Operations and Supply Chain Management: Manufacturing, Services, MRP, and Quality Control

Comprehensive vocabulary flashcards covering manufacturing processes, service systems, material requirements planning (MRP), and statistical quality control (SQC).

Lead Time

The time needed to respond to a customer order.

Order Decoupling Point

The location in the supply chain where inventory is positioned to allow processes or entities to operate independently, which determines customer lead times and inventory investment.

Make-to-Stock

A production environment where firms serve customer demand directly from pre-existing finished goods inventory.

Assemble-to-Order

A production environment where a company combines a number of preassembled modules to meet a customer's specific order requirements.

Make-to-Order

A production environment where the product is built from raw materials, parts, and components only after receiving a customer order.

Engineer-to-Order

A production environment where the company works directly with the customer to design the product and then manufactures it from purchased materials, parts, and components.

Process Selection

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

Project Layout

A manufacturing layout where the product remains in a fixed location (acting like the hub of a wheel), and manufacturing equipment and materials are moved concentrically to it.

Workcenter

A process layout where similar equipment or functions are grouped together in one area, and the part being worked on travels from one workcenter to another.

Manufacturing Cell

A dedicated production area where products that share similar processing requirements (part families) are produced through a specific set of regrouped processes.

Assembly Line

A progressive production layout where work processes follow a straight-line sequence of paced workstations linked by material handling devices for high-volume items.

Continuous Process

A highly automated, predetermined production sequence where materials flow continuously without interruption, often operating as one integrated machine 24 hours a day.

Product-Process Matrix

A strategic framework (Exhibit 5.3) that plots product volume against product standardization, showing the ideal diagonal alignment of production process types.

Supporting Facility

The physical resources that must be present before a service can be offered, such as a building, kitchen, or golf course.

Facilitating Goods

The physical materials purchased, consumed, or provided to the customer during service delivery, such as golf clubs, food, beverages, and utensils.

Information (Service Package)

Operations data or guidance provided to the customer to enable efficient, customized service, including menus, signage, prices, and tee-off times.

Explicit Services

The readily observable, essential benefits of a service that appeal directly to the senses, such as fast response times, air conditioning, and correct food preparation.

Implicit Services

The psychological benefits that a customer may sense only vaguely, such as status, ambiance, friendliness, and the feeling of security or privacy.

Buffered Core

A service system characterized by low customer contact, minimal interaction, high operational efficiency, and highly standardized processes.

Permeable System

A service system characterized by moderate customer contact, some customer interaction, partial customization, and relatively high production efficiency.

Reactive System

A service system with high customer contact and involvement, high customization, and lower production efficiency.

Service-System Design Matrix

A framework mapping degree of customer/server contact against sales opportunities and production efficiency across six service delivery configurations.

Service Blueprint

A specialized flowchart of a service process that distinguishes between activities visible to the customer and backstage activities not visible to the customer.

Poka-Yoke

Procedures, mechanisms, or fixtures designed to prevent mistakes from occurring and becoming actual defects.

Three-Ts

A classification of service fail-safing (poka-yokes) focusing on the Task to be done, the Treatment accorded to the customer, and the Tangible/environmental features of the facility.

Master Production Schedule (MPS)

A time-phased plan that specifies exactly how many end items (finished goods) the company plans to build, and in which time periods.

Time Fences (MPS)

Rules established across specific planning horizons (Frozen, Slushy, and Liquid) to balance schedule stability with production flexibility over time.

Frozen Time Fence

The earliest planning horizon in an MPS during which changes to the schedule are strictly prohibited or limited to only the most minor adjustments.

Slushy Time Fence

The middle planning horizon in an MPS that permits product trade-offs and mix changes within a product group, provided required parts are available.

Liquid Time Fence

The furthest planning horizon in an MPS where nearly any variation in products is allowed, as long as capacity remains stable and long lead-time components are not breached.

Available-to-Promise (ATP)

The quantity of end items in the master production schedule that remains uncommitted to actual (firm) customer orders and is available for sale.

