Process Strategy Chapter 3 Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 -01 What is Process Strategy? Process Strategy The pattern of decisions made in managing processes, so that the processes will achieve their competitive priorities. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 02 Supply Chain Processes Process Description Process Outsourcing Customer Service Warehousing Logistics Sourcing Description Cross-Docking Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 03 Business Function Processes Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 -04 Process Strategy Decisions Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 -05 Customer Contact in Services DIMENSIONS OF CUSTOMER CONTACT IN SERVICE PROCESSES Dimension High Contact Low Contact Physical presence Present Absent What is processed People Possessions or information Contact intensity Active, visible Passive, out of sight Personal attention Personal Impersonal Method of delivery Face-to-face Regular mail or e-mail Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 06 Process Structure in Services Customer Contact Customization Process Divergence Flexible Flow Line Flow Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 07 Service Customer-Contact Matrix Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 08 Process Structure in Manufacturing Job Process Batch - Small or Large Line Continuous Flow Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 09 Process Structure in Manufacturing Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 10 Production and Inventory Strategies Make-to-Order Assemble-to-Order - Postponement - Mass Customization Make-to-Stock - Mass Production Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 11 Layout Layout - The physical arrangement of human and capital resources Operation - A group of resources performing all or part of one or more processes Layout involves three basic steps 1. Gather information 2. Develop a block plan 3. Design a detailed layout Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 12 Layout Gather information on: - Space requirements - Available space - Closeness Factors Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 13 Layout Develop a Block Plan Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 14 Layout Use a Closeness Matrix Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 15 Layout Euclidian distance is the straight-line distance between two possible points d AB where 2 x A xB y A y B 2 dAB = distance between points A and B xA = x-coordinate of point A yA = y-coordinate of point A xB = x-coordinate of point B yB = y-coordinate of point B Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 16 Layout Rectilinear distance measures the distance between two possible points with a series of 90-degree turns d AB x A xB y A y B Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 17 Application 3.1 What is the distance between (20,10) and (80,60)? Euclidian Distance dAB = (20 - 80)2 + (10 - 60)2 = 78.1 Rectilinear Distance dAB = |20 - 80| + |10 - 60| = 110 Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 18 Example 3.1 Develop an acceptable block plan for the Office of Budget Management that locates departments with the greatest interaction as close to each other as possible. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 19 Example 3.1 How much better is the proposed block than the current block plan? The following table lists pairs of departments that have a nonzero closeness factor and the rectilinear distances between departments for both the current plan and the proposed plan 3 6 4 6 2 3 1 2 5 1 4 5 Current Block Plan Proposed Block Plan Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 20 Example 3.1 Current Plan Department Pair Closeness Factor (w) 1, 2 6 1, 6 10 2, 3 8 2, 4 1 2, 5 1 3, 4 3 3, 5 9 Weighted-Distance Score (wd) 5 1, 5 Distance (d) 6 1, 4 Weighted-Distance Score (wd) 3 1, 3 Distance (d) Proposed Plan Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 21 Example 3.1 Current Plan Department Pair Closeness Factor (w) 1, 2 3 1, 3 Distance (d) 1 Proposed Plan Weighted-Distance Score (wd) 3 Distance (d) 2 Weighted-Distance Score (wd) 6 1 6 3 18 6 3 15 1 5 1, 4 5 2 12 2 12 1, 5 6 2 20 1 10 1, 6 10 2 16 1 8 2, 3 8 2 2 1 1 2, 4 1 1 1 2 2 2, 5 1 2 6 2 6 3, 4 3 3 27 1 9 9 1 2 1 3, 5 Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 2 03 - 22 Example 3.1 Excel Solver evaluation of solution Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 23 Application 3.2 Matthews and Novak Design Company has been asked to design the layout for a newly constructed office building of one of its clients. The closeness matrix showing the daily trips between its six department offices is given below. Departments Trips between Departments 1 1 2 3 4 2 3 25 4 90 6 165 105 125 5 6 5 Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 