Test Bank & Instructor’s Solutions Manual to accompany QUALITY MANAGEMENT for Organizational Excellence Seventh Edition

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Test Bank & Instructor’s Solutions Manual to accompany QUALITY MANAGEMENT for Organizational Excellence Seventh Edition David L. Goetsch Stanley B. Davis ___________________________________... _______________________________________________ 1 TEST BANK Chapter One THE TOTAL QUALITY APPROACH TO QUALITY MANAGEMENT TRUE/FALSE: Place T or F in the space provided to the left of the statement. __T___1. Quality deals not only products and services but also includes people, processes, and environments. __F___2. Joseph M. Juran is best known for the Seven Deadly Diseases. __T___3. Today’s consumers define quality as being flawless and having all of the attributes they want in just the way they want them. _T____4. According to the Three-Legged Stool of Total Quality, the seat of the stool is customer focus. __F___5. Quality management has o future in the 21st century. __T___6. Peak performance is essential to organizations that operate in a globally competitive environment. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. The total quality approach has which of the following characteristics? A. ( Teamwork ) B. Obsession with quantity C. Confusion and poor leadership D. One employee in charge 2. Customers want an excellent product or service from an organization that also provides: A. The Deming Cycle B. Quick fixes C. ( Reliable delivery and after purchase support ) D. Stamps 2 3. Which of the following functions is part of the Juran Trilogy? A. Pareto Principle B. ( Quality planning ) C. Unity of purpose D. Six Sigma Program 4. Crosby's Quality Vaccine consists of three ingredients. Which of the following is not one of the three ingredients? A. ( Teamwork ) B. Education C. Determination D. Implementation 5. Which of the following is a trend that will shape the future of quality management? A. The Deming Cycle. B. The Juran Trilogy. C. Global economy. D. ( Increasing global competition. ) 6. Which of the following certifications is for managers who lead and champion continualprocess improvement initiatives? A. Calibration technician B. Six Sigma Green Belt C. ( Manager of Quality/Organizational Excellence ) D. Quality Process Analyst Chapter Two QUALITY AND GLOBAL COMPETITIVENESS TRUE OR FALSE: Place T or F in the space provided to the left of the statement. __F___1. U.S companies, mistakenly seeing quality as the issue, learned that quantity was the key to success in the global marketplace. __T___2. The need to improve an organization’s financial condition correlated directly with the process of making and measuring quality improvements. __T___3. A nation's ability to compete in the global marketplace has a direct bearing on the quality of life of its citizens. __F___4. The only way the U.S. can overcome business-related inhibitors is for the government to enact policies that will reduce non-value-added costs to a minimum. 3 __T___5. In order to be an exporter, a manufacturer must be able to outperform foreign competitors in terms of both quality and productivity. ___T__6. Management-by-accounting encourages short-term cost cutting instead of long-term improvement. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. Of the trends listed below, which one increases the level of globalization in business? A. Growing irrelevance of distance. B. Shifts in the interest rates. C. ( Quality of the product. ) D. Rise of small towns. 2. Which of the following statements are considered true concerning the affects of global integration? A. It has helped fuel economic growth throughout the industrialized world. B. It can be the Achilles heel of economic growth. C. Downturns in one country can now have a ripple effect that quickly spreads to other countries. D. ( All of the above ) 4 3. Which of the following countries is the most competitive country in the world? A. Germany B. United States C. ( Japan ) D. Switzerland 4. When making comparisons among internationally competing countries, the following indicators are used: A. ( Standard of living and investment. ) B. Quality is the key to success. C. Government infrastructure. D. Ability to compete. 5. The most important key in maximizing competitiveness is: A. Education B. ( Human resources ) C. Teamwork D. Government 1. The most common college degree among American CEOs is the: A. Quality management B. ( MBA ) C. CFO D. Management and Leadership Chapter Three STRATEGIC MANAGEMENT: PLANNING AND EXECUTION FOR COMPETITIVE ADVANTAGE TRUE OR FALSE: Place T or F in the space provided to the left of the statement. ___T__1. In order to survive in a globally competitive environment, organizations must adopt a broad strategy that gives them a sustainable competitive advantage. ___T__2. A core competency is something an organization does so well it can be viewed as a competitive advantage. ___F__3. SWOT Analysis is the only step needed in the strategic planning process. ___F__4. An organization's vision is a specific measurable goal it tries to achieve. __T___5. Change that is inflicted on employees will be resisted, but change that is engendered by employees who are involved in and prepared for it will be accepted and promoted. __T___6. Even the best plan can do no good until it is effectively executed. 5 MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. Which of the following statements apply when developing a mission statement? A. ( The how-to statements. ) B. Describe the “who, what, and where” of the organization. C. Be brief, but comprehensive. D. Choose wording that is simple. 2. Which of the following statements best describe the acronym SWOT? A. Specific, Witness, Opportunities, and Time. B. Single, Weaknesses, Occasion, and Tactics. C. ( Strengths, Weaknesses, Opportunities, and Threats. ) D. Strategic, Weaknesses, Objectives, and Tactics. 3. Strategic management is A. Creative thinkers who look at their business environment from a different perspective. B. Expansive and wasteful. C. Constantly seeking gaps in the marketplace that their companies can fill. D. ( Management that bases decisions within an ethical framework. ) 6 4. Which of the following statements is true concerning strategies used to execute a strategic plan? A. ( Organizations should communicate at all times. ) B. Consult with only managers. C. Adjust to administrative barriers. D. Be flexible and improvise. 5. Which of the following strategies is important when executing a strategic plan? A. Review the plan with customers. B. ( Identify advocates and resisters. ) C. Form an application task force. D. Activate the steering committee. 6. To promote successful execution of strategies, organizations should undertake which of the following strategies? A. ( Eliminate administrative barriers ) B. Conduct a secondary SWOT analysis C. Hold a stakeholder’s gap analysis D. Contract with an execution specialist 7 Chapter Four QUALITY MANAGEMENT, ETHICS, AND CORPORATE SOCIAL RESPONSIBILITY TRUE OR FALSE: Place T or F in the space provided to the left of the statement. ___T__1. Morality refers to the values that are subscribed to and fostered by society in general and by individuals within society. ___F__2. Locus of control is a person's ability to undertake self-directed tasks and to cope with tense structure. __T___3. In a total quality setting, people are responsible for their actions and accountable for their performance. __F___4. Managers must establish ethical standards within their organization. __T___5. Corporate social responsibility is a balanced approach for organizations to address economic, social and environmental issues in a way that aims to benefit people, communities and society. ___F__6. People in positions of authority are exempt from their organization’s ethics standards. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. The concepts of trust, integrity, and _______ are part of the value system of total quality. A. Morality B. ( Responsibility ) C. Trust D. Legality 2. Which of the following is not a value that leads to peak performance and excellence? A. Creativity B. Quality C. ( Dependability ) D. Opportunity 8 3. Managers have three main responsibilities in regard to ethics. Which of the following is NOT one of those? A. ( They are responsible for creating an internal environment that promotes, expects, and rewards ethical behavior. ) B. They are responsible for helping employees make ethical choices. C. They are responsible for setting an example of ethical behavior. D. They are responsible for helping employees follow through and exhibit ethical behavior after the appropriate choices have been made. 4. When handling an ethical dilemma, managers should select the option that will most likely: A. ( Pass the various ethics tests ) B. Build strength in the organization C. Set the best example for employees D. None of the above 5. When providing ethics training, it is important to: A. Facilitate, don’t preach B. Stimulate discussion C. Highlight practical applications D. ( All of the above are important ) 6. An organization’s responsibilities for ensuring ethical behavior include: A. Paying whistleblowers to speak up B. ( Creating and ethical environment ) C. Establishing in-house courts and juries D. Refusing to talk to the media Chapter Five PARTNERING AND STRATEGIC ALLIANCES TRUE OR FALSE: Place T or F in the space provided to the left of the statement. __T___1. The overall purpose of internal partnering is to harness the full potential of the workforce and focus it on continual improvement of quality. ___F__2. Any supplier would make a good partner. __F___3. If a manufacturer is not careful a customer-supplier partnership can be very costly, especially in the product development cycle. ___T__4. The rationale for partnering with potential competitors is competitiveness. 9 ___T__5. Educational institutions provide on-site customized training, technical assistance, and consulting services to help organizations continually improve their people and their processes. __F___6. Government mandated partnerships are recommended when dealing with foreign countries. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. The maximum benefits of partnering are realized when all parties in the chain of partners: A. Are satisfied B. ( Cooperate ) C. Get what they want D. Trust each other 2. Partnering can lead to continual improvements in such key areas as relationships between customers and suppliers, customer satisfaction, and A. Increased competitiveness B. Increased resources C. ( Processes and products ) D. Quality Control 3. Internal partnering occurs at three levels. Which of the following is NOT one of these levels? A. Team-to-team partnerships B. ( Management-to-management partnerships ) C. Management-to-employee partnerships D. Employee-to-employee partnerships 10 4. Successful supplier partnerships evolve in seven stages. They begin in the following order: Uncertainty and tentativeness; Short-term pressures; Need for new opportunity and ___________________. A. Adoption of new values B. Mature partnering C. ( Adoption of new paradigms ) D. Awareness of potential 5. Educational institutions provide which of the following services to help organizations continually improve their people and their processes. A. On-site customized training B. Technical assistance C. Consulting services D. ( All of the above ) 6. The rules for establishing global partnerships are the same as those for establishing domestic partnerships when: A. ( Partnerships are based on sound business principles rather than politics ) B. Governments agree to guarantee profits C. Governments are influenced D. Sound business principles are not allowed to inhibit partnerships Chapter Six QUALITY CULTURE: CHANGING HEARTS, MINDS, AND ATTITUDES TRUE OR FALSE: Place T or F in the space provided to the left of the statement. __T___1. Expectations are important determinants of organizational culture. __F___2. If an organization begins to decline after moving to total quality it should return to its traditional approach. __F___3. The most effective way to implement changes is to make sure all employees have sufficient warning prior to the actual changes. ___T__4. It might be necessary to change an organization’s leadership to ensure needed cultural change. __T___5. The key people in an organization that is establishing a quality culture are those who can facilitate and those who can inhibit implementation of the change. __T___6. To maintain a quality culture organizations must recognize and reward behaviors that nurture quality. 11 MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. There are several primary reasons why cultural change must either precede or at least parallel the implementation of total quality. Which of the following is NOT a primary reason? A. Moving to Total Quality takes time. B. ( Employees may not adapt to too many changes. ) C. It can be difficult to overcome the past D. Change cannot occur in a hostile environment 2. Which of the following is NOT a law of organizational change? A. Involve everyone affected by change in making it. B. Be prepared to listen and observe. C. ( Trust people and treat them with dignity and respect. ) D. Understand the history behind the current culture. 3. Which of the following strategies are needed for establishing a quality culture? A. Take a hearts and minds approach B. Put the planned changes in writing C. Support of management D. ( All the strategies above are needed for establishing a quality culture. ) 4. Advocates of change: A. ( Are often unaware of how a proposed change will be perceived by potential resisters. ) B. Fear a loss of control. C. Sometimes fear the unknown. D. Are patient with the concerns of resisters. 5. Strategies for establishing a quality culture include which of the following? A. Watching shocking videos B. Realization of the work effort C. ( Developing a plan for making the changes ) D. Rebuilding teams 6. Which of the following is a strategy for maintaining a quality culture? A. Increase the company’s debt-to-assets ratio B. Streamline the RFP process C. Discourage initiative in favor of SOPs D. ( Keep employees involved ) 12 Chapter Seven CUSTOMER SATISFACTION, RETENTION, AND LOYALTY TRUE OR FALSE: Place T or F in the space provided to the left of the statement. ___T__1. The customer in a total quality setting defines quality. __F___2. It is important to acquire as many customers as an organization is able because customers are not reliable and an organization must always be replacing a lost customer. ___F__3. Communication just happens. ___T__4. Quality Function Deployment is a model for incorporating customer input and feedback into product development. ___T__5. Meeting customer specifications does not produce customer satisfaction. __F___6. Satisfied customers will not migrate to a competitor. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. In a total quality setting, quality is defined by: A. The employee B. ( The customer ) C. The management D. The organization 2. An organization with a customer focus is: A. ( Outward-looking ) B. Inward-looking C. Established D. Continually improving 13 3. Which of the following mechanisms can help improve communication? A. An internal customer B. ( Self-managed and cross-departmental teams ) C. Organization employees D. External customers 14 4. Which of the following statements are true concerning communication with customers? A. Must extend only to internal customers. B. Is never misunderstood. C. ( Is essential in a competitive marketplace ) D. Is not necessary in a small town 5. The customer loyalty model consists of which of the following components? A. Business performance B. Global perceptions C. Loyalty behaviors D. ( All of the above are components of the customer loyalty model ) 6. The best way to generate customer loyalty is to provide customers with: A. Rebates B. Discounts C. ( Superior value ) D. Uninhibited access Chapter Eight EMPLOYEE EMPOWERMENT TRUE OR FALSE: Place T or F in the space provided to the left of the statement. ___T__1. Without empowerment, involvement is just another management tool that doesn’t work. __F___2. Employee empowerment is a new name for participatory management. __T___3. A workforce that is ready for empowerment is accustomed to critical thinking. ___T__4. A quality circle is a group of employees that meets regularly for the purpose of identifying, recommending, and making workplace improvement. ___T__5. Employee enlistment means not simply empowering employees to participate in the decision-making process but expecting them to do so. ___T__6. Fear of exclusion can cause managers to resist employee empowerment. 15 MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. Employee empowerment is: A. Employee involvement in decision making. B. Power of the employee to make suggestions that will be reviewed by management C. Employee input that is heard, seriously considered, and followed up on whether it is accepted or not. D. Power of the employee to make a decision without management involvement. Answer : C 2. The primary inhibitor of empowerment is: A. The Wohcao Syndrome B. Human nature's resistance to change. C. Resistance from employees and unions. D. Resistance from management. Answer : B 3. The word that best describes management’s role in employee empowerment is: A. Facilitation B. Leadership C. Commitment D. All of the above Answer : D 16 4. Which of the following strategies will help organizations move beyond empowerment to enlistment? A. Set up a reward system. B. Make it clear to all employees that their ownership is not just wanted and needed but that it is expected. C. Make it clear to implement suggestions. D. Empower employees for suggestions that are implemented. Answer : B 5. A workforce that is ready for empowerment: A. Is accustomed to critical thinking B. Understands the decision making process C. Knows where it fits into the big picture D. All of the above Answer : D 6. Which of the following is an element of management’s role in empowerment? A. Commitment B. Establishing quality circles C. Establishing customer feedback mechanisms D. Being impatient to earn employee buy-in Answer : A 17 Chapter Nine LEADERSHIP AND CHANGE TRUE OR FALSE: Place T or F in the space provided to the left of the statement. __F___1. Misleaders surround themselves with knowledgeable, strong people who are able to make them appear to be good leaders. ___F__2. Democratic leadership is called open, free-reign, or nondirective leadership. __T___3. Servant leadership/stewardship seeks to do a better job of serving both external and internal customers. ___T__4. Building trust requires leadership on the part of managers. ___T__5. To facilitate change in a positive way, leaders must have a clear vision and corresponding goals, exhibit a strong sense of responsibility, be effective communicators, have a high energy level, and have the will to change. __T___6. It is important for those who want to lead to first learn how to follow. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. Which of the following characteristics is not necessarily needed to be a good leader? A. Good communication skills B. Positive role model C. A charismatic personality D. Persuasiveness Answer : C 2. The most effective leaders can be found in what part of an organization? A. Top-level management B. Mid-level management C. Lowest paid wage earner D. All of the above Answer : D 3. Leadership skills are: A. Inherited B. Learned C. Both A and B D. None of the above Answer : C 18 4. Which of the following is the most appropriate leadership style in a total quality setting? A. Autocratic B. Democratic C. Participative D. Goal-orientated Answer : C 5. The change facilitation model contains which of the following steps? A. Develop a compelling change picture B. Conduct a comprehensive roadblock analysis C. Monitor and adjust D. All of the above Answer : D 6. Which of the following is a benefit of mentoring? A. Enhances performance B. Satisfies ISO 9000 standards C. Decreases the organization’s retention rate D. Eliminates the problem of stewardship Answer : A 19 Chapter Ten TEAM BUILDING AND TEAMWORK TRUE OR FALSE: Place T or F in the space provided to the left of the statement. ___T__1. A team is a group of people with a common, collective goal. ___T__2. A team must have a mission statement because it explains the team’s reason for being. ___F__3. Teams are not coached - they are bossed. ___T__4. Coaches promote mutual respect among team members and promote cultural diversity. ___F__5. Employees always work well together as a team just because it’s the right thing to do. __F___6. People in teams will respond to change in the same ways. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. Which of the following is not classified as a type of team according to Johnson, Katner, and Kikora? A. Environmental improvement team B. Departmental improvement team C. Process improvement team D. Task force Answer : A 2. Which of the following strategies counter the negative influences of advisor and followers? A. Personal identity of members B. Looking for disagreement among advisors C. Relationships among team members D. Follower’s identity within the organization Answer : B 3. Which of the following strategies are applied in order to be a good team member? A. Establish ground rules B. Be well prepared and participate C. Identify success criteria D. None of the above Answer : B 20 4. Which of the following character traits promote successful teamwork? A. Honesty B. Controlling C. Impatience D. Need to be in-charge (bossy) Answer : A 5. Which of the following is a common structural inhibitor to teamwork in organizations? A. Sensitivity B. Honesty C. Accountability to management D. Tolerance Answer : C 6. Which of the following is a personally negative response to conflict? A. Filing a lawsuit B. Going into denial C. Filing a grievance D. Submitting to mediation Answer : B 21 Chapter Eleven EFFECTIVE COMMUNICATION TRUE OR FALSE: Place T or F in the space provided to the left of the statement. __F___1. Effective communication means receiving a message, correctly decoding it, and accurately perceiving what it means. ___F__2. Company level communication is communication within a peer group. ___T__3. When trying to communicate it is important that you do not use open-ended questions. ___T__4. In order for employees and managers to function effectively in a total quality setting, they must have good interpersonal skills. ___T__5. Interpersonal skills are those needed for people to work together in a positive manner that is conductive to both personal and corporate success. ___F__6. One-way communication helps maintain a climate that is conducive to effective communication. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. There are several components of communication. They are: A. The sender, the message, the receiver, verification B. The message, the medium, the sender, the customer C. The medium, the goals, the receiver, the message D. The message, the sender, the receiver, the medium Answer : D 2. Which of the following is not a common inhibitor of communication? A. Lack of trust B. Lack of concentration C. Interference D. Inaccurate assumptions Answer : B 3. Empathic listening means: A. Agreeing with what is being said B. Receiving the message, correctly decoding it, and accurately perceiving what is means C. Listening with the intent to understand D. Pretending to listen Answer : C 22 4. Robert Luke offers four guidelines for enhancing the effectiveness of corrective feedback. They are: A. Be positive, be prepared, be realistic, and don’t be completely negative B. Be positive, be prepared, be realistic, be accurate C. Be direct, be prepared, be realistic, be accurate D. Don’t be completely negative, be positive, be brief, and be understanding Answer : A 5. Verbal communication is least effective when: A. Reprimanding an employee for poor performance B. Promoting a safety campaign C. Commending an employee for doing a good job D. Attempting to resolve conflict between or among employees Answer : B 6. One of the highest levels of verbal communication occurs when speakers use what to make their points? A. Stories B. Facts C. Photographs D. Graphs and charts Answer : A 23 Chapter Twelve EDUCATION AND TRAINING TRUE OR FALSE: Place T or F in the space provided to the left of the statement. __F___1. Technology transfer is the process of moving newly commercialized technologies into the workplace where they can be used to enhance productivity, quality, and competitiveness. ___T__2. The job task analysis survey is the most structured approach managers can use to assess training. _F____3. The lecture/discussion method of teaching should be used when the subject matter deals with skill development or how-to information. ___F__4. One half of the adult population in the US are marginally to functionally illiterate. ___T__5. E-learning is a tool, not a strategy. ___T__6. Training sometimes fails because of a lack of participation in planning on the part of management. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. The most important factors that combine to magnify the need for training are global competition, rapid and continual change, quality of the existing labor pool, technology transfer problems, and . A. Quality of organization B. Changing demographics C. Change in productivity D. Corporate image Answer : B 2. Computer-based training is part of: A. The external approach to training B. The internal approach to training C. The partnership approach to training D. None of the above Answer : B 24 3. What percentage of what is read is remembered and retained? A. 50% B. 30% C. 90% D. 10% Answer : D 25 4. What is the oldest and most used method of teaching? A. The demonstration method B. The conference method C. The lecture/discussion method D. The simulation method Answer : C 5. Which of the following is a strategy of e-learning? A. E-learning works best when there are learning coaches and mentors provided. B. E-learning must have a statement of purpose. C. Build in quality. D. Conflicting information Answer : A 6. Topics that are widely addressed in ethics training programs are: A. Drug and alcohol abuse B. Employee theft and sexual harassment C. Inaccuracy of books and records D. All of the above Answer : D 26 Chapter Thirteen OVERCOMING POLITICS, NEGATIVITY, AND CONFLICT IN THE WORKPLACE TRUE OR FALSE: Place T or F in the space provided to the left of the statement. ___T__1. Internal politics consists of the games people play to promote decisions that are based on criteria other than merit. ___F__2. Internal politics occurs when individuals put the organization’s goals ahead of their own. ___T__3. Power is the ability to exert influence. ___F__4. There are certain organizational structures that tend to prevent internal politics. __T___5. Conflict management means resolving conflict whenever it is detrimental and initiating it when necessary to overcome stagnation in an organization. __T___6. One definition of corporate culture is the way things are done in an organization. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. The Achilles Heel of the geographic structure with regard to internal politics is: A. Individual goals of the division managers B. The CEOs persona agenda C. Distance D. East/west and north/south conflict Answer : C 2. A strategy used by internal politics that involves the sharing and/or selective withholding of information is: A. Coalition building B. Lobbying C. Electioneering D. Spreading of rumors and gossip Answer : B 27 3. Bringing together people who have a common cause or goal is a strategy of internal politicians known as: A. Electioneering B. Lobbying C. Coalition building D. Rumor mongering Answer : C 4. Which of the following is NOT typically an effect of internal politics in an organization? A. Loss of morale B. Counterproductive internal competition C. Loss of quality, competitiveness, and customers D. Enhanced competitiveness Answer : D 5. Which of the following is NOT a strategy for preventing internal politics? A. Explaining the strategic plan to all employees B. Rewarding employees who win in internal competition situations C. Leadership by example D. Encouraging a customer focus Answer : B 6. Which of the following situations indicates that conflict should be stimulated? A. When employees always agree and tell managers what they want to hear B. Employees willingly admit their mistakes C. The turnover rate is unusually high D. Employees avoid proposing new ideas Answer : A 28 Chapter Fourteen ISO 9000 AND TOTAL QUALITY: THE RELATIONSHIP TRUE OR FALSE: Place T or F in the space provided to the left of the statement. ___F__1. ISO 9000 and total quality are interchangeable. ___T__2. ISO 9000 is compatible with, and can be a subset of total quality. __F___3. ISO 9000 is never implemented in a non-total quality environment. ___T__4. ISO 9000 can improve operations in a traditional environment. ___T__5. ISO 9000 may be redundant in a mature total quality environment. __T___6. ISO 9001 is intentionally generic so it can be applied to any kind of organization. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. Appropriate motives for adopting ISO 9000 include which of the following? A. To create a quality management system B. To improve operations C. To conform to the requirements of customers D. All of the above Answer : D 2. Which of the following is a documentation requirement for the ISO 9000 quality system? A. A Quality Policy B. Statement of Customer Focus C. Statement of Management Commitment D. Declaration that Teamwork is to be employed in all areas Answer : A 3. Which of the following statements outline the relationship factor? A. ISO 9000 and total quality are not in competition B. ISO 9000 and total quality are not interchangeable C. ISO 9000 is compatible with total quality D. All of the above Answer : D 29 4. Characteristics of total quality include: A. Scientific approach to problem solving and decision making B. Concerned only with quality management procedures C. Unity of purpose - all employees, all levels D. Both A & C Answer : D 5. Which of the following statements is true concerning the original aims of ISO 9000? A. To transform organizations into competitive players in the global marketplace. B. To create a universally recognized family of quality standards. Answer : B 6. Which of the following is a basic principle of ISO 9000? A. Certification authority held by ISO B. Continual improvement of processes and products C. Management authority D. Periodic internal audits Answer : B 30 Chapter Fifteen OVERVIEW OF TOTAL QUALITY TOOLS TRUE OR FALSE: Place T or F in the space provided to the left of the statement. ___T__1. A graphic representation of a process is called a Flowchart. __F___2. Attributes data are something resulting from measurement. __F___3. The diamond shaped symbol on a flowchart denotes an input or an output. ___T__4. FMEA is a tool to deal with potential product failures. ___T__5. Design of experiments is a very sophisticated method for experimenting with processes with the objective of optimizing them. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. The purpose of the Pareto Chart is: A. To identify and isolate the causes of a problem B. To show where to apply resources by revealing the significant few from the trivial many C. To collect variables data D. To determine the correlation between two characteristics Answer : B 2. Frequency Distribution Diagram is another name for a: A. Pareto Chart B. Fishbone Diagram C. Scatter Diagram D. Histogram Answer : D 3. Which chart is often referred to as a trend chart? A. Control Chart B. Run Chart C. Pareto Chart D. Scatter Diagram Answer : B 31 4. Which of the following is used to show correlation of two variables? A. Run Charts B. Histograms C. Scatter Diagram D. Stratification Answer : C 5. Which of the following reveals whether process variation is the result of a special cause? A. Control Chart B. Check Sheet C. Pareto Chart D. Run Chart Answer : A 32 Chapter Sixteen PROBLEM SOLVING AND DECISION MAKING TRUE OR FALSE: Place T or F in the space provided to the left of the statement. __T___1. When a problem solution returns a process to the state that existed before the problem occurred, a total quality organization would say that the problem was NOT resolved. ___T__2. Dr. Juran’s 85/15 rule holds that at least 85% of an organization’s problems would be eliminated if employees did their jobs correctly. __F___3. The PDCA cycle is one model for continual improvement. _____4. The Seven-Step Problem Solving process promoted by the authors was developed by Toyota. _____5. The major problem with employee involvement in problem solving is time. _____6. Repeatedly asking “why” related to the problem should eventually lead to a root cause. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. There are two ways to evaluate decisions. One way is to: A. Examine the results B. Examine the input that is used in decision making C. Evaluate the process used in making the decision D. A or C Answer : D 2. Objective information is: A. Not always factual B. Factual C. Open to interpretation D. Not reliable Answer : B 3. Factors that inhibit problem solving creativity include: A. Failing to be concerned about risk B. Fear of looking foolish or being rejected C. Having more than 4-5 people on the team D. Allowing ambiguity Answer : B 33 4. After defining a problem, the next step in the problem solving/decision making process should be: A. Institute a temporary fix to keep things moving B. Use Five-Why analysis C. Clarify the issue or problem in order to “grasp the situation” D. Define what the outcome should be Answer : C 5. Which of the following is a strategy for helping people think creatively? A. Idea vending (or stirring the pot) B. Being risk averse C. Unwillingness to hear “over the top” ideas or input D. Looking for the one right answer Answer : A 34 Chapter Seventeen QUALITY FUNCTION DEPLOYMENT TRUE OR FALSE: Place T or F in the space provided to the left of the statement. __T___1. Quality Function Deployment seeks to ensure that customer input is an important factor in the design of products. ___F__2. Quality Function Deployment’s HOQ matrix number 1 is for establishing the interrelationships between customer need and the technical requirements for the product. __T___3. The affinity diagram is used to bring logic and structure to the creative process. ___F__4. The HOQ matrix diagram establishes responsibilities for the producing organization’s various departments, minimizing the need for inter-departmental communication. ___T__5. The purpose of the HOQ’s Roof (Correlation Matrix) is to graphically show which product technical requirements support, and which impede, the others. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. QFD was developed in 1966 by: A. Yoji Akao B. Motorola C. W. Edwards Deming D. Ford Motor Co. Answer : A 2. In what matrix of the QFD HOQ are the improvement factor and sales point developed? A. Matrix 1 (Customer Needs) B. Matrix 2 (Planning) C. Matrix 4 (Interrelationships) D. Matrix 6 (Design Targets) Answer : B 3. A plus symbol (+) in one of the squares under the HOQ roof indicates that the two technical requirements forming that intersection: A. Are closely related. B. Are supportive of each other. C. Are high priority customer needs. D. Verifies the math in the planning section. Answer : B 35 4. Data in the Customer Importance column of the customer needs matrix A. Should be non-limiting and non-specific B. Is developed from unanimous customer input C. Is an estimate (by the QFD team) of the relative importance of the customer needs D. Is typically based on a scale of 1 – 5, with 1 being the highest importance Answer : C 5. QFD can be: A. Applicable to a wide range of products (or services), whether competed or not B. Applicable to large or small companies/organizations C. Applicable to both new and existing products D. All of the above. Answer : D 36 Chapter Eighteen OPTIMIZING AND CONTROLLING PROCESSES THROUGH STATISTICAL PROCESS CONTROL TRUE OR FALSE: Place T or F in the space provided to the left of the statement. ___T__1. Variation in any amount is considered a negative for quality. __T___2. At the heart of SPC is the realization that all processes have a natural, or built-in, variation. Processes may also be affected by special causes of variation. The objective of SPC is to separate special-cause variation from the natural variation. __F___3. For a process under SPC, it is important to frequently tweak its parameters in order to keep the process within the upper and lower control limits. ___T__4. Before a process can qualify for SPC, it must be free of special-cause variation. ___F__5. Upper and lower control limits may be derived from logged process data, or from tolerance specifications. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. The rationale for western manufacturers to embrace SPC is: A. Improve product quality and simultaneously reduce costs B. To be able to compete better with Japan and the world’s markets C. Improve their product image D. All of the above Answer : D 2. The most common inhibitor of SPC is: A. Inadequate training B. Lack of resources resulting from the absence of management commitment C. Failure to have processes under control D. Low production rates Answer : B 37 3. When a process is “in control” what percent of its output will be within the ±3σ limits? A. 66.6% B. 82.4% C. 99.7% D. 100% Answer : C 38 4. The minimum management involvement relative to SPC training involves: A. Providing sufficient funding B. Teaching classes C. Commitment D. None of the above Answer : A 5. The first step in the SPC execution phase is: A. To develop control charts B. Flowcharting or characterizing the process to which SPC will be applied C. Eliminate the special causes of variation D. Collect and plot SPC data Answer : B 39 Chapter Nineteen CONTINUAL IMPROVEMENT METHODS WITH SIX SIGMA, LEAN, LEAN SIX SIGMA, AND MORE TRUE OR FALSE: Place T or F in the space provided to the left of the statement. __T___1. As part of its leadership responsibility, management in an organization that practices total quality must be personally involved in continual improvement. __F___2. The only way a company can hope to compete in the modern marketplace is to improve its products, processes and people continually. ___T__3. If there are 10 processes that might be improved, the processes that should be worked on first are those which will yield the most benefit if improved. __F___4. Six Sigma can only be achieved through process improvement. __F___5. When we combine the most important features of Lean with the best features of Six Sigma we have Lean Six Sigma. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. In order for an organization to make continual improvement it must: A. Establish an organization-wide quality council B. Establish quality improvement goals with target dates C. Have top management commitment that is visible to all employees D. All of the above Answer : D 2. Variation in processes A. Can be caused by include people, machines, material, and environment B. Is of three kinds C. Should not be of concern D. Must be eliminated if continual improvement is to happen Answer : A 40 3. The Five-Step Plan that involves straightening up, putting things in order, cleaning up, standardizing, and discipline belongs to: A. Jidoka B. Kaizen C. CEDAC D. DMAIC Answer : B 41 4. Lean is based on the manufacturing system that was developed by A. Motorola B. Toyota C. Goldratt D. IBM Answer : B 5. Six Sigma process performance A. Represents a major advance in capability over the typical. B. Has yet to be achieved in actual practice C. Predicts 1 nonconformance in 500 million opportunities D. Is useful only in large scale manufacturing Answer : A 42 Chapter Twenty BENCHMARKING TRUE OR FALSE: Place T or F in the space provided to the left of the statement. ___T__1. Benchmarking supports total quality by providing the best means for rapid, significant process improvement. ___T__2. To achieve best in class, an organization must surpass the performance of the benchmark process ___F__3. Benchmarking is considered to be a one-shot process. ___T__4. The first member selected for a benchmarking team should be a process owner. ___F__5. Your selection of a benchmarking partner must be from your industry. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. Which of the following behaviors best describe the concept of benchmarking? A. Unethical B. Illegal C. Industrial espionage D. None of the above Answer : D 2. One of the three phases of benchmarking is: A. Conclusion B. Postexecution C. Reporting D. None of the above Answer : B 3. Several benchmarking considerations require management’s approval before the process can start: commitment to change; funding; personnel; disclosure; and . A. Oversight B. Direction C. Involvement D. Direct supervision Answer : C 43 4. Re-engineering is an appropriate replacement for benchmarking when: A. Your process is fairly strong relative to best-in-class. B. The best-in-class is not in your industry. C. Your process is not in statistical control, i.e. is unstable. D. Best-in-class is unwilling to cooperate. Answer : D 5. Benchmarking should be used when: A. Your process is too far behind to catch up with best-in-class through incremental improvement. B. Your process is close to, but not quite as good as, best-in-class. C. When another company sells a product for less than you can. D. When your process is clearly better than your competitor’s. Answer : A 44 Chapter Twenty-One JUST-IN-TIME/LEAN MANUFACTURING (JIT/LEAN) TRUE OR FALSE: Place T or F in the space provided to the left of the statement. __T___1. JIT/LEAN/Lean minimizes production lot sizes. ___T__2. In order for JIT/LEAN/Lean to bring about all the benefits inherent in its philosophy, it must be part of a total quality system. __F___3. In a JIT/LEAN/Lean production facility, the supplying process makes product, then stores it until a Kanban from the receiving process notifies the supplying process that product is needed. __F___4. In a JIT/LEAN plant, there is no such thing as a bottleneck. ___F__5. Automation is being superseded by JIT/LEAN/Lean in manufacturing plants. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. The JIT/LEAN/Lean “pull” system ensures that: A. Costs are minimized through “economy of scale.” B. That the production line will never stop because of a problem C. Buffer stocks are on hand to prevent line stoppage when a critical machine fails. D. The internal supplier process does not build product unless told to do so by the internal customer process. Answer : D 2. Which of the following individuals are identified as the developer of JIT/LEAN/Lean? A. Eiji Toyoda B. W. Edwards Deming C. Taiichi Ohno D. Henry Ford Answer : C 3. Reduced setup times are essential for: A. Supporting smaller lot sizes B. Preventing machine problems C. Making larger lot sizes possible D. Reducing machine maintenance time Answer : A 45 4. It is critical that machines used in JIT/LEAN/Lean processes are consistent and reliable. Which of the following philosophies are used to assure that? A. Concurrent engineering B. Total Productive Maintenance (TPM) C. If it isn’t broken, don’t fix it D. Frequent machine replacement Answer : B 5. Which of the following are NOT consistent with JIT/LEAN/Lean manufacturing? A. Partnering with suppliers B. Product flexibility C. Having environmentally controlled warehouses D. Elimination of all kinds of waste Answer : C 46 Chapter Twenty-Two IMPLEMENTING TOTAL QUALITY MANAGEMENT TRUE OR FALSE: Place T or F in the space provided to the left of the statement. ___T__1. In order for total quality to be implemented into an organization, top management must have an unwavering and unquestioned commitment to TQM. ___F__2. It is important for an organization to provide TQM training to all employees before actually starting a total quality program. ___T__3. Top management has to lead, and be actively involved in, the implementation, and its role must not be delegated. __T___4. The Steering Committee establishes the composition of the teams that will execute the projects that have been selected. ___F__5. The organization’s goals and objectives determine its Vision. MULTIPLE CHOICE: Circle the letter before the correct answer in each of the following questions. 1. The traditional management approach: A. Combines leadership and bossmanship in equal parts. B. Has more bossmanship than leadership. C. Has been around since about 1950 when Deming started working with the Japanese. D. Expects employees to find their own ways to improve processes. Answer : B 2. The Steering Committee must develop: A. Vision statement. B. Mission statement. C. Guiding principles. D. All of the above. Answer : D 47 3. The implementation plan must consider and provide for: A. Training of employees, and when to do it. B. Which departments are to be included in the implementation. C. The number of teams to be established. D. Who is to head the implementation. Answer : A 48 4. The steering committee is ideally composed of: A. The head of the Quality Assurance department and managers from other departments. B. The department heads and the managers reporting directly to them. C. The top manager and his/her immediate direct subordinates. D. The top manager and a group of employees most likely to support TQM. Answer : C 5. Infrastructure that supports total quality includes: A. Documented procedures for all key processes. B. An organizational structure that facilitates cross-functional communication. C. An awards and recognition program designed to reward total quality activity and behavior. D. All of the above. Answer : D 49 ANSWERS TO REVIEW QUESTIONS Chapter One THE TOTAL QUALITY APPROACH TO QUALITY MANAGEMENT ACHIEVING ORGANIZATIONAL EXCELLENCE 1. Define the term quality. Quality is a dynamic state associated with products, services, people, processes, and environments that meets or exceeds expectations. 2. What is total quality? Total quality is an approach to doing business that attempts to maximize the competitiveness of an organization through the continual improvement of the quality of its products, services, people, processes, and environments. 3. List and explain the key elements of total quality. Strategically-based Total quality organizations have a comprehensive strategic plan that contains at least the following elements: vision, mission, broad objectives, and activities that must be completed to accomplish the broad objectives. The strategic plan for a total quality organization is designed to give it a sustainable competitive advantage in the marketplace. Customer Focus In a total quality setting, the customer is the driver. This applies to both internal and external customers. Obsession with Quality This means all personnel at all levels approach all aspects of the job from the perspective of "How can we do this better?" When an organization is obsessed with quality, good enough is never good enough. Scientific Approach While it is true that people skills, involvement, and empowerment are important in a total quality setting, they represent only a part of the equation. Another important part of the equation is the use of the scientific approach in structuring work and in decision making and problem solving that relates to the work. Long-Term Commitment Organizations that implement management innovations after attending short-term seminars often fail in their initial attempt to adopt the total quality approach. This is because they approach total quality as just another management innovation rather than as a whole new way of doing business that requires a whole new corporate culture. Teamwork Internal competition tends to use energy that should be focused on improving quality, and, in turn, external competitiveness. Continual Improvement of Systems 50 In order to continually improve the quality of products or services: which is a fundamental goal in a total quality setting. It is necessary to continually improve systems. Continual Process Improvement Products are developed and services are delivered by people using processes within environments (systems). To continually improve the quality of products and services— which is a fundamental goal in a total quality setting—it is necessary to continually improve the processes that make up the organization’s systems. Education and Training Education and training are fundamental to total quality because they represent the best way to improve people on a continual basis. In a total quality organization, everyone is constantly learning. Freedom through Control Involving and empowering employees is fundamental to total quality as a way to simultaneously bring more minds to bear on the decision making process and increase the ownership employees feel in decisions that are made. The freedoms enjoyed in a total quality setting are actually the result of well-planned and carried out controls. Unity of Purpose In order to apply the total quality approach, organizations must have unity of purpose. Collective bargaining is about wages, benefits, and working conditions, not about corporate purpose and vision. Employees should feel more involved and empowered in a total quality setting than in a traditionally managed situation, but the goal of total quality is to enhance competitiveness not to eliminate unions. Employee involvement The basis for involving employees increases the likelihood of a good decision1 a better plan, or a more effective improvement by bring more minds to bear on the situation: not just any minds, but the minds of the people who are closest to the work in quest. It also promotes ownership of decisions by involving the people who will have to implement them. Empowerment means not just involving people but involving them in ways that give them a real voice. Peak Performance When effectively practiced, total quality allows every aspect of an organization to operate at peak levels. This means that personnel and processes operate at their best. Peak performance is essential to organizations that operate in a global environment where competition is intense, constant, and unforgiving. 4. Explain the rationale for the total quality approach to doing business. Total quality is not just one individual concept. It is a number of related concepts pulled together to create a comprehensive approach to doing business. Many people contributed in meaningful ways to the development of the various concepts that are known collectively as total quality. 5. Describe the following concepts: Deming's Fourteen Points His Fourteen Points describe what is necessary for a business to survive and be competitive today. They summarize what a company must do to effect a positive transition from 51 business-as-usual to world-class performance. They contain the essence of all of Dr. Deming's teachings and are the heart of his philosophy. 1. Create constancy of purpose toward the improvement of products and services in order to become competitive, stay in business, and provide jobs. 2. Adopt the new philosophy. Management must learn that it is a new economic age and awaken to the challenge, learn their responsibilities, and take on leadership for change. 3. Stop depending on inspection to achieve quality. Build in quality from the start. 4. Stop awarding contracts on the basis of low bids. 5. Improve continuously and forever the system of production and service, to improve quality and productivity, and thus constantly reduce costs. 6. Institute training on the job. 7. Institute leadership. The purpose of leadership should be to help people and technology work better. 8. Drive out fear so that everyone may work effectively. 9. Break down barriers between departments so that people can work as a team. 10. Eliminate slogans, exhortations, and targets for the workforce. They create adversarial relationships. 11. Eliminate quotas and management by objectives. Substitute leadership. 12. Remove barriers that rob employees of their pride of workmanship. 13. Institute a vigorous program of education and self-improvement. 14. Make the transformation everyone's job and put everyone to work on it. The Deming Cycle The Deming Cycle was developed to link the production of a product with consumer needs and focusing the resources of all departments (research, design, production, and marketing) in a cooperative effort to meet those needs. 1. Conduct consumer research and use it in planning the product (plan). 2. Produce the product (do). 3. Check the product to make sure it was produced in accordance with the plan (Check). 4. Market the product (act). 5. Analyze how the product is received in the marketplace in terms of quality, cost, and other criteria, or how it measures up against expectations (analyze). The Seven Deadly Sins The Seven Deadly Sins summarize Dr. Deming's views on what can inhibit the transformation from business-as-usual to worldclass quality. 1. Lack of constancy of purpose to pan products and services that have a market sufficient to keep the company n business and provide jobs. 2. Emphasis on short-term profits; short4erm thinking that is driven by a fear of unfriendly takeover attempts and pressure from bankers and shareholders to produce dividends. 3. Personal review systems for managers and management by objectives without providing methods of resources to accomplish objectives. Performance evaluations, merit ratings, and annual appraisals are all part of it - its disease. 4. Job hopping by managers. 5. Using only visible data and information in decision making with little or no consideration given to what is not known or cannot be known. 52 6. Excessive medical costs. 7. Excessive costs of liability driven up by lawyers who work on contingency fees. 5. List and explain Juran's main contributions to the quality movement. Juran's three Basic Steps to Progress. These are broad steps that, in Juran's opinion, companies must take if they are to achieve world-class quality. He also believes there is a point of diminishing return that applies to quality and competitiveness. 1. Achieve structured improvements on a continual basis combined with dedication and a sense of urgency. 2. Establish an extensive training program. 3. Establish commitment and leadership on the part of higher management Juran’s Ten Steps to Quality Improvement Ten steps which overlap with Deming's Fourteen Points. They mesh well with the philosophy of quality experts. 1. Build awareness of both the need for improvement and opportunities for improvement. 2. Set goals for improvement. 3. Organize to meet the goals that have been set. 4. Provide training. 5. Implement projects aimed at solving problems. 6. Report progress. 7. Give recognition. 8. Communicate results. 9. Keep score. 10. Maintain momentum by building improvement into the company's regular systems. The Pareto Principle According to this principle, organizations should concentrate their energy on eliminating the vital few sources that cause the majority of problems. This principle is sometimes called the 80/20 rule. 80% of the trouble comes from 20% of the problems. Though named for turn-of-the-century economist, Vilfredo Pareto, it was Dr. Juran who applied this idea to management. Dr. Juran advises us to concentrate on the vital few sources of problems and not be distracted by those of lesser importance. The Juran Trilogy The Juran Trilogy summarizes the three primary managerial functions. They are: Quality Planning, Quality Control, and Quality Improvement 6. Why do some quality initiatives fail? When organizations approach total quality as just another management innovation or, even worse, as a quick fix, their efforts are doomed to fail from the start. 7. What contributions to the quality movement is Philip B. Crosby known for? 53 Philip B. Crosby is best known for his advocacy of zero-effects management and prevention as opposed to statistically acceptable levels of quality. He is also known for his Quality Vaccine and Crosby's Fourteen Steps to Quality Improvement. Crosby's Quality Vaccine consists of 1) Determination, 2) Education, and 3) Implementation. Crosby's Fourteen Steps to Quality Improvement are as follows: 1. Make it dear that management is committed to quality for the long term. 2. Form cross-departmental quality teams. 3. Identify where current and potential problems exist 4. Assess the cost of quality and explain how it is used as a management tool. 5. Increase the quality awareness and personal commitment of all employees. 6. Take immediate action to correct problems identified. 7. Establish a zero defects program. 8. Train supervisors to carry out their responsibilities in the quality program. 9. Hold a Zero Defects Day to ensure all employees are aware there is a new direction. 10. Encourage individuals and teams to establish both personal and team improvement goals. 11. Encourage employees to tell management about obstacles they face in trying to meet quality goals. 12. Recognize employees who participate. 13. Implement quality councils to promote continual communication. 14. Repeat everything to illustrate that quality improvement is a never-ending process. 8. Summarize the most common errors made when starting quality initiatives. Senior management delegation and poor leadership Team mania Deployment process Taking a narrow dogmatic approach Confusion about the differences among education, awareness, inspiration, and skill building. 9. Explain the trends that are affecting the future of quality management are as follows: Increasing global competition. Today’s customers share two common characteristics: 1) they are part of regional trade alliances and 2) they expect both high quality and added value. Increasing customer expectations. Customers want an excellent product or service from an organization that also provides accurate billing, reliable delivery, and after purchase support. Opposing economic pressures. The global marketplace exerts enormous unrelenting pressure on organizations to continually improve quality while simultaneously reducing the prices they charge for goods and services. New approaches to management. Companies that succeed in the global marketplace have learned that you manage budgets, but lead people. 54 Chapter Two QUALITY AND GLOBAL COMPETIVENESS 1. Explain the relationship between quality and competitiveness. Companies that used to compete only on a local, regional, or national level now find themselves competing against companies from throughout the world. Some of these companies find the competition to be more intense than any they have ever encountered. Those who are able to produce world-class quality can compete at this level. 2. Explain how the cost of poor quality can affect competitiveness. The need to improve an organization’s financial condition correlates directly with the process of making and measuring quality improvements. Lower deficiencies will lead to lower total costs. Improvements in product or service features can lead to higher market share at a better price, which means higher revenue. 3. Describe the evolution of the rebuilding effort undertaken by Japan and Germany following World War II. As Japanese and German manufacturers rebuilt, two things became apparent to them: 1) In order to succeed, they would have to compete globally; and 2) In order to compete globally; they would have to produce goods of world-class quality. This meant producing better goods but at reasonable competitive prices. 4. Explain the actions of U.S. manufacturers during the same period on which Japan and Germany were rebuilding following World War II. The U.S. came out of World War II as the only major industrialized nation with its manufacturing sector completely intact. A well-oiled manufacturing sector and the availability of abundant raw materials helped the U.S. become the world leader in the production and export of durable goods. This resulted in a period of unparalleled prosperity and one of the highest standards of living ever experienced by any country. While the U.S. was enjoying its position as the world's preeminent economic superpower, the other industrialized nations of the world, particularly Japan and Germany, were busy rebuilding their manufacturing sectors. The U.S. manufacturers were slow to catch on that the game had changed from mass production with acceptable levels of waste to quality production with things done right the first time every time. With foreign companies, through a combination of better people, better technology, and better management began to eat away at markets, U.S. companies, mistakenly seeing cost rather than quality as the issue, learned that quality was the key to success in the global marketplace, Japan, Germany, Taiwan, and Korea had made major inroads into global markets previously dominated by U.S. manufacturers (i.e., steel, automobiles, computers, and consumer electronics). 5. How does a nation's ability to compete affect its quality of life? A nation's ability to compete in the global marketplace has a direct bearing on the quality of life of its citizens. Because the ability to compete translates into the ability to do a better 55 job of producing quality goods, it is critical that nations and individual organizations within them focus their policies, systems, and resources in a coordinated way on continually improving both quality and competitiveness. 6. Explain how education-related factors can inhibit competitiveness. The quality of a country's education system is a major determinant of the quality of its labor pool. The higher the quality of the labor pool, the higher the quality of entry-level employees. The higher the quality of entry-level employees, the faster they can become productive employees and contribute to the competitiveness of their employers. Consequently, a high-quality education system is an important component of the competitiveness equation. What all this means is that businesses in the U.S. are forced to spend money helping employees learn the basic skills of reading and writing while their competitors are able to devote their training dollars to developing advanced work-related skills. If international competition can be viewed as a footrace, this is the equivalent of forcing U.S. firms to start 100 yards behind the other competitor in a 200-yard race. 7. Compare investment and manufacturing productivity in the U.S with investment and manufacturing productivity in Japan. Investment, from the perspective of global competitiveness, is the percent of gross national product spent on education, equipment, facilities, and research and development in the period of 1970-90, Japan led the list of competitive countries, with an investment level of approximately 30 percent. The U.S. invested just over 20 percent during this period. The other countries, taken as a group, invested slightly more than the U.S. when education is removed from the list of investments, the U.S. invested as much or more than all other countries except Canada. However, there is evidence that American dollars invested in education are not used as effectively as those invested by other competing nations. It should be noted also that Japanese investment in equipment began to decline in 1992. During the first three quarters of the twentieth century, the U.S. enjoyed the highest productivity levels in the world. For example, in 1972 U.S. manufacturing productivity was 56 percent better than that of Japan. By 1987, this lead had dwindled to just 6 percent. By 1993, Japan equaled the U.S. in productivity. 8. List and briefly explain the basic philosophical constructs underlying the human resource aspects of the competitiveness of Japan and Germany. The basic philosophical constructs underlying the human-resource aspects of the competitiveness of both Japan and Germany are explained in the following list: Cooperation among business, labor, and government. The term social partners is used in Japan just as it is in Germany. Prior to the war, this prevailing view among top business executives was very like that of the American rugged individualist. As in Germany, however, the crisis provoked by defeat shifted the balance toward those who believed that business must join with the other major economic actors in the task of rebuilding the society, tying its own goals with the larger interests of the nation as a whole. 56 Cooperation Cooperation that was prompted by the devastation brought by war caught on and became the cornerstone of the competitiveness of both countries. High-quality education and training Germany and Japan take different routes, but they arrive at the same place regarding education and training. Germany uses a highly structured apprenticeship program that emphasizes both skills development and academic achievement. Japan relies on excellent primary and secondary education supplemented by industry-based training to prepare frontline employees. Employee involvement and empowerment In both Germany and Japan, employees are involved in functions traditionally viewed as management functions in the U.S. These functions include setting working hours, introducing new technologies, establishing compensation levels, human-resource planning, work design, and the provision of training. Leadership at all levels In both Germany and Japan, leadership occurs at all levels and leadership training is provided not just for managers but also for front-line employees. This is important in that it tends to improve the quality of employee involvement in continual improvement efforts. Teamwork In Germany and Japan, not only is work done by teams of employees, but the planning and designing of work, introduction of new technologies, and establishment of compensation levels are also done by teams that involve representatives from labor and management. 57 Chapter Three STRATEGIC MANAGEMENT: PLANNING AND EXECUTION FOR COMPETITIVE ADVANTAGE 1. What is strategic management? Strategic management is management that bases all actions, activities, and decisions on what is most likely: within an ethical framework: to ensure successful performance in the marketplace. From the perspective of the strategic manager, resources are wasted unless they contribute to success in the marketplace, and the more direct the contribution, the better. 2. List the steps in the strategic planning process. SWOT Analysis, Develop the Vision, Develop the Mission, Develop the Guiding Principles, Develop the Broad Strategic Objectives, and Develop the Specific Tactics 3. What is a core competency? A core competency is anything an organization does so well that it can be viewed as a competitive advantage. An organization’s core competencies might be based on its ability to achieve economy of scale, proprietary access to a given technology, expertise that is difficult to replicate, the ability to maintain world-class performance from critical processes, market proximity, a high-performance corporate culture, research and development expertise, the ability to respond rapidly to market research, or any other factor that contributes directly and significantly to the organization’s ability to provide superior value consistently over time. 4. Explain why creative thinking is important in strategic planning and how to encourage it. So as to ferret out things that are done the same way year after year just because that is the way they have always been done. This approach will not make an organization more competitive. 5. What is SWOT analysis? SWOT is the acronym for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis answers the following questions: What are this organization's strengths? What are this organization's weaknesses? What opportunities exist in this organization's business environment? What threats exist in this organization's business environment? 6. Write a sample vision for a hypothetical organization. The Institute for Corporate Competitiveness will be recognized by its customers as the provider of choice for organizational development products that are the best in the world. 7. Write a mission statement for the hypothetical organization in Question 6. The Institute for Corporate Competitiveness (ICC) is a business-development company dedicated to helping organization's continually improve their ability to compete in the 58 global marketplace. To this end, ICC provides high-quality competitiveness: enhancing products and services to an ever-increasing number of organizations in the United States. 8. Draft a set of guiding principles for the hypothetical organization in Question 6. XYZ Company will uphold the highest ethical standards in all of its operations. At XYZ Company, customer satisfaction is the highest priority. XYZ Company will make every effort to deliver the highest quality products and services in the business. At XYZ Company, all stakeholders (customers, suppliers, and employees) will be treated as partners. At XYZ Company, continued improvement of products, processes, and people will be the norm. XYZ Company will provide employees with a safe and healthy work environment that is conducive to consistent peak performance. XYZ Company will be a good corporate neighbor in all communities where its facilities are located. XYZ Company will take all appropriate steps to protect the environment. 9. Establish two or three broad objectives for the hypothetical organization in Question 6. 1. To produce organizational-development products of world-class quality that are improved continually. 2. To provide organizational-development services of world-class quality that is improved continually. 3. To establish and maintain a world-class workforce at all levels of the organization. 4. To continually increase the organizations market share for its existing products/services. 5. To continually introduce new products/services to meet emerging needs in the organizational development market. 10. Describe the steps you would apply in executing your strategic plan developed in Questions 5-9. A) Communicate; B) Build capabilities; C) Establish strategy-supportive stimuli; D) Eliminate administrative barriers; E) Identify advocates and resisters; F) Exercise strategic leadership; G) Be flexible and improvise; and H) Monitor and adjust as needed. Chapter Four 59 QUALITY MANAGEMENT, ETHICS, AND CORPORATE SOCIAL RESPONSIBILITY 1. Define the term ethics. Is an inquiry into the nature and grounds of morality where morality is taken to mean moral judgments, standards, and rules of conduct. 2. What is morality? Morality refers to the values that are subscribed to and fostered by society in general and by individuals within society. 3. Explain how a certain behavior could be legal but not ethical. Just because a choice made is legal does not necessarily mean it is ethical. A person's behavior can be well within the prescribed limits of the law and still be unethical. If a course of action is not legal, no further consideration of it is in order. If an action is not legal, it is also not ethical. A course of action that is balanced will be fair to all concerned. A course of action that leaves people feeling good about themselves is one that is consistent with their personal value system. 4. What role does trust play in a total quality setting? The total quality approach cannot be successfully implemented in an organization that does not subscribe to high standards of ethical behavior. This is because ethical behavior builds trust, and trust is an essential ingredient in total quality. Consider the various elements of total quality that depend on trust: communication, interpersonal relations, conflict management, problem solving, teamwork, employee involvement and empowerment, and customer focus. 