVEMENTGUARANTEES PRODUCTIVITY

IMPROVEMENT

IMPROVEMENT IN SALES REVENUE

ENSURES PRODUCTIVITY IMPROVEMENT

QUALITY IMROVEMENT ENHANCES

PRODUCTIVTY


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PARTIAL PRODUCTIVITY

DEFINED AS RATIO OF TOTAL OUTPUT TO ANY ONE TYPE

OF INPUT eg MATERIAL , MONEY ,LABOUR , ENERGY

LABOUR PRODUCTIVITY = TOTAL OUTPUT/LABOUR COST

eg 1000 cr/300cr = 3.3 MATERIAL PRODUCTIVITY =TOTAL OUTPUT/MATRL COST

eg 1000cr/200cr 5.0

CAPITAL PRODUCTIVITY = TOTAL OUTPUT/CAPITAL COST

eg 1000cr/300 = 3.3

CAN ALSO BE CALLED FIXED ASSET PRODUCTIVITY ENERGY PRODUCTIVITY =TOTAL OUTPUT/ENERGY COST

eg 1000cr/100cr = 10


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PARTIAL PRODUCTIVITY GIVES MEASURE OF

IMPACT OF TYPE OF INPUT ON OVERALL

PRODUCTIVITY

PARTIAL PRODUCTIVITY HELPS IN DETERMINING

IMPORTANCE OF TYPE OF INPUT ON

EFFECTIVENESS OF PROCESS


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ASSET ENERGY

SUSTAINABILITY INDEX Most companies concentrate on achieving a high degree of

overall equipment effectiveness

OEE = UPTIME * EFFICIENCY * QUALITY where

efficiency is the throughput productivity

But while doing so how much is the extra energy

consumed

Are we achieving higher throughputs but sacrificing

energy consumption

Asset Energy Sustainability Index = OEE * (Expected

energy consumption per unit produced/Actual energy

consumed per unit)


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COMPARITIVE PLANT FIGURES OF

ENERGY CONSUMPTION PER

VEHICLE IN HERO HONDA PLANTS2009 2010

PLANT VEH KWH/VEH VEH KWH/VEH

GURGAON 15.59L 35.85 15.93L 36.97

DHARUHERA 15.99L 31.12 15.33L 32.09

HARIDWAR 6.30L 24.63 14.04L 17.31

SOURCEANNUAL REPORT OF HERO HONDA 2009-2010


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ADVANTAGES EASY TO UNDERSTAND EFFECT OF

INDIVIDUAL FACTOR OF INPUT ON

OUTPUT EASY TO OBTAIN DATA

EASY TO COMPUTE PRODUCTIVITY

INDICES

EASY TO CONVINCE MGT OF BENEFITS

GOOD DIAGNOSTIC TOOLS AVAILABLE TO

PINPOINT AREAS OF PRODUCTIVITY

IMPROVEMENT


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DISADVANTAGES IF USED ALONE CAN BE MISLEADING

STRESSES ON ONE FACTOR

CANNOT EXPLAIN OVERALL COSTINCREASES

TEND TO SHIFT BLAME ON WRONG AREAS

OF MGT CONTROL

IN THE CASE OF PARTIAL LABOR

PRODUCTIVITY THE CONTRIBUTION OF

INDIRECT LABOR IS NOT TAKEN INTO

CONSIDERATION


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PROBLEM WITH TRADITIONAL

LABOR PRODUCTIVITY OUTPUT PRODUCED IS A RESULT OF JOINT AND

SIMULTANEOUS IMPACT OF ALL RESOURCES

NOT ONLY LABOR

COMPANIES SHOWING HIGH LABOR

PRODUCTIVITY GROWTH RATES ARE NOT

ALWAYS COMPETITIVE IN THE MARKET

ORGANIZATIONS WITH COLLECTIVE

BARGAINING AGREEMENTS BASED ONLY ONLABOR PRODUCTIVITY TEND TO REDUCE THE

UNIT LABOR COST BUT NOT ALWAYS THE TOTAL

UNIT COST eg COMPUTERIZATION LEADING TO

LABOR REDUCTION


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PROBLEM WITH TRADITIONAL

LABOR PRODUCTIVITY DIFFICULT TO IMPLEMENT TEAM CONCEPTS OF

MGT WHEN PERFORMANCE MGT IS FOCUSED

ONLY ON LABOR PRODUCTIVITY RATHER THAN

TOTAL PRODUCTIVITY

ORG STRUCTURES TEND TO BE LESS FLEXIBLE

WHEN EMPHASIS IS ON CONTROL OF LABOR

PRODUCTIVITY RATHER THAN TOTAL

PRODUCTIVITY DIFFICULT TO DIRECTLY RELATE LABOR

PRODUCTIVITY TO PROFITS

IN MOST MFG OUTFITS LABOR COST IS NOT A

SIGNIFICANT COMPONENT OF DIRECT COSTS eg


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TOTAL FACTOR

PRODUCTIVITY DEFINED AS RATIO OF NET OUTPUT TO SUM OF

LABOUR AND CAPITAL INPUTS

NET OUTPUT = TOTAL OUTPUTINTERMEDIATE

GOODS AND SERVICES PURCHASED

INTERMEDIATE GOODS AND SERVICES

PURCHASED INCLUDE RAW

MATRL,COMPONENTS,ENERGY COSTS,FUEL,FEES

FOR SERVICES etc

ALSO CALLED VALUE ADD WHEN COSTS

COMPUTED


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EXAMPLE OF TOTAL

FACTOR INDEX TOTAL FACTOR PRODUCTIVITY =

OUTPUT/CAPITAL + LABOUR INPUT =

100/(20 + 55) =100/75 = 1.33 VALUE ADD = SALESPROCURE PRICE

SERVICES PRICE = 25001000500 = 1000

VALUE ADD PER EMPLOYEE = 1000/200 = 5


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ADVANTAGES OF TOTAL

FACTOR PRODUCTIVITY DATA IS EASY TO OBTAIN

APPEALING FROM ECONOMIST

POINT OF VIEW


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DISADVANTAGES OF TOTAL

FACTOR PRODUCTIVITY VALUE ADDED APPROACH TO DEFINING

OUTPUT IS NOT VERY APPROPRIATE

NOT APPROPRIATE WHEN MATRL COSTFORMS SIZEABLE PORTION OF TOTAL

PRODUCT COST

ONLY LABOR AND CAPITAL INPUTS ARE

CONSIDERED

DATA FOR COMPARISON PURPOSES IS

DIFFICULT TO OBTAIN


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TOTAL PRODUCTIVITY

TOTAL PRODUCTIVITY IS THE RATIO OF TOTAL

OUTPUT TO THE SUM OF ALLINPUT FACTORS

MEASURE WHICH TAKES INTO CONSIDERATION

THE JOINT IMPACT OF ALL INPUT RESOURCES ON

OUTPUT SUCH AS

MATERIAL,MACHINES,CAPITAL,ENERGY etc

MEASURE VERY POPULAR IN INDUSTRY


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ADVANTAGES OF TOTAL

PRODUCTIVITY CONSIDERS ALL QUANTIFIABLE OUTPUT AND INPUT FACTORS AND IS

THEREFORE A MORE ACCURATE REPRESENTATION OF THE REAL

ECONOMIC PICTURE OF THE COMPANY

PROFIT CONTROL THRU THE USE OF THESE INDICES IS OF BENEFIT TO THE

MGT IF USED IN CONJUNCTION WITH PARTIAL PRODUCTIVITY CAN DIRECT

MGT ATTENTION IN AN EFFECTIVE MANNER

SENSITIVITY ANALYSIS IS EASIER TO PERFORM

EASILY RELATED TO TOTAL COSTS

MULTIPLE GOALS CAN BE ACHIEVED SIMULTANEOUSLY BY INCREASING

TOTAL PRODUCTIVITY OF A COMPANY USING THE RELATIONSHIP BETWEEN PROFIT AND TOTAL PRODUCTIVITY

A FIRM CAN OBJECTIVELY PLAN ITS PROFIT LEVEL BASED ON ITS ABILITY

TO REACH A CERTAIN PRODUCTIVITY LEVEL

USING THE CONCEPT OF BREAK EVEN POINT OF TOTAL PRODUCTIVITY A

FIRM CAN DETERMINE IF ITS TOTAL PRODUCTIVITY LEVEL IS A VALUE

THAT YIELDS PROFITS MGT IS FORCED INTO A LONG TERM ACTION ON QLTY,PROFITABILITY etc


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DISADVANTAGES OF TOTAL

PRODUCTIVITY DATA FOR COMPUTATION IS DIFFICULT TO

OBTAIN AT PRODUCT AND CUSTOMER LEVEL

LIKE THE PARTIAL AND TOTAL FACTOR

MEASURES THIS ALSO DOES NOT CONSIDER

INTANGIBLE FACTORS OF OUTPUT AND INPUT IN

A DIRECT MANNER


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AMERICAN PRODUCTIVITY

CENTRE MODEL MODEL DERIVES EQUATION OF PROFITABILITY WITH

PRODUCTIVITY AND PRICE RECOVERYFACTOR

PROFITABILITY = SALES/COST

= OUTPUT QTY * PRICE/INPUT QTY * UNIT COST=OUTPUT QTY/INPUT QTY *UNIT PRICE/UNIT COST

=PRODUCTIVITY * PRICE RECOVERY FACTOR

PRICE RECOVERY FACTOR INDICATES THE INFLATIONARY

EFFECT AND PRODUCTIVITY GIVES THE AMOUNT OF

RESOURCES CONSUMED TO PRODUCE THE DEFINEDOUTPUT. IT IS THE PRICE RATIO OF CURRENT PERIOD TO

THE BASE PERIOD


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APPLICATIONS OF

PRODUCTIVITY TECHNIQUES APPLIED TO ALL FUNCTIONAL AREAS BOTH IN

MFG AND SERVICES

CONCEPTS OF PRODUCTIVITY VITAL TO

SUCCESS AND SURVIVAL OF ORG IN TODAYS

HIGHLY COMPETITIVE GLOBAL BUSINESS

ENVIRONMENT

ONLY MEASUREMENT OF PRODUCTIVITY

INADEQUATE FOR COMPANY TO SURVIVE

CONTINUOUS IMPROVEMENT IN PRODUCTIVITY

IN ALL FUNCTIONAL AREAS AT A RATE FASTER

THAN COMPETITION IS A DECISIVE BUSINESS

FACTOR FOR SURVIVAL AND SUCCESS OF


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KEY PARAMETERS

MARKETING

ACCURACY OF DEMAND FORECASTING

-COST LEADERSHIP-SERVICING SPEED AND EFFECTIVENESS

-OPTIMISED PRODUCT MIX

PRODUCTION

-INVENTORY CONTROL-JUST IN TIME

-PROCUREMENT COST

-SAFETY


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AREAS OF PRODUCTIVITY

TECHNIQUES SUPPLY CHAIN MGT

DEMAND FORECASTING

COST MANAGEMENT LOGISTIC MGT

SERVICING SPEED AND EFFECTIVENESS

METHOD STUDY

PLANT LAYOUT MATERIAL HANDLING

INVENTORY CONTROL (INV TURNOVER RATIO)

