MEPM M01 TTLM N-Manage Competitive Manufacturing Processes

Metal Engineering Technology
Management (METM)
Level-V
Based on October 2011 G.C, Curriculum Version1
Module Title: - Managing Competitive Manufacturing Process

Module code: MNF MTM5 01 0311
Nominal duration: 120Hours
By: Muluneh Negussie
Dec, 2016 E.C
Kombolcha(South Wollo), Ethiopia
Table Of Content
Table Of Content ........................................................................................................... 1

Unit One: Analyze the existing manufacturing process. ........................................ 3
1.1 Introduction .................................................................................................................... 4
1.2 Process Validation/ Justification and Quality ................................................................ 5
1.3 Major processing steps for customer orders. ................................................................. 6
1.4 Competitive manufacturing strategy. ........................................................................... 11
1.5 Lead times, through input times and waiting times ..................................................... 28
1.6 Identifying variations and its causes within the process.............................................. 30
Unit Two :- Draft virtual flow process ..................................................................... 32
2.1. Value stream ................................................................................................................ 32
2.2. Levels of a Value Stream ............................................................................................. 33
Unit Three Prepare Proposals For Process Redesign. .......................................... 34
3.1. Identifying Options for the delivery of changes . ........................................................ 34
3.2. Planning changes to be implemented, .......................................................................... 34
3.3. Determining the proposed changes and benefit cost ratios .......................................... 34
3.4. Recommendations for change ...................................................................................... 34
3.5. Consulting relevant stakeholders. ................................................................................ 34
Unit Four : Implement the plan ................................................................................. 35
4.1. Planning and Implementing ......................................................................................... 35
4.2. Arranging altered process layout . ............................................................................... 35
4.3. Arranging altered infrastructure needs . ........................ Error! Bookmark not defined.
4.4. Monitoring and adjusting implementation of the plan . ............................................... 36
4.5. Reviewing and checking the new value stream . ......................................................... 36
4.6. Doing continuous improvement mechanism for the new value stream. ...................... 37
References:.................................................................................................................. 38
Page 1 of 39 KPC Managing Competitive Version -1

BY M N Manufacturing Process L.V Dec,, 2023
Introduction to the Module
Module descriptor: This module covers the knowledge, skills and attitudes required to prepare for and
manage the introduction of a competitive manufacturing process in a jobbing/batching/contracting
manufacturing environment.
This module covers the units :
1. Analyze the existing manufacturing process.
2. Draft a virtual flow process.
3. Prepare proposals for process redesign.
4. . Implement the plan.
Learning Outcomes (Objectives):- At the end of this module the trainees will be able to:
1. . Analyze the existing manufacturing process.
2. Draft a virtual flow process.
3. Prepare proposals for process redesign.
4. Implement the plan.
Module Instruction
For effective use this modules trainees are expected to follow the following module instruction:
1. Read the information written in each unit
2. Accomplish the self-checks at the end of each unit
3. Perform operation sheets which were provided at the end of units
4. Do the “LAP test” given at the end of each unit and
5. Read the identified reference book to get more knowledge as well as to do examples and
exercise

Unit One: Analyze the existing manufacturing process.
This unit to provide you the necessary information regarding the following content coverage
and topics:
1. Enterprise capability for products and processes.
2. Major processing steps for customer orders.
3. A competitive manufacturing strategy.
4. Lead times, through input times and waiting times
5. Variations and its causes within the process.
This unit will also assist you to attain the learning outcomes stated in the cover page.
Specifically, upon completion of this learning guide, you will be able to:
1. Identifying enterprise capability for products and processes.
2. Identifying major processing steps for customer orders.
3. Consulting e, managers and other major stakeholders to a competitive manufacturing strategy.
4. Identifying lead times, through input times and waiting times
5. Identifying variations and its causes within the process.

1.1 Introduction
What is manufacturing
• Inspect different objects around you : Your watch, chair , stapler , pencil , calculator,
telephone and light fixtures. You will realize that all these objects have a different
shape at one time
• A typical automobile, for example, consists of about 15000 parts and a C-5A transport
plane is made of more than 4,000,000 parts. All are made by various processes that we
call manufacturing.
• Manufacturing, in its broadest ,is the process of converting raw materials into
products. It includes the design and production of goods using various production
methods and techniques.
• Manufacturing is backbone of any industrialized nation. The level of manufacturing
activity is directly related to the economic health of a country. Generally, the higher the
level of manufacturing activity in a country, higher is the standard of living of its
people.
• Manufacturing also involves activities in which the manufactured product itself used to
make other products.
• The word manufacturing is derived from the Latin manufactus meaning made by hand.
The word manufacture first appeared in 1567 and the word manufacturing appeared in
1683.
What is Manufacturing process?:
• The manufacturing process is a process in which it results in commercial product (ex. Drug
that is marketed, distributed, and sold or intended to be sold). Thought processes and
procedures are involved in designing and manufacturing common products.
• Manufacturing process is that part of the production process which is directly concerned with
the change of form or dimensions of the part being produced. It does not include the
transportation, handling or storage of parts, as they are not directly concerned with the
changes into the form or dimensions of the part produced.
• The end result should be a product that meets high quality standards and expected
service requirements-and that also economical to produce.

