CPIM Part 2, Module 4 - Supply Flashcards
What are the key objectives of master scheduling? (6)
- Creating a build schedule by end items
- Setting due dates
- Providing the required information regarding resources and materials
- Enabling sales and customer service to promise deliveries to customers
- Providing basis for tradeoffs if orders cannot be met
- Coordinating sales and operations for superior customer service
What is an final assembly schedule?
A schedule of end items to finish the product for specific customers orders in a make-to-order or assemble-to-order environment.
What is a two-level master schedule?
A master-scheduling approach in which a planning bill of material is used to master schedule an end product or family
- This is used in assemble to order environments
What does the master production schedule take into account?
- Capacity limitations
- Production costs
- Resource considerations
- The sales and operations plan
What are three important manufacturing requirements that influence master scheduling approaches in different manufacturing environments?
- Appropriate production process
- Methods used to manage sales volume fluctuations
- Choice of unit production
What is product structure?
The sequence of operations that components follow during their manufacturing into a product
What are the inputs to a master production schedule?
- Forecasts
- Customer orders
- Supply lot size
- Production lead time
- Capacity
What is available-to-promise?
It is the uncommitted portion of a company’s inventory and planned production
What is a planning Bom?
It is an artificial grouping of items or events in bill-of-material format used to facilitate master scheduling and material planning
What are time fences?
Policies or guidelines established to note where various restrictions or changes in operating procedure take place
What are the three techniques for dealing with a overloaded master schedule?
- The five whys
- Managing output: This technique reduces the master production schedule to demonstrated output and then slowly increases it to grow capacity
- Level adjustments: This technique adjusts the level of master schedule to the capacity actually demonstrated and encourages incremental increases in output
What four actions are necessary to manage supply - and supplier- related issues that affect the succes of master scheduling?
- Changes in supplier delivery capabilities
- Availability of parts during shop floor execution
- Slippage in production schedules
- Supplier performance
What are the two main performance metrics for master scheduling?
- Customer service
- Aggregate production plan
What is the bill of resources?
A listing of the required capacity and key resources need to manufacture one unit of a selected item or family
What are the five steps of the rough cut capacity planning process?
- Identify critical resources and their capacity
- Develop resource profiles for each work center for items being master scheduled
- Calculate total load on the work centers
- Compare load to available capacity
- Balance required capacity and planned available capacity
What are the three approaches to rough-cut-capacity planning? And what do they include?
- Capacity planning using overall factors: The master schedule items and quantities are multiplied by the total time to build them, this provides the hours to produce the schedule
- Bill of labor approach:
- Resource profile approach:
Which rough cut capacity approach should be used when: There are shifts in product mix at work centers but there is a relatively constant work pattern?
The bill of labor approach
Which rough cut capacity approach should be used when: There are variations in product mix and the pattern of work varies form period to period?
The resource profile approach
What are the four inputs into MRP?
- Bill of material
- Inventory data
- Master production schedule
- (Planning factors)
What are the three functions of MRP?
- Plan and control inventories, including what must be ordered and in what quantities
- Plan and control order releases to ensure that delivery due dates are met and to maintain validity of due dates
- Provide accurate input regarding planned orders for capacity planning process
What are the three outputs of MRP?
- Schedule of planned production orders
- Action messages
- Schedule of planned purchase order releases
What is a Phantom bill of materials?
It is a bill-of-material coding and structural technique used primarily for transient subassemblies. It is a item that is physically build but rarely held on stock
What are the planning factors in MRP? (4)
- Lot size or order quantity
- Lead time
- Safety stock
- Scrap
What are the three types of information that inventory data includes?
- On-hand
- Allocation
- Scheduled receipts
What is system nervousness?
The impact of constant MRP changes on material planning.
What is an action message?
An output of a system that identifies the need for, and the type of action to be taken to correct, a current or potential problem
What are the three operations in a MRP process?
- Bill-of-material explosion
- Lead-time offsetting
- Calculation of gross and net requirements
What is the cumulative lead time?
The longest planned length of time to accomplish the activity in question
What is lead time offsetting?
A technique used in MRP where a planned order receipt in one time period requires a release of the order in an earlier time period
What are the steps of the CRP process?
- Determine load on resources over a defined time frame
- Using backward scheduling, simulate the scheduling of load at work centers by period, assuming infinite capacity
- Create work center load capacity profiles for each period
- Resolve load-capacity imbalances
- Prepare the operating plan for execution
What are advantages of CRP?
- It can reveal underloads and overloads and allows planners to act before problems become crises
- Rough-cut capacity planning at the master scheduling level also can be verified
- CRP can be used as a simulation tool
- CRP uses more detailed lead-time data than MRP
- CRP helps reduce erratic lead times
What is MRP-II?
