Given your main focus on helping managers implement cost control programs, the CFO asked you to put together a memorandum of likely opportunities to reduce costs through the manufacturing facility itself.
• He asked you to write short summaries of what each of the following specific opportunities to reduce costs is all about:
o Describe 1 of the following a total quality programs: Crosby, six sigma, or Juran.
o Describe the implementation of any one statistical process control program (e.g., Deming).
o Discuss moving toward reduction in non-value-added activities. Include examples.
o Explain the adoption of lean manufacturing techniques
• The CFO remembers, from your initial interview, the point you made about the need for firms to consider the total cost of a decision or proposal, which might be different than traditional procedures might consider (when just the costs and benefits of the immediate change, new equipment, or new process might be considered). He asks you to write a short paragraph about that, including an example.
• Finally, the CFO asked you to show him how to construct a control chart because he thinks he might use it in his own office processes to monitor performance in terms of timeliness of getting his reports done. Because you are not familiar with office processes, you instead show him an example of setting up and monitoring a control chart in a manufacturing process, given the following data:
o Part X specifications for cutting a piece of steel are a nominal dimension of 1" +/- 0.05".
o Once the process was deemed to be in control by the engineers, the next 10 consecutive samples drawn from the actual production showed a standard deviation of 0.016.
o Actual sampling of production the next day showed consecutive part actual dimensions of the following: 1.03, 1.03, 1.035, 1.039, and 1.046.
o Using this resource to assist you, set up a statistical process control (SPC) chart by plotting the following:
1. The upper and lower specification limits
2. The part's nominal dimension
3. The upper and lower control limits
4. The actual dimensions of the 5 samples
o Is there any cause for concern? Explain your reasoning.