Value Chain Analysis, MUDA, Poke Yoke and Kaizen

1. TQM PRESENTATION BY
GROUP 1
HRIDAY BORA
VISHNU TEJ
NEELANJAN GHOSH
MOHIT TARWAY
May 15, 2016 1

2. Value Chain Analysis
The value is the total amount that buyers are willing to
pay for a firm’s products.
The difference between the total value and the total
cost of performing all of the firm’s activities provides
the margin .
The value chain is a tool developed by Dr. Michael
porter

3.  Porter’s definition includes all activities to design, produce,
market, deliver, and support the product/service.
 The value chain is concentrating on the activities starting with
raw materials till the conversion into final goods or services.
 Two categories:
1. Primary Activities (operations, distribution, sales)
2. Support Activities (R&D, Human Resources)

4. TYPES OF VALUE CHAIN
 Value Chain is categorized into types based on
the type of organizations.
1. Manufacturing based.
2. Service based.
3. Both manufacturing and service based.

5. What is value chain analysis?
 Used to identify sources of competitive advantage
 Specifically:
Opportunities to secure cost advantages
Opportunities to create product/service
differentiation
 Includes the value-creating activities of all industry
participants

6. Value Chain Model
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound
Logistics
Operatio
ns.
Outbound
Logistics
Sales &
Marketing
Service and
Support
PRIMARY ACTIVITIES
SUPPORT
ACTIVITIES

7. PRIMARY ACTIVITIES
1.INBOUND LOGISTICS
- Concerned with receiving, storing, distributing inputs (E.G. Handling
of raw materials, warehousing, inventory control)
2. OPERATIONS
- Comprise the transformation of the inputs into the final product form
(E.G. Production, assembly, and packaging)
3. OUTBOUND LOGISTICS
-Involve the collecting, storing, and distributing the product to the buyers
(E.G. Processing of orders, warehousing of finished goods, and delivery)

8. 4. MARKETING AND SALES
-Identification of customer needs and generation of sales.
(E.G. Advertising, promotion, distribution)
5. SERVICE
-Involves how to maintain the value of the product
After it is purchased.(E.G. Installation, repair,
Maintenance, and training)

9. SUPPORT ACTIVITIES
1.FIRM INFRASTRUCTURE
The activities such as Organization structure, control system, company culture are
categorized under firm infrastructure.
2.HUMAN RESOURCE MANAGEMENT
Involved in recruiting, hiring, training, development and compensation.
3.TECHNOLOGY DEVELOPMENT
These activities are intended to improve the product and the process, can occur in many
parts of the firm.
4.PROCUREMENT
Concerned with the tasks of purchasing inputs such as raw materials, equipment, and even
labor.

10. USES OF VALUE CHAIN ANALYSIS
 The sources of the competitive advantage of a firm can be seen
from its discrete activities and how they interact with one one
another.
 The value chain is a tool for systematically examining the
activities of a firm and how they interact with one another and
affect each other’s cost and performance.
 A firm gains a competitive advantage by performing these
activities better or at lower cost than competitors.
 Helps you to stay out of the “No Profit Zone”
 Presents opportunities for integration
 Aligns spending with value processes

11. VERTICAL LINKAGES
 Linkages can also exist outside the firm; for instance there is a linkage between a firm’s chain and the value
chain of its suppliers and channels.
e.g. The activities of the raw materials suppliers affect the activities of the firm. Similarly, the activities of the
distributor also affect the firm.

12. MUDA
 Muda is a Japanese word, which means waste,
where waste is any activity that does not add
value. Reducing or eliminating Muda is, of
course, one of the fundamental objectives of any
quality-oriented person.

13. 7 MUDAS
Taichi ohno of Toyota identified what are called the seven
wastes or seven Mudas
1. Waste from overproduction
2. Waste of time in waiting
3. Transportation waste
4. Processing waste
5. Inventory waste
6. Waste of motion
7. Waste from product defects

14. 1.Waste from overproduction
 Which leads to excess inventory, paperwork, handling, storage, space, interest
charges, machinery, defects, people and overhead.
 It is often difficult to see this waste as everyone seems busy.
 Unnecessary production to show higher machine utilization
Strategies to eliminate :-
 Strong production planning and control
 Production according to customer schedule
 Firm delivery requirement from marketing.