5. Describe how managers can build trust. One of the best ways managers can help build trust is "to be loyal to those not present" Mother way is to apologize when wrong instead of making excuses. Keeping promises is another way. In attempting to build trust, managers should take the initiative, rather than sitting back and waiting for others. Dependability builds trust. 6. What role do values play in a total quality setting? Our values guide our behavior. This also applies to organizations. An organization will not produce a quality product or provide a quality service unless the organization values quality. Values that lead to ethical behavior include fairness, dependability, integrity, honesty, truthfulness. Values that lead to peak performance and excellence include achievement, contribution, self-development, creativity, synergy, quality and opportunity. These values tend to support and supplement each other in a work environment that involves, empowers, values, and nurture people, one that holds employees responsible, but also gives them the support, leeway, and resources needed to fulfill their responsibilities. 60 7. What role does integrity play in a total quality setting? When an individual or an organization has integrity, ethical behavior automatically follows. People with integrity can be counted on to do the right thing, to do things right, to accomplish tasks thoroughly and completely, to complete work on time, and to keep promises. The same is true of organizations. 8. What role does responsibility play in total quality? In a total quality setting, people are responsible for their actions and accountable for their performance. Accepting responsibility helps build trust, integrity, and all the other elements of ethics that are so important in a total quality environment. 9. Describe and differentiate among the following approaches to ethics best-ratio, black-andwhite ratio, and full-potential ratio. Best Ratio Approach The best-ratio approach is a pragmatic approach based on the belief that people are basically good, that under the right circumstances they will behave ethically and that under certain conditions they can be driven to ethical behavior. Managers should do everything possible to create conditions that promote ethical behavior and try to maintain the best possible ratio of good choices to bad and ethical behavior to unethical behavior. When hard decisions must be made, managers should make the choice that will do the most good for the most people. Black-and White Approach Right is right, wrong is wrong, and conditions are irrelevant. The manager's job is to make ethical decisions and carry them out. It is also to help employees behave ethically regardless of circumstances. When difficult decisions must be made, managers should make fair and impartial choices regardless of the outcome and do the right thing without concern for short-term circumstances. Full-Potential Decisions are made based on how they will affect the ability of those involved to achieve their full potential. People are responsible for realizing their full potential within the confines of morality. Choices that can achieve this goal without infringing on the rights of others are considered ethical. 10. What is a manager's role in ethics? Managers can play a role in promoting ethical behavior on the job by encouraging higher management to develop written ethics philosophies/credos/guidelines and then by modeling the behavior they encourage. 61 11. Explain the organization's role in promoting ethical behavior. Employees must be able to trust their employers to conduct all external and internal dealings in an ethical manner. Companies that do not pay their bills on time, companies that pollute, companies that do not live up to advertised quality standards, companies that do not stand behind their guarantees, and companies that are not good neighbors in their communities are not setting a good ethical example. In addition to creating an ethical internal environment and handling external dealings in an ethical manner, organizations must support managers who make ethically correct decisions: not just when such decisions are profitable but in all cases. 12. Why, in your own words, would an otherwise ethical person make an unethical decision? Student response. 13. Define the term corporate social responsibility. Corporate social responsibility is a balanced approach for organizations to address economic, social and environmental issues in a way that aims to benefit people, communities and society. 62 Chapter Five PARTNERING AND STRATEGIC ALLIANCES 1 Define the term partnering. The simplest way to understand the concept of partnering is to think of it as working together for mutual benefit. Those who work together may be suppliers, fellow employees, customers, and even businesses that are potential competitors. The creation of cooperation within an organization and between an organization and its suppliers and customers. Business partnering occurs through a pooling of resources in a trusting atmosphere focused on continual, mutual improvement. 2. What are the benefits of partnering? The maximum benefits of partnering are realized when all parties in the chain of partners cooperate. Partnering can lead to continual improvements in such key areas as processes and products1 relationships between customers and suppliers, and customer satisfaction. Internal partnering can improve relationships among employees and between departments within an organization. When taken as a whole, these individual benefits add up to enhanced competitiveness. 3. Describe each step in the partnering model. Develop a Partnering Briefing Partnering is about creating cooperative alliances. Before trying to establish such an alliance, make sure everyone involved understands partnering as a concept. Identify Potential Partners Any external or internal supplier or customer is a potential partner. Choose partners in an order determined by how much value the partnership can have toward enhancing quality, productivity, and competitiveness. Identify Key Decision Makers In every organization (unit, department, etc.) there are key people whose support is needed to make an initiative involving their organization work. Identify these key decision makers in any organization considered a potential partner. Their support will have to be won if a successful partnership is to be formed. Conduct a Partnering Briefing Call a meeting of the decision makers in both organizations, yours and the potential partners. Present a briefing explaining the partnering concept, with time built in for discussion and questions. This briefing should answer such questions as 1) How can we mutually benefit from a partnership? and 2) What is expected of each partner? Determine the Level of Commitment. After the key decision makers have been briefed, gauge their level of commitment. Are they willing to commit to the partnership for the long term? Are they willing to make any and all procedural and/or philosophical changes that may be necessary in order for the partnership to work? 63 Decide If There is Sufficient Commitment If the key decision makers show noticeable reluctance, they are not likely to make a full commitment to the partnership. There is no need to proceed any further with potential partners who seem reluctant. The better course of action in such a case is to break off further involvement and begin the process again with another external partner.Identify Key Operational Personnel If the level of commitment is sufficient to proceed with the partnership, who are the key people from both organizations needed to put it into operation? Are personnel needed from Marketing? Purchasing? Engineering? Manufacturing? Receiving? Accounting? Identify the people needed to put into action the commitment made by executive-level decision makers. Form the Partnership Team The key people identified as necessary to putting the partnership into operation should be formed into a team. This means more than just naming them to the team. They must be given opportunities to get to know and trust each other. The success of the partnership will depend in great measure on the willingness and ability of these team members to work together. Develop a Mission Statement The partnership team needs a clear and concise mission statement so that everyone involved understands what the team is supposed to do. The mission statement should be developed by executive-level decision makers from both organizations. Develop Objectives The mission statement is written in general terms. It is translated into more specific terms by objectives. These objectives should be developed by the partners and ratified by the executive-level decision makers of both partnership organizations. Well-written objectives are stated in measurable terms. Prioritize and Begin It will typically take several objectives to completely translate the mission statement into measurable action. The importance of these objectives is relative. Although all are important, the objectives should be prioritized and listed in order from the most important to the least. After priorities have been established and confirmed by executive-level personnel, the work necessary to accomplish them begins Results should be monitored and appropriate action taken when problems arise. 4. Define the term internal partnering. Internal partnering is creating an environment and establishing mechanisms within it that bring managers and employees, teams, and individual employees together in mutually supportive alliances that maximize the human resources of an organization. 5. What is partnering with suppliers? True supplier partnering requires an understanding of each party's needs and capabilities to establish a clear vision for focusing the efforts of people who work for buyer and supplier. Necessary improvement can then be dedicated to those areas identified as requiring attention and improvement. If that focus is placed, as it has been in most cases, solely on the buyer's perceived needs, nothing happens to establish overall improvement to the buyer-seller network. Long-term commitments then become nebulous and difficult to 64 achieve. Continual improvement is often reduced to a short-term project instead of an ongoing process. 6. Explain the mandatory requirements of supplier partnerships. Supplier personnel should meet with buyer personnel beyond those in the purchasing office. It is particularly important for them to meet with personnel who actually use their products so that needed improvements can be identified and made. The price only approach to buyer: supplier negotiations should be eliminated. Product features, quality, and delivery issues should also be part of the negotiations. The goal of the negotiations should be to achieve the optimum deal when price, features, quality, and delivery issues are all factored in. The quality of supplier products should be guaranteed by the supplier's quality processes. The buyer should have no need to inspect the supplier's products. The supplier should fully understand and be able to practice Just-In-Time/Lean (JIT/LEAN). Buyers should not need to maintain inventories. Both partners should be capable of sharing information electronically so that the relationship is not inhibited by paperwork. Electronic data exchange is particularly important for successful JIT/LEAN. 7. List and explain the stages of development in supplier partnerships. Uncertainty and Tentativeness In the uncertainty and tentativeness stage, the buyer and seller are like two people on their first date. There is interest, but it is tentative and prefaced with uncertainty. Neither party knows exactly what to expect of the other. At this point, there is no trust between the partners. Short-Term Pressures The typical short-term business pressures that apply in a traditional business setting manifest themselves in this step. The buyer will be under the usual pressure to cut costs. The supplier will be under the usual pressure to increase sales volume. Both partners will be cautious and initial attempts to begin putting some substance to the partnership will be probing and vague. Need for Approaches In the need for approaches stage, traditional negotiations will inevitably occur. The buyer will press price discounts, better payment terms, freight allowances, and other concessions that save it money but cost the supplier. The supplier will press for higher concessions that save it money but cost the supplier. The supplier will press for higher volume to offset concessions made to the buyer. Then, if either partner has involved personnel who are total quality conscious, it will dawn on them that quality is not being served by this traditional negotiating. Both will begin to realize that a new approach is needed. If this awareness does not occur, the partnership will fail. Adoption of New Paradigms In the adoption of new paradigms state, both partners explore ways to move toward the concept of mutual benefit. The key is for both partners to accept the principle that absorbing costs within the partnership (either by the supplier or the buyer) gives neither an advantage. The best way to promote competitiveness is for both partners to work together 65 to lower costs. This new way of thinking will give the partnership a competitive advantage over other organizations that produce the same product. Awareness of PotentialIn the awareness of potential stage, both partners become fully aware of the potential benefits that can be realized from the partnership. The potential for a true-win-win relationship can now be seen. Rather than negotiating price concessions and volume increases, both partners realize that by working together they can exceed any shortterm advantages that might have been realized from these traditional negotiating strategies. Adoption of New Values The adoption of new values stage, both partners adopt the new values inherent in a true supplier-buyer partnership. These values include trust, openness, and sharing. Each party trusts the other to protect the confidentiality of what they learn about one another. Both parties accept that the more information they share, including financial information, the better prepared they will be to help one another. Mature Partnering In the mature partnering stage, the partnership has solidified. A high level of trust and cooperation has been established between the partners. Continual interfacing between pertinent employees at all levels of both organizations exists as fact. Each partner has a strong self-interest in the success of the other partner. 8. Explain the rationale for partnering with customers. The rationale for forming partnerships with customers in this context is simple. It is the best way to ensure customer satisfaction, which is, in turn, the best way to be competitive. No organization can possibly know better than its customers what the customers want. Customer-defined quality is a fundamental part of the total quality philosophy. Where it is best to guess what a customer wants or to ask is obvious. No organization can afford to squander its resources and, in turn, its competitive edge guessing what customers want Ask. Any organization that produces a product can benefit from observing how it is used by customers. By involving customers early in the product development cycle, a manufacturer can make changes inexpensively and with relative ease. The key to success in partnering with customers is to get them involved early in the product development cycle. Get their feedback at every stage in the product development cycle, and make any changes needed as soon as they are identified. When this approach is used, customer satisfaction surveys can solicit feedback from a broader audience to verily the input given earlier in the product development. 9. What is a manufacturing network? A manufacturing network is a group of individual SMEs that cooperate in ways that increase their quality, productivity, and resultant competitiveness to levels beyond what the individual member companies could achieve by themselves. 10. What role does mutual need play in manufacturing networks? What makes a network succeed are two concepts: interdependence of member companies and mutual need. The member companies depend on each other in developing mutual solutions to common problems. Manufacturing networks are characterized by relationships of collaboration or interdependence among firms. The interactions between participants are neither dominated by any one firm nor are they simple economic exchanges motivated by 66 calculations of price and quantity. Firms in these networks are partners: they must rely on each other in order to accomplish their objectives. 11. List and explain the most widely practiced network activities. Production Networked SMEs are able to pursue production contracts larger than any individual member company could undertake alone. Through teaming arrangements, the work and the financing of it are divided among network members as appropriate. Education and Training Education and training are often a problem for SMEs. On the one hand, employees need ongoing education and training in order to continually improve quality, productivity, and competitiveness. On the other hand, they face the following problems because they have a limited employee base: a) Difficulty giving employees time off for education and training and still meeting production schedules; b) Difficulty convincing educational institutions that typically need 15-20 students in order to form a class to bring courses on-site; and c) high expenses for education because they do not get the substantial registration discounts large firms get when participating in training provided by private training firms. By partnering, SMEs can solve all three of these problems through economy of scale. Marketing Marketing is the most widely practiced joint activity among manufacturing networks of SMEs. Typically, the joint capabilities of the network are what are marketed. Member companies share the costs of producing marketing tools such as brochures, videos, and promotional materials; of attending trade shows; and of marketing personnel and related expenses such as travel. Product Development Developing new products can be too expensive an undertaking for SMEs. It typically involves such activities as research, design, market analysis, competition analysis, prototype production, performance testing, and test markets. The costs associated with these activities can be prohibitive for an individual SME. However, when the costs can be divided among network members, product development becomes a more feasible concept. Technology Transfer Technology is the physical manifestation of knowledge. Technology transfer is the movement of technology from one arena to another. The form of technology transfer that is most readily and widely recognized is the transfer of a new technology from a research laboratory to a production setting. After it has been diffused, technology must be properly used in order to realize the potential benefits. Proper use of technology requires knowledge. Knowledge sharing is the approach networks use to promote effective technology. Purchasing One of the most productive applications of the economy of scale gained from networking is in purchasing. SMEs working alone are not able to enjoy the cost savings that large firms achieve by purchasing bulk quantities of expendable materials and other necessities such as insurance. However, by jointly purchasing necessities, networked SMEs can achieve similar cost savings. 12. What types of service do educational institutions typically provide to business and industry partners? 67 The need to continually improve employees’ work skills is the primary driver behind business and education partnerships. Educational institutions provide on-site customized training, technical assistance, and consulting services to help organizations continually improve their people and their processes. 68 Chapter Six QUALITY CULTURE: CHANGING HEARTS, MINDS, AND ATTITUDES 1. Define the expression quality culture. A quality culture is an organizational value system that results in an environment that is conductive to the establishment and continual improvement of quality. It consists of values, traditions, procedures, and expectations that promote quality. 2. Explain why the implementation of total quality requires cultural change. Change Cannot Occur in a Hostile Environment. The total quality approach to doing business may be radically different than what management and employees are used to. Managers who are used to sitting in their lonely towers at the top of the pecking order and issuing edicts from on high are likely to reject the concept of employee involvement and empowerment. Employees who are used to competing against their own fellow workers for promotion and wage increases may not be open to mutually supportive internal partnerships and teamwork. Situations such as this can create an environment that is hostile toward change, no matter how desirable that change is. Change can be difficult, even when people want to change. It can be impossible in a hostile environment. Moving to Total Quality Takes Time The nature of total quality is such that the organization may have to go down somewhat before it can turn things around and start to come up. In a conversion to total quality, positive results are rarely achieved in the short run. This characteristic gives non-believers and people who just don't want to change (and such people are often the majority at first) the opportunity to promote the "I told you it wouldn't work" syndrome. It Can Be Difficult to Overcome the Past Employees who have worked in an organization for any period of time have probably seen a variety of management fads come and go. Promoting the latest management gimmick and then letting it die for lack of interest may be part of the existing organizational culture. If this is the case, it will be difficult to overcome the past. The past is not just an important part of an organization's culture; it can be the most difficult part to overcome. 3. List and describe the steps involved in laying the groundwork for a quality culture. Understand the History Behind the Current Culture Organizational cultures don't just happen. Somebody wrote the policy that now inhibits competitiveness. Somebody started the tradition that is now such a barrier. Times and circumstances change. Don't be too quick to criticize. Policies, traditions, and other aspects of the existing culture that now seem questionable may have been put in place for good reason in another time and under different circumstances. Learn the history behind the existing culture before trying to change it. Don't Tamper with Systems, Improve Them Tampering with existing systems is not the same as improving them. Tampering occurs when changes are made without understanding why a given system works the way it does and 69 without fully understanding why a given system works the way it does and without fully understanding what needs to be changed and why. In order to improve something, you must first understand what is wrong with it, why, and how to go about changing it for the better. Be Prepared to Listen and Observe People are the primary inhibitors of change in any organization. Consequently, it is easy to become frustrated and adopt an attitude of "we could get a lot done if it weren't for the people in this organization." It is important to pay attention to both people and systems. Try to hear what is being said and observe what is not being said. Employees who are listened to are more likely to participate in changes than those who are not. Involve Everyone Affected by Change in Making It The most effective way to ensure that employees will go along with changes is to involve them in planning and implementing the changes. Give them opportunities to express their concerns and rears. Getting problems into the open from the outset will allow them to be dealt with forthrightly and overcome. Showing them aside or ignoring them will guarantee that even little problems become big ones. 4. What are the characteristics shared by companies that have a quality culture? Widely shared philosophy of management Emphasis on the importance of human resources to the organization Ceremonies to celebrate organizational events Recognition and rewards for successful employees Effective internal network for communicating the culture Informal rules of behavior Strong value system High standards for performance 5. Why is change so difficult for people? Resistance to change is normal organizational behavior. Any organization has two separate cultures relating to change: the advocates and the resisters. Advocates focus on the anticipated benefits of the change. Resisters, on the other hand, focus on perceived threats to their status, beliefs, habits, and security. Often, both advocates and resisters are wrong in how they initially approach change. Advocates are often guilty of focusing so intently on benefits that they fail to take into account the perceptions of employees who may feel threatened by the change. Resisters are often guilty of focusing so intently on threats to the status quo that they refuse to acknowledge the benefits. These approaches typically divide an organization into warring camps that waste energy and time instead of focusing resources on the facilitation of change. 6. Describe the paradigm that should be adopted by advocates of change. Advocates of change tend to focus solely on expected results and benefits. Advocates are often unaware of how a proposed change will be perceived by potential resisters. Advocates of change are often impatient with the concerns of resisters. 70 7. Explain four reasons why people resist change. Fear Change brings with it the unwanted specter of the unknown, and people fear the unknown. Worst-case scenarios are assumed and compounded by rumors. In this way, fear tends to feed on itself, growing with time. Loss of Control People value having a sense of control over their lives. There is security in control. Change can threaten this sense of security and cause people to feel as if they are losing control of their lives1 jobs, areas of responsibility1 and so on. Uncertainty Uncertainty is difficult to deal with. For better or worse, people like to know where they stand. Will I be able to handle this? What will happen to me if I can't? These are the types of questions people have when confronted with change. More Work Change sometimes means more work3 at least at first. This concern includes work in the form of learning. In order to make the change, people may have to learn more information or develop new skills. For an undefined period, they may have to work longer hours. 8. List and describe the strategies that can be used to overcome resistance to change. Involve Potential Resisters At some point in the process, those affected by change (potential resisters) will have to take ownership of the change or it will fail. By involving them from the outset in planning for the change, organizations can ensure that potential resisters understand it and have adequate opportunities to express their views and concerns about it. This type of involvement will help potential resisters develop a sense of ownership in the change which can, in turn, convert them to advocates. Avoid Surprises Predictability is important to people. This is one of the reasons they should resist change. Change is unpredictable. It brings with it the specter of the unknown. For this reason, it is better to bring potential resisters into the process from the outset Surprising potential resisters will turn them into committed resisters. Move Slowly at First In order to gain the support of potential resisters, it is necessary to let them evaluate the proposed change, express their concerns, weigh the expected benefits, and find ways to alleviate problems. Start Small and be Flexible Change will be more readily accepted if advocates start small and are flexible enough to revise strategies that are not working as planned. Create a Positive Environment The environment in which change takes place is determined by reward and recognition systems and examples set by managers. A reward and recognition system that does not reward risk-taking or that punishes employees for ideas that don't work will undermine change. 71 Incorporate the Change Change will be more readily accepted if it can be incorporated into the existing organizational culture. Provide a Quid Pro QuoThis strategy could also be called require something, give something. If, for example, change will require intense extra effort on the part of selected employees for a given period of time, offer these employees some paid time off either before or immediately after the change is implemented. Using a quid pro quo can show employees that they are valued. Respond Quickly and Positively When potential resisters raise questions or express concerns, advocates should respond quickly and positively. Making employees wait for answers magnifies the intensity of their concerns. A quick response can often eliminate the concern before it becomes a problem. Work with Established Leaders In any organization, there are people who are looked to as leaders. In some cases, those people are in leadership positions (supervisors, middle managers, team captains, and so on). In other cases they are informal leaders (highly respected employees whose status is based on their experience or superior knowledge and skills). The support of such leaders is critical. Other employees will take their cues from them. The best way to get their support is to involve them in planning for the change from the outset. Treat People with Dignity and Respect This strategy is fundamental to all aspects of total quality. It requires behavior that acknowledges the human resource as the organization's most valuable resource. Be Constructive Change is not made simply for the sake of change. It is made for the sake of continual improvement. Consequently, it should be broached constructively from the perspective of how it will bring about improvements. 9. What strategies would you use to establish a quality culture in organizations? Identify the attitudes, behaviors, processes, and procedures that are to be changed. Put the planned changes in writing. Develop a comprehensive plan for making the changes. Make sure all change advocates are familiar with the emotional transition people go through when confronted with change. Identify the key people in the organization who can either make the conversion work or make sure it doesn't work. Get the identified key people on the team (turn them into advocates). Take a hearts and minds approach when introducing the new culture. Apply courtship strategies to bring people along slowly but steadily. SUPPORT, SUPPORT, SUPPORT 10. Explain which strategy from the previous questions is the most important and why. SUPPORT, SUPPORT, SUPPORT. This final strategy is critical. It means that the materiel, moral, and emotional support needed by people undergoing change should be provided. Undergoing change is a lot like walking a tightrope for the first time. It will work out a lot better if you have someone to help you get started, someone waiting at the other end to 72 encourage progress, and a safety net underneath in case you tall. Planning is important. Communication is critical, but support is essential. 11. Why is it sometimes necessary to change leaders to ensure cultural change? It might be necessary to ensure needed cultural change. This situation arises when the organization’s senior executives have a great deal invested in the status quo and therefore are staunch defenders for orthodoxy. 73 Chapter Seven CUSTOMER SATISFACTION, RETENTION, AND LOYALTY 1. Explain the contemporary concepts of customer and supplier. In a total quality setting, customers and suppliers exist inside and outside of the organization. My employee whose work precedes that of another employee is a supplier for that employee. Correspondingly, any employee whose work follows that of another employee and is dependent in some way on it is a customer. 2. How does the contemporary view of customers and suppliers differ from the more traditional view? In the traditional view1 an organization has the processes by which it produces its products. People who interact with the company prior to the processes have been considered suppliers. Those who interact with the company after the processes have produced the product have been viewed as customers. From this perspective, customers and suppliers are both external entitles. In the contemporary view, customers and suppliers exist both inside and outside of the organization. 3. Explain the role of the customer in a total quality setting. In a total quality setting, quality is defined by the customer. The customer defines quality. The customer must be the organization's top priority. The organization's survival depends on the employee. Customer satisfaction is essential. 4. What is a reliable customer? Reliable customers are the most important customers. A reliable customer is one who buys repeatedly from the same organization. Customers who are satisfied with the quality of their purchases from an organization become reliable customers. 5. What role does customer satisfaction play in the development of reliable customers? Customers who are satisfied with the quality of their purchases from an organization become reliable customers. Therefore, customer satisfaction is essential. 6. How is customer satisfaction ensured? To ensure customer satisfaction, it must be renewed with every new purchase. This cannot be accomplished if quality, even though it is high, is static. Satisfaction implies continual improvement. Continual improvement is the only way to keep a customer satisfied and loyal. 7. Briefly describe what is meant by an organization that has customer focus. Traditional management practices that take the management by results approach are inwardlooking. An organization with a customer focus is outward-looking. 8. How does an organization go about establishing a customer focus? 74 The key to establishing a customer focus is putting employees in touch with customers and empowering those employees to act as necessary to satisfy the customers. There are a number of ways to put employees in touch with customers. Actual contact may be in person, by telephone, or through reviewing customer- provided data. The employee-customer interaction is a critical element in establishing a customer focus. 9. Explain the six-step strategy for identifying customer needs. Speculate About Results Before gathering information about customer needs, it is a good idea to spend some time speculating about what might be learned. Write down what you think customers will say, so that you can compare your expectations with what is actually said. The purpose of this step is to help representatives of the organization determine if they are in touch with customer needs. Develop an Information Gathering Plan Before implementing the entire information-gathering plan, it is a good idea to conduct a smaller pilot study involving just a few customers. This will identify problems with the information-gathering methodology that should be corrected before you proceed on a larger scale. After the methodology has been appropriately refined, gather information in a timely manner. Analyze the Results Results should be analyzed carefully and objectively. Do they match the speculated results from the first step? How do they agree and disagree? What problems did customers identify? What strong points? Were there trends? How many customers complained of the same problem? What changes in the product or services relating to it were suggested? Check the Validity of Conclusions Having drawn conclusions based on the information gathered, the next step is to check the validity of those conclusions. Customers can be a valuable source of help. Select several customers and share the conclusions with them. Do they agree with the conclusions? Also share the conclusions with other people in the organization and get their feedback. Adjust your conclusions as needed based on this external and internal feedback. Take Action Based on the conclusions, what changes need to be made? Which of these changes are shortterm in nature, and which are long-term? Which can be made immediately and which will require longer? Take any corrective action that can be done immediately, and lay out a plan for completing any that are long-term in nature. Meet with customers and let them know what is going to be done and when. Make sure that changes are made to the extent possible, in the same order of priority as that dictated by customer needs. 10. Describe how organizations should go about communicating with their customers. Quality circles, self-managed teams, cross-departmental teams, and improvement teams are all examples of mechanisms for improving communication and, in turn, quality. These mechanisms serve to facilitate communication among internal customers and suppliers. However, they are not the only mechanisms available. Communication that occurs over a cup of coffee in a break room or during lunch can be equally effective. Training that promotes communication and helps improve communication skills are also important. Teamwork and how it can improve communications is important. 75 11. Explain briefly the concept of QFD and how it relates to customer satisfaction. Quality Function Deployment was developed to ensure that products entering production would fully satisfy the needs of their customers by building in the necessary quality levels as well as maximize suitability at every state of product development. It is an integrated approach to product development and quality in all reproduction activities. QFD is actually a model for incorporating customer input and feedback into product development. It establishes an operational structure for the concept of building quality in. The underlying philosophy is that even a perfectly manufactured product may not satisfy the customer because it may be nothing more than a perfect example of what the customer does not want. 12. Explain why it is important to measure customer retention. Many business leaders assume that having acquired customers they need only provide high quality products and services in order to retain them. Michael W. Lowenstein calls this the "myth of customer satisfaction." According to Lowenstein, "Conventional wisdom of business, academia, and the consulting community is that... if satisfied, the customer will remain loyal." Reality proves that customer loyalty or retention is a more complex, yet more definitive indicator of quality performance. 13. Explain why just meeting customer specifications might not produce customer satisfaction. A product that does not please the customer even though it meets the customer’s specifications is just as bad as one that does not meet specification that is poorly thought out, incomplete, or insufficient in any other way is still going to have an unhappy customer. 14. Describe the customer loyalty model. The customer loyalty model is a four-phase model that has the following components: (1) Business performance – when evaluating the performance of an organization they do business with, customers consider a variety of factors: product quality – attributes, features, usability, compatibility, reliability service quality – sales, after-purchase service, billing relationship quality – communication, availability, responsiveness image strength – when other performance indicators are equal, the organization’s image can be an important consideration Price perceptions – initial purchase price, cost of maintenance and repairs, cost of upgrades (2) Global perceptions – customers might form good or bad feelings about overall satisfaction, their willingness to recommend the organization to other potential customers, their willingness to do business with the organization, the extent to which the organization met their needs, or the value they received for their money. (3) Loyalty behaviors – can be measured. Measure the defection rate of its customers. The business volume of individual customers can also be measured. Is the volume of business for the customer going up or down? (4) Financial outcomes – are affected by several key factors: Market share – high customer loyalty leads to a larger market share which, in turn, leads to better financial outcomes. 76 Reduced costs – repeat customers cost less to deal with than new customers, which means that customer loyalty decreases the cost of doing business. Employee attitudes – positive employee attitudes promote positive customer relations. Profit – increased market share can results in increased profits provided the cost of doing business is held level or even decreased by customer loyalty. Shareholder value – customer loyalty can result in higher profits which, in turn, are a key driver of shareholder value. 15. Explain the concept of customers as innovation partners and how to implement the concept. A number of companies have adopted an intriguing approach. These companies have abandoned their efforts to understand exactly what products their customers want and have instead equipped them with tools to design and develop their own products, ranging from minor modifications to major new innovations. A “tool kit for customer innovation,” deploys new technologies like computer simulation and rapid prototyping to make product development faster and less expensive. 77 Chapter Eight EMPLOYEE EMPOWERMENT 1. Define the term empowerment being sure to distinguish between involvement and empowerment.Employee involvement and empowerment are closely related concepts, but they are not the same. In a total quality setting, employees are both involved and empowered. Employee involvement is a way of engaging employees at all levels in the thinking processes of an organization. It's the recognition that many decisions made in an organization can be made better by soliciting the input of those who may be affected by the decision. It's an understanding that people at all levels of an organization possess unique talents, skills, and creativity that can be of significant value if allowed to be expressed. Empowerment, stated simply, is employee involvement that matters. It's the difference between just having input and having input that is heard, seriously considered, and followed up on whether it is accepted or not. 2. Explain the following statement "Successful implementation of empowerment requires change in the corporate culture.” It's not something "nice" we do for our employees to make them feel better. It's an understanding that it's everyone's obligation: part of the job: to constantly look for better ways of doing things. It's part of the job to ask questions and raise issues of concern, to get them out on the table so they can be resolved. How else can we get better? Above all, employee involvement is not simply another management tool, but a major change of direction in the way we lead our workforce. It's a change that affects the culture of the workplace as we've come to know it in this century, and, therefore, it's a change that must be implemented with great care and attention. 3. Give a brief rationale for empowerment. The rationale for empowerment is that it represents the best way to bring the creativity and initiative of the best employees to bear on improving the company's competitiveness. 4. What is the relationship between empowerment and motivation? Participatory management is about managers and supervisors asking for their employee's help. Empowerment is about getting employees to help themselves, each other, and the company. This is why empowerment can be so effective in helping maintain a high level of motivation among employees. It helps employees develop a sense of ownership of their jobs and in the company. This, in turn, leads to a greater willingness on the part of employees to make decisions, take risks in an effort to make improvements, and speak out when they disagree. 5. List three inhibitors of empowerment and how they can be overcome. Resistance from Employees Employee resistance to change is the primary inhibitor. In addition to skepticism, there is the problem of inertia. Resistance to change is natural. Even positive change can be uncomfortable for employees because it involves new and unfamiliar territory. However, when recognized for what they are skepticism and inertia can be overcome. 78 Unions Unions are another source of resistance when implementing empowerment. Because of the traditional adversarial relationship between organized labor and management, unions may be suspicious of management's motives in implementing empowerment. They might also resent an idea not originated by their own organization. By involving personnel at all levels of an enterprise in problem solving and decision making by enriching the working lives of employees, by helping resolve personal concerns that affect their job performance, and by creating a climate in which people can achieve job satisfaction through directing their creativity and talents toward improving their work and their environment, worker participation programs can provide a foundation for sustained productivity growth. Resistance from Management Empowerment will not work unless management makes a full and whole-hearted commitment to it. Company must first make the necessary fundamental changes in organizational structure or management style for empowerment to work. The reasons behind management resistance to empowerment are: insecurity, personal values, ego, management training, personality characteristics, and managers left out. 6. Explain the various root causes of management resistance to empowerment. Fear of losing control There is an old adage that knowledge is power. By controlling access to knowledge as well as the day-to-day flow of knowledge managers can maintain power over employees. Managers who view the workplace from an us-against-them perspective tend to be insecure about any initiative they perceive as diminishing their power. I’m-the-boss syndrome Many of today' managers have a mindset when it comes to working with employees. This means they think employees should do what they are told, when they are told, and how they are told. Such a value system does not promote empowerment. Managers who feel this way will resist involvement and empowerment as being inappropriate. They are likely to think, "There can be only one boss around here and that boss is me." Status People who become managers may be understandably proud of their own status and protective of the prerequisites that accompany it. Status appeals to the human ego, and egofocused managers may project an I-am-the-boss attitude. Such managers may have difficulty reining in their egos enough to be effective participants in an approach they view as an encroachment on territory that should be exclusively theirs. Outdated management training Many of today's managers were educated and trained by modem followers of Frederick Taylor, the father of scientific management. Taylor's followers, whether university professors or management trainers, tend to focus on applying scientific principles to the improvement of processes and technology. Less attention is given to people-oriented improvements. Grazier says that "Taylor's scientific approach permitted them to deal with workflow procedures and equipment improvements rather than the more complex issues of employee commitment and morale. Taylor believes that it is the experts who solve problems. Taylor defined management’s role as the 'thinker' and labor's role as the 'doer', that is, management does the thinking and labor does whatever management says." Old-school syndrome 79 Off-school managers are often found to be more task-oriented than people-oriented. They tend to focus more on the task at hand and getting it done than on the people actually doing the work. Fear of exclusion Empowerment is about the total involvement of all personnel who will be affected by an idea or a decision. This includes the first level of management (supervisors) and midmanagement, and executive management. Even with a full commitment from executives and enthusiastic support from employees. Empowerment will not succeed if mid-managers and supervisors are excluded. Those who are excluded, even if they agree conceptually, may resist because they are left out. Organizational structure A company's organizational structure and its management practices can also work against the successful implementation of empowerment. Before implementing empowerment, the following questions should be asked: 1) How many layers of management are there between workers and decision-makers? 2) Does the employee performance appraisal system encourage or discourage initiative and risk taking? and 3) Do management practices encourage employees to speak out against policies and procedures that inhibit quality and productivity? 7. In what ways can an organization's structure and management practices inhibit empowerment? Employees will become frustrated if their suggestions have to work their way through a bureaucratic maze before reaching a decision-maker. Too many layers of managers who can say NO between employees and decision-makers who can say YES will inhibit and eventually kill risk taking and initiative on the part of the employee. Risk-taking employees will occasionally make mistakes or try ideas that don't work. If this reflects negatively in their performance appraisals, initiative will be replaced by a play-it-safe approach. This also applies to constructive criticism of company policies and management practices. The attitude of managers toward constructive criticism will determine whether they receive any. A positive, open attitude is essential. 8. Describe management's role in empowerment. Management's role can be stated simply. It is to do everything necessary to ensure successful implementation and ongoing application of the concept. The three words that best describe management's role in empowerment are commitment, leadership, and facilitation. All three functions are required to break down the barriers and overcome the inherent resistance often associated with implementation of empowerment, or with any other major change in the corporate culture. 80 9. Describe how to use brainstorming to promote empowerment. With brainstorming, managers serve as a catalyst in drawing out group members. Participants are encouraged to share any idea that comes to mind. All ideas are considered valid. After all ideas have been recorded, the evaluation process begins. Participants are asked to go through the list one item at a time weighing the relative merits of each. This process is repeated until the group narrows the choices to a specified number. For example, managers may ask the group to reduce the number of alternatives to three, leaving the selection of the best one to themselves. 10. What is a quality circle? A quality circle is a group of employees that meets regularly for the purpose of identifying, recommending, and making workplace improvements. 11. Describe the concept of MBWA. Simply walking around the workplace and talking with employees can be an effective way to solicit input. This approach is sometimes referred to as Management by Walking Around, or MBWA. An effective way to prompt an employee for input is to ask questions. 12. Explain the concept of workforce readiness as it relates to empowerment. A workforce that is ready for empowerment is accustomed to critical thinking, understands the decision making process, and knows where it fits into the big picture. 13. Distinguish between empowerment and enlistment. Organizations must go beyond empowerment to enlistment. Employee enlistment means not simply empowering employees to participate in the decision-making process but expecting them to do so. 81 Chapter Nine LEADERSHIP AND CHANGE 1. Define the term leadership.Leadership is the ability to inspire people to make a total willing, and voluntary commitment to accomplishing or exceeding organizational goals. 2. Explain the concept of the good leader. Good leaders share the common characteristics necessary to inspire people to make a total, willing, and voluntary commitment Good leaders are committed to both the job to be done and the people who must do it' and they are able to strike the appropriate balance between the two. Good leaders project a positive example at all times. They are good role models. They are good communicators. They use their communication skills to establish and nurture rapport with employees. Good leaders have influence with employees and use it in a positive manner. Finally, good leaders are persuasive. Good managers do not simply expect people to do as they are ordered. They are able to use their communication skills to persuade people to make a total, willing, and voluntary commitment to that point of view. 3. How can one distinguish between leaders and misleaders? Leaders define and clearly articulate the organization's mission. Leaders set goals, priorities, and standards. Leaders see leadership as a responsibility rather than a privilege of rank. Leaders surround themselves with knowledgeable, strong people who can make a contribution. Leaders earn trust, respect, and integrity. 4. Describe and debunk three common myths about leadership. Leadership is a rare skill. While it is true that few great leaders of world renown exist, many good, effective leaders do. Most effective leaders spend their careers in virtual anonymity, but they exist in surprisingly large numbers and there may be little or no correlation between their ability to lead and their relative positions in an organization. One of the keys to success in a total quality setting is to create an environment that brings out the leadership skills of all employees at all levels and focuses them on continually improving competitiveness. Leaders are born, not made. Leadership, attitudes, and behaviors can be learned, even by those who do not appear to have inborn leadership potential. Leaders are charismatic. Some leaders have charisma and some don't. Some of history's most renowned leaders have had little or no charisma. Correspondingly, some of history's greatest misleaders have been highly charismatic. Generals Dwight Eisenhower and Omar Bradley are examples of great but uncharismatic leaders. Adolph Hitler and Benito Mussolini are examples of great misleaders but who relied almost exclusively on charisma. 82 Leadership exists only at the top.Total quality would not work if this myth were true. Total quality relies on the building of teams at all levels in an organization and teaching employees in these teams to be leaders. In reality, the opposite of this myth is often true. Top managers may be the least capable leaders in a company. Leadership is about producing results and causing continual improvement, not one's relative position within the organization. Leaders control, direct, prod, and manipulate. If practice is an indicator, this is the most widely believed myth. Leadership is about involving and empowering, not prodding and manipulating. Leaders don't need to be learners. Lifelong learning is a must for leaders. One cannot be a good leader without being a good learner. Leaders approach learning from the perspective of what matters most to their organization. 5. List and briefly explain the principles of leadership. Customer Focus Leadership for quality requires a customer focus. This means the organization's primary goal is to meet or exceed customer expectations in a way that gives the customer lasting value. Obsession with Quality Obsession with quality is an attitude that must be instilled and continually nurtured by leaders in an organization. It means that every employee aggressively pursues quality in an attempt to exceed the expectations of customers, internal or external. Recognizing the Structure at Work Leadership for quality requires that work processes be analyzed to determine their appropriate structural makeup (organization, order of steps, tools used, motion required, and so on). When the optimum structure is in place, work processes should be analyzed, evaluated, and studied continually in an attempt to improve them. Freedom through Control Control in a total quality setting refers to human control of work methods and processes. Leaders must ensure that managers and employees take control of work processes and methods by working together to standardize them. The goal is to reduce variations in output by eliminating variations in how work is done. Unity of Purpose One of the most important responsibilities of a leader is to clearly and accurately articulate the organization's mission so that all employees understand it, believe in it, and commit to it. When there is unity of purpose, all employees pull together toward the same end. Looking for Faults In Systems Leadership for quality requires a change in focus from assessing blame for problems to assessing systems in an attempt to ferret out and correct systemic problems. TeamworkNot until competition among companies became global in nature did it become necessary to apply a principle that has been known for years: that a team of people working together toward a common goal can out-perform a group of individuals working toward their own ends. Leadership for quality requires team building and teamwork. 83 Continuing Education and Training Continued learning at all levels is a fundamental element of total quality. Working hard no longer guarantees success. In the age of high technology, it is necessary to work hard and work smart. 6. What is the Juran Trilogy? The Juran Trilogy is comprised of 1) quality planning, 2) quality control, and 3) quality improvement. 7. Describe Maslow's Hierarchy of Needs and how it can be used in a total quality setting. Maslow's Hierarchy of Needs arrays the basic human needs on five successive levels. The lowest level in the hierarchy encompasses basic survival needs. All people need air to breathe, food to eat, water to drink, clothing to wear, and shelter in which to live. The second level encompasses safety/security needs. All people need to feel safe from harm and secure in their world. To this end, people enact laws, pay taxes to employ police and military personnel, buy insurance, try to save and invest money, and install security systems in their homes. The third level encompasses social needs. People are social animals by nature. This fact manifests itself through families, friendships, social organizations, civic groups, special clubs, and even work-based groups such as company softball and basketball teams. The fourth level on the hierarchy encompasses esteem needs. Self-esteem is a key ingredient in the personal happiness of individuals. All people need to feel self-worth, dignity, and respect. People need to feel that they matter. This fact manifests itself in a variety of ways. The highest level of Maslow's hierarchy encompasses self-actualization needs. Complete self-fulfillment is a need that is rarely satisfied in people. The need for self-actualization manifests itself in a variety of ways. Some people seek to achieve it through their work; others through hobbies, human association, or leisure activities. 8. What leadership style is most appropriate in a total quality setting and why? The appropriate leadership style in a total quality setting might be called participative leadership taken to a higher level. Whereas participative leadership in the traditional sense involves soliciting employee input, in a total quality setting it involves soliciting input from empowered employees, listening to that input, and acting on it. The key difference in the traditional participative leadership and participative leadership from a total quality perspective is that, with the latter, employees providing input are empowered. 9. Explain the leadership characteristics that build and maintain followership. Sense of Purpose Successful leaders have a strong sense of purpose. They know who they are, where they fit in the overall organization, and the contributions their areas of responsibility make to the success of the organization. Self-Discipline Successful leaders develop discipline and use it to set an example. Through self-discipline, leaders and negative self-indulgence, inappropriate displays of emotion such as anger, and counterproductive responses to the everyday pressures of the job. Through self-discipline, 84 leaders set an example of handling problems and pressures with equilibrium and a positive attitude. Honesty Successful leaders are trusted by their followers. This is because they are open, honest, and forthright with other members of the organization and with themselves. They can be depended on to make difficult decisions in unpleasant situations with steadfastness and consistency. Credibility Successful leaders have credibility. Credibility is established by being knowledgeable, consistent, fair, and impartial in all human interaction; by setting a positive example; and by adhering to the same standards of performance and behavior expected of others. Common Sense Successful leaders have common sense. They know what is important in a given situation and what is not. They know that applying tact is important when dealing with people. They know when to be flexible and when to be firm. Stamina Successful leaders must have stamina. Frequently they need to be the first to arrive and the last to leave. Their hours are likely to be longer and the pressure they face more intense than those of others. Energy, stamina, and good health are important to those who lead. Commitment Successful leaders are committed to the goals of the organization, the people they work with, and their own ongoing personal and professional development. They are willing to do everything within the limits of the law, professional ethics, and company policy to help their team succeed. Steadfastness Successful leaders are steadfast and resolute. People do not follow a person they perceive to be wishy-washy and noncommittal. Nor do they follow a person whose resolve they question. Successful leaders must have the steadfastness to stay the course even when it becomes difficult. 10. Explain the pitfalls that can undermine followership. Trying to Be a Buddy Positive relations and good rapport are important, but leaders are not the buddies of those they lead. The nature of the relationship does not allow it. Having an Intimate Relationship With an Employee This practice is both unwise and unethical. A positive manager: employee relationship cannot exist under such circumstances. Few people can succeed at being the lover and the boss and few things can damage the morale of a team so quickly and completely. Trying to Keep Things the Same When Supervising Former Peers The supervisor-employee relationship, no mater how positive, is different than the peer-peer relationship. This can be a difficult fact to accept and a difficult adjustment to make. But it is an adjustment that must be made if the peer-turned-supervisor is going to succeed as a leader. 85 11. List the strategies leaders can use to play a positive role in facilitating the change. Have a clear vision and corresponding goals. Exhibit a strong sense of responsibility. Be an effective communicator. Have a high energy level. Have the will to change. 12. Explain what organizations must do to respond effectively to change. Once an organization has gone through the transformational process of change, both the change itself and the process of change should be incorporated as part of the organization’s culture. The major change that has just occurred must be anchored in the culture so that it becomes the normal way of doing business. The process for facilitating change must be institutionalized. 13. What can organizations do to promote a positive response to restructuring? Be smart and empathetic - maintain employee loyalty and calm employee fears during restructuring. Have a clear vision of what the organization is going to look like after the change. Establish incentives that promote the change. Continue to train. 14. Explain each step in change facilitation. Develop a compelling change picture Communicate the change picture to all stakeholders Conduct a comprehensive roadblock analysis Remove or mitigate all roadblocks identified Implement the change Monitor and adjust 15. Explain the main leadership lessons that can be learned by studying the lives of Abraham Lincoln, Harry Truman, and Winston Churchill. Lincoln’s strongest beliefs about leading: Get out of the office and circulate among the troops Persuade rather than coerce Honesty and integrity are the best policies Courage to handle unjust criticism Have a vision and continually reaffirm it Truman’s leadership strategies: Making the hard decisions and sticking by them Taking responsibility Believing in yourself when on one else does The key to Churchill’s courage was his unbounded optimism. Churchill combined an optimistic spirit and a bulldog tenacity into a can-do attitude that was contagious. He 86 convinced countrymen that if they would hang on and do their duty, the forces of good would overcome the forces of evil in due course. “All will come right.” 16. How does the concept of servant leadership/stewardship differ from traditional leadership philosophies? Servant leadership/stewardship seeks to do a better job of serving both external and internal customers. The concept differs from traditional leadership concepts not so much in its overall goal, but in its approach to achieving that goal. 17. Explain the strategies for countering the negative influences of advisor and followers. Leaders can counter the negative influence of followers by: Keeping visions and allures uppermost in their minds Looking for disagreement among advisors Encouraging truth telling Setting the right example Following their intuition Monitoring delegated work 87 Chapter Ten TEAM BUILDING AND TEAMWORK 1. What is a team and why are they important? A team is a group of people with a common, collective goal. The collective goal aspect of teams is critical. Teams are important because: Two or more heads are better than one. The whole (the team) is greater than the sum of its parts (individual members). People in teams get to know each other, build trust, and, as a result, want to help each other. Teamwork promotes better communication. 2. When does a group of people become a team? A group of people become a team when: Agreement exists as to the team's mission. Members adhere to team ground rules. Fair distribution of responsibility and authority exists. People adapt to change. 3. Explain the strategies for being an effective team leader. Be clear on the team's mission. The team's first organizational meeting should be used to draft a mission statement. This task, although guided by the team leader, should involve all team members. The statement should explain the reasons for the team's existence and define the limits of its authority. The mission statement will be the yardstick against which team performance is measured. Identify success criteria. The team must define what constitutes success and put it in writing. Be action centered. For every success criterion, the team should develop an action statement or plan that specifies exactly what must be done to satisfy the criterion, the time frame within which it must be done, and by whom. Establish the ground rules. The team needs to decide how it will operate. Team leaders should work to achieve consensus on such issues as 1) calling meetings when necessary; 2) making sure all team members come to meetings well briefed and fully prepared; 3) determining how much time to allocate for agenda items; 4) encouraging participants to be brief; 5) determining who will serve as the recorder during meetings; 6) deciding how and when to subdivide into subgroups; 7) keeping disturbances and interruptions out of meetings; 8) finishing an agenda item before moving on to the next item; and 9) allowing time for informed interaction among members before and/or after meetings. Share information. Information should be shared freely inside of the team and outside of it. Communication is a fundamental element of total quality. 88 4. What are the characteristics of a good team mission statement? A good mission statement is a tool for communicating the team's purpose: within the team and throughout the organization: not a device for confusing people or an opportunity to show off literary dexterity. 5. Define the concept of collegial relationships. A team works most effectively when individual team members form positive, mutually supportive peer relationships. These are collegial relationships and they can be the difference between a high-performance team and a mediocre team. 6. Describe how to promote diversity in teams. Diversity in teamwork can be promoted by applying the following strategies: Continually assess circumstances. Is communication among diverse team members positive? Do bias and stereotyping exist among team members? Do minorities and nonminorities with comparable jobs and qualifications earn comparable wages? Factors that might undermine harmonious teamwork should be anticipated, identified, and dealt with. Give team members opportunities to learn. Humans naturally tend to distrust people who are different, whether the differences are attributed to gender, culture, age, race, or any other factor. Just working with people who are different can help overcome this unfortunate but natural human tendency. Education and training aimed at promoting sensitivity to and appreciation of human differences should be provided. Such training should also help team members overcome the stereotypical assumptions that society in general seems to promote. 7. Explain the concept of institutionalized bias. A company whose workforce has historically been predominantly male now has a workforce in which women are the majority. However, the physical facility still has ten men's restrooms and only two for women. This is an example of institutionalized bias. Teams may find themselves unintentionally slighting members, simply out of habit or tradition. This is the concept of discrimination by inertia. It happens when the demographics of a team changes but its habits, traditions, procedures, and work environment do not. 8. Explain why some employees are not comfortable being team players. Employees might not be willing to trust their performance, in part, to other employees. 9. List and describe four common structural inhibitors of teamwork in organizations. Common structural inhibitors in organizations are: Unit structure - teams work best in a cross-functional environment. Accountability - teams work best when they feel accountable to customers. Unit goals - teams work best when they focus on overall process effectiveness. Responsibility - teams work best when individual employees are held responsible for the performance of their team. Compensation/Recognition - teams work best when both team and individual achievement are recognized and when performance is compensated. 89 Planning/Control - teams work best when in a setting in which managers and teams work together to plan and control. 10. Explain the concept of non monetary rewards. Non monetary rewards can be even more effective than actual dollars. They include the following: movie tickets, gift certificates, time-off, event tickets, free attendance at seminars, getaway weekends for two, airline tickets and prizes such as electronic and/or household products. 90 Chapter Eleven EFFECTIVE COMMUNICATION 1. Define the following terms relating to communication: Communication Communication is the transfer of a message (information, idea1 emotion, intent, feeling, or something else) that is both received and understood. Effective Communication Effective communication means that the message is received, understood, and acted on in a desired manner. 