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79 Cards in this Set

  • Front
  • Back
supply chain management
active mgmt of supply chain activities to maximize customer value and achieve a sustainable competitive advantage
activities that ensure that the company has suitable sources for the goods and services it needs (adds value)
focuses on the physical movement and storage of goods and materials
important trends
1. information revolution
2. increased competition and globalization in today's markets
3. relationship mgmt
process/business process
logical series of related transactions that converts input to results or output

-chain of logical connected repetitive activities that utilizes the enterprise's resources to refine of transform an object for the purpose of achieving specified and measurable results or out put for internal or external customers
functional area problems
1. allegiance to the function
2. turf wars
3. silo mentality-only focused on their specialisms and functions
inputs and outputs of operations
inputs-materials, intangible needs, information

outputs-tangible goods, fulfilled needs, satisfied customers
three points about transformation processes
1. output should be greater than the inputs
2. span boundaries across functional disciplines
3. a value added situation creates value for the customer
supply chain transformation process
includes all activities associated with the flow and transformation of goods from the raw materials stage, through the end user
measures/dimensions of success
1. quality
2. delivery speed
3. after-sales support
4. cost
5. flexibility
core competencies
organizational strengths or abilities, developed over a long period, which customers find valuable and competitors find difficult or even impossible to copy
mechanisms by which businesses coordinate their decisions regarding business processes, resources, information systems, and policies and procedures
business strategies should:
identify targeted customers, set time frames and performance objectives, identify core competencies
order winners
the performance dimensions that differentiate a company's products and services from tis competitors
order qualifiers
performance dimensions on which customers expect a minimum level of performance
total quality management
the philosophical underpinning of an organization's quality efforts

-the mgmt of an entire organization so that it excels in all quality dimensions that are important to customers
quality-value perspective
based on the idea that quality must be judged on how well the characteristics of a particular product or service align with the needs of specific user
dimensions on which users evaluate the quality of a product or service (8)
performance, features, reliability, durability, conformance, aesthetics, serviceability, perceived quality
conformance perspective
interested in whether or not a product was made or a service was performed as intended
total cost of quality curve
adds failure, prevention, and appraisal costs together
tqm principles
customer focus, leadership involvement, continuous improvement, employee empowerment, quality assurance, supplier partnerships, strategic quality plan
batch manufacturing
somewhere between job shops and lines in terms of production volumes and flexibility, most common type of manufacturing process, strikes a balance between the flexibility of a job shop and the efficiency of a line
hybrid manufacturing processes
seek to combine the characteristics of more than one of the classic types
make-to-stock products
involve no customizaion, generic products, produced in large enough volumes to justify keeping a finished goods inventory (tools)
assemble-to-order products
products that are customized only at the very end of the manufacturing process (airbrush t-shirt)
make-to-order products
use standard components but the final configuration of those components is customer specific (walk-in coolers or refrigerators)
engineer-to-order products
specially designed and produced from the start to meet unusual customer needs or requirements (hubble telescope)
upstream/downstream activities
activities taht take place prior/after the customization point
law of variability
the greater the random variability, either demanded of the process or inherent in the process itself or in the items processed, the less productive the process is
activities that can only be completed once the customers' needs are known (ex. cabinets)
five major types of manufacturing processes (spectrum)
1. the project
2. the continuous flow process
3. the job shop
4. the batch flow process
5. the line flow process
the ability to do work or perform a valuble service
measures of capacity
inputs, outputs, or some combination
controllable factors (capacity)
the number of shifts or lines that are active at any time
lead strategy
capacity is added in anticipation of demand, assures that hte organization has adequate capacity to meet all demand, even during periods of high growth, can be riskky if demand is unpredictable
lag strategy
opp. of lead, organizations add capacity only after demand has materialized, reduced risk of over-building, greater productivity due to higher utilization levels, and the ability to put off large investments as long as possible
match strategy
strikes a balance between the lead and lag strategies by avoiding periods of high under or over utilization
fixed costs
the expenses an organization incurs regardless of the level of business activity
variable costs
directly affected by some specific busienss activity