15. 2.Waste of time in waiting
Its occurs when worker or machine is not performing its job.
 People may be waiting for parts or instructions.
 Mostly they are waiting for one another, which often happens because they have non-aligned objectives.
 The talent of employees also wasted.
Tools to identify
 Kaizen
 Method study

16. 3.Transportation waste
It is highly visible form of waste unnecessary transportation create the need for more storage space, more
equipment and workers.
 Poor layouts lead to things being moved multiple times.
 If things are not well place, they can be hard to find.
 It can aggravate alignment of processes.
Strategies to eliminate
 Store material as close to the point of use as possible
 Avoid transportation over long distance.
 Avoid over production.

17. 4.Waste from product defects
Defects imply rework or reject. Research confirms that 20 to 30% of manufacturing
company’s gross revenues are spent on correcting mistake.
 Defects cause rework, confusion and upset a synchronized set of processes.
 Loss of customer
 Loss of future business
Causes of defects
 Incorrect product design
 Defective materials
 Poorly trained employees
Strategies to eliminate :-
 Design reviews
 Training to employees
 Maintenance of machines and equipment.

18. 5.Waste of motion
A worker while performing a task makes use of a number of motions. Some of these motion-
 Are unnecessary and can be eliminated
 Can be combined by changing their sequence.
 Can be performed efficiently by other members of the body.
Strategies to eliminate
 Motion economy principal
 Effective supervision

19. 6.Inventory waste
Inventory comprises of finished goods semi-finished products or parts and supplies. Excess inventory is a real waste as it
does not add value but add to the cost by-
 Occupying space
 Requiring additional equipment and facilities such as storage racks, cupboards etc.
Strategies to eliminate
 Dispose off obsolete material to save space and to avoid confusion.
 Do not produce items ahead of customer's delivery requirements.
 Do not manufacture products in excess of customer's requirements.

20. 7.Processing waste
Processing cost of a product is mainly decided by conversion process, combination
of mechanical and chemical operations and supports activities required to
produce goods and services.
 Additional effort may be required in an inefficient process
Causes of MUDA of processing
 Poor allocation of work to men
 Failure to identify and use of most effective method
 Over production
Tools to eliminate
 Method study
 Simplification
 Kaizen

21. Muda in office:-
 Muda can also be found in support function such as engineering, planning,
marketing, purchase, stores, a/c and hrm etc.
Examples of Muda in office
 Waiting the people at meeting
 Making unproductive phone calls
 Unnecessary copies of documents
 Letterheads printed in excess of requirements.
Tools to eliminate
 Work Simplification
 5-s technique for office

22. INTRODUCTION
What is a Poka- yoke?
 Shigeo shingo defined poka-yoke as POKA- ‘Inadvertent
mistake that anyone can make’ and YOKE- ‘To prevent or
proof’
 Poka-yoke is a tool to have “zero defects” and even reduce
or eliminate quality control.
 Poka-yoke is a Japanese name for “fool-proofing”.
 Poke-yoke represents the intelligence of the operator by
excluding repetitive actions that require a thinking
process.
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23. MISTAKE PROOFING
 Mistake-Proofing a product's design and its manufacturing
process is a key element of design for manufacturability /
assembly (DFM/A)
 Mistake proofing is also a key element of improving
product quality and reliability
FACTORS CONTRIBUTING TO MISTAKE PROOFING:
 Attention
 Perception
 Memory
 Logical reasoning
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24. PRINCIPLES OF MISTAKE-PROOFING
There are six mistake-proofing principles or methods.
 Elimination seeks to eliminate the possibility of error by
redesigning the product or process so that the task or part
is no longer necessary.
 Replacement substitutes a more reliable process to
improve consistency.
 Prevention engineers the product or process so that it is
impossible to make a mistake at all.
 Facilitation employs techniques and combining steps to
make work easier to perform.
 Detection involves identifying an error before further
processing occurs so that the user can quickly correct the
problem.
 Mitigation seeks to minimize the effects of errors.24

