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Supply Chain > Exam 1 > Flashcards

Exam 1 Flashcards

1
Q

Why Study Operations and Supply Chain Management

A
  • Every organization must make a product or provide a service that someone values
  • Most organizations function as a part of larger supply chains
  • Organizations must carefully manage their operations and supply chains in order to prosper, and indeed, survive
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2
Q

Operations Functions (or Operations)

A

Collection of people, technology, and systems within an organization that has primary responsibility for providing the organization’s products or services

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3
Q

Supply Chain

A
  • A network for manufacturers and service providers that work together to create products or services needed by end users. These manufacturers and service providers are linked together through physical flows, information flows, and monetary flows.
  • Primary focus on physical goods- conversion, storage, and movement of materials and products
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4
Q

Operations Management

A

The planning, scheduling, and control of the activities that transform inputs into finished goods and services

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5
Q

Transformation Process

A

Takes a set of inputs and transform them in some way to create outputs (goods or services)

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6
Q

Transformation Process Steps

A

Inputs -> this processes-> outputs

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7
Q

Transformation Process Inputs

A
  • Materials
  • Intangible needs
  • Information
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8
Q

Transformation Process Includes

A
  • Manufacturing Operations

- Service Options

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9
Q

Transformation Process Outputs Includes

A
  • Tangible goods
  • Fulfilled needs
  • Satisfied customers
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10
Q

Upstream

A

Activities or firms that are positioned earlier in the supply chain relative to some other activity of form of interest.

Ex: corn harvesting takes place upstream of cereal processing, and cereal processing takes place upstream of cereal packaging

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11
Q

Downstream

A

Activities or firms that are positioned later in the supply chain relative to some other activity or firm of interest

Ex: sewing a shirt takes place downstream of weaving the fabric, and weaving the fabric takes place downstream of harvesting cotton

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12
Q

First- Tier Supplier

A

A supplier that provides products or services directly to a firm

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13
Q

Second- Tier Supplier

A

A supplier that provides products or services to a firm’s first-tier supplier

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14
Q

Supply Chain Operations Reference Model (SCORR)

A

A framework developed and supported by the Supply Chain Council that seeks to provide standard descriptions of the processes, relationships, and metrics that define supply chain management

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15
Q

SCOR Areas

A
  • Planning activities
  • Sourcing activities
  • Make or production activities
  • Delivery actives
  • Return Activities
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16
Q

SCOR Area Planning Activities

A

Seek to balance demand requirements against resources and communicate these plans to the various participants

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17
Q

SCOR Area Sourcing Actives

A

Include identifying, developing, and contracting with suppliers and scheduling the delivery of incoming goods and services

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18
Q

SCOR Area Make or Production Activities

A

Cover the actual production of goods and services

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19
Q

SCOR Area Delivery Activities

A

Include everything from entering customer orders and determining delivery dates to storing and moving goods to their final destination

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20
Q

SCOR Area Return Activities

A

Activities necessary to return and process defective or excess products or materials

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21
Q

Trends in Supply Chain

A
  • Electronic commerce
  • Increase competition and globalization
  • Relationship management
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22
Q

Trends in Supply Chain- Electronic Commerce

A

Use of computer and telecommunication technologies to conduct business via electronic transfer of data and documents

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23
Q

Trends in Supply Chain- Increased Competition and Globalization

A
  • Rate of change in markets, products and technology increases
  • Managers make decisions on shorter notice and with less information
  • Customers are demanding delivery quicker
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24
Q

Trends in Supply Chain- Relationship Management

A

Manage relationship with upstream suppliers and downstream suppliers

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25
Q

Structural Element

A

Includes tangible resources, such as buildings, equipment, and computer systems

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26
Q

Major Decisions Addressed by a Strategy

A
  • Structural element

- Infrastructural element

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27
Q

Infrastructural Element

A

Includes policies, people, decision rules, and organizational structure choices made by a firm.

