ISQA 479

MRP

Quality Control

Materials Requirements Planning

Bill of MaterialList of all parts necessary to make ONE

BofM X Order = GROSS Req’mts Subtract Inventory Subtract On Order NET Req’mtsNet Req’mts = Exception Report

What to BUY, What to MAKE

Offset NR by Lead Time: WHEN to Order

MRP Concepts

Multiple ParentsMultiple Uses of One Part in BofMSystem NervousnessException Reports

MRP Concepts Lot-Sizing Techniques

Lot-for Lot EOQ/EPQ Periodic Order Quantity

Fixed Interval, Variable Quantity EOQ/Avg Use

Fixed Order Quantity Variable Interval, Fixed Quantity

Standard Package Quantities Price Break Levels EOQ

Quality

How would you define ‘Quality’?

Quality DefinitionsManufacturing-Based - Philip Crosby

“Quality means conformance to requirements”

Value-Based - Feigenbaum “Quality means best for certain customer

conditions. These conditions are (a) the actual use, and (b) the selling price of the product”

Philip CrosbyQuality is Free, pp. 15-16

Quality has much in common with sex. Everyone is for it (under certain conditions, of course). Everyone feels they understand it (even though they wouldn’t want to explain it). Everyone thinks execution is only a matter of following natural inclinations. (After all, we do get along somehow). And, of course most people feel that all problems in these areas are caused by other people. (If only they would take time to do things right).

Quality DefinitionsCustomer-Based - Juran

“Quality is fitness for use”Customer-Based - AT&T

Quality is meeting customer expectations.”

Quality Is Quality Free?Can We Achieve 100% Quality?

ShingoDifference Between Errors and Defects

Errors Cause Defects Defects Occur Because of Errors

Three Types of Inspection Self-Inspection Successive Checks - Next Person Source Inspection (Check for Errors that

WILL cause Defects Identify Errors, Fail Safe the Process

Control Charts Processes Have Natural Variation Fundamental Question:

Natural Variation or Process Change? That is what Statistical Process Control is All

About Key Assumptions:

Sample is RANDOMLY selected Defects are randomly distributed throughout the lot

SamplingFor Defects (What is Quality of Lot?)For Conformance to Specification (No

More Than X% Defective)

Control Chart TypesAttribute Charts (things counted)

P-chart: Proportion Defective C-chart: Number of Defects Focus is on PRODUCT output

Variable Charts X-chart: Sample Means R-chart: Range Means Focus in on PROCESS, itself

Control Chart Problem Indicators

One Data Point Outside Control LimitTwo Data Points in Zone ThreeFive Consecutive Data Points on One

Side of the MeanTrend - Five Successive Points in a

TrendErratic BehaviorSudden Change in Behavior

ISQA 479

Strategic AlliancesProcurement and Outsourcing

Strategic PlanningMission StatementVision StatementStrategies

Long-Term Action Plan Commits Organizational Resources Creates Competitive Advantage

Performance Measures

Characteristics of Supplier Alliances

Operational Strategic3rd Party Alliances

Criticality Grid: Managerial Objectives

High Patent Look Ahead Strategic AlliancesM Prop TechARK E Market Driven Market Driven T Min Admin Cost Supply Continuity Ind Std Automate Operational Alliance Commodity Low Low High

INTERNAL Volume, Importance Volume, Pervasive

Supplier RelationshipsRisk and Numbers of Suppliers

Industry Standard Custom Supplier Performance

Managing Supplier Relationships Interdependencies

Motivation Reward Power Punishment Power

Supplier Relationship GoalsLong-term Collaborative

Early Supplier InvolvementGrowth CapabilitiesCreate Competitive Advantage

Make/BuyProducts Never MakeProducts Always Make In Between Products

Make/Buy Industry Standards, Proprietary Products and

Make/Buy Procurement from Suppliers Procurement by Manufacture Fluid Decision Revisit at Regular Intervals

As Economic Conditions Change As Internal Conditions Change

Always Maintain Internal Capability

Reasons to MakeQuantities Too SmallQuality Too CriticalTiming Too CriticalTrade Secrets (for a time)CheaperKeep Crew BusyAvoid Sole Source (perhaps)Union Shop

Reasons to BuyQuantities Too LargeSupplier Quality AcceptableHave Sufficient Lead TimeLack of Necessary CompetenciesLack of CapacityCheaperReciprocity

OutsourcingStrategic DecisionActivity is Not Core CompetencyWill, In Future Completely Depend on

SuppliersWill No Longer Maintain Internal

Capability

Outsourcing Strategies

When to Consider Outsourcing? Why?Outsourcing RisksRisk Mitigation Strategies

Smith Group Case

Chapter 8, Question 1Logistics Strategy

Internal Logistics ExpertiseAcquire Logistics Company Internal Strategy, External Suppliers3PL Strategy

Chapter 8, Question 3

Quick ResponseContinuous ReplenishmentVMI

Chapter 8, Question 6

Why did VMI at Spartan Fail?How Should it Work?