125 25 105 03 - 24 Application 3.2 Shown on the right is a block plan that has been suggested for the building (original plan). Assume rectilinear distance and complete the highlighted cells. Department Pair Closeness Factor Distance Score 3 2 1 1 250 165 125 105 1 2 105 1 3 1 25 4 75 25 5 90 25 2 105 1, 3 1 105 180 5, 6 6 1, 6 165 3, 5 125 3, 6 125 2, 5 1, 2 4, 5 Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 25 Application 3.2 Department Pair Closeness Factor Distance Score 3 2 1 1 250 165 125 105 1 2 105 180 5, 6 105 1 105 1, 3 90 25 3 75 25 1 25 1, 6 165 3, 5 125 3, 6 125 2, 5 1, 2 4, 5 6 1 2 5 4 Based on the above results, propose a better plan and evaluate it in terms of the load-distance score. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 26 Application 3.2 Department Pair Closeness Factor 1, 6 105 1, 3 90 1, 2 25 4, 5 3 105 5, 6 5 Score 125 2, 5 1 125 3, 6 6 2 Distance 165 3, 5 4 25 Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall Total 03 - 27 Application 3.2 Department Pair Closeness Factor 1, 6 165 3, 5 1 Distance 125 4 Score 165 1 6 1 2 5 3 125 2 250 3, 6 125 2, 5 105 5, 6 105 1 1, 3 90 1 1, 2 25 3 4, 5 25 1 105 105 90 75 2 Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall Total 50 03 - 28 Customer Involvement Possible Disadvantages Can be disruptive Managing timing and volume can be challenging Quality measurement can be difficult Requires interpersonal skills Layouts may have to be revised Multiple locations may be necessary Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 29 Customer Involvement Possible Advantages Increased net value to the customer Can mean better quality, faster delivery, greater flexibility, and lower cost May reduce product, shipping, and inventory costs May help coordinate across the supply chain Processes may be revised to accommodate the customers' role Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 30 Resource Flexibility Workforce - Flexible workforce Equipment - General-purpose - Special-purpose Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 31 Application 3.3 BBC is deciding whether to weld bicycle frames manually or to purchase a welding robot. If welded manually, investment costs for equipment are only $10,000. The per-unit cost of manually welding a bicycle frame is $50.00 per frame. On the other hand, a robot capable of performing the same work costs $400,000. Robot operating costs including support labor are $20.00 per frame. Welded manually (Make) $10,000 Fixed costs Variable costs Welded by robot (Buy) $400,000 $50 $20 At what volume would BBC be indifferent to these alternative methods? Q = Fm - Fb $10,000 - $400,000 = $20 - $50 = 13,000 frames cb - Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall cm 03 - 32 Capital Intensity Automation in Manufacturing Automation in Services - Flexible Automation - Fixed Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 33 Decision Patterns for Service Processes Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 34 Link of Competitive Priorities to Manufacturing Strategies Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 35 Decision Patterns for Manufacturing Processes Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 36 Process Reengineering Critical processes Strong leadership Cross-functional teams Information technology Clean-slate philosophy Process analysis Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 37 Solved Problem 1 A defense contractor is evaluating its machine shop's current layout. The figure below shows the current layout and the table shows the closeness matrix for the facility measured as the number of trips per day between department pairs. Safety and health regulations require departments E and F to remain at their current locations. a. Use trial and error to find a better layout b. How much better is your layout than the current layout in terms of the wd score? Use rectilinear distance. Trips Between Departments Department A B C A 8 3 B C D D E 5 8 B F A C D F 9 E 9 3 3 Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 38 Solved Problem 1 a. In addition to keeping departments E and F at their current locations, a good plan would locate the following department pairs close to each other: A and E, C and F, A and B, and C and E. The below figure was worked out by trial and error and satisfies all these requirements. Start by placing E and F at their current locations. Then, because C must be as close as possible to both E and F, put C between them. Place A below E, and B next to A. All of the heavy traffic concerns have now been accommodated. Trips Between Departments Department A B C A 8 3 B C D D E E 5 8 F A B D F 9 C 9 3 3 Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 39 Solved Problem 1 b. The table reveals that the wd score drops from 92 for the current plan to 67 