PM 212 Definitions

production system

Has inputs, uses resources which are then transformed into outputs

Operations and Supply Chain Management (OSCM)

Design, operation and improvement of the systems that create and deliver the firm’s primary products and services

Operations

Manufacturing and service processes used to transform the resources employed by a firm into the products desired by customers

Supply chain

Processes that move information and material to and from the manufacturing and service process of the firm

Efficiency

Providing a good or service at the lowest possible cost

Effectiveness

Doing the right things to create the most value for the company

Value

Approximately quality divided by price (quality of a product compared to price)

Shareholders

Individuals or companies that legally own one or more shares of stock in the company

Stakeholders

Individuals or organizations who influence or are influenced by the business directly or indirectly

Straddling

When a firm seeks to match a competitor by adding new features to existing activities, often creating tradeoff problems

Order qualifiers

Services and features required for a product to even be considered for purchase

Order winners

Services and features that make a product stand out and win the customer over

Productivity

A measure of how well resources are being used, defined as output divided by input

Bottleneck

A resource that limits the capacity of a process

Make-to-order

Production activated only in response to an actual order, with minimal inventory

Make-to-stock

Production activated to meet expected or forecast demand, with inventory held

Assemble-to-order

Combining preassembled modules to meet customer specifications

Engineer-to-order

Working with the customer to design and then produce a product from materials and components

Process flow design

A mapping of the processes that materials, parts, and subassemblies follow through production

Operation time

Setup time plus run time

Throughput time

Average time for a unit to move through the system

Cycle time

Average time between completion of successive units in production

Flow time

Total time an item is worked on plus waiting time

Workcenter

Process structure for low-volume production of a variety of nonstandard products

Manufacturing cell

Dedicated area where a group of similar products are produced

Assembly line

A setup where an item is produced through a fixed sequence of workstations for high production rate

Continuous process

Process that converts raw materials into finished products in one continuous flow

Lean manufacturing

A system that produces what customers want, when they want it, with minimum resources

Lean production

An integrated set of activities to achieve high-volume production using minimal inventory and eliminating waste

Value Stream Mapping (VSM)

A graphical method to analyze where value is added or not added in a process

Backorders

Cost of not meeting demand and delivering late, resulting in losses

Yield management

Process of allocating capacity at the right price and time to maximize revenue in a fixed-capacity system

Material Requirements Planning (MRP)

System that determines the quantity and timing of materials, parts, and components needed for production

Master Production Schedule (MPS)

Time-phased plan specifying how many and when end items will be produced

Pegging

Identifying the parent items that create demand for components

Time fences

Control points that limit changes to production schedules (frozen, moderately firm, flexible)

Manufacturing Resource Planning (MRP II)

System to plan and monitor all resources of a manufacturing firm (closed-loop system)

Lot-for-lot (L4L)

Order exactly the amount of materials needed

Economic order quantity (EOQ)

Order materials in bulk quantities

Pareto Principle (80/20 rule)

A small number of causes accounts for a large percentage of the effect