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28
Q

Strategy

A

A mechanism by which a business coordinates its decisions regarding structural and infrastructural elements

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29
Q

Missions Statement

A
  • A statement that explains why an organization exists

- Describes what is important to the organization, called its core values, and identifies the organization’s domain

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30
Q

Business Strategy

A

Strategy that identifies a firm’s targeted customers and sets a time frames and performance objectives for a business

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31
Q

Core Competency

A

An organizational strength or ability, developed over a long period, that customers find difficult or even impossible to copy

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32
Q

Functional Strategy

A
  • A strategy that translates a business strategy into specific actions such as marketing, human resources, and finance
  • This should align with the overall business strategy with each other
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33
Q

Operations and Supply Chain Strategy

A
  • A functional strategy that indicates how structural and infrastructural elements within the operations and supply chain areas will be acquired and developed to support the overall business strategy
  • Ex: Choosing the amount of capacity and sourcing strategies
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34
Q

Objectives of Operations and Supply Chain Strategy

A
  • Help management choose the right mix of structural and infrastructural elements, based on clear understandings of the performance dimensions valued by customers and the trade-offs involved
  • Ensure that the firm’s structural and infrastructural choices are strategically aligned with the firm’s business strategy
  • Support the development of core competencies in the firm’s operations and supply chains
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35
Q

Structural Decisions Categories

A
  • Capacity
  • Facilities
  • Technology
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36
Q

Capacity- Structural Decisions Categories

A

Amount, type, and timing of capacity changes

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37
Q

Facilities- Structural Decisions Categories

A
  • Services/manufacturing, warehouses, distribution huts

- Size, location, degree of specification

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38
Q

Technology- Structural Decisions Categories

A

Service/manufacturing process, material handling equipment, transpiration equipment, information systems

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39
Q

Infrastructural Decision Categories

A
  • Organization
  • Sourcing/perchasing
  • Planning and control
  • Business Practices and Quality Management
  • Product and source development
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40
Q

Value Index

A

A measurement that uses the performance and importance scores for various dimensions of performance for an item or service to calculate a score that indicates the overall value of an item or service to a customer

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41
Q

Performance Dimensions

A
  1. ) Quality
  2. ) Time
  3. ) Flexibility
  4. ) Cost
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42
Q

Quality

A

The characteristics of a product or service that bear on its ability to satisfy stated or implied needs

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43
Q

Performance Quality

A

A sub-dimension of quality that addresses the basic operating characteristics of a product or service

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44
Q

Conformance Quality

A

A subdimension of quality that addresses whether a product was made or a service preformed to specifications

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45
Q

Reliability Quality

A

A subdimension of quality that addresses whether a product will work for a long time without failing or requiring maintenance

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46
Q

Delivery Speed

A

A performance dimension that refers to how quickly the operations or supply chin function can fulfill a need once it has been identified

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47
Q

Delivery Reliability

A

A performance dimension that refers to the ability to deliver products or services when promised

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48
Q

Delivery Window

A

The acceptable time range in which deliveries can be made

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49
Q

Flexibility

A

The performance dimension that considers how quickly operations and supply chains can respond to the unique needs of customers

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50
Q

Mix Flexibility

A

The ability to produce a wide range of products and services

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51
Q

Changeover Flexibility

A

The ability to provide a new product with minimal delay

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52
Q

Volume Flexibility

A

The ability to produce whatever volume the customer needs

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53
Q

Trade-Off

A

A decision by a firm to emphasize one performance dimension over another, based on recognition that excellence on some dimensions may conflict with excellence on others
- Ex: a marathon and long distance runner cannot do both

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54
Q
  • Order Winner
A

A performance dimension that differentiates a company’s product or services from its competitors. Firms win a cusomer’s business by providing superior levels of performance on order winners

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55
Q

Order Qualifier

A
  • A performance dimension on which customers expect a minimum level of performance.
  • Superior performance is not an order qualifier will not, by itself, give a company a competitive advantage
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56
Q

Stages of Alignment between Supply Chain and Operations Strategies

A

1- Internally Neutral
2- Externally Neutral
3- Internally Supportive
4- Externally Supportive

