Capital intensity

Automation is a system, process or piece of equipment that is self-acting and self-regulating

It substitutes labor-saving capital equipment and technology for labor

Automated manufacturing processes

Typically require high volumes and costs are high

Fixed automation produces one type of part or product in a fixed sequence

Flexible automation can be changed to handle various products

Industrial robots

Automated service processes

CHAPTER 2 PROCESS ANALYSIS

DMAIC= Define, Measure, Analyze, Improve and Control

Process Analysis

A firm cannot gain competitive advantage with faulty processes!

Processes can be analyzed and improved using certain tools and techniques.

Process analysis is the documentation and detailed understanding of how work is performed and how it can be redesigned

A systematic approach of process analysis: identify opportunity, define scope, document process, evaluate performance, redesign process and implement changes.

Documenting the process through flowcharts and process charts

Flowcharts: traces the flow of information, customer, equipment or materials through various steps of process. This charts are known as flow diagrams, process maps, relationship maps or blue prints. One of the most common flowchart is swim lane. Service blueprint is a flowchart of a service process that shows which steps have high customer contact.

Process charts: is an organized way to document all the activities performed by a person or group. Analyze a process using a table and provides info about each step.

Activities are typically organized into five categories: Operation (changes, created or add something), Transportation (move), Inspection, Delay (awaiting), Storage.

Data analysis tools

Checklists (data collection). Histograms and Bar Charts (data from checklist).Pareto Charts (problems that needs to be address or solve. Scatter Diagrams (verify or negate suspicion). Cause-and-Effect diagrams. Graphs (data in pictures)

Managing processes : Seven common mistakes: Not connecting with strategic issues. Not involving the right people in the right way. Not giving the design teams and process analysts a clear charter and then holding them accountable. Not being satisfied unless fundamental “reengineering” changes are made. Not considering the impact on people. Not giving attention to implementation. Not creating an infrastructure for continuous process improvement

Chapter 3 What is quality? A term used by customers to describe their general satisfaction with a service or product.

The ability of a product or service to consistently meet or exceed customer expectations

Costs of quality

Prevention costs: Preventing defects to happen. (cost associated with preventing defects before)

Appraisal costs: the firm assesses the level of performance of its process. (cost incurred when the firm assess the performance level)

Internal failure costs: costs resulting from defects that are discovered during the production of a service or product.

External failure costs: costs that arise when a defect is discovered after the customer receives the service orproduct.

Ethical failure costs: societal and monetary costs associated with deceptively passing defective services or products to internal or external customers.

Sampling distribution: the purpose is to estimate a variable or attribute for the output of the process without doing a complete inspection.

Statistical process control (spc)

SPC is the application of statistical techniques to determine whether a process is delivering what the customer wants.

Variation of outputs: no 2 services or products are exactly alike bc the processes used to produce them contain many sources of variation.

Performance measurement

 variables: service or product characteristics such as weight, volume, time and length. the advantage is if a product misses its performance specifications the inspector knows by how much. The disadvantages is that involve equipment employee skills, exacting procedures, time and effort.