SCM Exam 2

Product mix

A combination of different flow unit types moving through a process

Total demand rate

Tells us how many flow units need to be processed at resources i across all different flow units

Implied utilization

Captures the mismatch between demand and capacity; demand at the resource / capacity at the resource

Attrition losses

All flow units start at the same resource but then drop out of the process (or are removed from the process) at different points

Scrapping

Defective flow units that are eliminated from the process

Yield

Measures the percentage of good units that are processed at a resource

Flow unit-dependent processing times

The fact that the processing times can vary across flow unit types

Workload matrix

WL(i, j) = Number of flow units of type i that need to be processed by resource j × Processing time that resource j takes for customer type i.

Rework

The process of turning a defective unit into a good unit

Setup

A set of activities that 1) are required ti produce units but 2) for which the time to complete these activities does not depend directly on the number of units produced

Changeover (switchover) time

A setup time to change production from one type of product to another

Batch

A collection of units

Production cycle

A repeating sequence of produced units that can include setup time, production time, and idle time

Batch process

A type of production in which units are produced in batches

Idle time

Time not producing and not performing a setup

Target capacity

The smallest capacity that does not reduce the flow rate for the process

Single Minute Exchange of Die (SMED)

A goal to reduce the setup time to a single digit number of minutes (i.e., 9 minutes or less)

Internal setups

Activities that can only be done during the actual setup, i.e., when the machine is not producing

External setups

Activities that can be done while production continues to occur

Mixed-model assembly

An assembly process in which production resembles the true rate of demand, even over a short time horizon.

Heijunka

Leveling production by reducing variation in the work schedule that arises from either demand variation or the desire to run production or transports in large batches. This is a principle of the Toyota Production System that strives to have production match the true rate of demand.

James Womack

An MIT professor who founded the International Motor Vehicle Program and later the Lean Enterprise Institute

Toyota Production System (TPS)

A framework used to run operations with the goal of reducing both the waste of the capacity and the waste of flow time, thereby making sure supply and demand are matched just in time

Waste of time at a resource

The waste of time from the perspective of a resource, which reduces the capacity of the resource

Waste of time of a flow unit

The waste of time from the perspective of a flow unit, which makes the flow time of that flow unit longer than what is needed in the eyes of the customer

Frederick Winslow Taylor

The father of scientific management

Taylorism

Industrial analysts observe every action of workers in order to maximize worker productivity

Taiichi Ohno

Former chief engineer at Toyota and the founder of TPS

Waste (muda)

The consumption of inputs and resources that do not add value to the consumer

Non value added work

Those operations that do not add value in the eyes of the customer but must be done under the current conditions of the process in order to complete a unit

Value added work

Those operations valued by the customer because they are absolutely required to transform the flow unit from its inputs to being the output that the customer wants

Total available time

The amount of time a resource has available to fulfill demand

Overall Equipment Effectiveness (OEE)

The percentage of total available time that is used in a way that adds value to a consumer; value added time / total available time

Seven sources of production waste

Seven ways in which, in the eyes of Ohno, a resource can waste its capacity

Waiting (time on hand)

The first type of waste; idle time

Overproduction

The second type of waste; producing too much too soon

Just-In-Time (JIT) Production

Supplying a unit of demand when and where it is needed, thus avoiding unnecessary inventory

Inventory

The third type of waste, the result of overproduction and the most visible form of a supply-demand mismatch

Transport

The fourth type of waste; time spent moving flow units around

Overprocessing/Incorrect processing

The fifth type of waste; occurs when works spend more time on a flow unit than necessary

Rework

The sixth type of waste; repeating a particular operation

Unnecessary motions and movements

The final type of waste; non-ergonomic movements in a process

Value added percentage

The percentage of flow time used for value added work; value added time of a flow unit / flow time

4Ps of Toyota

Business principles embraced by Toyota that include philosophy, processes, people, and problem solving

Philosophy

A long term approach that favors quality and capabilities over short term financial goals

Processes

Continuous process flows that match supply with demand, aiming to reduce wastage of flow time and capacity

People and partners

Respectful interactions with employees and partners emphasizing skill development and growth

Problem solving

Ongoing improvement of the operations leveraging the experience of the front line employees

Run like the tortoise, not the hare

An ancient fable used by Ohno to illustrate that steady work, even when slow, is better than bursts of speed followed by periods of no movement.

It takes 8 men to row a boat

A crew of 8 amateur rowers will get slower if one of the rowers is substituted by a faster, professional rower

Takt time

The ratio between the time available and the quantity that has to be produced to serve demand

Single unit flow

Operate at a flow of unit unit at a time from one resource to the next instead of operating based on transfer batches

Pull system

The resource furthest downstream (i.e., closest to the market) is paced by market demand. In addition to its own production, it also relays the demand information to the next station upstream, thus ensuring that the upstream resource also is paced by demand. That is, it is an operating system in which the production or replenishment of a unit is only initiated when a demand occurs.

Kanban

Production and inventory control system in which production instructions and parts delivery instructions are triggered by the consumption of parts downstream.

Make-to-order

A production system in which an item’s production begins after the customer for the item is known. In a make-to-order system, units are generally delivered to a customer immediately after production is completed, thereby not spending time in inventory.

Process layout

The spatial location of resources in a process that drives the needs for transportation

Baton passing zone

Instead of having fixed allocations of activities to workers, the idea of a baton passing zone is that the process can absorb variations in speed and starting time

U-shaped line

Locating resources in a way that they create a “U,’ which increases the flexibility of workers to perform multiple tasks

Multitask job assignment

A technique to reduce idle time by avoiding a worker watching a machine do work

Target manpower

The number of workers required based on the takt time and the labor content

Demand leveling

A way to sequence flow units so that the workflow causes a stable workload for all workers involved in the process

Mura

Unevenness in flow

Muri

An unreasonable amount of work, overburdening a machine or operator

Jidoka

Upon detection of a problem, shutting down the machine to force a human intervention, which in turn triggers process improvement

Kaizen

Thoroughly analyzing the root cause

Poka-yoke

Avoiding the recurrence of the problem by implementing improvements

Detect-stop-alert

The philosophy of halting production when a quality problem is discovered

Andon

A system consisting of a visible board and a cord running adjacent to the assembly line. An employee who detects a problem can pull the cord to stop the line. This will be indicated on the board

Information turnaround time (ITAT)

The time between creating a defect and receiving the feedback about the defect

Kaizen

The process of making small changes to the process with the goal of eliminating waste

Genchi genbutsu

Gather firsthand information from the situation by going and observing the situation yourself, collecting data, and analyzing the data