 Many processes are used to produce parts and shapes .The broad categories of manufacturing
processing methods for materials are:
a) Casting (expendable and permanent mold).
b) Forming and shaping ( rolling , forging ,extrusion , drawing ,sheet forming ,powder
metallurgy , and molding)
c) Machining ( turning , boring , drilling , planning ,shaping, broaching, grinding, ultrasonic
machining; and chemical , electrical and electrochemical; and high energy beam
machining) .
d) Joining ( welding , brazing , soldering , diffusion bonding ,adhesive bonding and
mechanical joining).
e) Finishing operations (honing, lapping, polishing, burnishing, de-burring, surface treating,
coating and plating).
The Selection of a particular manufacturing process depends on:-
• The shape to be produced and
• The type of material and its properties .
For example , Brittle and hard materials can not be formed easily ,where as they can be
cast or machined by several methods . Complex parts also cannot be formed easily and
economically,
• Q. What are the important relationships among product design , material
selection and manufacturing processes?
1.2 Process Validation/ Justification and Quality

Process validation is defined as the collection and evaluation of data, from the process design
stage through commercial production, which establishes scientific evidence that a process is
capable of consistently delivering quality product. Process validation involves a series of
activities taking place over the lifecycle of the product and process.
Effective process validation contributes significantly to assuring quality. The basic principle of
quality assurance is that a product should be produced that is fit for its intended use.
This principle includes the understanding that the following conditions exist:
 Quality, safety, and efficacy / efficiency are designed or built into the product.

 Quality cannot be adequately assured merely by in-process and finished-product
inspection or testing.
 Each step of a manufacturing process is controlled to assure that the finished product
meets all quality attributes including specifications.
Process validation activities may be seen in three stages.
1) Process Design: The commercial manufacturing process is defined during this stage
based on knowledge gained through development and scale-up activities.
2) Process Qualification: During this stage, the process design is evaluated to determine if
the process is capable of reproducible commercial manufacturing.
3) Continued Process Verification: Ongoing assurance is gained during routine production
that the process remains in a state of control
Successful validation program depends upon information and knowledge from product and
process development. This knowledge and understanding is the basis for establishing an
approach to control of the manufacturing process those results in products with the desired
quality attributes. Manufacturers should:
 Understand the sources of variation
 Detect the presence and degree of variation
 Understand the impact of variation on the process and ultimately on product attributes
 Control the variation in a manner commensurate with the risk it represents to the process
and product
1.3 Major processing steps for customer orders.
What is customer order?
A customer order is a formal order from the customer which provides details of the amount and
due date for a customer's requirement of the product..
A customer Order is a written document specifying the orders made by the customer. In
addition, it states the amount of money to be paid, the due date on which the funds can be
expected, and the quantity of the product delivered.
It is mainly used in business to help customers get their products. It enables the company to
create a system to ensure that what they get from suppliers is what they want and order.
There are two types of it: purchase orders and sales orders.

1) A purchase order is an agreement between buyer and seller for the future delivery of goods
or services at a predetermined price.
2) In contrast, a sales order provides information about the current availability of specific items
with no commitment to purchase.
There is no reverting a customer order, which cannot be denied either. Instead, it becomes the
proof of transaction history between the buyer and seller once the company accepts it, also
known as ‘Transaction documents.’
They must provide the items mentioned in the customer order in the same condition as when
received and follow any instructions.
It is also added to the record book of all transactions done by a company. This can also be used
to predict the market demand of the company. In addition, this helps in developing
proper inventory management techniques.
Uses of customer order :- Some of the uses are as follows.
 It can help businesses drive sales and revenue by allowing customers to purchase goods or
services.
 Orders can also be used as a tool for tracking inventory levels and forecasting demand, as
well as helping to ensure the timely delivery of goods and services.
 It can also measure customer satisfaction and loyalty, allowing businesses to better
understand their customers’ needs and preferences.
 Finally, it can provide valuable insights into market trends and opportunities, which can
inform business decisions
Steps of Customer Order Processing
1 Customer order

At this stage, the customer browses through the products enlisted by the company, and upon
liking, one places an order. But, of course, the customer might also be custom-made, so the
detailed description provided by the customer is to be regarded with precision.
2 Acceptance of order
The customer order must be accepted by the company to enter into a transactional relationship.
That would let the customer know a few things, like delivery date and shipment details.
3 Delivery
The company organizes all items per instructions and manages all packaging and transfer-related
issues with expertise. Now it is time to deliver the shipment to the proper location. An on-time
delivery helps increase customer service and achieves customer trust, which is also very
important.
4 Payment
The payment might be immediately followed by the shipment, or it might have been done in
advance. In either case, no more negotiations can be done, and the customer must pay the entire
amount mentioned in the customer order.
5 Service/ facility
Some organizations do not cut off all ties with the customer after selling the product. Instead,
they provide servicing and maintenance of the sold products for maybe six months, one year, or
till the guarantee period.
Customer Order Management
The customer order management process is the procedure that can be followed to keep track of
all the customer orders by filling up customer order forms. It helps track their delivery time and
whether the shipment has reached its destination.
That also keeps a tab on the company’s transaction history, which helps predict the company’s
successful functioning.
The customer order processing system has become essential, especially for managing, collecting,
and processing customer orders.
Targets of management
 Tracking or Following new orders and deliveries each month
 Creating order acknowledgments that can be sent to the customers

 Tracking old orders and keeping track of unfulfilled orders to clear out the backlogs. It is
necessary for maintaining a good customer service level.
Hence, a company must maintain customer orders sincerely and prioritize open orders.
Customer Order Form
A Customer Order Form is a commercial document that enables the purchaser to communicate
with the seller and maker which article or merchandise is desired and for what specific purpose.
The top of the page includes contact information, such as name and phone number, email
address, and mailing address. However, the main content is the list of items the customer orders.
How to take orders from customers?

To take orders from customers, you need good customer service skills and an understanding of
the products or services offered. Ask the questions to the customer to get clarity on what he
wants.

