International Logistics EXAM 2 - Frank Adams

Changeover Time

Time required to switch a machine or process from producing one product to another.

Importance: Reducing changeover time increases flexibility, reduces downtime, and minimizes inventory.

Kanban

A scheduling system originating from Toyota's lean manufacturing process that uses visual signals (like cards, bins, or digital boards) to control the flow of materials and work through production or a supply chain.

Purpose of Kanban

- Implement a Pull System: Ensures production aligns with actual customer demand rather than speculative forecasts.

- Prevents overproduction, minimizes waste, and balances workload.

Key Features of Kanban

- Visual Signals: Cards, boards, or bins signal what, when, and how much to produce or move.

- Limits on WIP (Work in Progress): Controls the amount of work allowed at any stage to prevent bottlenecks.

- Continuous Improvement: Kanban boards help teams visualize inefficiencies and make process adjustments.

How Kanban works

- Consumption: When materials or parts are consumed, a Kanban card is sent as a signal to replenish.

- Replenishment or Production: The card triggers production or movement of the specified quantity.

- Delivery: The replenished items are delivered just in time to prevent delays or overstocking.

Benefits of Kanban

- Reduced Inventory: Produces only what is needed when it is needed.

- Improved Communication: Clear visual signals reduce misunderstandings and delays.

- Enhanced Flexibility: Adjusts quickly to changes in demand or process flow.

- Increased Productivity: Minimizes overproduction and downtime.

Kaizen

continuous improvement involving all employees.

- Focus on small, incremental changes.

- Encourage teamwork and innovation.

- Example: Daily team meetings to identify areas for process improvement.

Lean

Focuses on delivering maximum value with minimal resources.

Waste

Any activity that doesn't add value (e.g., overproduction, waiting).

Muda

Waste (e.g., defects, overproduction).

Mura

Unevenness in production causing inefficiencies.

Muri

Overburdening resources or people, leading to inefficiency, errors, or breakdowns.

Poka-yoke

Definition: Error-proofing techniques to prevent mistakes.

Example: USB connectors designed to fit only one way.

Takt Time

The rate at which products must be produced to meet customer demand.

Example: If 8 hours are available and 120 units are needed, Takt Time = 4 minutes/unit.

Control Chart Rules

Definition: Graphical tools to monitor process stability.

Rules: Points outside control limits.

Trends or patterns indicating non-random variation.

ISO (International Standards Organization)

- Ensures standardized quality management (e.g., ISO 9001).

- Improves consistency, customer satisfaction, and compliance.

Six-Sigma

A methodology to reduce defects and variability in processes.

Goal: Achieve fewer than 3.4 defects per million opportunities.

Tools: DMAIC (Define, Measure, Analyze, Improve, Control).

Center of Gravity Models

Definition: Mathematical approach to find the optimal location to minimize transportation costs.

Application: Facility placement for warehouses or distribution centers.

Coordination

Definition: Align geographically dispersed operations for seamless performance.

Example: Boeing sharing R&D insights across global teams.

Configuration

Definition: Deciding where to locate activities in the supply chain.

Factors: Resource access, scale economies, and proximity to markets.

Market Chasers

Locate facilities near customer populations to improve delivery speed and customer service.

Resource Chasers

Locate facilities near raw material sources or other critical resources to lower costs.

Demand Patterns Types

Trend, seasonal, cyclical, and random patterns.

Forecast Horizon

The time frame a forecast covers (short-term, medium-term, long-term).

Forecast Types

Qualitative: Expert judgment (e.g., Delphi method).

Quantitative: Data-driven techniques (e.g., moving averages, regression).

Procurement

Strategic acquisition of goods/services.

Purchasing

Transactional buying process.

Sourcing

Selecting and evaluating suppliers.

Strategic Sourcing Matrix - Categorizes purchases - Routine

Low value, low complexity.

Strategic Sourcing Matrix - Categorizes purchases - Leverage

High value, low complexity.

Strategic Sourcing Matrix - Categorizes purchases - Bottleneck

Low value, high complexity.

Strategic Sourcing Matrix - Categorizes purchases - Critical

High value, high complexity.

Aggregate Planning

Balances production, inventory, and workforce to meet demand.

Common Mistakes in ERP Implementation

Lack of user training, poor planning, and failure to redesign business processes.

Level and Chase Strategies

Level: Steady production, use inventory to meet peaks.

Chase: Adjust production to match demand fluctuations.

Integrated Planning

Synchronizes planning across functions like production and inventory.

EOQ (Economic Order Quantity)

Optimal order size minimizing total inventory costs.

Pareto Principle

80% of inventory value comes from 20% of items.

Backwards Scheduling

Start with the due date and work backward to plan tasks.

Bill of Materials (BOM)

Detailed list of materials and components required for production.

Dependent vs. Independent Demand

Dependent: Driven by production of another item (e.g., car parts).

Independent: Customer-driven demand for finished goods.

Fixed Order Quantity

A fixed amount ordered each time inventory is replenished.

Inventory Records

Tracks levels, orders, and usage of inventory.

Lot-for-Lot

Orders only the exact quantity needed.

Master Production Schedule (MPS)

Specifies what products to produce and when.

Periodic Order Quantity

Orders placed at set intervals, with varying quantities.

Cow to Customer

Highlights the disrupted beef supply chain during COVID-19, from ranchers to restaurants, showcasing vulnerabilities and adaptations.

The Quality Dimensions of Service - Tangibles

Physical appearance of facilities.

The Quality Dimensions of Service - Reliability

Consistency in service performance.

The Quality Dimensions of Service - Responsiveness

Willingness to help customers.

The Quality Dimensions of Service - Assurance

Knowledge and courtesy of employees.

The Quality Dimensions of Service - Empathy

Personalized care.

The Square Root Rule

Increasing the number of locations increases safety stock, but at a rate proportional to the square root of the number of locations.