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SCM 352 Exam 2
Supply Chain Management
104
Management
Undergraduate 4
10/30/2012

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Term
3 types of goods and services
Definition
Make-to-order, Assemble-to order, Make-to-stock
Term
Make-to-order
Definition
aka Custom, custom products, one of a kind, ex wedding, suits, surgery
Term
Assemble-to-order
Definition
aka Option, parts are finished, but not put together, ex dell computers, subway sandwich
Term
Make-to-stock
Definition
aka Standard, goods and services made for everyone, generally by machine, ex shoes, credit cards, soap
Term
Four types of processes
Definition
Projects, Job shop processes, Flow shop, Continuous flow
Term
Projects
Definition
large-scale, one time tasks such as complex, custome jewelry, airplanes
Term
Job shop processes
Definition
equipment for product or service is separated into areas based on their specific task, ex hospital has xray room, surgery room, and waiting room
Term
Flow shop
Definition
an assembly line used to make a variety of similar goods, ex automobiles, appliances, insurance policies
Term
Continuous flow
Definition
very standardized goods and services that are made constantly in high volumes ex, gasoline, soda, chips
Term
Value stream map
Definition
for order processes: used to determine if tasks add value or not, value adding tasks are determined by the customer
Term
Value stream calculations
Definition
Time= value adding tasks + nonvalue adding, Cost = value adding costs + nonvalue adding
Term
Little's law
Definition
throughput * flow time to explain work in process relationship between units made over time
Term
Throughput
Definition
output rate of process, ex 100 units/hours
Term
Bottleneck
Definition
work activity that limits throughput of the entire process, ex preparing side dishes slows down process
Term
Supply chain management
Definition
management of all activities that facilitate the fulfillment of a customer order for a manufactured good
Term
3 views of value/supply chains
Definition
Input/Output View, Pre and Post Services View, Typical Goods-Producing Supply Chain Structure
Term
Input/Output view
Definition
supplier to consumer (what goes in to make the product and what comes out)
Term
Pre and Post services view
Definition
gaining a customer and keeping the customer (before and after product)
Term
Typical Goods-Producing supply chain structure
Definition
supplier to manufacturer to consumer
Term
SCOR (Supply Chain Operations Reference Model)
Definition
1) Plan, 2) Source, 3) Make, 4) Deliver, 5) Return
Term
Contract manufacturer
Definition
firm specializes in certain types of goods-producing activities, such as customized design or manufacturing
Term
EMS (Electronic Manufacturing System)
Definition
term used for companies that design services for electronic components of a product
Term
Postponement
Definition
delaying product customization until product is closer to customre at the end of the supply chain
Term
Multisite management
Definition
process of managing geographically dispersed service-providing facilities
Term
Reverse logistics
Definition
managing the flow of finished goods that may be unusable or discarded through the supply chain from customers aka returns
Term
Sustainable supply chains
Definition
green supply chain that uses environmentally friendly inputs
Term
Bullwhip effect
Definition
order amplification in the supply chain where each member of a supply chain "orders up" to buffer their own inventory ex. Diapers at walmart
Term
4 main locations for supply chains
Definition
global, regional, community, local
Term
Center of gravity method
Definition
best place to place a warehouse using X and Y coordinates, and remember there are limitations ex. Mountain, ocean, railroad
Term
Inventory management
Definition
efficient distribution system allowing a company to operate with lower inventory levels
Term
VMI (Vendor Managed Inventory)
Definition
becoming popular where the seller manages inventory for the customer and tells the supplier
Term
Capacity
Definition
production volume of a manufacturer over a certain time period determined by resources
Term
Key capacity issues
Definition
Short term ex have overtime, increase number of on call workers, Long term ex construct a new plant, expand number of branches
Term
Economies of scale
Definition
average unit cost of a good decreases as the volume of sales increases
Term
Diseconomies of scale
Definition
average cost of a good increases as the volume of sales increases
Term
Focused factory
Definition
to achieve economies of scale without extensive investments by focusing on narrow range of goods or target market segments
Term
Safety capacity
Definition
aka Capacity Cushion, is the amount of capacity reserved for unanticipated events
Term
Average safety capacity
Definition
Percent = 100% - Average resource utilization %
Term
Complementary goods
Definition
seasonal products should have complementary products to sell during off seasons
Term
Short term capacity adjustments
Definition
change labor capacity and schedules, hire more/overtime
Term
TOC (Theory of Constraints)
Definition
principles used to increase total process maximization by constantly using all bottleneck stations
Term
Throughput
Definition
amount of money generated per time period in sales
Term
Constraint
Definition
anything that limits an organization from moving forward
Term
Physical constraint
Definition
associated with the capacity ex machine or employee
Term
Bottleneck work activity
Definition
limits capacity for entire process of a product
Term
CPFR (Collaborative Planning, Forecasting, and Replenishment)
Definition
sharing info with a selling company ex, Colgate does a promotion and tells Walmart so they know to order more products earlier
Term
Planning horizon
Definition
length of time where a forecast is based, short range are more accurate than long range because there are less variables
Term
Time series (5 points)
Definition
1) Trend, 2) Seasonal patterns, 3) Cyclical patterns, 4)/5) Random variation or noise and one time variation or error
Term
Random variation
Definition
aka Noise, unexplained deviation of a time series or trend because forecasts are never accurate
Term
Irregular variation
Definition
one time variation that is explainable, ex hurricane causes increase in demand for food and water
Term
Judgemental forecasting (Qualitative)
Definition
relies on opinions and expertise of forecasts when no historical data is available
Term
Delphi method
Definition
forecasting through expert opinion by getting a bunch of experts to talk about ideas individually
Term
Survey
Definition
sample size is larger than delphi method but is costly
Term
