CONTROLLING AND

IMPROVEMENT DECISIONS
Module IV
PRODUCTIVITY
PRODUCTIVITY
Production is a process or procedure developed to
transform a set of input elements into a specified set
of output elements in the form of finished products or
services,

Productivity means the amount of products or

services produced with the resources used.

Productivity in a time period is usually measured

with the following formula:

Productivity = Quantity of products or Service Produced

Amount of Resources used
 Productivity is one of the major concerns of
managers as high productivity is essential to
survive in a competitive environment.
Productivity is of two types - total productivity and

partial productivity.
The effectiveness and efficiency of an organization

depends on how effectively and efficiently

operations are managed.
The tools of operations research( linear

programming, assignment, decision tree etc.) are of

special interest to managers of production and
operations, as they help the managers increase
efficiency and profitability of the organization.
EFFICIENCY AND EFFECTIVENESS
 Efficiency refers to doing things in a right manner.

Scientifically, it is defined as the output to input ratio and focuses on getting the
maximum output with minimum resources.

Effectiveness, on the other hand, refers to doing the right things. It constantly
measures if the actual output meets the desired output.

Since efficiency is all about focusing on the process, importance is given to the means
of doing things whereas effectiveness focuses on achieving the end goal.

Efficiency is concerned with the present state or the status quo. Thinking about the
future and adding or eliminating any resources might disturb the current state of
efficiency.

Effectiveness, on the other hand, believes in meeting the end goal and therefore takes
into consideration any variables that may change in the future.
PROCESS CAPABILITY
o Process Capability is a production processs
ability to produce products within the desired
expectations of customers.

o It is a measurable property of a process to the

specification, expressed as a process capability
index (e.g., Cp or Cpk) or as a process
performance index (e.g., Pp or Ppk).
 Cp Process Capability. A simple and
straightforward indicator of process capability

Cpk Process Capability Index. Adjustment of Cp

for the effect of non-centered distribution

Pp Process Performance. A simple and

straightforward indicator of process performance

Ppk Process Performance Index. Adjustment of

Pp for the effect of non-centered distribution
 Cp/Cpk provides an estimate of potential process
performance or capability.

Pp/Ppk provides the actual process performance

given all the variance that is currently present in
the process
UNDERSTANDING QUALITY
QUALITY
Broadly defined,qualityrefers to the ability of a
product or service to consistently meet or exceed
customer requirements or expectations.
Different customers will have different
expectations, so a working definition of quality is
customer-dependent.
QUALITY COSTS
The "cost of quality" isn't the price of creating a quality product
or service. It's the cost of NOT creating a quality product or
service.

Every time work is redone, the cost of quality increases. Obvious

examples include:

The reworking of a manufactured item.

The retesting of an assembly.
The rebuilding of a tool.
The correction of a bank statement.
The reworking of a service, such as the reprocessing of a loan
operation or the replacement of a food order in a restaurant.
In short, any cost that would not have been expended if quality
were perfect contributes to the cost of quality.
CHECK SHEETS

A simple and effective method of gathering

information.
Ensures consistency of data collected.

Can be completed whilst doing the normal job.

Simplifies data collection and analysis.

Highlights trends.

Spots problems.
PARETO CHART
Commonly known as ABC analysis or the 80:20
rule
For example: 80% of problems are attributed to 20% of the
causes
Data categories are arranged in order of frequency -
starting with the most frequent
It is one of the most effective yet simple tools

available
It identifies the most significant problem to be

worked first
It is an effective on-going improvement tool

This tool distinguishes between the vital few and the

trivial many
SCATTER DIAGRAM
A graphical tool allowing the identification of
possible relationships between two different sets
of variables
A display of what happens to one variable when
another changes
A method of testing possible cause / effect
relationships
HISTOGRAM
Is a visual way of representing data easier to
display and interpret large amounts of data than
using tables
It is a picture of the process behaviour at a given
process of time
Why use a Histogram?