WORK MEASUREMENT


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AREAS OF PRODUCTIVITY

TECHNIQUES MOTION STUDY

MATERIALS MGT AND CONTROL

PRODUCTION PLANNING AND CONTROL INVENTORY MODELS

ERGONOMICS

SAFETY JOB EVALUATION


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CAUSES OF POOR

PRODUCTIVITY LACK OF PRODUCTIVITY MEASURES BY WAY OF ABSENCE

OF A SYSTEM TO CAPTURE CORRECT AND TIMELY INPUTS

RELEVANT TO PRODUCTIVITY MEASUREMENTS

ESPECIALLY FOR ADMINISTRATIVE STAFF

FAULTY APPRAISAL SYSTEM BASED ON QUALITATIVE

JUDGEMENTS

INADEQUATE WORK ASSIGNMENT

DEMOTIVATED OR UNDER CAPABLE EMPLOYEES

LOW EMPLOYEE INVOLVEMENT HUMAN CONFLICTS

LACK OF TRAINING AND SKILLS UPGRADES

TECHNOLOGICAL CHANGES ESPECIALLY FROM CLIENT

SERVER TO THIN CLIENT

UNBALANCED PRODUCTION LINE OR UNRELIABLE LINE


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MATERIAL BASED

PRODUCTIVITY TECHNIQUES INVENTORY CONTROL

SUPPLY CHAIN MGT

MATERIAL HANDLING

QUALITY ASSURANCE

JUST IN TIME MFG AND PROCUREMENT


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PEOPLE BASED PRODUCTIVITY

TECHNIQUES INDIVIDUAL FINANCIAL INITIATIVES

GROUP FINANCIAL INITIATIVES

LIBERAL FRINGE BENEFITS

EMPOWERMENT AND OWNERSHIP

TRAINING AND PERSONAL DEVELOPMENT

JOB ENRICHMENT AND ROTATION

EMPLOYEE PARTICIPATION IN MGT


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PRODUCT BASED

PRODUCTIVITY TECHNIQUES VALUE ENGINEERING

PRODUCT DIVERSIFICATION

PRODUCT SIMPLIFICATION

PRODUCT FLEXIBILITY AND AGILITY

BENCHMARKING


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TASK BASED

PRODUCTIVITY

TECHNIQUES WORK MEASUREMENT INCLUDING

METHOD STUDY , TIME STUDY , MOTION

STUDY JOB DESIGN JOB EVALUATION AND JOB

SAFETY


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ILO APPROACH TO PRODUCTIVITY

IMPROVEMENT ILO APPROACH IS TASK BASED

IT BREAKS MFG TIME INTO BASIC

WORK CONTENT ,ADDED WORKCONTENT AND INEFFECTIVE TIME

APPROACH FOCUSES ON REDUCING

INEFFICIENT TIME IN THE TOTALWORK CONTENT


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INEFFECTIVE TIME

ALL INTERRUPTIONS WHICH CAUSE

STOPPAGE IN OPERATION IS REGARDED

AS INEFFICIENT TIME BECAUSE NO WORKEFFECTIVE TOWARDS COMPLETION OF

OPERATION IN HAND IS BEING DONE

DURING PERIOD OF INTERRUPTION

INEFFECTIVE TIME DUE TOSHORTCOMINGS BY MGT.TIME DURING

WHICH MAN/MC IS IDLE BECAUSE MGT

FAILED TO PLAN DIRECT OORDINATE OR

CONTROL EFFICIENTLY


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REDUCTION IN

INEFFECTIVE TIME INEFFECTIVE TIME WITHIN CONTROL OF WORKER CAN BE

REDUCED THRU ADOPTION OF FOLLOWING INITIATIVES

- POOR DESIGN AND FREQUENT DESIGN CHANGES

-WASTE OF MATERIAL

-INCORRECT QUALITY STDS

-POOR LAYOUT AND UTILIZATION OF SPACE

-INADEQUATE MATEIAL HANDLING

-FREQUENT PRODUCTION STOPPAGES

-INEFFECTIVE WORK METHODS

-POOR WORK PLANNING-FREQUENT BREAKDOWNS

-ABSENTEEISM , WRONG ATTITUDES

-POOR WORKMANSHIP

-ACCIDENTS AND SAFETY ISSUES


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SURVEY RESULTS ON

PRODUCTIVITY TYPICAL 8 HR DAY

-3.5 HRS(44%) PRODUCTIVE TIME

-1.2 HRS(15%) UNAVOIDABLE DELAYS

-3.3 HRS(41%) WASTED TIME

REASONS FOR PRODUCTIVITY LOSS

-POOR PLANNING AND WORK SCHEDULING (35%)

-UNCLEAR INSTRUCTIONS TO EMPLOYEES(25%)

-INABILITY TO ADJUST STAFF SIZE AND DUTIESDURING PEAK LOADS(15%)eg BANK CASH

DISPENSING TELLERS

-POOR COORDINATION OF MATRL FLOW

,UNAVAILABILITY OF MACHINE(25%)


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COMMON MFG RATIOS

UNITS PRODUCED/LABOR HRS

REWORK HRS REQD/UNITS

PRODUCED

NUMBER DEFECTS/TOTAL UNITS

MACHINE UTILIZATION %

WT OF WASTE/WT OF FINISHED

GOODS

WT OF FINISHED GOODS/RM WEIGHT


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COMMON SERVICES RATIOS

NUMBER OF CUSTOMER

COMPLAINTS/ORDERS DELIVERED OR

NUMBER OF PRODUCTS SOLD NUMBER OF DATA ENTRY ERRORS /TOTAL

DATA ENTERED

LATE DELIVERIES/TOTAL DELIVERIES

PROJECT PLANNED COST/ACTUAL COST

OVERTIME HRS/REGULAR HRS

CUSTOMER RETURNS%

WARRANTY COSTS/SALES%


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HARD METRICS IN

PRODUCTIVITY PLANT UTILIZATION

ENERGY EFFECTIVENESS INDEX

NUMBER OF ACCIDENTS AND HRS

LOST DUE TO ACCIDENTS

OVERALL PLANT EFFECTIVENESS

OVERALL PROCUREMENT

EFFECTIVENESS

OVERALL DISTRIBUTION

EFFECTIVESS


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SOFT METRICS IN

PRODUCTIVITY EMPLOYE MORALE

EMPLOYEE LOYALTY

EMPLOYEE INVOLVEMENT

JOB SATISFACTION

HONESTY


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SUMANTHS TOTAL

PRODUCTIVITY MODEL MODEL DEFINES TOTAL PRODUCTIVITY

MEASURE WHICH INCLUDES ALL THE OUTPUT

AND INPUT FACTORS

THE TPM IS BASED ON TANGIBLE OUTPUT AND

INPUT ELEMENTS WHICH ARE DIRECTLY

MEASUREABLE AND QUANTIFIABLE

MODEL ALSO REFLECTS THE IMPACT OF

INTANGIBLES DIRECTLY eg IF THE TOTALPRODUCTIVITY LEVEL GOES DOWN IN A PERIOD

IT COULD BE BECAUSE OF POOR QLTY OF RAW

MATRL WHICH INCREASE THE MATRL INPUT OR

REDUCED OUTPUT AS A RESULT OF REWORK


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IMPLEMENTATION PROCESS FOR

TOTAL PRODUCTIVITY MGT MISSION STATEMENT DEVELOPMENT

TOTAL PRODUCTIVITY MODEL AND COMPREHENSIVE

TOTAL PRODUCTIVITY MODEL ANALYSIS

MGT GOALS DEVELOPMENT FISHBONE ANALYSIS

ACTION PLANS DEVELOPMENT

PRODUCTIVITY QUALITY TEAM TRAINING

IMPLEMENTATION OF ACTION PLANS

ASSESSING THE EXTENT TO WHICH THE MGT GOALS ARE

ACHIEVED

TOTAL PRODUCTIVITY GAINSHARING

NEW GOALS DEVELOPMENT


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STEP 1 MISSION

STATEMENT AN ENTERPRISE WITHOUT A MISSION STATEMENT IS LIKE

A BUILDING WITHOUT A FOUNDATION

MOST COMPANIES HAVE SO LITTLE SUCCESS WITH NEW

IDEAS BECAUSE THEY DONT HAVE A CENTRAL GUIDINGPHILOSOPHY CAPTURED THRU A VISION AND A MISSION

A VISION REPRESENTS A VERY LONG TERM GOAL

A MISSION REPRESENTS A SHORT TO MEDIUM TERM

STATEMENT OF PURPOSE

A MISSION STRETCHED OVER A RELATIVELY LONG PERIODOF TIME BECOMES A VISION

A CORRECTLY DRAFTED MISSION SHOULD HAVE SEVERAL

CHARACTERISTICS


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FACTORS TO BE CONSIDERED

IN MISSION STATEMENT HIGHLIGHT MAJOR STRENGTHS

HIGHLIGHT ENVIRONMENTAL FACTORS

SUCH AS ECONOMIC,POLITICAL,SOCIAL) STRATEGY FOR COMBATTING

COMPETITION

QUALITY OF SERVICE

STRATEGY FOR SUPPLIERS

CUSTOMER CHARACTERISTICS

MARKET CHARACTERISTICS


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CHARACTERISTICS OF

GOOD MISSION STATEMENT ARTICULATES GUIDING PHILOSOPHY OF

ENTERPRISE WITH A CENTRAL FOCUS

CONCISELY WORDED COMES NATURALLY TO EVERYONE

DEVELOPED CAREFULLY THRU ACTIVE

INVOLVEMENT OF EMPLOYEES

NEEDS TO BE REVISED AS PER THE

TACTICAL AND STRATEGIC PLANS OF THE

COMPANY AND THE THEN PREVAILING

INDUSTRIAL ENVIRONMENTAL OUTLOOK


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STEP 2 TPM ANALYSIS

TRENDS DISCOVERY IN

-TOTAL PRODUCTIVITY-BREAK EVEN POINT OF TOTAL PRODUCTIVITY

-HUMAN PRODUCTIVITY

-MATERIALS PRODUCTIVITY-FIXED CAPITAL PRODUCTIVITY

-WORKING CAPITAL PRODUCTIVITY

-ENERGY PRODUCTIVITY

-OTHER EXPENSES PRODUCTIVITY


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STEP 3 MANAGEMENT

GOALS FOUR CRITERIA FOR A GOAL TO QUALIFY AS A MGT GOAL

EVERY MGT GOAL MUST

-ACHIEVE MISSION STATEMENT

-BE VERY SPECIFIC

-BE TIME BASED

-BE VERIFIABLE

IN HMT THE GOALS ESTABLISHED WERE

-INCREASE HUMAN PRODUCTIVITY BY 7% PER YEAR

-INCREASE OTHER EXPENSE PRODUCTIVITY BY 3.5% YRLY

-REDUCE INVENTORIES BY 5% INORDER TO INCREASE

WORKING CAP ITAL PRODUCTIVITY


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STEP 4 FISHBONE ANALYSIS

WELL ESTABLISHED TOOL TO ANALYZE

THE CAUSES FOR A PROBLEM

FISHBONE ANALYSIS DONE FOR EACH OFMGT GOALS IN STEP 3

IF A COMPANY CAREFULLY ANALYZES

ALL TASKS , PROCESSES AND

TECHNIQUES NEEDED TO ACCOMPLISHEACH MGT GOAL , IT WILL BE BETTER

EQUIPPED TO ALLOCATE RESOURCES

TOGOALS THAT WOULD ATTAIN ITS

MISSION


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Cause-and-Effect Diagram for

Manufacturing

Exhibit S6.8


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STEP 5 ACTION PLANS

ACTION PLAN IS DEVELOPED FOR EACH MGT GOAL

ACION PLAN INCLUDES DETAILS OF TASKS ,START AND

END DATES,PEOPLE RESPONSIBLE FOR EACH TASK

ACTION PLAN IS ANOTHER WAY TO CREATE A CAREFULTHOUGHT OUT PLAN OF ACTION TO ACHIEVE A MGT GOAL

TOOL TO ASSIGN PEOPLE TO TASKS WHICH WHEN

ACCOMPLISHED WILL ACHIEVE MGT GOALS WHICH IN

TURN WILL AID ACHIEVEMENT OF VISION AND MISSION

ACTION PLAN HELPS IDENTIFY BOTTLENECKS


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STEP 6 PRODUCTIVITY

QUALITY TEAM TRAINING TRG IS PROVIDED TO ALL

EMPLOYEES SO THAT THEY HAVE

THE REQUISITE TOOLS TOACCOMPLISH TASKS IN THE ACTION

PLANS IN AN EFFECTIVE AND

EFFICIENT MANNER TRAINING FOCUSES ON PROBLEM

SOLVING


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STEP 7 IMPLEMENTATION

OF ACTION PLANS IMPLEMENTATION BECOMES MORE

SYSTEMATIC WITH DETAILED

ACTION PLAN ACTION PLANS ARE CONSTANTLY

REVISED AS THE TASKS PROGRESS

THER IS A CONTINUOUS FEEDBACKCONTROL WHICH IS MONITORED

CAREFULLY


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STEP 8 MGT GOALS

ACHIEVED PROGRESS TOWARDS ACHIEVEMENT OF

GOALS IN STEP 3 ASSESSED ON A

PERIODIC BASIS SAY QUARTERLY

IF A GOAL IS NOT ACHIEVED THE ACTION

PLAN RELATED TO THAT GOAL NEEDS TO

BE REVIEWED AND CORRECTIVE ACTION

INITIATED WHICH INCLUDESDOWNSIZING OF GOAL IF ACHIEVEMENT

IS NOT POSSIBLE DUE TO INTERNAL AND

EXTERNAL ENVIRONMENTAL CAUSES


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STEP 9 TOTAL PRODUCTIVITY

GAIN SHARING BRAINSTORMING APPROACH BASED ON TOTAL

PRODUCTIVITY

STEP PROVIDES FOR A TANGIBLE MONETARY INCENTIVE

TO ACHIEVE THE MAXIMUM POSSIBLE POTENTIAL OF TPM

REASONS FOR INCLUDING GAIN SHARING IN TPM INCLUDE

-NEED TO SUSTAIN MOTIVATION IN NEW CONCEPTS.