Once the order has been taken, it should be carefully entered into an order system, and
confirmation should be sent to the customer. Do follow-ups with customers to ensure that they
are satisfied with their purchase.
What is the customer order process?
When a customer places an order, the order goes through several steps before completion.
1) Receive the order, including filling it with what was ordered.
2) Package it and ship it out to get their items as soon as possible.
3) Receiving your item at your doorstep, and voila! You have just completed an order-
taking process without any hassle
What is the importance of order processing?
Order processing is crucial for businesses. It involves the receiving, verifying, and managing of
customer orders. Proper order processing is necessary to ensure that the right items are sent on
time to satisfy customers.
That helps to increase customer satisfaction and loyalty, reducing the risk of complaints and
refunds, and efficient order processing results in improved profitability for businesses as it helps
save time and money.
What is customer order used for?
It is used to track a customer’s purchases and requests. It is typically created when an order is
placed and contains details such as the requested items, the quantity desired, the payment
method, delivery information, and other important details.
The customer order is then sent to the supplier or manufacturer for fulfillment. Once the
customer receives the goods, they can review their order to ensure that it matches their
expectations.
What is customer order cycle time?
The customer order cycle time is when a customer initiates an order and when they receive the
product or service. This cycle time can be affected by several factors, including
 The supplier’s lead time,
 The product’s production time, and
 The shipping time.
Businesses must optimize their supply chain and process flow to reduce customer order cycle
time. Doing so can minimize delays and ensure that orders are fulfilled quickly.

In today’s competitive marketplace, reducing cycle time is essential for success. Businesses can
gain a significant advantage over their rivals by offering fast and efficient service.
1.4 Competitive manufacturing strategy.
It is important that Consulting e, managers and other major stakeholders on major expected
benefits from a move to a competitive manufacturing strategy.
Strategic management is underpinned/ supported by collaboration and is critical for innovation
within and across enterprises. Some firms which have no good working environment require
change in managerial behavior and people management practices, mindset and environments.
Research has shown that changes in the workplace team structures, communications and
managerial leadership all affect firm level productivity and workforce efficiency.
The followings are The Role of Management Practices to the Competitiveness of the
Manufacturing Industry in manufacturing process.
A) Operations Management
Operations management is defined as the design, operation, and improvement of the systems that
create and deliver the firm’s/company’s primary products and services. Operation managers are
concerned with planning, organizing, and controlling the activities which affect human behavior through
models..
1) PLANNING
 Activities that establishes a course of action and guide future decision-making is planning.
 The operations manager defines the objectives for the operations subsystem of the organization,.
 It also involves product planning, facility designing and using the conversion process.
2) ORGANIZING
 Activities that establishes a structure of tasks and authority.
 Operation managers establish a structure of roles and the flow of information within the operations
subsystem.
3) CONTROLLING
 Activities that assure the actual performance in accordance with planned performance.
 To ensure that the plans for the operations subsystems are accomplished, the operations manager must
exercise control by measuring actual outputs and comparing them to planned operations management.
Controlling costs, quality, and schedules are the important functions here.
 BEHAVIOUR

 Operation managers are concerned with how their efforts to plan, organize, and control affect human
behavior. Their interest lies in decision-making behavior.
Objectives of Operations Management: Objectives of operations management can be categorized into
1. customer service : The first objective of operating systems is the customer serivce to the
satisfaction of customer wants. Therefore, customer service is a key objective of operations
management. Thus, primary objective can be satisfied by providing the ‘right thing at a right
price at the right time’.
2. resource utilization :- Another major objective of operating systems is to utilise resources for the
satisfaction of customer wants effectively, i.e., customer service must be provided with the
achievement of effective operations through efficient use of resources..
Why Study Operations Management.
Key of OM Concepts
 Efficiency - Doing something at the lowest possible cost
 Effectiveness - Doing the right things to create the most value for the organization
 Value - Quality divided by price
 Core or Main “Factory Services” for customers need.
The Core Services are basic things that customers want from products when they purchase
them.
 Quality  Speed
 Flexibility  Price (or production cost
Value-Added Services: Value-added services differentiate the organization from competitors
and build relationships that bind customers to the firm in a positive way. These are
 Information  Sales Support
 Problem Solving and Field Support
Production
Production is defined as “the step-by-step conversion of one form of material into another form
through chemical or mechanical process to create or enhance the utility of the product to the
user.” Thus production is a value addition process. At each stage of processing, there will be
value addition.
Production as ‘a process by which goods and services are created’. Some examples of production are:
manufacturing custom-made products like, boilers with a specific capacity, constructing flats, some

structural fabrication works for selected customers, etc., and manufacturing standardized products like,
car, bus, motor cycle, radio, television, etc.
Production systems can be classified as Job Shop, Batch, Mass and Continuous Production
systems.
1) JOB SHOP PRODUCTION

Job shop production are characterized by manufacturing of one or few quantity of products
designed and produced as per the specification of customers within prefixed time and cost. The
distinguishing feature of this is low volume and high variety of products.
Examples of high technology / complex jobs: film production; large construction projects (e.g. the
Millennium Dome)
2) BATCH PRODUCTION
Batch production is defined by American Production and Inventory Control Society (APICS) “as
a form of manufacturing in which the job passes through the functional departments in lots
or batches and each lot may have a different routing.” Manufacturing of products (less in number say
200 to 800) with variety of similar parts with very little variation in size and shape . A
good example is the production of electronic instruments
3) MASS PRODUCTION
MASS PRODUCTION :- Manufacture of discrete parts or assemblies using a continuous
process are called mass production. This production system is justified by very large volume
of production. The machines are arranged in a line or product layout. Product and process

standardisation exists and all outputs follow the same path. Production of large number
of identical products (say more than 50,000) that needs line layout type of plant layout
which is highly rigid type and involves automation and huge amount of investment in special
purpose machines to increase the production .
4) CONTINUOUS PRODUCTION:
Production facilities are arranged as per the sequence of production operations from the first operations
to the finished product. The items are made to flow through the sequence of operations through material
handling devices such as conveyors, transfer devices, etc.
Productivity:-
 Productivity indicators show output quantity generated per input used.
 Productivity is a measure of economic performance that compares the amount of goods
and services produced (output) with the amount of inputs used to produce those goods
and services.
Mathematically,
Outputs
Productivity =
Inputs
p
5) Productivity Improvement
Productivity Improvement (PI) is the result of managing and intervening in transformation
or work processes. PI will occur if:

