Human Resources/OPERATIONS MANAGEMENT
Q1) Explain the concept Six Sigma. Bring out the significance of Six Sigma in Quality Management?
Q2) Define Project Management and explain its nature and features?
Q3) What is Process Analysis? Explain the steps in Manufacturing Process Selection and Design?
Q4) Enumerate and explain the Theory of Constraints?
Q5) Write short notes on
a) Inventory Control
b) Operations Scheduling
Q6) Explain the following concept
1) Product Design
2) Strategic Capacity Management
Q7) Define Material Requirements Planning. Discuss its various components?
Q8) What is Supply Chain Strategy? Discuss its characteristics?
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Q1) Explain the concept Six Sigma. Bring out the significance of Six Sigma in Quality Management?
What is Six Sigma ?
• Six Sigma's aim is to eliminate waste and inefficiency, thereby increasing customer satisfaction by delivering what the customer is expecting.
• Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services.
• Six Sigma follows a structured methodology, and has defined roles for the participants.
• Six Sigma is a data driven methodology, and requires accurate data collection for the processes being analyzed.
• Six Sigma is about putting results on Financial Statements.
• Six Sigma is a business-driven, multi-dimensional structured approach to:
o Improving Processes
o Lowering Defects
o Reducing process variability
o Reducing costs
o Increasing customer satisfaction
o Increased profits
The word Sigma is a statistical term that measures how far a given process deviates from perfection.
The central idea behind Six Sigma is that if you can measure how many "defects" you have in a process, you can systematically figure out how to eliminate them and get as close to "zero defects" as possible and specifically it means a failure rate of 3.4 parts per million or 99.9997% perfect.
Key Concepts of Six Sigma
At its core, Six Sigma revolves around a few key concepts.
• Critical to Quality: Attributes most important to the customer.
• Defect: Failing to deliver what the customer wants.
• Process Capability: What your process can deliver.
• Variation: What the customer sees and feels.
• Stable Operations: Ensuring consistent, predictable processes to improve what the customer sees and feels.
• Design for Six Sigma: Designing to meet customer needs and process capability.
Customers Feel the Variance, Not the Mean. So Six Sigma focuses first on reducing process variation and then on improving the process capability.
Myths about Six Sigma:
There are several myths and misunderstandings about Six Sigma. Few are given below:
• Six Sigma is only concerned with reducing defects.
• Six Sigma is a process for production or engineering.
• Six Sigma can not be applied to engineering activities.
• Six Sigma uses difficult-to-understand statistics.
• Six Sigma is just training.
The Benefits of Six Sigma
There are following six major benefits of Six Sigma that attract companies.
• Generates sustained success.
• Sets a performance goal for everyone.
• Enhances value to customers.
• Accelerates the rate of improvement.
• Promotes learning and cross-pollination.
• Executes strategic change.
Origin of Six Sigma
• Six Sigma originated at Motorola in the early 1980s in response to achieving 10X reduction in product-failure levels in 5 years.
• Engineer Bill Smith invented Six Sigma, but died of a heart attack in the Motorola cafeteria in 1993 never knowing the scope of the craze and controversy he had touched off.
• Six Sigma is based on various quality management theories (e.g.: Deming's 14 point for management, Juran's 10 steps on achieving quality ).
Total Quality Through Six Sigma
Some argue that many of the tools Six Sigma uses are not new. However, while Six Sigma uses conventional methods, its application is anything but conventional. Instead it stresses the importance of searching for a new way of thinking and doing. In fact, Six Sigma defines a clear road map to achieve Total Quality:
1. Leadership Commitment: Top management not only initiates Six Sigma deployment, it also plays an active role in the whole deployment cycle. Six Sigma starts by providing senior leadership with training in the principles and tools it needs to direct the development of a management infrastructure to support Six Sigma. This involves reducing the levels of organizational hierarchy and removing procedural barriers to experimentation and change.
2. Customer Focus: Systems are developed for establishing close communications with “external customers” (direct customers, end-users, suppliers, regulatory bodies, etc), and with internal customers (employees). From upstream suppliers to ultimate end-users, Six Sigma eliminates the opportunities for defects.
