Operations Final

Efficiency

Doing things at lowest cost

Effectiveness

Doing things in order to meet objective requirements

Functional Silo Approach

Responsibilities of purchasing, manufacturing, and distribution. Problems rise when all areas work independently

ERP (enterprise resource planning) Systems

centralizes a company's core business processes—like finance, HR, manufacturing, and supply chain—into a single platform, using a shared database to provide a single source of truth for real-time data, automate tasks, improve efficiency, and enable better strategic decisions across departments

Elements of Industry 4.0

-Smart manufacturing

-tech integration

-Cyber physical systems,

-human/machine collaboration,

-sustainability and Efficiency,

-security and data integrity.

Order Qualifier

minimum requirement a product or service must meet to be considered by customers.

Productivity

Ratio of Outputs to Inputs

Partial Measure

Output/Labor

Output/Capital

Output/Materials

Mutlifactor Measure

Output/Labor+Capital+Materials

Total Measure

Output/Input

Make-to-stock

Products are produced in advanced and served from finished good inventory

Assemble-to-order

Components are pre made put together in response to a specific customer order

Make-to-order

Production beings after customer order and built from raw material inventory

Engineer-to-order

Production begins after customer order and materials are purchased based on unique specifications

Economies of scale

As volume increases cost per unit decreases

Diseconomy of scale

As volume increases cost per unit increases

Capacity Cushion

% of capacity kept as a buffer to handle unexpected demand

Capacity Utilization

% of capacity actually being used

Goal of the Firm

to make money

Bottleneck

Resource that limits capacity of max output

Non-bottleneck

Resource whose capacity is greater than demand

Inventory Position

on-hand inventory + on-order inventory - backorders.

Optimal order quantity (EOQ)

Order size that minimizes total inventory costs

Reorder point (R)

Inventory level which new order should be placed

Safety stock

Extra inventory held to protect against demand uncertainty

ABC Classification

Divides inventory into dollar volume categories

Chase Strategy

"Change production to chase demand."

Workforce and production go up and down to match demand each period

Uses hiring and firing

Little or no inventory

Level Strategy

"Keep production constant."

Workforce and production stay the same every period

Uses inventory or backorders to handle demand changes

No hiring/firing

Mixed Strategy

"Use a combination of options."

Combines steady production with:

Overtime

Subcontracting

Limited hiring/firing

Mixed Strategy (Pros & Cons)

Pros: Balances cost and flexibility

Cons: More complex planning

Statistical Process Control (SPC)

Goal: Precision and accuracy with low variability

SPC

A methodology for monitoring a process to identify special causes of variation that signal the need to take corrective action when its appropriate.

Malcom Baldrige National Quality Award

Established by US Dept. of commerce to award companies that excel in quality

Conformance Quality

How well the product or service matches its design specifications.

Quality at the source

Doing quality checks where the work is performed, not at the end.

Dimensions of quality

The different ways customers evaluate the quality of a product or service.

Design Quality

How well a product or service is designed to meet customer needs and expectations.

Chase Strategy (Pros & Cons)

Pros: Low inventory cost

Cons: High hiring/firing costs, unstable workforce

Ethical Cost (quality cost)

Costs that arise when a company harms customers, employees, or society by acting unethically.

Internal Failure Cost (Quality cost)

Costs caused by defects found before the product reaches the customer.

External Failure Costs (Quality cost)

Costs caused by defects found after the product reaches the customer.

Level Strategy (Pros & Cons)

Pros: Stable workforce

Cons: Inventory or overtime costs

Appraisal Cost (quality costt)

Money spent to find defects before the product reaches the customer.

Order Winner

factor that differentiates a product or service and wins the customer's purchase over competitors

Value

Highest quality relative to cost

Attribute Data

Qualitative, generally counted (Proportion(P) Chart)

EX: categories, number of mistakes, pass/fail, yes/no decisions

Variable Data

Quantitative, generally measured (X and R chart).

EX: Time (seconds), Pressure (PSI), Money (Dollars)

Prevention Costs (quality cost)

goal to avoid having defects in the first place

ex: quality training for employees

Defects per million opportunities (DPMO)

measures how many defects occur for every one million opportunities for defects

DMAIC

A six-sigma process:

define- Clearly state the problem and what the customer cares about.

measure- Collect data to understand current performance.

analyze- Find the root causes of the problem.

improve- Fix the root causes and improve the process.

control- Make sure improvements last.

Forward Buying

Purchasing larger quantities in advance due to promotion or discount

Bullwhip Effect

Small changes in customer demand cause large fluctuations in orders and inventory as you move up the supply change

Functional Products

Staples that people buy in a wide variety of areas. Stable demand, long life cycle, and low profit margins.

Ex: groceries

Innovative products

Products with a small life cycle and unpredictable demand and high profit margins.

Ex: Designer clothes, cell phones

Efficient supply chains

Supply chains designed to minimize cost. Used for products with predictable demand

Responsive supply chain

Supply chain designed to respond quickly to unpredictable demand

Outsourcing

Moving some of a firms internal activities to outside providers

Vertical Integration

Company owning multiple stages of its supply chain

ISO 14000

a family of generic standards for environmental management established by the International Organization for Standardization

SIPOC

high-level process map that shows who provides inputs, what the process does, and who receives the output

Critical Path Method (CPM)

Algorithm for scheduling activities with in a project for fastest most efficient execution

More than 15% of $966B in holiday purchases will be returned. This is an example of?