Measuring Productivity
 Partial measures :- output/(single input) Or Uses a single “I” factor; e.g., output/labor-
hour, sales/employee
 Multi measures :- output/(multiple inputs) or Uses more than one “I” factor; e.g.
output/direct costs (labor, materials, and overhead).
 Total measure or Total-Factor :- output/(total inputs) or Uses all “I” factors.
(Note: Total-Factor captures “trade-offs” between input factors.)
Example
 10,000 Units Produced  Labor rate: $9/hr
 Sold for $10/unit  Cost of raw material: $5,000
 500 labor hours  Cost of purchased material: $25,000
What is the labor productivity?
10,000 units/500hrs = 20 units/hour ...
Self check:- Example: Productivity Measurement:- You have just determined that your
service employees have used a total of 2400 hours of labor this week to process 560 insurance
forms. Last week the same crew or team used only 2000 hours of labor to process 480 forms.
1) Is productivity increasing or decreasing?
 Application of Productivity Measures
 Individual level  Corporate level
 Group level  National level
 Department level  Global level
 Global-Level Productivity Measures
 GDP per capital (labor productivity * fraction of people who work) is widely
regarded as the best measure.
 A common currency is used to measure the GDP(Gross Domestic Product ).

 Importance of Global-Level Productivity Measures
 Measure and compare competitiveness among nations.
 Contribute to the development of a nation’s economic, social, and political policies.
 Develop global cooperation among nations.
 Help business organizations make investment decisions.
 Factors Affecting Productivity Improvement at Global Level.
 Education  Foreign aids
 Technology  Foreign investments
 Macroeconomic policies  Industry policies & competition
 Social and culture environments
 Why is National Productivity Important? - Competing on Productivity
 At the national level, growing productivity
 leads to a higher standard of living
 holds inflation in check
 enhances international competitiveness.
The annual GDP growth is partially due to growth in productivity and growth in inflation
 National Productivity Measures
 Comparisons within a segment of economy over time
 Comparisons of specific productivity measures
 International comparisons
 Factors or Measures Affecting Productivity
1) Efficiency:
 Measures the resources expected to be consumed to the resources actually
consumed.
 Hence, it focuses on the input side of the system. (To what degree did the system
utilize the “right” things.)
2) Effectiveness
 Measures what the system sets out to accomplish (objective) with what was actually
accomplished; plan vs. actual
 Hence, effectiveness is an output measure. (Is the output “right” - right quality, right
quantity, on time, etc.)

3) Quality:-
 Degree to which the outputs (products and services) from the system conform to
requirements or meet customer expectations.
 The focus is on quality attributes (e.g., conformance, performance, convenience,
responsiveness, perceived quality.)
 So Poor quality products would not meet customer requirements and would need repairs
and reworks on the product to meet the standards.
4) Quality of Work Life
 Measures the way that employees in a system respond to the sociotechnical aspects of
that system.
5) TECHNOLOGY( Innovation):Technological improvements have increased productivity.
Machines of today would out perform machine of yesterday but may not withstand machines
of tomorrow. Which
 Measures the applied creativity of the system.
 Relates to the design and development of improved products, services, and processes.
6) CAPITAL:
An existing machine or facility if it is not functioning up to full capacity or turning out products
which are not acceptable can lower productivity. A new machine or repair of existing machine
would require capital input.
7) MANAGEMENT:
With better scheduling, planning, coordinating and controlling activities of management the
machine operations can be carried to improve productivity.
N.B:- Productivity is a measure of economic performance that compares the amount of goods
and services produced (output) with the amount of inputs used to produce those goods and
services.
B) Production management
Production management is a process of planning, organizing, directing and controlling the activities of
the production function
 Objectives of Production Management
The objective of the production management is ‘to produce goods services of right quality and
quantity at the right time and right manufacturing cost’.

1. RIGHT QUALITY
The quality of product is established based upon the customers needs. The right quality is not
necessarily best quality. It is determined by the cost of the product and the technical
characteristics as suited to the specific requirements.
2. RIGHT QUANTITY
The manufacturing organization should produce the products in right number. If they are
produced in excess of demand the capital will block up in the form of inventory and if the
quantity is produced in short of demand, leads to shortage of products.
3. RIGHT TIME
Timeliness of delivery is one of the important parameter to judge the effectiveness of production
department. So, the production department has to make the optimal utilization of input resources
to achieve its objective.
4. RIGHT MANUFACTURING COST
Manufacturing costs are established before the product is actually manufactured. Hence, all
attempts should be made to produce the products at pre-established cost, so as to reduce the
variation between actual and the standard (pre-established) cost.
C) The Six sigma :- What Is Sigma?
• A term (Greek) used in statistics to represent standard deviation from mean value,
an indicator of the degree of variation in a set of a process.
• Sigma measures how far a given process deviates from perfection. Higher sigma
capability, better performance
Six Sigma - A highly disciplined process that enables organizations deliver nearly perfect in
products and services.
• The figure of six arrived statistically from current average maturity of most business
enterprises
• A philosophy and a goal: as perfect as practically possible.
• A methodology and a symbol of quality.
• A statistical concept that measures a process in terms of defects – at the six sigma level, there
3.4 defects per million opportunities.
But, it is much more!