3. Strategic Deployment: Six Sigma targets a small number of high-financial leveraged items. It focuses the company’s resources: right support, right people, right project, and right tools, on identifying and improving performance metrics that relate to bottom-line success.
4. Integrated Infrastructure: The Leadership Team defines and reviews project progress. The Champion acts as a political leader and removes the barriers for the project team. The Master Black Belt acts as a technical coach and provides in-depth knowledge of quality tools. The Black Belt controls the project while the Green Belt supports the Black Belt - together they form the Six Sigma Project Teams. In addition, the incentive and recognition systems motivate the project teams to achieve the business goals.
5. Disciplined Framework: Six Sigma projects are Implemented using the Measure, Analyze, Improve and Control disciplined road map. This MAIC discipline sets up a clear protocol to facilitate internal communication. In addition, from a business perspective, Six Sigma is also a framework for continuous business improvement.
6. Education and Training: Six Sigma believes that true commitment is driven by true understanding. As a fact-based methodology, it intensively utilizes quality and statistical tools to transform a practical problem to a practical solution. Thus, a top-to-bottom training is conducted in Six Sigma philosophy and system improvement techniques for all levels.
In conclusion, Six Sigma’s approach and deployment makes it distinguishable from other quality initiatives. The Six Sigma approach involves the use of statistical tools within a structured methodology for gaining the knowledge needed to achieve better, faster, and less expensive products and services than the competition. The repeated, disciplined application of the master strategy on project after project, where the projects are selected based on key business objectives, is what drives dollars to the bottom line, resulting in impressive profits. Moreover, fueled by the bottom line improvement, top management will continuously be committed to this approach, the work culture will be constantly nurtured, customers will definitely be satisfied, and Total Quality will ultimately be achieved.
Six Sigma VS. Total Quality Management (TQM)
In some aspects of quality improvement, TQM and Six Sigma share the same philosophy of how to assist organizations to accomplish Total Quality. They both emphasize the importance of top-management support and leadership. Both approaches make it clear that continuous quality improvement is critical to long-term business success. However, why has the popularity of TQM waned while Six Sigma's popularity continues to grow in the past decade?
T. Pyzdek (Why Six Sigma is Not TQM, 2001) stated that the primary difference is management. Unlike TQM, Six Sigma was not developed by technicians who only dabbled in management and therefore produced only broad guidelines for management to follow. The Six Sigma way of implementation was created by some of America's most gifted CEOs - people like Motorola's Bob Galvin, Allied Signal's Larry Bossidy, and GE's Jack Welch. These people had a single goal in mind: making their businesses as successful as possible. Once they were convinced that tools and techniques of Six Sigma could help them do this, they developed a framework to make it happen.
The differences between TQM and Six Sigma are summarized in Table 7.1.
TQM Six Sigma
A functional specialty within the organization. An infrastructure of dedicated change agents. Focuses on cross-functional value delivery streams rather than functional division of labour.
Focuses on quality. Focuses on strategic goals and applies them to cost, schedule and other key business metrics.
Motivated by quality idealism. Driven by tangible benefit far a major stockholder group (customers, shareholders, and employees).
Loosely monitors progress toward goals. Ensures that the investment produces the expected return.
People are engaged in routine duties (Planning, improvement, and control). “Slack” resources are created to change key business processes and the organization itself.
Emphasizes problem solving. Emphasizes breakthrough rates of
Focuses on standard performance, e.g. ISO 9000. Focuses on world class performance, e.g., 3.4 PPM error rate.
Quality is a permanent, full-time job. Career path is in the quality profession. Six Sigma job is temporary. Six Sigma is a stepping-stone; career path leads elsewhere.
Provides a vast set of tools and techniques with no clear framework for using them effectively. Provides a selected subset of tools and techniques and a clearly defined framework for using them to achieve results (DMAIC).
Goals are developed by quality department based on quality criteria and the assumption that what is good for quality is good for the organization. Goals flow down from customers and senior leadership's strategic objectives. Goals and metrics are reviewed at the enterprise level to assure that local sub-optimization does not occur.
Developed by technical personnel. Developed by CEOs.