INTANGIBLE MOTIVATION IS A NECCESARY CONDITION

NOT A SUFFICIENT ONE TO SUSTAIN POSITIVE

MOTIVATION

-IT IS FAIR TO SHARE GAINS WITH RESPONSIBLE FOR IT

-RATE OF NEW HIRING CAN BE REDUCED DRAMATICALLY


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STEP 10 NEW GOALS

SET NEW GOALS WHEN ALL

PREVIOUS GOALS HAVE BEEN

ACHIEVED SET ANNUAL GOALS. THIS LOOKS

OKAY BUT IN A DYNAMICALLY

CHANGING SITUATION ANNUALREVIEW OF GOALS MAY BE A BIT

TOO LATE. NEED TO REVIEW EITHER

ON A QTRLY BASIS OR WHENEVER


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HOW PRODUCTIVITY CAN

BE IMPROVED INCREASING OUTPUT WITH SAME

INPUT

INCREASING OUTPUT MORE THANTHE INCREASED INPUT

DECREASING INPUT FOR SAME

OUTPUT INCREASING OUTPUT WITH

DECREASED INPUT


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BENEFITS OF TOTAL

PRODUCTIVITY MGT CUSTOMER RESPONSIVENESS

QUALITY COMPETITIVENESS

TOTAL COST COMPETITIVENESS TEAM BUILDING AND ACCOUNTABILITY

TECHNOLOGY PLANNING

INVESTMENT ANALYSIS ACQUISITION AND MERGER PLANNING

PROFIT TARGETTING


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WASTE MANAGEMENT


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Wasteis anything other than

the minimum amount of

equipment, materials, parts,space, and workers time,

which are absolutely

essential to add value to the

product.

Shoichiro Toyoda

President, Toyota 1995 Corel Corp.

Introductory Quotation


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61

What is WASTE?

Any Activity that DOES NOT increase the Market Form

or Function of the Product or Service based on the

Critical Customer Requirements.

These are things the customer is NOT

willing to pay for.

DEFINITION OF


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DEFINITION OFWASTE

THE OXFORD DICTIONARY DEFINES WASTEAS UNPURPOSEFUL OR EXTRAVAGANTACTIVITY WHICH RESULTS IN

UNPRODUCTIVE END RESULTS WASTE IS A PRODUCT,ACTIVITY OR

SERVICE FOR WHICH AN EXTERNALCUSTOMER IS UNWILLING TO PAY FOR

CASE OF SECURITY CESS IN RAILWAYS WASTE IS ONLY NUISANCE VALUE TO

CUSTOMER


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WASTE MANAGEMENT

WASTE EXISTS EVERYWHERE FROMINDUSTRY TO HUMAN ACTIVITIES

IN ANY PROCESS WASTE ACCOUNTS FOR

A VERY LARGE AMOUNT OF NON VALUEADD ACTIVITY

MGT NEEDS TO CONTROL ACTIVITIESBETTER THRU TIGHTER CONTROL

WASTE MGT IMPROVES COSTS ANDPRODUCTIVITY AND REDUCES CYCLETIMES


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MUDA MURI MURA

3 JAPANESE TERMS USED BY TOYOTA TO

SIGNIFY DIFFERENT TYPES OF WASTES

MUDA IS WASTE. TWO TYPES OF WASTE TYPE 1

MUDA UNAVOIDABLE WASTE OR FORCEDSCRAP(ESSENTIAL NVA);TYPE 2 OR AVOIDABLE

WASTE

MURA IS WASTE OF INCONSISTENCY OR

UNEVENNESS OF FLOW.UNEVENNESS INPRODUCTION FORCES PROCESSES TO DEAL WITH

SPIKES IN DEMAND AND HAS IDLENESS IN

SLACK PERIODS

MURI IS OVERBURDENING OF SYSTEM64


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65

Eliminate Waste

Mudaanything that does not add value

for the customer

Products in storageProducts being inspected

Products waiting in queues

Defective productsUnnecessary movement of materials or workers

- 2 TYPES OF WASTES TYPE 1 WASTE WHICH ISESSENTIAL NON VALUE ADD ACTIVITIES AND TYPE 2

WASTE WHICH IS ELIMINATABLE eg INSPECTION


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66

Examples of Waste Idle machine run Waiting for parts

Counting parts

Overproduction Moving parts over long distances

Storing inventory

Looking for tools

Machine breakdown

Rework


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Common Causes of Waste

Layout (distance)

Long setup time

Incapable processes Poor maintenance

Poor work methods

Lack of training

Inconsistentperformance measures

Ineffective production

planning

Lack of workplaceorganization

Poor supplyquality/reliability

C C f W t


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Common Causes of Waste Excess Manning

Poor layout and material presentation Rework and extra processes

Inconsistent / inefficient work methods

Excess Downtime

Tooling condition Unreliable equipment

Long changeovers

Incapable process

Defectives - Rework or Replace

Incapable processes or process not compatiblewith customer expectations or design spec (designfor mfg)

Tooling condition

Operator methods and errors

Where is the Waste?


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69

Where is the Waste?

Defects incomplete or incorrect information

Overproduction releasing work before nextprocess can work on them, unbalanced work loads

Waiting unbalanced work loads, slow system response,incomplete information, approvals

Not Utilizing Employees old guard thinking, politics, high

turnover, low investment in training

Transportation poor layout, poor flow

Inventory large batches, complexity to complete task

Motion poor organization, no standard work

Excess Processing excess communication, lack ofcommunication, unnecessary approvals, customer

requirements are not clearly understood

All processes have waste.


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. 9-70

Types of Waste (Muda)

in Toyota production system Overproduction

Waiting

Transportation

Inventory

Motion

Overprocessing

Defects


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PRODUCING DEFECTS

DEFECTS IN PRODUCT / SERVICE ARE MAJOR SOURCE OF WASTE

COSTS OF WASTE INCLUDE WARRANTY COSTS,ATTENDINGCOMPLAINTS AS WELL AS REWORK,INSPECTION

CASE OF DELL COMPUTERS

PRODUCT DEFECTS TO BE ELIMINATED BY QUALITY ASSURANCE INDESIGN ELIMINATING NEED TO INSPECT OR REWORK

DEFECTS INCREASE PRODUCTION COSTS AND LEAD TIME OFMANUFACTURE

DEFECTS DUE TO WRONG OPERATING PROCEDURES,VARIATIONS INOPERATIONS RESULTING IN M/C WEAR,DEFECTIVE RAW

MATRL,OPERATOR ERROR etc

TRANSPORTATION AND


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TRANSPORTATION ANDMATERIAL HANDLING

ITEMS IN MFG MOVED FROM STATION TO STATION TRANSPORTATION WASTES TIME AND IN THE CASE

OF HUMAN BEINGS WHO MAY HAVE TO MOVE FROMSTATION TO STATION TO DO WORK IT IS

FATIGUING AND CAUSES DECLINE INPRODUCTIVITY AND INCREASE IN ERROR RATES OBJECTIVE IS TO MINIMIZE HUMAN EFFORT IN

TRANSPORTATION AND MATERIAL HANDLING BYHAVING CONVEYOR BELTS

CASE STUDY OF AUTOMOBILE ASSEMBLY LINEWHERE AUTOMOBILE MOVES ON THE CONVEYORBELT AND MAN IS STATIONARY.TIME REDUCEDFROM 12HRS/CAR TO 1 HR/ASSEMBLY


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INVENTORY

INVENTORY AS PER TOYOTA IS ONE OF THE SEVENSINS

INVENTORY REPRESENTS ITEMS WAITING FORSOMETHING TO HAPPEN (JUST IN CASE)

INVENTORY IS CARRIED TO PREEMPT DELAYS INDELIVERY OF PROCESS INPUT OR TO PROVIDE FORCUSHION STOCKS TO TAKE CARE OF MFGREWORK/SCRAP (SOME CUSHIONS ACCOUNT FORAS MUCH AS 5% OF RAW MATERIAL)