Six Sigma is a methodology that provides businesses with the tools to improve the capability of
their business processes. This increase in performance and decrease in process variation leads to
defect reduction and vast improvement in profits, employee morale and quality of product.
Six Sigma is not:
 A standard  A certification
 Another metric like percentage
But It is Rather!
 It is a Quality Philosophy and the way of improving performance by knowing where
you are and where you could be
 Methodology to measure and improve company’s performance, practices and systems
Six Sigma is a rigorous and a systematic methodology that utilizes information (management by
facts) and statistical analysis to measure and improve a company's operational performance,
practices and systems by identifying and preventing 'defects' in manufacturing and service
related processes in order to anticipate and exceed expectations of all stakeholders to accomplish
effectiveness.
• Six Sigma emerged as a natural evolution in business to increase profit by eliminating
defects.
• The Current business environment now demands and rewards innovation more than ever
before due to:
 Customer Expectations  Global Competition
 Technological Change  Market Fragmentation
The goal of Six Sigma is to increase profits by eliminating variability, defects and waste that
undermine customer loyalty.
Six Sigma has been around for more than 20 years and heavily influenced by TQM (total quality
management) and Zero Defect principles. In its methodology, it asserts that in order to achieve
high quality manufacturing and business processes, continued efforts must be made to reduce
variations.
Sigma Level ( Process Capability) Defects per Million

Opportunities

2 308,537
3 66,807
4 6,210
5 233
6 3.4
PHASES:- Phases of Six Sigma are: DMAIC

 Define specific goals to achieve outcomes, consistent with customers demand and
business strategy
 Measure reduction of defects
 Analyze problems ,cause and effects must be considered
 Improve process on bases of measurements and analysis
 Control process to minimize defects
1) Define: Define is the first step in the process. In this step, it is important to define specific
goals in achieving outcomes that are consistent with both your customer’s demands and your
own business’s strategy. In essence, you are laying down a road map for accomplishment.
2) Measure: In order to determine whether or not defects have been reduced, you need a base
measurement. In this step, accurate measurements must be made and relevant data must be
collected so that future comparisons can be measured to determine whether or not defects
have been reduced.
3) Analyze: Analysis is extremely important to determine relationships and the factors of
causality. If you are trying to understand how to fix a problem, cause and effect is extremely
necessary and must be considered.
4) Improve: Making improvements or optimizing your processes based on measurements and
analysis can ensure that defects are lowered and processes are streamlined.
5) Control: This is the last step in the DMAIC methodology. Control ensures that any variances
stand out and are corrected before they can influence a process negatively causing defects.
When Should Six Sigma Be Used?

Its usage depends on the type of business. In general, “If there are processes that generate a
lot of negative customer feedback, whether that customer is internal or external, the
components of Six Sigma should be considered as a means to study and rectify the problem.”
Benefits of six sigma
 Generates sustained success
 Sets performance goal for everyone
 Enhances value for customers
 Accelerates rate of improvement
 Promotes learning across boundaries
 Executes strategic change
D) Lean and Six Sigma
 LEAN = Improvement principles focused on dramatically improving process speed and

eliminating the eight deadly wastes.
 SIX SIGMA = Breakthrough Process, Design, or Improvement Teams focused on

eliminating chronic problems and reducing variation in processes.
 Lean Project Attributes
Simply stated: “Lean is about moving the Mean.” It focuses on efficiency.
 Lean reduces average cycle time.
 Lean reduces excess inventory.
 Lean improves average response time
Note the shift in the mean. For example, the mean cycle time is
reduced.

 Six Sigma Attributes
Simply stated: “Six Sigma is about Reducing Variation.” It focuses on Effectiveness. The mean
will most likely also be improved.
 Decrease defect rate
 Increase Process Yield
Note the shift in the mean and the reduced variation.

Which Technique to Begin With?
 It is often advantageous to begin with Lean projects.
– These are easier to understand and implement.
 Begin with streamlining/reorganize processes and Rapid Improvement Events.
 This gets the operation in good order.
 Chronic problems are now easier to deal with.
 “Low Hanging Fruit” is eaten.
 Lean attacks obvious waste.
 Next, select Six Sigma projects
Use Lean when you are trying to streamline/update any process and reduce process waste.
 Improve assembly line throughput
 Reduction in Finished Goods Inventory
 Reduce the time to process new proposals
 Reduce machine setup time
 Improve order processing time
Use Six Sigma where process metrics are more difficult to collect or understand, and project
success requires analysis of multiple input factors (Xs). These are often chronic problems.
 Improve yield on a continuously running machine
 Reduce defects on a machine with multiple inputs and machine settings
 Reduce the amount of wait time for a call center
 Improve the number of quality new hires
E) Just In Time:
 Concept of Just-in-Time

 Just-in Time (JIT) production attempts to smooth the flow of materials from the suppliers to
the customers, thereby, enhancing the speed of the manufacturing process.
 Just in time (JIT) is an inventory strategy companies employ to increase efficiency and
decrease waste by receiving goods only as they are needed in the production process, thereby
reducing inventory costs.
 Cost-effective production and delivery of only the necessary quantity of parts of the right
quality, at the right time and place, while, using a minimum number of facilities, equipment,
materials and human resources.
 Just-In-Time (JIT) Manufacturing is a philosophy rather than a technique. By eliminating all waste
and seeking continuous improvement, it aims at creating manufacturing system that is response to the
market needs
JIT as a Philosophy and Environment
 JIT as a Philosophy :
1) Elimination of waste: Any activity that does not add value to the product or service in the
eyes of the customer is a waste. E.g. Poor product design. These are
2) Waste of overproduction: Overproduction is the production of goods more than what are
immediately needed.
3) Waste of waiting: A material waiting in queue is a waste. An operator waiting for material
or instruction and having no productive work to do is a waste.
4) Waste of movement: Poor plant layout results in materials having to be moved extra
distances and cause unnecessary material handling costs. Work centers should be close to
each other in order to reduce the move distance.
5) Waste of inventories: Inventory causes costs of interest, space, record keeping, and
obsolescence. Inventory is not an asset; it is a waste!
6) Waste of motion: Improper methods of performing tasks by the operators cause wasted
motions. Bad layout or training causes waste of motion.
7) Waste of making defects: The cost of scraps is a waste. Defects interrupt the smooth flow of
materials in the production line..
8) Waste of process itself: Bad process design is a waste. For example, wrong type or size of
machines, wrong tools, and wrong fixtures are wastes.
 JIT as an Environment:-

