Supply Chain - Exam 1

Manufacturing strategy

Emphasizes how a factory's capabilities could be used strategically to gain advantage over a competing company

Lean manufacturing

Term used to refer to the set of concepts relating to JIT and TQC
To achieve high customer service with minimum levels of inventory investment

Workcenter

A process with great flexibility to produce a variety of products, typically at lower volume levels

Workstation cycle time

The time between successive units coming off the end of an assembly line

Logistics

Management functions that support the complete cycle of material flow: from the purchase and internal control of production materials; to the planning and control of work-in-process; to the purchasing, shipping, and distribution of the finished product

Lean production

Integrated activities designed to achieve high-volume, high-quality production using minimal inventories of raw materials, work-in-process, and finished goods

Level schedule

A schedule that pulls material into final assembly at a constant rate

Agile supply chain

A supply chain that must deal with high levels of both supply and demand uncertainty

Multiple sources of supply (pooling)

In order to cope with high levels of supply uncertainty, a firm would use this strategy to reduce risk

Returning

Processes that involve the receiving of worn-out, defective, and excess products back from customers and support for customers who have problems

Operations and supply chain management (OSCM)

The design, operation, and improvement of the systems that create and deliver the firm's primary products and services

Process

one or more activities that transform inputs into outputs

Product-service bundling

When a firm builds service activities into its product offerings to create additional value for the customer

Efficiency

Doing something at the lowest possible cost

Effectiveness

Doing the right things to create the most value for your customer

Value

The attractiveness of a product relative to its price

Benchmarking

When one company studies the processes of another company to identify best practices

Just-in-time (JIT)

An integrated set of activities designed to achieve high-volume production using minimal inventories of parts that arrive exactly when they are needed

Total quality control (TQC)

Aggressively seeks to eliminate causes of production defects

Total quality management (TQM)

Managing the entire organization so that it excels on all dimensions of products and services that are important to the customer

Business process reengineering (BPR)

An approach to improving business processes that seeks to make revolutionary changes as opposed to evolutionary (small) changes

Six Sigma

A statistical term to describe the quality goal of no more than 3.4 defects out of every million units. Also refers to a quality improvement philosophy and program

Mass customization

The ability to produce a unique product exactly to a particular customer's requirements

Electronic commerce

The use of the Internet as an essential element of business activity

Sustainability

The ability to meet current resource needs without compromising the ability of future generations to meet their needs

Triple bottom line

A business strategy that includes social, economic, and environmental criteria

Business analytics

The use of current business data to solve business problems using mathematical analysis

Lead time

The time needed to respond to a customer order

Customer order decoupling point

Where inventory is positioned it the supply chain

Make-to-stock

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

Assemble-to-order

A production environment where preassembled components, subassemblies, and modules are put together in response to a specific customer order

Make-to-order

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

Engineer-to-order

Here the firm works with the customer to design the product, which is then made from purchased materials, parts, and components

Total average value of inventory

The total investment in inventory at the firm, which includes raw material, work-in-process, and finished goods

Inventory turn

An efficiency measure where the cost of goods sold is divided by the total average value of inventory

Project layout

For large or massive products produced in a specific location, labor, material, and equipment are moved to the product rather than vice versa

Manufacturing cell

Dedicated area where a group of similar products are produced

Assembly line

Area where 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 the contiguous process

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

Assembly-line balancing

The problem of assigning tasks to a series of workstations so that the required cycle time is met and idle time is minimized

Precedence relationship

The required order in which tasks must be performed in an assembly process

Strategic sourcing

The development and management of supplier relationships to acquire goods and services in a way that aids in achieving the needs of the business

Sourcing

A process suitable for procuring products that are strategically important to the firm

Specificity

refers to how commonly available the material is and whether substitutes can be used

Request for proposal (RFP)

A solicitation that asks for a detailed proposal from a vendor interested in supplying an item

Vendor managed inventory

When a customer allows the supplier to manage the inventory policy of an item or group of items

Forward buying

A term that refers to when a customer, responding to a promotion, buys far in advance of when an item will be used

Bullwhip effect

The variability in demand is magnified as we move from the customer to the producer in the supply chain

Continuous replenishment

A program for automatically supplying groups of items to a customer on a regular basis

Functional products

Staples that people buy in a wide range of retail outlets, such as grocery stores and gas stations

Innovative products

Products such as fashionable clothes and high-end personal computers that typically have a life cycle of just a few months

Stable supply process

A process where the underlying technology is stable

Evolving supply process

A process where the underlying technology changes rapidly

Outsourcing

Moving some of a firm's internal activities and decision responsibility to outside providers

Total cost of ownership (TCO)

Estimate of the cost of an item that includes all the costs related to the procurement and use of the item including disposing of the item after its useful life

Inventory turnover

A measure of supply chain efficiency

Cost of goods sold

The annual cost for a company to produce the goods or services provided to customers

Average aggregate inventory value

The average total value of all items held in inventory for the firm, valued at cost

Weeks of supply

Preferred measure of supply chain efficiency that is mathematically the inverse of inventory turn times 52

Customer value

In the context of lean production, something for which the customer is willing to pay

Waste

Anything that does not add value from the customer's perspective

Value stream

These are the value-adding and non-value-adding activities required to design, order, and provide a product from concept to launch, order to delivery, and raw materials to customers

Waste reduction

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

Value stream mapping (VSM)

A graphical way to analyze where value is or is not being added as material flows through a process

Kaizen

Japanese philosophy that focuses on continuous improvement

Preventive maintenance

Periodic inspection and repair designed to keep equipment reliable

Group technology

Philosophy in which similar parts are grouped into families, and the processes required to make the parts are arranged in a specialized workcell

Quality at the source

Philosophy of making factory workers personally responsible for the quality of their output. Workers are expected to make the part correctly the first time and to stop the process immediately if there is a problem

Freeze window

The period of time during which the schedule is fixed and no further changes are possible

Backflush

Calculating how many of each part were used in production and using these calculations to adjust actual on-hand inventory balances. This eliminates the need to actually track each part used in production

Uniform plant loading

Smoothing the production flow to dampen schedule variation

Kanban

A signaling device used to control production

Kanban pull system

An inventory or production control system that uses a signaling device to regulate flows

Green sourcing

When a firm works with suppliers to look for opportunities to save money and benefit the environment

Supply (chain) network

The pipelinelike movement of the materials and information needed to produce a good or service

Making

A type of process where the major product is produced or service provided

Delivery

A type of process that moves products to warehouses or customers

DOWNTIME: D

Defects: Efforts caused by rework, scrap, and incorrect information

DOWNTIME: O

Overproduction: Production that is more than needed or before it is needed

DOWNTIME: W

Waiting: Wasted time waiting for the next step in a process

DOWNTIME: N

Non-Utilized Talent: Underutilizing people’s talents, skills, & knowledge

DOWNTIME: T

Transportation: Unnecessary movements of products & materials

DOWNTIME: I

Inventory: Excess products and materials not being processed

DOWNTIME: M

Motion: Unnecessary movements by people (e.g. walking)

DOWNTIME: E

Extra-Processing: More work or high quality than is required by the customer