2. List and explain four levels of communication. One-On-One-Level Communication One-one level communication involves one person communicating within a peer group. Team-Level Communication The primary difference between one-on-one and team-level communication is that, with the latter, all team members are involved in the process at once. A team meeting called to solve a problem or to set goals would be an opportunity for team-level communication. Company-Level Communication Company-level communication is communication among groups. A meeting involving various different departments within a company is an opportunity for company level communication. Community-Led Communication Community-led communication occurs when groups inside of a company and groups outside the company. Perhaps the most common examples of community- level communication are a company's sales force communicating with clients and the purchasing department communicating with vendors. 3. Describe the role communication plays in a total quality setting. Much of what total quality is all about depends on effective communication. Without it, total quality breaks down. Some of the key elements of the total quality concept are customer focus (internal and external), total employee involvement and empowerment, leadership, teamwork, decision making, problem prevention, problem solving, and conflict resolution. Each of these elements is dependent on effective communication. 4. Explain the process of communication. Communication is a process with several components. These components are the message, the sender, the receiver, and the medium. The sender is the originator or source of the message; the receiver is the person or group for whom the message is intended; the message is the information, idea, or feeling, or intent that is to be conveyed, understood, accepted, and acted on; and the medium is the vehicle used to convey the message. 91 5. List and briefly explain six inhibitors of communication.Differences in Meaning Differences in meaning can cause problems in communication. People have different backgrounds, levels of education, and cultures. As a result, words, gestures, and facial expressions can have altogether different means to different people. This is why managers should invest time getting to know employees. Lack of Trust A lack of trust can inhibit effective communication. If receivers do not trust senders, they may be overly sensitive and guarded. They might concentrate so hard on reading between the lines and looking for hidden agendas that they miss the message. Information Overload Information overload is more of an inhibitor than it has ever been. Computers, modems, satellite communication, facsimile machines, electronic mail, and the many other technological devices developed to promote and enhance communications can actually cause breakdowns in communication. Interference Interference is any external distraction that inhibits effective communication. Condescending Tone A condescending tone when conveying information can inhibit effective communication. People do not like being talked down to and typically respond to tone of voice as much as or more than the content of a message. Poor Listening Skills Poor listening skills can seriously inhibit effective communication. Premature Judgement Premature judgments by either the sender or the receiver can inhibit effective communication. Inaccurate Assumptions Our perceptions are influenced by our assumptions. Consequently, inaccurate assumptions tend to shut down communication before it has a change to get started. Kill-the-Messenger Syndrome In the days when gladiators dueled in Rome's Coliseum, it was common practice to kill the bearer of bad news. Managers who kill the manager when an employee tells the hard truth will eventually hear only what employees think they want to hear. This dangerous situation quickly leads to uninformed ill-advised managers. 6. Define effective listening. Effective listening means receiving the message, correctly decoding it, and accurately perceiving what it means. 7. List and briefly explain five inhibitors of good listening. Lack of Concentration Concentration requires the listener to eliminate as many extraneous distractions as possible and shut out the rest mentally. 92 Preconceived Ideas Managers who jump to preconceived notions don't give themselves a chance to listen effectively. Preconceived ideas can cause them to make premature judgement that turn out to be wrong. Thinking Ahead Managers who jump ahead to where they think the conversation is going often get there only to find they are alone. Managers will find that it takes less time to hear an employee out than it does to start over after jumping ahead to the wrong conclusion. Interruptions Interruptions not only inhibit effective listening, they can frustrate and confuse the speaker. If clarification is needed during a conversation, it is best to make a mental note and wait for the speaker to reach an interim stopping point Tuning Out Some people become skilled at using body language to make it appear they are listening while, in reality, their mind is focused on other areas of concern. Interference Interference is anything that distracts the listener, thereby impeding either hearing or perception or both. Background noises, a telephone ringing, and people walking in and out of the office are all examples of interference. 8. What is empathetic listening? Empathetic listening means listening with the intent to understand. It does not mean agreeing with what is being said. Rather, it means attempting to fully understand; not just the message, but also the messenger: both intellectually and emotionally. This is the highest level of listening. 9. What is responsive listening? Responsive listening can present a threat to the insecure because it involves laying aside prejudices and biases. 10. Explain how a person can become a responsive listener. By slowing down; allocating listening time; concentrating intently and simultaneously on both the verbal and non-verbal aspects of the message; removing distractions; granting a fair hearing; making it easy for the person to talk; understanding completely; and clarifying expectations. 11. Explain four strategies for improving listening skills. a. Listen more—talk less b. Ask clarifying questions c. Listen intuitively d. Concentrate 93 12. Define the following factors and explain how do they affect listening?Body Factors Posture, body poses, facial expressions, gestures, and dress convey a message. Even such extras as makeup or the lack of it, well-groomed or unkempt hair, and shined or scruffy shoes convey a message. Voice Factors Managers should listen for such factors as volume, tone, pitch of voice, and rate of speech. These factors can indicate anger, fear, impatience, unsureness, interest, acceptance, confidence, and a variety of other messages. It is also important to look for congruence. Proximity Factors Proximity involves ranging from where you position yourself when talking with an employee to how your office is arranged, to the color of the walls, to the types of fixtures and decorations. A manager who goes to the trouble to make his or her office a comfortable place to visit is sending a message that invites communication. A manager, who maintains a stark, impersonal office, sends the opposite message. 13. Describe how a person can improve his or her verbal communication skills. Show Interest When speaking with employees, show an interest in the topic. Show that you are sincerely interested in communicating your message to them. Also show interest in the receivers of the message. Look them in the eye, and when in a group, spread your eye contact evenly among all receivers. Be Friendly A positive, friendly attitude will enhance verbal communication. A caustic, superior, condescending, or disinterested attitude will shut off communication. So will an argumentative attitude. Be patient, be friendly, smile. Be Flexible Flexibility can enhance communication. For example, if a manager calls her team together to explain a new company policy but finds they are uniformly focused on a problem that is disrupting their work schedule, she must be flexible enough to put her message aside for a moment and deal with the problem. Be Tactful Tact is an important ingredient in verbal communication, particularly when delivering a sensitive or potentially controversial message. The key to tactful verbal communication lies in thinking before talking. Be Courteous Courtesy promotes verbal communication. Being courteous means showing appropriate concern for the needs of the receiver. 14. List and explain five rules of thumb for improving written communication.Plan before you write. Planning before writing is a matter of deciding who you are writing to, why, and what you want to say before beginning to write. Be brief. 94 Reading takes time and effort. Keep this in mind in writing. Be brief. In as few words as possible, explain your purpose, state your points, and tell recipients what you want them to do. Be direct. Directness is an extension of brevity. It means getting to the point without beating around the bush. Be accurate. Accuracy is important in written communication. Be exact. Avoid vague phrases and terms such as some time ago, approximately and as soon as possible. Practice self-editing. In your first draft, concentrate on what you are saying. In the second draft, concentrate on how you say it. These are two different processes that should not be mixed. Even professional writers find it difficult to edit for content and edit for grammar, sentence structure, and spelling simultaneously. 15. Explain the steps for improving written reports. 1. Define the problem. Before beginning to write a report, managers should finish the following sentence: "The purpose of this report is to...." The problem statement for a report should be brief, to the point, descriptive, and accurate. 2. Develop a workplan A workplan is a list of the tasks to be completed and a projected date of completion for each task. 3. Gather relevant data This step involves collecting all data pertaining to the problem in question. This is the research step. It might involve searching through files, reading other reports, interviewing employees and/or customers, running tests, or any other action step that will yield useful data. 4. Process findings. Information is simply data that have been converted into a useful form. Processing findings means converting the raw data collected in the previous step into information upon which recommendations can be based. This involves both analysis and synthesis. 5. Develop conclusions. Having identified a problem, gathered all pertinent data relating to the problem, analyzed and synthesized that data, the next step is to draw conclusions. The conclusions explain what caused the problem. Conclusions should be based on hard facts, stated objectively, and free of personal opinions or editorializing. 6. Make recommendations. Recommendations should grow out of the conclusions. Arrange recommendations sequentially in order of priority. Give options whenever possible. Recommendations should be specific and detailed, indicating time frames, the people responsible for carrying them out, costs, and any other pertinent information. 16. When it is necessary to communicate corrective feedback, what four guidelines should be applied? 95 Be positive. In order for feedback to be corrective1 it must be accepted and acted on by the employee. This is more likely to happen if it is delivered in a positive can-do manner. Be prepared Focus all feedback specifically on the behavior. Do not get into personality traits. Give specific examples of the behavior you would like to see corrected. Be realistic. Make sure the behaviors you want to see changed are controlled by the employee. Don't expect an employee to correct a behavior he or she has no control over. Don't be completely negative. Find something positive to say. Give the employee the necessary corrective feedback, but don't focus wholly on the negative. 17. Six guidelines to improved communication were set forth in this chapter. Explain all six. Keep up-to-date. Managers should make an effort to stay up-to-date with new information relating to the workplace.Prioritize and determine the time constraints. Communicating does not mean simply passing on everything you learn to your employees. Analyze your information and decide what your employees need to have. Then prioritize it from urgent to when time permits and share the information accordingly. Decide who to inform After you have prioritized your information, decide who needs to have it. Employees have enough to keep up with without receiving information they don't need. Determine how to communicate. A combination of communicating orally, in writing, one-on-one, in groups, and others will probably be more effective than any one method taken by itself. Communicate and follow up. Don’t just tell employees what you want them to know, follow up. Encourage employees to ask you questions for clarification. Check understanding and obtain feedback. Check to see that your communication was understood. Is the employee undertaking the correct next steps? Get feedback from employees to ensure that their understanding has not changed and that progress is being made. 18. Briefly describe the advantages and disadvantages of electronic communication. Benefits: 1) allows messages to be sent simultaneously, 2) allows messages to be sent to any number of people simultaneously, 3) messages can be easily and permanently stored, 4) messages can be acknowledged instantaneously, 5) messages can be forwarded to other parties, 6) messages can be prompted. Disadvantages: 1) an inherent inability to convey the non-verbal aspects of communication, 2) the tendency of some people to respond too quickly and say things they later regret, 3) impersonal nature of the medium, and 4) tendency of some people to send too many messages and frivolous messages. 19. Define interpersonal relations. 96 Interpersonal skills are those needed for people to work together in a manner that is conducive to both personal and corporate success. In order for employees and managers to function effectively in a total quality setting, they must have good interpersonal skills. Positive interpersonal relations among team members, between company representatives and customers, among internal customers, and between company officials and vendors are critical in a total quality setting. 20. How can managers ensure that employees have good interpersonal skills? Managers must recognize the need for these skills. When interpersonal skills are made a part of the selection process, the process changes somewhat the screening of written credentials and technical skills continues in the normal manner. After the candidates with the best credentials and technical skills have been identified, they are then carefully screened to determine whether they have such interpersonal skills as listening, patience, empathy, tact, open-mindedness, friendliness, and the ability to not just get along in a diverse workplace, but to be a positive agent in helping other employees get along with each other. Interpersonal skills are acquired through training. People learn to listen better, to empathize with different types of people, to be tactful, and to facilitate positive interaction among fellow employees through training. If managers value interpersonal skills, these skills will be measured as part of the normal performance appraisal process. Correspondingly, the results of such appraisals will be built into the reward system. 21. How can a manager promote responsiveness among employees? Value people. Valuing people means remembering that the most sophisticated technologies are designed, operated, and maintained by people. Consequently, in the final analysis, improving people and people-oriented processes such as communication is the best way to improve competitiveness. Give people what they want to get back. People have a natural tendency to mirror the treatment they receive from others. People have a natural tendency to mirror the treatment they receive from others. People who treat others with decency and respect are, in turn, treated with decency and respect. People who are loyal to others are likely to be beneficiaries of loyalty. Teaching employees to get by giving is a worthwhile task for managers in a total quality setting. Make cooperation a habit World-class athletes practice the skills that make them great until these skills become automatic and habitual. Any habit is hard to break. Consequently, employees who practice cooperation until it becomes habitual will practice cooperation for life. 22. List five personality traits and describe how they can affect communication. Introversion versus extroversion. When trying to communicate with an introvert, they are not likely to volunteer much information because they are more likely to be silent and reclusive. When trying to communicate with an extrovert, it might be difficult to get a word in because they are talkative, sociable, and enthusiastic. Neuroticism versus emotional stability. When trying to communicate with neurotic people, it is necessary to be patient, understated, and calm because they tend to see the bad side of 97 any situation. When trying to communicate with emotionally stable people, they tend to have a more realistic perspective. Agreeable versus stubborn. When trying to communicate with stubborn people, it is wise to first invest some time earning their trust so as to overcome their inherent suspiciousness. Agreeable people are friendly and easy to communicate with. Conscientious versus undependable. When trying to communicate with undependable people, it is wise to summarize and repeat what has been agreed to and be confident enough in what you are saying to offset the other person’s tendency toward faint-heartedness. Open to experience versus prefer the familiar. When trying to communicate with open people, rein them in and keep them focused and on task. When trying to communicate with familiar oriented people, take time to get them to think outside the box. 98 Chapter Twelve EDUCATION AND TRAINING 1. Define training and explain how it differs from education. Training is an organized, systematic series of activities designed to enhance an individual's work-related knowledge, skills, and understanding and/or motivation. Training can be distinguished from education by its characteristics of practicality, specificity, and immediacy. Training should relate specifically to the job performed by those being trained, and it should have immediate practical application on the job. Education is a broader term; training is a subset of education. Education tends to be more philosophical and theoretical and less practical than training. 2. Explain the total quality philosophy of training. The philosophy of the total quality approach concerning training can be summarized as spend the money where it will do the mast good. In practice, this philosophy translates into giving priority to those employees who are most actively involved in producing products or providing services. 3. Name ten widely used instructional methods. DVDs, lecture, demonstration (one-on-one), slides/transparencies, role playing, CDs, film, simulation, case studies, self-study instruction, video-conferencing and teleconferencing, and on-line instruction. 4. Describe the traditional attitude of corporate America toward training. How does this compare with other industrialized countries? Business is not taking a proactive role in demanding improvements that are so badly needed in American education and training. Contrasting what is found in the U.S. with other industrialized countries, the Commission concluded further that education and training for non-college-bound students is much better in such countries as Germany, Japan, Sweden, and Denmark. Consequently, American students rank near the bottom in indicators of school performance when compared with students from these countries. The Commission described the U.S. system for transitioning students from school to work as "the worst of any industrialized country." 5. List the five factors that magnify the need for training. Quality of the existing labor pool Global competition Rapid and continual change Technology transfer problems Changing demographics 6. What is technology transfer? What effect can it have on organization's competitiveness? Technology transfer is the movement of technology from one arena to another. There are two steps in the process. The first step is the commercialization of new technologies developed in research laboratories or by individual inventors. This is a business development issue and does not involve training. The second step is the process known as 99 technology diffusion and is training-dependent. Technology diffusion is the process of moving newly commercialized technologies into the workplace where they can be used to enhance productivity, quality and competitiveness. 7. Explain the potential benefits of training. Fewer production errors Increased productivity Improved quality Decreased turnover rate Lower staffing costs Improved safety and health Fewer accidents Minimized insurance costs Increased flexibility of employees Better response to change Improved communication Better teamwork More harmonious employee relations These potential benefits build upon themselves. 8. If asked to assess a department's training needs how would you go about it? By asking the following questions: "What knowledge, skills, and attitudes do our employees need to have in order to be world-class?" and "What knowledge, skills, and attitudes do our employees currently have?" A more structured way to assess training needs is to ask employees to state their needs in terms of their job knowledge and skills. A brainstorming session focusing on training needs is another method mangers can use. The most structured approach managers can use to assess training needs is the job task analysis survey. Another way to identity training needs is to ask employee groups to convene their own quality circles relating specifically to training. The organization's suggestion system should also be used to identify training needs. 9. What is a training objective? Write a sample objective in behavioral terms. A training objective is a statement of the purpose for training. A sample would be: "Upon completion of this lesson, employees will be able to solve right triangles." 10. List and explain five strategies for maximizing training resources. 1. Build in quality from the start. Take the time to do it right from the outset. 2. Design small. Do not try to develop courses that are all things to all people. Develop specific activities around specific objectives. 3. Think creatively. Do not assume that the traditional classroom approach is automatically best. 4. Shop around. Conduct an analysis of specific job training objectives and make sure the company you plan to deal with can provide it. 5. Preview and customize. If you can save by customizing a generic product, do so. 100 11. What does a manager need to know in order to be sure that training satisfied the training objectives? How can these things be determined? Was the training provided valid? Did the employees learn? Has the learning made a difference? 12. Describe how to evaluate a training program before purchasing it. Gilda Dangot-Simpkin of Dynamic Development suggests the following checklist of questions for evaluating training programs that are purchased: Does the program have specific behavioral objectives? Is there a logical sequence for the trainee? Is the training relevant for the trainee? Does the program allow trainees to apply the training? Does the program accommodate different levels of expertise? Does the training include activities that appeal to a variety of learning styles? Is the philosophy of the program consistent with that of the organization? Is the trainer credible? Does the program provide the follow-up activities to maintain the training on the job? 13. List and explain the principles of learning. People learn best when they are ready to learn. You cannot make employees learn anything. You can only make them want to learn. People learn more easily when what they are learning can be related to something they already know. Build today's learning on what was learned yesterday and tomorrow's learning on what was learned today. Begin each new activity with a brief review of the one that preceded it. People learn best in a step-by-step manner. Learning should be organized into logically sequenced steps that proceed from the concrete to the abstract, from the simple to the complex, and from the known to the unknown. People learn by doing. Inexperienced trainers tend to confuse talking with teaching. These things can be part of the learning process, but they do little good unless they are followed with application activities that require the learner to do something. The more often people use what they are learning the better they will remember and understand it. People forget what they do not use. Trainers should keep this principle in mind. It means repetition and application should be built into the learning process. Success in learning tends to stimulate additional learning. This principle is a restatement of a fundamental principle in management (success breeds success). Organize training in short enough segments to allow learners to see progress but not so short that they become bored. People need immediate and continual feedback to know if they have learned. People who are learning want to know immediately and continually how they are doing. Feedback can be as simple as a nod, a pat on the back, or as formal as a progress report or graded activity. 14. Describe the four-step teaching method. 101 Preparation Preparation encompasses all tasks necessary to get students prepared to learn, trainers prepared to teach, and facilities prepared to accommodate the process. Preparing students means motivating them to want to learn. Personal preparation involves planning lessons and preparing all of the necessary instructional materials. Preparing the facility involves arranging the room for both function and comfort, checking all equipment to ensure it works properly, and making sure that all tools and other training aids are in place. Presentation Presentation is a matter of presenting the material students are to learn. It might involve giving a demonstration, presenting a lecture, conducting a question/answer session, helping students interact with a computer, or interactively videodisc system, or assisting students who are proceeding through self-paced materials. Application Application is a matter of giving learners opportunities to use what they are learning. Application might range from simulation activities in which learners role play to actual hands-on activities in which learners use their new skills in a live format. Evaluation Evaluation is a matter of determining the extent to which learning has taken place. In a training setting, evaluation does not need to be a complicated process. If the training objective were written in measurable, observable terms, evaluation is simple. 15. What are the minimum recommended contents of a lesson plan? Lesson Title and Number Statement of Purpose Learning Objectives Training Aids List Instructional Approach Application Assignments Evaluation Methodology 16. As an instructor, what can you do to help students retain what they are learning? Trainers should get the learners actively engaged in seeing, saying, listening, and most importantly, doing. 17. List and explain the three components of a lecture. The Opening You tell them what you are going to tell them. The Body You tell them. The Closing You tell them what you told them. 102 18. Describe the following presentation methods: Stimulation Stimulation involves structuring a training activity that simulates a live situation. Simulation can also be technology-based. Computer simulation activities and those based on interactive laser disc and video technology are becoming more widely used. Programmed instruction Programmed instruction is an approach used to individualize instruction. Traditionally the programmed media has been a workbook or text that presents information in segments. Increasing programmed instruction is becoming computerized. This enhances the interactive nature of the instruction and, with good software, provides almost immediate feedback for the learner. Conference The conference method is particularly well suited for corporate training settings. It requires the trainer to serve as a facilitator rather than a teacher and is best used as a problem-solving teaching method. 19. Summarize the state of literacy in the U.S. and the impact it has on the competitiveness of U.S. companies. It is estimated that more than 60 million people or approximately one third of the adult population in this country are marginally to functionally illiterate. The impact this will have on industry in the U.S. can be summarized as follows: Difficulty in filling high-skill jobs. Lower levels of productivity and, as a result, a lower level of competitiveness. Higher levels of waste. Higher potential for damage to sophisticated technological systems. Greater number of dissatisfied employees in the workplace. 20. What can industry do to deal with workplace illiteracy? Industry in the U.S. has found it necessary to confront the illiteracy problem head-on. Companies are doing this by providing remedial education for employees in the workplace. Some companies contract with private training firms, others provide the education themselves, and others form partnerships with college, universities, or vocational schools. 21. Describe what managers in a total quality setting should know about literacy training The definition of literacy should be driven by the needs of the company. Companies should establish an environment in which employees feel comfortable having their literacy skills assessed and in seeking help to improve those skills. Whenever possible, companies should establish programs to improve the skills of existing employees rather than laying them off and hiring new employees. Whenever possible, companies should collaborate with educational institutions or education professionals in providing literacy training. 103 22. List and describe study skills employees should learn before beginning a training program. Make a study schedule and stick to it. Allow two hours of study time for each hour of class time. Schedule for review immediately before and immediately after class. Take short breaks, at least one each hour. Reward yourself for sticking to your schedule. Have a special place to study. Designate a quiet place as your study site and equip it with everything you will need (reference books, paper, pens, and whatever else you need). Listen and take notes. Concentrate on the presentation and take notes. Don't let your mind wander. In taking notes, don't try to write down everything that is said. Write down key points only, leaving room to expand later. Read assertively Just reading course materials will not adequately prepare you for class activities. After reading such materials, go back and make an outline of major points and supportive points. Improve test-taking skills. Don't cram for tests. Instead, study regularly. When taking tests, skim over the entire document before answering individual items. Answer the questions you are sure of first. This will allow more time to spend on those items you are less sure of. 23. Why does training sometimes fail?Lack of ParticipationToo Narrow in Scope 24. Juran recommends what three major components in quality training?Quality PlanningQuality ControlQuality Improvement 25. List 10 widely taught ethics topics.Drug and Alcohol AbuseEmployee TheftConflicts of InterestQuality ControlMisuse of Proprietary InformationAbuse of Expense AccountsPlant Closings and LayoffsMisuse of Company Property Environmental Pollution Methods of Gathering Competitor's Information Inaccuracy of Books and Records Receiving Excessive Gifts and Entertainment Kickbacks Insider Training Relations with Local Communities Anti-Trust Issues Bribery Political Contributions and Activities Improper Relations with Local Government Representatives Improper Relations with State Government Representatives Improper Relations with Federal Government Representatives Inaccurate Time-Charging to Government Improper Relations with Foreign Government Officials 26. Explain the strategies for making e-learning work. One of the strengths of e-learning is scalability. 104 E-learning works best when there are learning coaches and mentors provided. Blend e-learning and classroom instruction to get the best of both methods. Design student assessments of online learning in such a way that students cannot just copy answers to test out of their reference books. Give employees time and assistance in getting comfortable with computer-based instruction. E-learning is a tool, not a strategy. 105 Chapter Thirteen OVERCOMING POLITICS, NEGATIVITY, AND CONFLICT IN THE WORKPLACE 1. Define internal politics. Internal politics consists of activities undertaken to gain advantage or influence organizational decision making in ways intended to serve a purpose other than the best interests of the overall organization. Internal politics consists of the games people play to promote decisions that are based on criteria other than merit. 2. Explain the role organizational structure can play in promoting internal politics. In considering organizational structures, keep the following rule of thumb in mind: Factors that promote internal competition-whether intentionally or unintentionally-also promote internal politics. This is because internal politics is just one more tool (or weapon) to be used any time people within an organization compete among themselves. The competition might be about questions of who reports to whom; who gets the lion's share of limited resources; who will fill key positions; what department will be reorganized, and how; lines of authority; and any number of other issues in which people have vested interests. 3. Give an example of internal politics in action in an organization. Students may give a variety of answers to this question or use one of the examples presented in the text. 4. List and briefly describe the most commonly used methods of internal politics. Lobbying; Building coalitions; Harassment and pressure; Electioneering; and Gossiping and spreading rumors. 5. Describe the impact internal politics can have on the implementation of total quality. Internal politics can affect an organization in the same way that cancer affects an individual. Both start covertly inside the victim, often remaining invisible until the damage done is serious, and both can spread quickly. 6. Describe how managers can control internal politics in an organization. How does one go about convincing people in organizations-all of who have their own interests, ambitions, and egos-to put aside the natural inclination to practice internal politics and, instead, practice collaboration? Interestingly, trying to control internal politics in organizations is a lot like trying to prevent overeating in individuals. Both involve finding ways to subdue human nature, both require persistent effort, and both demand constant vigilance. Controlling internal politics in an organization requires a comprehensive effort involving all employees. 7. What are the categories of negativity in the workplace? Control disputes Territorial disputes 106 Dependence/independence issues Need for attention/responsibility Authority Loyal issues 8. Explain the strategies for overcoming territorial behavior. The following are strategies for creating a cooperative environment: Avoid jumping to conclusions. Talk to employees about territoriality versus cooperation. Ask to hear their views, and listen to what they say Attribute territorial behavior to instinct rather than people. Blaming people for following their natural instincts is like blaming them for eating. The better approach is to show them that their survival instinct is tied to cooperation, not turf. Rewarding cooperation and applying negative reinforcement to territorial behavior does this. Ensure that no employee feels attacked. Remember that the survival instinct is the driver behind territorial behavior. Attacking employees or even letting them feel as if they are being attacked will only serve to trigger their survival instinct. To change territorial behavior, it is necessary to put employees at ease. Avoid generalizations. When employees exhibit territorial behavior deal with it in specifics as opposed to generalizations. It is a mistake to witness territorial behavior on the part of one employee and respond by calling a group of employees together and talking about the issue in general terms. Deal with the individual who exhibits the behavior and deal in specifics. Understand "irrational" fears. The survival instinct is a powerful motivator. It can lead employees to cling irrationally to their fears. Managers should consider this point when dealing with employees who find it difficult to let go of survival behaviors. Be firm but patient, and never deal with an employee's fears in a denigrating or condescending manner. Respect each individual's perspective. In a way an individual's perspective or opinion is part of his or her psychological territory Failure to respect the perspectives of people is the same as threatening their territory when challenging territorial behavior, let employees explain their perspectives and show respect for them, even if you do not agree. Consider the employee's point of view. In addition to giving an appropriate level of respect to employees' perspectives. Managers should also try to step into their shoes. How would you, as a manager feel if you were the employee? Sensitivity to the employee's point of view and patience with that point of view are critical when trying to overcome territorial behavior. 9. When should conflict be encouraged in an organization? Occasionally an organization will have too little conflict. Employees have become comfortable and management has effectively suppressed free thinking, innovation, and creativity. When this occurs, stagnation generally results. Stagnant organizations need to be shaken up before they die. 107 Chapter Fourteen ISO 9000 AND TOTAL QUALITY: THE RELATIONSHIP 1. List six statements that summarize the competitive scope of ISO 9000 and total quality. ISO 9000 and total quality are not interchangeable ISO 9000 is compatible with and can be a subset of total quality ISO 9000 is frequently implemented in a non-total quality environment ISO 9000 can improve operations in a traditional environment ISO 9000 may be redundant in a mature total quality environment ISO 9000 and total quality are not in competition 2. Explain the origins of ISO 9000 and total quality. How are they different? ISO 9000 and total quality originated independently of each other, for different reasons, in different parts of the world, and at different times. You are already familiar from other chapters with the post-World War II origins in Japan of the total quality movement. The ISO 9000 series of standards was developed in response to the need to harmonize dozens of national and international standards then existing throughout the world. To that end the International Organization for Standardization (ISO) a worldwide federation of national standards organizations from 110 nations, formed Technical Committee 176. Although generally considered to be a European standard (certainly the impetus came from Europe), ISO 9000 was developed by an international team that includes the American National Standards Institute (ANSI), the U.S. member of ISO. ANSl was represented by the American Society for Quality (ASQ), its affiliate responsible for quality management and related standards. The first version of ISO 9000 was released in 1987. By this time, the total quality movement was more than 35 years old. A revised version of ISO 9000 was released in 1994. As a result of this standard, suppliers of products and services are able to develop and employ a quality system that is recognized by all their customers. 3. Contrast the aims of ISO 9000 and total quality. The reason for creating ISO 9000 was to replace dozens of national and international quality standards with one single family of standards, universally recognized and used worldwide. The aim of total quality is to transform organizations into competitive players in the global marketplace. This is achieved by continually improving quality and all other performance measures. 4. List three appropriate reasons for implementing ISO 9000. To improve operations by satisfying the ISO 9000 requirements for documented processes and records maintenance. To create or improve a quality management/quality assurance system that will be recognized by customers worldwide. To improve product or service quality or the consistency of quality. To conform to the requirements of one or more major customers (although adoption would be better motivated by internal considerations). 108 5. What is the most appropriate rationale for implementing total quality? Total quality encompasses every aspect of the business or organization, not just the systems used to design, produce, and deploy its products or services. This includes all support systems such as human resources, finance, and purchasing. Total quality involves more than just having procedures for the people involved in design and production. It means having every level of the organization, from top to bottom, committed to and involved in the continual improvement of all processes. 6. Describe how you would use ISO 9000 as an entry into total quality? For an organization attempting to adopt total quality, and one that would also benefit from ISO 9000, consider using the 20-step implementation process. At the planning phase, steps 12 through 15, the initial implementation approach should be designed to include the steps necessary for ISO 9000 registration. By adopting this strategy, the organization will be engaged in both a total quality implementation and an ISO 9000 preparation. The ISO 9000 effort will benefit from the total quality preparation phase by having the following components: an executive-level steering committee, a vision with the attendant guiding principles, a set of broad objectives, baselines on employee and customer satisfaction, an objective view of the organization’s strengths and weaknesses, and an indication of which employees at all levels can be counted on for support during the implementation. 109 Chapter Fifteen OVERVIEW OF TOTAL QUALITY TOOLS 1. Explain the purpose of a Pareto Chart. Give an example of when one would be used.The purpose of a Pareto chart is to show you where to apply your resources by revealing the significant few from the trivial many. A sample might show that 75% of company’s sales are the result of just two customers. 2. Describe the origin and use of cause-and-effect diagrams. Dr. Kaoru Ishikawa, a noted Japanese quality expert developed the cause-and-effect diagram, so sometimes the diagram is called an Ishikawa diagram. It is also often called a fishbone diagram because that is what it looks like. The fishbone diagram is the only tool of the seven tools that is not based on statistics. This chart is simply a means of visualizing how the various factors associated with a process affect the process's output. The causeand-effect diagram provides a graphic view of the entire process that is easily interpreted by the human brain. 3. How would a check sheet be used in a modern production facility? The check sheet is used to simultaneously make the collection of data easy, while at the same time displaying it in a manner that provides useful information to the user. The only rules are that data collection must be the equivalent of entering a check mark, and that the resulting data display must provide meaningful information. The purpose of the check sheet is to make it easy to collect data for specific purposes and to present the data in a way that facilitates conversion from data to useful information. For example, the logged checkmarks on a check sheet might form a histogram illustrating the effectiveness of a process, or it might present a picture of where, in a product, defects are occurring. The check sheet’s utility is restricted only by the imagination of the person seeking information. 4. What is a histogram and how is one used? A histogram is used to chart the frequency of occurrence of particular values or events across a continuous variable. How often does something happen? The “somethings” are laid out in a continuous scale, usually on the horizontal axis, and may be measurements (variables data) or physical characteristics (attributes data). The vertical axis logs how many times each of the individual measurements or attributes occur. In a normal distribution the resulting histogram will trace a bell shaped curve. The curve, in both its shape and position along the horizontal axis provides information on how well the process is working. Thus the histogram provides a graphical picture of a current state, and may predict a future state. 5. What accounts for the disparity in NPMO between the statistical 6σ and the popular Six Sigma approach? While the pure 6σ NPMO would yield 1 nonconformance in 500 million opportunities, the widely used Motorola version named Six Sigma yields 3.4 nonconformances per 1 million opportunities. This is fully explained in Chapter 19, but in brief, Motorola has compensated for the real world’s constantly changing long-term process environment by applying a 1.5σ shift. Six Sigma’s 3.4 NPMO, while not a true 6σ, can be described as a 110 quantum leap from typical process performance. 6. Describe two methods for improvement of the yield of a process (i.e., taking it to a higher sigma value). One method involves narrowing the bell curve through the development of superior processes. Another method involves designing a product that can tolerate wider physical or functional variation in its component parts while still performing to product specifications. The latter is often called “robust design.” 7. Explain the purpose of the scatter diagram. Give an example of how one would be used. The scatter diagram is used to determine the correlation (relationship) between two characteristics (variables). Suppose you have an idea that there is a relationship between automobile fuel consumption and the rate of speed at which people drive. To prove or disprove such an assumption you could record data on a scatter diagram that has miles per gallon (MPG) on the y-axis and the miles per hour (MPH) on the x-axis. MPG and MPH are the two characteristics. Examination of the scatter diagram shows that the aggregate of data points contains a slope down and to the right. This is correlation, and it supports the thesis that the faster cars travel, the lower the MPG. Had the slope been upward to the right, as it actually appears to be between 20 and 30 MPH, then the correlation would have suggested that the faster you travel, the better the fuel mileage. Suppose however, that the data points did not form any recognizable linear or elliptical pattern but were simply in a disorganized configuration. This would suggest that there is no correlation between speed and fuel consumption. 8. Contrast and compare run charts and control charts.The run chart is straightforward, and the control chart is a much more sophisticated outgrowth of it. Therefore, the two are usually thought of together as a single tool. Both can be very powerful and effective for the tracking and control of processes, and they are fundamental to the improvement of processes. The run chart records the output results of a process over time. The problem with the run chart, and in fact, many of the other tools, is that it does not tell us whether the variation is the result of special causes--things like changes in the materials used, machine problems, lack of employee training--or common causes that are purely random. In evaluating problems and finding solutions for them, it is important to distinguish between special causes and common causes. Not until Dr. Walter Shewhart made that distinction in the 1920s was there a real chance of improving processes through the use of statistical techniques. Shewhart, then an employee of Bell Laboratories, developed the control chart to separate the special causes from the common causes. 9. What is the most common use of stratification? Stratification can lead to the root cause of a problem. It is a simple tool in spite of its name. It involves investigating the cause of a problem by grouping data into categories. This grouping is called stratification. The groups might include data relative to the environment, the people involved, the machine(s) used in the process, materials, and so on. Grouping of data by common element or characteristics makes it easier to understand the data and to pull insights from it. The power of stratification lies in the fact that if you 111 stratify far enough you will arrive at a root cause of the problem. Only when root causes are corrected will the problem be solved. 10. What purpose is served by flowcharts? The purpose of a flowchart is to provide a graphic representation of the process in terms of its inputs, steps, functions, timing, and outflows in order to more fully understand how the process works, and who or what has input to, and influence on, the process. This understanding is a prerequisite to process improvement. To be of value, it is important that the flowchart accurately represents the way the process really works, and not the way it is “supposed” to work. 11. Give an example of how a survey might be used in a modern production setting. Remember that the purpose of a survey is to obtain information that you might not otherwise get. A typical department in any organization has both internal suppliers and internal customers. Like external customers, internal customers can be dissatisfied with the product they receive from their internal suppliers. A survey could be used to see if the internal supplier is meeting the needs of the internal customer, or if some change might make his product easier for the internal customer to use. We might find that the internal customer has ideas for improving the process or product, etc. Using the customer-oriented point of view in a survey has proven to be a powerful tool for opening communications within and among departments and getting people and departments to work together for the common goal. 12. What is the purpose of design of experiments? Design of experiments (DOE) is a very sophisticated method for experimenting with processes with the objective of optimizing them, and doing it faster and more easily than would be possible by empirical methods. If you deal with complicated processes that have multiple factors affecting them, DOE may be the only practical way of bringing about improvement. 13. In the context of the Five-S philosophy, what is the intent of the word standardize? Standardization in the context of Five-S means: using the best practices available by adopting the procedures for the best way to perform a given task, and then requiring everyone to perform the task in this way. It is important to understand that this does not prevent further improvement. A standardized process is not “cast in concrete” to remain in place forever. When an even better practice is found, Five-S would repeat the standardization process to adopt the new, better method. 14. Explain the difference between design FMEA and process FMEA. FMEA tries to identify all the possible types (modes) of failures that could happen to a product or process--before they happen. Once the possible failure modes have been identified the effects of these failures are analyzed, and the consequences are ranked by seriousness/criticality to the customer; probability of that failure to actually occur; and the difficulty of detection of the issue resulting in the failure mode. This ranking will show the organization where to apply its resources in an effort to make the product safer or more reliable. 112 Design FMEA is employed during the design phase of a product or service, hopefully starting at the very beginning of the project. In this way, the designers will be able to develop a design that has fewer potential failures, and those that cannot be avoided can be made less severe. Also, by using FMEA concurrently with the design activity, it is more likely that test and inspection methods will be able to catch the problems before they get to the customer. A second version is process FMEA. In this case, FMEA is looking at the potential failures (errors, miscues) of a process. The process might be that of an accounting firm, a hospital, a factory, a governmental agency, or any other entity. One can imagine that in a hospital there are many processes that can have lots of failure modes, some probably not too important, but some as severe as they come. One would hope that FMEA is in every hospital’s tool kit. 15. What are FMEA’s three risk-assessment factors? FMEA risk assessment factors:  Severity or criticality to the customer. This will be assigned a number from 1 (no effect) to 10 maximum severity).  Probability of the particular failure mode to occur. This will be assigned a number from 1 (unlikely to occur) to 10 (almost certain to occur).  Probability of the fault’s detection by the systems responsible for defect prevention or detection. This will be assigned a number from 1 (nearly certain to detect) to 10 (unlikely to detect). These risk assessment factors are used to develop a risk priority number (RPN) for the potential failure mode. The RPN will be a number between 1 (virtually no risk) and 1,000 (extreme risk). The higher the RPN, the more important it is that the potential fault be prevented through whatever means possible. 113 Chapter Sixteen PROBLEM SOLVING AND DECISION MAKING 1. Contrast problem solving with decision making. Decision making is concerned more with selecting options that can affect the organization in some significant and tangible way. Problem solving is concerned with reacting to a certain situation that has just presented itself and must be deal with now. Hence, decision making is typically more concerned with the future and problem solving is more concerned with the here and now. 2. Define decision making as it relates to total equality.Decision making is the process of selecting one course of action from among two or more alternatives. 3. Explain how to evaluate decisions in a total quality environment. There are two ways to evaluate decisions. The first is to examine the results. In every case when a decision must be made1 there is a corresponding result. That result should advance an organization toward the accomplishment of its goals. To the extent it does, the decision is usually considered a good decision. Managers have traditionally had their decisions evaluated based on results. Regardless of results, however, it is wise to also evaluate the process used in making a decision. Positive results can cause a manager to overlook the fact that a faulty process was used, and, in the long run, a faulty process will lead to negative results more frequently than to positive. 4. Describe the PDCA Cycle. Plan: Develop a plan to improve Even before problems occur, create a plan for improving your area of responsibility, particularly the processes in that area. Then, when problems occur, they can be handled within the context of Deming's model for continual improvement. Developing such a plan involves the following four steps: 1) Identity opportunities for improvement; 2) Document the current process; 3) Create a vision of the improved process; and 4) Define the scope of the improvement effort. Do: Carry Out the Plan Implement the plan for improvement. The recommended approach is to first implement on a small scale over a specified period of time. This is the equivalent of developing and testing a prototype of a design before moving to full production. Study: Examine the Results Examine and record the results achieved by implementing the plan. The recorded results form the basis for carrying out the steps in the next component. Act: Adjust as Necessary Make adjustments as necessary based on what was learned in the previous component. Then repeat the cycle for the next planned improvement by returning to the first component of the model. 5. Describe the Toyota method for problem solving. Toyota’s Practical Problem-Solving Process has seven main steps: 114 1. Perceive the initial problem At this point, the symptoms may be clear, but the problem is probably not well defined. 2. Clarify the problem It is critical for problem solvers to fully grasp the situation before proceeding. Observe situation with open mind Compare actual situation to the standard Determine if variance exists Determine if multiple variances exist If multiple variances exist, prioritize by severity Set improvement objective 3. Determine the actual “point of cause” Ask questions that lead upstream toward the root cause, which will be the target for improvement. 4. Identify the root cause Use the Five Why analysis. 5. Develop and implement a countermeasure If multiple solutions are possible, select the one that is most advantageous, being careful to avoid introduction of any new problems. 6. Evaluate the countermeasure’s effectiveness in solving the problem Evaluate by analysis before the solution is implemented, and observe and monitor after implementation. 7. Change the standard The original standard must be changed to reflect the countermeasure. 6. Name and describe three problem-solving tools. Cause and Effect Diagrams Cause-and-effect diagrams are also known as Ishikawa diagrams after the inventor, Dr. Kaoru Ishikawa. The benefits are as follows: 1) Creating the diagram itself is an enlightening, instructive process; 2) Such diagrams focus a group, thereby reducing irrelevant discussion; 3) Such diagrams separate causes from symptoms and force the issue of data collection; and 4) Such diagrams can be used with any problem. Flow Charts A flow chart is a graphic representation of a process. A necessary step in improving a process is to chart it. In this way, all parties involved can begin with the same understanding of the process. A good way to start is to ask several different team members who know the process to chart it independently. If their charts are not the same, one problem is revealed at the outset. Pareto Charts A Pareto chart is used to establish priorities. It is particularly effective in helping sort out what problems or causes of problems to pursue first. Run Charts Run charts are used to identify trends by charting data over a specified period of time. Histograms Histograms are used to chart frequency of occurrence. How often does something happen? Scatter Diagrams 115 Scatter Diagrams are used to graphically represent the relationship between two variables. Stratification Stratification involves investigating the cause of a problem by grouping data into categories. These categories might be related to environment, people, machines, material, and so on. Grouping data by common element or characteristic makes it easier to understand the data, and pull insights from them. Control Charts Control charts are used to analyze processes for the purpose of continually improving them. Such a chart has an upper control limit, an average, and a lower control limit. 7. Define the decision making process and explain each step in it. The decision making process is a logically sequenced series of activities through which decisions are made. Identify or Anticipate the Problem If managers can anticipate problems, they may be able to prevent them. Anticipating problems is like driving defensively; never assume anything. Look, listen, ask, and sense. The better managers know their employees, technological systems, products, and processes, the better able they will be to anticipate problems. Gather the Facts Before a good decision can be made, one must fully understand the problem. This is what Toyota calls clarifying the problem. Consider Alternatives This involves 1) to list all of the various alternatives available and 2) to evaluate each alternative. The number of alternatives identified in the first step will be limited by several factors. Practical considerations, the manager's range of authority, and the cause of the problem will all limit a manager's list of alternatives. After the list has been developed, each entry on it is evaluated. The main criteria against which alternatives are evaluated is the desired outcome. Will the alternative being considered solve the problem? If so, what will it cost? Cost is another criteria used in evaluating alternatives. The costs might be expressed in financial terms, in terms of employee morale, in terms of the organization's image, or in terms of a client's good will. Such costs should be considered when evaluating alternatives. Choose the Best Alternative, Implement, Monitor, and Adjust After all alternatives have been considered, one must be selected and implemented, and after an alternative has been implemented, managers monitor progress and adjust appropriately. Occasionally, the alternative chosen for implementation will not produce the desired results. When this happens and adjustments are not sulficient1 it is important for managers to cut their losses and move on to another solution. Managers should avoid falling into the ownership trap. This happens when they invest so much ownership in a given alternative that they refuse to change even when it becomes clear the idea is not working. This can happen anytime, but is more likely to happen when a manager selects an alternative that runs counter to the advice he or she has received, is unconventional or unpopular. The manager's job is to solve the problem. Showing too much ownership in a given alternative can impede one's ability to do so. 116 8. Contrast and compare objective and subjective decision making. The Objective Approach The objective approach is logical and orderly. It proceeds in a step-by-step manner and assumes that managers have the time to systematically pursue all steps in the decision making process. It also assumes that complete and accurate information is available and that managers are free to select what they feel is the best alternative. Subjective Decision MakingWhereas objective decision making is based on logic and complete, accurate information, subjective decision making is based on intuition, experience, and incomplete information. This approach assumes decision makers will be under pressure, short on time, and operating with only limited information. The goal of subjective decision making is to make the best decision possible under the circumstances. In using this approach, the danger always exists that managers might make quick, knee-jerk decisions based on no information and no input from other sources. The subjective approach does not give managers license to make sloppy decisions. If time is short, the little time available should be used to list and evaluate alternatives. If information is incomplete, use as much information as is available. 9. What is Juran's 85/15 rule? State the rule. It is one of the fundamental premises underlying the need for scientific decision making. Juran’s 85/15 rule is a rule of thumb that says: Only about 15% of any organization’s problems are under the control of, and can be solved by, the employees. At least 85% of the problems can only be corrected by improving the “systems” through which work is done, and that can only be done by management. If anything, the 85/15 rule should perhaps lean more toward 90/10. The point is that although employee involvement in problem solving is very important, management must also be involved. 10. Describe the scientific approach to decision making and problem solving. A scientific approach is really just a systematic way for individuals and teams to learn about processes. It means agreeing to make decisions based on data rather than hunches, to look for root causes of problems rather than react to superficial symptoms, to seek permanent solutions rather than rely on quick fixes. A scientific approach can, but does not always, involve using sophisticated statistics, formulas, and experiments. These tools enable us to go beyond band-aid methods, that merely cover up problems, to find permanent, upstream solutions. 11. Explain four types of complexity in the scientific approach. For the scientific approach to problem solving and decision making, complexity means nonproductive or unnecessary work resulting when organizations try to improve processes without first developing a systematic plan. Such nonproductive or unnecessary work is therefore a target of the scientific approach and includes: Errors and Defects Errors cause defects and defects reduce competitiveness. When a defect occurs, one of two things must happen: the part or product must be scrapped altogether, or extra work must be done to correct the defect. Work that results from errors and defects adds cost to the product without adding value. 117 Breakdowns and Delays Equipment breakdowns delay work, causing production personnel to either work overtime or to work faster to catch up. Overtime adds cost to the product without adding value. When this happens, the organization's competitors gain an unearned competitive advantage. When attempts are made to run a process faster than its optimum rate, an increase in errors is inevitable. InefficiencyInefficiency means using more resources (time, material, movement, or something else) than necessary to accomplish a task. Inefficiency often occurs because organizations fall into me habit of doing things the way they have always been done without ever asking why. Variation In a total quality setting, consistency and predictability are important. When a process runs consistently, efforts can begin to improve it by reducing process variations of which there are two kinds: 1) Special-cause variation, which is the result of factors that are not part of the process and that occur only in special circumstances, such as a shipment of faulty raw material, or a machine in need of maintenance. Special cause variation is the primary deterrent to predictability. Note that the special-cause variation must be dealt with to make the process consistent before any meaningful improvement can be made to the common-cause variation. 2) Common-cause (also called natural) variation, which is the result of the sum of numerous, small, ever-present sources of variation that are always part of the process. These include the environment, manpower, machine, and so forth. Reducing commoncause variation produces higher quality and better yields from the process. 12. What are the advantages and disadvantages of employee involvement in decision making? Advantages of Employee Involvement Involving employees can result in a more accurate picture of what the problem really is and a more comprehensive list of potential solutions. It can help managers do a better job of evaluating alternatives and selecting the best one to implement Perhaps the most important advantages are gained after the decision is made. Employees who participate in the decision making process are more likely to understand and accept the decision and have a personal stake in making sure the alternative selected succeeds. Potential Problems with Employee Involvement The major potential problem is that it takes time, and managers do not always have time. Other potential problems are that it takes employees away from their jobs and that it can result in conflict among team members. Next to time, the most significant potential problem is that employee involvement can lead to democratic compromises that do not necessarily represent the best decision. In addition, disharmony can result when a decision maker rejects the advice of the group. 13. Explain three techniques for increasing the effectiveness of group involvement. Brainstorming With the brainstorming technique, the manager serves as a catalyst in drawing out group members. Participants are encouraged to share any idea that comes to mind. All ideas are 118 considered valid. Other group members are not allowed to make judgmental comments or to evaluate suggestions that are made. Nominal Group Technique (NGT) Nominal group technique is a sophisticated form of brainstorming. In the first step, the facilitator states the problem and clarifies if necessary to make sure all participants understand it. In the second step, each group member silently records his or her ideas. At this point, no discussion occurs among group members. This promotes free and open thinking, unimpeded by judgmental comments or peer pressure. In the third step, the ideas of individual members are made public. This is done by asking each member to share one idea with the group. The ideas are recorded on a marker board or flip chart. The process is repeated until all ideas of all participants have been recorded. Each idea is numbered. No discussion occurs among participants during this step. Taking the ideas one-at-a-time and sequentially ensures a mix of recorded ideas that makes it difficult for participants to remember what ideas belong to which member. In the fourth step, recorded ideas are clarified to ensure that participants understand what is meant by each. In the final step, the ideas are voted on silently. Teams Problem solving teams are made up on a wide range of skills as appropriate to the problem. The team will always have representation from the process operators, and from those who provide input to the process and those taking output from it. Additional skills such as engineering, finance, human resources, and so forth are included as required. The team will have a leader, and perhaps a facilitator who is highly qualified in problem solving and decision making techniques. The idea is that such a group will look at the problem from many aspects, and should produce a more thoroughly considered recommendation or decision than a less diverse group 14. What is the role of information in decision making? Although having accurate, up-to-date, comprehensive information does not guarantee a good decision, lacking such information can guarantee a bad one. In order to make decisions that will help their organization be competitive, managers need timely, accurate information. 15. Explain creativity as a concept and the role it can play in decision making. The increasing pressures of a competitive marketplace are making it more and more important for organizations to be flexible, innovative, and creative in decision making. In order to survive in an unsure, rapidly changing marketplace, organizations must be able to adjust rapidly and change directions quickly. To do so requires creativity at all levels of the organization. Creativity can be viewed as an approach to problem solving and decision making that is imaginative, original, and innovative. Developing such perspectives requires that decision makers have knowledge and experience regarding the issue in question. 119 Chapter Seventeen QUALITY FUNCTION DEPLOYMENT (QFD) 1. Define Quality Function Deployment. Quality function deployment (QFD) is a specialized method for making customer needs/wants important components of the design and production of the product or service. 