Chapter 2 - The manufacturing Company Flashcards
Continuous line process
Continuous line process is a linear process in which material flow is continuous. If there is discrete manufacturing, this means that every unit of a manufactured item is handed over to the next manufacturing stp as it is produced, and not after a whole batch is produced.
Assemble to order (ATO)
A production environment where a good service can be assembled after receipt of a custmer’s order.
Control stock
A type of inventory that arises accidentally. Its size is related to imperfections in control and caused by items having to wait for other items to achieve simultaneous availability. A common example is items required for an assembly but which must wait in stock for starting the assembly operation due tto another item being out of stock.
Co-ordination stock
A co-ordination stock is a type of inventory caused by deliberate co-ordination of material flows. Two examples are the simultaneous inbound delivery of several items from the same supplier to decrease ytransport costs, and the simultaneous ordering of manufacturing to decrease set-up costs in production resources, even though the items have somewhat different requirements dates.
Customer order decoupling point
The point in time at which a product becomes earmarked for a particular customer. Downstream this point, the material flow is driven by customer orders in contrast to upstream flows which are driven by forecasts.
Customer order point
The position in a product’s bill of material from which the product has customer-specific appearance and characteristics.
Cycle stock
One of the two main conceptual components of any item inventory, the cycle stock is the most active component, i.e. that which depletes gradually as customer orders are received and is replenished cyclically when suppliers’ orders are received. The other conceptual components of the item inventory is the safety stock, which is a cushion of protection against uncertainty in the demand or in the replenishment lead time.
Engineering to order (ETO)
Products whose customer specifications require unique engineering design, significant customisation or new purchased materials. Each customer order results in a unique set of part numbers, bills of material and routings.
Intermittent line process
A line process in which entire batch quantities of manufactured items are completed in one manufacturing step before they are transported to the next step.
Jobbing or Job shop process
A process type characterised by production resources being organised by manufacturing function, and the flow of materials during the process of production is adapted to this organisation and production layout.
Levelling stock
A stock used to decouple rate of production from rate of consumption. It is used when producing goods at relatively even rate tio achieve a smooth utilisation of capacity and thereby decrease capacity costs.
Make to delivery schedule
Refers to manufacturing of completely known and specified products similar to make-to-stock operation. The difference is that manufacturing is not initiated by replenishment orders released based on availability in stock but by delivery schedules received from the customer.
Make to order (MTO)
A production environment where good and service can be made after receipt of customers’ order.
Make to stock (MTS)
A production environment where products can be and usually are finished before receipt of a customer order.
Obsolescence stock
Stock items that have met the obsolescence criteria established by the orgaisation. For example, stock that has been superseded by a new model or otherwise made obsolescent. Obsolete stock will never be used or sold at full value. Disposing of the stock may reduce a company’s profit.