25. 2-STATUS & 3-FUNCTIONS OF POKA-YOKE
POKA-YOKE HAS 2 STATUS AND 3 FUNCTIONS:
 Status:
1.The fault will happen or
2.The fault has happened
 Functions:
1.Stop
2.Check or
3.Alarm
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26. THREE STRATEGIES FOR ZERO DEFECT
 Only make the product when required!
 Make the product so it can not be used for anything else.
 If the product is ready use it immediately.
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27. POKA-YOKE CLASSIFICATION
Poka-yoke is classified into the following types:
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Server Poka-Yokes
Task
Treatment Tangibles
Customer Poka-Yokes
Preparation
Encounter
Resolution

28. PROVIDER(SERVER) ERRORS
 Task Errors
• Doing the work incorrectly
• Doing work not requested
• Doing work in the wrong order
• Doing work too slowly
 Treatment Errors
• Not acknowledging the customer
• Not listening to the customer
• Not reacting appropriately to the customer
 Tangible Errors
• Failure to clean facilities
• Failure to control noise
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29. CUSTOMER ERRORS
 Preparation Errors
• Failure to bring necessary materials to the encounter
• Failure to engage the correct service
 Encounter Errors
• Failure to remember steps in the service process
• Failure to follow system flow
• Failure to follow instructions
 Resolution Errors
• Failure to learn from experience
• Failure to adjust expectations appropriately
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30. SEVEN STEPS TO POKA-YOKE ATTAINMENT
 Quality Processes
 Utilize a team environment
 Elimination of Errors
 Eliminate the “Root Cause” of The Errors
 Do It Right The First Time
 Eliminate Non-Value Added Decisions
 Implement a Continual Improvement Approach
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31. POKA-YOKE APPROACH
 Proactive Approach :
 A fully implemented ZERO DEFECT QUALITY system requires Poka-
Yoke usage at or before the inspection points during the process.
 Poka-yoke will catch the errors before a defective part is
manufactured 100% of the time.
 Reactive Approach :
 Check occurs immediately after the process.
 Can be an operator check at the process or successive check at
the next process.
 Not 100% effective, will not eliminate all defects.
 Effective in preventing defects from being passed to next process.
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32. Two Poka-Yoke System approaches are utilized in
manufacturing which lead to successful ZERO DEFECT
QUALITY:
1.Control Approach:
 Shuts down the process when an error occurs.
 Keeps the “suspect” part in place when an operation is
incomplete.
2.Warning Approach
 Signals the operator to stop the process and correct the
problem.
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33. CONTROL SYSTEM
 Takes human element out of the equation ; does not
depend on an operator or assembler.
 Has a high capability of achieving zero defects.
 Machine stops when an irregularity is detected.
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34. WARNING SYSTEMS
 Sometimes an automatic shut off system is not an option.
 A warning or alarm system can be used to get an operators
attention.
 Color coding is also an effective non-automatic option
May 15, 2016 34

35. TEN TYPES OF HUMAN MISTAKES
 Forgetfulness
 Mis-understanding
 Wrong identification
 Lack of experience
 Willful (ignoring rules or procedure)
 Inadvertent or sloppiness
 Slowliness
 Lack of standardization
 Surprise (unexpected machine operation, etc.)
 Intentional (sabotage)
May 15, 2016 35

36. POKA-YOKE DEVICES
 Poka yoke is implemented by using simple objects like
fixtures, jigs, warning devices and the like to prevent
people from committing mistakes, even if they try to!.
 The main feature of poka-yoke devices is their exceptional
suitability for reducing or eliminating defects through
effective feedback and instantaneous corrective action.
 These devices are capable of being used all the time by all
workers; simple and usually installed with low
implementation cost.
 Poka-yoke devices help eliminate errors and defects by
giving machines the “intelligence” to stop and signal when
a error occurs.
 Poka-yoke devices stop machines and alert workers when a
problem exists. May 15, 2016 36

37. THE THREE LEVELS OF POKA-YOKE:
There are three levels at which your company can effect
poka-yoke:
 Eliminating errors defects and losses at the source or
prevention of a mistake from being committed..
 Detection of a loss or mistakes it occurs,allowing correction
before it becomes a problem.
 Detection of a loss or mistakes after it has occurred,just in
time before it blows up into a major issue(least effective).May 15, 2016 37