2. Describe the basic structure of the QFD House of Quality. The heart of QFD is the set of six interrelated matrices known as the House of Quality (HOQ), so named because the complete matrix takes on the appearance of a house. 1. The left wall is the Customer Needs matrix. Details customer needs and wants, and the importance of those needs/wants relative to the product or service (WHATs). Also referred to as the voice of the customer (VOC) 2. The right wall is the Planning matrix. Derived from customer satisfaction information for the organization’s product and competing products. This matrix establishes improvement factors, sales points, weighting for customer needs. 3. Upstairs is the Technical Requirements matrix (HOWs). Developed from the Customer Needs and Planning matrices, this matrix states how the organization intends to respond to each of the customer needs. These are not specifications, but rather characteristics and features perceived as meeting the customer needs. 4. The main floor is the Interrelationships matrix. Defines the relationship at each intersection of customer needs (matrix 1) and technical requirements (matrix 3) in terms of strong, medium or weak relationships. 5. The roof is the Correlation matrix. Here the determination is made of whether the technical requirements benefit each other, or if some work against each other. At each two-column intersection that correlation is indicated by a plus or minus symbol (for positive or negative correlation), or left blank for no correlation. Positive correlations are beneficial, but negative correlations have to be addressed. 6. The basement is the Design Targets matrix. If matrix 1 describes WHAT the customer needs, and the matrix 3 tells HOW the company is going provide the product characteristics necessary to address those needs, then the design targets specify HOW MUCH of the characteristic needs to be provided. 3. Explain the rationale for QFD. All organizations need customers in order to stay in business. Everything else being equal, customers buy products and services which best meet their needs. When a competitor develops a product that is perceived as superior, the competitor will get the business. Quality Function Deployment is a means of ensuring that the company does all that it can do to field products which will best meet the needs of its customers and potential customers. 4. List the principle benefits of QFD. QFD ensures that new products or services are designed to meet customer needs. This provides a much better chance for customer acceptance than a product development that simply makes assumptions about customer needs. QFD’s structured approach ensures that little in the design process is left to chance or based simply on a gut feel for what the 120 customers want, or what they will grudgingly accept. The QFD process has the benefits of being customer-focused, time-efficient, and teamwork oriented. 5. Explain the need for the QFD team to be cross-functional. In going through the QFD process, all the functional departments of the organization are involved from day one. This is because the gathering of information, analyzing it, sorting it, and constructing the six matrices require the expertise of all organizational departments. Beyond that, the cross-functional team always brings insights to the task that would otherwise be lacking. Another major factor is that the results of the cross-functional effort are ensured buy-in by the various departments. 6. Describe the function of an affinity diagram as used in QFD. Affinity diagrams are used in QFD to extract meaningful information from complex issues and/or disorganized facts. Affinity diagrams are used to stimulate the thought processes, get past ingrained paradigms, and get rid of mental baggage relating to past solutions that failed. Affinity diagrams are also useful in QFD when it is important to build a consensus for a proposed solution. 7. Describe the function of the Sales Point. A marketing factor called a Sales Point, is placed in the Planning Matrix. Sales point is a number from 1 to 1.5 that is used to place emphasis on the customer needs. It is an estimate by the QFD team of the marketing importance of the customer need in the development of the new product, and is therefore used, along with customer importance and improvement factor, in the calculation for overall weighting of the customer needs. A sales point of 1 results in no change in the overall weighting, whereas a 1.5 sales point increases the overall weighting half again beyond that indicated by the customer importance of the need and its improvement factor. 8. Explain why it is not advantageous to use more precise rating/ranking scales. The ratings and rankings are, after all is said and done, the result of a lot of opinion and estimating all the way from the customer, through the team’s deliberations and discussions. The math is going to produce numbers accurately reflecting the various ratings and factors —but the source data for those numbers should not be considered to be absolutely accurate. Simply put, the input data cannot support greater precision. 9. Describe the function of the HOQ’s roof. As a product or service is being designed there will inevitably be some technical requirements that tend to benefit one another and some that tend to work against one another. Those that benefit each other are said to have a supportive or positive correlation. Those working against each other have an impeding, or negative correlation. It is always helpful to know what kind of correlation exists in order to take advantage of the supportive correlations, and to contrive tradeoffs for those that impede. Failure to know this may result in a product that does not meet requirements, or one that requires expensive redesign in order to conform to customer requirements. Getting it right the first time is the purpose of the Correlation Matrix, or Roof, of the HOQ. 121 10. Describe the fundamental purpose of the Design Targets. The fundamental purpose of the design targets is to establish specific set of objectives for the design team. Chapter Eighteen 122 OPTIMIZING AND CONTROLLING PROCESSES THROUGH STATISTICAL PROCESS CONTROL (SPC) 1. Define the concept of statistical process control.Statistical Process Control (SPC) is a statistical method of separating variation resulting from special causes from natural variation in order to eliminate the special causes, and to establish and maintain consistency in the process, enabling process improvement 2. Explain briefly the rationale for SPC. The rationale for Western manufacturers to embrace SPC is not only to improve product quality and simultaneously reduce costs, but also to improve their product image in order to successfully compete in the world's markets. 3. What is meant by variation in processes? Variation in any process is the enemy of quality. Variation results from two kinds of causes, special causes and natural causes. Both kinds can be treated, but they must be separated so that the special causes: those associated with the Five Ms can be identified and eliminated. After that is done, the processes can be improved, never eliminating the natural variation, but continually narrowing its range, approaching perfection. It is important to understand why the special causes must first be eliminated. Until that happens the process will not be stable, and the output will include too much product that is unusable, therefore wasted. The process will not be dependable in terms of quantity or quality. In addition, it will be pointless to attempt improvement of the process, because one can never tell if the improvement is successful: the results will be masked by the effect of any special causes that remain. 4. Define the following concepts: Continual Improvement Continual improvement is a key element of total quality. One talks about improvement of products, whatever they may be, but in most cases, it would be more accurate to talk about continual improvement in terms of processes than in terms of products and services. It is often the improvement of processes that yields improved products and services. Both are critical to the continued viability of the organization. Predictability of Processes When a process is not under control, its capability is not very predictable. When that is the case, managers cannot know with certainty the capability of their processes, and therefore whether a customer's requirements can or cannot be met. This situation always results in pricing the product too high as a hedge against the cost of waste, or the possibility of losing money on the product due to excessive waste. The first situation makes the organization less competitive, while the second endangers the company’s viability. Organizations must have predictable, stable, consistent processes, and that can be achieved and maintained through SPC. Elimination of Waste When waste is eliminated the cost of goods produced (or services rendered) is reduced— not just from the cost of the defective product, but also the cost of inspection. At the same 123 time, the quality of the product is enhanced. Even when all parts are inspected, it is impossible to catch all the bad ones. When sampling is used, even more of the defective parts get through. If the final product contains defective parts, its quality has to be lower. By eliminating waste, a company reduces cost and increases quality--a direct competitive advantage. SamplingInspection can be done on every piece (100 percent inspection) or on a sampling basis. The supposed advantage of 100 percent inspection is that any defective or nonconforming product will be detected before it gets into the hands of a customer (external or internal). It would be faster and less expensive if it were possible to achieve the same level of confidence by inspecting only one piece out of ten (10-percent sampling), or five out of a hundred (15-percent sampling) or even less. Such sampling schemes are not only possible, they are accepted by such critical customers as the U.S. government and the automobile industry, but there is a condition: in order for sampling to be accepted, processes must be under control. Only then will the processes have the consistency and predictability necessary to support sampling. Auditing When a company's processes are determined to be capable of producing acceptable products, and after they are in control using SPC, the internal quality assurance organization can reduce its inspection and process surveillance efforts, relying to a greater degree on a planned program of process audits. This reduces quality assurance costs, and with it, the cost of quality. 5. What is management's role in the implementation of SPC? There must be a management commitment because there will be startup costs associated with implementation. Only management can establish the production quality level. Second, SPC and the continual improvement that results from it will transcend department lines, making it necessary for management involvement. Third, budgets must be established and spent, something else that can be done only by management. 6. Describe how the seven tools are used when implementing SPC. With SPC, the total quality tools have a dual role. First, they help eliminate special causes from the process, so that the process can be brought under control. Only then can the control charts be developed for the process and the process monitored by the control charts. The second role comes into play when, from time to time, the control chart reveals a new special cause, or when the operator wants to improve a process that is in control. 7. Why is it important to give operators authority over their processes? Operators who use SPC to keep track of their processes must have the authority to stop the production process when SPC tells them something is wrong. As long as the plots on the control chart vary about the process average, but do not penetrate a control limit, the process is in control and is being influenced by the common causes of variation only. Once a penetration is made, or if the operator sees a run of several plots all on one side of the process average, he or she has good reason to believe that the process needs attention. The operator should be able to stop the process immediately. Attempting SPC without giving process-stopping authority to the operator is a serious error. Give the authority to the operator, and the underlying problems will be eliminated. 124 8. List the various steps that should be followed when implementing SPC. Step 1: Commit to SPC Step 2: Form an SPC Committee Step 3: Train the SPC Committee Step 4: Set SPC Objectives Step 5: Identify Target Processes Step 6: Train Appropriate Operators and Teams Step 7: Assure Repeatability and Reproducibility (R&R) of Guages and Methods Step 8: Delegate Responsibility for Operators to Play a Key Role Step 9: Flow Chart the Process Step 10: Eliminate the Special Causes of Variation Step 11: Develop Control Charts Step 12: Collect and Plot SPC Data, and Monitor Step 13: Determine Process Capability Step 14: Respond to Trends and Out-of-Limits Data Step 15: Track SPC Data Step 16: Eliminate the Root Causes of Any New Special Causes of Variation Step 17: Continual Improvement--Narrow the Limits 9. Why is management commitment so important when implementing SPC? As with every aspect of total quality, management commitment is an absolute necessity. SPC and continual improvement represent a new and different way of doing business, a new culture. No one in any organization, except its management, can edict such fundamental changes. It is management's duty to establish the policies and procedures under which all employee work and to provide the necessary training to enable them to carry out those policies and procedures. When employees see management involved in an activity, they get a powerful message that the activity is important. If managers want their employees to give SPC a chance, they must demonstrate their commitment to it. 10. List and briefly explain the major inhibitors of SPC. Many organizations do not have the in-house expertise in statistics that is necessary for SPC. As SPC is being introduced, and decisions are made on where to sample, how much to sample, what kinds of control charts to use, and so forth, a good statistician is necessary to assure the validity of the program. If the organization does not employ such an expert, it should either hire one or retain the services of a consultant for the early phases of the SPC implementation. The danger inherent in not having statistical expertise is developing an SPC program that is statistically invalid: a fact that can easily escape nor-statisticians. When that happens, the SPC implementation may send messages that make the process control situation worse than it was before. It is important that the initial design of the SPC program be valid. This requires someone with more than a passing knowledge of statistics. If there are any doubts, get help. 125 Chapter Nineteen CONTINUAL IMPROVEMENT METHODS WITH SIX SIGMA, LEAN, AND LEAN SIX SIGMA 1. Explain the rationale for continual improvement Continual improvement is fundamental to success in the global marketplace. Companies that are just maintaining status quo in such key areas as quality, new product development, the adoption of new technologies, and process performance are sitting ducks for the competition. Competing in the global marketplace is like competing in the Olympics. Last year's records are sure to be broken this year. Athletes who don't improve continually are not likely to remain long in the winner's circle. The same is true of companies that must compete globally. In addition, customer needs and expectations are not static. They change continually. A typical example is the personal computer that has been continually improved since the first practical one appeared on the market in the 1980’s. Consider where a PC maker would be if it still marketed a 1985 computer—or a 1995, or even a 2005 version. That company would be out of business. 2. What is management's role in continual improvement? Management’s role in continual improvement is leadership. Executive-level managers must be involved personally and extensively by:  Establishing an organization-wide quality council and serving on it..  Working with the quality council to establish specific quality improvement goals with timetables and target dates.  Providing the necessary moral and physical support. Moral support manifests itself as commitment. Physical support comes in the form of the resources needed to accomplish the quality improvement objectives.  Scheduling periodic progress reviews and giving recognition where it is deserved.  Building continual quality improvement into the regular reward system, including promotions and pay increases. 3. Describe the five essential improvement activities. Maintain Communication Communication is essential to continual improvement. This cannot be overemphasized. Communication with improvement teams and between teams is a must. All stakeholders must be kept informed from beginning of the improvement activity through and after completion of the project. Correct Obvious Problems Often process problems are not obvious and a great deal of study is required to isolate them and find solutions. This is the typical case and it is why the scientific approach is so important in a total quality setting. However, there will be times when there is a problem with a process that is obvious. In such cases, the problem should be corrected immediately. Spending days studying a problem for which the solution is obvious just so that the scientific approach is used will result in ten-dollar solutions to ten-cent problems. Look Upstream 126 Look for causes, not symptoms. This is a difficult point to make with people who are used to taking a cursory glance at a situation and putting out the fire as quickly as possible without taking time to determine what caused it. But if the root cause is not eliminated in the “solving” of the problem, it will return again. Document Problems and Progress Take the time to write it down. It is not uncommon for an organization to continue solving the same problem over and over because nobody took the time to document the problems that have been dealt with and how they were solved. A fundamental rule for any improvement project team is “document, document, document.” Monitor Changes Regardless of how well studied a problem is, the solution eventually put in place may not solve it or may only partially solve it. It might even cause an unintended problem. So it is important to monitor the performance of a process after changes have been implemented. It is also important to ensure that pride of ownership on the part of those who recommended the changes do not interfere with objective monitoring of the changes. 4. If you were an executive manager in an organization, how would you structure the organization for quality improvement? Quality improvement doesn’t just happen. It must be undertaken in a systematic, step-bystep manner. For an organization to make continual improvements, it must be structured appropriately and Quality pioneer Juran calls this “mobilizing for quality improvement.” It involves the following three steps: Establishing a quality council, developing a statement of responsibilities, and establishing the necessary infrastructure. 5. What is meant by using the scientific approach? The scientific approach makes decisions based on data, looks for root causes of problems, and seeks permanent solutions instead of relying on quick fixes. 6. Describe the steps involved in developing an improvement plan. Understand the Process Before attempting to improve a process, make sure every team member thoroughly understands it. How does it work? What is it supposed to do? What are the best practices known pertaining to the process? The team should ask these questions and pursue the answers together. This will give all team members a common understanding, eliminate ambiguity and inconsistencies, and point out any obvious problems that must be dealt with before proceeding to the next stage of planning. Eliminate Errors In analyzing the process, the team may identify obvious errors that can be quickly eliminated. Such errors should be eliminated before proceeding to the next state. Remove SlackThis stage involves analyzing all of the steps in the process to determine whether they serve any purpose, and if so, what purpose they serve. In any organization, processes exist that have grown over the years with people continuing to operate them without giving any thought to why things are done a certain way, if they could be done better another way, or if they need to be done at all. There are few processes that cannot be streamlined. Reduce Variation 127 Variation in a process results from either common causes or special causes.  Special causes typically result in greater than normal variation in performance and are not always present. Special-cause variation should be targeted first. Eliminating special causes does not usually improve a process, but merely returns it to its usual performance.  Common causes result in normal (for the process) variations and are always present. These should be addressed after the special causes are eliminated. Reducing common cause variation results in process improvement. Plan for Continual Improvement By the time this step has been reached, the process in question should be in good shape. The key now is to incorporate the types of improvements made on a continual basis so that continual improvement becomes a normal part of doing business. The Plan-Do-Check-Act cycle applies here. With this cycle, each time a problem or potential improvement is identified, an improvement plan is developed (Plan), implemented (Do), monitored (Check), and refined as needed (Act). 7. List and explain three widely used improvement strategies. Describe the Process The strategy of describing the process is used to make sure that everyone involved in improving a process has a detailed knowledge of the process. Usually this requires some investigation and study. The steps involved are:  Establish boundaries for the process  Flowchart the process (as it really is—not as how it should be)  Diagram of how the work flows  Verify your work  Immediately correct any obvious problems identified. Standardize the Process In order to continually improve a process, all people involved in its operation must be using the same procedures. The steps involved in standardizing a process are:  Identify the current best known practices and write them down  Test the best practices to determine if they are, in fact, the best and improve them if there is room for improvement  Make sure that the newly standardized process is being used by everyone  Keep records of process performance, update them continually, and use them to identify ways to improve the process even further on a continual basis. Streamline the Process The strategy of streamlining the process is used to take the slack out of a process. This can be done by reducing inventory, reducing cycle times, and eliminating unnecessary steps. After a process has been streamlined, every step in it has significance, contributes to the desired end, and adds value. Reduce Sources of Variation The first step in the strategy of reducing sources of variation is identifying sources of variation. Such sources can often be traced to differences among people, machines, measurement instruments, material, and sources of material, operating conditions, and times of day. Differences among people can be attributed to levels of capability, training, 128 education, experience, and motivation. Regardless of the source of variation, after a source has been identified, this information should be used to reduce the amount of variation to the absolute minimum. Bring the Process under Statistical Control This was fully developed in Chapter 18. For our purposes here it is necessary to know that a control chart is planned, data are collected and charted, special causes are eliminated, the control chart is developed from the data, the chart is used to monitor the process to be aware of any new special-cause impact, and a plan for continual improvement is developed and pursued. Improve the Design of the Process There are many different ways to design and layout a process. Most designs can be improved on. The best way to improve the design of a process is through an active program of experimentation. In order to produce the best results, an experiment must be properly designed. Any process experiment should include a set of objectives and boundaries, and should be conducted in the Plan-Do-Check-Adjust format. 8. Explain the following improvement strategies: Group Technology Traditional production lines are straight. With group technology, processes are arranged so that work flows in a U-shaped configuration. This can yield the following benefits: shorter lead times, greater flexibility, less time in material handling, minimum work in progress, flexibility with regard to volume, less floor space used, and less need for direct coordination. Synchronized Production Synchronized production involves synchronizing the needs of the production line with suppliers of the materials (who may be internal or external) needed on the line. Jidoka Jidoka means halting an entire process when a defect is discovered so that it doesn’t cause additional problems further down the line. Jidoka can be accomplished manually, or can be programmed to stop automatically, or both. Supplier Partners This strategy amounts to involving suppliers as partners in all phases of product development rather than keeping them in the dark. If tested and trusted suppliers know what you are trying to do, and are invited to participate, they can use their superior knowledge of their products better help you with your projects. Total Productive Maintenance Total productive maintenance means maintaining all systems and equipment continually and promptly all of the time. In a rushed workplace, one of the most common occurrences is slacking off on machine and system maintenance. This is unfortunate because a poorly maintained system cannot achieve the quality and productivity needed to be competitive. Poor maintenance can result in shutdowns from unexpected damage, increased setup and adjustment time, downtime, speeds below the optimum, increased variation, increased waste from defects, and production losses. 129 9. Explain the concept of Kaizen. Kaizen is the name given by the Japanese to the concept of continual incremental improvement. Kai means change and Zen means good. Kaizen, therefore, means making changes for the better on a continual, never-ending basis. The improvement aspect of Kaizen refers to both people and processes. If the Kaizen philosophy is in place, all aspects of an organization should be improving all the time. The underlying value system of Kaizen can be summarized as continual improvement of all things, at all levels. In a total quality setting, quality is defined by the customers. Regardless of how customers define quality, it can always be improved and it should be, continually. Kaizen is a broad concept that promotes quality from the all-encompassing Big Q perspective. 10. What is CEDAC and how is it used? CEDAC is an acronym for Cause-and-Effect Diagram with the Addition of cards. Its purpose is to facilitate continual improvement in the workplace. CEDAC is based on the supposition that three conditions must exist in order for continual improvement to occur. These conditions are: a reliable system, a favorable environment, and practicing as a team. 11. What are the primary objectives of Lean? Lean is a concept established to help organizations produce better products or deliver better services using fewer resources through the continual elimination of waste, and the improvement of process flow. The unofficial motto of lean is doing more with less and doing it better. . 12. Explain the rationale of Six Sigma’s target of 3.4 NPMO. The numbers used by Motorola in its 3.4 NPMO Six Sigma program are significantly different from those derived from straight statistics, where 6σ predicts an NPMO of 0.002. Which is correct? The answer is that the straight statistics numbers are correct, but the Motorola numbers are better in a practical sense. Motorola has applied a factor to account for slight changes in environmental conditions, different operators, and so on. The reason Motorola considers this valid is that the sigma values of any process are derived from a statistically valid sample of that process’s operation, necessarily taken over a relatively short period of time. The typical histogram is a snapshot of what is going on at the time the data were collected. Should that period be changed from a few weeks to a few years, one would no doubt encounter new variations resulting from the environment, new operators, and other factors. Motorola believes that the short-term view provides an overly optimistic picture of process variation (in the long term) and, consequently, of the process results at a given sigma level. The company concluded, therefore, that the reality of the long term under which the processes operate should be compensated for. Motorola chose to do this by shifting the process average (μ) from the target, or ideal point, 1.5 sigma to the right, while leaving the normal Six Sigma field and the upper and lower specification limits as they were. The result is 3.4 NPMO. 13. How might a SIPOC map be used in a process improvement process? Improvement teams use the SIPOC diagram to identify the key elements involved with the process, including: • Suppliers of input elements to the process (internal or external) 130 • Input materials, information and resources necessary for process operation • Process’s key steps • Outputs of the process • Customers (internal or external) of the process output, noting their expectations 14. Define Lean Six Sigma. Lean Six Sigma most definitely is not some kind of a Lite Six Sigma, like an improvement system designed for those who only want a little improvement or who don’t want to be bothered by the details of Six Sigma. Lean Six Sigma is a wedding between two healthy, robust, powerful systems that stood alone in the two previous sections—Lean and Six Sigma. The Six Sigma part of Lean Six Sigma is still the full-bodied, potent improvement system that we discussed in the previous section. The Lean part of Lean Six Sigma is still the complete, proven Quality Management system found in the Toyota Production System and Just-In-Time/Lean. Lean Six Sigma combines the concepts of Six Sigma and Lean 15. Explain how the Theory of Constraints approaches Continual Improvement and how it differs from other approaches. The premise giving rise to the theory is that every organization faces constraints, at least one of which limits the rate of goal achievement. In this context a constraint as “anything limiting an organization from achieving its goal. Organizations may have tens, or even hundreds of constraints fitting this description, but a core principal within the TOC is that only one, or perhaps just a few, really constrain performance. (Remember the Pareto Principle discussed in Chapter 15.) The constraint may be internal to the organization, such as a machine that cannot produce acceptable parts fast enough, employees who lack the necessary skills, or policies and procedures that are unsuitable for the process as implemented. The constraint may also be external, such as lack of customer demand for the product. The TOC is intended to focus the attention and effort of the organization to the critical constraint through five steps: 1. IDENTIFY the constraint (What is the real or major constraint?) 2. Decide how to EXPLOIT the constraint (Turn it into a positive factor, eliminate, or circumvent) 3. SUBORDINATE AND SYNCHRONIZE everything else to the above decisions. (No other activity should have priority because the constraint is inhibiting achievement of the organization’s goal.) Then to improve the performance of that same value-chain, continue: 4. ELEVATE the performance of the constraint (e.g., add capacity) 5. If in any of the steps the constraint has shifted, GO BACK TO STEP 1. Differences from the other approaches include:  Focus on a single constraint  Promotes buffer stocks to prevent shut down when the constraining function cannot keep up. 131 Chapter Twenty BENCHMARKING 1. Define benchmarking. Benchmarking is the process of comparing and measuring an organization's operations or its internal processes against those of a best-in-class performer from inside or outside its industry. Benchmarking goes beyond competitive analysis to compare how the product is engineered, manufactured, distributed, and supported. Benchmarking is not so much interested in what the product is and what it costs1 but rather in the underlying processes used to produce, distribute, and support it. Benchmarking involves two organizations that have agreed to share information—it is not cheating, illegal, immoral, unethical, or industrial espionage. 2. Explain the difference in objectives for continual improvement and benchmarking. An organization can make incremental improvements to its process through continual improvement, but it might take years to make a 4X improvement, and by then the competition would probably be at 6X or better. Benchmarking is used to show which processes are candidates for continual (incremental) improvement and which require major (on-site) changes. Benchmarking offers the fastest route to significant performance improvement. It can focus an entire organization on the issues that really count. 3. List five factors that lead organizations to benchmarking. Some factors that drive companies to benchmark are commitment to total quality, customer focus, product-to-market time, manufacturing cycle time, and financial performance at the bottom line. 4. On which processes should an organization concentrate for benchmarking? Never benchmark a process that you do not wish to change. The processes that are put on a benchmark list should be those known to be inferior and that you intend to change. Leave the others for incremental change through continual improvement at least for the time being. 5. Why is it necessary that top management be committed as a prerequisite to benchmarking? Benchmarking requires a great deal of time from key people, and money must be available for travel to the benchmarking partners' facilities. Both of those require management's approval. You expect to gain information from your benchmarking partner for which they will expect payment in kind, namely information about you and your processes. This can be authorized only by management. Finally, the object of benchmarking is to discover processes to replace yours or at least to make major changes to them. Such changes cannot be made without management's approval. Without a mandate from top management, there is no point in attempting to benchmark. Several benchmarking considerations require management's approval before the process can start: commitment to change, funding, personnel, disclosure, and involvement. 132 6. What are the reasons for characterizing and documenting an organization’s processes before benchmarking?Strong processes will not be benchmarked initially; continual improvement techniques will be sufficient for them. Weak processes, however, become candidates for radical change through benchmarking, because incremental improvement would not be sufficient to bring them up to the level necessary in the time frame required. It can be difficult to categorize an organization's processes as weak or strong. Never consider a process to be above benchmarking, no matter how high it is rated. Concentrate on the weak ones, but keep an open mind about the rest. If research identifies a better process, add it to the list. Above all, document all processes fully: even the strong ones. Keep in mind that as you are looking at one of your benchmarking partner's processes because it is superior to yours, they will be looking at your strong processes for the same reason. If the processes are not well documented it will be very difficult to help your partner. One cannot compare two processes for benchmarking if both are not fully documented. 7. Identify the critical members of the benchmarking team. The people who operate the process, those who have input to the process, and those who take output from it are in the best position to recognize the differences between your process and that of your benchmarking partner. Every team should have someone with research capability and management representation. 8. Explain why it is not enough to simply clone the benchmarking partner's process. The objective is to put in place a process that is best-in-class. If the team merely transplants the partner company's process, it will not achieve the objective, although improvements may occur. To achieve best-in-class, an organization must surpass the performance of the benchmark process. It may not be possible to do this at the outset, but the team's initial planning should provide for the development work necessary to achieve it in a specified period of time. 9. Explain the importance of linking the benchmarking objectives with the organization's strategic objectives. Benchmarking requires a strong focus, or it can go off in numerous different directions as benchmarkers get carried away in their enthusiasm. Before it is started, benchmarking objectives must be linked to the company's strategic objectives, providing specific direction and focus for the effort. 10. Explain how the “not-invented-here” syndrome can be a hindrance to benchmarking effectiveness. If a company is imbued with the not-invented-here syndrome, it will have a problem with benchmarking, because the essence of benchmarking is capitalizing on the work and ideas of others. A company must be open to new ideas for benchmarking to provide any value. The benchmarking process may help bring about more receptivity to new ideas by demonstrating that they really work. 11. List and discuss the eight obstacles to successful benchmarking. 133 Internal Focus In order for benchmarking to produce the desired results, you have to know that someone out there has a far better process. If a company is internally focused (as many are), it may not even be aware that its process is 80 percent less efficient than the best-in-class. An internal focus limits vision. Is someone better? Who is it? Such organizations don't even ask the question. This is complacency: and it can destroy an organization. Benchmarking Objective Too Broad An overly broad benchmarking objective such as “Improve the Bottom-Line Performance” can guarantee failure. This may well be the reason for benchmarking, but the team will need something more specific and oriented not to the what but to the how. A team could struggle with the bottom line forever without knowing with certainty that it achieved success or failure. The team needs a narrower target like "Refine or replace the invoicing process to reduce errors by 50 percent" That gives it something they can go after. Unrealistic Timetables Benchmarking is an involved process that cannot be compressed into a few weeks. Consider four to six months the shortest schedule for an experienced team, with six to eight months the norm. Trying to rush it will force the team to cut corners, which can lead to failure. Poor Team Composition When a process is benchmarked, those who own the process, the people who use it day in and day out, must be involved. These people may be production line operators or clerks. Management may be reluctant to take up valuable team slots with these personnel when the positions could otherwise be occupied by engineers or supervisors. Engineers and supervisors should certainly be involved, but not to the exclusion of process owners. The process owners are the ones who know the most about how the process really operates, and they will be the ones who can most readily detect the often subtle differences between your process and that of the benchmarking partner. Teams should usually be six to eight people, so be sure the first members assigned are the operators. There will still be room for engineers and supervisors. Settling for OK-In-Class Too often organizations choose benchmarking partners who are not best-in-class. Organizations get involved in benchmarking when they decide that one or more of their processes is much inferior to the best-in-class. The intention is to examine that best-inclass process and adapt it to local need, quickly bringing your organization up to worldclass standards in that process area. It makes no sense to link with a partner whose process is just good. It may be better than yours, but if adopted, it still leaves your organization far below best-in-class. For the same amount of effort, an organization could have made it to the top. Organizations should identify the best and go for it. Improper Emphasis A frequent cause of failure in benchmarking is that teams get bogged down in collecting endless data and put too much emphasis on the numbers. Both data collection and the actual numbers are important, of course, but the most important issue is the process itself. Keep the emphasis on the process, with data and numbers supporting that emphasis. Insensitivity to Partners 134 Nothing will break up a benchmarking partnership quicker than insensitivity. Remember that a partner is doing your organization a favor by giving access to its process. You are taking valuable time from the partner's key people, and at best you are disrupting the routine of daily business. If you fail to observe protocol and common courtesy in all transactions, your organization runs the risk of being cut off. Limited Top Management Support This issue keeps coming up because it is so critical to success at all stages of the benchmarking activity. Unwavering support from the top is required to get benchmarking started, to carry it through the preparation phase, and finally to secure the promised gains. 135 Chapter Twenty-One JUST-IN-TIME/LEAN MANUFACTURING (JIT/LEAN) 1. Define JIT/Lean. JIT/Lean is a management philosophy that seeks to eliminate all forms of waste in manufacturing processes and their support activities. It permits the production of only what is needed, only when it is needed, and only in the quantity needed. 2. Explain the difference between the traditional production system and JIT/Lean in terms of placement of production control. The traditional process places a big supply of input materials in the warehouse, doling it out to the production line at the rate of so many pieces per unit time. Each processing stage pushes its output into the succeeding stage. Just-In-Time/Lean approaches the manufacturing process from the opposite end of the line. Rather than push materials into the processes, storing them whenever they cannot be accommodated, JIT/Lean controls the line from the output end. Input materials are pulled from supplying processes in the exact quantity needed, and no more. Therefore, no production process ever overproduces, or produces before a demand is made. There are no stored materials, therefore, no spoilage or obsolescence and waste is eliminated. 3. Describe the bases for production scheduling for mass production systems and for JIT/Lean. Mass production manufacturers set their production schedules based on a forecast of future needs, which in turn is based on historical data and trend analysis. The whole procedure is one of pushing. JIT/Lean, on the other hand is a pull system. The production demand comes from the customer (internal and external). Each process and each supplier is allowed to furnish only the quantity of its output needed by the succeeding process. 4. Explain how a JIT/Lean process knows when and how much to produce. The customer controls the line, because nothing is built until there is an order for it. After the order is received for a product, the final assembly process is turned on to put together the required number of units. The final production process pulls the required input materials from the supplying process(es)--only enough to make the required units, and no more and no less. 5. What two fundamental advantages are provided by JIT/Lean? Improved quality, and lower costs. 6. List the seven wastes enumerated by Taiichi Ohno. 1. Overproducing 2. Waiting (Time) 3. Transporting 4. Processing itself 5. Having unnecessary stock on hand 6. Using unnecessary motion 7. Producing defective goods 136 7. Identify the two pillars of the Toyota Production System.Autonomation and Just-InTime/Lean 8. Explain how mass production contributes to the seven wastes.Mass production is prone to overproducing, having people or materials waiting, transporting work in process back and forth across the plant, using inefficient processing, maintaining costly inventories of stock on hand, requiring non-value added motion because lines were set up to accommodate products, not workers, and producing defective goods because the line must continue to move. The words in italics represent the seven wastes. 9. Explain how JIT/Lean impacts each of the seven wastes. There is no overproduction since nothing is produced until a customer (internal or external) needs it. Waiting time is eliminated by not producing until needed. Transporting is greatly reduced since there is no requirement for moving WIP to-from storage areas. No inefficient processes are allowed under JIT/Lean. All processes are continually improved. JIT/Lean prohibits stock on hand that is beyond the immediate need. Unnecessary motion is eliminated by setting up the line in compact cells. There is a lower potential for runs of defective goods since a problem would stop the line immediately, and restart only after the problem is solved. 10. Discuss JIT/Lean’s vulnerability to parts shortages, breakdowns, bottlenecks from the perspective of the mass production advocate, and the JIT/Lean advocate. JIT/Lean, with no buffer stock of parts, is too precarious. One missing part, or a single failure of a machine (since there are no stores of parts) causes the JIT/Lean line to stop. It was this very idea that represented the power of JIT/Lean to Ohno. It meant that there could be no work-arounds for problems that did develop, only solutions to problems. It focused everyone concerned with the production process on anticipating potential problems, and developing solutions to prevent them. As long as the factory has the security buffer of a warehouse full of parts that might be needed, problems that interrupt the flow of parts to the line do not get solved because they are hidden by the buffer stock. When that buffer is eliminated, the same problems become immediately visible, take on a new urgency, and solutions emerge: solutions that not only fix the problem for this time, but for the future as well. In a conventional manufacturing plant, a bottleneck process is one that goes as fast as it can all the time, barely keeping up with demand. If it breaks down, there is real trouble. To keep it running, and to attempt to find ways to increase its output, the bottleneck receives attention out of proportion to the rest of the plant, monopolizing the efforts of engineering and management In a JIT/LEAN plant, all processes are potential bottlenecks in the sense just discussed, because there is little excess capacity, and there are no buffer stocks to fall back on when a process or machine shuts down. The upside of this is that all JIT/Lean processes are constantly under scrutiny: none are ignored. 11. Explain the push system and what triggers it to start. 137 The marketing forecast tells the factory what to produce and in what quantity; raw materials and parts are purchased, stored, forced into the front end of the production process, and subsequently pushed through each succeeding step of the process, until finally the completed product arrives at the shipping dock. It is hoped that by then there are orders for these goods, or they will have to either be stored or pushed (forced) into the dealers' hands, a widespread practice in the automobile business. The whole procedure, from imperfect forecast of marketability to the warehouse or the dealer is one of pushing. 12. Explain the pull system and how it is started.The production schedule does not originate in a market forecast, although a great deal of market research is done to determine what customers want. The production demand comes from the customer. The demand is made upon the final assembly process by pulling finished products out of the factory. The operators of that process in turn, place their pull demands on the preceding process, and that cycle is repeated until finally the pull demand reaches back to the material and parts supplier. Each process and each supplier is allowed to furnish only the quantity of its output needed by the succeeding process. 13. Why is superior machine maintenance and improvement critical to JIT/Lean? JIT/Lean cannot tolerate machine breakdowns or performance deterioration since there are no buffer stocks. Allowing a machine to produce defective parts is to permit the production of waste, and that, above all, is forbidden. The machines have to be kept in top shape through a systematic Total Productive Maintenance (TPM) process. TPM even predicts when parts should be replaced or adjustments made to maintain highest quality output. Machine improvement is a part of continual process improvement. 14. Describe how kanban supports the pull system. Kanban is a Japanese word meaning card. Kanbans are used to trigger activity and the flow of materials/parts from one process to another. When a succeeding process uses the output of the preceding process, it issues a kanban to the preceding process to produce another. 15. What are the advantages of reduced setup time? Too much setup time wastes valuable machine time, and prevents product flexibility on the line. By reducing setup time (which could be several hours or even longer) to a few minutes solves both problems. Lines can switch from model to model in accordance with customer orders, and the machines can be more fully utilized. 16. Why does this book recommend that JIT/Lean be a part of a total quality system? JIT/Lean was conceived as a total management system, not just for the manufacturing floor. Isolating JIT/Lean from the rest of the management system will not allow it to fully develop and mature. In order for JIT/Lean to bring about the benefits inherent in its philosophy, it should be part of a Total Quality Management system. 17. Describe JIT/Lean’s objectives relative to inventory and WIP. Without some inventory, you have nothing from which to produce your goods. The real objective of JIT/Lean is to minimize the inventory to the maximum possible extent without shutting down production. In practice, modern plants may have only a few minutes to a 138 few hours of materials inventory as opposed to the weeks-to-months supply in the traditional system. WIP includes all materials and parts that have been put into the production system, including the various stages from the first process to the last within the factory. WIP may be at a workstation undergoing one of the value-adding production processes, or it may be in storage between processes. In a mass production plant, the stored WIP can be substantial. 18. Discuss the relative complexity of the two production systems. The JIT/Lean system is simpler, eliminating whole functions such as material control, production control, warehousing/stocking, and so on. The simplicity of JIT/Lean production is most evident on the factory floor. In a mass production plant, or even a conventional job shop (low-volume, high-variety shops), it is almost impossible to tell from the factory floor how things are going relative to schedules. Parts of any product may be in any number of disparate locations in the plant at any given time--in the machine shop, welding shop, on the line, etc., or in storage. Computers keep track of it all, but even then it is difficult to track a given product through the plant, or to track its status at a given point in time. On the other hand, JIT/Lean, being a very visual process, makes tracking easy even without computers. Parts have no place to hide in a JIT/Lean factory. 19. Explain cycle time, and list its constituent elements. Production time is defined as the period bounded by the time materials are sent to the manufacturing floor for the making of a product, and the time the finished goods are dispatched from the manufacturing floor to a customer or to finished goods storage. Generally speaking, the shorter the production cycle time, the lower the production cost Short cycles improve a factory's ability to respond quickly to changing customer demands. The less time a product spends in the production cycle, the less chance there is for damage. 20. Why is a JIT/Lean production line-stop considered a positive phenomenon? JIT/Lean’s perceived weakness (not having buffer stocks available) turned out to be one of its greatest strengths because it causes problems to be immediately and highly visible, taking on an urgency to find root cause solutions. Only that kind of solution fixes the immediate problem, and prevents it’s recurrence in the future as well. 21. Explain how inventory can deter problem solving. If parts are readily available, there is no urgency to permanently solve problems. The very presence of these inventories masks the problems, so they go unnoticed and unresolved-- being repeated over and over, consuming unnecessary labor and lowering product quality. 22. Describe the difference in plant organizational layout between the two production systems.JIT/Lean organizes the factory floor by product. That is each product has its own self sufficient cell in which the product is produced. Compact and designed for easy interaction by the process operators. The traditional plant is usually organized by process, such as stamping, machining, welding, assembling, etc. The WIP must travel back and forth between these processes, and there is little opportunity for interaction by operators, etc. Inefficient. 139 23. Explain how JIT/Lean can cause immediate cycle time reduction. Wait time in storage (which builds cycle time) is simply not a factor in JIT/Lean, because nothing is produced in advance of its need by the succeeding process. That single factor can easily remove 80-90 percent of the cycle time in a traditional factory. Any contributor to cycle time is quickly apparent in a JIT/Lean environment, and it will be dealt with immediately. 24. To whom is credit given for the development of the JIT/Lean system? Taiichi Ohno. 25. Discuss the relative value of JIT/Lean in production environments of little or no automation versus those that are highly automated. JIT/Lean and automation are compatible. Automation can be used in a JIT environment very effectively. The same fundamentals apply equally to human or machine controlled processes, and the same benefits can be derived from using the humans or robots in a JIT/Lean environment. 140 Chapter Twenty-Two IMPLEMENTING TOTAL QUALITY MANAGEMENT 1. What is meant by the statement, "We are bound to a short-term focus?" Most organizations are driven by short-term objectives. This statement suggests that everything we do has to have a measurable payback in the next quarter or the next year, or it cannot be justified. 2. How does the traditional approach to doing business equate quality with higher cost? Organizations that have successfully changed themselves into total quality enterprises have found that quality is not just free, but it also brings unforeseen benefits. Sadly, though, many traditional managers still feel that if you want better quality, it will increase costs. 3. Differentiate between leadership and bossmanship. Traditional managers see their jobs as simply telling subordinates what to do and when to do it, rather than providing good leadership, which entails facilitating, coaching, and providing the necessary tools and training. 4. List and explain the requirements for total quality implementation. Commitment by Top Management For a total quality implementation to be successful there must be a full and unwavering commitment by the person at the very top of the organization to do it and to see it through--all the while backing up the commitment with action. Only that person can commit the resources and resolve the inevitable cross-functional issues. Commitment of Resources Total quality implementation need not be expensive, but everything has a cost, and there must be a commitment by management to provide for the necessary training, employee time, and so forth. Organization-Wide Steering Committee A total quality implementation requires a lot of planning, and management. This should be done by a top-level steering committee. It should be chaired by the person filling the top position in the structure and its membership comprised of that person's direct subordinates. The steering committee is to establish how total quality is to be implemented, and then see that it happens. Planning and Publicizing Before the implementation begins, the steering committee must develop the Vision Statement, the Broad Goals and Objectives, an Implementation Plan, an Awards and Recognition Program, and a Publicity Approach. Infrastructure that Supports Deployment and Continual Improvement With commitment from the top, a high-level steering committee, a set of plans for at least the early phases of implementation and the means of providing the required training, the final requirement is the infrastructure that will support the deployment of total quality throughout the organization and continual improvement on a neverending basis. The existing infrastructure will probably not be completely supportive 141 of the total quality implementation, and it may be necessary to change procedures, alter the organization, and/or deal with union considerations. 5. Describe the necessary components of an infrastructure that supports deployment and continual improvement. Procedures Virtually all organizations should operate in accordance with procedures. In many traditional organizations their procedures will have been developed in another culture, and they may not support total quality. These must be re-written. Some key processes may not have documented procedures at all. In that case, new procedures must be developed. Organization The typical U.S. and European organizational hierarchy does not fit with total quality. As total quality implementation progresses, you may find it necessary to alter your organization. Walls which have been around the departments over the years (as communication barriers) may need to be eliminated. Union Considerations In organizations with organized labor, the union is an inherent part of the infrastructure. The natural bent of the labor unions makes it difficult for them to accept the changes necessary for maximum benefit of total quality. 6. What is the role of top management in the implementation of total quality? Leadership: pulling, rather than pushing; knowing where they want to go; being courageous and trustworthy; forming the vision; setting the course, and helping people do their jobs with pride. The role of the leader is not to dictate, but to facilitate. 7. What is the role of middle management in the implementation of total quality? Leadership: dealing with the facilities, equipment, and processes put in place by higher management; operating within budget constraints for training self and subordinates. The middle manager must facilitate his or her people to do their jobs better, easier, and with increased satisfaction. He or she must help, teach, encourage, praise, and, most importantly, listen to those people. Middle managers often function as project team leaders, seeking to define and characterize processes, and finding ways to improve them or to take on a wide variety of special total quality projects. 8. List the implementation preparation steps that follow after the vision statement and broad objectives have been developed. Step 7. Communicate and publicize. Step 8. Identify organizational strengths and weaknesses. Step 9. Identify the probable advocates and resisters of total quality. Step 10. Baseline employee satisfaction and attitudes. Step 11. Baseline customer satisfaction. 142 9. List and briefly explain implementation approaches that should be avoided.  Don't train all your employees at once. Most employees will be unable to do anything with it for months or years. They will forget the training, and will be discouraged. The right way to do it is train small groups of employees just as they need it.  Don't rush into total quality by deploying too many teams. Teams should be formed deliberately as needed to take on specific issues or problems as directed by the steering committee. Don't worry about how many teams you have, only about results.  Total quality implementation must not be delegated. A successful total quality implementation requires both complete commitment and active, personal, day-in, day-out involvement by top management and staff.  Don’t start an implementation before you are prepared. Plunging into anything as technically and sociologically complex as total quality without first having a grasp of the subject will guarantee failure. Be sure the first step is becoming educated on the subject of total quality before attempting to implement. 10. Implementation of total quality happens in phases. Explain each phase in the order it occurs. The Preparation Phase This implementation phase is founded on top management’s commitment to proceed, and establishes the leadership structure for the implementation, provides for necessary training of the leaders, develops the direction and long range goals of the organization, identifies the employees most likely to advocate or to resist, identifies organizational strengths and weaknesses, baselines employee and customer satisfaction, and informs employees of the intent of the implementation and how it will affect them. The Planning Phase The steering committee determines the implementation approach to be taken, identifies improvement projects, forms, trains, and activates the teams. This phase also forms the part of the Plan-Do-Check-Adjust cycle where management keeps track of what is going on and whether some adjustment is required. This phase operates forever. The Execution Phase In this phase the teams execute their assignments, providing feedback to the steering committee. The steering committee also receives input from the customer and employee satisfaction loops. From all these inputs the steering committee also determines what infrastructure changes may be required. This phase also operates forever. 11. How can ISO 9000 registration be useful to a total quality implementation? ISO 9000 registration requires, for most organizations, a lot of work. If starting without any written procedures, if processes are not well-documented, and if there is no quality system or quality manual, an organization faces an uphill battle. But the work required is work that must be done for total quality anyway. ISO 9000 preparation can get an organization started on a total quality implementation. 143 12. List the seven categories of criteria for the Malcolm Baldrige National Quality Award. The Malcolm Baldrige National Quality Award evaluates competitors for the award according to criteria in seven categories as follows: Leadership; Strategic Planning; Customer Focus; Measurement, Analysis, and Knowledge Management; Workforce Focus; Operations Focus; and Results. 144 CHAPTER 1  What is Quality? - One way to understand quality as a consumer-driven concept is to consider the example of eating at a restaurant. How will you judge the quality of the restaurant? Most people apply such criteria as the following: 1- Service 2- Response time 3- Food preparation 4- Environment or atmosphere 5- Price 6- Selection  Quality has been defined in a number of ways:  Fred Smith, CEO of Federal Express, defines quality as “performance to the standard expected by the customer.”  The General Services Administration (GSA) defines quality as “meeting the customer’s needs the first time and every time.”  Boeing defines quality as “providing our customers with products and services that consistently meet their needs and expectations.”  The U.S. Department of Defense (DOD) defines quality as “doing the right thing right the first time, always striving for improvement, and always satisfying the customer.”  What is Quality? - Although there is no universally accepted definition of quality, enough similarity does exist among the definitions that common elements can be extracted: 1- Quality involves meeting or exceeding customer expectations. 2- Quality applies to products, services, people, processes, and environments. 3- Quality is an ever-changing state (i.e., what is considered quality today may not be good enough to be considered quality tomorrow).  With these common elements extracted, the following definition of quality can be set forth: 1- Quality is a dynamic state : associated with products, services, people, processes, and environments that meets or exceeds expectations and helps produce superior value. 2- The dynamic state : element speaks to the fact that what is considered quality can and often does change as time passes and circumstances are altered  The Total Quality Approach Defined - Just as there are different definitions of quality, there are different definitions of total quality. - The DOD defines the total quality approach as follows: - Total quality consists of the continual improvement of people, processes, products (including services), and environments. With total quality anything and everything that affects quality is a target for continual improvement. When the total quality concept is effectively applied, the end results can include organizational excellence, superior value, and global competitiveness.  Total quality : is a much broader concept that encompasses not just the results aspect but also the quality of people and the quality of processes.  Total quality : is an approach to doing business that attempts to maximize an organization’s competitiveness through the continual improvement of the quality of its products, services, people, processes, and environments. 145  Key Elements Of Total Quality - The total quality approach has the following characteristics: 1- strategically based 2- customer focus 3- obsession with quality 4- scientific approach 5- long-term commitment 6- Teamwork 7- employee involvement and empowerment 8- continual process improvement 9- bottom-up education and training 10- freedom through control 11- unity of purpose.  Product Quality Dimensions 1- Performance – Efficiency with which a product achieves its intended purpose 2- Features – Attributes of a product that supplement the product’s basic performance 3- Reliability – The propensity for a product to perform consistently over its useful design life 4- Conformance – Commitment to certain numeric dimensions for the product’s performance 5- Durability – The degree to which a product tolerates stress or trauma without failing 6- Serviceability – The ease of repair for a product 7- Aesthetics – The degree to which product attributes are matched to consumer preferences 8- Perceived quality – A customer’s understanding of the goodness of a product  Service Quality Dimensions : 1- Tangibles – The physical appearance of the service facility, the equipment, the personnel, and the communication materials 2- Service reliability – The ability of the service provider to perform the promised service dependably and accurately 3- Responsiveness – The willingness of the service provider to be helpful and prompt in providing service 4- Assurance – The knowledge and courtesy of employees and their ability to inspire trust and confidence 5- Empathy (Sympathy) – Caring, individualized attention from the service firm  Total Quality Pioneers : - Total quality is not just one individual concept. It is a number of related concepts pulled together to create a comprehensive approach to doing business. - Many people contributed in meaningful ways to the development of the various concepts that are known collectively as total quality. - The three major contributors are: 1- W. Edwards Deming 2- Joseph M. Juran 3- Philip B. Crosby  The Deming Cycle - The Deming Cycle was developed to link the production of a product with consumer needs and focus the resources of all departments (research, design, production, marketing) in a cooperative effort to meet those needs.  The Deming Cycle proceeds as follows: 146 1- The Deming Cycle proceeds as follows: 2- Conduct consumer research and use it in planning the product (Plan). 3- Produce the product (Do). 4- Check the product to make sure it was produced in accordance with the plan (Check). 5- Market the product (Act). 6- Analyze how the product is received in the marketplace in terms of quality, cost, and other criteria (Analyze).  The Juran Trilogy  The Juran Trilogy summarizes the three primary managerial functions: 1- Quality Planning 2- Quality Control 3- Quality Improvement  Quality Planning - Quality planning involves developing the products, systems, and processes needed to meet or exceed customer expectations. The following steps are required: 1- Determine who the customers are. 2- Identify customers’ needs. 3- Develop products with features that respond to customer needs. 4- Develop systems and processes that allow the organization to produce these features. 5- Deploy the plans to operational levels.  Quality Control - The control of quality involves the following processes : 1- Assess actual quality performance. 2- Compare performance with goals. 3- Act on differences between performance and goals  Quality Improvement - The improvement of quality should be ongoing and continual : 1- Develop the infrastructure necessary to make annual quality improvements. 2- Identify specific areas in need of improvement, and implement improvement projects. 3- Establish a project team with responsibility for completing each improvement project. 4- Provide teams with what they need to be able to diagnose problems to determine root causes, develop solutions, and establish controls that will maintain gains made.  Crosby’s Contributions - Emphasized the zero-defects approach and the behavioral and motivational aspects of quality improvement rather than statistical approach - He is also known for his Quality Vaccine and Crosby’s Fourteen Steps to Quality Improvement. - Crosby’s Quality Vaccine consists of three ingredients: 1- Determination 2- Education 3- Implementation  Crosby’s 14 Steps : 1- Make it clear that management is committed to quality. 2- Form Quality Improvement Teams with senior representatives from each department. 147 3- Measure processes to determine where current and potential quality problems lie. 4- Evaluate the cost of quality and explain its use as a management tool. 5- Raise the quality awareness and personal concern of all employees. 6- Take actions to correct problems identified through previous steps. 7- Establish progress monitoring for the improvement process. 8- Train supervisors to actively carry out their part of the quality improvement programme. 9- Hold a Zero Defects Day to reaffirm management commitment. 10- Encourage individuals to establish improvement goals for themselves and for their group. 11- Encourage employees to tell management about obstacles to improving quality. 12- Recognise and appreciate those who participate. 13- Establish Quality Councils to communicate on a regular basis. 