Chapter 7 OSCM

Lead time

The time needed to respond to a customer order.

Customer order decoupling point

Determines where inventory is positioned to allow processes or entities in the supply chain to operate independently.

Inventory

Acts as a buffer to separate the customer from the manufacturing process.

Selection of decoupling points

A strategic decision that determines customer lead times and can greatly impact inventory investment.

Trade-off in manufacturing

Quicker response to customer demand comes at the expense of greater inventory investment because finished goods inventory is more expensive than raw material inventory.

Make-to-stock

A production environment where the customer is served 'on-demand' from finished goods inventory.

Balancing finished inventory and service

The essential issue in satisfying customers in the make-to-stock environment.

Lean manufacturing

To achieve high customer service with minimum levels of inventory investment.

Assemble-to-order

A production environment where pre-assembled components, subassemblies, and modules are put together in response to a specific customer order.

Advantages of assemble-to-order

Moving the customer order decoupling point from finished goods to components. The number of finished products is usually substantially greater than the number of components combined to produce the finished product.

Make-to-order

A production environment where the product is built directly from raw materials and components in response to a specific customer order.

Customer order decoupling point in make-to-order

Could be in either raw materials at the manufacturing site or possibly even with the supplier inventory.

Example of make-to-order

Boeing's process for making commercial aircraft.

Emphasis in make-to-order

Managing capacity of critical resources such as engineering and construction crews.

Engineer-to-order

The firm works with the customer to design the product, which is then made from purchased material, parts, and components.

Customer order decoupling point in engineer-to-order

Could be in either raw materials at the manufacturing site or possibly even with the supplier inventory.

Emphasis in Engineering-to-order

In the engineer-to-order case, engineering determines what materials will be required and what steps will be required in manufacturing.

Process selection

Refers to the strategic decision of selecting which kind of production processes to use to produce a product or provide a service.

Facility arrangement

Defined by the general pattern of workflow.

Project Layout

A setup in which the product remains at one location, and equipment is moved to the product, high degree of task ordering is common

Workcenter

A process structure suited for low-volume production of a great variety of nonstandard products, often referred to as a job shop.

Manufacturing cell

A dedicated area where a group of similar products are produced. These cells are designed to perform a specific set of processes, and the cells are dedicated to a limited range of products

Assembly line

A setup in which an item is produced through a fixed sequence of workstations, designed to achieve a specific production rate.

Continuous process

A process that converts raw materials into finished product in one continuous process. similar to an assembly line in that production follows a predetermined sequence of steps, but the flow is continuous (such as with liquids) rather than discrete.

Product-process matrix

A framework depicting when the different production process types are typically used, depending on product volume and how standardized the product is.

Break-even analysis

A standard approach to choosing among alternative processes or equipment.

General-purpose equipment

Less specialized equipment that can be used easily in many different ways if set up in the proper manner.

Special-purpose equipment

More specialized equipment that is often available as an alternative to a general-purpose machine.

Break-even point

The point found when comparing two options by equating the cost of the first option to that of the second.

Task ordering

A high degree of ordering that determines production stages in a project layout.

Interdepartmental traffic

The movement of parts being worked on from workcenter to workcenter according to the established sequence of operations.

Scheduling in manufacturing cells

Manufacturing cells are typically scheduled to produce 'as needed' in response to current customer demand.

Flow in continuous process

The flow is continuous (such as with liquids) rather than discrete.

Automation in continuous process

Continuous processes are usually highly automated and may operate 24 hours a day to avoid expensive shutdowns and startups.

Examples of continuous process

Conversion and processing of undifferentiated materials such as petroleum, chemicals, and drugs.

Production rate in assembly line

The assembly line is designed to achieve a specific production rate.

Stations in assembly line

The assembly line steps are done in areas referred to as 'stations,' typically linked by some form of material handling device.

Pacing in assembly line

There is usually some form of pacing by which the amount of time allowed at each station is managed.

Examples of assembly line products

Examples include the assembly of toys, appliances, and automobiles.

Optimal placement in workcenters

Optimal placement often means placing workcenters with large amounts of interdepartmental traffic adjacent to each other.

Manufacturing cell design

Manufacturing cells are formed by allocating dissimilar machines to cells designed to work on products that have similar shapes and processing requirements.

High-volume items

Assembly lines are typically used in high-volume items where the specialized process can be justified.

Demand

(FC1 - FC2) / (VC2 - VC1)

Break Even Point

FC1 + VC1 Demand = FC2 + VC2 Demand