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OPM400 Exam Review
Chapter 8 - Managing Quality p 203-228
Total Quality Management (2 goals: Careful design of the product or service and Ensuring that the organization’s systems can consistently produce the design)
Quality Guru’s (Shewhart, Deming, Juran, Crosby)
Shewhart- developed the principles of statistical quality control(SQC) in the 1920s. he also created the Plan-Do Check-Act(PDCA) principles of continuous improvement.
Deming- emphasized the importance of organization –wide quality management. His well-known 14-point plan for quality helps achieve long term competitiveness. The plan focuses on the following major themes in quality improvement; 1)Defect prevention rather than in section, 2)doing business with suppliers based on quality rather than price, 3) leadership from top management that provides an atmosphere in which employees can focus on continuous improvement, and 4) the importance of continuous training and education.
Juran- developed the concept of quality as “fitness for use” the product must satisfy customer’s needs. He also prompted Poreto analysis in quality control and cost of quality. For preventing errors there are included “quality improvement and quality planning.
Crosby- developed the notion that “quality is free” reduce repair costs(less warranty work), better reputation, and more market share. “zero defects”
Dimensions of Quality
Performance- Primary product or service characteristics
Features- Added touches, bells and whistles, secondary characteristics.
Reliability/durability- consistency of performance ofver time, probability of failing useful life
Serviceability- ease of repair.
Aesthetics- Sensory characteristics (sound, feel, look and so on)
Perceived quality- Past performance and reputation.
Design Quality- refers to the inherent value of the product in the marketplace and is thus a strategic decision for the firm.
/Conformance Quality- refers to the degree to which the product or service design specifications are met. Activities; a tactical, day to day nature.
Quality at the Source.- is frequently in the context of conformance quality. Means that the person who does the work takes responsibility for making sure that his or her output meets specifications.
Costs of Quality(analysis are common in industry and constitute one of the primary functions of QC departments) –
Prevention- the sum of all costs to prevent defects, such as the cost of to identity the cause of the defect, to implement corrective action to eliminate the cause, to train personnel, to redesign the product of system and to purchase new equipment or make modification.
Appraisal- costs of the inspection, testing, and other tasks to ensure that the product of process is acceptable.
Internal – costs of defects incurred withing the system; scrap, rework, repair.
External Failure Costs- costs for defects that pass through the system customer warranty replacements, loss of customers or goodwill, handling complaints and product repair.
ISO9000- is a family of standards on good quality management practices based on international consensus. Provides standardized requirements of a quality management system for any organization.
ISO14000- is a set of international standards and quidance documents for environmental management.
Quality Awards CAE (Categories and forms of recognition for the awards)
7 main critera (leadership and governance, planning and environmental sustainability, customer/citizen/client focus, people focus and healthy workplace, process management, suppliers/partner focus, and overall organizational performance.,
Deming Prize- which is open to companies outside Japan also.
Six Sigma- a statistical term to describe the quality goal of no more than 3.4 defects out of every million units. Also refers to a quality improvement philosophy and program.
Six Sigma Methodology (DMAIC) – define, measure, analyze, improve and control.
Analytical Tools for Six Sigma Process
Flowcharts- show each of the steps required to produce either a good or service. Tasks are typically depicted as rectangles, waits or inventories as inverted triangles and decision points as diamonds.
Checksheets- collected data about some process by noting how frequently an even occurs and making a tick mark for a particular category in checklist.
bar charts- display data variation. A bar chart is used to graph nominal data which are data that can be categorized and counted rather than measured.
Pareto charts- the frequency of occurrence errors is sorted in discending order and a cumulative percentage line is typically added to make it easier to determine how the errors add up.
Scatterplots- shows the realationship between 2 measured variables.
run charts-behaviour of some variable over time.
Fishbone diagrams- cause and effect diagrams.
Chapter 13 - Supply Chain Management p 389-423
Definition of Supply Chain- how organizations are linked together, as viewed from a particular company.
Strategic Sourcing- the development and management of supplier relationship to acquire goods and services in a way that aids in optimizing the supply chain needs of the firm.
The Bullwhip Effect –the variability in demands is magnified as we move from the customer to the producer in the supply chain.
Trends in Strategic Sourcing (TCO, Fair trade practices) – when selecting a supplier, its important to consider all of the costs incolved. One of more of the following costs may be added to the purchase price depending on the product or service that is being produced: transportation and installation, inventory management, administration and order processing, trainin employees to use the product, data acquisition and evaluation, operating and maintenance.
Fair trade practices- it is important to ensure that suppliers companies are environmentally conscious, provide acceptable working conditions, and repect human rights issues such as not using child labour.
Vendor-Managed Inventories (VMI) –vendor manages customer’s inventory of the products the vendor supplies.
Vertical Integration – Level of ownership of partners in the supply chain.
Outsourcing- the act of moving some of a firm’s internal activities and decision responsibility to outside providers becoming less vertically integrated.
Measuring Supply Chain Performance (evaluate the performance of their supply chain)
(Inventory turns and weeks of supply calculations) Inventory turnover=(cost of goods sold/Average aggregate inventory value) Inventory and weeks of supply- measures of supply chain efficiency that are mathematically the inverse of one another. Week of supply=(average aggregate inventory value/ COGS)*52 weeks.
Reverse Supply Chain- serices of activities required to retrieve a used product of return from a customer and either dispose of it or reuse it.
ERP systems
Chapter 14 - Logistics p 428-447
Logistics – the art and science of obtaining, producing, and distributing material and product in the proper place and in the proper quantities.
3PL-a company that manages all or part of another company’s product delivery operations.
Modes of Transportation (highway (track), water(ship), air(aircraft),rail(trains), pipelines)
Use of Containers
Reduced material handling- compared to unpacking and re-packing for different transportation modes.
Extensive network- the combination of cargo ships, railway, and roads provides an extensive network to get the container from almost anywhere in the world.
Optimal cost-
Cross-Docking – goods flow across a facility, from the receiving dock to the shipping dock, without ever sitting in inventory.
Plant Location Methods: Factor-Rating Systems- are perhaps the most widely used of the general location techniques because they provide a mechanism to combine diverse ( quantitative and qualitative) factors in an easy to understand format.
Centroid Method (calculations)
Also called the centre of gravity method. Is a technique for locating single facilities that considers the existing facilities, the distances between them and the volumes of goods to be shipped.
Chapter 5 - Project Management P 95-119
What is Project Management?- planning, directing, and controlling resources( people, equipment and material)to meet the technical, cost, and time constraints of the project.
Evaluating project Success and Managing Project Constraints –project success historically has been based on comparing actual to planned performance on Budget(cost), time( Schedule), and functionality( Quality).
Work Breakdown Structure- the hierarchy of project tasks, subtasks and work packages.
Task- is a futher subdivision of a project.
Work package- is a group of activities combined to be assignable to a single organizational unit.
Statement of work
Network-Planning Models
Critical path method- scheduling maintance shutdowns at chemical processing plants owned by Dupont.
slack time – the time that an activity can be delayed; the difference between the late and early start times of an activity.