WASTES ASSOCIATED WITH HOLDING COSTS,DEPRECIATION, EXPIRY DATES , DETERIORATION.PILFERAGE ETC

JUST IN TIME IS THE REMEDY FOR EFFECTING ZEROINVENTORY


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OVERPRODUCTION

EXCESS PRODUCTION BECAUSE OFWRONG SALES FORECASTS OR ATTEMPTTO KEEP FACILITIES RUNNING

MFG OF EXCESS PRODUCTION IS WASTE

CASE OF ALL SALES OF READY MADEGARMENTS

WASTE FROM OVERPRODUCTION ISREFLECTED IN UNSOLD STOCKS WHICH

ADD TO FINISHED GOODS INVENTORY


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WAITING

WASTE OF WAITING IS EASY TO IDENTIFY

WAITING IS A RESULT OF UNBALANCEDPROCESS SEQUENCE OR BREAKDOWN INBOTTLENECK PROCESS

INCLUDES WAITING FOR ORDERS, RAWMATERIAL, POWER, SPARES, LABOUR OR EVENFUNDS TO PROCURE RESOURCES

WAITING ALSO INCLUDES ITEMS FROM

PRECEDING PROCESSES EXAMPLE OF PILE UP OF WIP OR PERISHABLES

AWAITING CUSTOMS CLEARANCE

WAITING


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WAITING

WAITING MINIMIZED BY BUSINESSPROCESS ACTIVITY IMPROVEMENT ORMINIMIZATION OF LEAD TIME TO

PROCURE THROUGH VENDOR MANAGEDINVENTORY OR OTHER INITIATIVES

WAITING ALSO MINIMIZED BY GOOD

MAINTENANCE PRACTICES SUCH AS CBMRESULTING IN MAXIMIZEDEFFECTIVENESS

PROCESSING


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PROCESSING

PROCESS MAY CONTAIN ACTIVITIES WHICH AREINEFFECTIVE OR UNNECCESARY

PROCESSING WASTE CAN BE ELIMINATED BYMINIMIZING MOTION REQUIRED TO PERFORM

WORK ACTIVITY ANALYSIS DONE TO DETERMINE

PROCESS UTILISATION TIME AND THEREAFTER

PROCESS IMPROVEMENT DONE TO ELIMINATEDELAYS AND NON VALUE ADDED ACTIVITIES

MOTION


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MOTION

BEING IN MOTION IS INCORRECTLY CONNOTED TO BE ATWORK

MOTION AND WORK ARE NOT THE SAME

WORK IS CONSIDERED A PARTICULAR KIND OF MOTION THATADDS VALUE

AN APPARENTLY BUSY PERSON MAY ACTUALLY PRODUCEVERY LITTLE WORK

INHERENT HANDICAP AT RIGHT HANDED WORKPLACE FORLEFTHANDERS

MOTION UNREQD TO DO WORK IS WASTE

EXCESSIVE MOTION CAUSES FATIGUE AND LOSS OFPRODUCTIVITY AND INCREASE OF WASTE

CASE OF BEARING LIFETIME INVERSELY PROPORTIONAL TORPM

ROOT CAUSE OF TOYOTA


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ROOT CAUSE OF TOYOTAWASTES

USAGE OF 5 WHY ANALYSIS

DEFECTS

-INADEQUATE DESIGN POOR MATERIAL

-WRONG PROCESS SPECIFICATIONS

-OPERATOR ERROR -INADEQUATE TESTING

TRANSPORTATION

-WAIT TIME TO TRAVEL -LAYOUT

INVENTORY

-OBSOLETE STOCKSJUST IN CASEWRONGFORECST

CUSTOMER CANCELLATIONSMKT SLUMP

OVERPRODUCTION -WRONG FORECAST

ROOT CAUSE OF TOYOTA


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OO U O O OWASTES

WAIT TIME

-IMBALANCE IN PROCESS THROUGHPUT ORPROCESS BREAKDOWN

-POOR SCHEDULING -INADEQUATE LABOURSCHEDULING

MOTION

-EXCESS MOTIONEXCESS PAPER DISTRIBUTION

PROCESSING-INEFFECTIVE OR NON VALUE ADDED STEPS

REMEDIESFOR TOYOTA


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WASTES

WASTE REMEDY

OVERPRODUCTION JIT/PULL PRODUCTIONWAITING PROCESS ACTIVITY STUDY

TRANSPORTATION MOTION STUDYWRONG PROCESSING METHOD STUDYEXTRA INVENTORY JUST IN TIMEEXTRA MOTION MOTION STUDY

DEFECTS ROOT CAUSE ANALYSISAND FMECA

OFFICE WASTES


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OFFICE WASTES

ERRORS IN DOCUMENTS

DOING UNREQUIRED WORK NOT REQUESTED PROCESS OF GETTING APPROVALS AND NEEDLESS LEVELS OF

APPROVALS BACKLOG OF WORK UNREQUIRED STATIONERY FILES PAPERS AT WORKPLACE UNCLEAR JOB DESCRIPTIONS RESULTING IN UNDEFINED

OUTCOMES EXCESS DEBIT CREDIT NOTES DUE TO ERRONEOUS PO

INVOICE OBSOLETE DATABASES TYPOGRAPHICAL ERRORS UNREQUIRED COMMUNICATION


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TOTAL WASTE REDUCTION

WASTE MAY EXIST IN PROCEDURES POLICIESSYSTEMS AND IS DIFFICULT TO IDENTIFYHIDDEN WASTES

AUTOMATION IS NOT THE SOLUTION TO WASTE

NEED OF THE HOUR IS TO IDENTIFY REALWASTES THAT AFFECT BOTTOM LINES

WASTE MGT SHOULD BE A CONTINUOUS DRIVEON THE GUIDELINES OF TQM

PERIODIC REVIEW OFPOLICIES,PROCEDURES,PROCESSES TO ENSUREPROCESS IMPROVEMENT AND WASTEREDUCTION

LEVELS OF WASTE


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LEVELS OF WASTE

FOUR LEVELS OF WASTE-BUSINESS LEVEL WASTES-PLANT LEVEL WASTES

-PROCESS AND METHOD WASTES-OPERATING LEVEL WASTES

LEVEL 1 BUSINESS LEVEL


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LEVEL 1 BUSINESS LEVELWASTE

LONG TERM AND SHORT TERM GOALS NOT COMMENSURATEWITH CAPABILITIES AND CAPACITY

SHORT TERM GOALS NOT ALIGNED WITH LONG TERMSTRATEGIC GOALS WHICH ENABLE THE REALISATION OF

VISION STRATEGIC OBJECTIVES OF EACH FUNCTION NOT IN UNISON

WITH CORPORATE OBJECTIVES LACK OF COORDINATION AND UNDERSTANDING WITH

STAKEHOLDERS LOP SIDED FINANCING INSTAL OF EXTRA CAPACITY W/O MAXIMISATION OF

CURRENT STRATEGIC DIVERSIFICATION IN AREAS WITHOUT

OPPORTUNITIES AND CORE COMPETENCE INEFFICIENT PRODUCT LIFECYCLE PLANNING AND MGT

LEVEL 2 PLANT LEVEL WASTE


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LEVEL 2 PLANT LEVEL WASTE

POOR PPC NOT BASED ON MARKETDYNAMICS

HIGH INVENTORIES

LOW PLANT EFFECTIVENESS ANDUNPROFITABLE OPERATIONS

HIGH OVERTIME PAYMENTS BUT LOWEMPLOYEE PRODUCTIVITY

LEVEL 3 PROCESS AND


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3 OC SSMETHODS LEVEL WASTE

INCORRECT OR INEFFECTIVEPROCESS METHODS

BORNE OUT OF LACK OF SKILLS OR

ATTITUDE

NEED TO MONITOR AND DO PERIODICMETHOD STUDIES TO MAXIMIZE

PROCESS THROUGHPUT WITHMINIMUM EFFORT

LEVEL 4 OPERATIVE LEVEL


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WASTE

POOR OPERATIVE CONTROLSRESULTING IN HIGH MFG COSTS

HIGH REWORK/REJECT CONTENT eg

.04% value of sales realized thru saleof scrap in 2008-09 and 0.16% valueof sales realized in 2009-10

UNDULY HIGH REACTIVEMAINTENANCE % ie 17.5% ofmaintenance time against 2% world

class (includes 7% breakdown)


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Root cause of waste

Defects

Inadequate Design - Poor Matrl - Wrong Proc - Oper Error

Inadequate Testing

Over Production

Over enthusiastic incentive - Wrong Forecast

Excess Inventory

Obsolete Stocks - Wrong Forecast - Customer amendments/cancellation

Poor Quality - Market Condition

Unrequired Motions

Over use of paper/distribution - Excess Walking - Excess Motions

Transportation Layout - wait time to travel

Wait Time

Poor Scheduling - Imbalance in prodn line - Inadequate labor resource


90/582

Root cause of waste

Process

Wrong operations or poor material leading to rework orreject

Poor process control Poor operating specifications

Untrained or de motivated operators


91/582

NON VALUE ADDED

ACTIVITIES


92/582

BUSINESS PROCESSES

EVERYTHING WE DO IS A PROCESS AND CONSISTS OF INPUTSPROCESSING AND OUTPUT

PROCESS TAKES INPUT FROM SUPPLIERS,ADDS VALUE ANDDELIVERS OUTPUT TO CUSTOMER

CUSTOMER COULD BE INTERNAL OR EXTERNAL AND SUPPLIER

COULD BE THE SAME AS CUSTOMER PROCESSES ARE SET OF LOGICALLY RELATED ACTIVITIES

LINKED BY RULES WHICH COMBINE TO DELIVER VALUE TOCUSTOMERS ACROSS FUNCTIONAL LINES . THEY USEPREDETERMINED LOGIC RULES TO PROCESS INPUTS

PROCESSES USE INPUTS FROM SUPPLIERS SUCH AS INFORMATIONSKILLS TRAINING PEOPLE,EQUIPMENT,MATERIAL,PROCEDURES

METHODS SPECIFICATIONS SERVICES KNOWLEDGE AND VOICEOF CUSTOMER

PROCESS PROCESSES INPUTS AS PER THE BUSINESS RULES ANDACTIVITY DEPENDENCIES

PROCESSES OUTPUT PRODUCTS SERVICES INFORMATION TOCUSTOMERS

OUTPUTS RESULT IN OUTCOMES WHICH ARE MEASURES

OUTCOMES ARE COMPARED WITH TARGETS AND RESULT IN

PROCESS MECHANICS


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MATERIALS

PROCEDURES

METHODS DATA

PEOPLE WITH SKILLS

KNOWLEDGE

MANAGEMENT

TRAINING

EQUIPMENT

FINANCE

BUSINESS RULES CONTROLS

ACTIVITIES

DEPENDENCIES

CONSTRAINTS

CAPABILITY

PRODUCTS

SERVICES

INFO

WASTE

INPUTS OUTPUTS CUSTOMER

VOICE OF THE

CUSTOMER

VOICE OF PROCESS

INPUTS PROCESS OUTPUTS

ACTIVITIES IN AN


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ACTIVITIES IN AN

ORGANIZATION EVERY THING WE DO IN A COMPANY IS A

PART OF A LARGER PROCESS WHICH IS

EXECUTED TO ACHIEVE BUSINESS

RESULTS

PROCESS COMPRISES OF SUB PROCESSES

SUB PROCESS IS DIDIDED INTO

ACTIVITIES WHICH CAN BE // OR INSEQUENCE

ACTIVITIES CAN BE DIVIDED INTO

INDIVISIBLE TASKS

PROCESS DECOMPOSITION INTO ACTIVITIES

ORDER TO


95/582

ORDER TO

CASH

ORDER

PROCESSING

PLAN TO

PRODUCE

DELIVER

NET MRP

MFG WO

PROCURE

TO PAY

RECEIVE

CASH

ACCEPT

TO

INVOICE

DELY TOACCEPT

TENDER

TO PO OR

PR TO PO

OPTIONAL

PO TO

TENDER

INDENT

TO PR

INVOICE

TO PAY

AWARD TOSUPPLIER

WRITE PROCURE

DETAILS WITH

QTY, RATE, DELVY

SCHEDULE,ETC

MULTI LEVEL

APPROVALAPPROVE PODESPATCH PO

ACTIVITIES

VALUE AND NON VALUE ADD


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VALUE AND NON VALUE ADD

ACTIVITIES MANY ACTIVITIES PERFORMED WHILE WORKING AND ARE

THE BUSINESS OUTCOMES OF PROCESSES

VALUE ADD ACTIVITIES ARE THOSE WHICH CUSTOMER ISWILLING TO PAY FOR

NON VALUE ADD ACTIVITIES ARE THOSE ACTIVITIESWHICH THE CUSTOMER WILL NOT PAY FOR

NON VALUE ADD ACTIVITIES MAY BE ESSENTIAL egSAFETY OR NON ESSENTIAL

PROCESS IMPROVEMENT NEEDS TO BE DONE ONESSENTIAL ACTIVITIES TO REDUCE COSTS,TIME ANDRESOURCES

NON VALUE ADD ACTIVITIES NEED TO BE EITHERELIMINATED OR MINIMISED AS THESE ACTIVITIES ONLYADD TO THE COSTS

VALUE ADDED ASSESSMENT


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ACTIVITY

REQD TO

PRODUC

E O/P

CONTRI

BUTES

TO CUST

REQMT

REQD TO

PRODUC

E O/P

ESSENTIAL NON

VALUE ADD

NON VALUE

ADD

REAL VALUE ADD

Y

NY

N

NY

ACTIVITY


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MAPPING AS-IS

INDENT TO

PURCHASE

ACTIVITY MAPPING AS-IS

INDENT TO PURCHASE


99/582

INDENT TO PURCHASE


100/582


101/582

ACTIVITY MAPPING

AS-IS INDENT TO


102/582

S S N N O

PURCHASE

ACTIVITY MAPPING

AS-IS INDENT TO


103/582

PURCHASE

ACTIVITY MAPPING TO BE TO

BE INDENT TO PURCHASE


104/582

ACTIVITY MAPPING

TO BE INDENT TO


105/582

PURCHASE

ACTIVITY MAPPING

TO BE INDENT TO


106/582

PURCHASE


107/582

ACTIVITY MAPPING

TO BE INDENT TO


108/582

PURCHASE


109/582

PROCESS WASTE


110/582

WASTE MANAGEMENT

WASTE EXISTS EVERYWHERE FROMINDUSTRY TO HUMAN ACTIVITIES

IN ANY PROCESS WASTE ACCOUNTS FOR

A VERY LARGE AMOUNT OF NON VALUEADD ACTIVITY

MGT NEEDS TO CONTROL ACTIVITIESBETTER THRU TIGHTER CONTROL

WASTE MGT IMPROVES COSTS ANDPRODUCTIVITY AND REDUCES CYCLETIMES

LEVELS OF WASTE


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LEVELS OF WASTE

FOUR LEVELS OF WASTE-BUSINESS LEVEL WASTES-PLANT LEVEL WASTES

-PROCESS AND METHOD WASTES-OPERATING LEVEL WASTES


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LEVELS OF WASTE

FOUR LEVELS OF WASTE:-LEVEL 1 refers to business related wastes. It includeswastes due to cross functional issues, poor communicationand coordination between vendors, customers and even

poor investment decisions-LEVEL 2 refers to plant level wastes. It includes faultyproduction planning and control, poor layout resulting inun required movement and WIP It includes poor m/ccapability resulting in rework, scrap and rejection. It alsoincludes poor maintenance policies