Focuses on long-term results. Expected payoff is not well-defined. Six Sigma looks for a mix of short-term and long-term results, as dictated by business demands.
Q2) Define Project Management and explain its nature and features?
"Managers do things right. Leaders do the right thing
Triangle of Objectives
A Project is a set of activities which achieves a specific objective (quality) through a process of planning and executing tasks (schedule) and the effective use of resources (budget).
A project has distinctive attributes which distinguish it from ongoing work or business process workflow.
While ongoing work is cyclic and repetitive, a project has discreet objectives and is funded only for the project life cycle.
Projects have a finite life span with a clear beginning and specified scope of work, including the desired end-result deliverables, end date and budget/ resource constraints.
Projects can be analyzed into a set of tasks laid out on a timeline. A complex project may have several strands of these timelines with different teams of people coordinating their activity to achieve the required deliverables at the date due.
Projects can be visualized as having milestones which define the required major steps of achievement (or deliverables) along the path toward final project completion. Milestones are important markers of progress that indicate if a project is on time or falling behind schedule.
Project management seeks to gain control over six main variables:
time, cost, quality, scope, risk, and people.
The three basic dimensions of project success are quality (end-results), time (schedule) and cost (budget). These are the issues that project managers are held accountable for:
Quality: fitness of end deliverables for purpose or specification level
Time: target completion date and schedule of tasks
Costs: budget and resource allocation
These three basic parameters are aggregated to define the Scope of Work,
the Risk factors in any project, and the way People are engaged.
Scope of Work: totality of work to complete a project (quality, time, cost). Change in various project parameters typically occurs, but these changes must be carefully managed and must not be so great that the project is covertly redefined. Agreement on scope between sponsor and project manager establishes a boundary within which resources and budget are allocated. Scope can be precisely defined in terms of the work breakdown structure and task analysis. An unknown or changing scope is a moving boundary that constantly redefines the project and the assumptions guiding allocation of resources. When scope cannot be precisely defined, it cannot be managed, and thereby becomes a significant project risk factor.
Risk Factors: potential harm to a project (quality, time, cost) that may arise from a process or a future event. A "risk" is the probability that a threat that will act on a vulnerability to cause an adverse impact. Risk management involves minimizing threats, vulnerabilities and/or impacts.
People: human resource (knowledge, skill and motivation) for implementation of tasks; a project team assembles special and general skills as resources to get the work done (quality, time, cost).
Of all of these components, people are the fundamental key to success because they provide the means to achieve project objectives. Staffing is the most adjustable resource in being able to dynamically respond to quality, cost and timing issues & constraints. In this way, staffing also represents the greatest risk factor — no matter what other budget, resource or time risks may also exist.
The dynamic trade-offs between these values has been humorously but accurately described by a sign at an automotive repair shop:
"We can do GOOD, QUICK and CHEAP work.
You can have any two but not all three.
1. GOOD QUICK work won't be CHEAP.
2. GOOD CHEAP work won't be QUICK.
3. QUICK CHEAP work won't be GOOD."
All project objectives (and tasks) must be SMART:
Specific: expressed clearly and singularly
Measurable: ideally in quantitative terms
Acceptable: to stakeholders
Realistic: in terms of achievement
Time-bound: a timeframe is stated
The power of project management is that it provides the most reliable method to achieve a target objective, on time and within budget.
Project Management is all about vision:
Seeing the end result so clearly and unambiguously at the beginning so that the logistics of production can be planned and the tasks executed
Sharing a plan (using unambiguous visual graphics showing status) constantly among project team and sponsors, so that decisions, approvals, agreements, and forecasts are made in advance of blocks to workflow (i.e., indecision, lack of commitment, lack of approval, lack of resources and budget, misunderstanding what must occur first in the chain of events).
