REVIEWER PRE-LIMS IN OPERATIONS MANAGEMENT

Pareto Charts - refer to bar charts on which factors are plotted along the horizontal axis in decreasing order of
frequency.

It is proposed by Vilfredo Pareto, a nineteenth-century Italian scientist whose statistical work focused on
inequalities of data.

Cause-and-Effect Diagrams- relate a key performance problem to its potential causes. It is used to identify and
isolate the causes of a problem. It is sometimes called the “fishbone diagram” because of its structure.

• It is developed by Kaoru Ishikawa, a Japanese quality expert, so sometimes the diagram is also called
“Ishikawa Diagram”.

Scatter Diagrams These are used to show the relationship between two (2) numerical data.

Run Chats example - This is used to study data for trends or patterns over a specified period of time focusing
on vital changes in the process

Stratification. This involves investigating the cause of a problem by grouping data into categories

Five-S. It represents Japanese words that describe the steps of a workplace organization process as follows:

Seiri (Sort). It refers to the practice of distinguishing necessary things and eliminating the unnecessary things
in the workplace.

Seiton (Straighten, Set). It refers to the practice of creating an orderly storage so items can be located
efficiently.

seiso (Shine, Sweep). It refers to the practice of maintaining a clean workplace so problems like leaks, spills, or
furniture damages can be more easily identified.

Seiketsu (Standardize). It refers to the practice of setting up standards for a clean workplace. o Shitsuke
(Sustain). It refers to the practice of supporting behaviors and habits that maintain organizational standards
for the long-term success of the company.

Flow Charts. It is a graphic representation of a process.

Kaizen Approach “Kaizen” is the name given by the Japanese to the concept of continual incremental
improvement. “Kai” means “change” and “zen” means “good.”

 Role of executive management. Executive managers are responsible for establishing Kaizen as
the corporate strategy of the organization.
 Role of middle managers. Middle managers are responsible for implementing the Kaizen policies
stablished by the executive management.
 Role of supervisors. Supervisors are responsible for applying the Kaizen approach in their
functional roles by developing plans, improving communication, maintaining morale, providing
coaching for teamwork activities, and for soliciting Kaizen suggestions from employees.
  Role of employees. Employees are responsible for participating in Kaizen by taking part in teamwork
activities, engaging in continual self-improvement activities, and enhancing job skills through education
and training.
 Motion Waste - It refers to the unnecessary movement into the production process or into the delivery
of services
 Waiting waste- It refers to the idle time of people, machines, or processes because of unavailable
resources.
 Underutilization waste- It refers to the underuse capabilities of technology or underutilized talents,
skills, and creativity of people.

DMAIC Approach- This approach refers to a data-driven quality strategy for improving processes.

1. Define. It involves determining customer requirements, defining variables in production, and

identifying the process standards of a company.
2. Measure. It involves understanding the process, evaluating risks on process inputs, and measuring
current performance of a company through data collection.
3. Analyze. It involves identifying the wastes in production and analyzing collected data to
determine root cause of wastes and opportunities for improvement.
4. Improve. It involves designing process improvements to formulate creative solutions to fix and prevent
problems.
5. Control. It involves development, documentation, and implementation of an ongoing monitoring plan
to ensure that processes are being carried out based on the established standards

Statistical Process Control (SPC) is an industry-standard methodology for measuring and controlling quality
during the manufacturing process to enable continual improvement.

Chance variation/Random variation. It refers to a manufacturing state where the product differs in design
and characteristics due to the combined natural influences in the production process.

Assignable variation/Nonrandom variation. It refers to a manufacturing state where the product differs in
design and characteristics due to an identifiable cause which can be easily eliminated

The rationale of Statistical Process Control

• Continual Improvement - The statistical process control aims to improve processes which yields improved
products and services on a continual basis.

• Predictability of Process - The statistical process control aims to establish production standards resulting to
a repeatable and predictable process that meet customer requirements.

• Lower Cost of Goods. The statistical process control aims to maximize resources and minimize wastes in the
production resulting to lower cost of production which yields lower cost of goods produced.

• Sampling and Auditing. The statistical process control aims to eliminate output variations and impose
production control resulting to lesser cost in inspection and audit of the quality assurance team of a company.

A control chart is a time-ordered plot of sample statistics that aims to monitor the causes of output variation
different uses of control charts in organizational setting

 In industrial settings. The control charts are designed for speed which makes it useful in the industrial
aspect of a business
 In non-profit organizations. The control charts are designed for promoting work efficiency which
makes it useful in the campaigns of charities and various organizations
 Budget. The control charts can be used to examine the percentage of monthly expenditures of a given
company.
 Retention rate. The control charts can be used to monitor the retention rate of the human resource
department of a given company.
 Customer surveys. The control charts can be used in monitoring customer surveys

Implementation and Deployment of SPC

• STEP 8: Delegate responsibility to the operators. The management must delegate responsibility in
maintaining SPC control charts, collecting, and plotting data to the operators since they are directly involved in
the process.

• STEP 9: Flowchart the process. The SPC committee together with the operators must create graphical
representation of the entire production process.
• STEP 10: Eliminate the special causes of variation. The SPC committee must formulate a cause-and-effect
diagram listing all the factors that might impact the result of the output during the production process.

• STEP 11: Develop control charts. The in-house experts must develop the appropriate control chart that will
be used to monitor the different steps in the production process.

• STEP 12: Collect and plot SPC data. The process operator must take the sample data and plot them on the
control chart at regular intervals.

• STEP 13: Determine process capability. The SPC committee must determine whether the established
process and standards are effective in achieving continual improvement

RUN CHART EXAMPLE. a run chart in a hospital might plot the number of patient transfer delays against the time of
day or day of the week.

CONTROL CHARTS- An accounts department started an improvement project to try to reduce the number of
internal purchase forms that its users completed incorrectly. As an overall measure of their success, they
used a p-type Control Chart to measure the proportion of purchase forms that were not completed correctly.
This was chosen, rather than measuring the actual number of defects, because any number of defects on a
form required about the same effort to revise