OM 300 - Exam 3 Northam University of Alabama

Chapter 10

N/a

The objective of HR strategy is

to manage personnel and design jobs so people are effectively and efficiently utilized

HR strategy ensures that people have:

a reasonable quality of work life in an atmosphere of mutual commitment and trust

What are the 3 labor planning policies?

1.Employment Stability

2.Work Schedules

3.Work Rules

Employment stability consists of what 2 strategies?

1. Follow demand exactly

2. Hold employment constant

Following demand exactly does what?

keeps direct labor costs tied to production

Within following exact demand, although direct labor costs are tied to production, what other costs are incurred?

hiring and termination, unemployment insurance, and premium wages

Holding employment constant maintains what?

What does it minimize?

HEC maintains trained workforce and minimizes hiring, layoff, and unemployment costs

One of the cons of HEC is that employees may be:

underutilized during slack periods or overworked during busy periods

Within following demand exactly, labor is treated as a _______ cost. Where as holding employment constant treats labor as a _____ cost.

variable

fixed

What are the different types of work schedules?

1. Standard work schedule - 5 eight hour days (typically 8-5)

2. Flextime - allows employees, within reason, to determine their own schedule

3. Flexible Workweek (aka compressed ww) - Fewer days, longer hours

4. Part time status - fewer, possibly irregular, hours

What are the standard work rules?

1. Specify who can do what

2. Specify when they can do it

3. Specify under what conditions they can do it

4. Often result of union contracts

5. Restricts flexibility in assignments and consequently efficiency of production

What does job design do?

specifies the tasks that constitute a job for an individual or a group

What are the 5 categories of job design?

1.Job specialization

2.Job expansion

3.Psychological components

4.Self-directed teams

5.Motivation and incentive systems

Job specialization is:

What are the factors of JS?

The division of labor into unique tasks

1.Development of dexterity

2.Less loss of time

3.Specialized tools

4.Paying exact wage for skills required

Job expansion is:

adding tasks requiring similar skill to existing job; intended to reduce boredom associated with labor specialization

Job expansion consists of:

-Job enlargement: adding more tasks to existing jobs

-Job rotation: employees move from one specialized job to another

-Job enrichment: adds planning and control to job

-Employee empowerment:

The psychological component of job design focuses on

how to design jobs that meet some minimum psychological requirements

The self-directed teams component of job design is:

a group of empowered individuals working together to reach a common goal; can be long-term or short-term

The motivation and incentives component of job design consists of:

•Bonuses - cash or stock options

•Profit-sharing - profits for distribution to employees

•Gain sharing - rewards for improvements

•Incentive systems - typically based on production rates

•Knowledge-based systems - reward for knowledge or skills

What is ergonomics?

the study of the human interface with the environment and machines; often called human factors

Issues that must be handled in the work environment

Feedback to operator, illumination, noise temperature, humidity

Flow diagrams and process charts are used to analyze

Movement of individuals or material

Activity charts are used to analyze

Activities of human and machine and crew activity

Operations charts are used to analyze

body movement

Labor standards are

the amount of time required to perform a job or part of a job

Labor standards help determine

labor requirements, costs, and fair work

Labor Standards may be set in what four ways?

1. Historical Experience

2. Time Studies

3. Predetermined time Standards

4. Work sampling

Historical experience is:

how the task was performed the last time, typically pulled from production records or time cards. Easy and inexpensive, however, data is not objective and can be inaccurate. Therefore, it is not recommended

Time Studies are:

the timing of a sample of a worker's performance and using it to set a standard; requires trained and experienced workers

Performance time standards is the practice of

Dividing manual work into small basic elements that have established times

Work sampling is good for:

Estimating the percent of time a worker spends on various tasks; requires random observations to record worker activity

Work sampling determines:

It can also be used for what?