Allows us to make sense of data

It allows us to see patterns that are difficult to

see in tables of numbers
It is a simple way of communicating data
CONTROL CHART
It is a statistical tool used to distinguish between
variation in a process resulting from common causes,
and variation resulting from special causes
It is a graphic display of the process stability or
instability over time
It displays data in the time sequence in which it occurred

Why use a Control Chart?

Can be used to make judgements of the process

performance over a certain period of time

It provides a common language for discussing process

performance
To assess the effectiveness of changes to improve a
process
CAUSE-EFFECT DIAGRAM
It is a tool that is used alongside brainstorming
and helps to identify, sort and display possible
causes of a specific problem.
Can otherwise be known as a Fishbone or
Ishikawa Diagram.
It illustrates the relationship between the
outcome and the factors that influence it.
FLOW CHART
They provide a process overview at a glance
They relate one step in the process to the others

They provide insight for data collection and

control points
They assist in identifying the process customers
QUALITY CONTROL METHODS AND
ACCEPTANCE SAMPLING
Acceptance sampling is an important field of statistical
quality control that was popularized by Dodge and Romig
and originally applied by the U.S. military to the testing of
bullets during World War II.

If every bullet was tested in advance, no bullets would be left

to ship.

If, on the other hand, none were tested, malfunctions might

occur in the field of battle, with potentially disastrous results.

Acceptance sampling is "the middle of the road" approach

between no inspection and 100% inspection.

THUS.
Acceptance Sampling is a statistical measure used in quality control.

A company cannot test every one of its products due to either ruining the
products, or the volume of products being too large. Acceptance sampling
solves this by testing a sample of product for defects.

The process involves batch size, sample size and the number of defects
acceptable in the batch.

This process allows a company to measure the quality of a batch with a

specified degree of statistical certainty without having to test every unit
of product.

The statistical reliability of a sample is generally measured by a t-

statistic.
INTRODUCTION TO TQM
CONTRIBUTION OF QUALITY GURUS
The modern era of quality management was
heralded by a few new thinkers.

Among them were Deming, Crosby,

Feigenbaum, Ishikawa, Juran and Taguchi

They worked with industry to start companies

on the way to development of quality
improvement program
DEMING
Dr. W. E Deming was a statistician and a consultant.

He travelled to Japan after World War II to assist the

industries of the Japanese government in improving
productivity and quality.

Deming introduced the PDCA (Plan-Do-Check-Act)

Cycle to Japanese Companies, which was originally
developed by Walter Shewart.

The PDCA Cycle represents the concept of

continuous improvement as an endless cycle.of
actions.
FEIGENBAUM
Arnold Feigenbaum developed the concept of TQC ( Total Quality
Control)

According to him the responsibility for quality depends on the

person who does the work.

The concept is referred to as quality at the source.

This means that every worker, engineer, salesperson etc. must be

responsible for performing his or her work with perfect quality.

In the TQC Model product quality is considered more important

than production rates.

Therefore workers are given the option to stop production when

quality problems occur.
JURAN
Joseph M. Juran played an important and early
role in teaching Japanese manufacturers how to
improve their product quality.

According to him there should be top

management commitment for improved
product quality, quality planning, statistics to
identify discrepancies and continuous
improvement of every aspect of product quality.
CROSBY
According to Philips B. Crosby any level of defects is
too high.
Companies should put programs into place that will

move them continuously towards the goal of zero

defects
The traditional trade off between the cost of improving

quality and the cost of poor quality is considered

erroneous by him..
The cost of poor quality includes all the costs of not doing

the job right the first time (scrap, re-work, lost labour
hours, customer ill-will and lost sales etc.).
He says that the cost of poor quality is so

understated that unlimited amounts can be profitably

spent to improve quality.
QUALITY CIRCLES
A Quality Circle ( QC) is a small group of
employees ( around 9), who volunteer to meet
regularly to undertake work related projects.

These projects are designed to advance the

company, improve working conditions and spur
mutual self development by using quality control
concepts.

-------------------- ( Ref photocopy)

KAIZEN
Japanese manufacturers have long practiced the principle of Kaizen.

Kaizen is the goal of continuous improvement in every phase of manufacturing.

