Operations Exam 3

Layout strategy

Arranging space, equipment, and people to improve utilization, flow, safety, customer interaction, and flexibility.

Office layout

Positions workers, equipment, and offices to facilitate collaboration and information flow.

Retail layout

Allocates display space based on customer behavior to maximize profitability per square foot or shelf space.

Warehouse layout

Balances low-cost storage with low-cost material handling.

Fixed-position layout

Layout for large, bulky projects such as ships or buildings where the product stays in place.

Process-oriented layout (job shop)

Groups similar machines or functions together; suitable for low-volume, high-variety work.

Work-cell layout

Groups workers and equipment to produce one product or a family of related products.

Product-oriented layout

Arranges operations around standardized, high-volume, low-variety production.

Material handling costs

Costs of incoming transportation, storage, finding and moving materials, outgoing transportation, and related resources.

Automated storage and retrieval system (ASRS)

Automated equipment that stores and retrieves warehouse items to improve productivity.

Cross-docking

Moving incoming materials directly from receiving to shipping without warehouse storage.

Process-oriented layout advantage

Flexibility to handle many different products or services.

Process-oriented layout disadvantage

Complex scheduling and potentially high setup, labor, and material handling costs.

Muther's grid

Closeness-rating tool used to prioritize which departments should be near one another when quantitative flow data are limited.

Muther's grid ratings

A = absolutely necessary; E = especially important; I = important; O = ordinary OK; U = unimportant; X = not desirable.

Focused facility

Facility organized around a family of similar products with reasonably stable demand.

Takt time

Available production time divided by customer demand; the pace needed to meet demand.

Group technology

Identifying products with similar characteristics to organize production into work cells.

Work-cell requirements

Related product family, sufficient volume, cross-trained workers, and equipment that can be rearranged.

Repetitive/product-oriented layout requirements

High volume, stable demand, standardized products, and adequate uniform supplies.

Fabrication line

Machine-paced sequence of equipment that makes components.

Assembly line

Series of workstations that put fabricated parts together; can be balanced by shifting tasks.

Assembly-line balancing

Assigning tasks among workstations to minimize idle-time imbalance while meeting output.

Cycle time

Available production time divided by required output.

Theoretical minimum workstations

Total task time divided by cycle time; round up to a whole workstation.

Precedence relationships

Restrictions specifying which assembly tasks must be completed before others.

Human resource strategy

Managing labor and designing jobs so people are used effectively and efficiently while maintaining reasonable quality of work life.

Follow demand exactly

Employment policy that changes workforce levels with demand and treats labor as a variable cost.

Hold employment constant

Employment policy that maintains a stable workforce and treats labor as a fixed cost.

Flextime

Work schedule allowing employees, within limits, to determine their own hours.

Compressed workweek

Work arrangement with fewer but longer workdays.

Part-time status

Work arrangement with fewer, potentially irregular hours.

Job classification and work rules

Rules specifying who may perform tasks, when, and under what conditions; can restrict flexibility.

Job design

Specifying tasks that constitute a job for a person or group.

Labor specialization

Dividing work into unique tasks to improve dexterity and reduce time lost switching tasks.

Job expansion

Adding variety or responsibility to work to reduce boredom from specialization.

Job enlargement

Adding more tasks at approximately the same level of responsibility.

Job rotation

Moving employees among different jobs to increase variety and skills.

Job enrichment

Adding planning, control, and responsibility to a job.

Employee empowerment

Giving employees authority and responsibility for decisions about their work.

Self-directed teams

Teams that take substantial responsibility for organizing and managing their work.

Hawthorne studies

Studies that highlighted the importance of social and psychological factors in worker productivity.

Skill variety

Job characteristic involving use of different skills and talents.

Job identity

Job characteristic involving completion of an identifiable whole piece of work.

Job significance

Job characteristic describing the importance or impact of the work.

Autonomy

Job characteristic giving workers freedom and discretion in how to do their work.

Feedback

Job characteristic providing information on how well work is performed.

Ergonomics (human factors)

Study of the interaction between people, their work environment, and machines.

Work environment factors

Illumination, noise, temperature, and humidity that affect work.

Methods analysis

Studying how tasks are performed to improve work methods.