14- Do it all over again to emphasise that the quality improvement process never ends  The Future of Quality Management : - There are several trends that will shape the future of quality management. These trends are as follows: 1- Increasing global competition - More and better competition from emerging industrialized nations will be an ongoing part of life for organizations. 2- Increasing customer expectations —Today’s global customer is interested in not just the quality of a product provided but also the quality of the organization that backs it up. 3- Opposing economic pressures —The key to achieving higher quality and lower prices for customers is the reduction of the expenses associated with satisfying unhappy customers—expenses that amount to as much as 25% of the cost of sales in many companies. 4- New approaches to management — Companies that succeed in the global marketplace have learned that you manage budgets, but lead people  Quality Management Characteristics for the Future : - Such companies will have the following characteristics: 1- A total commitment to continually increasing value for customers, investors, and employees. 2- A firm understanding that market driven means that quality is defined by customers, not the company. 3- A commitment to leading people with a bias for continuous improvement and communication. 4- A recognition that sustained growth requires the simultaneous achievement of four objectives continually forever: (a) customer satisfaction, (b) cost leadership, (c) effective human resources, and (d) integration with the supplier base. 5- A commitment to fundamental improvement through knowledge, skills, problem solving, and teamwork . 6- A commitment to fast-paced, constant learning, and an ability to respond quickly to changes in the competitive environment. 7- A commitment to achieving end-to-end collaboration using web-based, on-demand tools that are fully integrated throughout the supply chain. 8- A commitment to maintaining an environment in which creativity, critical thinking, and innovation are not just encouraged and supported, but demanded.  Quality Certifications - The American Society for Quality (ASQ) offers certifications in a variety of disciplines including: 1- Manager of Quality/Organizational Excellence 148 2- Quality Engineer 3- Quality Technician 4- Reliability Engineer 5- Software Quality Engineer 6- Quality Auditor 7- Six Sigma Black Belt 8- Six Sigma Green Belt 9- Calibration Technician 10- Quality Improvement Associate  Manager of Quality/Organizational Excellence - This certification is for managers who lead and champion continual processimprovement initiatives, facilitates and leads team efforts to establish and monitor customer and supplier relations, supports strategic planning and deployment efforts, assists in the development of measurement systems, motivates staff, evaluates staff, manages projects, manages human resources, analyzes budgets and finances, evaluates risk, and uses management tools and techniques.  Quality Engineer - The Quality Engineer certification is for individuals who develop and operate quality control systems, apply and analyze testing and inspection procedures, use metrology and statistical systems to diagnose and correct quality problems, understand human factors and motivation, understand quality cost techniques, develop and administer management information systems, and audit quality systems for identifying deficiencies and correcting them.  Quality Technician - This certification is for paraprofessionals who—under the direction of quality engineers and managers—analyze and solve quality problems, prepare inspection plans and instructions, select applications for sampling plans, prepare procedures, train inspectors, perform audits, analyze quality data, analyze quality costs, and apply basic statistical methods for process control. CHAPTER 2  The Relationship Between Quality And Competitiveness : 1- The relationship between quality and competitiveness can be summarized as follows: In a modern global marketplace, quality is the key to competitiveness. 2- At each successive level of competition the quality of the competitors increased. 3- Companies that used to compete only on a local, regional, or national level now find themselves competing against companies from throughout the world. 4- In practical terms, it is extremely important for a country’s businesses to be able to compete globally.  Cost of Poor Quality - The costs of poor quality include the following: - waste, rejects, retesting, rework, customer returns, inspection, recalls, excessive overtime, pricing errors, billing errors, excessive turnover, premium freight costs, development cost of the failed product, field service costs, overdue receivables, handling complaints, expediting, system costs, planning delays, late paperwork, lack of 149 follow-up, excess inventory, customer allowances, and unused capacity.  The following steps can be used to measure the costs of poor quality so that selected improvement projects have the highest priority: 1- Identify all activities that exist only or primarily because of poor quality. 2- Decide how to estimate the costs of these activities. 3- Collect data on these activities and make the cost estimates. 4- Analyze the results and take necessary corrective actions in the proper order of priority.  Factors Inhibiting Competitiveness - Factors inhibitors are socioeconomic and sociopolitical in nature. - Factors inhibitors fall into the following categories: 1- Business- and Government-Related Factors 2- Family-Related Factors 3- Education-Related Factors  Business- and Government-Related Factors - Business-related inhibitors will require business and government to work together in a positive, constructive partnership to enact policies that will reduce these non–valueadded costs to a minimum.  Family-Related Factors 1- Human resources are a critical part of the competitiveness equation. 2- One of the most important factors in fielding a competitive company is having the best possible employees. 3- The more knowledgeable, skilled, motivated, and able to learn members of the labor pool are, the better. 4- Parents who must work full-time have little or no time to help their children excel in school. 5- Children with parents who do not value education are unlikely to value it themselves.  Education-Related Factors 1- The quality of a country’s education system is a major determinant of the quality of its labor pool. 2- The higher the quality of the labor pool, the higher the quality of entry-level employees. 3- The higher the quality of entry-level employees, the faster they can become productive employees and contribute to the competitiveness of their employers. 4- Consequently, a high-quality education system is an important component of the competitiveness equation.  Comparisons of International Competitors - When making comparisons among internationally competing countries, the following indicators are usually used: 1- Standard of living 2- Manufacturing productivity 3- Investment 4- Trade  Human Resources And Competitiveness 150 - The most important key in maximizing competitiveness is the human resource. - Following World War II, this was the only resource that Germany and Japan had to draw on. Consequently, they built economic systems that encourage private employers to make business decisions that emphasize improved productivity and quality, rather than price 1- Cooperation among business, labor and government 2- High quality education and training 3- Employee involvement and empowerment 4- Leadership at all levels 5- Teamwork  Management-by- Accounting: Antithesis of Total Quality - Management by accounting puts organizations at a competitive disadvantage in the following ways: 1- It creates an analytically detached approach to decision making in which managers study financial printouts instead of gaining the insight that comes from firsthand knowledge of the situation. 2- It promotes a focus on short-term cost reduction to the exclusion of long-term improvements to people and processes. 3- It makes for narrowly focused managers who view every problem from a finance and accounting perspective when what is needed by organizations that must compete globally is a broadly focused view that integrates many functions, such as marketing, production, finance, and human resources CHAPTER 4  Definition and Overview of Ethics - Ethics : is about doing the right thing within a moral framework. - In other words, it is the practical application of morality. - Ethics : is the study of human behavior within a moral context. - Morality refers to the values that are subscribed to and fosters by society in general and by individuals within the society - Ethics : attempts to - apply reason in determining rules of human behavior that translate morality into everyday behavior. - Ethical Behavior – It is that which falls within the limits prescribed by widely accepted moral values.  Organizational factors that contribute to unethical behavior: 1- Failing to make ethics part of the organization’s core value 2- Failing to set a consistent positive example 3- Putting personnel in ethical ‘corners’ 4- Failing to adopt, deploy, and enforce a corporate code of ethics that provides specific guidance for personnel 5- Applying unrealistic pressure 6- Failing to reward ethical behavior  Trust and Total Quality - The total quality approach cannot be successfully implemented in an organization that fails to subscribe to high standards of ethical behavior. This because ethical behavior builds trust, and trust is an essential ingredient in total quality. - Ethics : plays a critical role in the successful application of total quality.  Elements of total quality that depend on trust: 1- Communication 2- Interpersonal relations 3- Conflict management 4- Problem solving 151 5- Teamwork 6- Employee involvement and empowerment 7- Customer focus  Trust : is a critical element of ethics, which, in turn, makes ethics critical in total quality.  Trust : can be built by being loyal to those not present, keeping promises, and sincerely apologizing when necessary.  If the trust that results from ethical behavior is so important to total quality, then it follows that modern managers need to be good trust builders.  Managers who are not trusted will be ineffective at fulfilling these responsibilities.  Vaues, integrity, and responsibility and total quality - Values : are those core beliefs that guide our behavior. Individuals and organization apply their knowledge and skills most willingly to efforts in which they believe. Managers should work to establish an environment in which values that lead ethical behavior and values that lead to peak performance are the same - Integrity : is a combination of honesty and dependability. People with integrity can be counted on to do the right thing, do it correctly, and do it on time - Accepting responsibility : is part of ethical behavior. People who pass blame are not behaving ethically. In total quality setting, people responsible for their performance. When speaking of their organization , ethical people say ‘we’ instead of ‘they’.  Manager’s Role in Ethics - Managers : play a key role in ethics in an organization. - Deciding what is ethical is much easier than actually doing what is ethical. - Managers and professionals in organizations are responsible for following through and actually exemplifying ethical behavior. - Managers have three main responsibilities: 1- Setting an example of ethical behavior 2- Helping employees make ethical choices 3- Helping employees follow through and exhibit ethical behavior after the appropriate choice has been made.  Three approaches managers can use in carrying out their responsibilities relating to ethics: 1- Best-Ratio Approach 2- Black-and-White Approach 3- Full-Potential Approach  The best-ratio approach : is a pragmatic approach based on the belief that people are basically good, that in the right circumstances they will behave ethically, and that under certain conditions they can be driven to unethical behavior.  With the black-and-white approach : right is right, wrong is wrong, and conditions are irrelevant.  With the full-potential approach : decisions made are based on how they will affect the ability of those involved to achieve their full potential. CHAPTER 4  Ethics is about doing the right thing within a moral framework.  In other words, it is the practical application of morality.  Ethics is the study of human behavior within a moral context. - Morality refers to the values that are subscribed to and fosters by society in general and 152 by individuals within the society  Ethics attempts to - apply reason in determining rules of human behavior that translate morality into everyday behavior.  Ethical Behavior – It is that which falls within the limits prescribed by widely accepted moral values.  Oganizational factors that contribute to unethical behavior : 1- Failing to make ethics part of the organization’s core value 2- Failing to set a consistent positive example 3- Putting personnel in ethical ‘corners’ 4- Failing to adopt, deploy, and enforce a corporate code of ethics that provides specific guidance for personnel 5- Applying unrealistic pressure 6- Failing to reward ethical behavior  Trust and Total Quality - The total quality approach : cannot be successfully implemented in an organization that fails to subscribe to high standards of ethical behavior. This because ethical behavior builds trust, and trust is an essential ingredient in total quality. - Ethics plays a critical role in the successful application of total quality.  Elements of total quality that depend on trust : 1- Communication 2- Interpersonal relations 3- Conflict management 4- Problem solving 5- Teamwork 6- Employee involvement and empowerment 7- Customer focus  Trust : is a critical element of ethics, which, in turn, makes ethics critical in total quality.  Trust : can be built by being loyal to those not present, keeping promises, and sincerely apologizing when necessary.  If the trust that results from ethical behavior is so important to total quality, then it follows that modern managers need to be good trust builders.  Managers who are not trusted will be ineffective at fulfilling these responsibilities.  Values, integrity, and responsibility and total quality - Values are those core beliefs that guide our behavior. Individuals and organization apply their knowledge and skills most willingly to efforts in which they believe. Managers should work to establish an environment in which values that lead ethical behavior and values that lead to peak performance are the same - Integrity is a combination of honesty and dependability. People with integrity can be counted on to do the right thing, do it correctly, and do it on time - Accepting responsibility is part of ethical behavior. People who pass blame are not behaving ethically. In total quality setting, people responsible for their performance. When speaking of their organization , ethical people say ‘we’ instead of ‘they’.  Manager’s Role in Ethics - Managers play a key role in ethics in an organization. - Deciding what is ethical is much easier than actually doing what is ethical. - Managers and professionals in organizations are responsible for following through and actually exemplifying ethical behavior. - Managers have three main responsibilities : 1- Setting an example of ethical behavior 2- Helping employees make ethical choices 3- Helping employees follow through and exhibit ethical behavior after the 153 appropriate choice has been made  Three approaches managers can use in carrying out their responsibilities relating to ethics : 1- Best-Ratio Approach 2- Black-and-White Approach 3- Full-Potential Approach  The best-ratio approach : is a pragmatic approach based on the belief that people are basically good, that in the right circumstances they will behave ethically, and that under certain conditions they can be driven to unethical behavior.  With the black-and-white approach: right is right, wrong is wrong, and conditions are irrelevant.  With the full-potential approach : decisions made are based on how they will affect the ability of those involved to achieve their full potential.  Organization’s Role in Ethics : - The organization’s role in fostering ethical behavior includes creating an ethical environment and setting an ethical example. Key in creating an ethical environment is having a comprehensive ethics policy. - The organization’s responsibilities are to : 1- Create an ethical environment in which stakeholders know that they will be supported when making ethical choices and 2- Ensure that all people in positions of authority in the organization set an example of living up to the highest ethical standards.  Organization’s Role in Ethics - An organization creates an ethical environment by establishing policies and practices that ensure that all employees are treated ethically and then by enforcing those policies. - Key in setting an example is following the policy, expecting all employees to follow the policy, and rewarding those who do.  Handling Ethical Dilemmas - In handling ethical dilemmas, managers should select the option that is most likely to build trust, integrity, and a sense of responsibility and that is most likely to pass the various ethics tests. - Managers response to ethical dilemma is very important.  Handling Ethical Dilemmas : - Following are the guidelines, managers can use in such situations  Ethics Training & Codes of Business Conduct 1- Ethics Training - Ethical behavior and the rationale for it can be taught. - Ethics training is becoming increasingly important as the pressures of succeeding in an intensely competitive global marketplace grow. - In ethics training : 1- Stimulate discussion 2- Facilitate, don’t preach 3- Integrate ethics training 4- Highlight practical applications 2- Code of Business Conduct - Written Codes of Business conduct encourage employees to do the right thing.  Models for Making Ethical Decisions - Decision making models used for determining ethical behavior can differ just as the values of organizations do. - Most widely used models are: 154 1- Categorical Imperative Model – black-and-white model 2- Full Disclosure Model – functional criterion 3- Doctrine of Mean Model – Average between 2 extremes 4- Golden Rule Model – Do unto others as you would have them do unto you 5- Market-Ethic Model – Any legal action that promotes profitability-ethical 6- Organizational Ethic Model – Loyalty to organization 7- Equal Freedom Model – Organizations have freedom to behave 8- Proportionality Ethic Model – World is so complex, decisions are not clear 9- Professional Ethic Model – Principle of peer review  Beliefs Versus Behavior : - Ethics in the workplace manifests itself through the application of such values as honesty, loyalty, fairness, caring, respect, tolerance, and duty. - Most, but not all, people subscribe to these values. - Several Reasons explain the disparity like : 1- Self-Interest/Self-Protection 2- People are, by their very nature, self-interested and, as a result, self-protective. 3- Conflicting Values 4- People who believe in ethical values sometimes find themselves in situations where these values seem to conflict. 5- Tangible or Intangible, Immediate or Deferred 6- People frequently make decisions that run counter to their beliefs because the benefits of ethical decisions are often intangible or deferred. 7- Making Ethics Tangible and Immediate 8- The challenge to the management is to help employees see that the benefits of ethical behavior are tangible and that even when deferred they still accrue.  Corporate Social Responsibility Defined : - Corporate social responsibility(CSR) : is a balance approach for organizations to address economic, social and environmental issues in a way that aims to benefit people, communities and society - Key elements of CSR include the ethical aspects of the following business and workplace issues : 1- Human rights 2- Occupational safety and health 3- Business practices 4- Governance 5- Environmental management 6- Consumer relations 7- Marketplace activities 8- Community involvement 9- Social development CHAPTER 7  Understanding who is a Customer 155 - The competitor to be feared is the one who never bothers about you at all but goes on making his own business better all the time . Henry Ford Sr.  Understanding who is a Customer : - In a total quality setting 1- Customers and suppliers exist inside and outside the organization. 2- Any employee whose work precedes that of another employee is a supplier for that employee. 3- Any employee whose work follows that of another employee and is dependent on it in some way is a customer. - For example, say Employee A attaches several components to a printed circuit board and then hands the board to Employee B to connect the components. In this relationship, Employee A is a supplier for Employee B, and Employee B is a customer of Employee A. Employee B cannot do her job correctly unless Employee A has done his correctly. The quality of Employee A’s work affects that of Employee B. This concept of dependency is critical in the supplier—customer relationship. 4- A customer, whether internal or external, depends on suppliers to provide quality work and produce quality products.  In a total quality setting, quality is defined by the customer. When quality is defined by the customer, the following factors apply : - In a total quality setting, quality is defined by the customer. When quality is defined by the customer, the following factors apply: - The customer must be the organization’s top priority. The organization’s survival depends on the customer. - Reliable customers : are the most important customers. Reliable customer is one who buys repeatedly from the same organization. Customers who are satisfied with the quality of their purchases from an organization become reliable customers. Therefore, customer satisfaction is essential. - Customer satisfaction : is ensured by producing high-quality products. It must be renewed with every new purchase. This cannot be accomplished if quality, even though it is high, is static. Satisfaction implies continual improvement. Continual improvement is the only way to keep customers satisfied and loyal.  Understanding who is a Customer - Traditional view of suppliers and customers showing that customers and suppliers are strictly external entities  Identify External and Internal Customer Needs - Six-step strategy for identify external customer needs : 1- Speculate about results. 2- Develop an information-gathering plan. 3- Gathering the information. 4- Analyze the results. 5- Check the validity of your conclusions. 6- Take action as indicated. - Identify the needs of internal customers(employees) is done by encouraging and facilitating communication between them.  Identify External and Internal Customer Needs - Communicating with customer : continual communication with customer is essential in a competitive marketplace. Establishing effective mechanisms for facilitating communication and using them are critical strategies in establishing a customer focus. - Communication with customer must extend to both internal and external customers 156 - Communication with customers : is sometimes misunderstood as one of the basic strategies used in a total quality setting. It does not mean asking customers what new products should be invented. Customers will not tell an organization what product to produce, but they will tell the organization what they think of its products.  Communicating with Customers : - Know your customer’s operation : as supplier to other companies (customer). Its important to know their operations. The more that is known about customer's operation's. the easier it will be to provide products that meet its need. - All of the market research in the world won’t spare the entrepreneur the anxiety of dealing with the inescapable element of risk. However, having taken the risk to produce a product, communicating with customers about that product can ensure that it gets the best possible reception in the marketplace and that it changes as the needs of customers change.  Using Customer Feedback to Make Design Improvements - Quality function development and design improvement (QFD) - QFD is a model for incorporating customer input and feedback into product development. - QFD allows for: the systematic incorporation of customer needs, production capabilities and capacity, and all other relevant parameters into product development. - QFD consists of the following basic activities : 1- Deployment of customer requirements (quality needs). 2- Deployment of measurable quality characteristics. 3- Determination of the correlation between quality needs and characteristics. 4- Assignment of numerical values to each quality characteristics. 5- Integration of quality characteristics into the product. 6- Detailed design, design, production, and quality control of the product.  Customer Satisfaction Process : - Customer focus is part of a process that leads to continual improvements in organization that, in turn, result in customer satisfaction. - Customer satisfaction process : 1- Determine who your customer are. 2- Determine what attributes of your product or service are most important to your customer. 3- Arrange these attributes in the order of importance indicated by your customers. 4- Determine your customers’ level of satisfaction with each of these attributes. 5- Tie of customer feedback to your processes. 6- Develop a set of metrics ( measurements) that tell how you are performing 7- Implement measurements at the lowest possible level in the organization. 8- Work on those processes that relate to attributes that having high importance but low customer satisfaction ratings. 9- Work on area within process that offer the greatest opportunity to improve. 10- Update customer input and feedback on a continual basis. 11- Maintain open, continual communication with all stakeholders. 12- Aggregate metrics organization-wide into a format for management review.  Customer-defined Value 157 - The value of a product or service is the sum of a customer’s perceptions of the following factors : 1- Product or service quality 2- Service provided by the organization 3- The organization’s personnel 4- The organization’s image 5- Selling price of the product or service 6- Overall cost of the product or service  Customer Retention - Customer satisfaction is a fundamental cornerstone of total quality. An organisation develops a customer focus to be better able to satisfy its customer. Consequently, forward-looking organisation use customer satisfaction data to measure success. But measuring customer satisfaction alone is not enough. Another important measure of success is customer retention. - Customer satisfaction is the critical component in customer retention - Customer satisfied is not always a customer retained.  Customer retention : is the activity that a selling organization undertakes in order to reduce customer defections. Successful customer retention starts with the first contact an organization has with a customer and continues throughout the entire lifetime of a relationship. A company’s ability to attract and retain new customers, is not only related to its product or services, but strongly related to the way it services its existing customers and the reputation it creates within and across the marketplace.  Customer retention : is more than giving the customer what they expect, it’s about exceeding their expectations so that they become loyal advocates for your brand.  To retain customers over the long term, organizations must turn them into partners and proactively seek their input rather than waiting for and reacting to feedback provided after a problem has occurred  Establishing a Customer Focus - Companies that have successfully established a customer focus share a number of common characteristics : 1- Vision, commitment, and climate 2- Alignment with customers 3- Willingness to find and eliminate customers’ problems 4- Use of customer information 5- Reaching out to customers 6- Competence, capability, and empowerment 7- Continual improvement of products and processes  Recognizing the Customer-driven Organization - Characteristics of customer-driven organization 1- Reliability - an organization that dependably delivers what is promised on time every time. 2- Assurance - an organization that is able to generate and convey trust and confidence. 3- Tangibles - an organization that pays attention to the details in all aspects of its operations. 4- Empathy - an organization that conveys a real interest in its customers. 5- Responsiveness - an organization that is willingly attentive to customer needs.  Customer Loyalty 158 - Organization attempt to consistently exceed customer expectation for the purpose of creating and maintaining customer loyalty. - Customer loyalty is all about attracting the right customer, getting them to buy, buy often, buy in higher quantities and bring you even more customer - Companies work hard to build customer loyalty. - Loyal customer is a customer forever.  Customer Loyalty Model - The customer loyalty model consists of four components : 1- Business performance 2- Global perceptions 3- Loyalty behaviours 4- Financial outcomes CHAPTER 8  Differences between Services and Manufacturing : 1- Many service attributes are intangible. 2- The outputs of services are heterogeneous. 3- Production and consumption of services often occurs simultaneously. 4- Customers are more involved in the production of services. 5- Customers are often coproducers in services. 6- Service times vary widely due to varying demands. 7- Service customers can exert control over the service provider and achieve customization  Differences between Services and Manufacturing 1- External services 2- Internal services 3- Voluntary services 4- Involuntary services  Differences between Services and Manufacturing - How are service quality issues different from manufacturing? 1- It can be difficult to obtain hard data. 2- You have to do it right the first time because you cannot inspect and rework defects. 3- There is significantly more variability due to customization. 4- Service design differs. 5- Warranty and repair processes are not as important. 6- Liability centers around safety concerns (malpractice). - How are service quality issues similar to manufacturing? 1- The customer is the core of the business. 2- Customer needs provide the major input to change. - Because services’ attributes can be intangible, it is sometimes difficult to obtain hard data relating to services. In manufacturing, dimensions such as height, weight, and width are available for measurement. Conformance to these measurements implies a certain dimension of quality. However, in services, such measurable dimensions are often unavailable. - Simultaneous production and consumption of services means that you have to do it right the first time. You can’t easily inspect and rework defects in a hair salon the way you can in manufacturing. - Customer contact leads to an increase in variability in the process. This leads to a high 159 degree of customization in services as well as great variability in the time required to perform services. - Services design is also very different from design in manufacturing. - Because services involve intangibles, warranty or repair processes are not as important as recovery or reimbursement processes (see A Closer Look at Quality 8-1). Also, the design of the services must take into account such variables as customer moods and feelings because these affect customer perceptions of service quality. - Product liability issues in services are very different from manufacturing. Whereas manufacturing liability issues center around safety concerns, in services liability, issues often relate to malpractice, which refers to the professionalism of the service provider and whether reasonable measures were taken to ensure the customer’s well-being. - For both manufacturing and service firms, the customer is the core of the business, and customer needs provide the major input to design. By focusing on the customer, many manufacturers and services firms have come to view themselves as service providers. Companies from Harley-Davidson to Hewlett Packard have spent extraordinary amounts of time designing services for their customers.  What Do Service Customers Want? - Key aspects of a leader in services : 1- Service vision 2- High standards 3- In-the-field leadership style  SERVQUAL - Advantages of SERVQUAL instrument : 1- It is accepted as a standard for assessing different dimensions of services quality. 2- It has been shown to be valid for a number of service situations. 3- It has been demonstrated to be reliable, meaning that different readers interpret the questions similarly. 4- Each instrument is parsimonious in that it has only 22 items. This means that it can be filled out quickly by customers and employees. 5- Finally, it has a standardized analysis procedure to aid both interpretation and results  SERVQUAL survey : - SERVQUAL survey: - Customer expectations - 22 items - Customer perceptions - 22 items  Gap analysis: - Because services are often intangible, gaps in communication and understanding between employees and customers have a serious negative effect on the perceptions of services quality. - The key to closing gap 5 is to first close gaps 1 through 4 through system design, communication, and workforce training. - The SERVQUAL instrument is useful for performing what is called gap analysis. The model in Figure 8-3 shows the gaps that commonly occur and can affect the 160 perceptions of services quality. - Each of the gaps in the model demonstrates differences in perceptions that can have a detrimental effect on quality perceptions in services. The SERVQUAL survey instrument can be administered in a variety of ways that examine each of these gaps. For example, SERVQUAL can be used to explore differences in perceptions between customers, between managers, between managers and customers, and between employees.  Gap 1: - It shows that there can be a difference between actual customer expectations and management’s ideas or perceptions of customer expectations - Gap 1 shows that there can be a difference between actual customer expectations and management’s ideas or perceptions of customer expectations. As a customer, have you ever wanted to tell a service provider, “I don’t want you to do that; I want you to do something else?” It is very difficult for managers or employees to break out of the internal, process-oriented view of the business. Many times, improving processes does not equal improving customer service. To truly improve customer service, we must understand what the customer wants. The SERVQUAL instrument can be used to help in this understanding.  Gap 2: - Managers’ expectations of service quality may not match service quality specifications. - Managers’ expectations of service quality may not match service quality specifications. This mismatch is demonstrated in gap 2. Once managers truly understand what the customer wants, a system can be developed to help provide exactly what the customer wants. Because firms do not specify customer requirements according to a well-defined process, there is often no way to know whether customer specifications and management expectations are aligned.  Gap 3: - After services specifications have been established, the delivery of perfect services quality is still not guaranteed. - After services specifications have been established, the delivery of perfect services quality is still not guaranteed. Inadequate training, communication, and preparation of employees who interact with the customer, referred to as contact personnel , can lower the quality of service delivered. This mismatch is gap 3.  Gap 4: - Gap 4 shows the differences between services delivery and external communications with the customer. Companies influence customer expectations of services through word of mouth and through other media such as advertising. As a result, there could be a difference between what customers hear you say you are going to deliver as a service provider and what you actually deliver. Have you ever heard someone say, “They promised me one thing and gave me another?” This gap can lead to seriously negative customer perceptions of service quality.  Gap 5: - There may be differences between perceived and expected services. - Gap 5 is the difference between perceived and expected services, which we considered briefly when we introduced the SERVQUAL instrument. Think of the first time you dealt with your university admissions office or financial aid office. In many universities and colleges, these offices are well run and provide great service. However, in other colleges, their service is not so good. The difference between your expectations and your perceptions is directly related to your perception of service quality.  Assessing Differences in Expectations by Using the Differencing Technique Steps: 1- Administer the expectations and perceptions SERVQUAL instruments to your 161 customers. - Typically need a sample size of between 50-100 2- Compute a difference score for SERVQUAL by separating the dimensions as follows (see table). 3- For each respondent, sum the SERVQUAL scores for each set of items relating to a given dimension. 4- Sum across the n respondents and divide by the total n.  Two-Dimensional Differencing : - The two-dimensional differencing technique is very useful for evaluating SERVQUAL responses if there is enough variation in the responses given to different dimensions. - The two-dimensional differencing technique allows the firm to determine which services it should emphasize to improve customer perceptions and those that make little difference. - Note that this technique is also used for specific questionnaires relating to specific services offered by companies. For example, St. John’s Hospital administers surveys to patients asking about several specific services such as food, laundry, nursing, and many other services. The two-dimensional differencing technique allows the hospital to determine which services it should emphasize to improve customer perceptions and those that make little difference.  Services Blueprinting - Four steps to developing a services blueprint : 1- Identify processes. 2- Isolate fail points. 3- Establish a time frame. 4- Analyze profits.  Services Blueprinting in a Hair Salon - Notice also that Figure 8-5 includes a line of visibility. The activities below the line of visibility are not seen by the customer, but they influence performance. This is true in many organizations. The area above the line of visibility is often referred to as the front office, and the area below the line of visibility is referred to as the back office. - Many times process improvements focus on back-office activities, whereas front-office activities that involve high customer interaction are ignored. Services process blueprinting places the focus on front-office activities. - To understand how you could apply services blueprinting, think about a restaurant. Typically, when you first enter a restaurant, you expect to be greeted at the door. Can you remember a time when you weren’t? This has happened to all of us at some point. A restaurant can install sensors or provide backups for the greeter so that this breakdown never occurs. Services blueprinting is a tool to help with brainstorming activities that lead to customer service improvement.  Moments of Truth - Fail points in the services blueprints or the times at which the customer expects something to happen - The fail points in the services blueprints are often referred to as moments of truth. These are the times at which the customer expects something to happen. Remember the SERVQUAL items? Expectations are a major determinant of customer perceptions of service quality. Therefore, when the customer expects something to happen, it has to 162 happen. It is that simple! Some companies list these moments of truth and define failsafes and procedures to see that they result in satisfied customers. - Customers’ contact with the business can occur in many different ways—face to face, over the Internet, by phone, through a machine such as an ATM, or through the mail. All these moments of truth result in either happy customers or lost customers. Moments of truth also can happen at various stages of the product life cycle, such as when the product is being used, when customer service queries arise, when the product needs repair, and when it is eventually disposed of.  Poka-yoke - A fail-safing device - Classifications for fail-safing devices in services: 1- Warning methods 2- Physical contact methods 3- Visual contact methods 4- Fail-safe methods can also be defined by the “three Ts”  The Three “Ts” of Poka-yokes 1- Tasks to be performed 2- Treatment provided to customer 3- Tangibles provided to customer  The Customer Benefits Package : - Consists of both tangibles that define the service and intangibles that make up the service: - Tangibles = goods-content - Intangibles = service-content - Four stages of the service benefit package design process : 1- Idea/concept generation 2- The definition of a services package 3- Process definition and selection 4- Facilities requirement definition  Objectives of the Customer Benefits Package 1- Make sure the final CBP attributes you are using are the correct ones. 2- Evaluate the relative importance of each attribute in the customer’s mind. 3- Evaluate each attribute in terms of process and service encounter capability. 4- Figure out how best to segment the market and position CBPs in each market. 5- Avoid CBP duplication and proliferation. 6- Bring each CBP and associated process and service encounters to market as quickly as possible. Use the CBP framework and final attributes to design facilities, processes, equipment, jobs, and service encounters. 7- Maximize customer satisfaction and profits.  Services Process Structure : - The CBP is defined largely by the degree of freedom allowed by the firm in the customization of the services package. Deborah Kellogg and Winter Nie provided a services process/services package matrix. As shown in Figure 8-8, firms will offer unique services packages, selective services packages, restricted services packages, or generic services packages. Generic services packages are of the one-size-fits-all variety. Unique services packages are especially tailored for each customer. Your firm’s capability to custom-tailor a benefits package depends on the amount of flexibility you have as a service provider. Strategic issues such as organizational flexibility, top163 management skill, employee motivation, training, hiring practices, culture of the service customer, nature of the service, and technological choice affect your ability to provide unique services packages. - Table 8-3 in your chapter shows a customer benefits package from the Slide-Master firm. Notice that Slide-Master has taken great care in defining tangibles and intangibles for its CBP. Slide-Master evaluates its CBP performance using monthly surveys of employees and customers.  Service Transaction Analysis (STA) - A service improvement technique that allows managers to analyze their service processes at a very detailed level - Involves identifying transactions and evaluating them from the customer’s perspective to determine whether there is a gap between service design and what the customer perceives as the service - ( Because we have discussed the design of services processes and improving services processes, we can now present service transaction analysis (STA). This is a service improvement technique that allows managers to analyze their service processes at a very detailed level. As we stated, Crosby views service encounters as a series of transactions (or moments of truth). STA is a method for identifying these transactions and evaluating them from the customer’s perspective to determine whether there is a gap between service design and what the customer perceives as the service. ) -  Service Transaction Analysis Sheet - A tool used in STA - Mystery shoppers or independent consultant-customers walk through the process and then rate each transaction - ( Figure 8-9 shows a service transaction analysis sheet. The rationales for these scores are entered into the right side of the sheet, and an overall evaluation is provided in the bottom of the sheet. Using these sheets, service designers, managers, and staff can attempt to understand why the customer did not like certain aspects of the service and use this as an input into improving the process. )  Improving Customer Service in Government - There is some evidence of improvement in several aspects of government : 1- Military adoption of statistical quality techniques 2- Government’s development of a searchable list of 4,000 customer service standards for 570 federal departments and agencies - As of 2011, thirty-two states have established quality award programs and many state agencies have adopted quality techniques - ( If customer service is the battlefield for business in the twenty-first century, then government is probably the last frontier. - There are some evidences of improvement in several aspects of government. )  Why the Government is Adopting Quality Techniques : - People want and desire to do good quality work. - Because quality management is associated with improved employee satisfaction, there is a major impetus to improve. - Government leaders are mandating standards, strategic plans, and new levels of performance at all levels of government. These standards are being adopted in government agencies because of the mandates. - Demand for government services is growing at a faster rate than funding for them. The natural reaction is to simplify processes that have become bloated. - Finally, the threat of privatization in government has led to an improvement in service in many areas. 164  Quality in Health Care - Several factors have contributed to the attention given to quality within health care : 1- Health care is facing the same “cost squeeze” that government is facing. 2- The Affordable Care Act has mandated improvements to the delivery of health care - coupled with more regulations. 3- A move toward health maintenance organizations (HMOs) is causing hospitals to streamline operations. 4- There is increasing diversity in health care. CHAPTER 10  Improving the System - To be successful, a business or organization must balance the needs of these different functional areas : 1- Supply chain management 2- Marketing 3- Accounting 4- Human resources 5- Operations 6- Engineering 7- Strategy - A quality system uses the business model with a focus on the customer, and includes the dynamics of : 1- Continual improvement 2- Change 3- Planning 4- Renewal  A Quality System - ( This quality system (which is discussed in greater depth in Chapter 15) is not just a series of variables and relationships. It is an interconnected, interdisciplinary network of people, technology, procedures, markets, customers, facilities, legal requirements, reporting requirements, and assets that interact to achieve an end. The most important aspect of the system is the people. - People are the engine of creativity and innovation. Technology is very good at performing rote tasks; however, technology in and of itself cannot innovate. Therefore, how we manage people may be the most important key in this system to unlock an organization’s potential. W. Edwards Deming was always adamant that we should continually and forever improve the system of production. The system includes people. )  Ishikawa’s Basic Seven Tools of Quality (B7) : 1- Process maps 2- Check sheets 3- Histograms 4- Scatter plots 5- Control charts 6- Cause and effect diagrams 7- Pareto analysis  Ishikawa’s Basic Seven Tools of Quality (B7) - Logical Map of the Order of the Basic Seven (B7) Tools - ( The basic seven tools of quality may be used in a logical order. Note that this is only a “typical” order of use for these tools; they can be used in almost any order. Figure 10- 2 shows this order. 165 - The flowchart gives the team the big picture of the process to be improved. Process data are collected using a check sheet. The data are analyzed using either histograms, scatter plots, or control charts. The root causes of the problems associated with the process are identified using a cause-and-effect diagram. Finally, causes are prioritized using Pareto analysis. These tools are discussed in more depth on the following pages. )  Process Maps : A picture of a process, or map of the process, as it exists - ( A process map is a picture of a process. The first step in many process improvement projects is to create a map of the process as it exists. This useful step also determines the parameters for process improvement. The concept is that we must know the process before we can improve it. - The language of process maps can vary from the simple to the complex. A simple set of symbols is provided here in Figure 10-3. The diamond indicates there is a decision to be made, and they often identify different paths of sequences in the process map. The parallelogram appears whenever materials, forms, or tools enter or leave the process. The rectangle is the processing symbol—the work that is actually performed. The start/stop symbol and the page connector are used for the convenience of the people using the process map. )  Simple Rules for Process Maps 1- Use the simple symbols to chart the process from the beginning, with all arcs in the process map leaving and entering a symbol. - The arcs represent the progression from one step to the next. 2- Develop a general process map and then fill it out by adding more detail, or a subflowchart, to each of the elements. 3- Step through the process by interviewing those who perform it – as they do the work. 4- Determine which steps add value and which don’t in an effort to simplify the work. 5- Before simplifying the work, determine whether the work really needs to be done in the first place.  Steps in Process Mapping : 1- Settle on a standard set of process mapping symbols to be used. 2- Clearly communicate the purpose of the process map to all the individuals involved in the exercise. 3- Observe the work being performed by shadowing the workers performing the work. 4- Develop a map of the process. 5- Review the process map with the employees to make needed changes and adjustments to the process map. 6- Develop a map of the improved process.  SIPOC Diagram - A diagram that is useful when it is not clear who your customers are, where specifications for inputs exist, and when clarifying customer requirements 1- Supplier 2- Inputs 3- Process 4- Outputs 5- Customers  A Closer Look at Quality 10-1 - Extended value stream mapping of supply chains - Customers and suppliers can collaborate to improve supply chains.  A Closer Look at Quality 10-1 166 - Global Corp Prior-state extended value stream map ( supply chain map for Global Corp, which includes supplier processes, receiving, internal processes, shipping, and customer service processes.) - Global Corp. Ideal-state extended value stream map ( shows a map of the improved process )  Check Sheets - Data-gathering tools that can be used to provide data for histograms - Can be either tabular, computer-based, or schematic - Setting up a check sheet : 1- Identify common defects occurring in the process. 2- Draw a table with common defects in the left column and time period across the tops of the columns to track the defects. 3- The user of the check sheet then places check marks on the sheet whenever the defect is encountered.  Histograms : Graphical representations of data in bar format - Used for continuous numerical data and to observe the shape of the data  Rules for Developing Histograms : 1- The width of the histogram bars must be consistent. 2- The classes must be mutually exclusive and all-inclusive (or collective exhaustive). 3- A good rule of thumb for the number of classes is 2k > n. - Where n is the number of raw data values and k is the number of classes 4- Solving for k, we obtain k > log n/log 2, therefore  Scatter Diagrams : Charts used to examine the relationships between variables; also called scatter plots. - Sometimes used to identify indicator variables in organizations. - Steps to set up a scatter plot : 1- Determine your x (independent) and y (dependent) variables. 2- Gather process data relating to the variables identified in Step 1. 3- Plot the data on a two-dimensional plane. 4- Observe the plotted data to see whether there is a relationship between the variables  Scatter Diagrams : Scatter plot of the relationship between conformance data and prevention and appraisal quality-related costs in a real firm  Control Charts : Charts used to determine whether a process will produce a product or service with consistent measurable properties  Cause-and-Effect ( Ishikawa Diagrams ) - A tool to help move to lower levels of abstraction in solving problems - Looks like the skeleton of a fish 1- Problem = Head 2- Ribs = Major causes 3- Bones = Subcases  Cause-and-Effect ( Ishikawa Diagrams ) - Steps to create a cause-and-effect diagram : 1- State the problem clearly in the head of the fish. 2- Draw the backbone and the ribs by asking participants to identify major causes of the problems labeled in the head of the diagram. 3- Continue to fill out the diagram asking “Why?” about each problem or cause of a problem until the fish is filled out. 4- View the diagram and identify core causes. 5- Set goals to address the core causes. 167  Cause-and-Effect Diagram: Wobbling Saw Blade - Ishikawa diagram prepared for a wood mill that was experiencing problems with wobbling blades in its saws. The symptom of the problem was the wobbly blades. The major causes were associated with machines, materials, people, and methods. Concerning people, it was found that workers were not properly trained. For machines, it was found that the blades were being incorrectly set up, off-center  Pareto Charts : Charts used to identify and prioritize problems to be solved - Aided by the 80/20 rule, which states that roughly 80% of the problems are created by 20% of the causes – or there are a “vital few” causes that create most of the problems  Rules for constructing Pareto charts : 1- Information must be selected based on types or classifications of defects that occur as a result of a process. 2- Data must be collected and classified into categories. 3- A frequency chart must be constructed, showing the number of occurrences in descending order.  Steps in Pareto analysis: 1- Gather categorical data relating to quality problems. 2- Draw a frequency chart of the data. 3- Focus on the tallest bars in the frequency chart first when solving the problem.  New Seven (N7) Tools for Improvement : 1- Affinity diagram 2- Interrelationship digraph 3- Matrix diagram 4- Tree diagram 5- Prioritization matrices 6- Process decision program chart 7- Activity network diagram  The Affinity Diagram : A tool that helps a group converge on a set number of themes or ideas that can be addressed later by creating a hierarch of ideas on a large surface  Steps in establishing an affinity diagram : 1- Identify the problem to be stated. 2- Give the team members a supply of note cards and a pen, and have them write down issues that relate to the problem (one idea per card). 3- Allow only about 10 minutes for this activity. 4- Place the written cards on a flat surface. 5- Lay out the finished cards so all participants can see and have access to all the cards 6- Let everyone on the team (silently) move the cards into groups with a similar theme. 7- If you disagree with someone else’s placement of a notecard, say nothing, but move it. 8- You reach consensus when all the cards are in groups, and the team members have stopped moving the cards. 9- Draw a finished affinity diagram and provide a working copy for all participants  The Interrelationship Digraph : A tool that shows the relationship between different issues 168 by understanding the causal relationships between the different issues that surfaced  Steps to complete the interrelationship digraph : 1. Construct an affinity diagram to identify the issues relating to a problem. 2. Create the digraph by examining the cards one by one, asking “What other issues on this digraph are caused or influenced by this issue?” 3. After reviewing the arrows and making needed revisions, count the numbers of arrows pointing to each note, and write the numbers on the notes. 4. Identify the cards with the most arrows as the “key factors.” 5. Draw a double box around the key factors and brainstorm ways to address these issues.  Tree Diagram : A tool that is used to identify the steps needed to address the given problem  Steps used to complete a tree diagram: 1- Assemble the header cards from the affinity diagram and choose the card that represents the most important issue. 2- Once the goal statement has been determined, ask “What are the steps required to resolve or achieve this major objective or goal?” 3- Once the major tasks have been identified, move to the next level under each task and ask this for second-level tasks: “What are the steps required to resolve or achieve this objective or goal?” 4- Continue doing this for successive levels until you have exhausted your ideas for steps.  Prioritization Grid : A tool used to make decisions based on multiple criteria  Steps in making a prioritization grid: 1- Determine your goal, your alternatives, and the criteria by which a decision is to be made. 2- Place the selection criteria in order from most important to least important. 3- Apply a percentage weight to each of the criteria for each option, and apply a weight to each of the criteria such that all the weights add up to 1. 4- Average the individual ratings for each criterion, then rank those average scores, with the highest averages ranked as 1. 5- Rank each alternative with respect to the criteria and add the rates for each alternative, then rank the sum of the scores for each alternative to determine final criteria rankings. 6- Multiply the final criteria ranking (Step 4) by each corresponding alternative’s rank (Step 5) to calculate an indifference score. 7- Add the importance scores for each alternative. 8- Rank each alternative according to importance. (The lower the score, the better).  Matrix Diagram : A brainstorming tool that can be used in a group to show the relationships between ideas or issues  Steps involved in creating a matrix diagram: 1- Determine the number of issues or dimensions to be used in the matrix. 2- Choose the appropriate matrix. 3- Place the appropriate symbols in the matrix.  Process Decision Program Chart : A tool used to help brainstorm possible contingencies or problems associated with the implementation of some program or improvement  Steps to create a process decision program chart : 1- When developing the tree diagram, place the first-level boxes in sequential order. 2- In the second level, list implementation details at a fairly high level and try to be allinclusive at a macro level. 3- At the third level, ask “What unexpected things could happen in this implementation?” or “What can go awry at this stage?” 4- At the fourth level, brainstorm possible countermeasures to the problems identified at 169 the third level. 5- Evaluate the countermeasures for feasibility, and mark those that are feasible with an O and those that are not feasible with an X.  Activity Network Diagram : A tool used for controlling projects: 1- Also known as a program evaluation and review technique (PERT) diagram or a critical path diagram 2- Nodes are circles, and times are given in days  Reflections on Managerial N7 Tools : - Useful for managing long projects that involve teams - When the tools are used along with the plan-do-check-act (PDCA) cycle, they give companies a simple and easy-to-understand methodology for solving unstructured problems.  Spider Charts : Graphs that present multiple metrics simultaneously in a two-dimensional plane  Balanced Scorecards : Spreadsheets that are communicated to management on a regular basis – weekly, monthly, quarterly, and annually  Dashboards : Tools that quickly communicate performance levels, with a focus on easy, clear communication  6- Supply Chain Quality in Services - Bidirectional Services Supply Chain - ( As we have talked about before, one of the major differences between services and manufacturing is the involvement of the customer in the process. - As shown in Figure 8-10, service supply chains are bi-directional. This means that service customers actually provide inputs to the supply chain. Many times, these inputs can be information, or in some cases, labor—as in the case of a self-service gas station. Therefore, effective communication is necessary between customers and suppliers to prevent inadequate fulfillment of customer expectations. The concept of garbage in, garbage out implies that the quality of a service supply chain will be limited by the quality of the supplied inputs. Even if customers provide poor inputs (inaccurate information), they may still expect accurate outputs. This expectation has implications for service design. - In an integrated supply chain, the service provider still has greater responsibility for verifying customer inputs to ensure that they are accurate. In some cases, the service provider may be able to initiate communication of customer-input delivery expectations, such as through reservation systems. This may be complicated by the fact that service delivery systems are often inherently just-in-time. Of course, in services, there are other suppliers besides the customers. They are often managed in a more traditional supply-chain manner. However, the customer-supplier linkage makes services unique. ) 10- A Theory for Service Quality Management 1- Proposition 1: The Unified Services Theory 2- Proposition 2: The Unreliable Supplier Dilemma 3- Proposition 3: Capricious Labor 4- Proposition 4: Everyone Presumes to be an Expert 170 CHAPTER 14  What is a management system : A management system describes the set of procedures an organization needs to follow in order to meet its objectives.  ISO 9000: The International Standard for Quality Management Systems : - ISO 9000 is a set of international standards on quality management and quality assurance developed to help companies effectively document the quality system elements to be implemented to maintain an efficient quality system. - They are not specific to any one industry and can be applied to organizations of any size. - ISO 9000 is a series, or family, of standards and guidelines related to the Quality Management System (QMS). - ISO 9000 can help a company to : 1- Improve customer satisfaction by fulfilling customer requirements; 2- Achieve continual improvement of organizational performance and competitiveness; 3- Continually improve its processes, products, and services; and 4- Comply with regulatory requirements.  ISO 9000:2000 refers to the ISO 9000 update released in the year 2000, is a guidance document that describes the fundamentals and the vocabulary of the QMS. The ISO 9000:2000 had five goals : 1- Meet stakeholder needs 2- Be usable by all sizes of organizations 3- Be usable by all sectors 4- Be simple and clearly understood 5- Connect quality management system to business processes  ISO 9001 specifies the requirements for the QMS. It is the standard’s only document to which organizations may be certified/registered.  ISO 9004 is a guidance document for continual improvement of organizational performance, systems, processes, and products/services as measured through the satisfaction of customers and other interested parties.  ISO 9001 Certification - When an organization demonstrates conformity to ISO 9001 to an independent registrar firm, the registrar can certify ( or register ) the organization. - Registration provides assurance to customers worldwide that products or services from the organization can be expected to consistently meet customer requirements. - To maintain its registration, the organization must constantly strive to ensure that the QMS continues to function effectively and that it is continually improved. 171  The Eight Principles : ISO 9000’s Basis - The ISO 9000 QMS is based on eight principles from total quality management (TQM) : 1- Customer Focus . Understand the customer’s needs, meet the customer’s requirements, and strive to exceed the customer’s expectations. 2- Leadership . Establish unity of purpose and organizational direction and provide an environment that promotes employee involvement and achievement of objectives. 3- Involvement of People . Take advantage of fully involved employees, using all their abilities for the benefit of the organization. 4- Process Approach . Recognize that things accomplished are the results of processes and that processes along with related activities and resources must be managed. 5- System Approach to Management . The multiple interrelated processes that contribute to the organization’s effectiveness are a system and should be managed as a system. 6- Continual Improvement . Continual improvement should be a permanent objective applied to the organization and to its people, processes, systems, and products. 7- Factual Approach to Decision Making . Decisions must be based on the analysis of accurate, relevant, and reliable data and information. 8- Mutually Beneficial Supplier Relationships . Both the organization and the supplier benefiting from the other’s resources and knowledge results in value for all.  Plan-Do-Check-Act : ISO 9000’s Operating Principle - Dr. W. Edwards Deming introduced the Plan-Do-Check-Act (PDCA) cycle to the Japanese in 1950, and it became one of the seeds of Japan’s quality revolution that gave us TQM. - PDCA has made its way to ISO 9000 and is said to be the operating principle of ISO’s management system standards. Its function is to operate in a never-ending loop, resulting in continual improvement for products/services, processes and systems of processes.  Plan - Establish objectives and develop the plans to achieve them.  Do - Put the plans into action.  Check - Measure the results of the action; that is, is the planned action working, or were the objectives met?  Act (or Adjust) - Learn from the results of the third (check) step, make any necessary changes to the plans, and repeat the cycle 172  ISO 9000’s Objective - Aims of ISO 9000 - The original aim of ISO 9000 was to ensure that the products or services provided by registered organizations were consistently fit for their intended purpose. - ISO 9000 raised the standard’s aim to a new level. Customer focus and continual improvement, along with the other six quality management principles that have been incorporated into the standard, are intended to make registered organizations more competitive. This is essentially the same objective as that of total quality management.  How ISO 9000 Is Applied to Organizations : - No organization is required by any government to use ISO 9000. - Some government and corporate customers may well require their suppliers to be ISO 9000 registered (or at least conforming), but usually whether to adopt the ISO 9000 QMS is strictly up to the organization’s management. - Once management decides to go with ISO 9000, then it is faced with the task of developing its QMS to conform to the requirements of ISO 9001. - ISO 9001 lays down the requirements for what an organization’s QMS must do but does not dictate how the QMS should do it in any particular organization. - The organization determines that for itself and, if seeking registration, employs an accredited registrar firm to verify its conformance to ISO 9001:2000.  The organization, once registered, must : 1- Apply its QMS to its operations according to the standard and exactly as the QMS states 2- Continually assess the effectiveness of the QMS and make changes to improve it 3- Conduct periodic internal QMS audits 4- Submit to external (third-party) surveillance audits at least annually by its registrar 5- Submit to a new registration audit every third year by a registrar  The ISO 9000 Quality Management System : A Definition - Quality Management System (QMS) : is composed of all the organization`s policies, procedures, plans, resources, processes, and delineation of responsibility and authority, all deliberately aimed at achieving product or service quality levels consistent with customer satisfaction and the organization`s objectives. - When the policies, procedures, plans, and so forth are taken together, they define how the organization works and how quality is managed.  The QMS will include this documentation : 1- A Quality Policy - This statement describes how the organization approaches quality. 2- The Quality Manual - This must address each clause of the ISO 9001 standard. It will also typically include an organization chart, or some such device, illustrating management responsibility for operating the quality system. Quality procedures may be part of this manual, or they may be referenced. 3- Quality Objectives - These are the goals related to quality and must be in harmony with the quality policy. Quality objectives are assigned to the relevant organizational functions and levels and are tracked by top management. 173 4- Quality Procedures - These describe step by step what the company does to meet the quality policy. As a minimum, there will be a procedure for each of the ISO 9001 clauses outlining requirements. There may also be procedures for any processes that can impact quality. 5- Form, Record, and so on - These provide proof of activities for the firm and for the auditors  Organizational Registration to ISO 9001 : - The organization that wants a conforming ISO 9000 QMS must go through a process that includes the following steps (steps 5 and 7 are omitted for nonregistering organizations) : 1- Develop ( or upgrade ) a quality manual that describes how the organization will assure the quality of its products or services. 2- Document procedures ( or upgrade existing documentation ) that describe how the various processes for design, production, continual improvement, and so forth will be operated. This must include procedures for management reviews and audits. 3- The organization must secure ( and provide evidence of, if registering ) top management’s commitment to the QMS and continual improvement. 4- The organization’s top management must ensure that customer requirements are determined and met. 5- If registering, the organization must hire and accredited registrar company to examine its system, processes, procedures, quality manual, records, and related items. If everything is in order and if the registrar is satisfied that the organization is effectively using the QMS, registration will be granted. Otherwise, the register will inform the organization of the areas requiring work, and another audit will be schedule. 6- Whether registered or not, the organization must conduct its own internal audits to ensure that the systems, processes, and procedures are working effectively. 7- Once registered, the outside registrar will make periodic audits for the same purpose. These audits must be passed to retain registration.  The Benefits of ISO 9000 - The benefits of ISO can be reviewed from 2 different perspectives : 1- Organizational Benefits – The ISO 9000 QMS is designed to provide the framework for continual improvement to increase the probability of enhancing customer satisfaction and the satisfaction of other interested parties. It provides confidence to the organization and its customers that it is able to provide products that consistently fulfill requirements. 2- Customer Benefits - Customers want products or services that meet their requirements, and they want them at a competitive price.  