Statistical forecasting (Quantitative)
Definition
using numbers to assume that the future is correlated to the past
Term
MAPE (Mean Absolute Percentage Error)
Definition
dividing absolute error by time series data to make it easier to interpret (a percentage of error)
Term
Tracking signal
Definition
method to quantiy bias by getting the average absolute deviation (MAD)
Term
Inventory management
Definition
planning and controlling everything that affects creating, storing, and transporting products
Term
Primary fuctions of inventory
Definition
to have enough for demand and not lose profits while they are not available
Term
WIP (Work in Process)
Definition
partially finished goods in various stages of completion
Term
MRO (Maintenance, Repair, and Operating
Definition
supplies used in operations but not part of finished goods
Term
Cycle inventory
Definition
inventory resulted from purchasing larger quantities than needed for immediate sale (normally high turnover products)
Term
Ordering/setup costs
Definition
costs to place an order/cost to prepare machines
Term
Inventory-holding/carrying costs
Definition
both are same: cost of storing inventory (price of units not being used)
Term
Independent demand
Definition
demand for a product SKU (individual product) which is unrelated to demand of other SKUs (individual products)
Term
Dependent demand
Definition
demand of one product is directly related to demand of another ex, tires to a car
Term
ABC inventory (80/20 rule or Pareto)
Definition
used to check on-hand inventory and sales of each item: A items sell for a lot but few are sold ex, car 20% of product but 80% of profit, C items sell for low prices but in large numbers 80% of product but 20% of profit
Term
Reorder point
Definition
when inventory falls below a certain value, a new order is automatically placed, sometimes by using the "average demand during the lead time"
Term
EOQ (Economic Order Quantity) Model
Definition
determines order size to minimize annual total cost: setup costs + carrying costs, but must meet all 8 assumptions
Term
Continuous review system
Definition
constantly checking inventory ex, 7-11
Term
Periodic review system
Definition
checking invnetory at specific points in time- higher chance of going out of stock, theft, etc
Term
Cross docking
Definition
all products go to a warehouse from suppliers to be separated and redistributed to various locations
Term
Facility layout
Definition
specific arrangement of physical facilities used to minimize delay, maintain flexibility, use labor and space effectively
Term
Product layout
Definition
aka Auto Assembly Line, arrangement based on sequence of operations, ex credit card processing, subway shops, auto assembly lines
Term
Process layout
Definition
aka Job Shop, grouping equipment or activities that do similar work
Term
Cellular layout
Definition
aka Flexible Manufacturing Systems, grouping equipment together by the need for a set of equipment ex, need for a legal group: labor law, bankruptcy, divorce
Term
Fixed position layout
Definition
aka Project, uses resources needed o make a good in one location (normally location it needs to be used)
Term
Flexibility
Definition
aka Variety
Term
Flow-blocking delay
Definition
when a work center completes a unit but cannot release it because the in process storage at the next stage is full (first operation is faster than second)
Term
Lack-of-work delay
Definition
when one stage completes work and no unit from previous stage is awaiting processing (second operation is faster in production than first)
Term
Assembly line balancing
Definition
grouping tasks among workstations so each workstation has the same amount of work, to minimize idle time
Term
Cycle time
Definition
interval between two successive outputs, A/R (available time to produce output/output or demand forecast in units) but A and R need the same units of measure*
Term
Maximum cycle time
Definition
sum of total task time
Term
Shortest cycle time
Definition
longest task time out of all operations
Term
Precedence relationships
Definition
must be taken into consideration: longest task time first (because shortest task time is easier to fit in a line), and shortest task time first (so that idle time is minimized)
Term
Job enrichment
Definition
to give more workers responsibility
Term
CRAFT
Definition
process layout software program in textbook
Term
Reducing number of work stations in an assembly line while maintaining desired output rate
Definition
no change in idle time
Term
Supply chain management
Definition
management of all activities that facilitate the fulfillment of a customer order for a manufactured good
Term
3 views of value/supply chains
Definition
Input/Output View, Pre and Post Services View, Typical Goods-Producing Supply Chain Structure
Term
Input/Output view
Definition
supplier to consumer (what goes in to make the product and what comes out)
Term
Pre and Post services view
Definition
gaining a customer and keeping the customer (before and after product)
Term
Typical Goods-Producing supply chain structure
Definition
supplier to manufacturer to consumer
Term
SCOR (Supply Chain Operations Reference Model)
Definition
1) Plan, 2) Source, 3) Make, 4) Deliver, 5) Return
Term
Contract manufacturer
Definition
firm specializes in certain types of goods-producing activities, such as customized design or manufacturing
Term
EMS (Electronic Manufacturing System)
Definition
term used for companies that design services for electronic components of a product
Term
Postponement
Definition
delaying product customization until product is closer to customre at the end of the supply chain
Term
Multisite management
Definition
process of managing geographically dispersed service-providing facilities
Term
Reverse logistics
Definition
managing the flow of finished goods that may be unusable or discarded through the supply chain from customers aka returns
Term
Sustainable supply chains
Definition
green supply chain that uses environmentally friendly inputs
Term
Bullwhip effect
Definition
order amplification in the supply chain where each member of a supply chain "orders up" to buffer their own inventory ex. Diapers at walmart
Term
4 main locations for supply chains
Definition
global, regional, community, local
Term
Center of gravity method
Definition
best place to place a warehouse using X and Y coordinates, and remember there are limitations ex. Mountain, ocean, railroad
Term
Inventory management
Definition
efficient distribution system allowing a company to operate with lower inventory levels
Term
VMI (Vendor Managed Inventory)
Definition
becoming popular where the seller manages inventory for the customer and tells the supplier
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