for the revised plan, a 27 percent reduction. Current Plan Department Pair Number of Trips (1) Distance (2) Proposed Plan wd Score (1) (2) Distance (3) wd Score (1) (3) A, B 8 2 16 1 8 A, C 3 1 3 2 6 A, E 9 1 9 1 9 A, F 5 3 15 3 15 B, D 3 2 6 1 3 C, E 8 2 16 1 8 C, F 9 2 18 1 9 1 3 D, F Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 3 1 3 03 - 40 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 03 - 41 Process Analysis Chapter 4 Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 01 What is Process Analysis? Process Analysis The set of tools used to identify opportunities for improvement, document current processes, evaluate processes to find performance gaps, redesign processes, and implement desired changes. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 -02 Process Analysis Steps Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04- 03 Documenting the Process Flowchart - A tool to trace the flow of information, customers, equipment and materials through the various steps of a process. Swim Lane Flowchart - A visual representation that groups functional areas responsible for different sub-processes into lanes. Flow Chart of Consulting Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 04 Swim Lane Flowchart in Manufacturing Swim Lane Flowchart - A visual representation that groups functional areas responsible for different sub-processes into lanes. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 05 Documenting the Process Service Blueprint - A special flowchart of a service process that shows which steps have high customer contact. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 06 Documenting the Process Work Measurement Techniques - Time Study - Elemental Standard Data approach - Predetermined Data Approach - Work Sampling Method - Learning Curve Analysis - Process Charts Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 07 Example 4.1 A process at a watch assembly plant has been changed. The process is divided into three work elements. A time study has been performed with the following results. The time standard for process previously was 14.5 minutes. Based on the new time study, should the time standard be revised? Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 08 Example 4.1 The new time study had an initial sample of four observations, with the results shown in the following table. The performance rating factor (RF) is shown for each element, and the allowance for the whole process is 18 percent of the total normal time. Obs 1 Obs 2 Obs 3 Obs 4 Average (min) RF Normal Time Element 1 2.60 2.34 3.12 2.86 2.730 1.0 2.730 Element 2 4.94 4.78 5.10 4.68 4.875 1.1 5.363 Element 3 2.18 1.98 2.13 2.25 2.135 0.9 1.922 Total Normal Time = 10.015 Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 09 Example 4.1 The normal time for an element in the table is its average time, multiplied by the RF. The total normal time for the whole process is the sum of the normal times for the three elements, or 10.01 minutes. To get the standard time (ST) for the process, just add in the allowance, or ST = 10.015(1 + 0.18) = 11.82 minutes/watch Yes, change the time standard from 14.5 minutes to 11.82 minutes. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04- 10 Documenting the Process Work Measurement Techniques - Work Sampling Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 11 Documenting the Process Work Measurement Techniques - Learning Curves Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 12 Documenting the Process Process Charts - An organized way to document all the activities performed by a person or group Activities are typically organized into five categories - Operation, - Transportation, - Inspection, - Delay, - Storage, Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 13 Process Charts Step No. Time (min) 1 0.50 2 Distance (ft) 10.00 3 4 Enter emergency room, approach patient window Sit down and fill out patient history X 15.0 Nurse escorts patient to ER triage room X Nurse inspects injury 0.75 40.0 X 0.75 Return to waiting room Wait for available bed 3.00 X 40.0 Go to ER bed Wait for doctor X 5 Doctor inspects injury and questions patient 1.00 6 7 8 Step Description X 1.00 60.0 Technician x-rays patient X Return to bed in ER 4.00 X 5.00 9 2.00 10 Nurse takes patient to radiology X 3.00 200.0 Wait for doctor to return Doctor provides diagnosis and advice Return to emergency entrance area Check out X Walk to pharmacy Pick up prescription 11 12 2.00 3.00 200.0 X Leave the building Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall X 04- 14 Process Charts Step No. Time (min) 1 0.50 2 Distance (ft) 10.00 3 4 0.75 Activity X 15.0 40.0 Operation Transport X X 40.0 1.00 6 7 8 Inspect Store X 1.00 60.0 X 10 5 Nurse escorts patient to ER 23.00room triage Nurse inspects injury 9 Return to waiting room Wait for available2 bed 