 JIT also provides an environment in which products are manufactured in a simpler way.
Claims for JIT:
1. Only what is needed, nothing more...
2. Reduced inventory
3. Reduce WIP
4. Shorter lead times
5. Not too early, not to late
JIT is the result businesses want, not a starting point. What happens with JIT…
Eliminate non-value added activities  less time spent and less money spent...
Involve your suppliers and customers eliminate duplications, non value added activities.
Shorter Set-up time and less WIP  Faster through-put, less time, higher quality
JIT Action Areas…
1. Develop people - increase skills, productivity, morale
2. Eliminate waste in all areas
3. Optimize materials handling and production flow
4. Control Tooling
5. Increase quality
6. Improve continuously!
F) Supply Chain Management
A supply chain is a sequence of organizations - their facilities, functions and activities - that are
involved in producing and delivering a product or service.
Supply chain management deals with linking the organizations within the supply chain in order
to meet demand across the chain as efficiently as possible. A supply chain consists of all parties
involved, directly or indirectly, in fulfilling a customer request. The supply chain includes not
only the manufacturer and suppliers, but also transporters, warehouses, retailers, and even
customers themselves
 Why is supply chain management so important?
 To gain efficiencies from procurement, distribution and logistics
 To make outsourcing more efficient
 To reduce transportation costs of inventories

To meet competitive pressures from shorter development times, more new products, and demand
for more customization
 To meet the challenge of globalization and longer supply chains
 To meet the new challenges from e-commerce
 To manage the complexities of supply chains
 To manage the inventories needed across the supply chain
A typical supply chain may involve a variety of stages, including the following:
1) • Customers 4) Manufacturers
2) • Retailers 5) Component/raw material
3) • Wholesalers/distributors suppliers
 THE OBJECTIVE OF A SUPPLYCHAIN
The objective of every supply chain should be to maximize the overall value generated. The
value (also known as supply chain surplus) a supply chain generates is the difference between
what the value of the final product is to the customer and the costs the supply chain incurs in
filling the customer’s request.
Supply Chain Surplus = Customer Value – Supply Chain Cost
The value of the final product may vary for each customer and can be estimated by the maximum
amount the customer is willing to pay for it. The difference between the value of the product and
its price remains with the customer as consumer surplus. The rest of the supply chain surplus
becomes supply chain profitability, the difference between the revenue generated from the
customer and the overall cost across the supply chain.
 Cycle View of Supply Chain Processes
Given the five stages of a supply chain all supply chain processes can be broken down
into the following four process cycles, Each cycle occurs at the interface between two
successive stages of the supply chain
A) Customer order cycle
B) Replenishment cycle
C) Manufacturing cycle
D) Procurement cycle

G) A value chain management framework
Is established with a strategy process on the strategic level, a planning process on the tactical
level and operations processes on the operational level. Value chain as a term was created by
Porter (1985) . A value chain “disaggregates a firm into its strategically relevant activities in
order to understand the behavior of costs and the existing and potential sources
Of differentiation”. Porter’s value chain consists of a “set of activities that are performed to
design, produce and market, deliver and support its product”.
Porter distinguishes between
 Primary activities: inbound logistics, operations, outbound logistics, marketing and sales,
service in the core value chain creating directly value
 Support activities: procurement, technology development, human resource management,
firm infrastructure supporting the value creation in the core value chain
H) Total Quality Management (TQM) and Total productive maintenance (TPM)
Definition
 TQM :- Total quality management is a management approach used to achieve quality
improvement and long-term success through customer satisfaction. TQM involves all
members of the organization, and is meant to improve the quality of all processes, products,
services, operations, and corporate culture. Or
A management philosophy embracing all activities through which the needs and expectations of
the CUSTOMER and COMMUNITY, and the objectives of the organization are satisfied in the
most efficient and cost effective manner by maximising the potential of ALL employees in a
continuing drive for improvement.”
TQM -The way of managing organization to achieve excellence
 Total – everything
 Quality – degree of excellence
 Management – art, act or way of organizing, controlling, planning, directing to achieve
certain goals
Requires cultural change – prevention not detection, pro-active versus fire-fighting, life-cycle
costs not price, etc.

Many companies will not start this transformation unless faced with disaster/problems or forced
by customers
TQM activities follow a plan-do-check-action (PDCA) cycle to improve the quality.
 `Plan’ step - the problem is defined, the symptoms are explained,
 ‘Do’ step- the cause of the symptoms is identified.
 ‘Check’ step - the effectiveness of the proposed approach is observed by using the
performance measures.
 ‘Action’ step - the results are studied to determine what was learned and what can be
predicted.
TQM Six Basic Concepts
1. Leadership 4. Continuous Process Improvement
2. Customer Satisfaction 5. Supplier Partnership
3. Employee Involvement 6. Performance Measures
 Total productive maintenance (TPM) is a maintenance program, which involves a
newly defined concept for maintaining plants and equipment. The goal of the TPM
program is to markedly increase production while, at the same time, increasing
employee morale and job satisfaction.
 TPM was introduced to achieve the following objectives. These are
 Avoid wastage in a quickly changing economic environment.
 Producing goods without reducing product quality.
 Reduce cost.
 Produce a low batch quantity at the earliest possible time.
 Goods send to the customers must be non-defective.
The differences between TQM and TPM are summarized below.
Category TQM TPM
Object Quality (Output and effects) Equipment (Input and cause)
Mains of attaining Systematize the management. Employees participation and it is
goal It is software oriented hardware oriented
Target Quality for PPM Elimination of losses and wastes.

