1)Less costs,

2) Create a competitive advantage,

3) Make better processes

1) They follow a negative exponential distribution,

2) rate of improvement decreases over time,

3) follows a scallop effect where there are short bursts of learning

They are company specific and you can't really compare, they are based on time so they must be accurate, 

changes in work place such as workers leaving affects it, 

indirect materials and labour are not factored into it

Customer satisfaction,

performance levels

Losing business,

liability (insurance required),

less productivity,

higher costs

Better reputation,

higher pricing and profit,

more market share,

more customer loyalty,

fewer production problems,

less liability

1) Performance - WIND

2) Features - acessories

3) Reliability - time put into testing

4) Conformance - McD is standardized

5) Durability - last long

6) Serviceability - easy of repair

7) Aesthetics - Good looking dinner plate

8) Perceived quality - $100 cake vs $20 cake

9) Value - add more stuff, buffet = value

Prevention costs - reduction of defects (knife that cuts not saws),

appraisal costs - evaluate products (drink some samples of wine),

internal failure - producing a defect before delivery (Samsung G7)

external costs - defects after delivery (ppl will destroy your company)

A refund plus a little more due to a hidden oppourtunity cost of them losing time,

counter measure would be to offer them stuff that costs you $0 like free bread

Through more sales,

-more rep.

-flexible prices

-more response

Through lower costs,

-more productive

-lower scrap costs

-lower warranty costs

Management's commitment,

customer involvement (they tell you whats wrong),

re-design products,

re-design processes

1) Design for robustness - works even in bad conditions

2) Design for manufacturability - easy assembly, few parts

3) Design for reliability - manufacture close to tolerances

1) Intanglible goods

2) Intangible expectations

3) Less standardized processes (important to design a good process)

4) Must be able to adapt to any situation

1) Reliability

2) Responsiveness

3) Access

4) Competence

5) Courtesy

6) Communication

7) Credibility

8) Security

9) Knowing the customer

10) Tangibles - physical evidence

They are about international quality standards.

1) Environment management

2) Auditing

3) Performance evaluation

4) Labelling

5) Life cycle assessment

1) Promote change and continuous improvement

2) Break barriers that may decrease productivity

3) Be supportive and help everyone to become better

It is a set of principles that implements a strategy to reduce the number of defects.

It operates at 6 standard deviations away from the mean.

Motorola was the first to use this.

1) Build communication networks

2) Get good supervisors

3) Give more responsbility

4) More morale

5) Make a formal team

Just in time is getting the inventory as an order comes in.

1) Reduced cost or quality

2) More quality

3) Reduced inventory

1) It may leave you vulnerable in the event that demand increases

1) Quality robustness - able to produce in bad conditions

2) Quality loss function

3) Target-oriented quality

1) When you start producing, so inspect the inputs

2) When you are about to deliver, so make sure no defects

3) When you are about to make an irreversible or expensive operation

1) Random variation - natural variations that can't be controlled(mahogany wood will always be random shades of mahogany)

2) Assignable variation - variation where you can put the blame on someone(black paint instead of white paint means someone screwed up)

A control chart is made in order to differentiate between random and assignable variation.

It is able to tell outliers because there is a UCL and LCL which contains all acceptable variations. The control limits are the outliers which are the random variations.

Sample mean charts are x bar charts which monitor the mean of processes

Sampel range charts are R charts which monitor the dispersion of processes

p-Chart - used to monitor proportion of defectives, is based on pass/fail and multiple samples

c-Chart - used to monitor the number of defectives, is based on when defects can be reasonably counted

1) Design specifications - range of acceptable values

2) Process variability - natural variation

3) Process Capability - the variation in relation to specifications

1) Simplify

2) Standardize

3) Mistake-proof

4) Upgrade equipment

5) Automate

1) Define

2) Measure

3) Compare to standard

4) Evaluate

5) Correct action

6) Re-evaluate

What is the simple supply chain process? (3)

What must be present throughout the ENTIRE process?

1) Start off with purchasing your source of materials

2) Start production and make products

3) Distribute and deliver products to customers

Information must be present and continuously passed in order to effectively conduct the supply chain process.

1) Information

2) Communication

3) Co-operation

4) Trust

1) Inaccurate demand forecasts

2) Late or incomplete deliveries

3) Product and price changes

4) Batch orders

5) Inflated orders

1) More competition

2) More outsourcing

3) More globalization

4) More e-commerce

5) Bullwhip effect - manage inventories

1) Planning software - designs the network and production

2) Execution software - used for management purposes throughout the production process

Go green if there are no extra costs associated with it or if you save money.

It improves sustainability and reputation

1) E-business

2) Electronic data interchange (EDI) - exchange info

3) Barcodes - useful for sales

4) Radio-frequency identification (RFID) - send information of a product via radio waves

5) Built-to-order (BTO) - direct sell on internet, no inventory lying around

What are the elements of supply chain integration?

What can it help to reduce?

