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supply chain mangement
supply chain ch. 12-15
146
Business
Undergraduate 3
07/11/2011

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Term
What is logistics management?
Definition
that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements.
Term
logistics covers a wide range of business activites including:
Definition
transportation, warehousing, material handling, packaging, inventory management, and logtistic information systems.
Term
Why is logistic critical?
Definition
logistics impacts cost, flexibility, and delivery performance. information systems have created opportunities once thought impossible. logistics has had a profound effect on delivery and customer satisfaction.
Term
logistics includes not only physical flows, but also:
Definition
information flows.
Term
what are the five widely recognized transportation modes.
Definition
highway, water, air, rail, and pipeline.
Term
Why is highway transportation dominant?
Definition
it is a geographic extension of supply chains.
there is a greater emphasis on delivery speed and flexibility.
there is changing supply chain linkages among manufacturers, wholesalers, and consumers.
Term
what is a direct truck shipment?
Definition
a shipment made directly, with no additional stops, changing of trucks, or loading of additional cargo.
Term
What is less than truckload shipment?
Definition
a smaller shipment, often combined with other loads to reduce and improve truck efficiencies.
Term
what is a multimodal solution?
Definition
transportation solutions that seek to exploit the strengths of multiple transportation modes through physical, information, and monetary flows that as seamless as possible.
Term
What are roadrailers?
Definition
specialized rail cars the size of standard truck trailers that can be quickly switched from rail to ground transport by changing the wheels.
Term
What is warehousing?
Definition
any operation that stores, repackages, stages, sorts, or centralizes goods or materials. organizations use warehousing to reduce transportation costs, improve operational flexibility, shorten customer lead times, and lower inventory costs.
Term
what is consolidation warehousing?
Definition
a form of warehousing that pulls together shipments from a number of sources ( often plants) in the same geographical area and combines them into larger, and hence more economical shipping loads.
Term
what is cross docking?
Definition
a form of warehousing in which large incoming shipments are received and then broken down into smaller outgoing shipments to demand points in a geographic area. cross docking combines the economies of large incoming shipments with the flexibility of smaller local shipments.
Term
what is break bulk warehousing?
Definition
a specialized form of cross docking in which the incoming shipments are from a single source or manufacturer.
Term
What is a hub and spoke system?
Definition
a form of warehousing in which strategically placed hubs are used as sorting or transfer facilities. the hubs are typically located at convenient, high traffic locations. the spokes refer to the routes serving the destinations associated with the hubs.
Term
what is postponement warehousing?
Definition
a form of warehousing that combines classic warehouse operations with light manufacturing and packaging duties to allow firms to put off final assembly or packaging of goods until the last possible moment.
Term
What is assortment warehousing?
Definition
a form of warehousing in which a wide array of goods is held close to the source of demand in order to assure short customer lead times.
Term
What is spot stock warehousing?
Definition
a form of warehousing that attempts to position seasonal goods close to the marketplace. at the end of each season, the goods are either liquidated or moved back to a more centralized location.
Term
what are the three major logistics systems?
Definition
decision support tools, planning systems, and execution systems.
Term
What are material handling systems?
Definition
the equipment and procedures needed to move goods within a facility, between a facility and a transportation mode, and between different transportation modes.
Term
what is packaging?
Definition
from a logistics perspective,the way goods and materials are packed in order to facilitate physical, informational, and monetary flows through the supply chain.
Term
in general, using slower and cheaper transportation modes will cause inventory levels within the supply chain to...
Definition
rise, while using faster and more expensive modes will enable firms to lower inventory levels.
Term
What is the logistics strategy?
Definition
A functional strategy that ensures that a organization's logistics choices- transportation, warehousing, information systems, and even form of ownership- are consistent with its overall business strategy and support the performance dimensions that targeted customers most value.
Term
What are common carriers?
Definition
also known as public carriers; transportation service providers who handle shipments on a case by case basis, without the need for long term agreements or contracts.
Term
what are contract carriers?
Definition
transportation service providers who handle shipments for other firms based on long term agreements or contracts.
Term
What are third party logistics providers.
Definition
service firms that handle all of the logistics requirements for other companies.
Term
What is a perfect order?
Definition
a term used to refer to the timely, error-free provision of a product or service in good condition.
Term
What is a landed cost?
Definition
the cost of a product plus all costs driven by logistics activities, such as transportation, warehousing, handling,customs fees,etc.
Term
what is a freight forwarder?
Definition
an agent who serves as an intermediary between the organization shipping the product and the actual carrier, typically on international shipments.
Term
what is a customs broker?