How employees allocate their time

To set staffing levels, reassign duties, estimate costs, and set delay allowances

Chapter 11

N/a

What is the objective of supply chain management?

to structure the supply chain to maximize its competitive advantage and benefits to the ultimate consumer

Supply chain management could be defined as:

The coordination of all supply chain activities, starting with raw materials and ending with a satisfied customer

Supply chain management includes:

suppliers, manufacturers and/or service providers, distributors, wholesalers, retailers, and final customers

Today, competition is not truly between companies. It is between:

supply chains

The supply chains strategic importance stems from the fact that:

a large portion of sales dollars are spent on purchases, so supply chains are a good place to look for savings

Relationships with suppliers are increasingly:

Why is this?

integrated and long term. Integrated focus places emphasis on managing supplier relationships

Because an increasing percentage of an organization's costs are determined by purchasing

Supply chains improve _____, speeds ______, and reduces ______

innovation, speed design, and costs

Activities of supply chain managers include:

accounting, finance, marketing, and operations disciplines

What decisions affect supply chain management?

Primary supplier selection criteria, supply chain inventory, distribution network, and product design characteristics

6 Sourcing Strategies:

1. Many suppliers

2. Few suppliers

3. Vertical integration

4. Joint ventures

5. Keiretsu networks

6. Virtual companies

Many suppliers, sourcing strategy 1, is commonly used for _____ _____, purchasing is typically based on _______, and suppliers ___________

commonly used for commodity products

purchasing is typically based on price

suppliers compete with one another and are responsible for technology, expertise, forecasting, cost, quality, and delivery

Few suppliers, sourcing strategy 2, creates ________ through economies of scale and learning curve improvements, buyer forms ______ _______ relationships w/ fewer suppliers, suppliers are more willing to participate in _______ _______, cost of ______ _______ is ______, and _______ and other _______ may be at risk

creates value through economies of scale and learning curve improvements

buyer forms longer term relationships with fewer suppliers

suppliers are more willing to participate in JIT Programs

cost of changing suppliers is huge

trade secrets and other alliances may be at risk

Vertical Integration, sourcing strategy 3, is integration either _______, towards the customer, or _______ towards the supplier(s), develops the ability to produce goods or services ______ _____, can improve ____________, and is ______ in industries with _______ ______ _______.

integration either forward towards the customer

backwards towards the supplier(s)

develops the ability to produce goods or services previously purchased

can improve cost, quality, delivery, and inventory but requires capital, managerial skills, and demand

is risky in industries with rapid technological change

Joint Ventures, sourcing strategy number 4, is formal collaboration that _____, ______, and ______.

Enhances skills, secures supply, and reduces costs

Joint ventures runs the risk of:

diluting the brand of conceding competitive advantage

Keiretsu Networks, Sourcing strategy number 5, is a middle ground between _______ and _______, suppler becomes part of company _______, provides _______ _______ for suppliers through ________ or ________, expects _______ ________, ______ ______, and _______, may extend to several levels of ______ ______, and are similar to Chaebols but more are family-friendly.

is a middle ground between few suppliers and vertical integration

supplier becomes part of company coalition

provides financial support for suppliers through ownership or loans

expects long-term relationships, technical expertise, and stable deliveries

may extend to several levels of supply chain

Virtual Companies, sourcing strategy number 6, rely on a variety of supplier relationships to provide ____ _____ _____, allow creation of ______ ______ to meet ______ ______ ______, may have _____ or _______ ________, and are exceptionally _____, ____ _______ ________, ________, and _______.

rely on a variety of supplier relationships to provide services on demand

allow creation of unique enterprises to meet changing market demands

may have short or long-term relationships

are exceptionally lean, low capital investment, flexibility, and speed

More reliance on supply chains means _____ _____ and fewer suppliers increases ________

More risk

Dependence

Supply chain reliance risks are compounded by:

globalization and logistical complexity

Aside from increased dependence and compounded risk, what other risks does supply chain management present?

Vendor reliability and quality risk and political and currency risks

Risks and Mitigation Tactics to combat supply chain risks:

•Research and assess possible risks

•Innovative planning

•Reduce potential disruptions

•Prepare responses for negative events

•Flexible, secure supply chains

•Diversified supplier base

10 opportunities in managing an integrated supply chain

put on cheat sheet

Supplier Selection

Put on cheat sheet

What are the various types of shipping systems?

