SCM 301 EXAM 3 Self made

Bill of Materials (BOM)

A list of all parts and quantities needed to manufacture a product, organized by BOM levels and parent/component relationships.

What do the different BOM levels represent?

Level 0 is the finished product. Level 1 contains its direct components. Level 2 contains components needed to make Level 1 items.

Can an item be both a parent and a component in a BOM?

Yes. An item can be a component of a higher-level assembly while also being the parent of lower-level parts.

Material Requirements Planning (MRP) is a dependent demand system

for planning components below the product or end item level.

In MRP, the due date for a component will

equal the start date of the parent item.

A valid Master Production Schedule (MPS) needs to include

a part number, quantity and due date.

The planning horizon for MRP needs to be at least as long as the product lead time.

Example - In  cases where the product lead time is greater than 52 weeks, the MRP planning horizon would have to be extended to at least equal the total lead time for that part number.

The level by level netting of requirements is referred to as

an MRP explosion.

When configured properly, MRP allows organizations to

increase customer service levels while also decreasing inventory levels by time phasing requirements.

Pegging is a feature in MRP that

allows a Planner to trace the requirement for a component item up to the end item product it is needed for.

Prerequisites for a successful MRP system include

Bill of Material file, Inventory Record file, Master Production Schedule and a computer to manipulate data.

Shop Floor Control executes

the Master Production Schedule on the factory floor.

Dispatching

how jobs are sequenced in the factory

Dispatching Techniques

- Earliest Due Date

- Shortest Processing Time

- Longest Processing Time

- Slack per Remaining Operation

- First Come, First Serve

- Critical Ratio

- Available Capacity at next Operation

- Random

Key Shop Floor Control metrics:

Schedule Adherence

Work Order Aging

Closed Work Orders with Open Requirements

The basic law of Input / Output control states that

Inputs must be less than or equal to outputs, or backlogs will increase.

The Routings file shows the steps of

how a product is built and is akin to a roadmap for manufactured items.

Key work order metrics include

schedule adherence, work order aging and closed work orders with open requirements.

In Lean operations, waste is identified as

anything that "consumes resources but does not add value".

8 forms of waste identifed by Ohno.

• Overproduction 

• Waiting 

• Unnecessary transportation 

• Inappropriate process 

• Unnecessary inventory 

• Unnecessary/excess motion 

• Defects 

• Underutilization of employees 

The Toyota Production System (TPS)

pioneered lean thinking and may be the most copied and imitated business process in history.

Kanban cards are

analogous to work orders used in more traditional manufacturing operations and are used to "pull" material through a factory.

High Inventory levels

hide some operational problems.

Logistics accounts for

8 percent of GDP, but without it the other 92 percent can not happen.

Activities that make up Logistics

Distribution centers

Inventory management

Logistics information systems

Transportation

Warehousing

Material handling

Packaging

Hub-and-spoke system

Combines the benefits of consolidation and cross- docking warehouses, but they differ from them in two important ways. First, the warehouses, or “hubs,” in these systems are purely sorting or transfer facilities. Hubs are designed to take advantage of transportation economies of scale; they do not hold inventory. Second, hubs are typically located at convenient, high- traffic locations, such as major airports, water ports, or the intersections of interstate highways.

Trucking accounts for

the largest percent of freight movement in the USA, and Less Than Truckload (LTL) shipments are most commonly used.

Warehousing can be used to:

• Reduce transportation costs

• Improve operational flexibility

• Shorten customer lead times

• Lower inventory-related costs

Consolidation warehousing (Reducing Transportation Costs)

A form of warehousing that pulls together shipments from a number of sources in the same geographic area and combines them into larger and more economical loads.

Cross-docking (Reducing Transportation Costs)

A form of warehousing in which large incoming shipments are received and then broken down into smaller outgoing shipments to demand points in a geographic area.

Break-bulk warehousing (Reducing Transportation Costs)

Incoming sources are from a single source or manufacturer

Postponement warehousing (Improving Operational Flexibility)

A form of warehousing that combines classic warehouse operations with light manufacturing and packaging duties to allow firms to put off final assembly or packaging of goods until the last possible moment

Assortment warehouses (Shortening Customer Lead Times)

A form of warehousing in which a wide array of goods is held close to the source of demand in order to ensure short customer lead times.

Spot stock warehouses (Shortening Customer Lead Times)

A form of warehousing that attempts to position seasonal goods close to the marketplace.

Third Party Logistics (3PL) providers are widely used due to

the specialized nature and high capital costs associated with Logistics.

What is the difference between long-haul and short-line railroads?

Long-haul (Class I) railroads transport freight over long distances. Short-line railroads handle local transportation and first-mile/last-mile connections.

Why are short-line railroads important to the supply chain?

They specialize in local transport and first and last mile delivery of freight cars

They connect local businesses, farmers, and manufacturers to major long-haul rail networks, allowing freight to move across the country.

What are the benefits of short-line railroads?

They help keep rural businesses and jobs local, reduce shipping costs, decrease highway congestion, and lower greenhouse gas emissions

Highway 

• Dominates the U.S. logistics infrastructure due to:

• Geographic extension of supply chains

• Greater emphasis on delivery speed and flexibility

Continues to grow because it is one of the most flexible modes of transportation

• Very few goods are moved without highway transportation at some point in transit

Has become more cost effective over time due to:

• Better scheduling and use of vehicle capacity

• More efficient and reliable vehicles

• Increased cost competition due to deregulation

Involves different types of shipments

• Direct truck – Shipment made with no stops

• Less than truckload (LTL) – Smaller shipment combined with other loads

• Automated Guided Vehicles (AGVs) are trending up.

Water

• Ideal for materials with high weight-to-value ratio, especially if delivery speed is not critical.

• Examples of these materials include farm produce, timber, and petroleum-based products.

• Has one of the lowest ton-mile rates of any mode, which helps to keep costs down.

Air

• Ideal for customers with a low weight-to-value ratio, especially if delivery speed or delivery reliability is critical.

• Is the least-used mode in terms of tons and ton-miles.

Rail

Has characteristics similar to water transportation but is somewhat more flexible.

To accommodate growth, rail carriers have doubled the number of lines along busy corridors, changed the physical configuration of the trains, and utilized multimodal solutions.

Railroads are generally either Class One (long haul) or Shortline operators.

Pipeline

It uses a network of pipes to move liquids and gases over long distances.

Multimodal solution

A transportation solution that seeks to exploit the strengths of multiple transportation modes through physical, information, and monetary flows that are as seamless as possible.

Ex: Roadrailers

Roadrailers

A specialized rail car the size of a standard truck trailer that can be quickly switched from rail to ground transportation without changing the wheels.

What is the last mile of delivery?

The final stage of transportation from a local distribution hub to the customer's home or business.

Why is the last mile of delivery so expensive and complicated?

Numerous individual stops, high labor and fuel costs, traffic, failed deliveries, and customer expectations for fast shipping.

Enterprise Resource Planning (ERP) Systems

Large, integrated, computer-based business transaction processing and reporting systems that include all functional areas.

How do ERP systems improve business operations?

They integrate information across departments, improve coordination, reduce duplicate work, and support better decision-making.

Software as a Service (SaaS) and Cloud have enabled smaller companies to

access improved tool sets.

Customer Relationship Management (CRM)

Planning and control activities and information systems that link a firm with its downstream customers.

Examples: Market analysis, sell process, order management, call/service center management.

Supplier Relationship Management (SRM)

Planning and control activities and information systems that link a firm with is upstream suppliers.

Examples: Design collaboration, sourcing decisions, negotiations, buy process, supply collaboration