Supply Chain Midterm 1

Front 1

What is operations and supply management

Back 1

- the design, operation (internal), and improvement of the systems that create and deliver the firm’s primary products and services
- concerned with the management of the entire system that produces a good or delivers a service

Front 2

Operations

Back 2

Manufacturing and service process used to transform resources into products desired by customers (internal factors within the organization)

Front 3

Supply

Back 3

Processes that move information and material up and down the supply chain (external function moving supplies/products to facilities, ect.)

Front 4

Supply Chain Processes

Back 4

Planning: Determine how anticipated demand will be met with available resources
Sourcing:involoves the selection of suppliers that will deliver the goods and services needed to create the firms product.
Making:Where the major product is produced or the service provided
Delivering: logistics process, carriers picked to move the product.
Returning:involved the processes for receiving worn-out, defective, and excess products back from the customers and support for customers who have problems with delivered products.

Front 5

Differences between goods and services

Back 5

1. Service is an intangible process that cant be weighed or measured while a good in a tangible output
2. service requires some degree of interaction with the customer
3. services are inderently heterogeneous (they vary day to day as a function of the attitudes of the customer and the servers)
4. services as a process are perishable and time dependent
5. specifications of a service are defined and evaluated as a package of features.

Front 6

Page 12 exhibit1.4

Back 6

Look in book
pure goods (food products, chemicals, ect)->Core goods (appliances, automobiles ext)->Core services (hotels, airlines ect)_>pure services (teaching, medical advice, ect)

Front 7

Servitization

Back 7

a company building service activities into its product offerings for its current users

Front 8

efficiency

Back 8

doing something at the lowest possible cost

Front 9

Effectiveness

Back 9

doing the right things to create the most value for the company

Front 10

value

Back 10

quality/price

Front 11

careers

Back 11

-major challenges is the field:
1. coordinating the relationship between mutually supportive but separate organizations
2. Optimizing global supplier, production, and distribution networks
3. managing customer touch points
4. raising senior management awareness of operations as significant competitive weapons
5. sustainability/triple bottom line:
sustainability: ability to maintain balance in a system.

Front 12

Productivity Ratio

Back 12

Productivity=outputs/inputs

Front 13

Triple Bottom Line

Back 13

Evaluating the firm against social (fair and beneficial business practices toward labor, community and the region), economic (compensate shareholders who provide capital) and environmental criteria.

Front 14

Competitive Dimensions

Back 14

-Cost or price
-Quality--design quality=set of features the product or service contains and process quality=reliability of the product or service
-delivery speed
-delivery reliability
-coping with changes in demand
-flexibility and new-product introduction speed
-Support it

Front 15

Tradeoffs

Back 15

An operation cant excel simultaneously on ALL competitive dimensions

Front 16

Straddling

Back 16

occurs when a company seeks to match the benefits of a successful position while maintaining its existing position

Front 17

Order Winner

Back 17

criteron that differentiated the products or services of one firm from those of another

Front 18

Order Qualifier

Back 18

screening criteria that permits a firms products to even be considered as possible candidates for purchase.

Front 19

Capacity utilization Rate

Back 19

Capacity Used/best operating level

Front 20

Capacity time Durations

Back 20

Long range:greater than one year
intermediate range:monthly or quarterly plans for the next 6-18 months
short range: less that one month (daily or weekly scheduling process; making adjustments to eliminate the variance between planned and actual output)

Front 21

Strategic capactiy Planning

Back 21

provide an approach for determining the overall capacity level of capital-intensive resources that best support the companys long range competitive strategy
-if capacity is excessive, company may have to reduce process to stimulate demand

Front 22

Focused factory

Back 22

a production facility works best when it focuses on a fairly limited set of production objectives

Front 23

plant within a plant

Back 23

PWP-separate sub-organizations, equipment and process policies ect, for different products (even under the same roof)

Front 24

Capacity flexibility

Back 24

having the ability to rapidly increase or decrease production levels or to shift production capacity quickly from one product or service to another
-flexible plants, processes, workers

Front 25

Decision Tree

Back 25

schemative model of the sequence of steps in a problem and the conditions and consequences of each step

Front 26

Planning service capacity

Back 26

-Service capacity is more time and location dependent
-Time:capacity must be available to produce a service when it is needed
-Location:service capacity must be located near the customers
-Volatility of Demand:volatility of demand is high for service
1. services cant be stored
2. customers interact directly with the production system
3. serice demand is directly affected by consumer behavior

