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Definition
| An approach used in consolidation warehouses where rather than making larger shipments, large shipments are broken down into small shipments for local delivery in an area |
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| Systems that combine the idea of consolidation and that of cross-docking |
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| A closed facility (under the supervision of government customs officials) into which foreign goods can be brought without being subject to the payment of normal import duties |
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| A group of countries that agree on a set of special arrangements governing the trading of goods between member countries. Companies may locate in places affected by the agreement to take advantage of new market opportunities. |
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| An approach for selecting a facility location by combining a diverse set of factors. Point scales are developed for each criterion. Each potential site is then evaluated on each criterion and the points are combined to calculate a rating for the site. |
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| A special linear programming method that is useful for solving problems involving transporting products from several sources to several destinations. |
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| A technique for locating single facilities that considers the existing facilities, the distances between them, and the volumes of goods to be shipped. |
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| The Seven Rights of Logistics |
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Definition
1. Right product
2. Right place
3. Right time
4. Right customer
5. Right condition
6. Right quantity
7. Right cost |
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Definition
| Integrated activities designed to achieve high-volume, high-quality production using minimal inventories of raw materials, work-in-process, and finished goods |
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| In the context of lean, something for which the customer is willing to pay |
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| Something that does not add value from the customers' perspective |
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Term
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Definition
| These are the value-adding and non-value-adding activities required to design, order, and provide a product from concept to launch, order to delivery, and raw materials to customers |
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Definition
| The optimization of value-adding activities and elimination of non-value-adding activities that are part of the value stream |
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| A graphical way to analyze where value is or is not being added as material flows through a process |
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| Japanese philosophy that focuses on continuous improvement |
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| Periodic inspection and repair designed to keep equipment reliable |
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| A philosophy in which similar parts are grouped into families, and the processes required to make the parts are arranged in a specialized work cell |
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| Philosophy of making factory workers personally responsible for the quality of their output. Workers are expected to make the part correctly the first time and to stop the process immediately if there is a problem |
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| A schedule that pulls material into final assembly at a constant rate |
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| The period of time during which the schedule is fixed and no further changes are possible |
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Definition
| Calculating how many of each part were used in production and using these calculations to adjust actual on-hand inventory balances. This eliminates the need to actually track each part used in production. |
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Definition
| Smoothing the production flow to dampen schedule variation |
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| Kanban and the kanban pull system |
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Definition
| An inventory or production control system that uses a signaling device to regulate flows |
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Definition
| Medium and long-term forecasts that are used to make decisions related to design and plans for meeting demand |
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| Short-term forecasts used as input for making day-to-day decisions related to meeting demand |
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Definition
| Requirements for a product or service caused by the demand for other products or services. This type of internal demand does not need a forecast, but can be calculated based on the demand for the other products or services |
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Definition
| Demand that cannot be directly derived from the demand of other products |
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Definition
| A type of forecast in which data relating to past demand are used to predict the future demand |
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Term
| Linear Regression Forecasting |
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Definition
| A forecasting technique that assumes that past data and future projections fall around a straight line |
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Definition
| A time series forecasting technique in which each increment of past demeand data is decreased by (1=alpha) |
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Term
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Definition
| The stock of any item or resource used in an organization |
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Definition
| The demands for various items are unrelated to eachother |
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Definition
| The need for any one item is a direct result of the need for some other item, usually an item which it is a part |
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Term
| Fixed-order quantity model (or Q-model) |
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Definition
| An inventory control model where the amount requisitioned is fixed and the actual ordering is triggered by inventory dropping to a specified level of inventory |
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Term
| Fixed-Time period model (or P-Model) |
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Definition
| An inventory control model that specifies inventory is ordered at the end of a predetermined time period. The interval of time between orders is fixed and the order quantity varies |
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Term
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Definition
| The amount-on-hand plus on-order minus backordered quantities. In the case where inventory has been allocated for special purposes, the inventory position is reduced by these allocated amounts |
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Definition
| The amount of inventory carried in addition to the expected demand |
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Definition
| A physical inventory-taking technique in which inventory is counted on a frequent basis rather than once or twice a year |
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Term
| Aggregate Operations Plan |
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Definition
| Translating annual and quarterly business plans into labor and production output plans for the intermediate term. The objective is to minimize the cost of resources required to meet demand |
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Term
| Sales and operations planning |
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Definition
| A term that refers to the process that helps companies keep demand and supply in balance. |
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Term
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Definition
| Activity typically done annually and focusing on a horizon of a year or more |
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Term
| Intermediate-range planning |
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Definition
| Activity that usually covers a period from 3 to 18 months with weekly, monthly, or quarterly time increments |
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Term
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Definition
| Planning that covers a period less than six months with either daily or weekly increments of time |
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Definition
| The number of units completed per unit of time |
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Definition
| The number of production workers needed each period |
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Definition
| Unused inventory carried from a previous period |
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Term
| Production planning strategies |
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Definition
| Plans that involve tradeoffs among workforce size, work hours, inventory, and backlogs |
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Term
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Definition
| A plan that uses just one of the options available for meeting demand. Typical options include chasing demand, using a stable workforce with overtime or part-time work, and constant production with shortages and overages absorbed by inventory |
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Definition
| A plan that combines options available for meeting demand |
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Definition
| Allocating the right type of capacity to the right type of customer at the right place and time to maximize revenue or yield |
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Term
| Enterprise Resource Planning (ERP) |
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Definition
| A computer system that integrates application programs in accounting, sales, manufacturing, and the other functions in a firm. This integration is accomplished through a database shared by all the application programs. |
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Term
| Material Requirements Planning (MRP) |
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Definition
| The logic for determining the number of parts, components, and materials needed to produce a product. MRP also provides the schedule specifying when each of these materials, parts, and components should be ordered or produced. |
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Term
| Issues in Facility Location |
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Definition
1) Proximity to customers
a. Makes rapid delivery easier
2) Business Climate
a. Can include presence of similar-sized businesses, businesses in the same industry, and other foreign companies
b. How are other competitors doing?
3) Total costs
a. Object is to minimize overall cost
b. How easy is
4) Infrastructure
a. Adequate road, rail, air, and sea transportation along with energy and telecommunications
5) Quality of Labor
a. Educational and skill levels must match needs
6) Suppliers
a. Proximity of important suppliers supports lean production
7) Other Facilities
a. Location of other facilities can influence a location decision (capacity and product mix)
8) Free trade zones
a. A closed facility into which foreign goods can be brought without being subject to
b. 260 free trade zones in the US
9) Political Risk
a. Risks in both the country of location and the host country influence the decision
10) Government Barriers
a. Barriers in many countries are being removed
11) Trading Blocs
a. Firms locate within a block to take advantage of new markets or lower total cost
12) Environmental Regulation
a. These impact a certain industry in a given location and must be included in the decision
13) Host community
Competitive advantage |
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