The fundamental management skills that a Project Manager must be able to exhibit are:
1. Quality Control: Project Plan Development, Plan Execution, Integrated Change Control ; Quality Planning, Quality Assurance, Quality Control
2. Budgetary Control: Resource Planning, Cost Estimating, Cost Budgeting, Cost Control; Procurement Planning, Solicitation Planning, Solicitation, Source Selection, Contract Administration, Contract Closeout
3. Scheduling Control: Activity Definition, Activity Sequencing, Activity Duration Estimating, Schedule Development and Schedule Control
4. Scope of Work Control: Initiation, Scope Planning, Scope Definition, Scope Verification and Scope Change Control
5. Risk Control: Risk Management Planning, Risk Identification, Qualitative Risk Analysis, Quantitative Risk Analysis, Risk Response Planning, Risk Monitoring and Control
6. Communication & Leadership: Human Resource Management, Organizational Planning, Staff Acquisition, Team Development; Project Communications Management, Communications Planning, Information Distribution, Performance Reporting, Administrative Closure
Benefits of Project Management
Project Management (PM) provides a workflow system that unites all team members in shared principles and practice — a methodology of planning, control, coordination, communication and execution that provides ground rules for proven teamwork "best practices" and discipline.
PM software provides automated tools for task definition and layout, scheduling, resource allocation, tracking, report generation, and team communication. Project reporting technology has evolved from: (1) paper-based systems which were hard and expensive to keep up to date, (2) desktop software which made tracking and report generation more cost-effective, and (3) now to online web-based systems which provide the enormous benefit of dynamic real-time status reporting.
Using the PM methodology benefits the Project Manager, workgroup members, project sponsors, and the Team as a whole.
Project Management Life Cycle
Project Management is accomplished thorough the use of processes such as initiating, planning, executing, controlling, and closing. These are the fundamental skill sets of a Project Manager. The Project Management process covers all phases within the life cycle of any project. A standard project typically has the following major phases (each with its own agenda of tasks and issues):
Initiate -- process for developing a proposal, and authorizing (including assigning the initial budget allocation for) the project
Plan -- process to define the objectives, methods, timeframe, resources, constraints, and end-deliverables (renegotiation of assignments, authority, and budget will often occur when the fully developed plan is reviewed & signed by the project sponsor)
Execute -- process of coordinating people and resources to carry out the plan
Control -- process to ensure project objectives are met by monitoring, measuring, and reporting progress
Close -- process for formalizing acceptance of the project, final documentation, and bringing about an orderly conclusion
It is important to note that many of the processes within project management are iterative in nature. This is due to the necessity for progressive elaboration of detail decisions, and re-adjustment of resources and schedule throughout the life cycle. So phases in the Project Life Cycle can and will overlap.
The value of the following map is that it identifies key milestones which distinguish each phase. This way of describing the life cycle emphasizes that planning drives execution, and that controlling is interdependent with planning and executing.
In the real world, the Project Management lifecycle phases will almost always overlap. The following graphic more accurately illustrates how the tasks of the Project Manager change over time — in that the proportion of time and energy allocated to a particular role shifts as the life cycle progresses.
Work Breakdown Structure (WBS)
A Project Requirements document is typically used at the initiation of project to communicate to the Project Manager the project mission and scope, and enable the Project Sponsors (often with a signed Executive Committee approval) to allocate a budget and officially indicate acceptance, agreement, and start date. Failure to establish budget, scope and support at the outset will invariably lead to project crisis at a later date.
The Project Manager must then translate the initial "high-level" project definition into an itemized project plan that addresses the lowest levels of implementation details. The method for accomplishing this is the "Work Breakdown Structure" (WBS). A WBS document lists task deliverables and identifies all activities required to produce the final project deliverable(s). This is a critical process (and documentation) as it forms the basis for other management processes such as resource allocation, time scheduling, cost control, and risk management. Failure to conduct WBS basically means that a project management methodology has not been undertaken.
WBS is utilized to:
Break activities into smaller tasks
Identify the phases of activities, including milestone tasks which indicate completion of each phase
Sequence the tasks
Estimate the duration of tasks
Schedule the tasks
Identify the needed resources for each task
Estimate the resource costs
The WBS results in a official Project Plan for review and approval by sponsors. The WBS will ideally use a software instrument, like Microsoft Project, to create an automated Gantt chart. In a Gantt, inter-dependencies of tasks are indicated by cascading arrows (instances where one activity cannot begin until another is completed). Project milestones (time points that indicate a completion of key tasks or phases), and deliverables (defined and tangible outcomes of the project) are also clearly identified.