Front 27

Inventory Calculation

Back 27

inventory=throughput rate X flow time

Front 28

Work in process inventory calculation

Back 28

WIP inventory=throughput rate X Flow time

Front 29

Total Inventory Calculation

Back 29

Total inventory= WIP=raw material inventory

Front 30

Flow Time Calculation

Back 30

flow time=inventory/throughput

Front 31

Production Processes:Lead Time

Back 31

The time needed to respond to a customers order

Front 32

Production Processes: Make to Stock

Back 32

firms that serve customers from finished goods inventory

Front 33

Production Processes:Assemble to Order

Back 33

Combine a number or preassembled modules to meet a customers specifications

Front 34

Production Processes:Make to Order

Back 34

Make the customers product from raw materials, parts, and components

Front 35

Production Processes:Engineer to order

Back 35

works with the custoemr to design the product, and then make it from purchased materials, parts and and components

Front 36

Inventory Turn

Back 36

COGS/Average inventory Value

Front 37

Days of Supply

Back 37

The inverse of inventory turn scaled to days (Ex: if a firm turns inventory 6 times a year, the dats of supply=1/6 times per year or apprx every 61 days)

Front 38

Little's law

Back 38

says there is a long-term relationship between the inventory, throughput, and flowtime of a production system in a steady state

Front 39

Throughput

Back 39

long term average rate that items are flowing through the process

Front 40

Flow Time

Back 40

Time that it takes a unit to flow through the process from beginning to end

Front 41

How production processes are organized:Project layout

Back 41

the product remains in a fozed location (high degree of task ordering)

Front 42

How production processes are organized:workcenter

Back 42

job shop, where similar equipment of functions are grouped together

Front 43

How production processes are organized:manufacturing cell

Back 43

dedicated area where products that are similar in processing requirements are produced (group parts into families)

Front 44

How production processes are organized:Assembly Line

Back 44

where work processes are arranged according to the progressive steps bu which the product is made

Front 45

How production processes are organized:Continuous Process

Back 45

similar to an assembly line;production follows a predetermined sequence of steps, but the flow is continuous

Front 46

How production processes are organized:product-process matrix

Back 46

the first dimension relates to the volume of a particular product or group of standardized

Front 47

Splitting tasks (if we need to increase capacity in a manufacturing setting, what do we do>)

Back 47

-Split the task
-share the task
-use parallel workstations
-use a more skilled worker
-work overtime
-redesign (last resort)

Front 48

Utilization Calculations (p 116-118)

Back 48

??

Front 49

Customer Contact

Back 49

The physical presence of the customer in the system
-service systems with a high degree of contact are more difficult to control and more difficult to rationalize than those with low degree of contact

Front 50

Service system design matric (p. 102 exhibit 5.1)

Back 50

See book:
Degree of customer server contact:
-buffered core (no contact
-permeable system (some contact)
-reactive system (much contact)

Sales opportunity vs production efficiency

Front 51

Virtual Service:Pure virtual customer contact

Back 51

companies enable customers to interact with one another in an open environment

Front 52

Virtual Service:Mixed virtual and actual customer contact

Back 52

where customer to interact one with another in a server-moderated environment such as product discussion groups.

Front 53

Service Blueprint

Back 53

Flowchart to emphasize the importance of process design distinguishing between high and low customer contact

Front 54

Line of visibility

Back 54

high customer contact aspects of the service (the parts of the process that the customer sees) vs. those activies that the customer does not see

Front 55

Poka-Yoke

Back 55

procedures that block the inevitable mistake from becoming a service defect; avoid mistakes

Front 56

managing cues

Back 56

-segment the customers
-train your servers to be friendly
-inform you customers of what to expect
-try to divert the customers attention when waiting
-encourage customers to come during slack periods

Front 57

Line structures: Single channel, single phase

Back 57

simplest type of waiting line structure ex: one person barbershop

Front 58

line structures: single channel, multiphase

Back 58

series of services performed in a fairly uniform sequence;car wash--multiple services--washing, rinsing drying ect

Front 59

line structures:Multi channel, multi phase

Back 59

two or more services are performed in sequence
ex:admission of patients into a hospital (specific sequence of steps usually followed with several servers so more than one patients at a time can be processed

Front 60

Line structures: Mixed

Back 60

Multiple to single:merge
Alternative path structures:two structures that differ in direction

Front 61

DPMO:defects per million opportunities

Back 61

DPMO=(# of defects/(#of opporunities for error X #of unites)) X 1,000,000

Front 62

Six Sigma

Back 62

Philosophy and methods companies use to eliminate defects in their products and processes

Front 63

Total Quality Management

Back 63

managing the entire organization so that it excels on all dimensions of products and services that are important to the customer
-two goals (1) careful design of the product or service and (2) consistency product the design

Front 64

Malcom Baldrige Award (1987)

Back 64

To help companies review and structure their quality programs

Front 65

The Quality Gurus Compared (exhibit 6.1 pg 135)

Back 65

-Look at book:
Definition of quality:
-Crosby:conformance to requirements
-Deming-predictable defree of uniformity and dependability at low cost and suited to the market
-juran-fitness for use (satisfies customers needs)