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57
Q

Internally Neutral Stage of Alignment

A
  • Management seeks only to minimize any negative potential in the operations and supply chain areas
  • No effort made to link these areas with the business strategy
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58
Q

Externally Neutral Stage of Alignment

A
  • Industries practice is followed, based on the assumption that what works for competitors will work for the company
  • No effort to link the operations and supply chain areas with the overall business strategy
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59
Q

Internally Supportive Stage of Alignment

A
  • Operations and supply chain areas participate in the strategic debate
  • Management recognizes that the operations and supply chain structural and infrastructural elements must be aligned with the business strategy
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60
Q

Externally Supportive Stage of Alignment

A
  • Operations and supply chain areas do more than just support the business strategy
  • Business strategy actively seeks to exploit the core competencies found within these areas
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61
Q

Manufacturing and Service Processes are Important to Firms Because

A
  • Tend to be expensive and far reaching
  • Managers must make sure that the process they choose best support their overall business strategy and the needs of their targeted customers
  • Process decisions deserve attention- different processes have strengths and weaknesses
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62
Q

Questions to Ask When Selecting a Manufacturing Process

A
  • What are the physical requirements of the company’s product?
  • How similar are one another are the products the company makes?
  • What are the company’s production volumes?
  • Where in the value chain does customization take place (if at all)?
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63
Q

Flexible Manufacturing Systems (FMSs)

A

Highly automated batch processes that can reduce the cost of making groups of similar products

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64
Q

Production Line

A

A type of manufacturing process used to product a narrow range of standard items with identical or highly similar designs

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65
Q

Characteristics of a Production Line

A
  • Follows a product-based layout
  • Steps are usually linked by some system that moves the items from one step to the next
  • Suitable for high-volume production of the product(s) characterized by similar design attributes
  • Need high volumes to justify the required investment in specialized equipment and labor
  • Are inflexible with regard to items that do not fit the design characteristics of the production line
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66
Q

Product- Based Layout

A

A type of layout where resources are arranged sequentially, according to the steps required to make a product

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67
Q

Cycle Time

A

For a line process, the actual time between completions of successive units on a production line

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68
Q

Continuous Flow Process

A
  • A type of manufacturing process that produces highly standardized products using a tightly linked, paced sequence of steps
  • Closely resembles a production line process.
  • The main difference is the form of the product, which usually cannot be broken into discrete units.
  • Ex: yarns and fabrics, food products, and chemical products like oil and gas
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69
Q

Job Shop

A
  • A type of manufacturing process used to make a wide variety of highly customized products in quantities as small as one.
  • They are characterized by general puspose equipment and workers who are broadly skilled workers
  • Main emphasis is meeting a customer’s unique requirements
  • Product design is not standardized and work closely with customer
  • Typically follow a functional layout
  • Ex: custom furniture, specialized machine tools used by manufacturers, and restoration and refurbishing work
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70
Q

Functional Layout

A
  • A type of layout where resources are physically grouped by a function
  • Ex: molding, welding, paining
  • Process steps required vary from one job to the next
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71
Q

Batch Manufacturing

A
  • A type of manufacturing process where items are moved through different manufacturing steps in groups or batches
  • Fits between job shops and lines in terms of production volumes and flexibility and strikes a balance between the flexibility of job shops and the efficiency of a line
  • The most common type of manufacturing process
  • The sequence of steps is not as tightly linked as the production line
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72
Q

Flexible Manufacturing Systems

A

Highly automated batch process that can reduce the cost of making groups of similar products

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73
Q

Fixed-Position Layout

A

A type of manufacturing process in which the position of the product is fixed. Materials, equipment, and workers are transported to and from the product
- Ex: shipbuilding, construction projects, and traditional homebuilding

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74
Q

Hybrid Manufacturing Process

A

General term referring to a manufacturing process that seeks to combine the characteristics, and hence advantages, of more than one of the classic processes
- Ex: include flexible manufacturing systems, machining centers, and group technology

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75
Q

Machining Center

A

A type of manufacturing process that completes several manufacturing steps without removing any items from the process