It is a closed-loop system that relies on feedback from subsequent stages of the manufacturing process to adjust and improve preceding activities. It is a finite scheduling system.
What are the three scheduling methods?
- MRP based scheduling
- Theory of constraints
- Lean
What is loading and what are the two approaches for loading workcenters?
Loading involves scheduling jobs to work centers and various machines within the work center
- Infinite loading
- Finite loading
What are the two ways that infinite loading can be done?
- Vertical: each work center is scheduled independently
- Horizontal: whole orders are scheduled across multiple work centers at the same time
What are the authorization steps? (4)
- Receive authorization to release order
- Check tooling and material availability
- Check capacity requirements and availability
- Release order to manufacturing
What is a capacity constrained resource?
A resource that is not a constraint but will become one unless scheduled carefully
What are the five steps of a FAS process?
Step 1. Collect order specifications - Only schedule things that are ordered
Step 2. Determine capacity required -Capacity check, normally at RCCP level
Step 3. Determine components - about determining availability
Step 4: Develop FAS
Step 5: Link FAS to MPS (optional)
What are the five steps of a FAS process?
Step 1. Collect order specifications - Only schedule things that are ordered
Step 2. Determine capacity required -Capacity check, normally at RCCP level
Step 3. Determine components - about determining availability
Step 4: Develop FAS
Step 5: Link FAS to MPS (optional)
What is a two-level MPS?
A system that runs an MPS for components and options in an ATO environment but also maintains a separate master scheduling system for common configurations to speed response to common customer orders
Planning and coordinating longer-term changes can involve changes in which six areas?
- Inventory levels
- Backlog sizes
- Capacity
-Time fences - Product and process design
- Supply factors
What are the five goals of procurement?
- Identify capable suppliers
- Obtain goods in the necessary quantity, quality and time
- Reduce costs of supplies
- Minimize the risk of outsourcing
- Implement responsible procurement
What are supplier selection criteria? (6)
- Manufacturing capability
- Technical ability
-Financial stability
- Service level
- Commitment to sustainability
- Location
What are critical characteristics?
The attributes of a product that must function properly to avoid failure of the product
What is critical-to-quality characteristics (CTQ)?
The important and measurable traits of a product or process whose performance targets must be met to satisfy the customer
What are the four benefits of supplier certification?
- Reduction in the cost of quality for buyers
- Reduction in internal and external failure costs
- Reduction in preventive costs
- Preference in competitive bidding by suppliers
What is a lean metric?
A metric that permits a balanced evaluation and response - quality without sacrificing quantity objectives
What are the five supplier-customer relationships?
Arm’s length
1. Vendors
2. Conventional suppliers
3. Certified suppliers
Collaborative
4. Partnership type relationships
5. Strategic alliances
What is a customer-supplier partnership?
A long-term relationship between a buyer and supplier characterized by teamwork and mutual confidence. Supplier considered an extension of buyers network
The operations strategy addresses supplier relationships based on a number of factors, which three are these?
- Organizations business strategy
- Stability of the industry
- Competitiveness factors
What are the four domains of the kraljik / supply risk VS profit impact?
- Bottleneck items = High risk / Low impact
- Strategic items = High risk / High impact
- Noncritical items = Low risk / Low impact
- Leverage items = Low risk / High impact
What are the four strategic sourcing process steps?
- Internal analysis: Analyze item categories and establish usage
- External analysis: Research the market for suppliers, prices, risks etc.
- Strategy formulation:
- Strategy execution: Tenders, reviews, contract negotiations
What Kraljik item is sourcing management used for?
- Bottleneck items = High risk / Low - Moderate impact on profit
What is the goal of sourcing management?
To secure materials as reliably as possible at the best total cost of ownership
What is tactical buying?
The purchasing process focused on transactions and nonstrategic material buying. Sow low risk and low impact on profit.
What are the three conditions that characterize tactical buying situations?
- There are many competing supplier, room for bidding
- Products have standard specs and reliable levels of quality
- Material requirements have stable usage and predictable schedules
What are virtual organizations?
Short-term alliances between independent organizations in a potentially long-term relationship to design, produce, and distribute a product
What is an strategic alliance?
A relationship formed by two or more organizations that share information, participate in joint investments, and develop linked and common processes to increase the overall performance
What is a strategic partnership?
An alliance with top supplier and buyer performers to enhance a firm’s performance
What is a joint venture?
An agreement between two or more firms to risk equity capital to attempt a specific business objective
What are the three benefits of working with a 3PL?