Definition
an agent who handles customs requirements on behalf of another firm. in the U.S. customs brokers must be licensed by the customs service.
Term
what is a reverse logistics system?
Definition
a complete supply chain dedicated to the reverse flow of products and materials for the purpose of returns, repair, remanufacture, and/or recycling.
Term
what are some issues when incorporating reverse logistics strategy?
Definition
firms have less control over the timing, transportation modes used, and packaging for goods flowing back up the supply chain.
goods can flow back up the supply chain for a variety of reasons.
forward logistics systems typically aren't set up to handle reverse logistics.
Term
what is the weighted center of gravity method?
Definition
A logistics decision modeling technique that attempts to identify the best location for a single warehouse,store, or plants, given multiple demand points that differ in location and importance.
Term
What are optimization models?
Definition
a class of mathematical models used when the user seeks to optimize some objective function subject to some constraints.
Term
what is the objective function?
Definition
a quantitative function that an optimization model seeks to optimize ( maximize or minimize ).
Term
What are constraints?
Definition
within the context of optimization modeling, quantifiable conditions that place limitations on the set of possible solutions. The solution to an optimization model is acceptable only if it does not break any of the constraints.
Term
What is the assignment problem?
Definition
A specialized form of optimization model that attempts to assign limited capacity to various demand points in a way that minimizes costs.
Term
What are decision variables?
Definition
within the context of optimization modeling, those variables that will be manipulated to find the best solution.
Term
What is sales and operations planning?
Definition
A business process that helps firms plan and coordinate operations and supply chain decisions over a tactical time ( 4 to 12 months out)
Term
What is aggregate planning?
Definition
See sales and ops planning.
Term
What is strategic planning?
Definition
Planning that takes place at the highest level of the firm, addressing needs that might not arise for years into the future.
Term
What is tactical planning?
Definition
Planning that covers a shorter period, usually four months to a year out, although the planning horizon may be longer in industries with very long lead times ( such as engineer to order firms)
Term
What is detailed planing and control?
Definition
planning that covers time periods ranging from weeks, down to just a few hours out into the future.
Term
What is top down planning?
Definition
An approach to S and Op where a single, aggregated sales forecast drives the planning process. For top down planning to work,the mix of products or services must be essentially the same from one time period to the next, or the products or services must have very similiar resource requirements.
Term
what is bottom up planning?
Definition
An approach to S and Op that is used when the product/service mix is unstable and resource requirements vary greatly across the offerings. Under such conditions, managers will need to estimate the requirements for each set of products or services separately and then add them up to get an overall picture of the resource requirements.
Term
What are planning values?
Definition
values that decision makers use to translate the sales forecast into resource requirements and to determine the feasibility and costs of alternative sales and operations planning.
Term
What is the 3 step process for generating a top down plan?
Definition
1.) develop the aggregate sales forecast and planning values.
2.)translate the sales forecast into resource requirements.
3.) generate alternative production plans.
Term
What is level production plan?
Definition
a sales and operations plan in which production is held constant and inventory is used to absorb differences between production and the sales forecast.
Term
What is chase production plan?
Definition
A sales and operations plan in which production is changed in each time period to match the sales forecast.
Term
What is a mixed production plan?
Definition
A sales and operations plan that varies both production and inventory levels in an effort to develop the most effective plan.
Term
What is a load profile?
Definition
A display of future capacity requirements based on released and/or planned orders over a given span of time.
Term
What is net cash flow?
Definition
the net flow of dollars into or out of a business over some time period.
Term
What is the formula for net cash flow?
Definition
Net cash flow = cash inflows - cash outflows.
Term
What are some critical organizational questions associated with s and op?
Definition
how do we choose between alternative plans?
how often should s and op be done?
how do we implement s and op in our business environment?
Term
What is the three phase process describing the implementation of s and op?
Definition
developing a foundation, integrating and streamlining the process, and gaining a competitive advantage.
Term
how will companies know when they have reached the stage or gaining a competitive advantage?
Definition
there is a well integrated demand planning process, including the use of forecasting models.
continuous improvement is planned and monitored as an integral part of the s and op process.
capital equipment planning can be triggered at any time
what if analyses are a way of life and the s and op database is networked to provide ready access to s and op data.
Term
what are two categories that services have for aligning resources with demand?
Definition
making sales match capacity, and making capacity typically the workforce match sales.
Term
what is yield management?
Definition
An approach commonly used by services with highly perishable products in which prices are regularly adjusted to maximize total profit.
Term
What is a tiered workforce?
