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Supply Chain Midterm BYU
Supply Chain Midterm BYU
70
Business
Undergraduate 3
02/25/2012

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Term
Operations and Supply Management
Definition
The design, operation, and improvement of the systems that create and deliver the firm's primary products and services.
Term
Operations
Definition
The manufacturing and service processes that are used to transform the resources employed by a firm into products desired by customers
Term
Supply
Definition
The supply chain processes that move information and material to and from the manufacturing and service processes of the firm. These include logistics processes that physically move product and the warehousing and storage processes that position products for quick delivery to the customer.
Term
The Supply Chain Processes
Definition
1) Planning
2) Sourcing
3) Making
4) Delivering
5) Returning
Term
Goods vs. Services
Definition
Services are: 1) Intangible, 2) Require some degree of interaction w/ customer, 3) Heterogeneous (they vary day to day), 4) Perishable and time dependent, and 5) Services are a package of features (five senses)
Term
Pure Goods, Core Goods, Core Services, and Pure Services
Definition
Pure Goods = Food, chemicals
Core Good = Appliances, Cars (service/warranty)
Core Services = Hotels, Airlines (must have a tangible good)
Pure Services = Teaching, consulting
Term
Servitization
Definition
A company building service activities into its product offerings for its current users. i.e. Maintenance, training, etc.
Term
Efficiency
Definition
Doing something at the lowest possible cost/inputs.
Term
Effectiveness
Definition
Doing the right things to create the most value for the company.
Term
Value
Definition
Quality / Price. Give a customer a better car for a lower price = BIG value
Term
Triple Bottom Line
Definition
1) Social
2) Economic
3) Environmental
Term
Competitive Dimensions
Definition
Price, Quality, Delivery Speed, Delivery Reliability, Coping with Changes in Demand (Change Volume), Flexibility and New Product Introduction Speed (Change It), and Support
Term
Trade-Off
Definition
In Competitive Dimensions, you may not be able to keep cost low if you have high quality...It's a trade-off
Term
Straddling
Definition
When a company seeks to match the benefits of a successful position while maintaining its existing position. This is risky.
Term
Order Winner vs. Order Qualifier
Definition
Order Winner = A criterion that differentiates products or services of one firm from another. What makes us better?

Order Qualifier = It's what allows your company to even be on the map. You meet the basic criterion.
Term
Productivity Ratio
Definition
Outputs / Inputs
Term
Capacity Time Durations
Definition
the ability to hold, receive, store, or accommodate. If you're a service business, this may be how many customers you can take on at a given moment.

Time Durations:
Long Range - Greater than One Year
Intermediate Range - 6-18 months
Short Range - Less than one month
Term
Strategic Capacity Planning
Definition
Determining the overall capacity level of capital-intensive resources--facilities, equipment, and overall labor force size--that best supports the company's long-range, competitive strategy
Term
Capacity Utilization Rate
Definition
Capacity Used / Best Operating Level
Term
Focused Factory
Definition
Factory that focuses on specific production objectives and produces a small set of similar products.
Term
Plant Within a Plant
Definition
Smaller focused factories all under the same roof as an answer to different consumer / company demands for products.
Term
Capacity Flexibility
Definition
1) Maintain System Balance (Part 1 gives exactly what Part 2 needs)

2) Frequency of Capacity Additions (Upgrading too much or too little)

3) External Sources of Operations and Supply Capacity (Outsourcing & Sharing Capacity)

4) Decreasing Capacity (When times are rough, how can you shed capacity off?)
Term
Decision Tree
Definition
A schematic model of the sequence of steps in a problem and the conditions and consequences of each step
Term
Planning Service Capacity
Definition
Time - Services cannot be stored for later use.

Location - Service capacity must be located near the customer.

Volatility of Demand - Consumer behavior and consumer interactions are different everywhere.
Term
Lead Time
Definition
The time needed to respond to a customer order
Term
Customer Order Decoupling Point
Definition
Determines where inventory is positioned to allow processes or entities in the supply chain to operate independently. i.e. Retail stock keeps the manufacturer from the consumer. The point is closer to the customer
Term
Make-to-Stock, Assemble to Order, Make to Order, Engineer to Order
Definition
Make-to-stock
Offer finished goods. Retail stores.

Assemble-to-order
Customized to the consumer, made from preassembled modules. Think Harley Davidson

Make-to-Order
Make the customer's product from raw materials

Engineer-to-Order

The firm will work with the customer to design and then make the product
Term
Lean Manufacturing
Definition
The attempt to achieve high customer service with minimum levels of inventory investment
Term
Total Average Value of Inventory
Definition
The total average investment in raw material, work in process, and finished goods inventory
Term
Inventory Turn
Definition
COGS / Inventory Value
Term
Days of Supply
Definition
1/Inventory Turn X 365 (how many days do you turn your inventory)
Term
Little's Law
Definition
Inventory = Throughput Rate X Flow Time
Term
Throughput
Definition
Long term average rate that items are flowing through the process
Term
Flow Rate
Definition
The time it takes a unit to flow through the process from beginning to end.
Term
Flow time Calculation
Definition
Inventory / Throughput
Term
How Production Processes Are Organized
Definition
Project Layout
The product being made stays at a fixed location. Equipment is moved to the product

Workcenter
Where similar equipment or functions are grouped together, such as all drilling machines in one area and all stamping machines in another.