38. EXAMPLES OF POKA-YOKE PRODUCTS
May 15, 2016 38

39. IMPLEMENTATION IN MANUFACTURING
Poka-yoke can be implemented at any step of a
manufacturing process where something can go wrong or an
error can be made.
Shigeo Shingo recognized three types of poka-yoke
for detecting and preventing errors in a mass production
system:
 The contact method identifies product defects by testing
the product's shape, size, color, or other physical
attributes.
 The fixed-value (or constant number) method alerts the
operator if a certain number of movements are not made.
 The motion-step (or sequence) method determines whether
the prescribed steps of the process have been followed.May 15, 2016 39

40. ADVANTAGES
 They are simple and cheap.
 They are part of the process, implementing what Shingo
calls "100%" inspection.
 They are placed close to where the mistakes occur,
providing quick feedback to the workers so that the
mistakes can be corrected.
 Once put in place, they require minimal supervision.
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41. CONCLUSION
Poka-yokes deals with understanding why people make errors
and how to analyze the process to know where errors are likely to occur
and what root causes contribute to them.
Since the poka-yoke devices detect errors at their roots n prevent them
from blowing up to become bigger problems, there is consistency in the
quality of the products, saving the cost and time spent in subsequent
quality inspection processes.
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42. INTRODUCTION
KAI = CHANGE
ZEN = GOOD
"CHANGE FOR THE BETTER"
Kaizen = Continuous Improvement
...by Everybody! Everyday! Everywhere!

43. WHAT IS KAIZEN?
 A Japanese philosophy that focuses on continual improvement throughout all
aspects of life
 When applied to the workplace, it can improve every function of a business,
from manufacturing to marketing and from the CEO to the assembly-line
workers
 Aims to eliminate waste in all systems of an organization through improving
standardized activities and processes

44. THE CONTINUOUS CYCLE OF KAIZEN ACTIVITY HAS
SEVEN PHASES:
 Identify an opportunity
 Analyze the process
 Develop an optimal solution
 Implement the solution
 Study the results
 Standardize the solution
 Plan for the future
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45. HISTORY
 Kaizen was originally introduced to the West by Masaaki Imai in his
book Kaizen: The Key to Japan’s Competitive Success in 1986
 Today Kaizen is recognized worldwide as an important pillar of an
organization’s long-term competitive strategy.

46. KAIZEN ACTIVITIES COVER IMPROVEMENTS IN A NUMBER OF
AREAS, INCLUDING:
 Quality – Bettering products, service, work environment, practice and processes.
 Cost – Reducing expenses and manpower, and use of material, energy and resources.
 Delivery – Cutting delivery time, movement and non-value-added activities
 Management – Improving procedures, training, morale, administration, planning, flow,
information systems, documentation and reporting.
 Safety – Decreasing hazardous situations, unsafe working conditions, chances of resource
depletion and damage to the environment.

47. THE FOLLOWING ARE SOME BASIC TIPS FOR DOING KAIZEN:
 Replace conventional fixed ideas with fresh ones.
 Start by questioning current practices and standards.
 Seek the advice of many associates before starting a Kaizen activity.
 Think of how to do something, not why it cannot be done.
 Don’t make excuses. Make execution happen.
 Do not seek perfection. Implement a solution right away, even if it covers only 50 percent of the
target.
 Correct something right away if a mistake is made.

48. KAIZEN IS CONTINUOUS IMPROVEMENT THAT IS BASED ON
CERTAIN GUIDING PRINCIPLES:
 Good processes bring good results
 Go see for yourself to grasp the current situation
 Speak with data, manage by facts
 Take action to contain and correct root causes of problems
 Work as a team
 Kaizen is everybody’s business

49. IMPLEMENTATION
 The Toyota Production System is known for kaizen, where all line personnel are expected to stop
their moving production line in case of any abnormality and, along with their supervisor, suggest
an improvement to resolve the abnormality which may initiate a kaizen
 The cycle of kaizen activity can be defined as:

50. THANK YOU
May 15, 2016 50