1. Trucking

2. Railroads

3. Airfreight

4. Waterways

5. Pipelines

6. Multi-modal/inter-modal

Aspects of trucking:

-Moves the vast majority of manufactured goods

-Chief advantage is flexibility

Aspects of Railroads

-Capable of carrying large loads

-Little flexibility though containers and piggybacking have helped with this

Aspects of Air-freight

-Fast and flexible for light loads

-May be expensive

Aspects of waterways

-Typically used for bulky, low-value cargo

-Used when shipping cost is more important than speed

Aspects of pipelines

-Used for transporting oil, gas, and other chemical products

Aspects of multi-modal shipping

-Combines shipping methods

-Common, especially in international shipments

-Aided by standardized containers

Percent Invested in Inventory shows:

the amount of money invested in inventory, usually expressed as a percentage of assets

A _____ Percent Invested in Inventory is ______ because why?

A lower PII is better because that frees up cash for other purchases

Inventory Turnover shows what?

How many times the stock of inventory is sold out annually

A ______ inventory turnover is ________. Why is this?

A higher inventory turnover is better because that indicates that inventory is selling at a higher rate

Weeks of Supply shows what?

How many week you have left of inventory.

Weeks of Supply must match up with:

Demand of global markets and global sources (higher or lower does not necessarily indicate good or bad)

Chapter 11s

N/a

What is the Bullwhip Effect?

The tendency for larger order size fluctuations as orders are relayed through the supply chain

Look at table S11.1

What does the bullwhip effect create?

unstable production schedules, expensive capacity change costs, underutilization, longer lead times, obsolescence

How can the bullwhip effect be minimized?

Supplier coordination and planning

When does the bullwhip effects occur?

When orders are relayed through supply chain increasing at each step

What are 4 causes of the bullwhip effect and their remedies?

1. Demand forecast errors - Share demand info throughout supply chain

2. Order batching - Channel coordination

3. Price fluctuations - Price stabilization

4. Shortage gaming - Allocate orders based on past demand

What else helps control the bullwhip effect?

RFID

Chapter 12

N/a

What is the objective of inventory?

to strike a balance between inventory investment and customer service

What are the 4 functions of inventory?

1. To provide a selection of goods for anticipated demand and to separate the firm from fluctuations in demand

2. To decouple or separate various parts of the production process

3. To take advantage of quantity discounts

4. To hedge against inflation

What are the 4 types of inventory?

1. Raw Material

2. Work-in-process

3. Maintenance/Repair/Operating

4. Finished Goods

What is raw material?

material purchased but not yet processed

What is work-in-process?

Material undergone some change but not completed; a function of cycle time for product

What is maintenance/repair/operating?

A necessity to keep machinery and processes productive

How is inventory managed?

1. Inventory items can be classified using ABC analysis

2. Accurate inventory records can be maintained

What does ABC analysis do?

Divides inventory into 3 classed based on annual dollar volume:

Class A: highest ADV

Class B: Medium ADV

Class C: Lowest ADV

What is ABC used for?

to establish policies that focus on the few critical parts and not the many trivial ones

What is other criteria that may be used in ABC Analysis?

-engineering changes

-Delivery problems

-Quality problems

-High unit cost

-High shortage or holding cost

Policies employed under ABC Analysis may include:

1. More emphasis on supplier development for A items

2. Tighter physical inventory control for A items

3. More care in forecasting A items

Classification is _____ and record accuracy is _______

ABC Analysis

Cycle Counting

Accurate records are a:

critical ingredient in production and inventory systems

What two methods are common for checking record accuracy?

1. Periodic Systems

2. Perpetual Inventory

Periodic Systems require:

regular checks of inventory; "Two bin system"

Perpetual inventory tracks:

receipts and subtractions on a continuing basis; may be semi-automated

3 factors of record accuracy:

1. Incoming and outgoing records must be accurate

2. Stockrooms should be secure

3. Necessary to make precise decision about ordering, scheduling, and shipping

In cycle counting, items are:

Cycle counting in often used with:

counted and records are updated on a periodic basis

ABC Analysis

Advantages of Cycle Counting:

1. Eliminates shutdowns and interruptions

2. Eliminates annual inventory adjustment

3. Trained personnel audit inventory accuracy

4. Allows causes of errors to be identified and corrected

5. Maintains accurate inventory records

What are the different inventory costs?

1. Holding Cost

2. Ordering Cost

3. Setup Cost

What is holding cost?

costs of holding or carrying inventory

What is Ordering cost?

Costs of placing order and receiving goods