Definitions

Question 1

Define bill of materials

Answer 1

A listing of all the subassemblies, intermediates, parts, and raw materials that go into making the parent assembly showing the quantities of each required to make an assembly

Question 2

Define low level code

Answer 2

A number that identifies the lowest level in any bill of material at which a particular component appears. Net requirements for a given component are not calculated until all the gross requirements have been calculated down to that level. Low-level codes are normally calculated and maintained automatically by the computer software. Syn.: explosion level

Question 3

Define routing files/sheets

Answer 3

Information detailing the method of manufacture of a particular item. It includes the operations to be performed, their sequence, the various work centers involved, and the standards for setup and run. In some companies, the routing also includes information about tooling, operator skill levels, inspection operations and testing requirements, and so on. Syns.: bill of operations, instruction sheet, manufacturing data sheet, operation chart, operation list, operation sheet, route sheet, routing sheet

Question 4

Define forecasting

Answer 4

FC is a projection of past information and or experience into expectation of demand in the future.

The business function that attempts to predict sales and use of products so they can be purchased or manufactured in appropriate quantities in advance.

Question 5

Define procurement

Answer 5

The business functions of procurement planning, purchasing, inventory control, traffic, receiving, incoming inspection, and salvage operations.
(Strategic level)

Question 6

Define Sourcing

Answer 6

The process of identifying a company that provides a needed good or service
(Tactical level)

Question 7

Define purchasing

Answer 7

The term used in industry and management to denote the function of and the responsibility for procuring materials, supplies, and services
(Operational level)

Question 8

Define Capacity

Answer 8

The maximum level of value-added activity that an operation, or process, or facility is capable of over a period of time

The capability of a worker, machine, work center, plant, or organization to produce output per time period.

Question 9

Define Load

Answer 9

The amount of planned work scheduled for and actual work released to a facility, work center, or operation for a specific span of time. This is usually expressed in terms of standard hours of work or, when items consume similar resources at the same rate, units of production.

Question 10

Define Outsourcing

Answer 10

The process of having suppliers provide goods and services that were previously provided internally. Outsourcing involves substitution—the replacement of internal capacity and production by that of the supplier

Types:
Offshoring
Partial outsourcing
Integral (Turnkey)

Question 11

Define Spend management

Answer 11

Managing the outflow of funds in order to buy goods and services

Question 12

Objectives of Supplier relationship management

Answer 12

• Reduced costs
• Improved quality and efficiency
• Enhanced innovation
• Reduced risks
• Increased visibility

Question 13

Define safety stock

Answer 13

A quantity of stock planned to be in inventory to protect against fluctuations in demand or supply

Question 14

Define Contract management

Answer 14

The process that ensures all parties comply with a contract and fully meet their obligations

The 3 main phases:
- Pre contract
- Contract execution
- Post contractual stage

Question 15

What is a logical map

Answer 15

A logical supply chain map is a process relationship map visually represents the flow of material, information and money within a supply chain from the initial raw material suppliers to the end customers.

Question 16

What is a GeoMap

Answer 16

GEO MAP is a node relationship map visually represents the three flow in a geographical context and can be used to show where we source material from, in which quantities and how it is being transported

Question 17

Define Lead time

Answer 17

A span of time required to perform a process (or series of operations)

This measures the total time it takes for a product to move from raw materials or components to the final customer. It encompasses all stages, including manufacturing, transportation, and warehousing.

Question 18

Define Total cost of ownership

Answer 18

In supply chain management, the total cost of ownership of the supply delivery system is the sum of all the costs associated with every activity of the supply stream. The main insight that TCO offers to the supply chain manager is the understanding that the acquisition cost is often a very small portion of the total cost of ownership

Question 19

Define Cost of goods sold

Answer 19

An accounting classification useful for determining the amount of direct materials, direct labor, and allocated overhead associated with the products sold during a given period of time

Question 20

Define inventory turns

Answer 20

The number of times that an inventory cycles, or turns over, during the year

This KPI measures how often your inventory is sold and replaced over a specific period

Question 21

Define inventory days of supply

Answer 21

1) Inventory-on-hand metric converted from units to how long the units will last. For example, if there are 2,000 units on hand and the company is using 200 per day, then there are 10 days of supply. 2) A financial measure of the value of all inventory in the supply chain divided by the average daily cost of goods sold rate

Question 22

Define the price/cost dimension of PPM

Answer 22

the relationship between standard and actual prices paid for materials and services.

Question 23

Define the product/quality dimension of PPM

Answer 23

Procurement’s responsibility with regard to the quality of purchased materials and services should not be defined too narrowly

Question 24

Define the logistics/delivery (supply chain) dimension of PPM

Answer 24

Another key performance area is procurement’s role in contributing to an efficient incoming flow of purchased materials and services.

Question 25

Define the sustainability dimension of PPM

Answer 25

key responsibilities for procurement is to secure the sustainability of purchased materials and services. In this respect, procurement professionals are not only focusing on the product level, but also on supplier and supply chain level. With sustainability programmers in procurement, companies aim to improve their carbon footprint, reduce waste, improve fuel efficiency and set high standards for ethics, labor conditions and safety in their supply chains.

Question 26

Define the organisational dimension of the PPM

Answer 26

This dimension includes the major internal resources that are used to achieve the goals and objectives of the procurement organization.

Question 27

Define the supplier relationship dimension of PPM

Answer 27

This dimension includes the major external resources that are used to achieve the goals and objectives of the procurement organization, namely: supplier relationships.

Question 28

Define sigma (1 standard deviation) in relation to safety stock

Answer 28

a quantity of stock planned to be in inventory to protect against fluctuations in demand or supply

Question 29

Define Maverick spend

Answer 29

When employees or managers purchase from nonqualified suppliers and bypass established purchasing procedures

Question 30

Define the objective of forecasting

Answer 30

Understanding the demand patterns for products (&/or services) over different time frames to effectively plan capacity resources.

Question 31

Define capacity management

Answer 31

the function of establishing, measuring, monitoring, and adjusting limits or levels of capacity in order to execute all manufacturing schedules

Question 32

Define sourcing strategy

Answer 32

A sourcing strategy refers to a plan or approach used by an organization to procure goods and services