CHAPTER 8 – MAKING YOUR PRODUCTS OR SERVICES Flashcards
SCOR stands for
Supply Chain Operations Reference
refers to the group of processes that transform components into a new product or service that has value for a customer.
(from SCOR framework)
make
The job of overseeing these processes (transform components into a new product or service) is often called
Operations management
-The process of making anything really starts when you decide what to make, how much to make, and when to make it (term for manufacturing company)
-for service companies
-production planning and scheduling
-service planning and scheduling
planning production steps (3)
a. Setting a demand goal
b. Creating a production schedule
c. Finalizing the production schedule
Production planning starts with a high-level goal: _______
– This high-level demand goal is called the _____
-how much you want to sell.
-Master Demand Schedule (MDS).
After determining your demand goal, you break that sales goal down into a ________
Master Production Schedule (MPS).
building the____is how you decide what you’ll need to make each day to meet the MDS goal.
MPS
bottlenecks or problems that may interfere with production
Production constraints
The ______ gives your team their actual production targets — how much you expect to make and when you expect to make it.
final production schedule
– often combines parts sequencing and JIT deliveries
Lean manufacturing
– A production schedule that changes too often
– _____create waste in a supply chain such as unnecessary work and excess inventory
-nervous schedule
-Nervous production schedules
– threshold, usually measured in days or weeks
– how far in advance they can realistically change the production schedule without creating chaos for their supply chain
Time Fence
– production targets should always be aligned with your sales goals to ensure that you aren’t making too much or too little to satisfy your customers.
Sales and operations planning (S&OP)
– used by companies to update schedules automatically
Material requirements planning (MRP) software
there are three concepts that every supply chain manager needs to understand because they factor into your production plan:
a. Design Capacity
b. Operating Capacity
c. Capacity Utilization
– (or theoretical capacity) is the maximum that a machine (or person) can possibly produce.
a. Design Capacity
– (or effective capacity)w limit on how much you can make, which is much lower than your design capacity
b. Operating Capacity
– A common way to measure production output, or_____, is the percentage of operating capacity that you actually use
– This percentage is called_______
yield, Capacity Utilization
supply chain management has two types of processes for manufacturing products:
a. Discrete manufacturing
b. Continuous manufacturing
– Some products are manufactured as separate items or in batches.
a. Discrete manufacturing
The output of a discrete manufacturing process typically is measured by the number of items produced during a certain period, usually per hour or per day. This metric is the ____.
production rate
there are two different ways to execute this work (discrete manufacturing):
Assembly line
Cellular manufacturing
bringing the work to the workers
Assembly line
bringing the workers to the work
Cellular manufacturing
time required for each step in an assembly line process.
Takt time
Adjusting process steps to achieve consistent takt times is called _____
balancing or leveling a line.
time required for all the production steps to be completed, from beginning to end; the minimum amount of time required to make each product (or batch of products)
Cycle time
place where these products (bulky and difficult to move) are built
Manufacturing cell/manufacturing stall
– Other products can’t be easily separated into individual units or batches (items are made in stream)
b. Continuous manufacturing
Continuous manufacturing
-tend to be highly efficient, because the capacity of each step in the process can be sized for the same ____ or _____
rate of material flow, or throughput
term for rate of material flow
throughput
Choosing the right production environment is based on two factors:
what you’re making
what your customers need.
– also called customer response time
– is the time between when a customer places an order and when you deliver the product to them.
Total lead time
Three types of production environments
a. Make-to-stock
b. Make-to-order
c. Engineer-to-order
– If your customers need a product right away, and the product doesn’t require customization, you probably want to have some items premade and ready for them to buy
– Having a high level of ___ is important for keeping customers happy and growing your market share.
a. Make-to-stock
- product availability
– a jargon term to describe products that are stolen, damaged, or wasted
– they lead to a reduction — or shrinking — of inventory.
Shrinkage
– If your manufacturing lead time is shorter than your customer’s required response time, you may not need to have any inventory.
– Instead, you can wait until an order comes in and then produce the product for your customer.
– eliminates inventory and warehousing costs, thereby freeing up cash, which translates directly into increased profits
b. Make-to-order
– In some cases, customers want specific products and services that really can’t be pre-planned, such as yachts, racing engines, or custom cabinets.
– When your customers want this type of customization, you must wait until they place an order
c. Engineer-to-order
You can measure the quality of a product – and how much variability you have in a process to make a product – through:
Quality control (QC)
Quality assurance (QA)
(testing the products) involves testing and measuring the outputs to make sure they are acceptable.
Quality control (QC)
– (managing the process) is about looking at each step in a production process and ensuring that things are working properly by measuring variability.
Quality assurance (QA)
– There are lots of things in a production environment that can change throughout the day, such as temperature and humidity, and each of these changes results in small variations in a process
Controlled Variability
the amount of variability that you choose to accept
Controlled limit or the Tolerance
– variability becomes a problem when it is unexpected and your process exceeds your control limits
Random variability or uncontrolled variability
– talk about common cause variability, which is similar to controlled variability, and special cause variability, which is similar to random variability
Quality gurus
comes from something in the environment
Common cause variability = controlled variability
can be assigned to a specific source or event, like a misplaced order
special cause variability = random variability
– Anything that’s left over at some point in the manufacturing process
– outputs that are not useful and end up being discarded
Waste
– Three options to keep in mind when looking at manufacturing waste:
a. Reduce
b. Reuse
c. Recycle
– ____can have a positive effect both on the planet and on your company’s profits, because it’s often the fastest, most effective way to make huge improvements
Reducing waste
measures the performance of a company based on social effects, financial performance, and environmental sustainability.
triple bottom line
other term for triple bottom line approach
three Ps (people, profit, and planet).