- Allowing the manufacturer to focus its time on its core competencies
- Transferring necessary investments for transport to the 3PL
- Gaining benefit form 3PL’s greater familiarity with cost-saving delivery strategies and issues
What is a 4PL?
A party to whom you outsource the design and management of the entire logistics function
What is value analysis?
The systemic use of techniques that identify a required function, establish a value for that function, and provide that function against lowest overall costs
Functional specifications may be described by one or a combination of four this. Which four?
- Brand
- Characteristics
- Engineering drawings
- Miscellaneous attributes
What three things are described in a purchasing contract?
- Item specifications
- Payment conditions
- The service level
What are the steps of the ordering cycle?
- Generate requisition
- Issue purchase order
- Follow-up
- Receive goods
- Approve payment
What is a purchase order?
The purchaser’s authorization used to formalize a purchase
transaction with a supplier
what are the three characteristics of effective supplier performance measurement?
- Communication and collaboration with suppliers
- Short feedback loops that promote improvement in supplier performance
- Metrics that are aligned with the organization’s goals
What is cost accounting?
The branch of accounting that is concerned with recording and reporting business operating costs. Financial accounting and managerial accounting rely on this.
What are period costs?
All costs not included in product costs
What is absorption costing?
An approach to inventory valuation in which variable costs and a portion of fixed costs are assigned to each unit of production
Which costing method will be used for external reporting and which one will be used for managers who try to asses costs performance?
For the external reporting it would be absorption costing and for the internal measurement of costs performance variable costing
What is variable costing?
An inventory valuation method in which only variable production costs are applied to the product. This is also used in make or buy decisions
What are the four different types of product costing approaches?
- Throughput costing: Only considers direct material costs
- Variable costing: Considers direct materials, direct labor and variable factory overhead
- Full absorption costing: Considers direct materials, direct labor, variable factory overhead and fixed factory overhead
- Life-cycle costing: Contains everything
What is transfer pricing?
The pricing of goods or services transferred from one segment of a business to another
What are the costing methods in manufacturing? (3)
- Job costing
- Process costing
- Operation costing
What is job costing?
A cost accounting system in which costs are assigned to specific jobs
What is process costing?
A cost accounting system in which the costs are collected by time period and averaged over all the units produced during the period
What is operation costing?
A method of costing used in batch manufacturing environments when the products produced have both common and distinguishing characteristics
What is activity-based costing?
A managerial tool. The use of activity based costing information about cost pools and drivers, activity analysis, and business process to identify business strategies; improve product design, manufacturing and distribution, to remove waste from the process
What is a cost driver?
In activity-based cost accounting, a numerical measure of demand placed on one cost object by other cost objects
What are the four steps in activity based costing?
- Identify the cost drivers
- Assign an overhead rate for each driver
- Estimate the number of occurrences for each driver
- Repeat for all drivers so all overhead costs are summed into a total overhead cost
What is activity-based management (ABM)?
A cost accounting system that accumulates costs based on activities performed and then uses cost drivers to allocate these costs to products or other bases such as customers, market and projects
What is cost control?
Applying procedures that monitor the progress of operations against authorized budgets and taking action to achieve minimal costs
What is cost variance?
In cost accounting, the difference between what has been budgeted for an activity and what is actually costs
What are the two common methods for determining cost variance?
- Comparing actual costs to costs budgeted at the beginning of the planning period
- Comparing actual costs to standard costs based on practical standards
What are Muda, Muri and Mura?
- Muda: costs are reduced by reducing waste
- Muri: a Japanese word meaning strain or burden
- Mura: a Japanese word meaning unevenness or variability
What are the seven wastes?
- Waste of overproduction
- Waste of waiting
- Waste of transportation
- Waste of stocks
- Waste of motion
- Waste of making defects
- Waste of overprocessing itself
- Waste of people skills ( 8th waste, added later)
What is Shojinka?
Continually balancing the number of workers in a work center to meet demand with a minimum number of workers to improve flow
What are the four MRP variability sources?
- Demand variability
- Supply variability
- Quantity variability
- Timing variability
What are the four lot-sizing optimization models? And what do they entail?
- Economic order quantity (EOQ): Requires uniform demand
- Period order quantity (POQ): Determines most economical time between orders
- Part period balancing (PPB): Considers all information in the MRP grid by considering every possible alternative for the planning horizon, from an order for every individual requirement to an order for all requirements at once
- Wagner-Whitin algorithm: More complex than PPB
What is life cycle analysis?
A quantitative forecasting technique based on applying past patterns of demand data covering introduction, growth, maturity and decline of similar products to a new product family