I) The Balanced Scorecard
Definition: The Balanced Scorecard is a management tool that provides stakeholders with a
comprehensive measure of how the organization is progressing towards the achievement of its
strategic goals.
• Balances financial and non-financial measures
• Balances short and long-term measures
• Balances performance drivers (leading indicators) with outcome measures (lagging
indicators)
• Should contain just enough data to give a complete picture of organizational
performance… and no more!
• Leads to strategic focus and organizational alignment.
Balanced Scorecard :- The scorecard measures an organization’s performance from four
perspectives
 Financial
 Customer
 Internal business processes
 Learning and growth
1.5 Lead times, through input times and waiting times
Lead time is the amount of time that passes from the start of a process until its conclusion.
Lead time is a metric that measures the period of time from the start to the completion of a
production process. It refers to the amount of time between starting a process and
wrapping it up. It’s an important metric used in both manufacturing and project
management, which can be broken down into different types of lead time depending on the
area of business or production.
Lead time types
Lead time is broken down into various types, each with its own effects on business
performance. Figuring out each one is key to optimizing processes, reducing waste, and
achieving a strong operation.
1) Customer lead time: The waiting period between when a customer places an order to
when they receive it plus any other customer activities like order customization.

Manufacturing Process L.V Oct,, 2023
2) Material lead time: Part of material handling, this lead time is all about your raw
materials.
Let’s say a car company orders steel to manufacture their vehicles. The time it takes from
placing the order for steel to having it delivered to the factory is considered the material
lead time.
3) Production lead time: While material lead time focuses on what’s going on before
production begins, production lead time focuses on when production begins to shipping
time — when the final product is ready to go. When a baker receives flour, sugar, and
other ingredients at the bakery, the time taken to convert those raw ingredients into a
batch of baked goods is their production lead time.
4) Cumulative lead time: Cumulative lead time is basically the total time it takes for a
product to go from "I want it" to "I got it." It includes everything from ordering,
manufacturing, getting it shipped, and all of the steps in between.
5) Manufacturing lead time: This part of managing manufacturing inventory combines
material lead time, production time, and the time it takes to move a product through
the production line.
An example would be the time between when a furniture store decides to produce a new
collection of furniture pieces until the final pieces are ready for the store that will sell them.
6) Delivery lead time: The time it takes for a product or service to be delivered from the
time an order is placed to the time it is received by the customer. This is similar to
customer lead time but without any customer activities besides placing the order.
7) Throughput time, also known as process time or lead time, encompasses the entire journey
of a task, product, or service through a process from initiation to completion. It includes all
stages, activities, waiting periods, and any delays that occur within the process.
How to Calculate Lead Time

Lead time can be broken in several different components: the pre-processing, the processing, and
the post-processing. These may be defined or stated differently, but the general formula to
calculate lead time is:
Lead Time = Pre-Processing Time + Processing Time + Post-Processing Time
For a manufacturing company where,

 The pre-processing time is the procurement stage where raw materials are sourced and
delivered to its manufacturing headquarters or processing plant.
 The processing time is the manufacturing stage.
 The post-processing time is the stage of processing the order and delivering the final
good to the customer.
Total Lead Time for Manufacturing Company = Procurement Time (for raw
materials) + Manufacturing Time + Shipping Time
Lead Time for Retail Company = Procurement Time (for final products) + Shipping Time
For a retail company, there is no manufacturing time as the retail firm does not manufacture its
own good. In addition, the procurement time is different as instead of procuring raw materials, it
sources final products to then sell directly to customers.
Lead Time and Supply Chain
The lead time varies among supply chain sources, causing difficulty in predicting when to expect
the delivery of items and coordinating production. Frequently the result is excess inventory,
which places a strain on a company’s budget.
Long lead times can be caused by procurement and inventory mismanagement, production
workflow issues, and inaccurate demand forecasting.
Other ways to reduce lead times include streamlining your operations, optimizing your
supply chain, minimizing changeovers and setup times, and improving communication and
collaboration within your business.
Keep customers satisfied by setting realistic delivery dates. This will help you manage
customer expectations so they understand how long their orders will take to arrive.
A too-long lead time, and you’re setting yourself up for risk. When your lead time is just
right, you’ll be rewarded with happy customers and a healthy bottom line!
N.B. Reducing lead time can streamline operations and improve productivity, increasing
output and revenue. By contrast, longer lead times negatively affect sales and
manufacturing processes.
1.6 Identifying variations and its causes within the process.
Variation source identification for manufacturing processes is critical for product dimensional
quality improvement, and various techniques have been developed in recent years. Most existing

variation source identification techniques are based on a linear fault quality model, in which the
relationships between process faults and product dimensional quality measurements are linear.
In practice, many dimensional measurements are actually nonlinearly related to the process
faults: For example, relational dimension measurements such as the relative distance between
features are used to monitor composite tolerances.
All products and services are designed with good intentions but without knowing what variables
will cause the product or service to not meet customer needs over time. Over time excess
variation from these root causes must be reduced.
 List examples of process variation in your
system.
Sources of Variation

Unit Two :- Draft virtual flow process
2.1. Value stream
• A Value Stream is the set of all actions (both value added and non value added) required
to bring a specific product or service from raw material through to the customer.
• Whenever there is a product (or service) for a customer, there is a value stream. The
challenge lies in seeing it.”
 A Value Stream
 Focuses attention on what is important for the customer.
 Identifies all the necessary components to bring a product or service from conception to
commercialization.
 Identifies waste inherent in processes and works to remove it.
 Reduces defects in products and deficiencies in processes.
 Focuses on improving specs and cost
 Enterprise value streams:
 Raw Materials to Customer – Manufacturing
 Concept to Launch – Engineering
 Order to Cash - Administrative Functions
 Value Stream Improvement vs. Process Improvement
 Follow a “product” or “service” from beginning to end, and draw a visual representation
of every process in the material & information flow.
 Then, draw (using icons) a “future state” map of how value should flow
2.2. Levels of a Value Stream
Current State Mapping

