chapter 5 Quantitative Data Analysis and a Selection of Quantitative Methods for Logistics and Supply Chain Management Flashcards
Discuss the seven steps in the quantitative analysis of supply chain data
- Defining the supply chain problem
This is the most important and difficult step. The supply chain manager must develop
a clear and concise statement of the supply chain problem, giving rise to the
following requirements:
* It is essential to go beyond symptoms and identify true causes.
* It is necessary to concentrate on only one problem at a time – selecting the
right problem is very important.
* Specific and measurable objectives for solving the problem have to be developed.
2.Developing a supply chain model
Quantitative analysis supply chain models are realistic, solvable and understandable
mathematical representations (equations) of a supply chain situation. - Acquiring supply chain input data
Supply chain input data must be accurate, because if garbage information goes
into the development of the supply chain model, garbage results will come out
of it.
4.Developing a supply chain solution
The best (optimal) solution to a problem is found by manipulating the model variables
until a solution is found that is practical and can be implemented. - Testing the model’s solution
Both input data and the model should be tested for accuracy before analysis and
implementation. New data can be collected to test the model and the results
should be logical, consistent and represent the real situation. - Analysing the model’s results
Determine the implications of the supply chain solution. Implementing results often
requires change in a supply chain. The impact of actions or changes need to be
studied and understood before implementation
7.Implementing the supply chain results
Implementation incorporates the solution into the supply chain. Implementation
can be very difficult since people can resist changes.
Define Distribution Resource Planning
Distribution resource planning (DRP) is a supply chain planning method that helps businesses determine how much of a product to produce and distribute to meet customer demand.Distribution Resource requires three principle
inputs:
1. inventory status information;
2. product structure information; and
3. a master production schedule.
Name five other areas DRP can be extended to
- Transportation planning and scheduling
- Shipping frequency
- Maximize cube/weight utilization of transportation modes
- Budgeting
- Space planning
Define Lean Supply Chains
Lean is an approach to improving the supply chain that focuses on the elimination of
activities that don’t add value to customers
Discuss the so called “Big Five” elements spanned by the concept of lean supply
chains
- Design.The incorporation of lean in the design area entails collaborative teams that often
involve
specialists from other organizations who provide technical input that is not
available to a single design team. It also encompasses designing products that can
be easily sourced and that minimize the part count - Procurement.Lean procurement
is concerned with important activities such as rationalizing the supplier base so that
meaningful relationships can be formed with suppliers.Also, changes are implemented that reduce the time and cost involved in placing
orders, while introducing flexibility in supply so that the processes are neither starved
nor flooded with stock. - Manufacturing.
- Transportation.Lean transportation is about introducing concepts like combined multi-stop loads,
cross-docking, right sizing equipment and packaging solutions. It also involves developing
relationships with the bigger transporters in order to reduce costs and improve
delivery performance. - Warehousing.The lean concepts applicable to warehousing include reducing stock levels, increasing
pick rates and accuracy and reducing damage, whether it be to staff or to products.
Give a brief discussion of the importance of Lean Supply Chains
Briefly discuss the following nine types of waste:
–– Overproduction
–– Defects
–– Inventory
–– Transportation
–– Waiting
–– Correction
–– Motion
–– Over processing
–– Incoherence of knowledge
1.1. Over-Production: Producing More Than is Needed.
2.Waiting: Time Wasted for the Process Step to be Completed.
3. Transportation: Unnecessary Movement of Material, Product, or Goods.
4. Over-Processing: Doing More Than is Required.
5. Motion:Unnecessary Movements of People.
6. Excess Inventory: WIP (work in process) being completed before it is needed.
7. Defects: Errors Made on Daily Tasks, Creating Defective Parts, or Anything Else That Creates Rework.
8. Intellect: Under-utilization of Skills.
Explain the Six Sigma concept
Six Sigma is a quality management methodology that helps businesses improve their products, services, and processes by eliminating defects. The goal is to reduce or eliminate variance in processes and achieve a defect-free rate of 99.99966%.
benefits of the Lean Concept:
–– Increased operational readiness
–– Increased product quality
–– Increased workers’ efficiency
–– Increased utilisation of machines and space
–– Reduced machine failures
–– Compressed cycle times
–– Reduced logistics costs
–– Increased inventory levels
–– Increased supply chain visibility
–– Improved supplier and logistics performance
Discuss the internal and external supply chain risks
Define the following methods for indentifying supply chain risks:
–– Brainstorming
–– What if?
–– Mind mapping
–– Check-sheets
–– Flowcharting
–– Process mapping
–– Cause and effect/Fishbone diagrams
–– Hazard Operability Analysis (HAZOP)
1.Brainstorming
Brainstorming is a technique usually utilised where you have a group of people trying
to find a solution to a problem. It aims to achieve quality through quantity by capturing
a wide spectrum of ideas from various disciplines in an open and encouraging atmosphere.
2.What if?
is a technique commonly used in engineering to determine hazards associated
with a facility, equipment or a process. The process under review is broken down
into sub-processes and each step interrogated by asking “what if there is a failure in
the sub-process
3.Mind Mapping
Mind maps are diagrammatic representations of ideas arranged radially around a
central
idea or theme.
4.Check-sheets
Check-sheets are commonly used tools that allow collection of information from a
process
in a systematic, organised way in real time at the location where data is being
generated.
5. Flow Charts
Flowcharting is the process of charting a process or information by representing the
individual steps as boxes and displaying the order of occurrence by connecting each
box with an arrow showing the direction of process/information flow.
6.Process Mapping
A process map is a diagrammatic representation of a process that utilises geometric
shapes representing actions or stages interconnected by flow-lines
7.Cause and Effect/Fishbone Diagrams
Fishbone diagrams (also known as cause and effect diagrams or Ishikawa diagrams)
are primarily used to identify causes associated with an event, but are easily adopted
to identify hazards/risks associated with an event
8.Hazard Operability Analysis (HAZOP)
Using the HAZOP approach assumes that events and hazards that generate risks are
caused by deviations from the established mapped design and operating intentions,
and uses a systematic technique to help identify potential deviations from normal use
or design intentions in use.
Discuss the nine steps necessary to gain alignment between the value chain
partners
Step 1: Develop collaboration arrangement
Step 2: Create joint business plan
Step 3: Create sales forecast
Step 4: Identify exceptions for sales forecast
Step 5: Resolve/Collaborate on exception items
Step 6: Create order forecast
Step 7: Identify exceptions for order forecast
Step 8: Resolve/Collaborate on exception items
Step 9: Order generatio
what is a quantitative supply chain analysis
Quantitative supply chain analysis is a scientific approach to supply chain managerial
decision making whereby raw supply chain data are processed and manipulated,
resulting in meaningful supply chain information