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76
Q

Group Technology

A

A type of manufacturing process that seeks to achieve the efficiencies of a line process in a batch environment by dedicating equipment and personnel to the manufacture of products with similar manufacturing characteristics

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77
Q

Cellular Layout

A

Type of layout typically used in group technology settings in which resources are physically arranged according to the dominant flow of activities for the product family

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78
Q

Product Family

A

In group technology, a set of products with very similar manufacturing requirements

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79
Q

Four Levels of Customization

A
  1. ) Made to Stock (MTS)
  2. ) Assemble to Order (ATO)
  3. ) Make to Order (MTO)
  4. ) Engineer to Order (ETO)
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80
Q

Make-to-Stock (MTS) Products

A
  • Products that require no customization

- Are typically generic products and produced in large enough volumes to justify keeping a finished goods inventory

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81
Q

Assemble-to-Order (ATO) or (Finish-to-Order Products)

A
  • Products that are customized only at the very end of the manufacturing process
  • Ex: a T-shirt with a company name
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82
Q

Make-to-Order (MTO) Products

A
  • Products that use standard components but have customer-specific final configuration of those components
  • Ex: custom refrigeration units
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83
Q

Engineer-to-Order (RTO) Products

A

Products that are designed and produced from the start to meet unusual customer needs or requirements. They represent the highest level of customization

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84
Q

Upstream Activities

A

In the context of manufacturing customization it is the activities that occur before the point of customization

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85
Q

Downstream Activities

A

In the context of manufacturing customization it is the activities that occur at or after the point of customization

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86
Q

Law of Variability

A
  • Greater random variability either demanded of the process or inherent in the process itself or in the terms processed, the less productive the process is
  • Customization- Completing upstream activities off-line help isolate those activities from the variability caused by either timing or unique requirements of individual customers
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87
Q

When Customization Occurs Early in the Supply Chain

A
  • Flexibility in response to unique customer needs will be greater
  • Lead times to the customer will tend to be longer
  • Products will tend to be more costly
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88
Q

When Customization Occurs Late in the Supply Chain

A
  • Flexibility in response to unique customer needs will be limited
  • Lead times to the customer will tend to be shorter
  • Products will tend to be less costly
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89
Q

Service Processes- Dimensions on Which Services can Differ

A
  • Nature of service package
  • Degree of customization
  • Level of customer contact
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90
Q

Service Package

A

A package that includes all the value-added physical and intangible activities that a service organization provides to a customer

Emphasis on physical and intangible activities

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91
Q

Physical Activities

A

More management’s focus will be towards capital expenditures (buildings, planes, and trucks) material costs, and other tangible assets

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92
Q

Intangible Activities

A

More critical are the training and retention of skilled employees and the development of the firm’s knowledge assets.

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93
Q

Service Customization

A

Ranges from highly customized to standardized

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94
Q

As Service Customization Decreases

A

The service package becomes more standardized

95
Q

As Service Customization Increases

A

Service package becomes less predictable and more variable

96
Q

Customer Contact

A

The degree determines the relative importance of front room and back room operations in a service process

97
Q

Front Room

A

Physical or virtual point where the customer interfaces directly with the service organization
- Ex: sales floor in a retail store

98
Q

Back Room

A

Part of a service operation that is completed without direct customer contact
- Ex: packages sorting at FedEx, Testing medical samples

99
Q

Service Blueprinting

A

Specialized form of business process mapping the layers out the service process from the viewpoint of the customer and parses out the organization’s service actions based on

100
Q

Service Positioning

A

Service operations complete and position themselves in the marketplace based on three dimensions

  1. ) Nature of service package
  2. ) Degree of customization
  3. ) Degree of customer contact
101
Q

Line Balancing

A

Technique used in developing product-based layouts that work by assigning tasks to a series of linked workstations in a manner that minimizes the number of workstations and minimizes the total amount of idle time at all stations for a given output level