 Completed in a day
 Performed by a cross functional team of middle managers responsible for implementing
new ideas
 Resulting in a picture (and team observations) of what we “see” when following the
product
Future State Mapping
 Completed in a day with the same team
 Focused on:
 Creating a flexible, reactive system that quickly adapts to changing customer needs
 Eliminating waste, Creating flow and Producing on demand
Lean Value Stream Management starts with defining value in terms of products and process
capabilities to provide the customer with what they need at the right time and at an appropriate
price. The Eight Wastes are:
1) Overproduction—making or doing more than is required or earlier than needed.
2) Waiting—for information, materials, people, maintenance, etc.
3) Transport—moving people or goods around or between sites.
4) Poor process design—too many/too few steps, non- standardization, inspection rather than
prevention, etc.
5) Inventory—raw materials, work-in-progress, finished goods, papers, electronic files, etc.
6) Motion—inefficient layouts or poor ergonomics at work-stations or in offices.
7) Defects—errors, scrap, rework, non-conformance.
8) Underutilized personnel resources and creativity—ideas that are not listened to, skills that are
not utilized.

Unit Three Prepare Proposals For Process Redesign.
Q. Prepare a proposals for process redesign in welding assembly of a handicap wheelchair
accordingly
3.1. Identifying Options for the delivery of changes .
3.2. Planning changes to be implemented,
 Change implementation including resource, industrial relations, workforce development
and occupational health and safety considerations and implications
3.3. Determining the proposed changes and benefit cost ratios
3.4. Recommendations for change
3.5. Consulting relevant stakeholders.

Unit Four : Implement the plan
4.1. Planning and Implementing
An implementation plan—also known as a strategic plan—outlines the steps your team should
take when accomplishing a shared goal or objective. This plan combines strategy, process, and
action and will include all parts of the project from scope to budget and beyond.
 Don’t Wait!
 You need a plan!
 Tie it to your business objectives
 Make a VS Plan: What to do by when
 Establish an appropriate review frequency
 Conduct VS Reviews walking the flow
4.2. Arranging altered process layout and product layout .
A process layout is where similar items are grouped together. Process layouts are ideal for
companies that perform custom work and where the demand for each product is low. A product
layout is where the equipment, tools, and machines are located according to how a product is
made.
IN manufacturing engineering, a product layout refers to a production system where the work
stations and equipment are located along the line of production, as with assembly lines. Usually,

work units are moved along line (not necessarily a geometric line, but a set of interconnected
work stations) by a conveyor..
What is the main advantage of process layout over product layout? Flexibility: By using a
process layout, organizations can enjoy a high level of flexibility in the type of processes they
can perform and have the ability to complete various processes simultaneously.
4.3. Monitoring and adjusting implementation of the plan .
Implementation of the plan :-is a management tool for tracking progress of on-going projects and
is an integral part of project execution. Accordingly, project managers must develop a
monitoring plan to enable them to perform this function with dili- gence, overseeing integral
project implementation, including technical and financial aspects.
1. MONITORING AND ADJUSTMENTS. ...
2. Redesign Methodology – Implementation. ...
3. Brainstorm ideas with your team on what to monitor. ...
4. Don't try to measure everything. ...
5. Choose the most useful actions on the basis of the results. ...
6. Ensure that you schedule monitoring on a regular basis (daily/weekly) and have
a way to keep to plan.
4.4. Reviewing and checking the new value stream .
A value stream is the sequence of activities necessary to deliver a product, service or experience
to a customer, internal or external. Value streams cut across and connect soloed business
capabilities. They provide end-to-end visibility of the activity flow, from customer request to
delivery. Following:- DMADIM
1 Step 1: Define your value stream. ...
2 Step 2: Map the current state. ...
3 Step 3: Analyze the current state. ...
4 Step 4: Design the future state. ...
5 Step 5: Implement the future state. ...
6 Step 6: Monitor and improve the future state.
value stream map is made up of a three distinct looking parts: a process map, a corresponding
timeline, and information flow. The process map is comprised of the steps and the information
associated with the steps of your process.

4.5. Doing continuous improvement mechanism for the new value stream.
The basic principles of continuous improvement are as follows:
 Focus on Customers.
 Benefiting from Employees' Ideas.
 Leadership Support.
 Applying Incremental Changes.
 Using Data-Driven Methods.
 Continuous Improvement Software.

References:
1 Production and operation management – 2nd edition by S,ANIL KUMAR
2 Principles of Metal Manufacturing Processes J. Beddoes & M. J. Bibby

Carleton University, Canada http://www.isixsigma.com
3 Production and Operations Management R20MBA15 MBA I Year II

Semester AY 2020-22
4 http://www.sixsigmaonline.org/index.html
5 http://www.ge.com/en/company/companyinfo/quality/whatis.htm
6 http://mypptsearch.allpopular.info/search-ppt/six+sigma+ppt.


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Metal Engineering Technology

Module Title: - Managing Competitive Manufacturing Process

Table Of Content ........................................................................................................... 1

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1.2 Process Validation/ Justification and Quality

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How to take orders from customers?

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1) JOB SHOP PRODUCTION

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Sigma Level ( Process Capability) Defects per Million

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PHASES:- Phases of Six Sigma are: DMAIC

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 LEAN = Improvement principles focused on dramatically improving process speed and

 SIX SIGMA = Breakthrough Process, Design, or Improvement Teams focused on

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Note the shift in the mean and the reduced variation.

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How to Calculate Lead Time

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Current State Mapping

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1 Step 1: Define your value stream. ...

2 Step 2: Map the current state. ...

3 Step 3: Analyze the current state. ...

4 Step 4: Design the future state. ...

5 Step 5: Implement the future state. ...

6 Step 6: Monitor and improve the future state.

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1 Production and operation management – 2nd edition by S,ANIL KUMAR

2 Principles of Metal Manufacturing Processes J. Beddoes & M. J. Bibby

3 Production and Operations Management R20MBA15 MBA I Year II

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