Management Motivation for Registration to ISO 9001 - Appropriate motives for adopting ISO 9000 include the following : 1- To improve operations by implementing a QMS that satisfies the ISO 9000 requirements for management responsibility; resource management; product realization; and measurement, analysis, and continual improvement 2- To create or improve a QMS that will be recognized by customers worldwide 174 3- To improve product or service quality or the consistency of quality 4- To improve customer satisfaction 5- To improve competitive posture 6- To conform to the requirements of one or more major customers CHAPTER : managing Quality  Quality : A term used by customers to describe their general satisfaction with a service or product  Defect : Any instance when a process fails to satisfy its customer  Costs of Quality : - Prevention costs : Costs associated with preventing defects before they happen (packaging, keep cold…. rotten food, …) - Appraisal costs : Costs incurred when the firm assesses the performance level of its processes (example, bulb) - Internal Failure costs : Costs resulting from defects that are discovered during the production of a service or product - External Failure costs : Costs that arise when a defect is discovered after the customer receives the service or product  Total Quality Management and Six Sigma - Total Quality Management : A philosophy that stresses three principles (customer satisfaction, employee involvement and continuous improvement) for achieving high level of process performance and quality - Six Sigma : A comprehensive and flexible system for achieving, sustaining, and maximizing business success by minimizing defects and variability in processes  Total Quality Management 1- Customer Satisfaction - Conformance to Specifications - Value - Fitness for Use - Support - Psychological Impressions 2- Employee Involvement 3- Cultural Change - Quality at the Source 4- Teams - Employee Empowerment - Problem-solving teams - Special-purpose teams - Self-managed teams  Continuous Improvement 1- Kaizen - Japanese concept/philosophy 2- Problem-solving tools - Focus on aspects (of processes) that do not add value 3- Plan-Do-Study-Act Cycle - Deming’s wheel 175  Six Sigma : Goal of achieving low rates of defective output by developing processes whose mean output for a performance measure is +/- six standard deviations (sigma) from the limits of the design specifications for the service or product.  Acceptance Sampling : The application of statistical techniques to determine if a quantity of material from a supplier should be accepted or rejected based on the inspection or test of one or more samples.  Acceptable Quality Level : The quality level desired by the consumer.  Statistical Process Control (SPC) 1- SPC - The application of statistical techniques to determine whether a process is delivering what the customer wants. 2- Variation of Outputs - No two services of products are exactly alike because the processes used to produce them contain many sources of variation, even if the processes are working as intended. 3- Performance Measurements - Variables - Service or product characteristics that can be measured 4- Attributes - Service or product characteristics that can be quickly counted for acceptable performance - (Yes/No), defective non defective, …..,1/0, 5- Complete Inspection - Inspect each service or product at each stage of the process for quality 6- Sampling - Sample Size - Time between successive samples - Decision rules that determine when action should be taken  Why sampling? - There is situations where mesuring lead to the destruction of the product « cable, light, tire in a car, …. - It’s costly to asses quality (HR, raw material, component, energy,  Statistical Process Control (SPC) - The sample mean is the sum of the observations divided by the total number of observations. - The range : is the difference between the largest observation in a sample and the smallest. - The standard deviation : is the square root of the variance of a distribution. - An estimate of the process standard deviation based on a sample is given by:  Categories of Variation - Common cause - The purely random, unidentifiable sources of variation that are unavoidable with the current process - Assignable cause - Any variation-causing factors that can be identified and eliminated - A machine needing repair, An employee needing training  Control Chart - Time-ordered diagram that is used to determine whether observed variations are 176 abnormal  Controls chart have a nominal value or center line, Upper Control Limit (UCL), and Lower Control Limit (LCL)  Steps for using a control chart : 1- Take a random sample from the process and calculate a variable or attribute performance measure. 2- If a statistic falls outside the chart’s control limits or exhibits unusual behavior, look for an assignable cause. 3- Eliminate the cause if it degrades performance; incorporate the cause if it improves performance. Reconstruct the control chart with new data. 4- Repeat the procedure periodically.  Control Charts 1- Type I error - An error that occurs when the employee concludes that the process is out of control based on a sample result that fails outside the control limits, when it fact it was due to pure randomness 2- Type II error - An error that occurs when the employee concludes that the process is in control and only randomness is present, when actually the process is out of statistical control  Variable Control Charts - R-Chart – Measures the variability of the process - -Chart – Measures whether the process is generating output, on average, consistent with a target value  Attribute Control Charts - p-chart – Measures the proportion of defective services or products generated by the process - c-chart – Measures the number of defects when more than one defect can be present in a service or product  Steps to Compute Control Charts : 1- Collect data. 2- Compute the range. 3- Use Table 3.1 to determine R-chart control limits. 4- Plot the sample ranges. If all are in control, proceed to step 5. Otherwise, find the assignable causes, correct them, and return to step 1. 5- Calculate for each sample and determine the central line of the chart, 6- Use Table 3.1 to determine control limits 7- Plot the sample means. If all are in control, the process is in statistical control. Continue to take samples and monitor the process. If any are out of control, find the assignable causes, correct them, and return to step 1.  Process Capability – The ability of the process to meet the design specification for a service or product 1- Nominal Value - A target for design specifications 2- Tolerance - An allowance above or below the nominal value 177  Process Capability (Cp) - The tolerance width divided by six standard deviations.  International Quality Documentation Standards - ISO 9001:2008 – Documentation Standards - ISO 14000:2004 – Environmental Management System  Benefits of Baldrige Performance Excellence Program : 1- Baldrige Performance Excellence Program - Application process is rigorous and helps organizations define what quality means to them - Investment in quality principles and performance excellence pays off in increased productivity 2- Seven Major Criteria - Leadership - Strategic Planning - Customer Focus - Measurement, Analysis, and Knowledge Management - Workforce Focus - Operations Focus - Results Chapter : Managing Process Constraints  Constraint : Any factor that limits the performance of a system and restricts its output.  Bottleneck : A capacity constraint resource (CCR) whose available capacity limits the organization’s ability to meet the product volume, product mix, or demand fluctuations required by the marketplace  The Theory of Constraints (TOC) : A systematic management approach that focuses on actively managing those constraints that impede a firm’s progress toward its goal  Key Principles of the TOC : 1- The focus should be on balancing flow, not on balancing capacity. 2- Maximizing the output and efficiency of every resource may not maximize the throughput of the entire system. 3- An hour lost at a bottleneck or constrained resource is an hour lost for the whole system. 4- An hour saved at a nonbottleneck resource does not make the system more productive. 5- Inventory is needed only in front of bottlenecks and in front of assembly and shipping points. 6- Work should be released into the system only as frequently as needed by the bottlenecks. 7- Bottleneck flows = market demand 8- Activating a nonbottleneck resource is not the same as utilizing a bottleneck resource. 9- It doesn’t increase throughput or promote better performance. 10- Every capital investment must be viewed from the perspective of the global impact on overall throughput, inventory, and operating expense. 178  The Theory of Constraints : 1- Identify the System Bottleneck(s) 2- Exploit the Bottleneck(s) 3- Subordinate All Other Decisions to Step 2 4- Elevate the Bottleneck(s) 5- Do Not Let Inertia Set In  Managing Bottlenecks in Service Processes : - Identifying Bottlenecks : Setup times and their associated costs affect the size of the lots traveling through the job or batch processes.  Drum-Buffer-Rope : A planning and control system that regulates the flow of workin-process materials at the bottleneck or the capacity constrained resource (CCR) in a productive system  Drum-Buffer-Rope Systems : - The bottleneck schedule is the drum because it sets the beat or the production rate for the entire plant and is linked to market demand. - The buffer is the time buffer that plans early flows into the bottleneck and thus protects it from disruption. - The rope represents the tying of material release to the drum beat, which is the rate at which the bottleneck controls the throughput of the entire plant.  Applying the Theory of Constraints to Product Mix Decisions : - Contribution margin : The amount each product contributes to profits and overhead; no fixed costs are considered when making the product mix decision  Managing Constraints in a Line Process : 1- Line Balancing : The assignment of work to stations in a line so as to achieve the desired output rate with the smallest number of workstations 2- Precedence Diagram : A diagram that allows one to visualize immediate predecessors better 3- Desired output rate : Ideally is matched to the staffing or production plan 4- Cycle time : Maximum time allowed for work a unit at each station 5- Theoretical Minimum (TM) : A benchmark or goal for the smallest number of stations possible 6- Idle time : The total unproductive time for all stations in the assembly of each unit 7- Efficiency : The ratio of productive time to total time, expressed as a percent 8- Balance Delay : The amount by which efficiency falls short of 100 percent  Finding a Solution : The goal is to cluster the work elements into workstations so that: 1- The number of workstations required is minimized 2- The precedence and cycle-time requirements are not violated  Rebalancing the Assembly Line : - Managerial Considerations 1- Pacing is the movement of product from one station to the next as soon as the cycle time has elapsed 2- Behavioral factors such as absenteeism, turnover, and grievances can increase after installing production lines. 3- The number of models produced complicates scheduling and necessitates 179 good communication. 4- Cycle times are dependent on the desired output rate or sometimes on the maximum workstations allowed. Chapter 15 : Overview of Total Quality Tools  Total Quality Tools Defined : - Total quality tools also enable today’s employees, whether engineers, technologists, production workers, managers, or office staff, to do their jobs. - If the job includes continual improvement, problem solving, or decision making, the seven tools discussed in this chapter fit the definition. - Each of these tools is some form of chart for the collection and display of specific kinds of data. - Through the collection and display facility, the data become useful information— information that can be used to solve problems, enhance decision making, keep track of work being done, and even predict future performance and problems. - The beauty of the charts is that they organize data so that we can immediately comprehend the message. This would be all but impossible without the charts, given the mountains of data flooding today’s workplace.  Seven Tools of Quality : 1- Pareto Analysis 2- Histograms 3- Scatter Diagrams 4- Check Sheets 5- Control Charts 6- Process Maps 7- Cause and Effect Diagrams  Pareto charts : used to identify and prioritize problems to be solved.  Pareto charts : are useful for separating the important from the trivial. They are named after Italian economist and sociologist Vilfredo Pareto. Pareto charts are important because they can help an organization decide where to focus limited resources.  The Pareto Principle holds that a few significant causes lead to the majority of problems.  Rules for constructing Pareto charts : 1- Information must be selected based on types or classifications of defects that occur as a result of a process. 2- Data must be collected and classified into categories. 3- A frequency chart must be constructed, showing the number of occurrences in descending order.  Steps in Pareto analysis : 1- Gather categorical data relating to quality problems. 2- Draw a frequency chart of the data. 3- Focus on the tallest bars in the frequency chart first when solving the problem.  Histograms : - Histograms are a graphical representations of data in bar format. - Histograms are used for continuous numerical data and to observe the shape of the data.  Rules for Developing Histograms : - The width of the histogram bars must be consistent (i.e., class widths are the same 180 where each bar contains a single class). - The classes must be mutually exclusive and all-inclusive (or collective exhaustive). - A good rule of thumb for the number of classes is: 2 k > n. - Where n is the number of raw data values and k is the number of classes - Solving for k, we obtain k > log n/log 2, therefore:  Scatter Diagrams - The scatter diagram or scatter plot is used to examine the relationships between variables. - These relationships are sometimes used to identify indicator variables in organizations.  Steps to set up a scatter plot : 1- Determine your x (independent) and y (dependent) variables. 2- Gather process data relating to the variables identified in Step 1. 3- Plot the data on a two-dimensional plane. 4- Observe the plotted data to see whether there is a relationship between the variables. - Scatter plot of the relationship between conformance data and prevention and appraisal quality-related costs in a real firm  Check sheets : are data-gathering tools that can be used to provide data for histograms; they can be either tabular, computer based, or schematic.  Setting up a check sheet: 1- Identify common defects occurring in the process. 2- Draw a table with common defects in the left column and time period across the tops of the columns to track the defects. 3- The user of the check sheet then places check marks on the sheet whenever the defect is encountered.  Control charts : are used to determine whether a process will produce a product or service with consistent measurable properties  Process Maps : - A process map is a picture of a process. - The first step in many process improvement projects is to create a map of the process as it exists. - This useful step also determines the parameters for process improvement. - The concept is that we must know the process before we can improve it.  Simple Rules for Process Maps : 1- Use the simple symbols to chart the process from the beginning, with all arcs in the process map leaving and entering a symbol. 2- The arcs represent the progression from one step to the next. 3- Develop a general process map and then fill it out by adding more detail, or a subflowchart, to each of the elements. 4- Step through the process by interviewing those who perform it – as they do the work. 5- Determine which steps add value and which don’t in an effort to simplify the work. 6- Before simplifying the work, determine whether the work really needs to be done in the first place.  Steps in Process Mapping : 1- Settle on a standard set of process mapping symbols to be used. 2- Clearly communicate the purpose of the process map to all the individuals involved in 181 the exercise. 3- Observe the work being performed by shadowing the workers performing the work. 4- Develop a map of the process. 5- Review the process map with the employees to make needed changes and adjustments to the process map. 6- Develop a map of the improved process.  Cause-and-Effect (Ishikawa Diagrams) : - Steps to create a cause-and-effect diagram : 1- State the problem clearly in the head of the fish. 2- Draw the backbone and the ribs by asking participants to identify major causes of the problems labeled in the head of the diagram. 3- Continue to fill out the diagram asking “Why?” about each problem or cause of a problem until the fish is filled out. 4- View the diagram and identify core causes. 5- Set goals to address the core causes.  Chapter 16: Statistically Based Quality Improvements for Variables  Statistical thinking : is a decision-making skill demonstrated by the ability to draw conclusions based on data.  Statistical thinking is based on three concepts: 1- All work occurs in a system of interconnected processes. 2- All processes have variation (the amount of variation tends to be underestimated). 3- Understanding variation and reducing variation are important keys to success.  Understanding Process Variation - All processes exhibit variation - Some variation can be managed and some cannot be managed. - Two types of process variation : - Random - Nonrandom  Process stability : means that the variation we observe in the process is random variation and not nonrandom variation.  To determine process stability, we use process charts  Process charts : are graphs designed to signal process workers when nonrandom variation is occurring in a process  Sampling Methods - Reasons why sampling is used: 1- To ensure that processes are stable, data are gathered in samples. 2- For the most part, sampling methods have been preferred to the alternative of 100% inspection. 3- Samples are cheaper, take less time, are less intrusive, and allow the user to frame the sample. 4- In cases where quality testing is destructive, 100% inspection would be impossible and would literally drive the company out of business.  Sampling Methods : 1- Random samples - Randomization is useful because it ensures independence among observations. - To randomize means to sample in such a way that every piece of product has an equal 182 chance of being selected for inspection. 2- Systematic samples - Samples can be systematic according to time or according to sequence. - If a sample is systematic according to time, a product is inspected at regular intervals of time - If a systematic sample is performed according to sequence, one product is inspected every tenth iteration. 3- Rational subgroup samples - A rational subgroup is a group of data that is logically homogeneous.  Control plans : are an important part of a quality control system and are a required part of an ISO 9000 quality management system.  Control plans : provide a documented, proactive approach to defining how to respond when process control charts show that a process is out of control.  Statistical process control charts :  Tools for monitoring process variation  Variable : Continuous measurement such as height, weight, or volume  Attribute : An either-or situation, such as a motor starting or not, or a lens being scratched or not  Variables and Attributes Control Charts : - Central requirements for properly using process charts: 1- You must understand this generic process for implementing process charts. 2- You must know how to interpret process charts. 3- You need to know when different process charts are used. 4- You need to know how to compute limits for the different types of process charts. 5- We treat each of these topics separately.  Chapter 17 : Statistically Based Quality Improvement for Attributes  Types of Attributes : 1- Structural attributes 2- Sensory attributes 3- Performance attributes 4- Temporal attributes 5- Ethical attributes 6- Customer-based attributes 7- Production-related attributes  Generic Process for Developing Attributes Charts : 1- Identify critical operations in the process where inspection might be needed. 2- Identify critical product characteristics. 3- Determine whether the critical product characteristic is a variable or an attribute. 4- Select the appropriate process chart from the many types of charts. 5- Establish the control limits and use the chart to continually monitor and improve. 6- Update the limits when changes have been made to the process.  Defect – an irregularity or problem with a larger unit - Countable; can be several within one unit - Monitored using c and u charts  Defective – a unit that, as a whole, is not acceptable or does not meet performance requirements 183 - Monitored using p and np charts  184 Discussion Questions 1. Why is it important to pursue quality management from a systems perspective? As we have seen, no part of the business operates independently. For a quality system to be successful, the interrelationships between the business systems must be taken into account. A quality system must therefore take the business system into account. Figure 10-1 presents the quality model and depicts the relationships. 2. Why is continual improvement necessary for a business organization? Deming made the point that for optimum results, the quality process must be continuing. If quality is treated as an add-on process, quality will suffer. As Figure 10-1 shows, the business model focuses on the customer and prompts continuous change and growth. Without this approach, the business will grow stagnant. 3. The statement has been made that “A quality system is not just a series of boxes and arrows. It is an interconnected, interdisciplinary network of people, technology, procedures, markets, customers, facilities, legal requirements, reporting requirements, and assets that interact to achieve an end.” What does this statement mean to you? For a quality program to be successful, it must be ingrained into the culture of the organization. If the workers see a quality program as just another set of forms to fill out and keep current, they will not be performing the tasks properly. If a culture of continuing quality exists, the workers will be a vital part of the process. The system is vibrant, ongoing, dynamic, and in need of constant updating and nurturing to remain effective. 4. How do the basic tools work within W. E. Deming’s plan–do–check–act (PDCA) cycle as a process for continual improvement? The plan-do-check-act cycle can be described as: plan represents strategy formulation, do refers to implementing strategy, check relates to evaluation and control, and act results in full-scale strategy implementation. These four simple steps become the base on which continual improvement is built. The cycle provides four identifiable activities into which continuing improvement can be integrated. 5. What are the seven basic tools of quality? Who developed these tools? Kaoru Ishikawa identified seven tools that, when used together, provide a path to continuing quality improvement. 6. Describe the purpose of a histogram. The figure below presents a histogram. As stated on page 249, histograms are simply graphical representations of data in a bar format. This histogram provides a comparison between occurrence and sales for various sales registers. 185 7. Describe the purpose of a Pareto chart. Describe an instance (other than the one in the book) in which a Pareto chart could be effectively used. A Pareto Chart is a histogram that allows the analyst to identify and prioritize potential or real problems based upon Juran’s “80/20” rule. The example on page 256 and 257 present the following: The frequencies of each problematic area are then plotted: This simple example presents the primary problem area – “Setup routines are not standardized.” Any multi-step process can be aided through the use of a Pareto Chart. In a class discussion, many applications will surface. 8. What are the three basic rules for constructing Pareto charts? On page 256, the three basic rules are presented as:  Information must be selected based on types or classifications of defects that occur as a result of a process. An example of this might be the different types of defects that occur in a semiconductor.  Data must be collected and classified into categories.  A histogram or frequency chart is constructed showing the number of occurrences. A Pareto chart enables you to isolate and focus on the 20% of failures that cause 80% of the problems. 9. What is the purpose of a cause-and-effect (Ishikawa) diagram? Often, workers spend too much time focusing improvement efforts on the symptoms of problems rather than the causes. The Ishikawa cause and effect diagram is a good tool to help move to lower levels of abstraction in solving problems. The diagram looks like the skeleton of a fish: the problem being the head of the fish, major causes being the "ribs" of the fish, and sub-causes forming smaller "bones" off of the ribs. Figure 10-13 in the text shows an Ishikawa diagram that was performed for a wood mill that was experiencing problems with wobbling blades in its saws. The principle behind this is that for a problem to be solved, the focus must be placed on the problems, not the symptoms. The symptom of the problem was the wobbly blade. The major causes were associated with machines, materials, people, and methods. Under people, it was found that workers were not properly trained. Under machines, it was found that the blade was being set up off-center. 10. Describe the purpose of a check sheet. Describe an instance (other than the ones in the book) in which a check sheet could be effectively used. A check sheet is a simple mechanism that is used to gather information used to diagnose a problem. On page 248, the text shows a check sheet to collect information that will be used to compile a histogram. 186 In Question 7, a class discussion was suggested to find alternative uses for a Pareto chart. This topic would be ideal for that discussion. 11. Describe the purpose of a scatter diagram. Figure 10-10 presents a scatter diagram: This diagram presents a series of points that show the relationship between prevention and appraisal costs and percentage of conformance. A mathematic technique called curve-fitting presents a smoothed line that indicates the relationship between the two variables. A statistical tool called regression analysis will provide a value called the correlation, which uses the data to present the relative value of the relationship. When loaded into Excel, a correlation can be run between the two sets of data. The resulting correlation would be . 8824, or approximately 88%. This indicates that there is approximately an 88% probability that there is a cause-andeffect relationship between the two values. 12. Describe the purpose of a flowchart (process map). What are three of the rules for designing and using flowcharts (process maps)? A process map (flowchart) is a picture of a process. The first step in many process improvement projects is to create a map of the process, as it exists. This step presents the parameters for process improvement. The concept is that one must know the process before it can be improved upon. Three basic rules for designing and using a flowchart (process map) are as follows:  Use these simple symbols (shown in Figure 10-3) to chart the process from the beginning, with all arcs in the process map leaving and entering a symbol.  Develop a general process map and then "flesh it out" by getting more detailed.  Step through the process by interviewing those who perform the process as they do the work.  Determine which steps add value and which don't, in an effort to simplify the work.  Before simplifying the work, determine if it really needs to be done in the first place. 13. What is the purpose of a control chart? A control chart provides information about a product or service that has measurable quantities. Figure 10-12 presents two control charts together: 14. Which of the seven (Ishikawa) tools of quality described in the chapter have been the most helpful to you in your experiences? Please make your answer as substantive as possible. Ishikawa’s seven basic tools consist of: 1) Process maps 2) Check sheets 3) Histograms 4) Scatter plots 5) Control charts 6) Cause-and-effect diagrams 7) Pareto analysis Each of these tools provides a unique look at the environment being analyzed. Each student will probably have a different view based upon his/her respective background. This can make a lively class discussion. 15. What is the purpose of an affinity diagram? 187 An affinity tool is a brainstorming technique that allows teams to break an issue down to its component sub-issues, enabling them to isolate the root problems and provide solutions to them. 16. Describe the purpose of an interrelationship digraph? The interrelationship diagraph is a continuation of the affinity diagram. It is designed to locate any possible errors that might result from the relationship between different issues. On page 262, the steps involved in creating this document are identified as: 1. Construct an affinity diagram to identify the issues relating to a problem. After you have done this, place the cards with related issues in columns with gaps between the cards. It is helpful to use sticky notes on a large piece of flipchart paper. 2. Create the digraph by examining the cards one by one asking, “What other issues on this digraph are caused or influenced by this issue?” As team members identify issues that are related, draw a one-way arrow from the first issue (the cause) to the second issue (the one influenced by the cause). Do this until all the issues have been discussed. 3. After reviewing the arrows and making needed revisions, count the numbers of arrows pointing to each note, and write the numbers on the notes. 4. Identify the cards with the most arrows as the "key factors." Experience has shown that there should not be more than 5 to 10 key factors, depending on the issue being discussed. 5. Draw a double box around the key factors and brainstorm ways to address these issues. 17. Describe the purpose of tree diagrams. Describe an instance in which a tree diagram could be used. A tree diagram is accomplished by breaking a task down to its composite sub-tasks; this is done iteratively until a base activity level has been reached. The resulting hierarchic breakdown provides a manner of breaking the tasks to be accomplished into “bite-sized chunks.” Figure 10-22 on page 264 (shown below) provides an example. Trees (or hierarchic structures) are used in many situations. Their flexibility is apparent in any situation where a task is composed of subordinate tasks. 18. Describe the purpose of a prioritization grid. A prioritization grid allows a person to evaluate the options and assign weights to them to aid in the solution. The steps in creating a prioritization grid are presented on page 264: 1. Determine your goal, your alternatives, and the criteria by which a decision is to be made. 2. Place the selection criteria in order from most important to least important. 3. Apply a percentage weight to each of the criteria for each option. Apply a weight to each of the criteria such that all the weights add up to 1 (for example, A = .40, B = .30, C = .25 D = .05). 4. Add the individual rating for each criterion to come to an overall ranking. Divide by the number of options to find an average ranking. 5. Rank each option with respect to the criteria. Average the rankings, and apply a completed ranking. 6. Multiply the criteria weight by its associated criterion rank for each criterion in the matrix. Notice that in this case a ranking of 4 is best and 1 is worst. The result in each cell of the matrix is called an importance score. 188 7. Add the importance scores for each alternative. 8. Rank the alternatives according to importance. 19. Describe the purpose of a matrix diagram. In what ways is the matrix diagram a brainstorming tool? Brainstorming is a process by which a group of people collectively participates in a problem-solving exercise. A matrix diagram presents the relationships between ideas or issues. Figure 10-23 presents the relationships between assignments and tasks in reducing the number of billing errors. 20. What is the purpose of a process decision program chart? A process decision program chart is used to help brainstorm possible contingencies or problems associated with the implementation of some program or improvement. The tool can take the form of either an outline or a tree chart. Figure 10-24 on page 268 shows a process decision program chart in tree form. 189 Case 10-1: Corporate Universities: Teaching the Tools of Quality 1. Are corporate universities a good idea? If so, why? The corporation that dedicates resources to education signals to its employees that the corporation considers its employees an asset. A corporate university also provides an organization a permanent place to train its employees in the methods and procedures that make the company unique and successful. 2. How can a corporate university do a better job of teaching a firm’s employees the “tools of quality” than traditional training programs? Corporate universities can do a better job of teaching a firm's employees the "tools of quality" than traditional training programs in the following ways:  Corporate universities can prioritize a firm's training initiatives and quickly share with a firm's employees the skills, techniques, and best practices that are necessary to remain competitive.  Corporate universities can provide focus to a company's training and development activities.  Corporate universities can develop a standard curriculum to ensure that all of a company's employees receive consistent training.  Corporate universities, because they are permanent, can provide "follow-up" training and consulting services to firm employees. 3. Select a corporate university and visit its website. How does the company’s corporate university facilitate the company’s overall quality-related goals and initiatives? Each of the listed companies is in a different industry and has a different product mix. Each has a different set of needs for its employees. Motorola University bases its training on Six-Sigma. Sears provides an ongoing Management Skills Curriculum. Food for thought: How do these programs reflect the needs of the company? How do they reflect the culture of the company? 190 Case 10-2: Lanier: Achieving Maximum Performance by Supporting Quality Products with Quality Services 1. Why was it important for Lanier to develop specific programs, such as Customer Vision and Performance Promise, to facilitate its dual emphasis on quality products and quality services? The specific programs focus Lanier's employees and customers on areas that have been particularly important to the company in achieving its dual emphasis on quality products and quality services. For instance, the Customer Vision program focuses the company's employees on providing high customer service. Similarly, the Performance Promise program focuses the company's customers on the strength of Lanier's commitment to guarantee total product satisfaction. Lanier's commitment to quality products and quality services might not come through as clearly to its employees and customers without these tangible programs to rally around. 2. What steps has Lanier taken to reinforce the importance of quality services to its employees? Lanier has initiated the programs referred to including Customer Vision, The Performance Promise, 100 Percent Sold, and The Lanier Team Management Process as tangible evidence of its commitment to quality service. Lanier has also shifted its marketing emphasis from sales to customer satisfaction and has shifted its corporate culture accordingly. 3. Do you believe that Lanier continued to be successful? Why or why not? Lanier has grabbed an interesting niche. The field of document production has been massively enhanced by the current state of office automation. This trend will most likely continue. Their success obviously depends on how well they integrate themselves into the burgeoning culture. Will they continue to be successful? This is a fascinating question for a classroom discussion. 191 Suggested Answers to End of Chapter Problems 192 18. Develop a process map for the registration process at your university. Analyze the number of value-added and nonvalueadded steps. Answers will vary for this question. Below is an example of a process map for registration at a large public university. 193 23. Develop a tree diagram for building a home. A tree diagram could be developed for either decisions or tasks. Student solutions could include a lot of detail or be brief. Some samples follow. 194 24. Develop a tree diagram for writing a major research paper. Now, take the steps you identified for this project and develop an activity network diagram. An example of a tree diagram flowing from bottom to top, with activity network diagram node letters and arrows added: 25. Complete the analysis for the prioritization matrix information in the text by finding the final rankings: For this problem, the smaller result is the best. Final Priority Vector by Machine Machine 1 .3(1) + .2(3) + .5(4) = 2.9 Machine 2 .3(2) + .2(2) + .5(2) = 2.0 Machine 3 .3(3) + .2(4) + .5(1) = 2.2 Machine 4 .3(4) + .2(1) + .5(3) = 2.9 Machine 2 is the best overall choice given the subjective ratings and parameters in this problem. 26. Develop a process decision chart for completing your college degree. One of many potential solutions is presented below. Operations Management: Processes and Supply Chains, 10e (Krajewski et 195 al.) Chapter 5 Quality and Performance 1) The investment a company makes in training employees to perform their duties and redesigning products and processes to improve them would be categorized as prevention costs. Answer: TRUE Reference: Cost of Quality Difficulty: Moderate Keywords: prevention cost Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 2) Appraisal costs are associated with preventing defects before they happen. Answer: FALSE Reference: Cost of Quality Difficulty: Moderate Keywords: appraisal cost Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 3) External failure costs arise when a defect is discovered after the customer has received the product or service. Answer: TRUE Reference: Cost of Quality Difficulty: Moderate Keywords: external failure cost Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 4) An example of an internal failure cost would be warranty cost. Answer: FALSE Reference: Cost of Quality Difficulty: Moderate Keywords: internal failure cost Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 5) From an ethical standpoint, it is acceptable for a hospital's cardiac surgery unit that is striving for zero complications to turn down high-risk patients. Answer: FALSE Reference: Ethics and Quality Difficulty: Easy Keywords: quality, ethics 196 6) Since an employee's responsibility is to move production along, it is ethical to knowingly pass defective services or products to internal or external customers when capacity is tight. Answer: FALSE Reference: Ethics and Quality Difficulty: Easy Keywords: quality, ethics 7) One of the principles that total quality management (TQM) stresses is customer satisfaction. Answer: TRUE Reference: Total Quality Management Difficulty: Easy Keywords: TQM, customer satisfaction 8) The notion of internal customers applies to all parts of a firm. Answer: TRUE Reference: Total Quality Management Difficulty: Easy Keywords: TQM, internal customer 9) Value requires an assessment of the quality of a product or service with reference to the cost of obtaining it. Answer: TRUE Reference: Total Quality Management Difficulty: Easy Keywords: TQM, value 10) People often evaluate the quality of a service on the basis of psychological impressions. Answer: TRUE Reference: Total Quality Management Difficulty: Easy Keywords: TQM, psychological impressions 11) One of the principles that total quality management (TQM) stresses is employee involvement. Answer: TRUE Reference: Total Quality Management Difficulty: Easy Keywords: TQM, employee involvement 12) The Six Sigma five-step approach contains the elements define, measure, analyze, improve, and control. Answer: TRUE Reference: Six Sigma Difficulty: Moderate Keywords: Six Sigma, define, measure, analyze, improve, control Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma 197 13) Applying Six Sigma to service processes is more challenging than for manufacturing processes. Answer: TRUE Reference: Six Sigma Difficulty: Moderate Keywords: Six Sigma, service processes, manufacturing processes Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma 14) Because Six Sigma involves the elimination of defects, it can only be applied in manufacturing processes Answer: FALSE Reference: Six Sigma Improvement Model Difficulty: Easy Keywords: Six Sigma Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma 15) The Six Sigma improvement model can be applied both to projects involving incremental improvements to processes and to projects requiring major changes. Answer: TRUE Reference: Six Sigma Improvement Model Difficulty: Easy Keywords: Six Sigma Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma 16) Acceptance sampling is the application of statistics to determine if the quality of incoming materials should be accepted or rejected. Answer: TRUE Reference: Acceptance Sampling Difficulty: Easy Keywords: acceptance sampling 17) While acceptance sampling does determine if incoming materials should be accepted or rejected, it does not limit the buyer's risk of accepting bad-quality parts or rejecting goodquality parts. Answer: FALSE Reference: Acceptance Sampling Difficulty: Moderate Keywords: acceptance sampling 18) Statistical process control (SPC) is the application of statistical techniques to determine whether a quantity of material should be accepted or rejected. Answer: FALSE Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, statistical process control Learning Outcome: Apply basic statistical process control (SPC) methods. 19) Common causes of variation are the purely random, unidentifiable sources of variation that are unavoidable with the current process. Answer: TRUE Reference: Statistical Process Control Difficulty: Moderate 198 Keywords: common causes of variation Learning Outcome: Apply basic statistical process control (SPC) methods. 20) Assignable causes of variation include any variable-causing factors that can be identified and eliminated. Answer: TRUE Reference: Statistical Process Control Difficulty: Moderate Keywords: assignable causes of variation Learning Outcome: Apply basic statistical process control (SPC) methods. 21) On a control chart, a type I error occurs when the employee concludes that the process is in control when it is actually out of statistical control. Answer: FALSE Reference: Statistical Process Control Difficulty: Moderate Keywords: control chart, type I error Learning Outcome: Apply basic statistical process control (SPC) methods. 22) Convicting an innocent defendant is an example of a type II error. Answer: FALSE Reference: Statistical Process Control Difficulty: Moderate Keywords: control chart, type II error Learning Outcome: Apply basic statistical process control (SPC) methods. 23) Wider limits on a control chart result in lower probability of a type I error. Answer: TRUE Reference: Statistical Process Control Difficulty: Moderate Keywords: control chart, type II error Learning Outcome: Apply basic statistical process control (SPC) methods. 24) One common point for inspection is at the raw material input stage. Answer: TRUE Reference: Statistical Process Control Difficulty: Moderate Keywords: inspection point, material input 199 25) A process is monitored with a control chart. The process is correctly judged to be incontrol once the results from the most recent sample are plotted. Therefore, all of the output produced at that time is good. Answer: FALSE Reference: Statistical Process Control Difficulty: Hard Keywords: control chart, sample Learning Outcome: Apply basic statistical process control (SPC) methods. 26) One chart commonly used for quality measures based on product or service attributes is the x chart. Answer: FALSE Reference: Statistical Process Control Difficulty: Moderate Keywords: x-bar chart, variables, attributes Learning Outcome: Apply basic statistical process control (SPC) methods. 27) Process centering is shown by an x chart. Answer: TRUE Reference: Statistical Process Control Difficulty: Easy Keywords: x-bar chart, centering Learning Outcome: Apply basic statistical process control (SPC) methods. 28) A process may be in control according to the x chart and out of control according to the R-chart. In this case, the process is said to be in partial control. Answer: FALSE Reference: Statistical Process Control Difficulty: Easy Keywords: x-bar, R charts, process control Learning Outcome: Apply basic statistical process control (SPC) methods. 29) The process x and R-charts are developed using a sample size of 5, but the technician mistakenly looks up A2, D3, and D4 values for a sample size of 7. If these charts are put into daily use, the manufacturer will mistakenly ship more bad product than had the charts been constructed correctly. Answer: FALSE Reference: Statistical Process Control Difficulty: Moderate Keywords: x-bar, R charts, process control Learning Outcome: Apply basic statistical process control (SPC) methods. 30) Products never have more than one defect per unit. Answer: FALSE Reference: Statistical Process Control Difficulty: Moderate Keywords: defect Learning Outcome: Apply basic statistical process control (SPC) methods. 200 31) The advantage of variable measurements is that they can be quickly counted compared to attribute measurements. Answer: FALSE Reference: Statistical Process Control Difficulty: Moderate Keywords: variable measurements, attribute measurements Learning Outcome: Apply basic statistical process control (SPC) methods. 32) Process capability determines whether a process is capable of producing the product or services that customers demand. Answer: TRUE Reference: Process Capability Difficulty: Moderate Keywords: process capability 33) ISO 9001:2008 standards provide strict guidelines for how products are to be produced. Answer: FALSE Reference: International Quality Documentation Standards Difficulty: Moderate Keywords: ISO 9001:2008 34) ISO 14000:2004 is a documentation standard that requires participating companies to keep track of their raw-materials use. Answer: TRUE Reference: International Quality Documentation Standards Difficulty: Moderate Keywords: ISO 14000:2004 35) ISO 26000:2010 address human rights as part of the social responsibility standard for public and private organizations. Answer: TRUE Reference: International Quality Documentation Standards Difficulty: Moderate Keywords: ISO 26000:2010 36) Despite their recent development, more firms are certified to the ISO 26000:2010 social responsibility guidelines than the ISO 14000:2004 environmental management system guidelines. Answer: FALSE Reference: International Quality Documentation Standards Difficulty: Moderate Keywords: ISO 26000:2010, ISO 14000:2004 37) The Baldrige Performance Excellence Program considers a company's business results but ISO 9001:2008 registration does not. Answer: TRUE Reference: Baldrige Performance Excellence Program Difficulty: Moderate Keywords: Baldrige, ISO 9001:2008 38) Financial and market results are one consideration of the Baldrige Performance Excellence Program. Answer: TRUE Reference: Baldrige Performance Excellence Program 201 Difficulty: Moderate Keywords: Baldrige, results 39) Strategic planning is given the most weight among the Baldrige Performance Excellence Program. Answer: FALSE Reference: Baldrige Performance Excellence Program Difficulty: Moderate Keywords: Baldrige, strategic planning 40) When a process fails to satisfy a customer: A) it is quite often the customer's fault. B) it is considered a defect C) it is time to reengineer the process. D) it is usually half the customer's fault and half the company's fault. Answer: B Reference: Cost of Quality Difficulty: Easy Keywords: process defect 41) Consumers consider five aspects when defining quality. Which one of the following is least likely to be one of these aspects? A) value B) fitness for use C) psychological impressions D) individual development Answer: D Reference: Cost of Quality Difficulty: Moderate Keywords: quality dimensions 42) Which of the following would be considered a prevention cost of quality? A) inspecting incoming raw materials B) training workers to perform their jobs C) issuing a recall of defective product before another customer is injured D) performing a 24 hour burn-in on every item produced to make sure it works before it is shipped. Answer: B Reference: Cost of Quality Difficulty: Easy Keywords: prevention cost Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 202 43) Which of the following would be considered an appraisal cost of quality? A) training workers to perform their jobs B) purchasing better tools for workers to perform their jobs C) repairing an item under the warranty D) running a functional test on each item before it is boxed for shipment Answer: D Reference: Cost of Quality Difficulty: Easy Keywords: appraisal cost Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 44) A prime example of an internal failure cost is the: A) labor cost associated with inspecting every item produced. B) labor cost associated with repairing an item returned under warranty. C) material cost of a piece of stock metal that has had too large a hole drilled in it. D) material cost of the paint applied to the case of a finished unit. Answer: C Reference: Cost of Quality Difficulty: Easy Keywords: internal failure cost Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 45) A professor, dissatisfied with a product he's purchased, bad mouths the product to his class, resulting in decreased market share (since the students believe everything he tells them). The manufacturer suffers: A) an internal failure cost. B) an external failure cost. C) a prevention cost. D) an appraisal cost. Answer: B Reference: Cost of Quality Difficulty: Easy Keywords: internal failure cost Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 203 46) If the quality level is increased by taking steps to prevent defects before they happen, which one of the following statements is TRUE? A) Prevention costs increase. B) Appraisal costs increase. C) Internal failure costs increase. D) External failure costs increase. Answer: A Reference: Cost of Quality Difficulty: Moderate Keywords: prevention cost Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 47) Improving quality seems to be a strategic weapon in gaining market share. However, improving quality entails allocation of resources and effort. As greater effort is expended to stop defects before they occur, which one of the following costs increases? A) prevention costs B) appraisal costs C) internal failure costs D) external failure costs Answer: A Reference: Cost of Quality Difficulty: Easy Keywords: prevention cost Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 48) Which one of the following is a consequence of internal failures? A) increased customer service B) increased inventory costs C) increased productivity D) decreased lead time Answer: B Reference: Cost of Quality Difficulty: Moderate Keywords: internal failure Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 204 49) Increasing the quality level by better products and processes may: A) allow a company to raise the price of the product. B) move a company closer to a competitive priority of price. C) reduce prevention costs. D) ensure that the trade-off between prevention costs and other costs of poor quality is worthwhile. Answer: A Reference: Cost of Quality Difficulty: Moderate Keywords: quality level, price Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 50) Which one of the following is a direct effect of high yield losses? A) shorter lead times B) reduced need for capacity C) lower inventory levels D) loss of material Answer: D Reference: Cost of Quality Difficulty: Moderate Keywords: scrap, yield loss 51) Which one of the following statements is TRUE? A) Fitness for use is how well a product or service serves its intended market at a price customers are willing to pay. B) The quality of service is generally easier to measure than is the quality of manufactured products. C) High conformance to quality in manufacturing has no effect on profit margins. D) Rework tends to increase lead time and inventory levels maintained in a manufacturing company. Answer: D Reference: Cost of Quality Difficulty: Hard Keywords: rework, rework cost, lead time 52) Which one of the following is considered to be an appraisal cost? A) cost of quality audits B) cost of supplier programs C) cost of rework D) cost of process design Answer: A Reference: Cost of Quality Difficulty: Moderate Keywords: appraisal cost, audit costs Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 205 53) Which one of the following statements is TRUE? A) Appraisal costs decrease as quality level decreases. B) Appraisal costs increase as the variation of output increases. C) Appraisal costs increase as the variation of output decreases. D) Appraisal costs increase as quality level increases. Answer: B Reference: Cost of Quality Difficulty: Moderate Keywords: appraisal cost, quality costs Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 54) A cost that is incurred if some aspect of a service must be performed again is called a(n): A) yield loss. B) prevention cost. C) appraisal cost. D) rework cost. Answer: D Reference: Cost of Quality Difficulty: Moderate Keywords: rework cost Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 55) When errors have been made while producing a product such that the item must be discarded, the resultant cost is called a(n): A) warranty. B) scrap cost. C) rework cost. D) external failure cost. Answer: B Reference: Cost of Quality Difficulty: Moderate Keywords: yield loss, scrap cost Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 56) Which one of the following is part of prevention costs? A) the costs of quality audits B) the costs resulting from scrap C) the costs of improving process design and product design D) the costs of lawsuits from injury from use of the product Answer: C Reference: Cost of Quality Difficulty: Hard Keywords: prevention cost Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 57) Which one of the following is a potential consequence of external failures? A) longer lead times B) less rework C) more litigation costs D) lower product costs 206 Answer: C Reference: Cost of Quality Difficulty: Moderate Keywords: external failure Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 58) At which of the following steps will the cost of detecting product defects be the highest? A) customer B) process C) final testing D) raw material Answer: A Reference: Cost of Quality Difficulty: Moderate Keywords: external failure Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 59) Developing a cultural environment for ethical behavior in an organization includes all of the following EXCEPT: A) education in how ethics is part of an employee's job. B) organization of an ethics public relations group to interface between the firm and society. C) redesign of a service or product to make it easier to produce. D) documentation of a company's ethical standards and practices. Answer: C Reference: Ethics and Quality Difficulty: Moderate Keywords: quality, ethics 60) "Quality at the source" implies: A) less expensive raw materials. B) lower scrap. C) higher rework costs. D) more final-test inspectors. Answer: B Reference: Total Quality Management Difficulty: Hard Keywords: quality at the source, TQM 207 61) Which one of the following statements is a key feature of both TQM and Six Sigma? A) Quality is primarily the responsibility of all employees in the organization. B) Quality is primarily the responsibility of the quality control department. C) Quality is primarily the responsibility of the production department. D) Quality is primarily the responsibility of top management. Answer: A Reference: Total Quality Management, Six Sigma Difficulty: Moderate Keywords: TQM, total quality management, Six Sigma Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma 62) A firm's internal program in employee involvement includes which of the following considerations? A) defining who is the customer B) supplier management C) product availability D) psychological impressions Answer: A Reference: Total Quality Management Difficulty: Easy Keywords: TQM, total quality management, defining the customer 63) The TQM wheel features ________ at its center. A) incremental improvement B) customer satisfaction C) employee teams D) leadership Answer: B Reference: Total Quality Management Difficulty: Easy Keywords: TQM wheel, customer satisfaction 64) As an operations manager, which definition of quality do you have the most control over? A) conformance to specifications B) support C) psychological impressions D) value Answer: A Reference: Total Quality Management Difficulty: Moderate Keywords: quality conformance 208 65) Quality measured with reference to price is captured by the notion of: A) conformance to specifications. B) value. C) fitness for use. D) psychological impressions. Answer: B Reference: Total Quality Management Difficulty: Easy Keywords: quality, value 66) If a product initially fails to live up to the customer's expectations, which dimension of quality might salvage the sale and the company's reputation? A) psychological impressions B) fitness for use C) support D) value Answer: C Reference: Total Quality Management Difficulty: Easy Keywords: quality, value, support 67) As he entered his broker's office for the first time, the young associate professor was dazzled by its tasteful accoutrements and the offer of a double tall split shot skinny hazelnut latte. He knew his lottery winnings would be safe here, thanks to his: A) broker's conformance to specifications. B) broker's fitness for use. C) broker's support. D) own psychological impressions. Answer: D Reference: Total Quality Management Difficulty: Easy Keywords: quality, psychological impressions 68) The 15-year-old car didn't dazzle students or members of the opposite sex, but it started every morning and evening and got the professor to his destination on time, thereby scoring high on the: A) psychological impressions scale of quality. B) fitness for use scale of quality. C) support scale of quality. D) bells and whistles scale of quality. Answer: B Reference: Total Quality Management Difficulty: Easy Keywords: quality, fitness for use 209 69) One of the main challenges in developing the proper culture for TQM is to: A) define customer for each employee. B) suspend reward systems based on quantity. C) institute an equitable employee recognition program. D) get buy-in from the customer. Answer: A Reference: Total Quality Management Difficulty: Easy Keywords: TQM culture, total quality management, defining the customer 70) A firm that has embraced the notion of quality at the source is more likely to have: A) an inspector at each workstation working alongside each employee. B) inspectors at each of their suppliers performing 100% inspection on shipments bound for them. C) multiple inspectors at the end of the line to make sure no defects are passed along to the customer. D) no inspectors. Answer: D Reference: Total Quality Management Difficulty: Moderate Keywords: TQM, quality at the source, inspectors 71) Continuous improvement is a philosophy that: A) uses problem-solving techniques within work teams. B) ensures there are plenty of quality inspectors to find areas for improvement. C) waits until a big problem occurs, then systematically solves it. D) encourages the hiring of statistical process control specialists to reduce the need for current employees to learn statistical methods. Answer: A Reference: Total Quality Management Difficulty: Moderate Keywords: continuous improvement, TQM 72) Which of the following statements relating to total quality management and Six Sigma is true? A) The only effect of internal failure is loss of material. B) Poor quality generally does not increase the inventory level or lead times. C) To produce 100 good units in a process with a 20 percent defective rate, the company must produce a total of 120 units. D) High product quality in manufacturing can have significant market implications for a firm. Answer: D Reference: Multiple Sections Difficulty: Moderate Keywords: TQM, total quality management, Six Sigma Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma 210 73) When considering the plan-do-study-act cycle for problem solving, evaluating how closely a project's results correspond to the initial goals set for the work is part of the ________ step. A) plan B) do C) study D) act Answer: C Reference: Continuous Improvement Difficulty: Moderate Keywords: continuous improvement, PDSA, plan, do study, act 74) When considering the plan-do-study-act cycle for problem solving, instructing other employees in the use of the new process occurs in the ________ step. A) plan B) do C) study D) act Answer: D Reference: Continuous Improvement Difficulty: Moderate Keywords: continuous improvement, PDSA, plan, do study, act 75) When considering the plan-do-study-act cycle for problem solving, quantitative goals are set for process improvement in the ________ step. A) plan B) do C) study D) act Answer: A Reference: Continuous Improvement Difficulty: Moderate Keywords: continuous improvement, PDSA, plan, do study, act 76) What is one reason that Six Sigma is more difficult to apply to service processes? A) There is no manual that suggests how Six Sigma can be applied to services. B) The work product is more difficult to see. C) There is no way to measure process capability of a service product. D) The National Six Sigma Society cautions against using it for services. Answer: B Reference: Six Sigma Difficulty: Moderate Keywords: Six Sigma, service processes Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma 211 77) Which step of the Six Sigma DMAIC procedure applies tools such as Pareto charts and cause-and-effect diagrams to determine where major process redesign may be necessary? A) Define B) Measure C) Analyze D) Improve E) Control Answer: C Reference: Six Sigma Difficulty: Moderate Keywords: Six Sigma, improvement model, DMAIC Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma 78) Which step of the Six Sigma DMAIC procedure monitors the process to make sure high performance levels are maintained? A) Define B) Measure C) Analyze D) Improve E) Control Answer: E Reference: Six Sigma Difficulty: Moderate Keywords: Six Sigma, improvement model, DMAIC Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma 79) Which step of the Six Sigma DMAIC procedure involves identifying data sources and preparing a data collection plan? A) Define B) Measure C) Analyze D) Improve E) Control Answer: B Reference: Six Sigma Difficulty: Easy Keywords: Six Sigma, improvement model, DMAIC Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma 212 80) Six sigma teacher can attain different level titles, based on their experience and level of achievement. What is the highest level a Six Sigma teacher can reach? A) Black Belt B) Green Belt C) Master Black Belt D) Master Green Belt Answer: C Reference: Six Sigma Difficulty: Easy Keywords: Six Sigma, Black Belt, Green Belt Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma 81) In acceptance sampling, the proportion defective that the buyer will allow in an incoming shipment is: A) the acceptable random sample (ARS). B) the upper control limit (UCL). C) the lower control limit (LCL). D) the acceptable quality level (AQL). Answer: D Reference: Acceptance Sampling Difficulty: Easy Keywords: acceptance sampling, AQL 82) In acceptance sampling, when the random sample passes the buyer's incoming test (low number of defects found), the next action taken is to: A) accept the entire lot of incoming materials. B) do additional testing to reduce the risk of accepting a bad-quality lot. C) place the lot on hold and wait for additional lots from this seller to be tested to assure consistent good quality. D) 100% inspect the lot because some defects were found. Answer: A Reference: Acceptance Sampling Difficulty: Easy Keywords: acceptance sampling, AQL 83) Which of the following would be a "common" cause of variation? A) random sources B) a machine in need of repair C) an untrained worker D) a defective raw material Answer: A Reference: Statistical Process Control Difficulty: Easy Keywords: common and random causes of variation Learning Outcome: Apply basic statistical process control (SPC) methods. 213 84) Which one of the following statements is TRUE? A) Nothing can be done to completely eliminate variation in process output. B) SPC and TQM are one and the same thing. C) Assignable causes of variation are purely random factors that can be assigned to a particular process. D) Common causes of variation are those factors that can be identified as commonly occurring at a particular process. Answer: A Reference: Statistical Process Control Difficulty: Moderate Keywords: common causes of variation Learning Outcome: Apply basic statistical process control (SPC) methods. 85) In Statistical Process Control, ________ are used to detect defects and determine if the process has deviated from design specifications. A) Flowcharts B) Cause-and-Effect Diagrams C) Process Capability Charts D) Control Charts Answer: D Reference: Statistical Process Control Difficulty: Easy Keywords: Statistical Process Control, SPC Learning Outcome: Apply basic statistical process control (SPC) methods. 86) A sampling plan is best for evaluating quality when: (1) Inspection costs are high (2) Inspection costs are low (3) Non-destructive testing is available (4) Destructive testing is required A) 1 and 3 B) 1 and 4 C) 2 and 3 D) 2 and 4 Answer: B Reference: Statistical Process Control Difficulty: Easy Keywords: Statistical Process Control, sampling 214 87) A measure of the dispersion of observations in a process distribution is called a(an): A) average. B) range. C) shape. D) specification. Answer: B Reference: Statistical Process Control Difficulty: Easy Keywords: process distribution, dispersion, range Learning Outcome: Apply basic statistical process control (SPC) methods. 88) Which of the following can be used to eliminate "common" causes of variation? A) statistical process control B) acceptance sampling C) traditional statistical techniques D) they cannot be eliminated. Answer: D Reference: Statistical Process Control Difficulty: Moderate Keywords: common causes of variation Learning Outcome: Apply basic statistical process control (SPC) methods. 89) Which one of the following statements about quality control is TRUE? A) Measurement by attributes is a simple yes or no decision. B) Complete inspection is used when inspection cost is high. C) Sampling inspection is used when the cost of passing a defective unit is high relative to the cost of inspection. D) Measurement by variables is often used when the quality specifications are complex. Answer: A Reference: Statistical Process Control Difficulty: Moderate Keywords: quality control, measurement of attributes Learning Outcome: Apply basic statistical process control (SPC) methods. 90) Which one of the following statements relating to quality is TRUE? A) Sampling procedures based on measurement by variables should be used when quality specifications are complex. B) A distribution of sample means has more variance than the process distribution itself. C) The distribution of sample means can be approximated by the normal distribution. D) Sampling is a better approach than 100 percent inspection when the cost of accepting a defective item is very high. Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: normal distribution, mean, sample means 215 91) When should complete inspection be used? A) when inspection tests are destructive B) when inspection tasks are monotonous C) when the cost of product failure is high relative to the inspection costs D) when quality is a competitive priority Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: complete inspection 92) An operator of a filling machine plotted the weights of each bag she filled for three weeks. At the same time, a quality inspector randomly took groups of five bags of the same output and plotted the average weights of the samples. The inspector's sampling distribution will: A) have greater variability than the operator's distribution. B) have less variability than the operator's distribution. C) show if the output has been produced to the operator's specifications. D) have a mean five times greater than the operator's distribution. Answer: B Reference: Statistical Process Control Difficulty: Moderate Keywords: variance, SPC Learning Outcome: Apply basic statistical process control (SPC) methods. 93) In SPC, the distribution of sample means: A) can be approximated by the normal distribution. B) will have greater variability than the process distribution. C) will always have a mean greater than the process distribution because of the sample size. D) cannot be used for control charts because the variability is understated. Answer: A Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, distribution, sample mean Learning Outcome: Apply basic statistical process control (SPC) methods. 94) The three sigma limits for a process whose distribution conforms to the normal distribution include approximately: A) 50% of the observed values, in the long run. B) 68% of the observed values, in the long run. C) 95% of the observed values in the long run. D) 99% of the observed values in the long run. Answer: D Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, distribution limits Learning Outcome: Apply basic statistical process control (SPC) methods. 216 95) Regarding control charts, a type I error refers to concluding that the process is: A) in control when it is not in control. B) incapable when it is capable. C) out of control when it is in control. D) capable when it is not capable. Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: type I errors, SPC, process control Learning Outcome: Apply basic statistical process control (SPC) methods. 96) An example of a type I error would be: A) throwing away a perfectly good banana. B) counting a student's multiple choice response correct when it is actually incorrect. C) releasing a guilty defendant. D) counting a student's multiple choice response correct when it is actually correct. Answer: A Reference: Statistical Process Control Difficulty: Moderate Keywords: type I and type II errors, process control Learning Outcome: Apply basic statistical process control (SPC) methods. 97) An example of a type II error would be: A) counting a student's True/False response incorrect when it is actually correct. B) convicting an innocent defendant. C) eating food that you were unaware was spoiled. D) counting a student's True/False response incorrect when it is actually incorrect. Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: type I and type II errors, process control Learning Outcome: Apply basic statistical process control (SPC) methods. 