Flow diagram

Diagram showing movement of people or materials through a workspace.

Process chart

Chart documenting steps such as operations, transportation, inspections, delays, and storage.

Activity chart

Chart analyzing how people, machines, or crews use time.

Operations chart

Chart analyzing body movements used to complete a task.

Labor standards

Expected time required to perform a task under specified conditions.

Four methods of setting labor standards

Historical experience, time studies, predetermined time standards, and work sampling.

Time study

Measuring task elements and adjusting observed time for performance and allowances.

Average observed time

Sum of observed times divided by number of observations.

Performance rating

Adjustment reflecting how fast or slow a worker performs compared with normal pace.

Normal time

Average observed time multiplied by the performance rating factor.

Standard time

Normal time adjusted to include personal, fatigue, and delay allowances.

Personal time allowance

Time for personal needs such as restrooms or water.

Delay allowance

Extra time allowed for unavoidable delays.

Fatigue allowance

Extra time allowed for worker fatigue.

Time-study sample size factors

Desired accuracy, confidence level, and variation in observed task times.

Predetermined time standards

Standard times built from established times for small basic motions or work elements.

Work sampling

Observing work at random times to estimate proportions of time spent on activities.

Job design ethics

Fairness, equal opportunity, equal pay for equal work, and safe working conditions.

Supply chain management

Structuring the supply chain to maximize competitive advantage and benefits to the final consumer.

Supply chain

Network of suppliers, producers, distributors, retailers, and customers from raw materials to final consumer.

Tier 1 supplier

Supplier that directly supplies the manufacturer.

Tier 2 supplier

Supplier that supplies a tier 1 supplier.

Tier 3 supplier

Supplier further upstream that supplies a tier 2 supplier.

Low-cost supply chain strategy

Emphasizes supplier cost, minimal inventory, and inexpensive transportation.

Response supply chain strategy

Emphasizes supplier capacity, speed, flexibility, buffer stock, and fast transportation.

Differentiation supply chain strategy

Emphasizes product-development capability, collaboration, and sharing market information.

Make-or-buy decision

Choosing whether to produce a product or service internally or purchase it externally.

Outsourcing

Transferring activities and resources previously handled internally to outside vendors.

Six sourcing strategies — VERY IMPORTANT

Many suppliers, few suppliers, vertical integration, joint ventures, keiretsu networks, and virtual companies.

Many suppliers

Competitive sourcing, usually for commodities, in which price is a major selection factor.

Few suppliers

Building long-term relationships with a small number of suppliers to gain scale, expertise, and cooperation.

Vertical integration

Developing or acquiring the ability to perform activities previously handled by suppliers or distributors.

Backward integration

Moving ownership or control upstream toward raw materials and suppliers.

Forward integration

Moving ownership or control downstream toward customers and distribution.

Joint venture

Formal collaboration between organizations to combine strengths, secure supply, or reduce costs.

Keiretsu network

Japanese-style coalition of firms and suppliers linked through long-term relationships, cooperation, and sometimes financial support.

Virtual company

Organization that relies on flexible supplier relationships to provide services or products as demand changes.

Local optimization

Decisions that benefit one supply-chain stage but may worsen overall chain performance.

Bullwhip effect

Demand-order fluctuations that become larger as orders move upstream through the supply chain.

Large-lot problem

Large shipments may lower transportation or production costs but raise inventory holding costs.

Logistics management

Integrating material acquisition, movement, and storage to reduce costs and improve service.

Supply chain supplier-selection criteria

Criteria vary by strategy: cost for low cost; speed and capacity for response; development and collaboration for differentiation.

Lean operations

Supplying exactly what the customer wants, when wanted, without waste, through continuous improvement.

Three fundamental lean tasks

Eliminate waste, remove variability, and improve throughput.

Waste

Anything that does not add value from the customer's point of view.

Seven wastes (Ohno) — IMPORTANT

Overproduction, queues/waiting, transportation, inventory, motion, overprocessing, and defects.

Overproduction

Making more or earlier than is needed.

Queues (waiting)

Idle time while workers, materials, or products wait.

Transportation waste

Unnecessary movement of materials between places.

Inventory waste

Excess materials, work-in-process, or finished goods.