102
Q

Steps to Line Balancing

A
  1. ) Identify all of the process steps required, their times, immediate predecessors and total time for all tasks
  2. ) Draw a presence diagram
  3. ) Determine takt time for the line
  4. ) Compute a theoretical minimum number of workstations needed
  5. ) Use a decision rule to assign tasks to workstations
  6. ) Evaluate the performance of the proposed line by calculating some basic performance measures
103
Q

Takt Time

A
  • In production line setting- the available production time devided by the required output rate
  • Sets the maximum allowable cycle time for a line
104
Q

Takt Time Formula

A

Available production time / required output rate

105
Q

Assigning Department Locations in Functional Layouts

A
  • Minimize the distance traveled

- Arrange functional areas or departments so that departments are close who work together

106
Q

Process

A

A set of logically related tasks or activities performed to achieve a defined business outcome

107
Q

Primary Process

A
  • A process that addresses the main value-added activities of an organization
  • Ex: delivering a service and manufacturing a product
108
Q

Support Process

A
  • A process that performs necessary, albet non value-added, activities
  • Ex: evaluating suppliers, recruiting new workers
109
Q

Development Process

A
  • A process that seeks to improve the performance of primary and support processes
  • Ex: developing new products, performing basic reasearch
110
Q

Mapping

A

The process of developing graphic representations of the organizational relationships and/or activities that make up a business process

111
Q

Purpose of Mapping

A
  • Creates common understanding of the content of the process; its activities, its results and who performs various steps
  • Defines boundaries of the process
  • Provides a baseline against which to measure the impact of improvement efforts
112
Q

Process Map

A

A detailed map that identifies the specific activities that make up the informational, physical, and/or monetary flows of a process

113
Q

Process Map Rules

A
  • Identify the entity that will serve as the focal point
  • Identify clear boundaries and staring and ending points
  • Keep it simple
114
Q

Swim Lane Process Map

A

A process map that graphically arrange the process steps so that users can see who is responsible for each step

115
Q

Measures of Process Performance

A
  1. ) Quality
  2. ) Cost
  3. ) Time
  4. ) Flexibility
116
Q

Productivity

A

A measure of process performance; the ratio of outputs to inputs

117
Q

Productivity Equation

A

Outputs/inputs

118
Q

Single-Factor Productivity

A
  • A productivity score that measures output levels relative to single input
  • Ex: number of calls a sales person makes per hour
119
Q

Multifactor Productivity

A
  • A productivity score that measures output levels relative to more than one input
  • Ex: sales dollar generated- has labor, materials and machine costs
120
Q

Efficiency

A
  • A measure of the process performance; the ratio of actual outputs to standard inputs.
  • Usually expressed as a percentage
121
Q

Efficiency Formula

A

100% (actual outputs/ standard outputs)

122
Q

Standard Output

A

An estimate of what should be produced, given a certain level of resources

123
Q

Cycle Time

A
  • The total elapsed time needed to complete a business process
  • Also called throughput time
124
Q

Percent Value-Added Time

A
  • A measure of process performance

- The percentage of total cycle time that is spent on activities that actually provide value

125
Q

Benchmarking

A

The process of identifying, understanding and adopting outstanding practices from within the same organization or from other businesses to help improve performance

126
Q

Competitive Benchmarking

A

The comparison of an organization’s process with those of competing organizations

127
Q

Process Benchmarking

A
  • The comparison of an organization’s process with those of noncompetitors that have been identified as having superior processes
  • Ex: studying Walmarts methods without competing with Walmart
128
Q

Six Sigma Methodology

A

A business improvement methodology that focuses an organization on

  • Understanding and managing customer requirements
  • Aligning key business processes to achieve those retirements
  • Utilizing rigorous data analysis to understand and ultimately minimize variation in those processes
  • Driving rapid and sustainable improvement to business processes
129
Q

Champion

A

Senior level executive who “owns: a Six Sigma project and has the authority and resources needed to carry it out

130
Q

Master Black Belt

A

A full-time Six Sigma expert who is “responsible for Six Sigma strategy, training, mentoring, deployment and results”

