Intro to Supply Chain Rutgers Chapter 8

Operations Management refers to managing the process to _________________ in alignment with the company's business strategy as efficiently and effectively as possible, while also controlling costs.

convert resources into goods and services

Manufacturing

To process or make raw materials or components into a finished product, especially by means of a large scale industrial operation, i.e., mass production.

To process or make ___________ especially by means of a large-scale industrial operation, i.e., mass production.

raw materials or components into a finished product

Companies must develop a manufacturing strategy that suits the _________that they produce, their _________, and their __________

type of products, customer's expectations, strengths

Make-to-Stock

means to manufacture products for stocks based on demand forecasts

Make-to-Stock means to ___________based on demand forecasts

manufacture products for stocks

Make-to-Order

is a manufacturing strategy in which manufacturing starts only after a customer's order is received

Make-to-Order is a manufacturing strategy in which manufacturing starts only ______________

after a customer's order is received

The MTO strategy ________the problems of ______ that is common with the Make-to-Stock strategy

relieves, excessive inventory,

Assemble-to-Order (ATO) is a manufacturing strategy where products ordered by customers are produced quickly and are ______________to a certain extent

customizable

ATO is a ________, attempting to combine the benefits of both Make-to-Stock and Make-to-Order strategies

hybrid strategy

Engineer-to-Order (ETO) is a manufacturing strategy in which the product is _________, __________, and ____to the customer's specifications after receipt of the order

designed, engineered, built

In the ETO world, the __________can be very high

cost of poor quality

Two Manufacturing Processes

Intermittent Processes, Repetitive Processes

Intermittent Processes

used to produce a large variety of products with different processing requirements in lower volumes

Repetitive Processes

used to produce one, or a few, standardized products in high volumes.

Total Cost Manufacturing

is the complete cost of producing and delivering products to your customers

As volume goes up, Manufacturing and Procurement costs go ____

Up

As volume goes up, Inventory and Warehousing costs go _____

up

As volume goes up, Transportation costs go ______, but level off at high volumes as the shipping container gets filled to capacity and another container must be used

down

LEAN

is an operating philosophy of waste reduction and value enhancement. It was originally created as the Toyota Production System (TPS) by key Toyota executives

Six Sigma

is a disciplined, statistical-based, data-driven methodology for identifying and removing the deficiencies (errors) and variability in manufacturing and in business processes

Quick Response

the rapid replenishment of a customer's stock by a supplier with direct access to data from the customer's point of sale

Efficient Consumer Response

a strategy to increase the level of services to consumers through close cooperation among retailers, wholesalers, and manufacturers

Just In Time

an inventory strategy to decrease waste by receiving materials only when and as needed in the production process, thereby reducing inventory costs

Keiretsu Relationships

involves companies both upstream and downstream of a manufacturing process, remaining independent but working closely together for mutual benefit

LEAN is NOT a tool box of methods, ideas, or methodologies, it is _____ / ______

culture, value

Value is the _______ of a product as judged by the customer, and reflected in its selling price and market demand

inherent worth

Waste encompasses ______________________________

defects, overproduction, waiting, Non-utilized talent, transportation, inventory, motion, extra-processing

__________ waste is removed, processes are often scattered, which can negatively affect your customers

Before

________ waste is removed, processes are more streamlined, resulting in more satisfied customers. You'll also save your organization time and money

After

Lean Layouts: Move people and materials ______, and as soon as possible

when and where needed

Are very _______ with operators at one processing center able to monitor work at another

visual

Sort

Keep only necessary items in the workplace, eliminate the rest

Straighten

Organize and arrange items to promote an efficient workflow

Shine

Clean the work area so it is neat and tidy

Standardize

Schedule regular cleaning and maintenance

Sustain

Stick to the rules, Maintain and review the standards

Some inventory may be necessary but excess inventory is a _______

Waste

Reducing inventory levels can also __________

uncover production problems

Setup Time

is the time taken to prepare and format the manufacturing equipment and systems for production

Changeover Time

is the time taken to adapt and modify the manufacturing equipment and systems to produce a different product or a new batch of the same product

Both setup and changeover are ______and should be minimized as much as possible

non-value added operations

Large batches can _______as production in large batches creates an uneven workload

exacerbate the bullwhip effect

Production in small batches creates __________ as production can be synchronized with customer demand, facilitating a pull system.

a smooth workload

Small batch scheduling can be facilitated through the use of __________

Kanbans

Matching the production plan to follow demand exactly can contribute to inefficiency and waste, including __________ or ___________

excess inventory, shortages of inventory

Uniform Plant Loading

Planning up to capacity in earlier time periods to meet demand in later time periods

Firms develop lean supply chain relationships with ______ and _______

key customers, key suppliers

What is Six Sigma

improving the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variablilty in manufacturing and business processes

Six Sigma is a structured and data-driven approach to drive a near-perfect quality goal

Zero defects

The concept of Six Sigma was originated by_____

Motorola

Three Foundational Aspects

Quality is defined by the customer, Use of technical tools, People involment

Six Sigma has two key methodologies

DMADV, DMAIC

,DMADV

Define, Measure, Analyze, Design and Verify

Strategy for designing products & processes

DMAIC

Define, Measure, Analyze, Improve, Control

Strategy for improving products & processes

Total Quality Management

a management philosophy based on the principle that every employee must be committed to maintaining high standards of work in every aspect of a company's operations.

W.Edwards Deming

is widely considered the father of TQM. He is the creator of the Plan-Do-Check-Act model

Stressed management's responsibility for quality. He developed 14 points to guide companies in quality improvement

Philip Crosby

He introduced the concepts of zero defects, and the focus on prevention not inspection

Joseph Juran

defined quality as "fitness for use". He developed the concept of the cost of quality

Kaoro Ishikawa

developed one the first tools in the quality management process, the cause and effect diagram, which is also called the "Ishikawa" or "fishbone" diagram.

Voice of the customer

Term used in business to describe the in-depth process of capturing internal and external Customers's expectations preferences, likes, an dislikes

Cost of Quality

An approach that supports a company's efforts to determine the level of resources necessary to prevent poor quality, and to evaluate the quality of the company's products and services

Appraisal Costs

associated with the evaluation of purchased materials, processes, products, and services to ensure that they confirm to specifications

Prevention Cost

are related to the design, implementation, and maintenance of the quality management system. They are planned, and experienced before actual products or materials are acquired or produced

Internal Failure Cost

occur when the product or service does not meet the designed quality standards, and are identified before the product or service is delivered to the customer

External Failure Costs

occur when the product or service does not meet the designed quality standards, but is not detected until after the product or service is delivered to the customer

Seven tools of quality control

Check Sheets

Histogram

Pareto Analysis

Cause and Effects Diagrams

Flow Diagram

Control Charts

Scatter Diagram

Check Sheets

Used to determine frequencies for specific problems

Histograms

a graphical display where the data is grouped into ranges

Pareto Analysis

for presenting data in an organized fashion, indicating process problems from most to least severe

Cause and Effects Diagrams

Used to aid in brainstorming and isolating the cause of a problem

Flow Diagram

Sequence of movements or actions of people or things involved in a complex system or activity

Control Charts

graph to study how a process changes overtime

Scatter Diagram

the value of two variables plotted along two axes to reveal any correlation present

Acceptance Sampling

When a shipment is received from a supplier, a selection of a set of items from a product lot is taken and measured against the quality acceptance standard

The 5 Whys is a questioning technique for identifying the ______

root cause of a problem

The 5 Hows is a questioning technique for drilling down into the details of a ____ to a known problem

solution