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114/582


WASTE

Faulty performance measure

Poor business policies and short sightedness at top

level

Poor communication and coordination between

vendors and customers

Too much emphasis on utilization of resources

Excess production

Poor product and process design

LEVEL 1 BUSINESS LEVELWASTE


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WASTE

LONG TERM AND SHORT TERM GOALS NOT COMMENSURATEWITH CAPABILITIES AND CAPACITY SHORT TERM GOALS NOT ALIGNED WITH LONG TERM

STRATEGIC GOALS WHICH ENABLE THE REALISATION OFVISION

STRATEGIC OBJECTIVES OF EACH FUNCTION NOT IN UNISON

WITH CORPORATE OBJECTIVES LACK OF COORDINATION AND UNDERSTANDING WITH

STAKEHOLDERS LOP SIDED FINANCING INSTAL OF EXTRA CAPACITY W/O MAXIMISATION OF

CURRENT

STRATEGIC DIVERSIFICATION IN AREAS WITHOUTOPPORTUNITIES AND CORE COMPETENCE

INEFFICIENT PRODUCT LIFECYCLE PLANNING AND MGT

LEVEL 2-PLANT LEVEL


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LEVEL 2 PLANT LEVEL

WASTES

Play safe tendency

Poor production planning and control

Poor layout resulting in back tracking andexcessive traveling

WIP inventory

Batch size constraints


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LEVEL 3-PROCESS AND


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LEVEL 3 PROCESS AND

METHOD WASTES

Poor sequencing of machines and

operations

Long changeover times Poor work place design

Tendency of temporary storage

Incapable and poorly maintained equipment

Unsafe methods

LEVEL 3 PROCESS ANDMETHODS LEVEL WASTE


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METHODS LEVEL WASTE

INCORRECT OR INEFFECTIVEPROCESS METHODS

BORNE OUT OF LACK OF SKILLS OR

ATTITUDE NEED TO MONITOR AND DO PERIODIC

METHOD STUDIES TO MAXIMIZE

PROCESS THROUGHPUT WITHMINIMUM EFFORT

LEVEL 4-MACHINE/OPERATOR


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LEVEL 4 MACHINE/OPERATOR

LEVEL WASTES

Poor housekeeping

Excess bending and fatigue

Lack of operator training Operator has to frequently fetch material for

production

LEVEL 4 OPERATIVE LEVELWASTE


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WASTE

POOR OPERATIVE CONTROLSRESULTING IN HIGH MFG COSTS

HIGH REWORK/REJECT CONTENT

UNDULY HIGH REACTIVEMAINTENANCE %

OFFICE WASTES


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ERRORS IN DOCUMENTS DOING UNREQUIRED WORK NOT REQUESTED PROCESS OF GETTING APPROVALS AND NEEDLESS LEVELS OF

APPROVALS BACKLOG OF WORK UNREQUIRED STATIONERY FILES PAPERS AT WORKPLACE

UNCLEAR JOB DESCRIPTIONS RESULTING IN UNDEFINEDOUTCOMES EXCESS DEBIT CREDIT NOTES DUE TO ERRONEOUS PO

INVOICE OBSOLETE DATABASES TYPOGRAPHICAL ERRORS UNREQUIRED COMMUNICATION



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STRUCTURED APPROACH TO DEAL WITH

WASTES AND DELAYS WITH VIEW TO

ELIMINATION

APPROACH SEPARATES WASTE(NON

VALUE ADD ACTIVITIES) FROM VALUE

ADDITION AND SCRUTINISES ESSENTIAL

NON VALUE ADD ACTIVITIES FORMINIMISATION OF WASTEFUL ACTIVITIES

PREREQUISITE FOR TQM



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WASTE MAY EXIST IN PROCEDURES POLICIESSYSTEMS AND IS DIFFICULT TO IDENTIFYHIDDEN WASTES

AUTOMATION IS NOT THE SOLUTION TO WASTE

NEED OF THE HOUR IS TO IDENTIFY REALWASTES THAT AFFECT BOTTOM LINES

WASTE MGT SHOULD BE A CONTINUOUS DRIVEON THE GUIDELINES OF TQM

PERIODIC REVIEW OF

POLICIES,PROCEDURES,PROCESSES TO ENSUREPROCESS IMPROVEMENT AND WASTEREDUCTION



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DRASTICALLY IMPROVES QLTY,PRODUCTIVITY,FLEXIBILITY AND SAFETY

REDUCES CYCLE TIME AND IMPROVESRESPONSIVENESS

MAXIMIZES UTILIZATION OF ASSETS ANDPROCESSES

MINIMISES [PROCESS LOSSES AND COST OF NONCONFORMITY

REDUCES PROCESS AND PRODUCT COST AND

IMPROVES CONTRIBUTIONS IMPROVES LIQUIDITY BY FREEING MONEY TIED

UP IN INVENTORIES AND OTHER WASTES

TOYOTA 7 WASTES


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TOYOTA 7 WASTES

PRODUCTION DEFECTS

TRANSPORTATION

INVENTORY OVER PRODUCTION

WAITING

PROCESSING

MOTIONS AND EFFORT

OTHER( ) WASTES


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OTHER(canon) WASTES

WASTED CAPACITY

WASTED ENERGY

WASTE FROM LOST OPPORTUNITY

WASTE FROM UNREQD EXPENSES

WASTE FROM UNUTILISED TALENT WASTE FROM LOSSES DUE TOEFFICIENCY,STARTUP,IDLING, BATCH CHANGEOVER

WASTE DUE TO COMMN LOSSES OR INEFFECTIVENESS OFCOMMN

WASTED PLANNING EFFORTS

WASTED INVESTMENTS WASTED OVERSTAFFING

WASTE IN DISPOSAL

ELIMINATION OF 3M


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ELIMINATION OF 3M

3M STAND FOR MUDA MURA AND MURI

MUDA MEANS WASTES OF ALL KINDSSUCH AS

REWORK,TRANSPORTATION,DELAYS MURA MEANS INCONSISTENCES SUCH ASNON CONFORMANCE TO QLTY AND STDOPERATING PROCEDURES

MURI MEANS NON RATIONALITY ORDISCREPANCY ie UNSCIENTIFIC WAY OFDOING THINGS

ELIMINATION OF 3M


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ELIMINATION OF 3M

3M EXERCISE DONE TO

-ELIMINATE WHOLE ACTIVITY

-REDUCE STEPS IN ACTIVITY-CHANGE AND SIMPLIFY ACTIVITY

-REDUCE THE TIME COST AND

FATIGUE INVOLVED IN ACTIVITY

MUDA


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MUDA

MUDA MEANS WASTE

WASTE IS ANY ACTIVITY THAT DOES NOT ADD VALUE

SUCH ACTIVITIES CONTRIBUTE TO COST OF POOR

QUALITY

MUDA IS TOTAL COST OF EXTERNAL PRODUCT/SERVICE

FAILURE PLUS THE COST OF PREVENTIVE MEASURES

MUDA DEFINED IN TOYOTA 7 WASTES AND CANON 9

WASTES

ELIMINATING MUDA REDUCES COST OF PRODN ,

ENHANCES PRODUCTIVITY , REDUCES CYCLE TIME , AND

LEADS TO BETTER CUSTOMER SATISFACTION

8 types of Muda


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1.Muda of over-production2. Muda of waiting

3. Muda of transport

4. Muda of processing

5. Muda of inventory

6. Muda of motion

7. Muda of repair/rejects

8. Muda of Untapped Human potential

MURI


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MURI

MURI MEANS UNREASONABLE OR IRRATIONAL

APPROACH TO ANY OPERATION

KAIZEN CHECKLIST TRIES TO LOOK INTO IMPROVEMENT

BY IDENTIFYING AND ELIMINATING THE

UNREASONABLENESS IN AREAS SUCH ASMANPOWER,TECHNIQUE,METHOD,TIME,FACILITIES,TOOLS,

MATERIALS,INVENTORY,PLACE,PRODUCTION,,QUANTITY,

QUALITY, etc

MURI LOOKS FOR IRRATIONALITY WITH FOUR MAJOR

APPROACHES

M ri


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Muri

Muri = Physical Strain

Bend to work?

Push hard?

Lift weight?

Repeat tiring action?

Wasteful walk?

All this is Muri

4 APPROACHES OF MURI


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4 APPROACHES OF MURI

THINGS OR ACTIVITIES THAT ARE EXTREMELY DIFFICULT

TO DO AND AT THE MOMENT BEYOND REACH SHOULD BE

IDENTIFIED AND ELIMINATED FROM ACTIVITIES

DO NOT PURSUE ACTIVITIES THAT DO NOT ADD VALUE

IDENTIFY AND REFINE REASONS FOR PERFORMINGACTIVITIES

ELIMINATE IRRATIONAL OPERATIONS THAT CAUSE

FATIGUE

MURA


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MURA

INCONSISTENCY IN OPERATIONS

DEVIATION FROM STANDARDS

LEADING TO INCONSISTENCY MURA CALLS FOR MINIMUM

DEVIATION BETWEEN BEST AND

WORST PRODUCT BY MINIMIZINGRANGE OF STD DEVIATION USING

SPC

MUDA (WASTE) EXPLAINED OVERPRODUCTION WASTE


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OCCURS WHEN WE PRODUCE WHAT IS UNNECESSARY, WHEN IT ISUNNECESSARY, AND IN UNNECESSARY AMOUNT.

INVENTORY WASTE

INVENTORY-SYMPTOM OF ILL HEALTH IN FACTORY OPERATIONS. INVENTORYAVOIDS BUT NEVER SOLVES PROBLEMS.

CONVEYANCE WASTE

IS A RESULT OF POOR LAYOUT, HANDLING, OF MATERIAL ETC.

. DEFECT PRODUCTION WASTE

HUMAN ERRORS CAUSE DEFECTS, DEFECTS ARE WASTE AND ALSO CAUSE

WATE OF DETECTION, CORRECTION, CUSTOMER COMPLAINTS ETC. THEYALSO DISRUPT NORMAL FLOW OF GOODS AND REDUCE PRODUCTIVITY

. PROCESS-RELATED WASTE

EXAMPLES:

I. DRILLING MACHINE SCREW HOLES, EVEN AFTER DESIGN HAS CHANGEDTHE FASTENING METHOD TO WELDING

II. USING SIX SCREWS WHERE FOUR MEET THE PURPOSE.

OPERATION RELATED WASTENOT ALL OF WORKERS MOVEMENT IS WORK OR VALUE-ADDING, SUCHWASTE RESULTS FROM POOR EQUIPMENT LAYOUT OR BY POORLY PLACEDPARTS, JIGS & TOOLS.

IDLE TIME WASTE

INCLUDES HUMAN AS WELL AS MACHINE IDLE TIME. GENERALLY IT IS THETIME OF WAITING FOR SOMETHING.

EFFORTS REQUIRED IN WASTE MGTINITIATIVE


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ELIMINATING WASTE REQUIRES A COMPANYWIDE

INTEGRATED EFFORT WHICH INCLUDES ALLCORPORATE FUNCTIONS SUCH ASMARKETING,SALES,FINANCE,MANUFACTURING,R&D.