11.00 815 8.00 Wait for doctor 3 8.00 Doctor inspects injury and questions patient Nurse takes patient to radiology Return to bed in ER X 5.00 2.00 Distance (ft) Technician x-rays patient 4.00 9 Time (min) Go to ER bed Delay X 5 Number of Steps Enter emergency room, approach patient window Sit down and fill out patient history X 3.00 0.75 Summary Step Description X 3.00 200.0 Wait for doctor to return Doctor provides diagnosis and advice Return to emergency entrance area Check out X Walk to pharmacy Pick up prescription 11 12 2.00 3.00 200.0 X Leave the building Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall X 04- 15 Process Charts The annual cost of an entire process can be estimated It is the product of 1) Time in hours to perform the process each time 2) Variable costs per hour 3) Number of times the process is performed each year Annual labor cost = Time to perform the process in hours Variable costs Number of times process per hour performed each year Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 16 Process Charts If the average time to serve a customer is 4 hours The variable cost is $25 per hour And 40 customers are served per year The total labor cost is 4 hrs/customer $25/hr 40 customers/yr = $4,000 Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 17 Data Analysis Tools Checklists Histograms and bar charts Pareto charts Scatter diagrams Cause-and-effect diagrams (Fishbone) Graphs Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 18 Example 4.2 The manager of a neighborhood restaurant is concerned about the smaller numbers of customers patronizing his eatery. Complaints have been rising, and he would like to find out what issues to address and present the findings in a way his employees can understand. The manager surveyed his customers over several weeks and collected the following data: Complaint Frequency Discourteous server 12 Slow service 42 Cold dinner 5 Cramped table 20 Atmosphere 10 Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 19 Failures Example 4.2 50 - 45 - 40 - 35 - 30 - 25 - 20 - 10 - 5- 0- Discourteous server Slow service Cold dinner Cramped tables Atmosphere Failure Name Bar Chart Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04- 20 Pareto Chart for a Restaurant (42 + 20) 89 100% = 69.7% - 100.0% 45 - 40 - Failures 35 - - 60.0% 30 - 25 - - 40.0% 20 - - 20.0% 10 - 5- Percent of Total - 80.0% - 0.0% 0- Slow service Cramped Discourteous Atmosphere tables server Cold dinner Failure Name Pareto Chart Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04- 21 Example 4.3 The operations manager for Checker Board Airlines at Port Columbus International Airport noticed an increase in the number of delayed flight departures. Draw a Fishbone Diagram to determine the root cause of the problem of Delayed Flight Departures. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 22 Example 4.3 Equipment Personnel Aircraft late to gate Other Mechanical failures Weather Passenger processing at gate Late cabin cleaners Unavailable cockpit crew Air traffic delays Late cabin crew Late baggage to aircraft Late fuel Late food service Materials Contractor not provided with updated schedule Delayed flight departures Poor announcement of departures Weight/balance sheet late Delayed check-in procedure Waiting for late passengers Procedures Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04- 23 Example 4.4 The Wellington Fiber Board Company produces headliners, the fiberglass components that form the inner roof of passenger cars. Management wanted to identify which process failures were most prevalent and to find the cause. Step 1: A checklist of different types of process failures is constructed from last month's production records. Step 2: A Pareto chart is prepared from the checklist data. Step 3: A cause-and-effect diagram identified several potential causes for the problem. Step 4: The manager reorganizes the production reports into a bar chart according to shift because the personnel on the three shifts had varied amounts of experience. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04- 24 Example 4.4 Checklists Bar Chart Pareto Chart Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 25 Example 4.4 Fishbone Diagram Bar Chart Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 26 Redesigning the Process Generating Ideas: Questioning and Brainstorming Ideas can be uncovered by asking six questions 1. What is being done? 2. When is it being done? 3. Who is doing it? 4. Where is it being done? 5. How is it being done? 6. How well does it do on the various metrics of importance? Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 27 Redesigning the Process Generating Ideas: Questioning and Brainstorming Benchmarking - Four basic steps Step 1. Planning Step 2. Analysis Step 3. Integration Step 4. Action Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 28 Managing and Implementing Processes Seven common mistakes 1. Not connecting with strategic issues 2. Not involving the right people in the right way 3. Not giving the design teams and process analysts a clear charter and then holding them accountable 4. Not being satisfied unless fundamental \"reengineering\" changes are made 5. Not considering the impact on people 6. Not giving attention to implementation 7. Not creating an infrastructure for continuous process improvement Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 29 Solved Problem 1 Create a flowchart for the following telephone-ordering process at a retail chain that specializes in selling books and music CDs. It provides an ordering system via the telephone to its time-sensitive customers besides its regular store sales. The automated system greets customers, asks them to choose a tone or pulse phone, and routes them accordingly. The system checks to see whether customers have an existing account. They can wait for the service representative to open a new account. Customers choose between order options and are routed accordingly. Customers can cancel the order. Finally, the system asks whether the customer has additional requests; if not, the process terminates. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 30 Solved Problem 1 Continued on Next Slide Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04- 31 Solved Problem 1 Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04- 32 Solved Problem 2 An automobile service is having difficulty providing oil changes in the 29 minutes or less mentioned in its advertising. You are to analyze the process of changing automobile engine oil. The subject of the study is the service mechanic. The process begins when the mechanic directs the customer's arrival and ends when the customer pays for the services. The times add up to 28 minutes, which does not allow much room for error if the 29-minute guarantee is to be met and the mechanic travels a total of 420 feet. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 33 Step No. Time (min) 1 0.80 2 1.80 3 0.80 5 0.60 6 0.90 8 1.90 9 0.40 10 0.60 11 4.20 12 0.70 13 2.70 X 50.0 Step Description Direct customer into service bay 0.70 7 2.30 4 Distance (ft) Summary X Record name and desired service Number Activity X 5.00 Delay 1 Wait for customer decision 0.70 Store X Walk to storeroom 1 1.30 420 0.30 Look up filter number(s) X X Check filter number(s) Carry filter(s) to service pit X Perform under-car services X Climb from pit, walk to automobile X Fill engine with oil, start engine Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 14 16.50 Recommend additional4 services X 40.0 7 5.50 Inspect X 50.0 Walk to customer in waiting area 8 Transport X 70.0 Distance (ft) Open hood, verify engine type, inspect hoses, check fluids Operation X 0.30 of Steps Time (min) X Inspect for leaks 04- 34 Solved Problem 3 What improvement can you make in the process shown in Solved Problem 2? a. Move Step 17 to Step 21. Customers should not have to wait while the mechanic cleans the work area. b. Store small inventories of frequently used filters in the pit. Steps 7 and 10 involve travel to the storeroom. c. Use two mechanics. Steps 10, 12, 15, and 17 involve running up and down the steps to the pit. Much of this travel could be eliminated. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04- 35 Solved Problem 4 Vera Johnson and Merris Williams manufacture vanishing cream. Their packaging process has four steps: (1) mix, (2) fill, (3) cap, and (4) label. They have had the reported defects analyzed, which shows the following: Defect Lumps of unmixed product Over- or under filled jars Jar lids did not seal Labels rumpled or missing Total Frequency 7 18 6 29 60 Draw a Pareto chart to identify the vital defects. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04- 36 Solved Problem 4 Defective labels account for 48.33 percent of the total number of defects: 29 100% = 48.33% 60 Improperly filled jars account for 30 percent of the total number of defects: 18 100% = 30.00% 60 The cumulative percent for the two most frequent defects is 48.33% + 30.00% = 78.33% Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 37 Solved Problem 4 Lumps represent 7 100% = 11.67%of defects; the 60 cumulative percentage is 78.33% + 11.67% = 90.00% Defective seals represent 6 100% = 10% of defects; the 60 cumulative percentage is 10% + 90% = 100.00% Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04- 38 Solved Problem 4 - 100 90% 36 - 78% 32 - Frequency of Defects 100% - 90 - 80 28 - - 70 24 - - 60 20 - 48% - 50 16 - - 40 12 - - 30 8- - 20 4- - 10 0- Cumulative Percentage of Defects 40 - -0 Label Fill Mix Seal Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04- 39 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 04 - 40