Exam 1 Supply Chains

operations management

the planning, scheduling, and control of the activities that transform inputs into finished goods and services

supply chain

the network of suppliers that deliver products from raw materials to the end customers through either an engineered transaction flow of info goods and money

supply chain management

the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value and building a competitive infrastructure

all within one company except external needs

upstream

closer to raw materials

downstream

heading towards customer

SCOR model

source: buying materials

make: making

deliver: getting to customer

return: bringing products back from customer

components of supply chain management

strategy

identifies how company will function in its enviro

OR

the creation of a unique valuable position involving a different set of activities

core competencies

bundle of skills/knowledge sets that enable a firm to provide the greatest level of value to its customers i a way that is difficult for competitors to emulate and that provides future growth

customer value

the worth of an item good or service

order qualifier

competitive characteristics that a firm must exhibit to be a viable competitor in the marketplace

order winner

those competitive characteristics that cause a firms customers to choose that firms goods and services over those of its competitors

value index

uses the performance and importance scores for various dimensions of performance for an item or service to calculate a score that indicates the overall value of the item or service to a customer

higher score=product you should choose

performance dimensions

quality, time, flexibility (mix of products), cost

mission statement

the company statement of purpose

“reason for being”

product design

the thoughtful process of creating goods and services that meet user needs, operate efficiently, and stand out in the marketplace

product

any good/service produced for sale, barter, or internal use

products are developed to fulfill consumer needs

good

a tangible product, merchandise, or ware

can be stored for later use

consistent product definition (laptop description through brands)

production usually separate from consumption

*can be inventoried

low customer interaction (not interaction with company that made a basketball

service

intangible product (ex: haircut)

produced and consumed at the same time (ex: sitting in chair while they cut it)

often unique (everyones hair is different)

high customer interaction (I want blonder)

inconsistent product definition

often knowledge based (lawyer, cosmotology school)

frequently dispersed

why develop new products

gain competitive advantage

improve profitability

meet changing customer needs

use existing resources more efficiently

block out competitors from a market

phases of product/service development

1. idea generation

2. preliminary design

3. detailed design

4. testing and refinement

5. launch

can have sequential development process (slow, all separate) or concurrent engineering (fast, phases overlap)

DMDAV

define (product goals/customer requirements)

measure (customer needs/prod capabilities)

design (process to meet customer needs)

analyze (data to identify critical factors)

verify (design meets customer requirements)

QFD

quality function deployment

“voice of customer”

ask for their needs/wants/rankings

helps engineers figure out what is most important for their customer

**make sure you are looking at the correct customers for attributes, you want the AVERAGE customer

DFM

(design for manufacturability)

part standardization

reducing number of parts

designing for efficient assembly

(changing features that customers might not even know about)

value engineering/value analysis

a method for improving a products value by either enhancing its function/reducing its cost without sacrificing quality

questions:

are there features the customer doesnt actually need?

can 2 parts be combined into 1?

are we using unnecessarily expensive materials?

project

temporary endeavor undertaken to create a unique project, service, or result

it has a clear start, clear end, and specific goal/outcome

temporary but can learn lessons to help in future

project management

the application of knowledge, skills, tools, and techniques to project activities in order to meet project requirements

5 main project phases

initiation, planning, execution, monitoring and control, closure or completion

initiation (project management)

step 1

project charter

brainstorming (gonna build a house)

planning (project management)

step 2

project plan

gantt chart

scope and budget (idea of what were gonna do, resources needed)

communication

ex: 4 bed, 2 bath…

execution (project management)

step 3

project plan

gantt chart

task dependencies

collaboration

actually building the house, figure out how each activity works with each other

monitoring and control (project management)

step 4

project stand ups

status reports

KPIs

Milestones*

closure/completion (project management)

step 5

post mortem

lessons learned

milestone

part of monitoring and controlling phase

a significant checkpoint or event in a project that marks the completion of a major phase or important deliverable

milestones help teams to

measure progress w/o tracking every small step

confirm key pieces of project are completed on time

communicate status clearly to stakeholders

WBS

work breakdown structure

a hierarchial decomposition of the total scope of work to be carried out by the project team to accomplish the project objectives and create the required deliverables

breaking a project into smaller, manageable activities that are easier to plan

WBS elements

activity, duration, predecessor

activity

part of WBS

the specific work that must be completed

duration

part of WBS

an estimate of how long the activity will take to compare

predecessor

part of WBS

the activity/s that must be completed before this activity can begin

Gantt chart

a bar chart of schedule info where activities are listed on the vertical axis, dates on horizontal axis, activity durations shown as horizontal bars

network diagrams

A visual representation of a project that shows:

-all project activities

-the precedence relationship between those activities

-the logical flow of work from start to finish

slack

the amt of time an activity can be delayed without delaying entire project

critical path

the longest path through the network diagram, determines shortest possble project duration

all activities have zero slack on critical path

delays in critical path delay entire project

the project cannot finish earlier than length of critical path

crashing a project

shortening the project duration by allocating additional resources to certain activities on the critical path

business procfess

set of logically related tasks or activities performed to achieve a defined business outcome

process map

a diagram of the flow of production process/service process through the production system

standardized symbols are used to designate processing flow directions, branching directions, input/output, and other aspects of process

process map chipotle ex:

current state

representation of what is actually happening, not what we think should happen and where we want it to be

swim lane process map

adds another layer to the process map by adding group/person responsible for activities

benchmarking

comparing products, processes, and services to those of another organization thought have a superior performance

process benchmarking

focus on the target firms business process

competitive benchmarking

comparing against a competitors product or service

theory of constraints

a systems constraint is anything that limits a system from achieving higher performance versus its goal

constraint/bottleneck

anything that limits a system from achieving higher performance vs its goal

anything holding you back

assumption of constraint

each station works independently at their own pace

theory of constraints 5 points

capacity

capability of a worker, machine, work center, plant, or organization to produce output per time period

theoretical capacity

the maximum that can be produced by a worker/machine over a given time period assuming everything works all the time

rated capacity

the EXPECTED output capability of a resource or system

downtime

time when a resource is scheduled for operation, but is not producing for reasons such as maintenance, repair, or setup

capacity in services varies for three main reasons

time (restaurant, peak times)

locatuon

volatility of demand

factors affecting capacity

number of employees

number of machines

number of production lines

number of shifts

number of temporary workers

variety of products (downtime between)

lead capacity strategy

adding capacity to a resource in anticipation of increased future demand. this is done to ensure the ability to satisfy market demand when an increase occurs

risky!

lag capacity strategy

not adding capacity until firm is operating at or beyond full capacity. this keeps unit costs maximized by working at full capacity, but does not satisfy total demand

match capacity strategy

a capacity strategy that strikes a balance between the lead and lag capacity strategies by adding capacity at approximately the rate of actual demand increase

total cost (TC)

all cost impacts, rather than just one cost impact, and are the sum of fixed and variable costs

Fixed costs (F)

an expenditure that doesnt vary with the production volume, such as rent, property tax, and salaries of personell

variable cost (VC)

an operating cost that varies directly with a change of unit in production volume

total revenue

the amt of money we make before subtracting expenses

break even point

the point where the company neither makes a profit nor loses money