Definition
a strategy used to vary workforce levels, where additional full time or part time employees are hired during peak demand periods, while a smaller, permanent staff is maintained year round.
Term
What is offloading?
Definition
a strategy for reducing and smoothing out workforce requirements by having the customers perform part of the work themselves.
Term
What is optimization models?
Definition
a class of mathematical models used when the user seeks to optimize some objective function subject to some constraints.
Term
What is the objective function?
Definition
a quantitative function that an optimization model seeks to optimize ( maximize or minimize)
Term
What are constraints?
Definition
quantifiable conditions that place limitations on the set of possible solutions. The solution to an optimization model is acceptable only if it does not break any of the constraints.
Term
What is inventory?
Definition
Those stocks or items used to support production ( raw materials and work in process items), supporting activities ( maintenance, repair, and operating supplies) and customer service ( finished goods and spare parts)
Term
What is cycle stock?
Definition
components or products that are received in bulk by a downstream partner, gradually used up,and then replenished again in bulk by the upstream partner.
Term
What is safety stock?
Definition
Extra inventory that companies hold to protect themselves against uncertainties in either demand or replenishment time.
Term
What is anticipation inventory?
Definition
Inventory that is held in anticipation of customer demand.
Term
What is hedge inventory?
Definition
A form of inventory buildup to buffer against some event that may not happen. Hedge inventory planning involves speculation related to potential labor strikes, price increases, unsettled governments, and events that could severely impair the company's strategic initiatives.
Term
What is transportation inventory?
Definition
Inventory that is moving from one link in the supply chain to another.
Term
What is smoothing inventory?
Definition
inventories used to smooth out differences between upstream production levels and downstream demand.
Term
What are inventory drivers?
Definition
business conditions that force companies to hold inventory.
Term
What is supply uncertainty?
Definition
the risk of interruptions in the flow of components from upstream suppliers.
Term
What is demand uncertainty?
Definition
the risk of significant and unpredictable fluctuations in downstream demand.
Term
What are the four inventory drivers, and what are their impacts?
Definition
Uncertainty in supply or demand- safety stock, hedge inventory.
Mismatch between downstream partner's demand and most efficient production or shipment volumes for upstream partner.- cycle stock
Mismatch between downstream demand levels and upstream production capacity- smoothing inventory.
Mismatch between timing of customer demand and supply chain lead teams- anticipation inventory, transportation inventory.
Term
What is independant demand inventory?
Definition
inventory items with demand levels that are beyond a company's complete control.
Term
What is dependant demand inventory?
Definition
inventory items whose demand levels are tied directly to the company's planned production of another item.
Term
What is the periodic reveiw system?
Definition
an inventory system used to manage independant demand inventory. the inventory level for an item is checked at regular intervals and restocked to some predetermined level.
Term
What is the formula for periodic review system?
Definition
Q= R - I
Q- order quantity
r- restocking level
I- inventory at the time of review.
Term
what is service level?
Definition
a term used to indicate the percentage of time inventory levels will be high enough to meet demand during the re order period.
Term
What is a continuous review system?
Definition
An inventory system used to manage independant demand inventory. the inventory level for an item is constantly monitored, and when the reorder point is reached, an order is released.
Term
What are some key features of the continuous review system?
Definition
1.) inventory levels are monitored constantly, and a replenishment oder is issued only when a preestablished reorder point has been reached.
2.) The size of a replenishment order is typically based on the trade off between holding costs and ordering costs.
3.) the reorder point is based on both demand and supply considerations, as well as on how much safety stock managers want to hold.
Term
What is the economic order quanitity?
Definition
the order quantitty that minimizes annual holding and ordering costs for an item.
Term
EOQ tells mangers how much to order, but not
Definition
when to order.
Term
In general, the decision of how much safety stock to hold depends on what five factors?
Definition
1.) variability of demand
2.) the variability of lead time
3.) the average length of lead time
4.) the desired service level.
5.) the average demand.
Term
when volume price discounts are in effect, we must follow what two step process?
Definition
1.) calculate the EOQ. If the EOQ number represents a quantity that can be purchased for the lowest price, stop- you have found the lowest cost order quantity. Otherwise go to step 2.
2.) Compare total holding, ordering, and item costs at the EOQ quantity with total costs at each price break above EOQ. There is no reason to look at quantities below the EOQ, as these would result in higher holding and ordering costs, as well as higher item costs.
Term
What is a single period inventory?
Definition
A system used when demand occurs only in a single point in time.
Term
What is the target service level?
Definition
For a single period inventory system, the service level at which the expected cost of a shortage equals the expected cost of having excess units.