98) Regarding control charts, changing from three-sigma limits to two-sigma limits: A) increases the probability of concluding nothing has changed, when in fact it has. B) increases the probability of searching for a cause when none exists. C) decreases the probability that the process average will change. D) decreases the probability that defects will be generated by the process. Answer: B Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, sigma limits, type I and type II errors, process control Learning Outcome: Apply basic statistical process control (SPC) methods. 217 99) Regarding control charts, changing from two-sigma limits to three-sigma limits: A) increases the probability of concluding nothing has changed, when in fact it has. B) increases the probability of searching for a cause when none exists. C) decreases the probability that the process average will change. D) decreases the probability that defects will be generated by the process. Answer: A Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, sigma limits Learning Outcome: Apply basic statistical process control (SPC) methods. 100) The UCL and LCL for an x chart are 25 and 15 respectively. The central line is 20, and the process variability is considered to be in statistical control. The results of the next six sample means are 18, 23, 17, 21, 24, and 16. What should you do? A) Nothing; the process is in control. B) Explore the assignable causes because the second, fourth, and fifth samples are above the mean. C) Explore the assignable causes because there is a run. D) Explore the assignable causes because there is a trend. Answer: A Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, process control, assignable causes Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 101) The central line on a p-chart is 0.50 with a UCL of 0.65 and an LCL of 0.35. The results of the next six samples are 0.60, 0.37, 0.45, 0.48, 0.45, and 0.42. What should you do? A) Nothing; the process is behaving as expected. B) Explore the assignable causes because three observations are above the central line. C) Explore assignable causes because there is a run. D) Increase the sample size to get a better measure. Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: p-chart, SPC, process control, assignable causes Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 102) The underlying statistical distribution for the p-chart is: A) Poisson. B) binomial C) percentage. D) normal. Answer: B Reference: Statistical Process Control Difficulty: Moderate Keywords: p-chart, binomial distribution Learning Outcome: Apply basic statistical process control (SPC) methods. 103) A company is interested in monitoring the variability in the weight of the fertilizer bags it produces. An appropriate control chart would be: A) an x chart. 218 B) a p-chart. C) a c-chart. D) an R-chart. Answer: D Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, process control, variability Learning Outcome: Apply basic statistical process control (SPC) methods. 104) A company is interested in monitoring the average time it takes to serve its customers. An appropriate control chart would be: A) an x chart. B) a p-chart. C) a c-chart. D) an R-chart. Answer: A Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control chart, mean, central tendency, center line Learning Outcome: Apply basic statistical process control (SPC) methods. 105) A company is interested in monitoring the number of scratches on Plexiglass panels. The appropriate control chart to use would be: A) an x chart. B) a p-chart. C) a c-chart. D) an R-chart. Answer: C Reference: Statistical Process Control Difficulty: Hard Keywords: process control, SPC, defects Learning Outcome: Apply basic statistical process control (SPC) methods. 106) Which alternative will increase the probability of detecting a shift in the process average? A) increasing the control limit spread B) taking smaller samples C) taking smaller samples more frequently D) taking larger samples more frequently Answer: D Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, process control, sample Learning Outcome: Apply basic statistical process control (SPC) methods. 219 107) Five samples of size 4 were taken from a process. A range chart was developed that had LCLR = 0 and UCLR = 2.50. Similarly, an average chart was developed with the average range from the five samples, with LCLx =15.0 and UCLx = 24.0. The ranges for each of the five samples were 1.75, 2.42, 2.75, 2.04, and 2.80, respectively. The values of the sample average for each sample were 19.5, 22.3, 17.4, 20.1, and 18.9, respectively. What can you tell management from this analysis? A) The process variability is out of control, and we cannot make a statement about the process average. B) The process variability is out of control, but the process average is in control. C) The process variability and the process average are out of control. D) We cannot tell if the process variability or the process average is out of control. Answer: A Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, process control, process variability, process average Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 220 Table 5.1 Factors for Calculating Three-Sigma Limits for the x Chart and R-Chart Size of Sample Factor for UCL and LCL for x-bar-Charts A2 Factor for LCL for R-Charts D3 Factor for UCL for R-Charts D4 2 1.880 0 3.267 3 1.023 0 2.575 4 0.729 0 2.282 5 0.577 0 2.115 6 0.483 0 2.004 7 0.419 0.076 1.924 8 0.373 0.136 1.864 9 0.337 0.184 1.816 10 0.308 0.223 1.777 Source: 1950 ASTM Manual on Quality Control of Materials, copyright American Society for Testing Materials. Reprinted with permission. 108) A milling operation has historically produced an average thickness of 0.005 inch with an average range of 0.0015 inch. Currently, the first three items from each batch of 20 are inspected. Use Table 5.1. What is the value of the lower control limit for the x-bar chart? A) less than or equal to 0.00100 B) greater than 0.00100 but less than or equal to 0.00299 C) greater than 0.00299 but less than or equal to 0.00499 D) greater than 0.00499 Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, lower control limit, x-bar chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 109) A milling operation has historically produced an average thickness of 0.005 inch with an average range of 0.0015 inch. Currently, the first three items from each batch of 20 are inspected. Use Table 5.1. What is the value of lower control limit for the x-bar chart if the sample size is increased to 6? A) less than or equal to 0.0030 B) greater than 0.0030 but less than or equal to 0.0049 C) greater than 0.0049 but less than or equal to 0.0069 D) greater than 0.0069 Answer: B Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, lower control limit, x-bar chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 110) Historically, the average diameter of the holes drilled has been 0.25 cm and the average range has been 0.1 cm. Determine the central line and upper and lower control limits for an and an R-chart, assuming samples of size 8 will be taken. Use Table 5.1. For 221 the R-chart, what is the value of the UCLR? A) less than or equal to 0.1000 B) greater than 0.1000 but less than or equal to 0.1510 C) greater than 0.1510 but less than or equal to 0.2020 D) greater than 0.2020 Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, upper control limit, R-chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 111) Historically, the average diameter of the holes drilled has been 0.25 cm and the average range has been 0.1 cm. Determine the central line and upper and lower control limits for an and an R-chart, assuming samples of size 8 will be taken. Use Table 5.1. For the R-chart, what is the value of the LCLR? A) less than or equal to 0.010 B) greater than 0.010 but less than or equal to 0.020 C) greater than 0.020 but less than or equal to 0.030 D) greater than 0.030 Answer: B Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, lower control limit, R-chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 112) Historically, the average diameter of the holes drilled has been 0.25 cm and the average range has been 0.1 cm. Determine the central line and upper and lower control limits for an and an R-chart, assuming samples of size 8 will be taken. Use Table 5.1. For the chart, what is the value of the upper control limit for the x-bar chart? A) less than or equal to 0.100 B) greater than 0.100 but less than or equal to 0.200 C) greater than 0.200 but less than or equal to 0.300 D) greater than 0.300 Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, upper control limit, x-bar chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 222 113) Historically, the average diameter of the holes drilled has been 0.25 cm and the average range has been 0.1 cm. Determine the central line and upper and lower control limits for an x and an R-chart, assuming samples of size 8 will be taken. Use Table 5.1. For the x chart, what is the value of the lower control limit for the x-bar chart ? A) less than or equal to 0.10 B) greater than 0.10 but less than or equal to 0.19 C) greater than 0.19 but less than or equal to 0.29 D) greater than 0.29 Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, lower control limit, x-bar chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 114) Historically, the average time to service a customer complaint has been 3 days and the standard deviation has been 0.50 day. Management would like to specify the control limits for an x chart with a sample size of 10- and 3- sigma limits. The LCL for the chart would be: A) less than 2.40. B) greater than 2.40 but less than or equal to 2.45. C) greater than 2.45 but less than or equal to 2.50. D) greater than 2.50. Answer: D Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, lower control limit, x-bar chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 115) Historically, the average time to service a customer complaint has been 3 days and the standard deviation has been 0.50 day. Management would like to specify the control limits for an x chart with a sample size of 10- and 3- sigma limits. Suppose the next sample of 10 yielded the following result: 3.2, 2.1, 3.6, 2.8, 3.9, 3.5, 2.7, 4.1, 2.6, and 3.3. What conclusion can be drawn? A) Assuming the process variability is in control, the process average is also in statistical control. B) Assuming the process average is in control, the process average is out of statistical control. C) The sample size should be increased. D) No conclusion can be drawn because there is insufficient data. Answer: A Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, process control, process variability Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 223 116) Historically, the average time to service a customer complaint has been 3 days and the standard deviation has been 0.50 day. Management would like to specify the control limits for an x chart with a sample size of 10 and 3- sigma limits. The UCL for the chart would be: A) less than or equal to 3.30. B) greater than 3.30 but less than or equal to 3.40. C) greater than 3.40 but less than or equal to 3.50. D) greater than 3.50. Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control limit, x-bar chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills Table 5.2 117) Using Table 5.2, the sample values represent service times in minutes. For the Rchart, what is the value of UCLR? A) less than or equal to 0.90 B) greater than 0.90 but less than or equal to 0.99 C) greater than 0.99 but less than or equal to 1.99 D) greater than 1.99 Answer: D Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control limit, R-chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 118) Using Table 5.2, for the R-chart, what is the value of LCLR? A) less than or equal to 0.01 B) greater than 0.01 but less than or equal to 0.02 C) greater than 0.02 but less than or equal to 0.03 D) greater than 0.03 Answer: A Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control limit, R-chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 119) Using Table 5.2, for the x chart, what is the value of the upper control limit for the x-bar chart? 224 A) less than or equal to 9.00 B) greater than 9.00 but less than or equal to 9.99 C) greater than 9.99 but less than or equal to 10.99 D) greater than 10.99 Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control limit, x-bar chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 120) Using Table 5.2, for the x chart, what is the value of the lower control limit for the x-bar chart? A) less than or equal to 9.00 B) greater than 9.00 but less than or equal to 9.99 C) greater than 9.99 but less than or equal to 10.99 D) greater than 10.99 Answer: B Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control limit, x-bar chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 121) The consultant suspiciously eyed the c-chart that Chickenverks used to monitor the number of broken eggs in each 100 egg carton. "You know you really should be using a pchart," the consultant commented with an air of superiority. "What's the difference between a p-chart and a c-chart in this application?" the long time Chickenverks employee asked with an obvious edge to his voice. "Well," the consultant replied, "the difference is: A) the width of the three sigma limits for the c-chart is 100 times greater than those of the p-chart." B) the three-sigma p-chart will catch problems earlier than the three sigma c-chart." C) the three sigma c-chart will catch problems earlier than the three sigma p-chart." D) well, OK, you got me. The charts will look and behave the same for all practical purposes." Answer: D Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, attributes, p-chart, c-chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 225 122) Historically, the average proportion of defective bars has been 0.015. Samples will be of 100 bars each. Construct a p-chart using z = 3. What is the value of UCL? A) less than or equal to 0.050 B) greater than 0.050 but less than or equal to 0.060 C) greater than 0.060 but less than or equal to 0.070 D) greater than 0.070 Answer: B Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, upper control limit, p-chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 123) Historically, the average proportion of defective bars has been 0.015. Samples will be of 100 bars each. Construct a p-chart using z = 3. What is the value of LCL? A) less than or equal to 0.01 B) greater than 0.01 but less than or equal to 0.02 C) greater than 0.02 but less than or equal to 0.03 D) greater than 0.03 Answer: A Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, lower control, limit, p-chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 124) Historically, the average proportion of defective bars has been 0.015. Samples will be of 100 bars each. Construct a p-chart using z = 3. Suppose a sample had 0.07 defectives. What would you do? A) Nothing; it is just random variation. B) Look for assignable causes. C) Change z to 2 and take another sample. D) Change z to 4 and continue sampling. Answer: B Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control limit, p-chart, assignable causes Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 226 125) Historically, the average proportion of defective bars has been 0.015. Samples will be of 100 bars each. Construct a p-chart using z = 3. Suppose a sample had 0.04 defectives. What would you do? A) Nothing; it appears to be random variation. B) Look for assignable causes. C) Change z to 2 and take another sample. D) Change z to 4 and continue sampling. Answer: A Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control limit, p-chart, random variation Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills Table 5.3 Sample Number Number Defective 1 1 2 4 3 2 4 4 5 0 126) Samples of 100 checks each were taken at a bank from an encoding machine (which records the amount of a check) over a five-day period. Details are summarized in Table 5.3. If the bank were to use the average proportion defective from these five samples as the central line for a process control chart, what would be the central line? A) less than or equal to 0.01 B) greater than 0.01 but less than or equal to 0.02 C) greater than 0.02 but less than or equal to 0.03 D) greater than 0.03 Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, process control, center line, p-chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 127) Use the information from Table 5.3. What is the upper control limit (UCL) if the bank were to use z = 2 and a sample size of 100? A) less than or equal to 0.02 B) greater than 0.02 but less than or equal to 0.04 C) greater than 0.04 but less than or equal to 0.06 D) greater than 0.06 Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, upper control limit, p-chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 128) Four samples of 100 each were taken from an assembly line, with the following results: Sample Number Number 227 Defective 1 6 2 12 3 2 4 8 Using the historical average as the central line of the chart, which one of the following is the limit for an attributes control chart with z = 2? A) UCL > 0.1 and LCL > 0.03 B) UCL > 0.1 and LCL < 0.03 C) UCL < 0.1 and LCL > 0.03 D) UCL < 0.1 and LCL < 0.03 Answer: B Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control limit, attributes Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills Table 5.4 The manager of Champion Cooling Company has recently implemented a statistical process control method. The accompanying table shows the results of five different samples of walk-in coolers that were produced in the previous month. Sample 1 Sample 2 Sample 3 Sample 4 Sample 5 Unit 1 104.0 100.1 101.1 102.0 102.7 Unit 2 106.4 104.4 100.4 105.9 105.4 Unit 3 101.8 103.6 103.0 104.6 106.1 Unit 4 105.6 101.4 101.0 102.1 102.5 Unit 5 100.6 100.7 104.9 107.0 102.0 129) Using the data in Table 5.4, what is the value of the center line for the chart that monitors performance to target? A) 3.9 B) 102.0 C) 103.2 D) 103.7 Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, center line, variables, control chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 228 130) Use the information in Table 5.4. The first point plotted on the x-bar chart has a value of: A) 104.3. B) 103.7. C) 102.0. D) 103.2. Answer: B Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control chart, variables Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 131) Use the information in Table 5.4. The upper control limit for the x-bar chart with three sigma limits is: A) 105.9. B) 103.7. C) 103.2. D) 102.3. Answer: A Reference: Statistical Process Control Difficulty: Hard Keywords: SPC, UCL, control chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 132) Use the information in Table 5.4. The center line of the R-chart is: A) 4.4. B) 3.9. C) 4.8. D) 5.9. Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, R-chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 133) Use the data in Table 5.4. What would be the best chart to construct to monitor how consistent the production process is? A) p-chart B) c-chart C) x-bar chart D) R-chart Answer: D Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, R-chart, variables Learning Outcome: Apply basic statistical process control (SPC) methods. 134) If an x-bar chart is constructed using the data in Table 5.4, what conclusion can be reached? A) The process is in control. B) The process is out of control. C) The process is capable. 229 D) The process is both capable and in control. Answer: A Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, variables, x-bar chart, process control Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 135) A hotel tracks the number of complaints per month. When the process is in control, there is an average of 35 complaints per month. Assume that a 2-sigma control limit is used. What is the lower control limit? A) less than or equal to 15 B) more than 15 but less than or equal to 20 C) more than 20 but less than or equal to 25 D) more than 25 Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control limit, attribute Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 136) A hotel tracks the number of complaints per month. When the process is in control, there is an average of 35 complaints per month. Assume that a 2-sigma control limit is used. What is the upper control limit? A) less than or equal to 35 B) more than 35 but less than or equal to 45 C) more than 45 but less than or equal to 55 D) more than 55 Answer: C Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control limit, attribute Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 230 137) A hotel tracks the number of complaints per month. When the process is in control, there is an average of 35 complaints per month. Assume that a 2-sigma control limit is used. The next four months have 33, 27, 29, and 43 complaints. What should management do? A) Look for assignable causes because the process is in control. B) Look for assignable causes because the process is out of control. C) Look for common causes because the process is out of control. D) Do nothing; the process is in control. Answer: D Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control limit, attribute Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 138) Process capability can be addressed when: A) assignable causes are present. B) a process is in statistical control. C) a process is in statistical control but assignable causes are present. D) the nominal value equals the tolerance regardless of assignable causes. Answer: B Reference: Process Capability Difficulty: Moderate Keywords: process capability, process control Learning Outcome: Apply basic statistical process control (SPC) methods. 139) Which of the following statements is TRUE? A) A process can be out of statistical control but still exhibit process capability. B) Process capability refers to the ability of the operations function to meet a product's design specifications. C) A process in statistical control necessarily exhibits process capability. D) Process capability can be determined for manufactured products only, not for services. Answer: B Reference: Process Capability Difficulty: Moderate Learning Outcome: Apply basic statistical process control (SPC) methods. 231 140) A metal-cutting operation has a target value of 20 and consistently averages 19.8 with a standard deviation of 0.5. The design engineers have established an upper specification limit of 22 and a lower specification limit of 18. Which statement concerning this process is TRUE? A) The process capability ratio is 1.46. B) The process capability index is 1.33. C) The process is in control. D) None of these is true. Answer: D Reference: Process Capability Difficulty: Moderate Keywords: process capability ratio, process capability index Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 141) A metal-cutting operation has a target value of 20 and consistently averages 19.8 with a standard deviation of 0.5. The design engineers have established an upper specification limit of 22 and a lower specification limit of 18. What is the process capability index? A) 1.20 B) 1.33 C) 1.46 D) 1.66 Answer: A Reference: Process Capability Difficulty: Moderate Keywords: process capability index Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 142) The upper and lower control limits for a component are 0.150 cm. and 0.120 cm., with a process target of .135 cm. The process standard deviation is 0.004 cm. and the process average is 0.138 cm. What is the process capability index? A) 1.00 B) 1.25 C) 1.50 D) 1.75 Answer: A Reference: Process Capability Difficulty: Moderate Keywords: process capability index Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 232 143) Service time is targeted for 15 minutes with an upper and lower specification of 16 and 14 min., respectively. The process standard deviation is 0.2 min. and the process average is 14.8 min. What is the process capability ratio? A) 1.33 B) 1.50 C) 1.66 D) 2.00 Answer: C Reference: Process Capability Difficulty: Moderate Keywords: process, capability ratio Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 144) A metal-cutting operation has a target value of 20 and consistently averages 19.8 with a standard deviation of 0.5. The design engineers have established an upper specification limit of 22 and a lower specification limit of 18. What is the process capability ratio? A) 1.20 B) 1.33 C) 1.46 D) 1.66 Answer: B Reference: Process Capability Difficulty: Moderate Keywords: process capability index Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 145) The upper and lower specifications for a service are 10 min. and 8 min., respectively. The process average is 9 min. and the process capability ratio is 1.33. What is the process standard deviation? A) 0.1 B) 0.15 C) 0.20 D) 0.25 Answer: D Reference: Process Capability Difficulty: Moderate Keywords: process capability ratio, process standard deviation Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 233 146) A drilling and deburring process has tolerances of plus or minus .001 millimeters. What does the process standard deviation need to be in order for this process to have a capability ratio of 1.67? A) 0.0002 millimeters B) 0.0001 millimeters C) 0.00002 millimeters D) 0.00001 millimeters Answer: A Reference: Process Capability Difficulty: Moderate Keywords: process capability ratio, process standard deviation Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 147) A drilling and deburring process has tolerances of plus or minus .01 centimeters. What does the process standard deviation need to be in order for this process to have a capability ratio of 1.50? A) 0.0022 millimeters B) 0.0001 millimeters C) 0.0022 centimeters D) 0.00001 centimeters Answer: C Reference: Process Capability Difficulty: Moderate Keywords: process capability ratio, process standard deviation Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 148) A laser eye surgery process has tolerances of plus or minus .001 inches. What does the process standard deviation need to be in order for this process to have a capability ratio of 1.33? A) 0.025 inches B) 0.0015 inches C) 0.015 inches D) 0.00025 inches Answer: A Reference: Process Capability Difficulty: Moderate Keywords: process capability ratio, process standard deviation Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 234 149) A laser surgery process has tolerances of plus or minus .01 inches. What does the process standard deviation need to be in order for this process to have a capability ratio of 1.00? A) 0.02 inches B) 0.0033 inches C) 0.002 inches D) 0.033 inches Answer: B Reference: Process Capability Difficulty: Moderate Keywords: process capability ratio, process standard deviation Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 150) A manufacturer embarking on a Six Sigma program sets the goal of having true Six Sigma capability for all processes by the end of the month. If their current process capability index on a key metric is less than 2.0 and the process capability ratio is 1.0, what must happen with the process standard deviation? A) The process standard deviation must be doubled. B) The process standard deviation must be reduced by a factor of six. C) The process standard deviation must be cut in half. D) The process tolerances should be doubled. Answer: C Reference: Process Capability Difficulty: Moderate Keywords: process capability ratio, process standard deviation Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma AACSB: Analytic skills 151) A manufacturer embarking on a Six Sigma program sets the goal of having true Six Sigma capability for all processes by the end of the month. If their current process capability index on a key metric is less than 2.0 and the process capability ratio is 1.5, what must happen with the process standard deviation? A) The process standard deviation must be reduced by 25%. B) The process standard deviation must be reduced by 33%. C) The process standard deviation must be reduced by 50%. D) The process standard deviation must be reduced by 67%. Answer: A Reference: Process Capability Difficulty: Moderate Keywords: process capability ratio, process standard deviation Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma AACSB: Analytic skills 235 152) A manufacturer embarking on a Six Sigma program sets the goal of having true Six Sigma capability for all processes by the end of the month. If their current process capability index on a key metric is less than 2.0 and the process capability ratio is 1.70, what must happen with the process standard deviation? A) The process standard deviation must be reduced by 50%. B) The process standard deviation must be reduced by 33%. C) The process standard deviation must be reduced by 25%. D) The process standard deviation must be reduced by 15%. Answer: D Reference: Process Capability Difficulty: Moderate Keywords: process capability ratio, process standard deviation Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma AACSB: Analytic skills 153) A manufacturer embarking on a Six Sigma program sets the goal of having true Six Sigma capability for all processes by the end of the month. If their current process capability index on a key metric is less than 2.0 and the process capability ratio is 1.25, what must happen with the process standard deviation? A) The process standard deviation must be reduced by about 25%. B) The process standard deviation must be reduced by about 37%. C) The process standard deviation must be reduced by about 50%. D) The process standard deviation must be reduced by about 67%. Answer: B Reference: Process Capability Difficulty: Moderate Keywords: process capability ratio, process standard deviation Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma AACSB: Analytic skills 154) The ISO 9001:2008 standard: A) emphasizes corporate leadership as a means of determining who receives the award. B) has the greatest number of points awarded for business results. C) is awarded by the U.S. government each year. D) addresses quality system documentation. Answer: D Reference: International Quality Documentation Standards Difficulty: Moderate Keywords: ISO 9001:2008, standards, documentation 236 155) The international standard that is applied to determine a company's "environmental friendliness" is: A) ISO 9001:2008. B) ISO 14000:2004. C) ISO 19000:2008. D) ISO 26000:2010. Answer: B Reference: International Quality Documentation Standards Difficulty: Moderate Keywords: ISO 14000:2004, environment 156) The international standard that is applied to determine a company's "social responsibility" is: A) ISO 9001:2008. B) ISO 14000:2004. C) ISO 19000:2008. D) ISO 26000:2010. Answer: D Reference: International Quality Documentation Standards Difficulty: Moderate Keywords: ISO 26000:2010, social responsibility 157) Which of these ISO standards has the greatest number of organizations certified as of 2009? A) ISO 9001:2008. B) ISO 14000:2004. C) ISO 19000:2008. D) ISO 26000:2010. Answer: A Reference: International Quality Documentation Standards Difficulty: Moderate Keywords: ISO 9001:2008, social responsibility 158) Which of these ISO standards has the fewest number of organizations certified as of 2009? A) ISO 9001:2008. B) ISO 14000:2004. C) ISO 22000. D) ISO 26000:2010. Answer: D Reference: International Quality Documentation Standards Difficulty: Moderate Keywords: ISO 26000:2010, social responsibility 237 159) The ISO 14000 standards explicitly mentions: A) composition of the company safety committee. B) fair labor practices. C) life-cycle assessment D) fair operating practices. Answer: D Reference: International Quality Documentation Standards Difficulty: Moderate Keywords: ISO 14000:2004, environmental management 160) The Baldrige Performance Excellence Program: A) involves a rigorous review process that often helps the companies define what quality means to them, regardless of the outcome. B) focuses on large manufacturing companies because of the impact they have on the economy. C) is a set of standards governing the requirements for documentation of a quality program. D) was devised by the International Organization for Standardization for companies doing business in Europe. Answer: A Reference: Baldrige Performance Excellence Program Difficulty: Moderate Keywords: MBNQA, Baldrige 161) The Baldrige Performance Excellence Program: A) focuses on large manufacturing companies because of the impact they have on the economy. B) involves seven major criteria that are built on the base of customer satisfaction. C) is a set of standards governing the requirements for documentation of a quality program. D) was devised by the International Organization for Standardization for companies doing business in Europe. Answer: B Reference: Baldrige Performance Excellence Program Difficulty: Moderate Keywords: MBNQA, Baldrige, customer satisfaction 162) ________ means that customers expect the product or services they buy to meet or exceed certain advertised levels of performance. Answer: Conformance to specifications Reference: Cost of Quality Difficulty: Moderate Keywords: conformance to specifications 163) ________ refers to how well the product or service performs its intended purpose. Answer: Fitness for use Reference: Cost of Quality Difficulty: Moderate Keywords: quality, fitness for use 238 164) ________ costs arise when a defect is discovered after the customer has received the product or service. Answer: External failure Reference: Cost of Quality Difficulty: Moderate Keywords: external failure cost Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 165) ________ costs are associated with preventing defects before they happen. Answer: Prevention Reference: Cost of Quality Difficulty: Easy Keywords: prevention cost Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 166) ________ is the societal effect that is factored into decisions involving the production of goods and services that goes beyond other cost of quality measures. Answer: Ethics Reference: Ethics and Quality Difficulty: Moderate Keywords: ethics 167) ________ is an approach to teamwork that moves responsibility for decisions farther down the organizational chart–to the level of the employee actually doing the job. Answer: Employee empowerment Reference: Total Quality Management Difficulty: Moderate Keywords: TQM, total quality management, employee involvement 168) ________ are small groups of supervisors and employees who meet to identify, analyze, and solve production and quality problems. Answer: Problem-solving teams or quality circles Reference: Total Quality Management Difficulty: Moderate Keywords: quality circle, employee problem solving, teams 169) External customers are those who ________ the product or service. Answer: buy Reference: Total Quality Management Difficulty: Moderate Keywords: external customer 239 170) Defects are caught and corrected where they were created under a(n) ________ philosophy. Answer: quality at the source Reference: Total Quality Management Difficulty: Moderate Keywords: TQM, quality at the source 171) Small groups of employees and supervisors that meet to identify, analyze, and solve process and quality problems are known as ________. Answer: quality circles Reference: Total Quality Management Difficulty: Moderate Keywords: quality circles 172) The customer's assessment of quality with reference to the price paid for the good or service is known as ________. Answer: value Reference: Total Quality Management Difficulty: Moderate Keywords: value 173) The Deming wheel depicts a cycle with the following four steps: ________, ________, ________, and ________. Answer: plan, do, study, act Reference: Total Quality Management Difficulty: Moderate Keywords: Deming wheel, PDSA, plan, do, study, act 174) ________ is the application of statistical techniques to determine if the quality of incoming materials should be accepted or rejected, based on the testing of a sample of parts. Answer: Acceptance sampling Reference: Acceptance Sampling Difficulty: Easy Keywords: AQL, acceptance sampling Learning Outcome: Apply basic statistical process control (SPC) methods. 175) In acceptance sampling, the ________ is the proportion defective that the buyer will allow in an incoming shipment. Answer: acceptable quality level (AQL) Reference: Acceptance Sampling Difficulty: Easy Keywords: AQL acceptance sampling Learning Outcome: Apply basic statistical process control (SPC) methods. 240 176) ________ of variation are the purely random, unidentifiable sources of variation that are unavoidable with the current process. Answer: Common causes Reference: Statistical Process Control Difficulty: Moderate Keywords: common causes of variation Learning Outcome: Apply basic statistical process control (SPC) methods. 177) ________ of variation include any variation-causing factors that can be identified and eliminated. Answer: Assignable causes Reference: Statistical Process Control Difficulty: Moderate Keywords: assignable causes of variation Learning Outcome: Apply basic statistical process control (SPC) methods. 178) A(n) ________ specifies the sample size, the time between successive samples, and decision rules that determine when action should be taken. Answer: sampling plan Reference: Statistical Process Control Difficulty: Moderate Keywords: sampling, sampling plan, sample Learning Outcome: Apply basic statistical process control (SPC) methods. 179) A(n) ________ is a time-ordered diagram that is used to determine whether observed variations are abnormal. Answer: control chart Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control chart Learning Outcome: Apply basic statistical process control (SPC) methods. 180) Jerry watched in awe as Warren went to 2 sigma limits from the company-mandated 3 sigma limits, thereby increasing the likelihood of a type ________ error. Answer: I Reference: Statistical Process Control Difficulty: Moderate Keywords: type I error limits Learning Outcome: Apply basic statistical process control (SPC) methods. 181) Two types of control charts useful for variable quality measures are the ________ and the ________. Answer: R-chart, x chart Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control chart, variables Learning Outcome: Apply basic statistical process control (SPC) methods. 241 182) The poultry farmer was aghast when the grocery store revealed their new weapon in the war on poor quality. They planned to use a(n) ________ to monitor the rotten eggs found in the cartons of farm fresh free range eggs that he supplied. The poultry farmer was wellversed in quality and knew their choice to be the right one; nevertheless he was upset about this level of scrutiny and what he perceived as a lack of trust. Answer: p-chart or c-chart Reference: Statistical Process Control Difficulty: Moderate Keywords: attributes, p-chart, c-chart Learning Outcome: Apply basic statistical process control (SPC) methods. 183) Process capability measures the ability of the process to meet the ________ for a product or service. Answer: design specifications Reference: Process Capability Difficulty: Moderate Keywords: process capability, design specifications Learning Outcome: Apply basic statistical process control (SPC) methods. 184) Genichi Taguchi first combined engineering and statistical methods to reduce costs and improve quality in an approach called ________. Answer: quality engineering Reference: Process Capability Difficulty: Moderate Keywords: quality engineering, Taguchi 185) Taguchi's quality loss function should be centered on the ________. Answer: nominal value Reference: Process Capability Difficulty: Moderate Keywords: nominal, Taguchi, loss function 186) A firm targeting Six Sigma quality will use a process capability ratio of ________ as their goal. Answer: 2.0 Reference: Process Capability Difficulty: Moderate Keywords: process capability, Six Sigma Learning Outcome: Apply basic statistical process control (SPC) methods. 187) ________ is a comprehensive and flexible system for achieving, sustaining, and maximizing business success through intensive data analysis and process management, improvement and reengineering. Answer: Six Sigma Reference: Six Sigma Difficulty: Moderate Keywords: Six sigma Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma 242 188) Full-time teachers and leaders of teams involved in six sigma projects are referred to as ________. Answer: black belts Reference: Six Sigma Difficulty: Moderate Keywords: Six Sigma, black belt Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma 189) ________ is the international standard governing documentation of a quality program. Answer: ISO 9001:2008 Reference: International Quality Documentation Standards Difficulty: Moderate Keywords: ISO 9001:2008, international standard, quality documentation 190) ________ is the international standard governing environmental management. Answer: ISO 14000:2004 Reference: International Quality Documentation Standards Difficulty: Moderate Keywords: ISO 14000:2004, international standard, environment documentation 191) ________ is the international standard governing social responsibility. Answer: ISO 26000:2010 Reference: International Quality Documentation Standards Difficulty: Moderate Keywords: ISO 26000:2010, international standard, social responsibility 192) Organizations are audited and certified to the ISO ________ and ISO ________ standards but the ISO ________ standard is voluntary. Answer: ISO 9001:2008, ISO 14000:2004, ISO 26000:2010 Reference: International Quality Documentation Standards Difficulty: Moderate Keywords: ISO 9001:2008, ISO 14000:2004, ISO 26000:2010, international standard 193) The ________ section of the Baldrige Performance Excellence Program has the greatest emphasis. Answer: business results Reference: Baldrige Performance Excellence Program Difficulty: Hard Keywords: Baldrige award, business results 243 194) Illustrate the differences between prevention and appraisal costs using a restaurant setting as an example. Answer: Prevention costs are associated with preventing defects before they happen. In a restaurant, this would be the expense associated with training employees how to take an order, prepare food, bus tables or in mistake-proofing systems. Appraisal costs are incurred in assessing the level of performance of the firm's processes. In a restaurant this might be inspections by managers, reviewing and acting on customer satisfaction cards, or testing prepared dishes. Reference: Cost of Quality Difficulty: Moderate Keywords: prevention cost, appraisal cost Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality 195) What is the long-term impact of unethical business practices on product and service quality? Answer: Firms that produce better quality services or products can expect to earn a premium for that higher quality. They can also expect to grow and prosper over time because of their ability to create true value for customers. Firms that engage in deception, however, undermine the ability and competence of their employees and demean their relationship with external customers. The unfortunate message these firms send to their employees, who are also their internal customers, is that management views them as being less capable of producing quality services or products than their counterparts in ethical firms. Under these conditions employees are also less likely to be motivated to put forth their best effort. The message unethical firms send to their external customers is that their product or service cannot effectively compete with that of others and so they must engage in deception in order to be profitable. Employees of firms that attempt to profit by deceiving customers are less likely to create true value for customers through product or service improvements that can enhance the customers' experience. That erodes a firm's ability to compete now and in the future. Reference: Ethics and Quality Difficulty: Moderate Keywords: dimensions of quality 196) What are any three dimensions of quality and which one accurately describes how you assess education? Answer: Answers will vary on the educational assessment portion of this question. The dimensions of quality mentioned by the authors include conformance to specifications, value, fitness for use, support, and psychological impressions. Reference: Total Quality Management Difficulty: Moderate Keywords: dimensions of quality 197) Provide examples of the three main tenets of total quality management as applied to this operations management course. Answer: Answers will vary depending on the student's experiences in operations management. The three tenets of TQM discussed by the authors include customer satisfaction, employee involvement, and continuous improvement. Reference: Total Quality Management Difficulty: Moderate Keywords: TQM, total quality management, customer satisfaction, employee involvement, continuous improvement 198) Why is employee empowerment important in a total quality management program? Answer: With TQM, everyone is expected to contribute to the overall improvement of 244 quality. Each employee must identify his or her customers, and for many employees their internal customers may outnumber their external customers. Once customers are identified, means of satisfying those customers must be identified and acted on. Empowerment moves the responsibility farther down the organizational chart and allows employees to independently make changes in what they do in order to satisfy their customers. Reference: Total Quality Management Difficulty: Moderate Keywords: employee empowerment 199) When is it advantageous to use sampling rather than complete inspection? Answer: Sampling is advantageous when testing is destructive or when the cost of inspection is high relative to the cost of passing a defect. Reference: Statistical Process Control Difficulty: Moderate Keywords: sampling, inspection Learning Outcome: Apply basic statistical process control (SPC) methods. 200) What is the relationship between type I and type II errors and the width of the upper and lower control limits on SPC charts? Propose a mechanism for determining SPC chart limit widths based upon the financial consequences of type I and type II errors. Answer: Type I and type II errors move in opposite directions, that is, as the chance of a type I error increases, the chance of a type II error decreases. As the width of SPC control limits increases, the chance of a type I error decreases (and the chance of a type II error increases). The width of control limits might be balanced based upon the cost incurred from false positives and false negatives in the course of monitoring the process. The cost associated with a type I error, sometimes called producer's risk, is that a process that is actually in control is stopped and effort is spent troubleshooting the process. The process might be adjusted, suppliers contacted, etc., all in the name of fixing a problem that in actuality, doesn't exist. The direct financial impact is the labor cost of troubleshooting and the lost productive capacity. The cost associated with a type II error, sometimes called a consumer's risk, is that defective product will reach the hands of a consumer and fail, potentially resulting in warranty repair or replacement, negative word of mouth from a dissatisfied customer, and litigation. Depending on the product, these costs could be substantial. A producer might choose to balance the costs with a calculation similar to expected monetary value. A producer might choose to lower the EMV of the type II costs to something they could pay out (or have insurance for). Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control charts, Type I errors, Type II errors Learning Outcome: Apply basic statistical process control (SPC) methods. 245 201) The UCL and LCL for an x chart are 100 ounces and 95 ounces, respectively. The sample size is 5. The inspector looks at the very next unit and finds that it is 108 ounces. What can you conclude? Why? Answer: Nothing yet. The weight of an individual unit is not relevant for the chart. You must compare the average of a sample, which will balance the high and low observations. Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, process control, x-bar chart Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 202) Discuss the situations under which each of the following charts would be best: x chart, p-chart, and c-chart. Answer: The x chart is used to observe the mean of the process. It uses variable-type measurements. The p-chart uses a yes—no type of classification–typically "defective or not defective." It uses attribute-type variables. It is beneficial when it is difficult to use a variable type of measurement. The c-chart is used for situations in which a product can have more than one defect per unit. Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, x-bar chart, p-chart, c-chart, variables, attributes Learning Outcome: Apply basic statistical process control (SPC) methods. 203) Hassan was the company plotter. Give him any data set and he could plot a graph that was not only accurate, but also aesthetically pleasing. One afternoon he took some attribute data and plotted it as a p-chart. When Saba, his supervisor, saw the plot he insisted it be discarded and in its place a c-chart should be constructed. Hassan made the c-chart and noticed that when he placed the two charts one on top of the other, the lines created by the data points were exactly the same shape. Has our plotting colleague made a mistake? If not, why should there be these two types of charts when the data generate identical lines? Answer: The p-chart uses a yes—no type of classification–typically "defective or not defective." This yes/no, two-valued data is binomially distributed, and one way to consider the "p" in p-chart is the proportion defective. The c-chart is used for situations in which a product can have more than one defect per unit. The "c" in c-chart is therefore the count of defects in an item. This data is governed by the Poisson distribution. It is natural that the two plots would display the same shape; the binomial distribution is a special case of the Poisson distribution. The p-chart allows the user to work with a variable sample size, either by averaging samples sizes or dealing with specific sample sizes on a point by point basis. The c-chart requires a constant sample size. For a constant sample size and attribute data, the two charts should arrive at the same conclusion of either in or out of control and can be superposed. Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, p-chart, c-chart, attributes Learning Outcome: Apply basic statistical process control (SPC) methods. 246 204) How does SPC help companies implement continuous improvement programs? Answer: The feedback from out-of-control signals from control charts should be used to eliminate assignable-cause variation from the process. By using SPC over a long time period, the quality of the process should improve. Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control charts, continuous improvement Learning Outcome: Apply basic statistical process control (SPC) methods. 205) What is the difference between the Cp and Cpk measures? Provide an example of a situation in which a process might perform well on one measure but poorly on the other. Answer: The process capability ratio, Cp, is the tolerance width of the process divided by the natural spread of the data generated by that process. The process capability index, Cpk, measures the potential for a process to generate defective outputs relative to either upper or lower specifications. A process that has a narrow spread but is off center (target) by either too high or too low could perform well when analyzed with the Cp measure but poorly using the Cpk measure. Reference: Process Capability Difficulty: Moderate Keywords: Cp, Cpk, process capability Learning Outcome: Apply basic statistical process control (SPC) methods. 206) How is Taguchi's quality loss function related to the process capability ratio and the process capability index? Which process performance measure is it closest to? Answer: The quality loss function is zero when the quality characteristic is exactly on the target value and otherwise is computed as a quadratic function as the process deviates from the target. The higher the process standard deviation is in relation to the width of the specification limits, the greater the average loss will be as computed by the quality loss function. The process capability ratio is the ratio of the width of the specification limits to the natural spread of the process. As the process standard deviation increases, the process capability ratio falls. The loss function and the capability ratio move in opposite directions as the standard deviation varies. The process capability index is the minimum of two ratios; the upper spec limit less the process mean to three standard deviations and the process mean less the lower spec limit to three standard deviations. As the process standard deviation increases, the process capability index falls. The process capability index does not assume that the process is perfectly centered, thus the need to take the minimum of the two ratios. It can be argued that the process capability index is more similar to the Taguchi loss function for this reason; both take the process mean into consideration but the process capability ratio does not. Reference: Process Capability Difficulty: Moderate Keywords: Taguchi, quality loss function, process capability 247 207) What are the steps in the Six Sigma improvement model and how do they relate to the PDSA cycle? Answer: The Six Sigma improvement model contains the steps define, measure, analyze, improve, and control. The PDSA cycle contains the steps plan, do, study, and act. Both approaches call for improvement of current processes using a management-by-data approach, i.e., experimentation followed by analysis and then a change in methods if improvement can be achieved. The PDSA cycle suggests continuous improvement; the Six Sigma improvement model has no direct statement of iteration. Once the process is improved by the Six Sigma approach, emphasis is shifted toward controlling the improved process rather than improving it further. Reference: Six Sigma Difficulty: Moderate Keywords: Six Sigma, PDSA Learning Outcome: Describe the advantages and disadvantage of various production strategies such as lean, Theory of Constraints, JIT, and Six Sigma 208) Explain the difference between the Baldrige Performance Excellence Program and ISO 9001:2008. Answer: The Baldrige Performance Excellence Program is a U.S. award that promotes, recognizes, and publicizes quality strategies and achievement. ISO 9001:2008, on the other hand, is an international set of standards for documenting quality procedures. Organizations are certified to the ISO 9001:2008 standards by external examiners. Reference: Multiple Sections Difficulty: Moderate Keywords: Baldrige, ISO 9001:2008 209) What are the benefits of ISO certification? Answer: ISO certification bestows significant external and internal benefits. The external benefits come from the potential sales advantage that companies in compliance have. Companies looking for a supplier will more likely select a company that has demonstrated compliance with ISO documentation standards, all other factors being equal. Consequently, more and more firms are seeking certification to gain a competitive advantage. Internal benefits can be substantial. Registered companies report an average of 48 percent increased profitability and 76 percent improvement in marketing. The British Standards Institute, a leading third-party auditor, estimates that most ISO 9000-registered companies experience a 10 percent reduction in the cost of producing a product because of the quality improvements they make while striving to meet the documentation requirements. Certification in ISO 9001:2008 requires a company to analyze and document its procedures, which is necessary in any event for implementing continuous improvement, employee involvement, and similar programs. The guidelines and requirements of the ISO documentation standards provide companies with a jump-start in pursuing TQM programs. Reference: International Quality Documentation Standards Difficulty: Moderate Keywords: Baldrige, ISO 9001:2008 248 210) What are the key components of the ISO 14000:2004 standard? Answer: The ISO 14000:2004 family addresses environmental management by specifying what the firm does to minimize harmful effects on the environment caused by its activities, and to achieve continual improvement of its environmental performance. The documentation standards require participating companies to keep track of their raw materials use and their generation, treatment, and disposal of hazardous wastes. Although not specifying what each company is allowed to emit, the standards require companies to prepare a plan for ongoing improvement in their environmental performance. ISO 14000:2004 covers a number of areas, including the following: a) Environmental Management System. Requires a plan to improve performance in resource use and pollutant output. b) Environmental Performance Evaluation. Specifies guidelines for the certification of companies. c) Environmental Labeling. Defines terms such as recyclable, energy efficient, and safe for the ozone layer. d) Life-Cycle Assessment. Evaluates the lifetime environmental impact from the manufacture, use, and disposal of a product. Reference: International Quality Documentation Standards Difficulty: Moderate Keywords: ISO 14000:2004 211) What are the key components of the ISO 26000:2010 standard? Answer: The ISO 26000:2010 guidelines, according to the International Organization for Standards, provide harmonized, globally relevant guidance on social responsibility for private and public sector organizations based on international consensus among experts. The seven core subjects of social responsibility covered in the guidelines are (1) human rights, (2) labor practices, (3) the environment, (4) fair operating practices, (5) consumer issues, (6) community involvement and development, and (7) the organization. In this way the international community is encouraging ethical business behavior between businesses and consumers. Reference: Multiple Sections Difficulty: Moderate Keywords: Baldrige, ISO 26000:2004 249 212) Thermostats are subjected to rigorous testing before they are shipped to air conditioning technicians around the world. Results from the last five samples are shown in the table. Is the process under control? Unit # Sample 1 Sample 2 Sample 3 Sample 4 Sample 5 1 73.5 70.8 72.2 73.6 71.0 2 71.3 71.0 73.1 72.7 72.2 3 70.0 72.6 71.9 72.4 73.3 4 71.1 70.6 70.3 74.2 73.6 5 70.8 70.7 70.7 73.5 71.1 Answer: R-chart is in control 250 x-bar chart is in control Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control charts, variables Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 251 213) Construct a 3-sigma x and R-chart for the length in centimeters of a part from the following table. Sample # Observation 1Observation 2Observation 3Observation 4 1 0.486 0.499 0.493 0.511 2 0.499 0.506 0.516 0.494 3 0.496 0.5 0.515 0.488 4 0.495 0.506 0.483 0.487 5 0.472 0.502 0.526 0.469 6 0.473 0.495 0.507 0.493 7 0.495 0.512 0.49 0.471 8 0.525 0.501 0.498 0.474 9 0.497 0.501 0.517 0.506 10 0.495 0.505 0.516 0.511 Answer: X = .4981, R = .0321 Control limits for R-chart: UCL = D4 R = 2.282(.0321) = .073 LCL = D3 R = 0(.0321) = 0.00 252 Control limits for x chart: UCL, LCL = X ± A2 R = .4981 ± .729(.0321) = .522, .475 The process is in control. Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control charts, control limits Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 253 214) The management of a line that fills cereal boxes wants the box filled at 32.2 ounces. When the process is in control, the standard deviation is .1 ounces. a. Construct the upper and lower control limits for a 3-sigma x-bar chart using a sample size of five. b. The results from the last 10 samples follow. Is the process in control? Answer: x-bar = 32.2, σ = .1 Control limits for x chart: UCL, LCL = X ± 3σ = 32.2 ± 3(.1) = 32.5, 31.9 The process is in control. Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control charts, control limits, variables Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 254 215) The defect rate for a product has historically been about 2.0%. What are the upper and lower control chart limits if you wish to use a sample size of 100 and 3-sigma limits? Answer: UCL p = p + zσp = 0.02 + 3 √ 0.02 × 0.98 100 = 0.062 UCL p = p - zσp = 0.02 - 3 √ 0.02 × 0.98 100 = -0.022 → 0 Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control charts, control limits, attributes Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 255 216) The quality control technician grew weary of measuring pistons that came off the line, so he decided to make a fixture that would tell him whether the piston fell within product specifications. The fixture had two holes, one the exact width of the upper specification (24 cm) and one slightly smaller than the lower specification (21 cm). If the piston fit through the smaller hole, it would be too small and therefore rejected. If the piston didn't fit through the larger hole, it was too large and would be rejected. Just to test his idea, he used the traditional measurement system and his new system on the next eight samples. The data and the two charts he constructed are shown below. Why aren't the plotted points forming similar shapes between the two graphs? Evaluate the advantages and disadvantages of his proposed system. Sample 1 29.5 23 20.9 24.9 Sample 2 22.9 20.1 23.7 26.9 Sample 3 25.9 23.6 23 24.3 Sample 4 25.3 23.2 29.8 22.3 Sample 5 24.7 25.1 20.6 23 Sample 6 28.4 29.7 27.1 23.7 Sample 7 21.9 23.5 24.9 24.2 Sample 8 26.9 21.1 28.1 20.2 Sample 9 25.5 27.6 26.3 27.2 Sample 10 23.9 28.6 21.7 20.6 256 Answer: The points don't form similar shapes due to the nature of the data generating functions. The x-bar chart is from a process that creates a continuous random variable stream. The c-chart takes the same data and converts it to attribute data that can generate signals (errors) for being either too high or too low. The judgements made by the go/no-go gauge are accurate and this approach is often faster than taking a continuous measurement and meticulously recording the observations. The speed comes at the expense of information about the process. With the c-chart, an observer can tell that defects are being produced, almost three per sample, but there is no way to tell if the output is consistently too large, too small, or a mix of the two. The x-bar chart will provide information as to the direction of the production error, thereby providing process troubleshooting with some focus. Reference: Statistical Process Control Difficulty: Hard Keywords: SPC, control charts, control limits, attributes Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 257 217) Samples of size four were taken from a process that had a target of 25 ounces with upper and lower specification limits of 30 ounces and 20 ounces respectively. Create the appropriate control charts and determine whether the process is in control. Then compute process capability. Sample 1 29.5 23.0 22.0 24.9 Sample 2 22.9 22 23.7 26.9 Sample 3 25.9 23.6 23.0 24.3 Sample 4 25.3 23.2 29.8 22.3 Sample 5 24.7 25.1 24.5 23.0 Sample 6 28.4 29.7 27.1 23.7 Sample 7 21.9 23.5 24.9 24.2 Sample 8 26.9 26.2 28.1 20.2 Sample 9 25.5 27.6 26.3 27.2 Sample 10 23.9 28.6 21.7 20.6 Answer: This is variables data, so x-bar and R charts are the appropriate control charts for this process. The overall process average is 25, with a standard deviation of 2.406 The chart calculations are summarized in this table: X bar CenterX UCLx LCLx Range Rbar UCLr LCLr Sample 1 24.85 25.00 28.70 21.30 7.50 5.08 11.59 0.00 Sample 2 23.88 25.00 28.70 21.30 4.90 5.08 11.59 0.00 Sample 3 24.20 25.00 28.70 21.30 2.90 5.08 11.59 0.00 Sample 4 25.15 25.00 28.70 21.30 7.50 5.08 11.59 0.00 Sample 5 24.33 25.00 28.70 21.30 2.10 5.08 11.59 0.00 Sample 6 27.23 25.00 28.70 21.30 6.00 5.08 11.59 0.00 Sample 7 23.63 25.00 28.70 21.30 3.00 5.08 11.59 0.00 Sample 8 25.35 25.00 28.70 21.30 7.90 5.08 11.59 0.00 Sample 9 26.65 25.00 28.70 21.30 2.10 5.08 11.59 0.00 258 Both charts reflect a process that is in control. The process capability ratio is 0.69 (USL-LSL)/(6 ∗ σ) = (30-20)/(6 ∗ 2.406)=10/14.436=0.69 Reference: Statistical Process Control Difficulty: Hard Keywords: SPC, control charts, control limits, process capability Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 259 218) A process with a target of 25 was used to generate the following data points. Is the process properly centered? Determine the process capability given a USL=27 and LSL=18. The standard deviation of the data is 2.712. Sample 1 29.5 23 20.9 24.9 Sample 2 22.9 20.1 23.7 26.9 Sample 3 25.9 23.6 23 24.3 Sample 4 25.3 23.2 29.8 22.3 Sample 5 24.7 25.1 20.6 23 Sample 6 28.4 29.7 27.1 23.7 Sample 7 21.9 23.5 24.9 24.2 Sample 8 26.9 21.1 28.1 20.2 Sample 9 25.5 27.6 26.3 27.2 Sample 10 23.9 28.6 21.7 20.6 Answer: The sample means and ranges are contained in this table X bar Range 24.6 8.6 23.4 6.8 24.2 2.9 25.2 7.5 23.4 4.5 27.2 6 23.6 3 24.1 7.9 26.7 2.1 23.7 8 The overall average is 24.6, and the average range is 5.73., so the process is not centered. Using a value of 0.729 for the A2 lookup from Table 5.1 yields: UCL = 24.6 + 0.729 ∗ 5.73 = 28.8 LCL = 24.6 - .729 ∗ 5.73 = 20.4 The chart is in control, so a process capability index has meaning. The standard deviation is 2.712. 260 Wow, that's sad! Reference: Statistical Process Control Difficulty: Hard Keywords: SPC, control charts, control limits, attributes Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 219) A professor records the number of students who complain each week throughout the semester. If the class size is forty students, what are 3-sigma control limits for this class? Construct a control chart and interpret the data. Week number Complaint s 1 5 2 2 3 7 4 1 5 3 6 2 7 8 8 1 9 3 10 5 11 4 12 6 13 3 14 1 15 4 261 Answer: The process is in control. Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control charts, p-chart, attributes Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 262 220) A bank randomly looks at loan applications and checks them for errors. Ten applications and the number of errors identified on the applications are found in the following table. When the process is working correctly, the average number of errors found is 2. Construct a c-chart to determine if the process is in control. Application number Number of errors 1 3 2 0 3 1 4 0 5 3 6 2 7 4 8 4 9 1 10 1 Answer: The process is in control. Reference: Statistical Process Control Difficulty: Moderate Keywords: SPC, control charts, c-chart, attributes Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 263 221) The upper and lower specification limits for a component are 3.98 and 4.02 inches, respectively. The process standard deviation is .004, and the process average is 4.005 inches. Is this process capable of achieving four-sigma performance (the four-sigma performance target value is 1.33) ? Answer: First calculate the process capability index: Cpk = Minimum of [ X - Lower specification 3 σ , Upper specification - X 3 σ ] = [ 4 .005 - 3. 98 3(.004 ) , 4 .02 - 4 .005 3(.004 ) ] = [2.08, 1.25] = 1.25 The process capability index of 1.25 indicates that the process is not currently capable of four-sigma performance. However, this does not tell us if the issue is with process variability or centering. The process capability ratio is then calculated to check process variability: Cp = Upper specification - Lower specification 6 σ = 4.02 - 3.98 6 (.004) = 1.67 A process capability ratio of 1.67 indicates that four-sigma performance can be met with regard to variability. Work must be done on the process to improve centering in order to achieve four-sigma process performance. With its current center of 4.005, it is not capable of meeting the specifications. Reference: Process Capability Difficulty: Moderate Keywords: process capability, Cp, Cpk Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 264 222) MKS Inc., produces meter sticks that have a target length of 100 centimeters with upper and lower specification limits of 100.05 and 99.95 centimeters respectively. Their existing process produces meter sticks with an average length of 99.97 centimeters and a standard deviation of 0.015 centimeters. They are considering the purchase of a new machine that can hold a process output average exactly to target with a standard deviation of 0.02. Which machine will provide a better process capability index? Answer: Existing Process: Cpk = Minimum of [ X - Lower specification 3 σ , Upper specification - X 3 σ ] = Minimum of = [ 100. 05 - 99. 97 3(.015 ) , 99. 97 - 99. 95 3 (. 015 ) ] = [1.78, 0.44] = 0.44 New Process: Cpk = Minimum of [ X - Lower specification 3 σ , Upper specification - X 3 σ ] = Minimum of = [ 100 . 05 - 100.00 3(. 02) , 100 .00 - 99. 95 3(.02) ] = [0.83, 0.83] = 0.83 The New Process is more capable than the existing process. Reference: Process Capability Difficulty: Moderate Keywords: process, capability Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 265 223) A company measures their Taguchi quality loss function for a product that has a nominal value of 10. The loss function os governed by a parabola, L(x) = k(x-T)2 where T is the nominal value and x is any x-axis value. If the loss curve is as shown in the figure, what is the value of the constant k? Answer: Working with L(x) = k(x-T)2 and T = 10, we can pick any point for x, read the corresponding value from the graph and solve for k. An endpoint, such as L(11) = 25 is probably the easiest to work with. L(11) = 25 = k(11- 10)2 25 = k(1)2 k = 25 Reference: Process Capability Difficulty: Hard Keywords: process, capability Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills 266 224) A manufacturer enjoys both a Cpk and a CP = 2.0. How high does the process mean have to drift (in number of standard deviations) away from target in order to result in a 1% chance of making a product out of specification? Illustrate this situation (both before shift and after shift) with a diagram. Answer: Initially the process has a Cpk and a CP = 2.0, and the natural spread of the data is well within the upper and lower specification limits. The process shifts an amount (delta) so it now has a new mean that is equal to the original mean plus delta as shown in equation 1. 1. μ2 = μ1 + δ 2. Z = USL - μ2 σ = 2.33 3. USL = μ2 + 2.33σ 4. μ2 = USL - 2.33σ 5. USL - μ1 3 σ = 2 6. USL - μ1 = 6σ 7. USL = 6σ + μ1 8. 6σ + μ1 = μ2 + 2.33σ = μ1 + δ + 2.33σ 9. 6σ = δ + 2.33σ 10. 