INDUSTRIAL ENGG, QUALITY,CUSTOMER SERVICE,

DISTRIBUTION,HR ETC

WASTE AS SEEN COMPRISES OF MFG AND ADMINWASTES

ADMIN WASTES COULD BE EXCESSIVECOMMUNICATION,UNCONTROLLED DISTRIBUTION OF

INFORMATION, DELAYED INFORMATION ,BREAKDOWNIN ADMIN SERVICES, ERRORS IN COMMERCIALDOCUMENTS,WASTED SALES CALLS,UNPRODUCTIVEMEETINGS ETC

COST OF I.T. /INFRASTRUCTURE DOWNTIME A MAJOR

ISSUE AND NEED FOR BUSINESS CONTINUITY PLAN

Root cause of waste


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Root cause of waste

Defects

Inadequate Design - Poor Matrl - Wrong Proc - Oper Error

Inadequate Testing

Over Production

Over enthusiastic incentive - Wrong Forecast

Excess Inventory Obsolete Stocks - Wrong Forecast - Customer amendments/cancellation

Poor Quality - Market Condition

Unrequired Motions

Over use of paper/distribution - Excess Walking - Excess Motions

Transportation

Layout - wait time to travel

Wait Time

Poor Scheduling - Imbalance in prodn line - Inadequate labor resource

Root cause of waste


139/582

Root cause of waste

Process

Wrong operations or poor material leading to rework orreject

Poor process control Poor operating specifications

Untrained or de motivated operators


140/582

DEFINITION OF VALUE


141/582

DEFINITION OF VALUE

VALUE IS A WORD USED WITHOUTUNDERSTANDING THE MEANING

DIFFERENT DEPTS OF SAME COMPANYHAVE VARIED MEANING

DESIGNER RELATES VALUE WITHRELIABILITY

MFG RELATES WITH COST OF MFG

PURCHASE RELATES WITH COST OF RM

SALES RELATES TO THE PRICE CUSTOMERIS WILLING TO PAY

DEFINITION OF VALUE


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DEFINITION OF VALUE

VALUE IS THE RELATIONSHIP BETWEEN COST AND QLTY

VALUE = QUALITY/COST

VALUE IS PLACED FOR VARIOUS ATTRIBUTES MORE POPULARLYKNOWN AS FUNCTIONS OF A PRODUCT

TWO TYPES OF FUNCTIONS

-PRIMARYSECONDARY PRIMARY FUNCTIONS ARE THOSE ATTRIBUTES FOR WHICH APRODUCT IS PURCHASED AND MEANT TO BE USED eg THEPRIMARY FUNCTION OF A CAR IS TO SAFELY TRANSPORT PEOPLEBETWEEN TWO POINTS WITH FUEL ECONOMY

SECONDARY FUNCTIONS ARE THOSE ATTRIBUTES WHICH ARENOT PRIMARY FUNCTIONS BUT WHICH PEOPLE WISH TO SEE AS

ATTRIBUTES OR FUNCTIONSS IN A PRODUCT eg IN A CAR WEALSO WISH TO HAVE A/C AND OTHER ACCESSORIES


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VALUE ENGG/ANALYSIS


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VALUE ENGG/ANALYSIS

ENGINEERING IS A PROCESS OF ASSESSMENT OF APRODUCT DURING DESIGN PHASE

ANALYSIS IS ASSESSMENT OF A PRODUCT DURING USAGE

OBJECTIVE IS TO ELIMINATE UNREQD FEATURES ANDFUNCTIONS IN PRODUCT DESIGN

MOST ACTIVITIES PERFORMED IN ANALYSIS PHASE VA TEAM ASSIGNS A VALUE TO EACH FUNCTION AND

FINDS COSTS TO DELIVER FUNCTION AND RATIO OFVALUE TO COST IS CALCULATED

RATIO IMPROVED BY REDUCING COST OF ITEM ORINCREASING WORTH

VALUE ENGG/ANALYSIS


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VALUE ENGG/ANALYSIS

VALUE ANALYSIS IS A MGT TECHNIQUEFOR REDUCING MFG COSTS AND ///LYIMPROVING QLTY AND RELIABILITY OFPRODUCT

VALUE ENGG IS USED TO COVER THEINITIAL DESIGN STAGE

VALUE MEANS DIFFERENT THINGS TODIFFERENT PEOPLE AT DIFFERENT TIME

VALUE OF AN ITEM DETERMINED ON THEBASIS OF VARIOUS ASPECTS:

FOUR WAYS TO INCREASING


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VALUE OF FUNCTION

DECREASE COST AND MAINTAIN

PERFORMANCE LEVEL eg NANO

INCREASE PERFORMANCE AT SAME COST

eg TOOTHPASTE/AERATED DRINKS

DECREASE COST AND ENHANCE

PERFORMANCE eg PC HARDWARE

INCREASE BOTH COST ANDPERFORMANCE BUT PERFORMANCE

INCREASE > COST INCREASE eg BUFFETS

TYPES OF VALUE


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TYPES OF VALUE COST VALUE IS SUM OF ALL COSTS INCURRED IN MFG OF PRODUCT eg

MATRL LABOUR TOOLING O/H USE VALUE IS THE COST INCURRED TO MAKE PRODUCT FUNCTIONAL

eg QLTY COSTS INCURRED TO ENSURE A/C COOLS TO REQDTEMPERATURE

ESTEEM VALUE IS THE COST INCLUDED INTO PRODUCT TO ENHANCECUSTOMER APPEAL

Eg IN SOME CASES THE MOTOR CAR ESTEEM VALUE > USE VALUE INTERMS OF FUEL CONSUMPTION LIKE IN THE CASE OF A MERCEDESBENZ WHICH GIVES ONLY 6 KM/LTR AGAINST THE AVERAGE 15-18KM/LTR IN OTHER BRANDED CARS

EXCHANGE VALUE IS THE VALUE OF PROPERTIES WHICH ENABLESAN ITEM TO BE EXCHANGED FOR SOMETHING ELSE .EXCHANGEVALUE IS GENERALLY RESALE VALUE. Eg REAL ESTATE EXCHANGEVALUE IS INFLATED BY 20% EVERY YEAR

PLACE VALUE IS VALUE OF PROPERTY/EQUIPMENT WHICH VARIES INPRICE WRT LOCATION eg IN MUMBAI REAL ESTATE IS MOREEXPENSIVE IN WESTERN SUBURBS THAN IN EAST

TIME VALUE IS PROPERTY OF PRODUCT/SERVICE RENDERED AT THERIGHT TIME eg THE TIMING OF AN EMERGENCY OPERATION ISCRITICAL FOR SURVIVAL OF THE PATIENT

VALUE ENGG/ANALYSIS


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VALUE ENGG/ANALYSIS

ECONOMIC WORTH = COST VALUE + EXCHANGEVALUE + USE VALUE + ESTEEM VALUE + PLACEVALUE + TIME VALUE

REAL WORTH = ECONOMIC WORTH/COST VALUE

REAL WORTH = WORTH/LIFE CYCLE COST

FOCUS OF VE TO INCREASE REAL VALUE OFPRODUCT PROCESS OR SERVICE

VE/VA GENERALLY RESULTS IN COST

REDUCTION

QUESTIONS IN VALUE


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ANALYSIS

CAN WE DO WITHOUT IT

DOES IT DO MORE THAN REQD

DOES IT COST MORE THAN IT IS WORTH

CAN SOMETHING ELSE SUBSTITUTE IT CAN TWO PARTS BE COMBINED OR CAN ONE

COMPONENT BE MADE INTO TWO

CAN IT BE MADE IN A LESS COSTLY METHODWITH LESS COSTLY MATRL

CAN IT BE MADE CHEAPER BETTER OR FASTER

WHAT NEW PROCESSES CAN WE USE

QUESTIONS IN VALUE


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ANALYSIS

CAN AN ALTERNATIVE MATRL BE USED

CAN ANY DIMENSIONS BR REDUCED TOUSE LESS MATRL

CAN AMOUNT OF WASTE BE REDUCED CAN PARTS BE STANDARDISED

CAN TWO PARTS BE COMBINED

IS BUYING CHEAPER THAN MAKING

WHAT IS THE COST OF ADHERING TOSPECS

WHAT NEW PROCESSES CAN BE USED

WAYS TO INCREASE VALUE


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BY VE

REDUCE FUNCTIONS WITH CUTCORNERS EXERCISE

KEEP FUNCTIONS UNCHANGED BUTREDUCE COSTS

INCREASE FUNCTIONS BUT RETAINCOSTS

INCREASE FUNCTIONS MORE THANCOST INCREASE

USES OF VALUE ENGINEERING


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USES OF VALUE ENGINEERING

COST PREVENTION AND ELIMINATIONTECHNIQUE TO REDUCE COST OF PRODUCT

ENABLES BETTER UNDERSTANDING OF EMPLJOBS

BALANCES COST AND PERFORMNCE

PREVENTS OVER DESIGN OF COMPONENTS

MOTIVATES EMPL TO GIVE CREATIVE IDEAS

INCREASES PROFITS AND DEFLATES COSTS

HELPS SATISFY CUSTOMERS WITH PRODUCTS


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WHEN TO APPLY VA


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WHEN TO APPLY VA

PRODUCTS ARE LOSING THEIR MKT

SHARE AND THERE IS DECLINE IN SALES

PRODUCTS ARE PRICED HIGHER THAN

COMPETITION IN A PRICE SENSITIVE MKTOR PRODUCT COST IS > SALES PRICE OF

COMPETITION

NEW DESIGNS TO BE UNDERTAKEN RISING MFG COSTS

REASONS FOR UNNECCESARY


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COSTS

LACK OF RELEVANT INFO LEADS TO

WRONG DECISIONS WHICH

INCREASE COSTS

WRONG BELIEFS FROM ACCEPTING

OPINIONS

LACK OF IDEAS

DIFFERENCE BETWEEN VE

AND OTHER COST REDUCTION


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AND OTHER COST REDUCTION

TECHNIQUES TRADITIONAL TECHNIQUES ARE POST PRODUCTION ORIENTEDAND CONCENTRATION IS ON THE PART OR ELEMENT INCONTRAST TO VALUE ANALYSIS WHICH IS FUNCTION ORIENTED

OTHER TECHNIQUES TRY TO REDUCE THE COST BY EXISTINGMETHOD WHEREAS VA NEVER CONSIDERS ANY PROCESSMETHOD OR ELEMENT GRANTED AND IT ANALYSES BY

FUNCTION RATHER THAN PART OR ELEMENT COST REDUCTION CAN REDUCE THE COSTS UPTO 10% WHEREAS

VA CAN REDUCE COSTS UPTO 40-50% WITHOUT SACRIFICINGQLTY AND PERFORMANCE

VALUE ANALYSIS QUESTIONS THE VERY EXISTENCE OF PARTSOR PROCESS BY ANALYSIS OF ITS DESIGN SPECIFICATIONS,MATRLS AND PROCESS OF MFG

COST REDUCTION IS COST ORIENTED AND CONCENTRATES ONFINDING THE CHEAPER COST WHEREAS VALUE ANALYSIS ISFUNCTION ORIENTED AND TRY TO PRODUCE THE PRODUCT ATLOWEST COST WITHOUT SACRIFICING QLTY AND PERFORMANCE