A Internal failure

B External failure

C Appraisal cost

D Prevention cost

B

Jeni's addressed their quality problem by removing ALL inventory. Discussed in lecture this is an example of?

A Internal failure

B External failure

C Appraisal cost

D Prevention cost

D

Cost of quality is the least?

A During inspection

B During recalls

C Before production

D After production

C

What is DMAIC?

A Fact based problem solving methodology

B Theory of constraints

C Strategic capacity management

D Global certification

A

Which of the following is NOT correct about ISO Certification?

A A defective product means the producer is not ISO certified

B ISO standards provide global guidelines for quality

C Firms pick ISO 9000 suppliers to reduce liabilities

D ISO certifies process not products

A

Which of the following is NOT lean thinking?

A Striving for excellence through continuous improvement

B Respecting people who do the work

C Increasing productivity by staff reduction

D Viewing value from customer point of view

C

Efforts caused by rework scrap and incorrect information is what type of waste?

A Defects

B Waiting

C Motion

D Inventory

A

Unnecessary movement by people such as walking is an example of what type of waste?

A Defects

B Waiting

C Motion

D Inventory

C

Shadow boards is a component of?

A A 5S program

B A VSM map

C A constraint management system

D Mixed model assembly

A

Which statement about a Cause and Effect Diagram is FALSE?

A Captures tribal knowledge

B Focuses on symptoms rather than causes

C Effective root cause analysis tool

D Documents structured brainstorming

B

SIPOC is a high level process mapping tool. What does the I represent?

A Instructions

B Incentives

C Inputs

D Information

C

What does the Process element in SIPOC represent?

A Steps converting inputs to outputs

B Customers

C Suppliers

D Tools

A

Assume 20 cars in line and two lanes. If service time is 2 minutes what is correct?

A Processing time 2 minutes and cycle time 1 minute

B Processing time 2 minutes and cycle time depends on line

C Processing time 1 minute and cycle time 2 minutes

D Processing time 10 minutes and cycle time 5 minutes

A

The takt time for the Taktful Turkey example is?

A 15 seconds

B 30 seconds

C 45 seconds

D Cannot be determined

B

Taktful Turkey why are customers unhappy in current state?

A Bottleneck in serve utilization over 100 percent

B Bottleneck in assemble utilization under 100 percent

C Bottleneck in warm longest time

D Bottleneck in serve processing time higher than takt time

D

What does Charles Duhigg mean by psychological safety?

A Conversational turn taking and active listening

B Some members need it more

C Diverse team

D Equal number of women and men

A

The critical path is?

A Bottleneck

B Shortest path

C Slowest path

D Longest path

D

The amount of time an activity can be delayed without impacting completion is?

A Latest start time

B Activity slack

C Earliest start time

D Indirect cost

B

In minimum cost scheduling activities are shortened on the?

A Shortest path

B Fastest path

C Critical path

D Slowest path

C

In minimum cost scheduling activities are shortened until?

A Cost less than savings

B Cost greater than savings

C No more critical paths

D Penalty cost greater than project cost

B

Every process has?

A Normal distribution

B Special cause variation

C Random variation

D Assignable variation

C

Accuracy can be described with?

A Range

B Mean

C Standard deviation

D Variance

B

Precision can be described with?

A Range

B Mean

C Median

D Average

A

Control limits represent?

A Specification limits

B Voice of customer

C Attribute data

D Three standard deviations above and below mean

D

An example of attribute data?

A Patient wait time

B Dollars spent

C Product weight

D Number of errors per purchasing order

D

Primary role of Sales and Operations Planning is?

A Control daily work

B Balance supply and demand

C Create salary plan

D Manage raw materials

B

Which is NOT an input to Sales and Operations Planning?

A Competitor behavior

B Employee benefit details

C Current workforce

D Raw material availability

B

Primary idea of Level Strategy is?

A Keep production steady and use inventory

B Change workforce constantly

C Vary production monthly

D Only temporary workers

A

Best idea for a Mixed Strategy is?

A Use inventory for all changes

B Keep constant production

C Hire and fire

D Use overtime with existing employees

D

Which costs are significantly incurred in a Chase strategy?

A Backorder costs

B Inventory handling costs

C Inventory ordering costs

D Hiring and firing costs

D

Industry 4.0 stands for?

A Industry to the fourth power

B Fourth industrial revolution

C Four elements of the industrial revolution

D Fourth technology revolution

B

The classic metric for manufacturing is?

A Highest cost

B Lowest cost

C Best price

D Number of bids

B

Purpose of an ERP system is to?

A Integrate planning and execution across functions

B Create separate databases

C Delay processing

D Add redundancy

A

Which is NOT an element of Industry 4.0?

A Smart manufacturing

B Security and data integrity

C Human machine collaboration

D Manual processing

D

Slack Time

Late start - Early start

Lean Six Sigma: 8 Wastes

-Talent

-Inventory

-Motion

-Waiting

-transportation

-Defects

-Over production

-Overprocessing

5S of lean systems

Sort- separate what you need from what you dont

Straighten- theres a place for everything

Shine- clean, inspect, care

Standardize- Apply 5s everywhere in process

Sustain- Make it a habit and do it consistently

Waste reduction

the optimization of value-adding activities and elimination of non-value-adding activities that are part of the value stream

Checklist

standardized lists used to ensure tasks are done correctly and consistently every time.