Front 66

Design Quality

Back 66

the inherent value of the product in the marketplace

Front 67

conformance quality

Back 67

the degree to which the product or service design specs are met

Front 68

quality at the source:

Back 68

the person who does the work takes responsbility for making sure that his or her output meets specs

Front 69

dimensions of quality

Back 69

performance, features, reliabiltiy, serviceability, asethics, perceived quality

Front 70

Costs of Quality

Back 70

costs that are the difference between what can be expected from excellent performance and the current costs that exist

Front 71

appraisal costs

Back 71

costs of the inspection, testing aand other tasks to ensure that the product of process is acceptible

Front 72

prevention costs

Back 72

the sum of all the costs to precent defects

Front 73

internal failure costs

Back 73

costs for defects incurred within the system

Front 74

external failure costs

Back 74

costs for defect that pass through the system (ie customer warranty replacements, product repair, complaints)

Front 75

ISO 9000

Back 75

based on 8 quality management principles; international reference for quality management requirements in a B2B dealing

Front 76

ISO 14000

Back 76

primarily concerned with environmental managemen; three pronged approach for dealing with environmental challenges

Front 77

6 sigma methodology

Back 77

DMAIC:
define
measure
analyze
improve
control (dumb managers always ignore customers)
-focus is understanding and achieving what the customer wants (key to profitability)

Front 78

variation

Back 78

as variation is reduced, quality is improved
-it is impossible to have 0 variability (therefore there are design limit\s about the target that the process must fall into)

Front 79

Statistical Process control

Back 79

involves testing a random sample of output from a process to determine whether the process in producing items within a preselected range
-sampling attributes
-sampling variables

Front 80

p calculation

Back 80

p=total #defects from ALL samples/(number of samples X Sample size)

Front 81

Standard deviation (s)

Back 81

=square root of p(1-p)/n
**Do example 6.3

Front 82

UCL-upper process control limit

Back 82

p+(3 X S)

Front 83

LCL:lower control limit

Back 83

p-(3 X S)

Front 84

EVM

Back 84

Step 1: Calculate the Budgeted Cost of Work Scheduled (value or cost of the project that is expected given the project at time “X”)
Step 2: Calculate the Budgeted Cost of Work Performed (actual value of the project to date at point “X”)
Step 3: Obtain the Actual Cost (from the accounting records for the project)
Step 4: Calculate key performance measures for the project
- schedule variance
- schedule performance index
- cost variance
- cost performance index
* EXAMPLE 7.1

Front 85

Types of development projects
(pg 181 exhibit 7.1)

Back 85

Look in book

Front 86

project management

Back 86

planning, directing and controlling resources to meet the technical cost and time constraints of the project

Front 87

Structuring Projects:Pure project

Back 87

"skunkworks" a self containted team works full time on the project
advantages: project manager has full authority over the project, team members report to one boss, lines of communication are shortened, team pride, motivation and commitment are high
disadvantages: duplication of resources, organizational goals and policies are ignored, organization falls behind in its knowledge of new technology, worry about life-after-project

Front 88

Structuring Projects:Fuctional Projects

Back 88

Project within a functional division
advantages;team members can work on several projects, technical expertise maintained even if individuals leave, functional area is home eve after the project is completed, synergistic solutions to a projects technical problems
disadvantages:asepects of the project that arent directly related to the functional area are shortchanged, weak team motivation, needs of the clients are secondary and are responded to slowly

Front 89

Structuring Projects:Matrix Project

Back 89

Attempts to blend properties of functional and pure project sturctures-each project utilizes people from different functional areas;project manger decides what tasks and when they will be performed;functional manager controls which people and technologies are used.
-advantages:communication between functional divisions enhanved project manager held responsible for project completion duplication of resources in minimized, team members have a functional home after project completion, policies of parent prganization are followed
Disadvantages:there are two bosses, doomed to failure unless project manager has strong negotiating skills

Front 90

Work breakdown structure

Back 90

defines the heiarchy of project tasks, subtasks, and work packages;breaks down project into manageable pieces.

Front 91

Gantt Chart

Back 91

"bar Chart" shows the amount of time involved and the sequence in which activities can be performed

Front 92

EVM: Earned value management

Back 92

technique for measuring project progress in an objective manner; combine measurements of scope, cost, and schedule of project; measures relative success of a project at a point in time
-need a project plan that identigies the activities to be done
-need a valuation of each activity work (planned value)
-need the predefined costing rulers (metrics)
-EXAMPLE 7.1

Front 93

Critical path method

Back 93

1. identify each activity to be done in the project and estimate how long it will take to complete each activity
2. determine the required sequence of activities and construct a network reflecting the precedence relationships
3. determine the critical path (form the longest chain in terms of their time to complete)
4. determine the early start/finish and late start/finish schedule
*Look at graphs and descriptions in book for more clarification