131
Q

Black Belt

A

A fully trained Six Sigma expert with up to 160 hours of training who performs much of the technical analyses required of Six Sigma projects, usually on a full time basis

132
Q

Green Belt

A

An individual who has some basic training in Six Sigma methodologies and tools and is assigned to a project on a part-time basis

133
Q

Team Members

A

Individuals who are not trained in Six Sigma but are included on a Six Sigma project team due to their knowledge or direct interest in a process

134
Q

Six Sigma People

A
  • Black belt
  • Green belt
  • Team members
  • Master black belt
  • Champion
135
Q

DMAIC (Define Measure Analyze Improve Control)

A

A Six Sigma process that outlines the steps that should be followed to improve an existing business process

  • Define the goals of the improvement activity
  • Measure the existing process
  • Analyze the process
  • Improve the process
  • Control the new process
136
Q

DMADV (Define Measure Analyze Design Verify)

A

A Six Sigma process that outlines the steps needed to create completely new business processes or products

137
Q

Continuous Improvement

A

The philosophy that small, incremental improvements can add up to significant performance improvements over time

138
Q

Root Cause Analysis

A

A process by which organizations brainstorm about possible causes of problems (effects) and then, through structured analysies and data-gathering efforts, gradually narrow the focus to a few root causes

139
Q

Cause-and-Effect Diagram

A

A graphical tool used to categorize the possible causes for a particular result

140
Q

The Five M’s

A

The five main branches of a typical cause and effect diagram

141
Q

Components of the Five M’s

A
  1. ) Manpower
  2. ) Methods
  3. ) Materials
  4. ) Machines
  5. ) Measurements
142
Q

Manpower

A

People do not have the right skills, authority or respect.

143
Q

Methods

A

Poor business practices- poor process, products, or service designs

144
Q

Materials

A

Poor quality inputs

145
Q

Machines

A

Equipment is not capable of doing the job

146
Q

Measurements

A

Performance measurements that are not geared towards eliminating the problem

147
Q

Five Whys

A
  • An approach used during the narrow phase of root cause analysis, in which trams brainstorm successive answers to the question “why is this a cause of the original problem?”
  • The name comes from the general observation that the questioning process can require up to five rounds
148
Q

Scatter Plot

A

A graphical representation of the relationship between two variables

149
Q

Check Sheet

A

A sheet used to record how frequently a certain event occurs

150
Q

Pareto Chart

A

A special form of bar chart that shows frequency counts from highest to lowest

151
Q

Bar Graph

A

Graphical representation of data that places observations into specific categories

152
Q

Histogram

A

A special form of bar chart that tracks the number of observations that fall within a certain interval

153
Q

Run Chart

A

A graphical representation that tracks changes in a key measure over time

154
Q

How the Standardize Process Should be

A

Consider tools suchas process mapping and DMAIC to be overused and applied in environments where flexibility and variability in outcomes are valued

155
Q

Four Types of Processes

A
  1. ) Mass process
  2. ) Mass customization
  3. ) Artistic process
  4. ) Nascent (broken) process
156
Q

Mass process

A

Output the same every time

157
Q

Mass Customization

A

Variation is controlled

158
Q

Artistic process

A

Variability in process and outputs are valued

159
Q

Nascent (broken) process

A

Mismatch between what the consumer wants and what the process is capable of providing

160
Q

Business Process Reengineering (BPR)

A

A procedure that involves the fundamental rethinking and radical redesign of business processes to achieve dramatic organizational improvements in such critical measures of performance as cost, quality, service and speed

161
Q

Supply Chain Operations Reference (SCOR) Model

A

A comprehensive model of the core management processes and individual process types that, together, define the domain of supply chain management

162
Q

Five Core Management Processes

A
  1. ) Source
  2. ) Make
  3. ) Deliver
  4. ) Return
  5. ) Plan
163
Q

Source Five Core Management Processes

A

Process that procure goods and services to meet planned or actual demand

164
Q

Make Five Core Management Processes

A

Process that transform products to a finished stat to meet planned or actual demand