3.66σ = δ 267 Equation 2 illustrates a z-score that will produce 99% of output within the upper specification limit and 1% of output outside the upper specification limit. The value 2.326 is found in the standard normal table in the appendix. Equations 3 and 4 show a rearrangement of terms in equation 2. Equation 5 demonstrates the original situation with a CP = 2.0, focusing on the upper half of the equation in the manner of a CPK calculation. Equations 6 and 7 rearrange terms from equation 5 and equation 8 relates equations 7 and 3 by virtue of their equality to the USL, and then substitutes the results from equation 1. Equation 9 shows the collection of terms, dropping the original mean since it is added to both sides of equation 8. Finally, equation 10 shows that a process mean shift up of 3.673 standard deviations will result in 1% defective output produced. Reference: Process Capability Difficulty: Hard Keywords: process capability Learning Outcome: Apply basic statistical process control (SPC) methods. AACSB: Analytic skills Operations Management: Processes and Supply Chains, 10e (Krajewski et al.) Chapter 7 Constraint Management 268 1) A bottleneck is an operation that has the lowest effective capacity of any operation in the process. Answer: TRUE Reference: Introduction Difficulty: Moderate Keywords: bottleneck, effective capacity 2) The process with the least capacity is called a bottleneck if its output is less than market demand. Answer: TRUE Reference: Introduction Difficulty: Moderate Keywords: bottleneck, capacity 3) The process with the least capacity is called a bottleneck if its output is still greater than the market demand. Answer: FALSE Reference: Introduction Difficulty: Moderate Keywords: bottleneck, capacity 4) Operating processes close to their capacity can result in low customer satisfaction and even losing money despite high sales levels. Answer: TRUE Reference: The Theory of Constraints Difficulty: Moderate Keywords: capacity, customer satisfaction Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 5) The Theory of Constraints method is also referred to as the drum-buffer-rope method. Answer: TRUE Reference: The Theory of Constraints Difficulty: Easy Keywords: TOC, theory of constraints, drum-buffer-rope 6) According to the Theory of Constraints, the four operational measures include inventory, throughput, delivery lead times and utilization. Answer: FALSE Reference: The Theory of Constraints Difficulty: Moderate Keywords: TOC, capacity measures, inventory, throughput, operating expense, utilization 269 7) A business school with plenty of classroom space that hires adjunct faculty for a semester to meet unusually high student demand for courses is an example of elevating a bottleneck. Answer: TRUE Reference: The Theory of Constraints Difficulty: Moderate Keywords: elevate bottleneck, TOC 8) Any system composed of resources that are operating at maximum output will, by definition, have maximum output for the entire system. Answer: FALSE Reference: The Theory of Constraints Difficulty: Moderate Keywords: constraint, bottleneck, TOC 9) In a shop managed according to TOC principles, inventory is needed only in front of bottlenecks in order to prevent them from sitting idle. Answer: FALSE Reference: The Theory of Constraints Difficulty: Moderate Keywords: TOC, buffer 10) The first step in applying the Theory of Constraints is to identify the constraint. Answer: TRUE Reference: The Theory of Constraints Difficulty: Moderate Keywords: constraint, bottleneck, TOC 11) The final step in applying the Theory of Constraints is to repeat the first four steps. Answer: TRUE Reference: The Theory of Constraints Difficulty: Moderate Keywords: inertia, TOC 12) Lanny discovers that the bottleneck is the riveting machine so he schedules all production around when that machine is available. This is an example of elevating the constraint in the five-step constraint management process. Answer: FALSE Reference: The Theory of Constraints Difficulty: Moderate Keywords: exploit constraint, TOC 13) A bottleneck process has the lowest capacity and the longest total time from the start to the finish. Answer: TRUE Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: bottleneck process, lowest capacity, longest total time Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 14) A competent operations manager should first eliminate all of the bottlenecks from the process. Answer: FALSE Reference: Identification and Management of Bottlenecks 270 Difficulty: Moderate Keywords: bottleneck process Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 15) Short term capacity planning should be driven by identification and management of bottlenecks. Answer: TRUE Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: capacity planning, bottleneck Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 16) Line balancing is the assignment of work to stations in a line to achieve the desired output rate with the smallest number of workstations. Answer: TRUE Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line balance, workstations, line Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 17) Line balancing strives to create workstations so that the capacity utilization for the bottleneck is much higher than for the other workstations in the line. Answer: FALSE Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line balance, workstations, line, bottleneck Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 18) Line balancing applies only to line processes that do assembly work, or to work that can be bundled in many ways to create the jobs for each workstation in the line. Answer: TRUE Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line balance, workstations, line Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 19) Immediate predecessors are the smallest units of work that can be performed independently. Answer: FALSE Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: predecessor, work, task 20) The balance delay is the amount by which efficiency falls short of 100 percent. Answer: TRUE Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: balance delay, efficiency 21) To generate the maximum output, the cycle time should be set as the longest elemental 271 task time. Answer: TRUE Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: cycle time, output, task Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 22) Paced lines require that inventory storage areas be placed between stations. Answer: FALSE Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: paced line, inventory 23) A mixed-model line produces several items belonging to the same family. Answer: TRUE Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: mixed model line, family 24) The focus for a process improvement exercise should be on balancing: A) flow. B) capacity. C) workload. D) time. Answer: A Reference: The Theory of Constraints Difficulty: Moderate Keywords: TOC, theory of constraints, flow Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 25) According to the Theory of Constraints, the four operational measures of capacity include all of the following EXCEPT: A) inventory. B) throughput. C) utilization. D) delivery lead times. Answer: D Reference: The Theory of Constraints Difficulty: Moderate Keywords: TOC, capacity measures, inventory, throughput, operating expense, utilization 26) Practical application of the Theory of Constraints involves the implementation of all of the following steps EXCEPT: A) Identify the system bottleneck(s). B) Exploit the bottleneck(s). C) Reduce the capacity at the bottleneck(s). D) Elevate the bottleneck(s). Answer: C Reference: The Theory of Constraints Difficulty: Moderate Keywords: TOC, capacity measures, inventory, throughput, operating expense, utilization 27) Consider consecutive processes A-B-C, where process A has a capacity of 20 units per 272 hour, process B has a capacity of 25 units per hour, and process C has a capacity of 30 units per hour. Where would an operations manager want any inventory? A) in front of process A B) in front of process B C) in front of process C D) Inventory should not exist anywhere. Answer: A Reference: The Theory of Constraints Difficulty: Moderate Keywords: TOC, theory of constraints, inventory Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 28) Use the process flow diagram to determine which of these events has the greatest net benefit. A) reducing the flow time at Station A from 8 to 7 minutes B) increasing the capacity at Station B to 8 units per hour C) increasing the capacity at Station C to 7 units per hour D) reducing the flow time at Station D from 9 to 8 minutes Answer: C Reference: The Theory of Constraints Difficulty: Moderate Keywords: TOC, theory of constraints, bottleneck AACSB: Analytic skills 273 29) Use the process flow diagram to determine which of these events has the greatest net benefit. A) reducing the flow time at Station A from 10 to 8 minutes B) increasing the capacity at Station B to 12 units per hour C) increasing the capacity at Station C to 10 units per hour D) reducing the flow time at Station D from 12 to 10 minutes Answer: D Reference: The Theory of Constraints Difficulty: Moderate Keywords: TOC, theory of constraints, bottleneck Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. AACSB: Analytic skills 30) Use the process flow diagram to determine which of these events has the greatest net benefit. A) reducing the flow time at Station A from 8 to 7 minutes B) increasing the capacity at Station B to 12 units per hour C) increasing the capacity at Station C to 9 units per hour D) reducing the flow time at Station D from 6 to 5 minutes Answer: A Reference: The Theory of Constraints Difficulty: Moderate Keywords: TOC, theory of constraints, bottleneck Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. AACSB: Analytic skills 31) Work should be released into the system when: A) a customer order is received. B) the first step in the process is idle. C) a customer order is completed. D) the bottlenecks need work. Answer: D Reference: The Theory of Constraints Difficulty: Easy Keywords: TOC, theory of constraints, bottleneck Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 32) The second step in Theory of Constraints application, "exploit the bottleneck(s)," means that the analyst should: A) create a schedule that maximizes the throughput of the bottlenecks. 274 B) repeat the analysis process to look for other bottlenecks. C) consider increasing capacity of the bottleneck. D) schedule non-bottleneck resources to support the bottleneck. Answer: A Reference: The Theory of Constraints Difficulty: Moderate Keywords: bottleneck, TOC, theory of constraints Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 33) The third step in Theory of Constraints application, "subordinate all other decisions to Step 2," means that the analyst should: A) wait for authorization before proceeding with any system-wide changes. B) schedule non-bottleneck processes to support the bottleneck schedule. C) seek to increase capacity of only the bottleneck resources. D) should seek to increase capacity of both the bottleneck and non-bottleneck resources. Answer: B Reference: The Theory of Constraints Difficulty: Moderate Keywords: bottleneck, TOC, theory of constraints Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 34) The fourth step in Theory of Constraints application, "elevate the bottleneck(s)," means that the analyst should: A) create a schedule that maximizes the throughput of the bottlenecks. B) repeat the analysis process to look for other bottlenecks. C) consider increasing capacity of the bottleneck. D) schedule non-bottleneck resources to support the bottleneck. Answer: C Reference: The Theory of Constraints Difficulty: Moderate Keywords: bottleneck, TOC, theory of constraints Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 275 35) The fifth step in Theory of Constraints application, "do not let inertia set in," means that the analyst should: A) create a schedule that maximizes the throughput of the bottlenecks. B) repeat the analysis to identify and manage new set of constraints. C) consider increasing capacity of the bottleneck. D) schedule non-bottleneck resources to support the bottleneck. Answer: B Reference: The Theory of Constraints Difficulty: Moderate Keywords: bottleneck, TOC, theory of constraints Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 36) Which of the following statements regarding setups is TRUE? A) Unusually high setup times result in higher utilization. B) Processes are generating output throughout the entire setup process. C) A machine used in a line process would probably have fewer setups than a batch process. D) A TOC analyst would not be concerned with setup times on non-bottleneck machines. Answer: D Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: setup, TOC, bottleneck 37) There are three consecutive steps in a customer service process. The first two steps are each capable of serving 25 customers per hour while the third step can process only 20 customers per hour. Which of the following statements regarding this system is true? A) The entire system is capable of processing 25 customers per hour. B) There are floating bottlenecks in the system. C) If the first two steps are run at full capacity, then the third step has a waiting line. D) The first and second steps are bottlenecks for the system. Answer: C Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: capacity, bottleneck Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 276 Table 7.1 The figure above shows the call routing process for a customer service call center. Incoming calls are routed, depending on the complexity of the caller's request. Simple request are routed to work center B, while the more complex calls are routed to work center C (which also takes simple calls when not busy). The numbers in parentheses are the time in minutes for each step of the process. 38) Use the information in Table 7.1. What is the throughput time for the process, assuming that the Call Center is always busy and has customers waiting to be processed? A) 24 minutes B) 18 minutes C) 20 minutes D) 22 minutes Answer: B Reference: Identification and Management of Bottlenecks Difficulty: Easy Keywords: bottleneck, throughput time AACSB: Analytic skills 39) Use the information in Table 7.1. What is the process bottleneck? A) A B) B and C together C) D D) E Answer: C Reference: Identification and Management of Bottlenecks Difficulty: Easy Keywords: process bottleneck AACSB: Analytic skills 40) Use the information in Table 7.1. What is the 8-hour capacity for the process? A) 24 calls B) 17.1 calls C) 40 calls D) 48 calls Answer: D Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: bottleneck, capacity AACSB: Analytic skills 277 41) Use the information in Table 7.1. Where would you expect customer wait times to occur? A) D only B) C and D C) A only D) E only Answer: B Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: bottleneck, capacity, customer wait times Table 7.2 The figure above shows the process for paying tuition at a major university. Students are provided their bill for the next term for review, then routed to different tables for questions to be answered before finally paying their tuition at E. The numbers in parentheses are the time in minutes for each step of the process. 42) Use the information in Table 7.2. What is the throughput time for the A-B-C-E process route? A) 17 minutes B) 27 minutes C) 21 minutes D) 19 minutes Answer: A Reference: Identification and Management of Bottlenecks Difficulty: Easy Keywords: bottleneck, throughput time AACSB: Analytic skills 43) Use the information in Table 7.2. What is the throughput time for the A-B-D-E process route? A) 17 minutes B) 27 minutes C) 21 minutes D) 19 minutes Answer: C Reference: Identification and Management of Bottlenecks Difficulty: Easy Keywords: bottleneck, throughput time AACSB: Analytic skills 278 44) Use the information in Table 7.2. What is the capacity for the A-B-C-E process route? A) 10 students per hour B) 6 student per hour C) 3.5 students per hour D) 2.9 students per hour Answer: A Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: bottleneck, throughput time AACSB: Analytic skills 45) Use the information in Table 7.2. What is the capacity for the A-B-D-E process route? A) 10 students per hour B) 6 student per hour C) 3.5 students per hour D) 2.9 students per hour Answer: B Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: bottleneck, throughput time AACSB: Analytic skills 46) Use the information in Table 7.2. If 60% of the students are routed to C and 40% are routed to D, what is the average capacity per hour for the process? A) 10 students per hour B) 6.5 student per hour C) 8 students per hour D) 8.4 students per hour Answer: D Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: bottleneck, capacity AACSB: Analytic skills 47) Use the information in Table 7.2. Where would you expect student wait times to occur? A) D only B) B, C and D C) A only D) E only Answer: B Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: bottleneck, capacity, customer wait times AACSB: Analytic skills 279 Table 7.3 The figure above shows the process for customers arriving at Pierre's Spa and Salon. After signing in, customers are routed to different locations in the Spa for the two different services provided. The numbers in parentheses are the time in minutes for each step of the process. 48) Use the information in Table 7.3. What is the throughput time for the A-B-C-D -H routing? A) 48 minutes B) 30 minutes C) 53 minutes D) 23 minutes Answer: C Reference: Identification and Management of Bottlenecks Difficulty: Easy Keywords: bottleneck, throughput time AACSB: Analytic skills 49) Use the information in Table 7.3. What is the throughput time for the A-B-E-F-G-H routing? A) 48 minutes B) 30 minutes C) 53 minutes D) 23 minutes Answer: A Reference: Identification and Management of Bottlenecks Difficulty: Easy Keywords: bottleneck, throughput time AACSB: Analytic skills 50) Use the information in Table 7.3. What is the process bottleneck? A) H B) B C) C D) D Answer: D Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: bottleneck, throughput time 280 Table 7.4 The figure above shows the process for customers arriving at Hobbies Unlimited for several advertised crafts demonstrations. After signing in, customers are routed to different locations in the store for the two different programs provided. The numbers in parentheses are the time in minutes for each step of the process. 51) Use the information in Table 7.4. What is the throughput time for the A-B-C-D-G routing? A) 25 minutes B) 70 minutes C) 105 minutes D) 60 minutes Answer: D Reference: Identification and Management of Bottlenecks Difficulty: Easy Keywords: bottleneck, throughput time AACSB: Analytic skills 52) Use the information in Table 7.4. What is the throughput time for the A-B-E-F-G routing? A) 25 minutes B) 70 minutes C) 105 minutes D) 60 minutes Answer: B Reference: Identification and Management of Bottlenecks Difficulty: Easy Keywords: bottleneck, throughput time AACSB: Analytic skills 53) Use the information in Table 7.4. How many customers can be processed through the AB-C-D-G routing during a 4-hour evening session? A) 48 B) 24 C) 32 D) 12 Answer: D Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: bottleneck, throughput time AACSB: Analytic skills 281 54) Use the information in Table 7.4. How many customers can be processed through the AB-E-F-G routing during a 4-hour evening session? A) 8 B) 24 C) 12 D) 32 Answer: A Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: bottleneck, throughput time AACSB: Analytic skills Table 7.5 A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials and $15 of labor to produce; Product B sells for $75 but needs $30 of materials and $15 of labor to produce; Product C sells for $100 but needs $50 of materials and $30 of labor to produce; Product D sells for $150 but needs $75 of materials and $40 of labor to produce. The processing requirements for each product on each of the four machines are shown in the table. Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching between products. Market demand for each product is 80 units per week. In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product. 55) Use the information in Table 7.5. Which work center is of greatest concern to the operations manager? A) Work Center W B) Work Center X C) Work Center Y D) Work Center Z Answer: B Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: TOC, bottleneck AACSB: Analytic skills 282 56) Use the information in Table 7.5. Using the traditional method, which product should be scheduled first? A) Product A B) Product B C) Product C D) Product D Answer: D Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck 57) Use the information in Table 7.5. Using the traditional method, in what sequence should products be scheduled for production? A) D, C, B, A B) D, B, A, C C) C, D, A, B D) C, D, B, A Answer: B Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, sequence, profit per minute at bottleneck 58) Use the information in Table 7.5. Using the traditional method, what is the optimal product mix (consider variable costs only–overhead is not included in this profit calculation)? A) 71 A, 80B, 80C, 80 D B) 80A, 72B, 80C, 80D C) 80A, 80B, 60C, 80D D) 80A, 80B, 80C, 70D Answer: C Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck, mix AACSB: Analytic skills 59) Use the information in Table 7.5. Using the traditional method, what is the profit if the company manufactures the optimal product mix (consider variable costs only–overhead is not included in this profit calculation)? A) less than or equal to $8,100 B) greater than $8,100 but less than or equal to $8,300 C) greater than $8,300 but less than or equal to $8,500 D) greater than $8,500 Answer: C Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck, mix AACSB: Analytic skills 283 60) Use the information in Table 7.5. Using the bottleneck method, which product should be scheduled first? A) Product A B) Product B C) Product C D) Product D Answer: C Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck 61) Use the information in Table 7.5. Using the bottleneck method, in what sequence should products be scheduled for production? A) D. C. B. A B) D, C, A, B C) C, D, A, B D) C, D, B, A Answer: D Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, sequence, profit per minute at bottleneck 62) Use the information in Table 7.5. Using the bottleneck method, what is the optimal product mix (consider variable costs only–overhead is not included in this profit calculation)? A) 71 A, 80B, 80C, 80 D B) 80A, 72B, 80C, 80D C) 80A, 80B, 60C, 80D D) 80A, 80B, 80C, 70D Answer: A Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck, mix AACSB: Analytic skills 63) Use the information in Table 7.5. Using the bottleneck method, what is the profit if the company manufactures the optimal product mix (consider variable costs only–overhead is not included in this profit calculation)? A) less than or equal to $8,100 B) greater than $8,100 but less than or equal to $8,300 C) greater than $8,300 but less than or equal to $8,500 D) greater than $8,500 Answer: D Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck, mix AACSB: Analytic skills 284 Table 7.6 Burdell Industries makes four different models of computer printers: the E-1000, the S2000, the P-2000 and the N-1000. The E-1000 sells for $200 and has $40 in parts and $40 in labor; the S-2000 sells for $150 and requires $30 in parts and $30 in labor; the P-2000 sells for $100 and has $20 in parts and $20 in labor; and the N-1000 sells for $75 but requires only $10 of parts and $10 of labor. Fixed overhead is estimated at $5,000 per week. The manufacture of each printer requires four machines, Machines #1, 2, 3 and 4. Each of the machines is available for 40 hours a week and there is no setup time required when shifting from the production of one product to any other. The processing requirements to make one unit of each product are shown in the table. Weekly product demand for the next planning period has been forecasted as follows: 80 E-1000s; 65 S2000s; 35 P-2000s; and 20 N-1000s. In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product. 64) Use the information in Table 7.6. Which machine is the bottleneck operation? A) Machine 1 B) Machine 2 C) Machine 3 D) Machine 4 Answer: C Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: TOC, bottleneck AACSB: Analytic skills 65) Use the information in Table 7.6. Using the traditional method, which product should be scheduled first? A) Product E B) Product S C) Product P D) Product N Answer: A Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck AACSB: Analytic skills 285 66) Use the information in Table 7.6. Using the traditional method, in what sequence should products be scheduled for production? A) N, S, E, P B) N, E, P, S C) P, E, N, S D) E, S, P, N Answer: D Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, sequence, profit per minute at bottleneck AACSB: Analytic skills 67) Use the information in Table 7.6. Using the traditional method, what is the optimal product mix? A) 120 E, 90 S, 60 P, 55 N B) 60 E, 20 S, 50 P, 33 N C) 80 E, 65 S, 35 P, 5 N D) 80 E, 65 S, 20 P, 35 N Answer: C Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck, mix AACSB: Analytic skills 68) Use the information in Table 7.6. Using the traditional method, what is the profit if Burdell manufactures the optimal product mix? A) less than or equal to $10,000 B) greater than $10,000 but less than or equal to $13,000 C) greater than $13,000 but less than or equal to $16,000 D) greater than $16,000 Answer: B Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck, mix, profit AACSB: Analytic skills 69) Use the information in Table 7.6. Using the bottleneck method, which product should be scheduled first? A) Product E B) Product S C) Product P D) Product N Answer: D Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck AACSB: Analytic skills 286 70) Use the information in Table 7.6. Using the bottleneck method, in what sequence should products be scheduled for production? A) N, S, E, P B) N, E, P, S C) P, E, N, S D) E, S, P, N Answer: A Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, sequence, profit per minute at bottleneck AACSB: Analytic skills 71) Use the information in Table 7.6. Using the bottleneck method, what is the optimal product mix? A) 80 E, 65 S, 35 P, 20 N B) 60 E, 20 S, 50 P, 33 N C) 120 E, 90 S, 60 P, 55 N D) 80 E, 65 S, 30 P, 20 N Answer: D Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck, mix AACSB: Analytic skills 72) Use the information in Table 7.6. Using the bottleneck method, what is the profit if Burdell manufactures the optimal product mix? A) less than or equal to $10,000 B) greater than $10,000 but less than or equal to $13,000 C) greater than $13,000 but less than or equal to $16,000 D) greater than $16,000 Answer: C Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck, mix, profit AACSB: Analytic skills 287 Table 7.7 A company makes four products that have the following characteristics: Product A sells for $75 but needs $20 of materials and $20 of labor to produce; Product B sells for $90 but needs $45 of materials and $20 of labor to produce; Product C sells for $110 but needs $50 of materials and $30 of labor to produce; Product D sells for $135 but needs $75 of materials and $40 of labor to produce. The processing requirements for each product on each of the four machines are shown in the table. Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching between products. Market demand is 50 As, 60 Bs, 70 Cs, and 80 Ds per week. In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product. 73) Use the information in Table 7.7. Which work center is the bottleneck operation? A) Work Center W B) Work Center X C) Work Center Y D) Work Center Z Answer: C Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: TOC, bottleneck AACSB: Analytic skills 74) Use the information in Table 7.7. Using the traditional method, which product should be scheduled first? A) Product A B) Product B C) Product C D) Product D Answer: A Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck AACSB: Analytic skills 288 75) Use the information in Table 7.7. Using the traditional method, in what sequence should products be scheduled for production? A) A, B, C, D B) A, C, B, D C) A, D, B, C D) D, B, C, A Answer: B Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, sequence, profit per minute at bottleneck AACSB: Analytic skills 76) Use the information in Table 7.7. Using the traditional method, what is the optimal product mix? A) 37 A, 60 B, 70 C, 80 D B) 50 A, 51 B, 70 C, 80 D C) 50 A, 60 B, 62 C, 80 D D) 50 A, 60 B, 70 C, 60 D Answer: D Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck, mix AACSB: Analytic skills 77) Use the information in Table 7.7. Using the traditional method, what is the profit if the company manufactures the optimal product mix (consider variable costs only–overhead is not included in this profit calculation)? A) less than or equal to $6,500 B) greater than $6,500 but less than or equal to $6,700 C) greater than $6,700 but less than or equal to $6,900 D) greater than $6,900 Answer: B Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck, mix AACSB: Analytic skills 78) Use the information in Table 7.7. Using the bottleneck method, which product should be scheduled first? A) Product A B) Product B C) Product C D) Product D Answer: A Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck AACSB: Analytic skills 79) Use the information in Table 7.7. Using the bottleneck method, in what sequence should products be scheduled for production? A) A, D, B, C B) D, A, B, C C) A, D, C, B D) D, A, C, B 289 Answer: C Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, sequence, profit per minute at bottleneck AACSB: Analytic skills 80) Use the information in Table 7.7. Using the bottleneck method, what is the optimal product mix? A) 37 A, 60 B, 70 C, 80 D B) 50 A, 51 B, 70 C, 80 D C) 50 A, 60 B, 62 C, 80 D D) 50 A, 60 B, 70 C, 60 D Answer: B Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck, mix AACSB: Analytic skills 81) Use the information in Table 7.7. Using the bottleneck method, what is the profit if the company manufactures the optimal product mix (consider variable costs only–overhead is not included in this profit calculation)? A) less than or equal to $6,500 B) greater than $6,500 but less than or equal to $6,700 C) greater than $6,700 but less than or equal to $6,900 D) greater than $6,900 Answer: C Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck, mix AACSB: Analytic skills 290 Table 7.8 King Supply makes four different types of plumbing fixtures: W, X, Y and Z. The contribution margins for these products are: $70 for Product W, $60 for Product X, $90 for Product Y and $100 for Product Z. Fixed overhead is estimated at $5,500 per week. The manufacture of each fixture requires four machines, Machines #1, 2, 3 and 4. Each of the machines is available for 40 hours a week and there is no setup time required when shifting from the production of one product to any other. The processing requirements to make one unit of each product are shown in the table. Weekly product demand for the next planning period has been forecasted as follows: 70 Ws, 60 Xs, 50 Ys and 30 Zs. In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product. 82) Use the information in Table 7.8. Which machine is the bottleneck operation? A) Machine 1 B) Machine 2 C) Machine 3 D) Machine 4 Answer: A Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: TOC, bottleneck AACSB: Analytic skills 83) Use the information in Table 7.8. Using the traditional method, which product should be scheduled first? A) Fixture W B) Fixture X C) Fixture Y D) Fixture Z Answer: D Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck AACSB: Analytic skills 291 84) Use the information in Table 7.8. Using the traditional method, in what sequence should the fixtures be scheduled for production? A) Z, Y, X, W B) X, W, Z, Y C) Z, Y, W, X D) W, X, Y, Z Answer: C Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, sequence, profit per minute at bottleneck AACSB: Analytic skills 85) Use the information in Table 7.8. Using the traditional method, what is the optimal product mix? A) 70 W, 60 X, 90 Y, 100 Z B) 70 W, 50 X, 50 Y, 30 Z C) 70 W, 60 X, 47 Y, 30 Z D) 70 W, 47 X, 50 Y, 30 Z Answer: B Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck, mix AACSB: Analytic skills 86) Use the information in Table 7.8. Using the traditional method, what is the profit if King Supply manufactures the optimal product mix? A) less than or equal to $10,000 B) greater than $10,000 but less than or equal to $11,000 C) greater than $11,000 but less than or equal to $12,000 D) greater than $12,000 Answer: A Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck, mix, profit AACSB: Analytic skills 87) Use the information in Table 7.8. Using the bottleneck method, which product should be scheduled first? A) Fixture W B) Fixture X C) Fixture Y D) Fixture Z Answer: B Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck AACSB: Analytic skills 292 88) Use the information in Table 7.8. Using the bottleneck method, in what sequence should products be scheduled for production? A) Z, Y, X, W B) X, W, Z, Y C) Z, Y, W, X D) X, Y, Z, W Answer: B Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, sequence, profit per minute at bottleneck AACSB: Analytic skills 89) Use the information in Table 7.8. Using the bottleneck method, what is the optimal product mix? A) 70 W, 60 X, 90 Y, 100 Z B) 70 W, 50 X, 50 Y, 30 Z C) 70 W, 60 X, 47 Y, 30 Z D) 70 W, 47 X, 50 Y, 30 Z Answer: C Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck, mix AACSB: Analytic skills 90) Use the information in Table 7.8. Using the bottleneck method, what is the profit if Burdell manufactures the optimal product mix? A) less than or equal to $10,000 B) greater than $10,000 but less than or equal to $11,000 C) greater than $11,000 but less than or equal to $12,000 D) greater than $12,000 Answer: B Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: TOC, bottleneck, profit per minute at bottleneck, mix, profit AACSB: Analytic skills 91) In a drum-buffer-rope system, the lot size that moves from one work center to another for additional processing is a(n): A) process batch. B) operations batch. C) transfer batch. D) rope batch. Answer: C Reference: Identification and Management of Bottlenecks Difficulty: Easy Keywords: DBR, drum-buffer-rope, transfer batch 293 92) The process batch at the constraint in a drum-buffer-rope system should be: A) the same size as that at any non-constraint. B) the same size as the transfer batch. C) of such a size as to maximize the number of setups for the constraint D) of such a size as to improve utilization of the constraint. Answer: D Reference: Identification and Management of Bottlenecks Difficulty: Easy Keywords: DBR, drum-buffer-rope, process, batch, size 93) Which one of the following statements is best concerning line balancing? A) The theoretical minimum number of stations must always be fewer than the actual number achieved in a final solution. Increasing the output rate may increase the theoretical minimum number of stations. B) The "largest number of followers" rule assigns as quickly as possible those work elements most difficult to fit into a station. C) Selecting the cycle time can never have an effect on line efficiency. Answer: B Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line balancing, output rate, theoretical minimum number of work stations Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 94) What is the definition of "theoretical maximum efficiency"? A) It is the amount by which efficiency falls short of 100 percent. B) It is the efficiency that could be obtained by a solution that achieves the theoretical minimum number of stations. C) It is the maximum time allowed for work on a unit at each station. D) It is alternatively called the desired output rate. Answer: B Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: efficiency, line process 95) Balance delay could be described as the: A) amount by which efficiency falls short of 100 percent. B) efficiency that could be obtained by a solution that achieves the theoretical minimum number of stations. C) maximum time allowed for work on a unit at each station. D) desired output rate. Answer: A Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: balance delay, line process 294 96) A line balance that is 100% efficient must: A) be using the minimum cycle time. B) be using the theoretical minimum number of work stations. C) also achieve 100% balance delay. D) be producing the theoretical maximum output. Answer: B Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: efficiency, line process 97) Instead of dividing by nc to determine the efficiency of a line balance, you could divide by: A) the number of workers times the number of stations. B) the number of tasks plus the number of stations. C) the sum of the task times plus the sum of the idle times. D) (1-balance delay). Answer: C Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: efficiency, line process 98) The most controversial aspect of line-flow layout is: A) the heuristic decision rules in assigning the next work element. B) the number of models produced. C) the cycle time. D) behavioral response. Answer: D Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: behavioral response, line process 99) A line that produces several items belonging to the same family is called a: A) mixed-model line. B) part family line. C) group technology line. D) cellular line. Answer: A Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: mixed-model, line process 295 100) Which one of the following statements about line balancing is best? A) If a precedence relationship exists between A and B, they cannot be assigned to the same station. B) If the desired output rate increases, the cycle time also tends to increase. C) The theoretical minimum number of stations can never be achieved, hence the name "theoretical." D) If a line's balance delay is minimized, its efficiency is maximized. Answer: D Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line balancing, flow, balance delay, efficiency Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. Figure 7.1 101) Use the information in Figure 7.1. What are the required predecessors of activity H? A) E & G B) A through F, including E C) Activity H has no required predecessors. D) D Answer: A Reference: Managing Constraints in a Line Process Difficulty: Easy Keywords: predecessor, line process, flow 102) Use the information in Figure 7.1. If each task has a work time of one minute, what is the theoretical minimum cycle time? A) There is no minimum cycle time. B) 1 minute C) 8 minutes D) The cycle time cannot be determined with the information given. Answer: B Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: cycle time, line process, flow AACSB: Analytic skills 296 103) Use the information in Figure 7.1. If each task has a work time of one minute and there are 480 work minutes in a day, what is the task assignment at the fourth workstation if maximum output is desired? A) A B) B C) C D) D Answer: D Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: cycle, line process, flow, task AACSB: Analytic skills 104) Use the information in Figure 7.1. If each task has a work time of one minute and there are 8 hours in a day, what is the task assignment at the first station if 160 units should be produced each day? A) A, B, C, D B) H, G, F, E C) A, B, C D) H, G, F Answer: C Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line process, flow, task, station AACSB: Analytic skills 105) Use the information in Figure 7.1. If each task has a work time of one minute and there are 8 hours in a day, what is the minimum number of stations if 240 units should be produced each day? A) one B) two C) three D) four Answer: D Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: station, minimum number of stations AACSB: Analytic skills 297 Table 7.9 Balance the following line for an output rate of 3 units per minute. Work Element Time (sec) Immediate Predecessor(s ) A 12 -- B 6 A C 12 A D 4 B E 14 B, C F 10 E G 6 D, F 106) Use the information in Table 7.9. How many stations are required? A) 3 B) 4 C) 5 D) 6 Answer: B Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: stations, flow, line process AACSB: Analytic skills 107) Use the information in Table 7.9. What is the balance delay for your solution? A) less than or equal to 15% B) more than 15% but less than or equal to 25% C) more than 25% but less than or equal to 35% D) more than 35% Answer: B Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: balance delay, line process, flow AACSB: Analytic skills 298 Table 7.10 Balance the following line for an output rate of five pieces per hour. The times are in minutes (not seconds). Work Element Time (min) Immediate Predecessor(s ) A 7 -- B 5 -- C 3 -- D 4 -- E 2 A, B F 5 C G 6 D H 7 E, F I 11 F, G J 4 H, I 108) Use the information from Table 7.10. The theoretical minimum number of stations is: A) fewer than three stations. B) three stations. C) four stations. D) more than four stations. Answer: D Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line process, flow, stations AACSB: Analytic skills 109) Use the information from Table 7.10. The highest efficiency for a balanced line is: A) less than 89%. B) more than 89% and less than 91%. C) more than 91% and less than 93%. D) more than 93%. Answer: B Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line process, flow, efficiency AACSB: Analytic skills 299 Table 7.11 The Pennsylvania Appliance Company is installing an assembly line to produce vacuum cleaners, and you, as an operations manager, are responsible for balancing the line. The work elements to be performed are listed, along with their times and immediate predecessors. Work Element Time (sec) Immediate Predecessor(s ) A 60 -- B 40 A C 30 B D 20 B E 40 B F 60 C G 70 D H 50 F, G I 20 E J 60 H, I 110) Use the information in Table 7.11. The company is planning to operate 2 shifts per day, 8 hours per shift. If the desired output rate of the line is 480 units per day, what is the cycle time? A) 60 seconds B) 120 seconds C) 180 seconds D) 240 seconds Answer: B Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: cycle time, line process, flow AACSB: Analytic skills 111) Use the information in Table 7.11. The company is planning to operate 2 shifts per day 8 hours per shift. If the desired output rate of the line is 480 units per day, what is the theoretical minimum number of stations (TM) for the line? How many workstations are needed for the most efficient balance possible given these circumstances? A) TM = 3; solution = 3 stations B) TM = 3; solution = 4 stations C) TM = 4; solution = 4 stations D) TM = 4; solution = 5 stations Answer: C Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: stations, line process, flow AACSB: Analytic skills 300 112) Use the information in Table 7.11. The company is planning to operate 2 shifts per day 8 hours per shift. If the desired output rate of the line is 480 units per day, what is the highest efficiency possible for a balanced line? A) less than 91% B) more than 91% and less than 93% C) more than 93% and less than 95% D) more than 95% Answer: C Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: efficiency, line process, flow AACSB: Analytic skills Table 7.12 A company desires to set up a line to produce 60 units per hour. The work elements and their precedence relationships are as follows. Work Element Time (sec) Immediate Predecessor (s) 1 40 - 2 30 1 3 50 1 4 40 2 5 6 2 6 25 3 7 15 3 8 20 4, 5 9 18 6, 7 10 30 8, 9 113) Use the information in Table 7.12. What is the theoretical minimum number of stations? A) 3 B) 4 C) 5 D) 6 Answer: C Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: minimum number of stations, line process, flow AACSB: Analytic skills 301 114) Use the information in Table 7.12. What is the highest efficiency line balance possible? A) less than 93% B) more than 93% but less than or equal to 95% C) more than 95% but less than or equal to 97% D) more than 97% Answer: A Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: efficiency, line process, flow AACSB: Analytic skills Table 7.13 The following information is given about an assembly line. The desired output rate is 90 units per hour. Work Element Time (sec) Immediate Predecessor(s ) A 10 -- B 6 A C 15 A D 20 B E 12 B F 14 C, E G 8 D H 20 F, G 115) Use the information in Table 7.13. What is the fewest number of workstations that you need? A) two stations B) three stations C) four stations D) more than four stations Answer: B Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: minimum number of stations, line process, flow AACSB: Analytic skills 116) Use the information in Table 7.13. Suppose that the desired output rate is increased to 120 units per hour and a solution has been found that has four workstations. What is the efficiency of this new assembly line? A) less than 80% B) between 80% and 85% C) between 85% and 90% D) more than 90% Answer: C Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: efficiency, line process, flow AACSB: Analytic skills 117) A line-balancing solution has been developed for the assembly line for fertilizer spreaders at Green Grass, Inc. The desired output rate of 30 spreaders per hour will be achieved. The sum of times for all tasks performed on the line is 1200 seconds for each 302 spreader assembled. This is the total productive time. Which of the following statements must be true? A) The cycle time is 30 seconds per spreader. B) The theoretical minimum number of stations is 10. C) If the solution calls for 11 stations, the efficiency is 80%. D) If the solution calls for 12 stations, the efficiency is 80%. Answer: B Reference: Managing Constraints in a Line Process Difficulty: Moderate Table 7.14 The production of a particular product consists of seven work elements. The desired output rate is 60 units per hour. The work element and their precedence relationships are given. Work Element Time (sec) Immediate Predecessor(s ) 1 30 -- 2 15 1 3 20 2 4 15 3 5 30 3 6 25 4 7 30 5, 6 118) Use the information in Table 7.14. How many stations are required for the most efficient balance you can achieve? A) two stations B) three stations C) four stations D) five stations Answer: B Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line process, flow, minimum number of stations AACSB: Analytic skills 119) Use the information in Table 7.14. What is the most efficient line balance you can achieve? A) less than or equal to 70% B) more than 70% but less than or equal to 75% C) more than 75% but less than or equal to 80% D) more than 80% Answer: D Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: efficiency, line process, flow AACSB: Analytic skills 120) An assembly line has to perform 10 work elements, whose time requirements follow. An operations analyst has found a solution using some heuristics, as shown in the table. If the cycle time of the line is 90 seconds, what is the efficiency of the assembly line? 303 A) less than 85% B) greater than 85% but less than 90% C) greater than 90% but less than 95% D) greater than 95% Answer: C Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: efficiency, line process, flow AACSB: Analytic skills 304 121) Given the following data about an assembly line and the knowledge that we are trying to attain an output rate of 40 units per hour, what is the theoretical minimum number of stations? Work Element Time (sec) 1 90 2 80 3 75 4 70 5 90 6 85 A) four or fewer stations B) five stations C) six stations D) seven or more stations Answer: C Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line process, flow, minimum number of stations AACSB: Analytic skills 122) The production of a particular product consists of the following work elements. If the cycle time is 4 minutes and the work-element times are as follows, what is the theoretical minimum number of stations? Work Element Time (min) 1 2.4 2 0.5 3 2.1 4 2.0 5 2.7 6 1.1 7 2.0 8 2.7 9 1.6 10 1.4 A) fewer than or equal to three stations B) four stations C) five stations D) more than five stations Answer: C Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line process, flow, minimum number of stations AACSB: Analytic skills 123) Fun Vehicles, Inc. makes beach buggies on an assembly line. The total productive time to make one buggy is 300 seconds. The current line has a 90-second cycle time and consists of four workstations. The balance delay of this line must be: A) 0%. 305 B) greater than 0% but less than 6%. C) greater than 6% but less than 12%. D) greater than 12% but less than 18%. Answer: D Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: balance delay, line process, flow AACSB: Analytic skills Table 7.15 The Terminal Company is attempting to balance its assembly line of high-voltage electrical connectors. The desired output for the line is 50 connectors per hour, and the information on the work elements for this assembly line is as follows. Work Elements Time (sec) Immediate Predecessor(s ) A 40 -- B 36 A C 20 A D 25 A E 30 B, C F 34 D G 35 E H 5 F I 15 E, H J 40 H K 38 G, I, J 124) Use the information from Table 7.15 to balance this line. What is the most efficient solution? A) more than 90% B) 80 - 90% C) 70 - 79% D) less than 70% Answer: C Reference: Managing Constraints in a Line Process Difficulty: Hard Keywords: efficiency, line balance, flow AACSB: Analytic skills 306 125) Use the information from Table 7.15 and the most efficient line balance possible. What work elements are included in the first station? A) A only B) A and B only C) A and E only D) A and D only Answer: D Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: tasks, station, line balance, flow AACSB: Analytic skills 126) Use the information from Table 7.15, and assume that the most efficient line balance possible ha been achieved. What is the total idle time for an eight hour work day? A) less than an hour and a half B) more than 1:30 but less than or equal to 1:45 C) more than 1:45 but less than or equal to 2 hours D) more than 2 hours Answer: D Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: idle time, line balance, flow AACSB: Analytic skills 127) Any factor that limits the performance of a system and restricts its output is a(n) ________. Answer: constraint Reference: Introduction Difficulty: Easy Keywords: constraint 128) ________ is the maximum rate of output of a process or a system. Answer: Capacity Reference: Introduction Difficulty: Easy Keywords: capacity 129) A(n) ________ is an operation that has the lowest effective capacity of any operation in the process, and thus limits the system's output. Answer: bottleneck Reference: The Theory of Constraints Difficulty: Easy Keywords: bottleneck, TOC, output 307 130) According to the Theory of Constraints, all the money invested in a system in purchasing things that it intends to sell is ________. Answer: inventory Reference: The Theory of Constraints Difficulty: Easy Keywords: inventory, TOC 131) According to the Theory of Constraints, brand new cars on the lot waiting to be sold are ________, not ________. Answer: inventory, throughput Reference: The Theory of Constraints Difficulty: Easy Keywords: inventory, TOC, throughput 132) The wages paid to workers on the line are categorized as ________ in the Theory of Constraints. Answer: operational expense Reference: The Theory of Constraints Difficulty: Easy Keywords: operational expense 133) ________ is the total time taken from the start to the finish of a process. Answer: Throughput time Reference: Identification and Management of Bottlenecks Difficulty: Easy Keywords: throughput time 134) Variability of a firm's workload may create ________. Answer: floating bottlenecks Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: workload, variability, floating bottleneck 135) With TOC, ________ are scheduled to maximize their throughput of products while adhering to promised completion dates. Answer: bottlenecks Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: TOC, bottleneck 136) Instead of producing products with the highest profit margins, operations managers should focus on the ________ generated at the ________ . Answer: profit (margin), bottleneck Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: TOC, bottleneck, profit, profit margin Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 137) ________ is a planning and control system that regulates the flow of work-in-process materials at the bottleneck or the capacity constrained resource in a productive system. Answer: Drum-buffer-rope (DBR) Reference: Identification and Management of Bottlenecks Difficulty: Easy Keywords: drum-buffer-rope, DBR, CCR, capacity constrained resource, bottleneck 308 Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 138) Every time a manufacturer uses one resource, they make a lot size of 300. Once a group of 30 units are completed, they are taken to the next step in the process. The lot of 300 is the ________ and the group of 30 is the ________. Answer: production batch, transfer batch Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: production batch, transfer batch 139) ________ is the maximum time allowed for work on a unit at each station. Answer: Cycle time Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: cycle time, work, line process, flow 140) ________ is the amount by which efficiency falls short of 100 percent. Answer: Balance delay Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: balance delay, efficiency, line process, flow 141) Regardless of the number of tasks or their lengths, a line balance efficiency of 100% is possible if the number of stations is ________. Answer: one Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line balance, efficiency 142) A(n) ________ line is a product line that produces several items belonging to the same family. Answer: mixed-model Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: mixed-model line, family 143) The movement of product from one station to the next as soon as the cycle time has elapsed is called ________. Answer: pacing Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: pacing, line process, flow, cycle time 144) Explain why a bottleneck limits system output. Answer: A bottleneck, by definition, is a process that has less capacity than all other processes in the system. Just as a chain is as strong as its weakest link, the rest of a production system can produce only as much as the slowest process. The bottleneck limits capacity by serving to slow the rest of the system down. Running all other processes at their maximum capacity will result in inventory buildup in front of the bottleneck. Reference: Introduction Difficulty: Moderate Keywords: bottleneck, output, TOC Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 309 145) What are five of the seven key principles of the Theory of Constraints? Answer: The principles of TOC are The focus should be on balancing flow, not on balancing capacity. Maximizing the output and efficiency of every resource may not maximize the throughput of the entire system. An hour lost at a bottleneck or a constrained resource is an hour lost for the whole system. In contrast, an hour saved at a nonbottleneck resource is a mirage because it does not make the whole system more productive. Inventory is needed only in front of the bottlenecks in order to prevent them from sitting idle, and in front of assembly and shipping points in order to protect customer schedules. Building inventories elsewhere should be avoided. Work, which can be materials, information to be processed, documents, or customers, should be released into the system only as frequently as the bottlenecks need it. Bottleneck flows should be equal to the market demand. Pacing everything to the slowest resource minimizes inventory and operating expenses. Activating a nonbottleneck resource (using it for improved efficiency that does not increase throughput) is not the same as utilizing a bottleneck resource (that does lead to increased throughput). Activation of nonbottleneck resources cannot increase throughput, nor promote better performance on financial measures outlined in Table 7.1. Every capital investment must be viewed from the perspective of its global impact on overall throughput (T), inventory (I), and operating expense (OE). Reference: The Theory of Constraints Difficulty: Moderate Keywords: TOC, steps Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 310 146) Describe a process from your own personal experience at home or work that suffers from a lack of sufficient throughput. Apply the first four TOC steps to address the situation, assuming you have complete authority to do so. Answer: Examples will vary. The steps of TOC are (1) identify the system bottleneck(s); (2) exploit the bottlenecks; (3) subordinate all other decisions to step 2; (4) elevate the bottleneck(s); and (5) do not let inertia set in. Reference: The Theory of Constraints Difficulty: Moderate Keywords: TOC, steps Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 147) What are two ways a process manager can identify a bottleneck in a service or manufacturing process? If you were in a manufacturing firm, what physical cues would signal a bottleneck? Answer: A workstation in a process is a bottleneck if 1) it has the highest total time per unit processed, or 2) it has the highest average utilization and total workload. Generally, the bottleneck has a pile of materials in front of it waiting to be processed. Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: bottleneck Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 148) What is contribution margin for a product? How might it be used to manage the productive resources on a shop floor? Answer: Contribution margin is the amount each product contributes to profits and overhead. Determining which product has the highest contribution margin and producing it at the expense of other products is the traditional method of shop floor management. The Theory of Constraints instead studies product's contribution margin based on bottleneck usage, which may be entirely different. Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: bottleneck Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 311 149) What is a Drum-Buffer-Rope system for planning and control? Answer: Drum-Buffer-Rope (DBR) is a planning and control system based on the theory of constraints that is often used in manufacturing firms to plan and schedule production. It works by regulating the flow of work-in-process materials at the bottleneck or the capacity constrained resource (CCR). The bottleneck schedule is the drum because it sets the beat or the production rate for the entire plant and is linked to the market demand. The buffer is a time buffer that plans early flows to the bottleneck and thus protects it from disruption. It also ensures that the bottleneck is never starved for work. A finished-goods inventory buffer can also be placed in front of the shipping point in order to protect customer shipping schedules. Finally, the rope represents the tying of material release to the drum beat, which is the rate at which the bottleneck controls the throughput of the entire plant. It is thus a communication device to ensure that raw material is not introduced into the system at a rate faster than what the bottleneck can handle. Completing the loop, buffer management constantly monitors the execution of incoming bottleneck work. Working together, the drum, the buffer, and the rope can help managers create a production schedule that reduces lead times and inventories while simultaneously increasing throughput and on-time delivery. Reference: Identification and Management of Bottlenecks Difficulty: Moderate Keywords: bottleneck Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 150) Describe three ways that line balancing and line flow layouts are similar to project management and three ways they are different. Answer: Answers may vary. Line balancing and project management both rely on the completion of predefined activities in the proper sequence. A line flow may have multiple feeder lines that supply subassemblies to the main line, similar to subcontractors working on the project in state of partial completion. Both have anticipated completion times that may not be reached if things don't go smoothly. The time scale is radically different between line balancing and project management; projects tend to take much longer. Projects also tend to be one of a kind endeavors; line balancing is performed with the anticipation of high volumes of fairly standardized output. Line flows are created for more routine, process-oriented work that can be composed of standardized tasks. Projects are typically anything but routine and far from processfocused. Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line balancing, flow layout Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 312 151) You have been assigned a line balancing task and given a list of tasks, their precedence requirements, and the time needed to accomplish them. As you begin to balance the line, you realize that you must make some assumptions. What are these assumptions and which of them has the greatest impact on the success of your balance? Answer: One assumption that is being made is that the task times are invariant, unless a mean and standard deviation have both been provided. You must also assume that the task durations will stay roughly the same, i.e., that learning effects are not significantly different amongst the tasks. You are also assuming that the tasks will stay somewhat static, or the line would require rearrangement and possibly rebalancing with some frequency. You also assume that the precedence is static. Among these, the last assumption is probably the least tenuous. Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line balancing, flow layout Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 152) How can Theory of Constraints principles be reconciled with line balancing? Answer: Line balancing strives to assign work to stations such that the amount of work at each station is equal. Work flows from station to station based on a cycle time that is determined based on the number of units to be produced per unit time. Theory of Constraints stresses the need to balance flow with demand and is concerned with preserving flow through the bottleneck, or lowest capacity station. Flow can be preserved by protecting the bottleneck with protective WIP and making sure that market demand is sufficient to support continuous bottleneck operation. Line balancing, as explained in the text, assumes that all task times are constant. So the person performing the balance can try to allocate capacity as evenly as possible. If task times were stochastic, then flow would not be preserved with classic line balancing techniques because the lowest capacity work station would occasionally fall idle. Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line balancing, TOC, theory of constraints Learning Outcome: Explain options for managing bottlenecks and managing capacity in service and manufacturing processes. 313 153) Schmidt Industries makes four different snake traps; the Harlan, the Gaylen, the Leah and the Matthew. The Harlan sells for $200 and has $40 in parts and $40 in labor; the Gaylen sells for $150 and requires $30 in parts and $30 in labor; the Leah sells for $100 and has $20 in parts and $20 in labor; and the Matthew sells for $75 but requires only $10 of parts and $10 of labor. Schmidt Industries has four machines (we'll call them A, B, C, and D for convenience) that are used in the production of each of these products. Each of these machines is available for 40 hours a week and there is no setup time required when shifting from the production of one product to any other. The processing requirements to make one unit of each product are shown in the table. Schmidt Industries has monthly fixed costs of $5000 and has a demand forecast of 80 Harlans, 60 Gaylens, 40 Leahs and 20 Matthews for the coming month. How many of each of the four models should Susan, the operations manager, schedule for production this month? Answer: The processing requirements for the demand forecast result in a need for: Machine A: 80 × 10 + 60 × 10 + 40 × 5 + 20 × 5 = 1700 ≤ 2400 Machine B: 80 × 15 + 60 × 10 + 40 × 10 + 20 × 10 = 2300 ≤ 2400 Machine C: 80 × 15 + 60 × 10 + 40 × 15 + 20 × 10 = 2500 ≰ 2400 Bottleneck Machine D: 80 × 5 + 60 × 10 + 40 × 10 + 20 × 10 = 1600 ≤ 2400 The contribution margin per bottleneck minute is: Harlan: (200 - 40 - 40)/15 = $8/min Gaylen: (150 - 30 - 30)/10 = $9/min Leah: (100 - 20 - 20)/15 = $4/min Matthew: (75 - 10 - 10)/5 = $11/min Products should be produced in Matthew, Gaylen, Harlan, and Leah order. The product mix is 20 Matthews (using 100 minutes of Machine C); 60 Gaylens (using 600 minutes of Machine C); 80 Harlans (using 1200 minutes of Machine C); and 33 Leahs (using up the remaining 500 minutes of Machine C time). Reference: Identification and Management of Bottlenecks Difficulty: Hard Keywords: capacity, bottleneck AACSB: Analytic skills 314 154) Consider the process shown that is trying to produce to meet a market demand of 500 units per week. Step 1: Material release schedule Step 2: Drilling (capacity is 500 units/week) Step 3: Tapping (capacity is 450 units/week) Step 4: Grinding (capacity is 600 units/week) Step 5: Coating (capacity is 400 units/week) Step 6: Inspection (capacity is 1000 units/week) a. Where should buffers be placed? b. Which resource is the drum? c. Where should the rope be placed? d. Which resource is the bottleneck? e. Which resource is the CCR? Answer: a. A constraint buffer should be placed between steps 4 and 5 to protect the bottleneck which is Step 5 (Coating). A shipping buffer should be placed at the end of the line, after Step 6, (Inspection). b. The resource functioning as the drum is the bottleneck, Step 5. c. The rope should connect Step 1 and Step 5. d. The bottleneck is Step 5. e. A CCR exists if the process with the least capacity can still meet market demand, which is not the case in this scenario. Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: drum-buffer-rope, DBR, CCR, capacity constraint resource, bottleneck AACSB: Analytic skills 315 155) Consider the process shown that is trying to produce to meet a market demand of 250 units per week. Step 1: Material release schedule Step 2: Drilling (capacity is 300 units/week) Step 3: Tapping (capacity is 150 units/week) Step 4: Grinding (capacity is 300 units/week) Step 5: Coating (capacity is 200 units/week) Step 6: Inspection (capacity is 500 units/week) a. Where should buffers be placed? b. Which resource is the drum? c. Where should the rope be placed? d. Which resource is the bottleneck? e. Which resource is the CCR? Answer: a. A constraint buffer should be placed between steps 2 and 3 to protect the bottleneck which is Step 3 (Tapping). A shipping buffer should be placed at the end of the line, after Step 6, (Inspection). b. The resource functioning as the drum is the bottleneck, Step 3. c. The rope should connect Step 1 and Step 3. d. The bottleneck is Step 3. e. A CCR exists if the process with the least capacity can still meet market demand, which is not the case in this scenario. Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: drum-buffer-rope, DBR, CCR, capacity constraint resource, bottleneck AACSB: Analytic skills 316 156) Balance the assembly line for the tasks contained in the table. The desired output is 240 units per day. Available production time per day is 480 minutes. What is the efficiency for the balanced assembly line? Work Element Time (Sec.) Immediate Predecessor(s ) A 40 --- B 45 --- C 55 A D 55 B E 65 B F 40 C, D G 25 D, E Answer: For 240 units/day with available time of 480 minutes per day, the cycle time is 2.00 minutes or 120 seconds. One line balance is: Station 1 2 3 Totals Task(s) B, E D, A C, F, G Work Time 45, 65 55, 40 55, 40, 25 325 Idle Time 10 25 0 35 Efficiency = Work Time Work Time + Idle Time = 325 325 + 35 = 90.28% There are four other legal assignments possible at the first work station, AB, BA, AC, and BD. There are a large number of possible legal balances since the longest two task times sum to 120, which is within the desired cycle time. A number of possible balances will achieve the three station balance that yields 90.28% efficiency. Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line balance, efficiency AACSB: Analytic skills 317 157) Balance the assembly line for the tasks contained in the table. The desired output is three units per hour. Available production time per day is eight hours. What is the theoretical minimum number of stations? What is the efficiency for the balanced assembly line? Work Element Time (Min.) Immediate Predecessor(s ) A 5 --- B 8 A C 12 A D 11 B E 5 C F 6 D G 4 D H 12 E I 14 G, H J 9 F K 8 I L 3 K, J Answer: For 3 units/hour the cycle time is 20 minutes. The theoretical minimum number of stations is 97/20=4.85→5 One line balance is: Station 1 2 3 4 5 6 Totals Task(s) A, C B, D F, J, E H, G I K, L Work Time 5, 12 8, 11 6, 9, 5 12, 4 14 8, 3 97 Idle Time 3 1 0 4 6 9 23 Efficiency = Work Time Work Time + Idle Time = 97 97 + 23 = 80.8% Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line balance, efficiency AACSB: Analytic skills 318 158) Balance the assembly line using the following task information contained in the table. The desired output is 360 units per day. Available production time per day is 480 minutes. What is the efficiency for the balanced assembly line? Work Element Time (Sec.) Immediate Predecessor(s ) A 30 --- B 20 A C 50 A D 45 B E 30 B F 55 C, D G 35 D, E H 40 F Answer: Cycle time for 360 units in a 480 minute day is 480/360 = 1.33 minutes = 80 seconds The theoretical minimum number of stations is 4; this balance is one of the 5-station solutions. Station 1 2 3 4 5 Totals Task(s) A, C B, D F H, E G Work Time 30, 50 20, 45 55 40, 30 35 305 Idle Time 0 15 25 10 45 95 Efficiency = Work Time Work Time + Idle Time = 305 305+ 95 = 76.25% Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line balance, efficiency AACSB: Analytic skills 319 159) Balance the line in order to achieve maximum output for this ten activity product. Determine the number of units produced in a seven hour work day and the total idle time in hours. Task Time (sec) Predecessor Z 40 --- Y 30 Z X 80 Z W 75 X, Y V 15 W T 55 W S 35 V R 40 T Q 10 R M 40 S, R Answer: Cycle time for maximum output is 80 seconds and the theoretical minimum number of stations is Station 1 2 3 4 5 6 7 Totals Task(s) Z, Y X W V, T S R, M Q Work Time 40, 30 80 75 15, 55 70 40, 40 60 420 Idle Time 10 0 5 10 10 0 20 55 Efficiency = Work Time Work Time + Idle Time = 420 420 + 55 = 88.42% There are 315 units produced in a day. 7 hours/day × 60 minutes × 60 seconds 80 seconds/unit The total idle time per day at this level of production is 4.8125 hours. (4:48:45 to be precise) 300 units/day × 55 seconds idle/unit = 17,325 seconds 17,325 seconds 3600 seconds/hour = 4.8125 hours Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line balance, efficiency AACSB: Analytic skills 320 160) Balance the line in order to achieve maximum output for this eight-activity product. Then balance the line to maximize the efficiency of the operation. How do the levels of output (assume an eight hour day) and line efficiencies compare? Task Time (min) Predecessor 1 10 --- 2 8 Task 1 3 9 Task 1 4 2 Task 2 5 6 Task 3 6 12 Task 4, Task 5 7 7 Task 5 8 5 Task 6, Task 7 Answer: The cycle time for maximum output is 12 minutes. One balance is show below; it has 6 stations, an increase of one from the theoretical minimum of five stations. It produces at 81.9% efficiency. It produces a unit every twelve minutes, so over the course of a day it can produce 40 units using six people. Station 1 2 3 4 5 6 Totals Task(s) 1 3 2, 4 5 6 7, 8 Work Time 10 9 8, 2 6 12 7, 5 59 Idle Time 2 3 2 6 0 0 13 Efficiency = Work Time Work Time + Idle Time = 59 59 + 13 = 81.94% The cycle time for maximum efficiency is 59 minutes. One balance is show below; it has one station and produces at 100% efficiency. It produces a unit every 59 minutes, so over the course of an eight-hour day it can produce eight complete units plus get started on a ninth unit using just one person. If the line was replicated and six workers perfectly cross trained, they could produce 54 units and start on the first task for units 55-60. Station 1 Totals Task(s) 1, 3, 2, 4, 5, 6, 7, 8 Work Time 10, 9, 8, 2, 6, 12, 7, 559 Idle Time 0 0 Efficiency = Work Time Work Time + Idle Time = 59 59 + 0 = 100% Reference: Managing Constraints in a Line Process Difficulty: Moderate Keywords: line balance, efficiency AACSB: Analytic skills 321 [Show More]

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