STRATEGIC STEPS IN VALUE

ANALYSIS


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ANALYSIS

DETERMINE FUNCTION AND COST OFEACH ELEMENT IN FINISHED PROD

CONSIDER ALTERNATIVES THAT FULFILFUNCTIONS

SELECT BEST ALTERNATIVE WHICHINCLUDES MATRL,STANDARDISATION OFDIMENSIONS

STRATEGIC CHOICE OF MAKE EXPENSIVE

PRODUCTS OR SUBCONTRACT MODIFY DESIGN TO REDUCE COSTS

VA PROCEDURE


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VA PROCEDURE

IDENTIFY ITEMS TO BE ANALYSED

DIFFERENTIATE WHETHER ITEM OR PROCESS

IDENTIFY INTERNAL AND EXTERNAL CUSTOMERS

IDENTIFY BASIC FUNCTIONS

IDENTIFY SECONDARY FUNCTIONS WHICH SUPPORT BASIC

TO PRIORITISE DETERMINE VALUE OR IMPERTANCE TOCUSTOMER OF EACH FUNCTION

BREAK ITEM/PROCESS INTO CONSTITUENT COMPONENTSBY USING FLOWCHART

ASSOCIATE COMPONENTS WITH FUNCTIONS

LOOK FOR COMPONENTS WHICH CAN BE MODIFIED ORELIMINATED

OPTIONS IN VA/VE


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OPTIONS IN VA/VE

MODIFY

INTEGRATE

SUBSTITUTE SIMPLIFY

EXAMPLES OF VALUE

ANALYSIS


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ANALYSIS

MODIFY-MOTOR CAR ENGINES HAVE BEENMODIFIED TO RUN ON CNG

INTEGRATE-AIR CONDITIONER AND HEAQTERINTEGRATED INTO ONE UNIT

SUBSTITUTE-INHOUSE WIRING HAS BEENCHANGED FROM COPPER TO ALUMINIUM ORCOKE BOTTLES CHANGED FROM GLASS TOPLASTIC

SIMPLIFY-APPLICATION SOFTWARE SIMPLIFIED

BY BEING MADE MODULAR.EARLIER ALLMODULES WERE BUNDLED OR COMPLICATEDEQUIPMENT MADE MODULAR WHICH SIMPLIFIESMAINTENANCE

WHEN TO USE VA/VE


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WHEN TO USE VA/VE

AIM IS TO EVALUATE REAL VALUE

OF PRODUCT/PROCESS

FOCUS IS ON SAVING COSTS AIM IS ON INCREASING VALUE OF

PROCESS/PRODUCT

BENEFITS OF VALUE

ENGINEERING


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ENGINEERING

COST REDUCTION/ELIMINATION

TECHNIQUE

BALANCES COSTS AND PERFORMANCE

PREVENTS OVER DESIGN OF PRODUCT

(CUSTOMER FUNCTION DEPLOYMENT)

INCREASES PROFITS AND REDUCES COSTS

INCREASES CUSTOMER SATISFACTION


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Introduction

D fi iti W k St d i th t ti


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Definition: Work Study is the systematic

examination of the methods of carrying onactivities so as to improve the effective use ofresources and to set up standards ofperformance for the activities being carried out.

Work Studysucceeds because it issystematic both in the investigation of theproblem being considered and in thedevelopment of its solution.

164

Continue.


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If work study results in cutting down the timeof performing a certain activity by 20 per cent

Merely as a result of rearranging the sequenceor simplifying the method of operation

Without additional expenditure

Then productivity will go up by acorresponding value, that is by 20 per cent.

165

WORK STUDY


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OPERATIONS MGT IS ABOUT ADDING VALUE IN ACTIVITIES

AND PRODUCING RESULTS AS DESIRED BY THE

CUSTOMER.

ACTIVITIES HAVE INPUTS WHICH ARE IN VARIOUS FORMS.

THEY ALSO HAVE BUSINESS RULES AND METHODS BYWHICH THEY HAVE TO BE PERFORMED.THEY ALSO

PRODUCE RESULTS WHICH SHOULD CONFORM TO

CUSTOMERS REQUIREMENT

WORK STUDY DEFINED AS SCIENCE OF EXAMINATION OF

HUMAN WORK IN ALL CONTENTS WHICH LEADS TOSYSTEMATIC INVESTIGATION OF ALL FACTORS WHICH

AFFECT EFFICIENCY

GENERIC FORM OF TECHNIQUES WHICH ARE USED TO

EXAMINE HUMAN WORK IN ALL ASPECTS AND WHICH

SYSTEMATICALLY LEAD TO THE INVESTIGATION OF ALL

WORK STUDY


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WORK STUDY INVESTIGATES AND

CRITICALLY EXAMINES WORK DONE AND

FINDS THE BEST AND MOST EFFECTIVE

WAY OF USING RESOURCES TO AHIEVEBEST QUALITY RESULTS IN THE LEAST

TIME AND COST

CRUX OF WORK STUDY IS TO OPTIMIZE

USAGE OF INPUT RESOURCES AND TO

MAXIMIZE PRODUCTIVITY

WORK STUDY HELPS IN DECIDING

RESOURCE RE UIREMENTS AT THE

Operational Time

Definition: The time taken by a worker or a machine to carry outan operation or to produce a given quantity of a certain product .


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p p g q y p

Basic work content of product and/oroperation

Work content added by poor product designor material utilization

Work content added by inefficient methodsof manufacturing or operation.

Ineffective time resulting from humanresources contribution

168

Techniques of work study


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Method study :The systematic recording and criticalexamination of ways of doing things in order to make

improvements.

Work measurement :The application of techniques

designed to establish the time for a qualified worker

to carry out a task at a defined rate of working.

169

M h d S d

Work Study Relationship


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Method Study

To simplify the job & develop moreeconomical methods of doing it

Work Measurement

To determine how long it should taketo carry out

Higher Productivity

Work

study

170

ADVANTAGES OF WORK

STUDY


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STUDY IMPROVED PRODUCTION FLOW

HIGHER PRODUCTIVE EFFICIENCY

REDUCE MANUFACTURING COSTS

FAST AND ACCURATE DELIVERIES

BETTER EMPLOYEE RELATIONS

BETTER SERVICE TO CUSTOMERS

JOB SATISFACTION TO EMPLOYEES

BETTER WORKING CONDITIONS

HIGHER INCENTIVE BASED WAGES BASED ON HIGHERPRODUCTIVITY

ADVANTAGES OF WORK

STUDY


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STUDY PRODUCTION SMOOTHING DUE TO LINE

BALANCING

REMOVAL OF BOTTLENECKS LEADING TO

REDUCED INVENTORY HIGHER PRODUCTIVE EFFICIENCY

REDUCED MFG COST

ACCURATE DELIVERY DATES TO CUSTOMER AS

PER COMMITMENT BETTER SERVICE TO CUSTOMER

How to apply Work Study


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Method Study Work Measurement

Analyzing the specific

Methods used in

carrying out an operation

And simplifying job thruEconomical ways

-Determine the time

required to perform

the operation and its

elements-Comprises of Motion and

Time study


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METHOD STUDY

METHOD STUDY


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DEFINED AS SYSTEMATIC AND SCIENTIFIC

ANALYSIS OF PROPOSED METHOD OF DOING A

JOB IN ORDER TO DEVELOP A SIMPLE EFFICIENT

EFFECTIVE AND LESS FATIGUING PROCEDURE OF

DOING THE SAME JOB AT A LESSER COST BY

OPTIMIZING INPUT RESOURCES

IT USES DIFFERENT PROCESS MAPPING

TECHNIQUES TO IDENTIFY AND ERADICATE THE

NON VALUE ACTIVITIES

OBJECTIVE OF METHOD STUDY IS TO IMPROVE

PROCESS OF VALUE ADDITION .THIS IS DONE BY

MAXIMIZING VALUE ADDED OPERATIONS AND

MINIMIZING OR ELIMINATING DELAY STORAGE

METHOD STUDY


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METHOD STUDY INVOLVES THE STUDY

OF HOW ACTIVITIES ARE PERFORMED

AND ATTEMPTS TO REMOVE NON VALUE

ADDED ACTIVITIES AS WELL AS IMPROVETHE PROCEDURE AND WAY IN WHICH THE

ACTIVITY IS PERFORMED SO THAT THE

TIMING TO EXECUTE MAY BE REDUCED

AND THE ACTIVITY IS PERFORMED INLESSER TIME WITH LESSER EFFORT. Eg

DENNIS LILEE BOWLING ACTION AFTER

BACK OPERATION

METHOD STUDY


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METHOD STUDY IS SYSTEMATIC RECORDING AND

CRITICAL EXAMINATION OF WAYS OF DOING THINGS

OBJECTIVE OF METHOD STUDY IS TO IMPROVE ACTIVITY

ACTIVITY CAN BE IMPROVED THROUGH PROCESS

REENGINEERING BY ELIMINATING NVA ACTIVITIES OR BYREDUCING EXISTING TIMINGS OF ACTIVITIES THROUGH

BETTER WAYS

NEED TO DRAW PROCESS CHARTS AND ACTIVITY CHARTS

WITH

MOVEMENT,STORAGE,DELAY,INSPECTION,ACTIVITY,DECISION ALONG WITH TIMINGS

OBJECTIVES OF METHOD

STUDY


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STUDY IMPROVED WORK PROCESS LEADING TO ENHANCED

PRODUCTIVITY

STANDARDIZED PROCEDURE LEADIND TO CONSISTENCY

IN ACTIVITY EXECUTION;HENCE GENERALLY

CONSISTENCY IN PERFORMANCE BETTER WORKPLACE LAYOUT

SAFER WORKING CONDITIONS

IMPROVED PRODUCT QUALITY DUE TO HIGHER QUALITY

ASSURANCE

IMPROVED WORK ERGONOMICS LEADING TO HIGHERPRODUCTIVITY

Objective of Method Study


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Improvement of processes and procedures Improvement in the design of plant and

equipment

Improvement of layout

Improvement in the use of men, materials andmachines

Economy in human effort and reduction ofunnecessary fatigue

Improvement in safety standards Development of better working environment.

179

HUMAN OPERATIONS

ANALYSIS


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ANALYSIS

DETAILED STUDY OF DIFFERENT

OPERATIONS INVOLVED IN DOING

WORK WITH THE OBJECTIVE TO

FIND DEFECTS IN EXISTING

METHODS AND TO DEVELP

IMPROVED PROCEDURE

AIMS AT OPTIMIZING UTILIZATION

OF RESOURCES AND ESPECIALLY

THOSE PARTS OF HUMAN BODY

METHOD STUDY

PROCEDURE


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PROCEDURE SELECT WORK TO BE STUDIED AND DEFINE

OBJECTIVES TO BE ACHIEVED

OBJECTIVE MAY BE TO REDUCE COSTS

BOTTLENECKS OR TO REDUCE FATIGUE

INCURRED BY WORKERS AND TO INCREASE

THEIR EFFICIENCY eg CONVEYOR BELT BY FORD

RECORD RELEVANT INFORMATION PERTAINING

TO EXISTING METHOD IN DETAIL AND

DOCUMENT ACTIVITIES BY WAY OF MATERIAL

FLOW CHARTS , PROCESS FLOW CHARTS ,

ACTIVITY FLOW CHARTS,INFORMATION FLOW

CHARTS

METHOD STUDY

PROCEDURE


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PROCEDURE INSTAL THE BEST DEVELOPED METHOD

MAINTAIN AND CONTINUOUSLY REVIEW AND

IMPROVE THE NEW METHOD (ADLI)

Method Study Procedure


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1. DEFINE2. RECORD

3. EXAMINE

4. DEVELOP

5. DEFINE NEW METHOD

6. INSTALL7. MAINTAIN

183

ADVANTAGES OF METHOD

STUDY


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STUDY IMPROVED WORK PROCESS LEADING TO

HIGHER PRODUCTIVITY

STANDARDIZED PROCEDURE LEADING TO

CONSISTENCY IN PERFORMANCE

BETTER WORK PLACE LAYOUT AND

POSITIONING AND ARRANGING FACILITIES AND

MACHINES

NEAT AND CLEAN ENVIRONMENT

REDUCED FATIGUE IN WORKERS

IMPROVES PRODUCT QUALITY

ENSURES SAFETY AND MINIMIZES HEALTH

HAZARDS AT WORKPLACE


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TIME STUDY

TIME STUDY


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TIME STUDY CAN BE DEFINED AS THE

APPLICATION OF SCIENTIFIC TECHNIQUES

TO MEASURE WORK CONTENT OF

ACTIVITY IN A NORMAL DEFINEDSITUATION AND ESTABLISH TIME

REQUIRED TO EXECUTE JOB BY VARIOUS

SKILLS AT A DEFINED LEVEL OF

PERFORMANE. FALLACY LIES INDEFINING STD TIME FOR ALL LEVELS OF

CAPABILITY AND EXPERIENCE

TIME STUDY


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ALSO CALLED WORK MEASUREMENT

IT DETERMINES THE TIME TAKEN TO DO A JOB

DECIDES MANPOWER REQUIRED (QUANTITY VS QUALITY)

DECIDES EQUIPMENT REQUIRED

PROVIDES VALUABLE INFO FOR PRODN PLANNING INTERMS OF TIME ESTIMATION FOR EACH STEP IN THE

ROUTING

INDICATES REALISTIC LABOR BUDGETING

PROVIDES BASE FOR STD COSTING (CHECK CHANGING

PARAMETERS)

RESULTS IN EFFECTIVE LABOUR CONTROL

TIME STUDY


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CONSISTS OF A WIDE VARIETY OF

PROCEDURES FOR DETERMINING

THE AMOUNT OF TIME REQD UNDER

CERTAIN STD CONDITIONS OF

MEASUREMENT

A TERM WORK MEASUREMENT IS

ALSO USED FOR TIME STUDIES

Objective of Work Measurement


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To find ineffective time in a process

To set standard for output level

To evaluate worker's performance

To plan work force needs.