Bill of Materials (BOM)

A structured document or file specifying the complete product hierarchy, all raw materials, parts, components, quantities, and assembly sequences needed to make an end item.

Low-Level Coding

The restructuring convention in a BOM where identical parts appearing at multiple levels of a product structure tree are assigned to the lowest level they appear.

Modular Bill of Materials

A BOM organized around a standard buildable subassembly item that can be produced and stocked separately to support assemble-to-order manufacturing.

Super Bill of Materials

A specialized BOM structure that includes items with fractional options to facilitate aggregate planning and forecasting.

MRP System Structure

The integrated information architecture that combines customer forecasts, firm orders, engineering changes, and inventory records into the MRP computer engine to produce primary and secondary reports.

Gross Requirements

The total anticipated demand for an item during a given period, generated by parent production schedules or external customer demand before inventory is deducted.

Scheduled Receipts

Open orders already released to the shop floor or to outside suppliers that are scheduled to arrive at the start of a designated period.

Projected Available Balance

The expected on-hand inventory balance remaining at the conclusion of a planning period, after accounting for scheduled receipts and gross requirements.

Net Requirements

The actual quantity of an item that must be provided when current projected inventory plus scheduled receipts cannot satisfy gross requirements in a period.

Planned Order Receipt

The quantity of an order that is planned to be received at the beginning of a period to fulfill net requirements.

Planned Order Release

The planned order receipt quantity offset backward by the required lead time to identify exactly when the order must be initiated.

MRP Explosion

The computational sequence of calculating net requirements, applying lot-sizing rules, offsetting for lead time, and exploding gross requirements down level-by-level to child components.

Total Quality Management (TQM)

An organization-wide management approach focused on the careful design of a product or service and ensuring that systems consistently produce the design.

Quality Trilogy

Joseph Juran's quality management framework emphasizing fitness for use across three core processes: quality planning, quality control, and quality improvement.

Zero Defects

Philip Crosby's quality standard defining quality as conformance to requirements, identifying prevention as the method, and measuring nonconformance through costs.

Quality Loss Function

Genichi Taguchi's concept proposing that any deviation from the optimal target specification generates an incremental societal and financial loss.

Design Quality

The inherent value and performance characteristics of a product or service in the marketplace, reflecting a firm's strategic positioning.

Conformance Quality

The measurable degree to which a manufactured product or delivered service satisfies its established engineering design specifications.

Quality at the Source

The operational philosophy where the individual worker is directly responsible for inspecting and guaranteeing the quality of their own output.

Appraisal Costs

The costs associated with inspecting, testing, and auditing products or processes to ensure they conform to standards.

Prevention Costs

The costs invested to avert defects before they happen, including system redesign, training, equipment modification, and root-cause correction.

Internal Failure Costs

The expenses incurred when defects are detected within the facility before the product reaches the customer, including scrap, rework, and re-testing.

External Failure Costs

Costs resulting from defects discovered after delivery to the customer, including warranty repairs, complaint management, product recalls, and lost customer goodwill.

DMAIC Cycle

The foundational five-step improvement process in Six Sigma methodology: Define, Measure, Analyze, Improve, and Control.

Common Variation

The natural, inherent, and random fluctuation in process output produced by numerous small, uncontrollable variables.

Assignable Variation

Nonrandom, identifiable variation in a process's output that can be directly traced to a specific root cause and corrected.

Process Capability

The inherent ability of an in-control, stable process to produce goods or services within customer-specified upper and lower tolerance limits.

Capability Index ($C_{pk}$)

A statistical ratio measuring how effectively a process's output fits between tolerance limits, where a value of $C_{pk} ≥ 1$ indicates that the process is capable.

p-Chart

An attribute control chart based on the binomial distribution used to monitor the proportion or fraction of defective items in large samples.

c-Chart

An attribute control chart based on the Poisson distribution used to monitor the number of defects occurring on a single item ($n = 1$).

X-bar Chart

A variable control chart used to monitor the central tendency, average, or mean performance of a continuous process.

R-Chart

A variable control chart used to track the dispersion, range, and variability around the process mean over time.