1) Share information among supply-chain members

2) Collaborate planning, forecasting and design

3) Co-ordinate the work flow and production

4) Adopt new models and technology

This can help to reduce the bullwhip effect.

1) Trust

2) Effective communcation

3) Performance metrics - costs, delivery, flexibility

4) Ease of access

1) Identify sources of supply

2) Negotiate contract

3) Maintain communication

4) Establish relationships

5) Manage supplies

6) Obtain goods and services

INMEMO

1) Less costs

2) More flexible

3) More capacity

4) Gain more expertise

The disadvantage is loss of control

1) Competitive bidding

2) Published price lists

3) Negotiations

Centralized means that the purchasing is taken care of by one department

Decentralized means it is taken care of by individual departments

Identify the expenditure data and then reduce costs and improve efficiency.

It provides answer to many questions such as,

what was bought, who was supplier, etc.

It is the transportation and warehousing portion of the process.

It involves the flow of materials and products

1) Raw materials

2) Work in process (WIP)

3) Finished goods

4) Spare tools and supplies

1) Protect against stock out

2) Quality discounts

3) Smooth production requirements

4) Decouple operations

5) Hedge against price increases

6) Always something to work on

The fill rate is the level of customer service.

The inventory turnover is the amount of shelf life the inventory has during one cycle.

1) Forecasts of demand

2) Lead time knowledge

3) Estimates of costs (hold, order, shortage)

4) Classification and tracking systems

1) Security

2) Safety 

3) Obsolescence

1) Fixed point/reorder model - reorder new stuff when inventory drops below a fixed point

2) Two-bin system - replenish when one bin is empty

3) Barcodes

4) RFID (Radio frequency identification)

1) Purchasing costs

2) Ordering costs

3) Carrying costs

4) Stockout costs 

5) Quality costs (4 types)

What is the difference between independant and dependant demand?

Which one is certain?

Independant demand is the demand for the final product.

Dependant demand is the demand for all other parts and components

Dependant demand is certain, independant demand is uncertain.

1) Order/set-up costs

2) Holding/carrying costs

3) Shortage costs

What is the ABC Classification system used for?

What is the significance of the letters A, B and C? (3)

It is used to organize inventory according to some measure of importance and volume

A- Very important

B- Moderately important

C- Not very important

1) Only order/carry costs

2) Same quantity ordered every time

3) Details known with certainty

4) No discounts

5) One product

6) Demand is known and consistent

7) Lead times are the same with single deliveries

1) Re-order point - When the quantity hits this point, you order more products

2) Safety Stock - stock that is held in excess in case demand unexpectedly rises

3) Service level - Probability that demand won't exceed supply during the lead time

1) Exclude sunk costs

2) Very small values may not be valid

What are some benefits of fixed-order intervals? (3)

What are some disadvantages? (3)

1) Tight control of items

2) Possible savings in costs

3) Practical when inventory can't be monitored

1) Requires large safety stock

2) Increased carrying cost

3) Cost of periodic reviews

The single period model is used for ordering items with limited useful lives

1) Continuous stocking - determines optimal level of stock

2) Discrete stocking - meets or exceeds level of service required

What is Shortage cost?

What is Excess cost?

Shortage cost is the unrealized profits per unit

Excess cost is the different between purchase cost and salvage value

What is the too much inventory strategy?

What is the wise inventory strategy?

Too much inventory is having too much = lotta problems but living with the problems, costs a lot to maintain this

Wise inventory is having few safety stocks and small lots, instead being smart about inventory, can be risky.

1) Breakdown maintenance - Reactive approach, deal with it when it happens

2) Preventive maintenance - Proactive approach, periodically monitor and fix stuff

1) Avoid disruption

2) No excess production costs

3) Maintain quality

4) Avoid missed delivery

1) Production capacity reduced or no production

2) Quality issues

3) Safety issues

What is predictive maintenance and what is the goal?

What is autonomous maintenance?

Why is autonomous maintenance bad and who should take do it?

An attempt to determine when its best to perform maintenance. The goal is to balance costs.

Get the worker to do maintenance when they think it is the right time.

This is bad because they can hold you liable, better to get a professional to do maintenance since you can hold them liable.

It is a philosophy of waste reduction and continuous improvement.

It is sometimes referred to as JIT.

1) Cost of repair vs replace

2) Possible disruptions

3) Teaching employees again

4) Demand forecasts may require more capacity

What is Reliability Centered Maintenance (RCM)?

1) Record accuracy

2) Cycle counting - eliminates inefficiency

3) Control of service inventories - good personnel, know when stuff is coming in, going out

What is total productive maintenance (TPM)?

What are some elements involved with it? (4)

It is using autonomous maintenance and attempts to reduce variability with strategic views of total quality management.

1) Proper design

2) Emphasize costs

3) Develop plans

4) Train operators

What are some techniques for enhancing maintenance? (3)

What do they all involve?

1) Simulation

2) Expert systems

3) Automated sensors

They all use computer software.