Term
What is target stocking point?
Definition
for a single period inventory system, the stocking point at which the expected cost of a shortage equals the expected cost of having excess units.
Term
What is the formula for the target service level?
Definition
Expected shortage cost = expected excess cost.
Term
what is the bullwhip effect?
Definition
An extreme change in the supply position upstream in a supply chain generated by a small change in demand downstream in the supply chain.
Term
the decision of where to put inventory is based on two general truths:
Definition
1.) the cost and value of inventory increase as materials move down the supply chain.
2.) the flexibility of inventory decreases as materials move down the supply chain.
Term
What is inventory pooling? the act of holding safety stock in a single location instead of multiple locations. Several locations then share safety stock inventories to lower overall holding costs by reducing overall safety stock levels.
Definition
the act of holding safety stock in a single location instead of multiple locations. Several locations then share safety stock inventories to lower overall holding costs by reducing overall safety stock levels.
Term
What is planning and control?
Definition
A set of tactical and execution level business activities that includes master scheduling, material requirements planning, and some form of production activity control and vendor order management.
Term
What does the top down model of manufacturing planning and control systems.
Definition
top- sales and op planning
second to top- master schedule
third from top- material requirements planning
branched off- production activity control, vendor order management.
Term
What is master scheduling?
Definition
A detailed planning process that tracks production output to actual customer orders.
Term
what several key pieces of information does master schedule records track?
Definition
forecasted demand, booked orders, projected inventory levels, production quantities, units still available to meet customer needs.
Term
What is forecasted demand?
Definition
in the context of master scheduling, the company's best estimate of the demand in any period.
Term
What are booked orders?
Definition
in the context of master scheduling, confirmed demand for products.
Term
What is the master production schedule?
Definition
The amount of product that will be finished and available for sale at the beginning of each week. the master production schedule drives more detailed planning activities, such as material requirements planning.
Term
What is available to promise?
Definition
A field in the master schedule record that indicates the number of units that are available for sale each week, given those that have already been promised to customers.
Term
What is the planning horizon?
Definition
The amount of time the master record or MRP record extends into the future. In general, the longer the production and supplier lead times are, the longer the planning horizon must be.
Term
What is rough cut capacity planning?
Definition
A capacity planning technique that uses the master production schedule to monitor key resource requirements.
Term
What is material requirements planning?
Definition
A planning process that translates the master production schedule into planned orders for the actual parts and components needed to produce the master schedule items.
Term
What is dependent demand inventory?
Definition
Inventory items whose demand levels are tied directly to the production of another item.
Term
What 3 related concepts is MRP based on?
Definition
1.) The bill of material
2.) backward scheduling
3.) the explosion of the bill of material.
Term
What is the bill of material?
Definition
a listing of all the subassemblies, intermediates, parts, and raw materials that go into a parent assembly showing the quantity of each required to make an assembly.
Term
What is the product structure tree?
Definition
A record or graphical rendering that shows how the components in the BOM are put together to make the level 0 item.
Term
What is planning lead time?
Definition
Within the context of MRP, the time from when a component is ordered until it arrives and is ready to use.
Term
What is exploding the BOM?
Definition
The process by which one works backwards from the master production schedule for a level 0 item to determine the quantity and timing of orders for the various subassemblies and components. Exploding the BOM is the underlying logic used by MRP.
Term
what is a parent/ child relationship?
Definition
refers to the logical linkage between higher and lower level items in the BOM.
Term
What is MRP nervousness?
Definition
A term used to refer to the observation that any change, even a small one, in the requirements for items at the top of the bill of material can have drastic effects on items further down the bill material.
Term
What is job sequencing rules?
Definition
Rules used to determine the order in which jobs should be processed when resources are limited and multiple jobs are waiting to be done.
Term
What can PAC systems do?
Definition
1.) route and prioritize jobs going through the supply chain.
2.) coordinate the flow of goods and materials between a facility and other supply chain partners.
3.) Provide supply chain partners with performance data on operations and supply chain activities.
Term
What is the critical ratio?
Definition
Days until due / Total task time remaining.
Term
What are distribution requirements planning?
Definition
A time phased planning approach similiar to MRP that uses planned orders at the point of demand ( customer, warehouse, etc) to determine forecasted demand at the source level ( often a plant).
Term
What is an information system?
Definition
A set of interrelated components that collect ( or retrieve), process, store, and distribute information to support decision making, coordination, and control in an organization.
Term
What supply chain activities are information sensitive?
Definition
1.) execution and transaction processing.
2.) routine decision making
3.) tactical planning
4.) strategic decision making
Term
What is customer relationship management?