To determine available capacity

To compare work methods To facilitate operations scheduling

To establish wage incentive schemes 189

USE OF STANDARD TIME


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STANDARD TIME IS USED AS A NUMERICAL COEFFICIENT

FOR CONVERTING A QUANTITATIVE STATEMENT OF THE

WORKLOAD TO A QUANTITATIVE STATEMENT OF THE

REQUIRED RESOURCES

PLANNED COSTS ARE DERIVED FROM STANDARD TIMESBECAUSE BUDGETS ARE DERIVED FROM THE ACTIVITIES

PERFORMED IN STANDARD TIME WHICH REQUIRE MONEY

MATERIAL MEN etc.

STANDARD TIME IS USED TO DETERMINE LABOR AND

EQUIPMENT REQUIREMENTS ESPECIALLY OUTSOURCED

EQUIPMENT .IN CERTAIN JOBS STANDARD TIME IS OF

CRITICAL IMPORTANCE BECAUSE OF RESTRICTIONS IN

DOWN TIME eg AN OIL AND GAS PRODUCTION WELL CAN

BE DOWN FOR ONLY 120 HOURS IN A YEAR AND ALSO

THEY NEED TO OUTPUT A MINIMUM FLOW OF GAS FAILING



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TO ASSIST IN DEVELOPING EFFECTIVE METHODS

TO DETERMINE THE NUMBER OF EQUIPMENT A PERSON

CAN MANAGE AT A TIME eg WEAVERS 8/16 LOOMS.

TIME VALUES SHOULD BE SET IN SUCH A WAY TAKING

INTO ACCOUNT AN AVERAGE WORKER WITH A CERTAINMINIMUM LEVEL OF SKILLS.TODAY THE STD TIMES ARE

ERRONEOUSLY CALCULATED ON EITHER VERY HIGH SIDE

LEADING TO LOW PRODUCTIVITY FIGURES OR LOW SIDE

LEADING TO MISLEADING HIGH PRODUCTIVITY FIGURES.

Eg STD TIME 20 MIN ACTUAL TIME 10 MIN PRODUCTIVITY

200%

DISTRIBUTION OF WORK AMONG CREW

COMPARE METHODS

TO SET SCHEDULES



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TO SET SUPERVISORY OBJECTIVES

TO ASSIST IN COMPARING PLANS

WITH ACHIEVEMENT WITH RESPECT

TO WORKLOAD AND RESOURCE

USAGE

FOR TOTAL PRODUCTIVITY

MEASUREMENT

ALLOWANCES


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ALLOWANCES ARE ADDED TO NORMAL TIME TO ARRIVE

AT STANDARD TIME

TYPES OF ALLOWANCES INCLUDE PROCESS ALLOWANCE

AND PERSONAL ALLOWANCE

PROCESS ALLOWANCE ARE ALLOCATED TO COVERENFORCED IDLE TIME OR SPECIAL CASES WHICH ARE NOT

PART OF WORK CYCLE BUT ARE ESSENTIAL FOR

PERFORMING WORK eg BEAM CHANGE IN WEAVING OR

MACHINE SET UP TIME OR INTERFERENCE ALLOWANCE

WHEN WORKER HANDLES MORE THAN ONE MACHINE eg

WEAVER HANDLES 8/16 MACHINES

PERSONAL ALLOWANCES INCLUDE TIME ALLOWED FOR

FATIGUE , CALLS OF NATURE , DIFFICULT WORKING

CONDITIONS etc. VARIES FROM 15% TO 30% DEPENDING ON

SITUATIONS


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ADVANTAGES OF TIME

STUDY


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STUDY DECIDES MANPOWER SKILLS (AND SHOULD

ALSO DECIDE CAPABILITIES) REQUIRED TO DO

THE JOB

DECIDE EQUIPMENT REQUIRED

PROVIDES INFORMATION FOR EFFECTIVE

PRODUCTION PLANNING AND MAINTENANCE

PROCEDURES

AIDS AT CALCULATING REALISTIC DE3LIVERY

DATES AND DOES REALISTIC LABOR BUDGETING

PROVIDES BASIS FOR STANDARD COSTING

FORMS THE BASE FOR INCENTIVE SYSTEMS


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MOTION STUDY


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ANALYSIS OF MOTION


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ANALYSIS OF AN OPERATION FOR ATTAINMENT

OF END OBJECTIVE IS CARRIED OUT IN TERMS OF

INDIVIDUAL MOTIONS OF A PERSON AS WELL AS

THE WORK PLACE LAYOUT AND ERGONOMICS

FOR ATTAINMENT OF HIGHEST LEVEL OFPRODUCTIVITY

PURPOSE OF MOTION ANALYSIS IS TO

ELIMINATE UNNECESSARY MOTIONS TO REDUCE

FATIGUE AND EFFORT AND MAKE HUMANEFFORT MORE PRODUCTIVE eg WEIGHT LIFTING

STEPS FOR MOTION STUDY


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CHART VARIOUS MOTIONS PERFORMED BY OPERATORS

IDENTIFY LABORIOUS AND IDLE MOTIONS.ALSO IDENTIFY

COMPLEX MOTIONS WHICH ARE DIFFICULT TO

PERFORM.OCCASIONALLY PERFORMER EXAGGERATES

COMPLEXITY OF MOTION eg SIMPLE CATCH IS MADE TO

LOOK DIFFICULT

IDENTIFY PRODUCTIVE ,NON VALUE ADD AND IDLE

MOTIONS

ELIMINATE NON PRODUCTIVE AND UNREQUIRED MOTIONS

OR SIMPLIFY COMPLEX MOTIONS eg WEIGHT LIFTING REDESIGN EXISTING OPERATING PROCEDURE BY

IMPROVING THE MOTIONS INVOLVED IN WORK TAKING

INTO ACCOUNT THE ABOVE OBSERVATIONS

IMPART REQUIRED INSTRUCTIONS AND TRAINING TO

OPERATORS


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PRIMARY OBJECTIVES OF

MOTION STUDY


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MAXIMIZE FINANCIAL ADVANTAGE THRU

-LESS DIRECT LABOR EFFORT AND TIME

-FEWER STEPS IN PROCESS

-MORE PRODUCTIVE LABOR

-LESS EQUIPMENT USAGE

-LESS SPACE USAGE

-LESS SCRAP GENERATED

-LOWER OVERALL COSTS

-LESSER IDLE TIME AND LESSER FATIGUE

-FEWER HAZARDS IN OPERATIONS

-


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Facility Design


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Facility layout: Arrangement of machines, storage areas,

and/or work areas usually within the confines of a

physical structure, such as a retail store, an office, a

warehouse, or a manufacturing facility.

Factors that influence layout

Volume, weight of items to be produced.

Nature of the service to be provided.

Cost of the building to house the operation.

The product mix that must have a facility.

The fragility of the product or component.

What Is Layout Planning


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Layout planning is determining the best physical arrangement of

resources within a facility

Facility resource arrangement can significantly affect productivity

Two broad categories of operations:

Intermittent processing systemslow volume of many different

products

Continuous processing systemshigh volume of a few

standardized products


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INTRODUCTION


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To make a decision about layout planning, 4 different

questions must have an answer:

Which centers do we have to consider?

How much space and capacity is required for each center?

If there is not enough space, productivity may be reduced.

Too much space is expensive and may also reduce

productivity.

How must the space be configured at each center?

Space quantity, shape and the elements of the work center arerelated to each other.

Where should each center be located at within the facility?

The allocation of the different centers may affect productivity.

INTRODUCTION


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The plant layout process starts at an aggregate

level, taking into account the different

departments. As soon as we get into the details,

the different issues arise, and the originalconfiguration may be changed through a feedback

process.

Most (if not all of them) layouts are designed

properly for the initial conditions of the business,although as long as the company grows and has to

be adapted to internal and external changes, a re-

layout is necessary.

INTRODUCTION


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The reasons for a re-layout are based on 3 types of

changes:

Changes in production volumes. Changes in processes and technology.

Changes in the product.

The frequency of the re-layout will depend on the

requirements of the process.


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A Good Layout ...


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Reduces bottlenecks in moving people or material.

Minimizes materials-handling costs and material inprocess

Reduces hazards to personnel.

Utilizes labor efficiently.

Increases morale.

Utilizes available space effectively and efficiently.

Provides flexibility.

Provides ease of supervision.

Facilitates coordination and face-to-face communicationwhere appropriate.

Implements safety measures

Lay Out


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Types of Plant Layout

Product Layout

Process Layout

Fixed Position Layout

Cellular Layout

Layout for Services

Objectives of Plant Layout


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These main objectives are reached through the attainment of the followingfacts:

Congestion reduction.

Elimination of unnecessary occupied areas.

Reduction of administrative and indirect work.

Improvement on control and supervision.

Better adjustment to changing conditions.

Better utilization of the workforce, equipment and services.

Reduction of material handling activities and stock in process.

Reduction on parts and quality risks.

Reduction on health risks and increase on workers safety. Moral and workers satisfaction increase.

Reduction on delays and manufacturing time, as well as increase in productioncapacity.

All these factors will not be reached simultaneosly, so the best solution willbe a balance among them.

Factors affecting Plant Layout The final solution for a Plant Layout has to take into account a

balance among the characteristics and considerations of all factorsaffecting plant layout, in order to get the maximum advantages.


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affecting plant layout, in order to get the maximum advantages.

The factors affecting plant layout can be grouped into 8 categories:

Materials

Machinery

Labor

Material Handling

Waiting Time

Auxiliary Services

The building

Future Changes

Factors affecting Plant Layout


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The factors affecting plant layout can be grouped into 8categories:

Materials

The layout of the productive equipment will depend on the

characteristics of the product to be managed at the facility, as well as

the different parts and materials to work on.

Main factors to be considered: size, shape, volume, weight, and the

physical-chemical characteristics, since they influence the

manufacturing methods and storage and material handling processes.

The sequence and order of the operations will affect plant layout as

well, taking into account the variety and quantity to produce.



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Machinery

Having information about the processes, machinery, tools and

necessary equipment, as well as their use and requirements isessential to design a correct layout.

The methods and time studies to improve the processes are closely

linked to the plant layout.

Regarding machinery, we have to consider the type, total available

for each type, as well as type and quantity of tools and equipment. Its essential as well to know about space required, shape, height,

weight, quantity and type of workers required, risks for the personnel,

requirements of auxiliary services, etc.



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Labor

Labor has to be organized in the production process (direct labor,

supervision and auxiliary services). Environment considerations: employees safety, light conditions,

ventilation, temperature, noise, etc.

Process considerations: personnel qualifications, flexibility, numberof workers required at a given time as well as the type of work to beperformed by them.

Material Handling

Material handling does not add value to the product; its just waste.

Objective: Minimize material handling as well as combining withother operations when possible, eliminating unnecessary and costlymovements.


The factors affecting plant layout can be grouped into 8


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categories:

Waiting time - Stock

Objective: Continuous Material Flow through the facility, avoiding

the cost of waiting time and demurrages that happen when the flow

stops. On the other hand, the material waiting to flow through the facility

not always represents a cost to avoid. As stock sometimes provides

safety to protect production, improving customer service, allowing

more economic batches, etc.

Its necessary then to consider space for the required stock at the facilitywhen designing the layout.

prod techniques old

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