TC=FC + VC*x
theory of contraints
focuses on how capacity should be managed when products or services flow along a chain of processes, based on the recognition nearly all products and services are created through a series of linked processes, bottleneck=constraint
five step process to improve overall throughput of a process chain
1. identify constrain
2. exploit constraint
3. subordinate everything to the constraint
4. elevate the constraint
5. find the nwe constraint and repeat the steps
customer driven process requirements
established through makign specfici targets in objective measurable terms such as cost, quality, cycle time, customer service and support or other relevent metrics
process capability
measures provide information on what a process can do and how well it can perform its function, relative to customer requirements
determinants of process capability
1. people-skills, experience, training
2. inputs-information, materials
3. methods-work flow, decision making
4. technology-equipment, IS/IT
process capacity
the volume of work or product that can be performed by a process during a specified time period
determinants of process capacity
quantity and type of resources available, product/service mix required, planned down time, unplanned down time
design (theoretical) capacity
the maximum output that can possibly be attained under perfect conditions
effective capacity
the maximum output from a process given that you estimate how much planned and unplanned downtime, estimate product/service mix levels, estimated quality problems, etc
demonstrated (actual) capacity
the rate of output actually acheived from a process based on historical data
sales and operations planning (aggregate)
a business process that helps firms plan and coordinate near-term operations and supply chain decisions with other functional areas and the firm's supply chain partners
strategic capacity planning
takes place at the highest levels of the firm, addresses capacity needs that might not arise for years into the future (bricks and mortar, major process choice, planning done at very high level, high risk)
tactical planning
covers a shorter period (six months-year), more detailed than strategic but constrained by the longer-term decisions, (workforce, inventory, subcontracting, logistics, planning numbers, moderate risk)
detailed planning and control
covers short time periods(weeks-hours), usually few options,(limited ability to adjust capacity, detailed planning, lowest risk)
successful SOP characteristics:
-indicates how the organization will use its tactical capacity resources to meet expected customer demand
-strikes a balance between the various needs and constraints of the supply chain partners
-serves as a coordinating mechanism for the various supply chain partners
-expresses the business' plans in terms that everyone can understand
top-down planning (SOP)
simplest approach, uses a single set of planning values to estimate tactical capacity requirements for all products or service offered, requires service mix to stay the same and the individual services to have similar resource requirements, allows managers to see the relationship between overall demand, production and inventory levels
level production strategy
production is held steady and inventory is used to absorb the differences betwen production and demand
chase production strategy
will vary production each month in an effort to match production levels to demand levels
mixed production strategy
varies both inventory levels and capacity resources in an effort to develop the best plan
those stocks or items used to support production, supporting activities, and customer service
cycle stock
components or products that are receivedi n bulk by a downstream partner, gradually used up, and then replenished again in bulk by the upstream partner
safety stock
extra inventory that comapnies hold to protect themselves against uncertainties in either demand or replenishment time
anticipation inventory
inventory that is held in anticipation of custoemr demand
hedge inventory
form of inventory buildup to buffer against some event that may not happen (strikes, price increases, unsettled governments)
transportation inventory
"in the pipeline", moving from one link in the supply chain to another
smoothing inventories
used to smooth out difference between upstream production levels and downstream demand, allow individual links in the supply chain to stabilize theri production at the msot efficient level, and to avoid the costs and headaches associated with constantly changing workforce levels and/or production rates
inventory drivers
business conditions that force companies to hold inventory
-uncertainty in supply or demand
-mismatch between downstream partner's demand and most efficient production or shipment volumes for upstream partner
-mismatch between downstream demand levels and upstream production capacity
-mismatch between timing of customer demand and supply chain lead times
independent demand inventory
refers to inventory items with unpredictable demand levels that are beyond an organization's complete control (kitchen table)
dependent demand inventory
refers to inventory items whose demand levels are tied directly to the production or another item (components of tables)
periodic inventory review systems
comapnies hcheck the inventory levels of an item at regular intervals and restock it at some predetermined level
perpetual inventory review systems
inventory levels are monitored constantly, reorder point is reached, size of replensihment order is typically based on the tradeoff between holding costs and ordering costs, reorder point based on demand and supply considerations and safety stock
economic order quantity
particular order quantity that strikes the best balance between holding cost and ordering cost, found by setting yearly holding cost equal to yearly ordering cost and solving for Q
master scheduling
first step in planning and control, the overall resource levels established by SOP begin to be fleshed out with specifics, states exactly when and in what quantities specfic products will be made, links production with specific customer orders, informs the operations manager which products or production capacities are still available to meet new demand
material requirements planning
translates the master schedule for final products into detailed material requirements
projected ending inventory
= BI + MPS - the greater of forecasted demand or booked orders
indicates the number of units taht are available for sale each week, given those that have already been promised to customers

=BI + MPS - Booked orders
three concepts of MRP
bill of material, backward scheduling, and explosion of the bill of material
advantages of MRP
indicates the exact timing and quanitty or oders for all components, lowers inventory levels and helps firms to meet their master schedule commitments, allows managers to trace every order for lower-level items through all the levels of the BOM, up to the master schedule, tells the firm and its suppliers precisely what needs to be made when
considerations in MRP
accurate information, accommodate uncertainty, MRP nervousness
root cause analysis
process by which organizations brainstorm about possible causes of problems and then through structured analyses and data gathering efforts, gradually narrow the focus to a few, root causes