Manufacturing Cell
A dedicated area where products that are similar in processing requirements are produced. Cells are designed to perform a specific set of processes.

Assembly Line
Processes are arranged according to the progressive steps by which the product is made.

Continuous Process
Similar to assembly line in that there is sequential steps, but the flow is continuous (such as with petroleum, chemicals, and drugs)
Term
High vs Low Degree of Customer Contact
Definition
High contact means they can affect the time of demand, the nature of the service, and the quality. High is more difficult to manage.
Term
Virtual Service
Definition
Pure virtual customer contact - Customers contact between eachother (ebay)

Mixed Virtual and Actual Customer Contact - Customers interact with each other in a server-moderated environment such as product discussion groups, YouTube, WikiPedia...
Term
Service Blueprint
Definition
A flowchart detailing the service process. Emphasizes what is visible and what is not visible to the customer.
Term
Managing Queues
Definition
1) Segment the customers
2) Train your servers to be friendly
3) Inform your customers of what to expect
4) Try to divert the customer's attention when waiting
5) Encourage customers to come during slack periods
Term
Single Channel, Single Phase
Definition
One person barber shop
Term
Single Channel, Multiphase
Definition
A car wash (single place, multiple phases)
Term
Multichannel, Single Phase
Definition
Cash registers in Walmart
Term
Multichannel, Multiphase
Definition
Hospital receives patients and takes them to several locations (channels) and then performs multiple phases at each channel
Term
Mixed Line Structure
Definition
A mixture of multiple and single channel line structures
Term
Average Utilization Calculation
Definition
Arrival Rate / Service Rate
15 per hour come to the store and I can serve 20 per hour. 15/20 = 75%
Term
Average Number Waiting in Line
Definition
(Arrival Rate)^2
-----------------
Service Rate X (SR - AR)
Term
Average Number in the System Calculation
Definition
Arrival Rate
-------------
(Service Rate - AR)
Term
Average Waiting Time
Definition
Average Number Waiting in Line
------------------------------
Arrival Rate
Term
Average Waiting Time in the System
Definition
Average Number in the System
----------------------------
Arrival Rate
Term
Total Quality Management
Definition
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
2) Ensuring that the organization's systems can consistently produce the design
Term
Malcolm Baldrige National Quality Award
Definition
An award from the department of commerce for companies with high quality
Term
Design Quality
Definition
The inherent value of the product in the marketplace
Term
Conformance Quality
Definition
The degree to which the product or service design specifications are met
Term
Quality at the Source
Definition
The person who does the work takes responsibility for making sure his or her work meets specifications
Term
Dimensions of Quality
Definition
1) Performance
2) Features
3) Reliability / Durability
4) Serviceability
5) Aesthetics
6) Perceived Quality
Term
Costs of Quality
Definition
Costs attributable to the production of quality that is not at 100%.

1) Appraisal Costs - Inspection, Testing, etc.
2) Prevention Costs - Costs to prevent defects
3) Internal Failure Costs - Costs for defects incurred within the system (scrapping the part or repairing it)
4) External Failure Costs - Warranties, Returns, Complaints, etc.
Term
ISO 90000 & 140000
Definition
International standards for quality management ans assurance.
ISO 140000 is for environmental management
Term
DPMO
Definition
Number of Defects
------------------
Number of Opportunities for error per unit X Number of Units
Term
Six Sigma
Definition
The philosophy and methods companies such as General Electric use to eliminate defects in their products processes.
Term
Six Sigma Methodology - DMAIC Cycle
Definition
Define
Measure
Analyze
Improve
Control
Term
Find upper and lower control limits
Definition
1) Number of defects
------------------ = P
Number of Samples X Sample Size

2) S(p) = Sqrt ((P X (1-P))/n)

3) UCL = P + Z X S(p)
LCL = P - Z X S(p)
Term
Project Management
Definition
Planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of the project.
Term
Pure Project
Definition
A self-contained team works full time on a project. The project manager has full authority over the project
Term
Functional Project
Definition
Team members are assigned from the functional units of the organization. The team members remain a part of their functional units and typically are not dedicated to the project
Term
Matrix Project
Definition
A structure that blends the functional and pure project structures. Each project uses people from different functional areas. A dedicated project manager decides what tasks need to be performed and when, but the functional managers control which people to use.
Term
Work Breakdown Structure
Definition
Program --> Project --> Task --> Subtask --> Work package
Term
Gantt Chart
Definition
Shows both the amount of time involved and the sequence in which activities can be performed.
Term
Earned Value Management (EVM)
Definition
Has the ability to measure scope, schedule, and cost in a project
Term
Critical Path Method
Definition
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.
a. Immediate Predecessors
i. Activities that need to be completed immediately before an activity
3) Determine the critical path
4) Determine the early start/finish and late start/finish schedule
a. Slack time
i. Leeway in when the activity can start and finish
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