Definition
A term that broadly refers to planning and control activities and information systems that link a firm with its downstream customers.
Term
What is supplier relationship management?
Definition
A term that broadly refers to planning and control activities and information systems that link a firm with its upstream suppliers.
Term
What is internal supply chain management?
Definition
A term referring to the information flow between higher and lower levels of planning and control systems within an organization.
Term
What is enterprise resource systems?
Definition
Large, integrated, computer based business transaction processing and reporting systems. ERP systems pull together all of the classic business functions such as accounting, finance, sales, and operations into a single, tightly integrated package that uses a common database.
Term
What are decision support systems?
Definition
Computer based information systems that allow users to analyze, manipulate, and present data in a manner that aids higher level decision making.
Term
What are network design applications?
Definition
Logistics information systems that address such long term strategic questions as facility location and sizing, as well as transportation networks. these applications often make use of simulation and optimization modeling.
Term
What is warehouse and transportation planning systems?
Definition
logistics information systems that support tactical planning efforts by allocating fixed logistics capacity in the best possible way given business requirements.
Term
What is warehouse management and transportation execution systems?
Definition
Logistics information systems that initiate and control the movement of materials between supply chain partners.
Term
What is just in time?
Definition
A philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity. In the broad sense, it applies to all forms of manufacturing and to many service industries as well. used synonymously with lean.
Term
What is lean?
Definition
A philosophy of production that emphasizes the minimization of the amount of all the resources ( including time ) used in the various activities of the enterprise. it involves identifying and eliminating non value adding activities in design, production, supply chain mangement, and dealing with the customers. used synonymously with JIT.
Term
What is lean six sigma?
Definition
A methodology that combines the organizational elements and tools of six sigma with lean's focus on waste reduction.
Term
What is lean supply chain management?
Definition
An extension of the lean philosophy to supply chain efforts beyond production. Lean supply chain mangement seeks to minimize the level of resources required to carry out all supply chain activities.
Term
What is waste?
Definition
According to JIT/ Lean perspective, any activity that does not add value to the good or service in the eyes of the consumer.
Term
What is muda?
Definition
japanse term meaning waste.
Term
What are 8 commonly recognized forms of muda?
Definition
overproduction, waiting, unnecessary transportation, inappropriate process, unnecessary inventory, unnecessary/ excess motion, defects, underutilized employees.
Term
what is one hallmark of a lean environment?
Definition
the strong emphasis placed on reducing raw material, work in process, and finished goods inventories throughout the system.
Term
what is one hallmark of a lean environment?
Definition
the strong emphasis placed on reducing raw material, work in process, and finished goods inventories throughout the system.
Term
why is inventory in the supply chain compared to water in a river.
Definition
the water is high enough, it will cover all the problems, under lean, slowly reducing the water will expose these problems.
Term
six sigma combines the discipline of define, measure, analyze, improve and control, as well as...
Definition
the rigor of statistical analysis , to identify a root cause, sustain improvement and provide the solid measurements that create a balanced scorecard.
Term
What are some critical factors of waste and variation?
Definition
Clarification, handoff, and aftercare.
Term
What is a kanban system?
Definition
a production control approach that uses containers, cards, or visual cues to control the production and movement of goods through the supply chain.
Term
What key characteristics do kanban systems have?
Definition
1.) they use simple signaling mechanisms, such as a card or even an empty space or container, to indicate when specific items should be produced or moved. Most kanban systems do not require computerization.
2.) Kanban systems can be used to synchronize activities either within a plan or between different supply chain partners.
3.) Kanban systems are not planning tools. Rather, they care control mechanisms that are designed to pull parts or goods through the supply chain based on downstream demand.
Term
What is a two card kanban system?
Definition
A special form of the kanban system that uses one card to control production and another card to control movement of materials.
Term
What is a move card?
Definition
A kanban card that is used to indicate when a container of parts should be moved to the next process step.
Term
What is a production card?
Definition
A kanban card that is used to indicated when another container of parts should be produced.
Term
What is a pull system?
Definition
A production system in which actual downstream demand sets off a chain of events that pulls materials through the various process steps.
Term
Cards arent the only signaling method, what are some other methods?
Definition
Single card systems where the single card is the production card, and the empty container serves as the move signal.
color coding of containers
designated storage spaces
computerized bar coding systems
Term
kanban systems can be used to synchronize the supply chain at the production activity control ( PAC) and venfore order management, tru or false?
Definition
true
Term
for a kanban system to work properly, there must be a ....
Definition
smooth consistent pull of material through the links.
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