Eg.Managers may encourage workers to reduce in progress inventories a step further

to see if any production problem occurs, thus identifying a target for the workers to
eliminate. Kaizen is continuous improvement that is based on certain guiding
principles:

Good processes bring good results

Go see for yourself to grasp the current situation
Speak with data, manage by facts
Take action to contain and correct root causes of problems
Work as a team
Kaizen is everybodys business

Oneof the most notable features of kaizen is that big results come from many small
changes accumulated over time.

. (ref photocopy)
INDUSTRIAL SAFETY AND
ERGONOMICS
INDUSTRIAL SAFETY AND
ERGONOMICS
Ergonomics is an applied science which
emphasizes the importance of designing
workstations (i.e. office furniture or industrial
work areas and equipment) so the workstation
fits the individual worker.

The objective is to "design out" as many

ergonomic risk factors as possible in an effort to
reduce musculoskeletal disorders (MSD).
Ergonomics is also referred to as Human Factors.
HIGH RISK SITUATIONS
1. Do not start up or shut down equipment or installations without using the
appropriate written operating procedure.

2. Traffic: Machine/vehicle/cyclist/pedestrians
Do not exceed the speed limits.

3. Body mechanics and tools

Do not carry out work if you do not have the right tools for the job and the
environment.

4. Protective equipment
Do not access installations and perform work without wearing general or
task-specific personal protective equipment (PPE).

5. Work permits
Do not perform work without a valid work permit.
.
6. Lifting
Do not walk under a load while lifting is taking place.
7. Work on powered systems
Do not perform work without checking that the power and product source
supply has been rendered inoperative.

8. Confined spaces
Do not enter a confined space until isolation has been verified and the
atmosphere checked.

9. Excavation work
Do not perform excavation work without a valid work permit comprising a
map of all underground hazards.

10. Working at heights

Do not work at heights without a safety harness when there is no collective

protective equipment.

11. Change management

Do not make any technical or organizational changes without prior
authorization.

12. Simultaneous operations or co-activities

Do not perform simultaneous operations or co-activities without a prior
visit.
 An industrial safety system is a
countermeasure crucial in any hazardous plants
such as oil and gas plants and nuclear plants.
They are used to protect human, plant, and
environment in case the process goes beyond the
control margins.
These systems are not intended for controlling
the process itself but rather protection.
 Ergonomics is an applied science which emphasizes the
importance of designing workstations (i.e. office furniture or
industrial work areas and equipment), controls, displays,
safety devices, tools and lighting to fit the employees physical
requirements, capabilities and limitations to ensure his/her
health and well being.

The objective is to "design out" as many ergonomic risk factors

as possible in an effort to reduce musculoskeletal disorders
(MSD).

It may include restructuring or changing workplace conditions

to reduce stressors that cause these MSDs.

Ergonomics is also referred to as Human Factors.

EG: WHAT ARE THE BASIC GUIDELINES FOR SETTING
UP A COMPUTER WORKSTATION CORRECTLY?

Workstations that include video display terminals (VDTs)

should be ergonomically designed for both computer and non-
computer work. VDT workstations should be adjustable so
users can easily change their working postures and equipped
with the following:

Adjustable and detachable keyboards;

Display screens that tilt up and down;

Brightness and contrast controls;

Flexible copy-holders that reduce the distance between the

screen and source material; and

Proper lighting and anti-glare filters should be installed to

prevent glare from the VDT screen. VDTs should be placed in

the workspace in such a way as to minimize or diminish glare.
GREEN OPERATIONS MANAGEMENT
WHAT IS GREEN?

A green business, or sustainable business, can

generally be defined as one that strives to reduce
its negative impact on the local environment,
community, society or economy while
maintaining a profit.

However, there is no standard definition and

perhaps the best approach is for each business to
define for itself what it means to be a green
business and develop a list of actions or
standards that it will adhere to.
 A business looking to describe itself as a green
business could work towards matching itself
against the following four criteria:
It incorporates principles of sustainability into its
business decisions.
It supplies environmentally friendly products or
services that replaces demand for non-green
products and/or services.
It is greener than traditional competition.

It has made an enduring commitment to

environmental principles in its business
operations.