165
Q

Deliver Five Core Management Processes

A

Process that provide finished goods and services to meet planned or actual demand. The process include order management as well as logistics and distribution activities

166
Q

Return Five Core Management Processes

A

Process associated with returning or receiving returned products for any reason

167
Q

Plan Five Core Management Processes

A

Process that balance aggregate resources with requirements

168
Q

Quality

A
  • The characteristics of a product or service that bear on its ability to satisfy stated or implied needs
  • A product or service that is free of deficiencies
169
Q

Perspectives on Quality

A
  1. ) Value perspective

2. ) Conformance perspective

170
Q

Value Perspective

A

A quality perspective that holds that quality must be judged, in part, by how well the characteristics of a particular product or service align with the needs of a specific user

171
Q

Eight Dimensions of Quality

A
  1. ) Performance
  2. ) Features
  3. ) Reliability
  4. ) Durability
  5. ) Conformance
  6. ) Aestetics
  7. ) Serviceability
  8. ) Perceived quality
172
Q

Performance- Eight Dimensions of Quality

A

Basic operating characteristics of the product and service

173
Q

Features- Eight Dimensions of Quality

A

What extra characteristics the product has

174
Q

Reliability-Eight Dimensions of Quality

A

How long can a product go before needing maintenance

175
Q

Durability- Eight Dimensions of Quality

A
  • Useful life of the product

- How it handles extreme use

176
Q

Conformance- Eight Dimensions of Quality

A
  • Did the product perform to expectations

- Ex: number of defects in the car

177
Q

Aestethics- Eight Dimensions of Quality

A

How the product appeals to the senses

178
Q

Serviceability- Eight Dimensions of Quality

A

How easy it is to repair the product

179
Q

Perceived Quality- Eight Dimensions of Quality

A

What the reputation is of the product/ service

180
Q

Conformance Perspective

A

A quality perspective that focuses on whether or not a product was made or a service was performed as intended

181
Q

Total Cost of Quality

A
  • Prevention costs
  • Appraisals cost
  • Internal failure cost
  • External failure cost
182
Q

Internal Failure Costs

A

Cost caused by defects that occur prior to delivery to the customer, including money spent on repairing on reworking defective products, as well as time wasted on these activities.

183
Q

External Failure Costs

A

Cost incurs by defects that are not detected until a product or service reaches the customer

184
Q

Appraisal Costs

A

Costs a company incurs for assessing its quality levels

185
Q

Prevention Costs

A

The costs an organization incurs to actually prevent defects from occurring to begin with

186
Q

Total Cost of Quality Curve

A

The curve that suggests that there is some optimal quality level, Q*. The curve is calculated by adding costs of internal and external failures, prevention costs, and appraisals cost

187
Q

Total Quality Management (TQM)

A

A managerial approach in which an entire organization is managed so that is excels in all quality dimensions that are important to customers

188
Q

Principles of Total Quality Management (TQM)

A
  1. ) Customer focus
  2. ) Leadership involvement
  3. ) Employee empowerment
  4. ) Quality assurance
  5. ) Strategic partnerships
  6. ) Strategic quality plan
189
Q

Continuous Improvement

A

A principle of TQM that assumes there will always be room for improvement, no matter how well an organization is doing

190
Q

Employee Empowerment

A

Giving employees the responsibility, authority, training, and tools necessary to manage quality

191
Q

Quality Assurance

A

The specific actions firms take to ensure that their products, services, and processes meet the quality requirements of their customers

192
Q

Quality Function Deployment (QFD)

A

A technique used to translate customer requirements into technical requirements for each stage of product development and production

193
Q

Statistical Quality Control (SQC)

A

Application of statistical techniques to quality control

  • Process capability
  • Six Sigma Quality
  • Control Charts
  • Acceptance sampling
194
Q

Strategic Quality Plan

A

An organizational plan that provides for a vision, guidance, and measurements to drive the quality effort forward and shift the organization’s course when necessary

195
Q

Process Capability Ratio (Cp)

A
  • A mathematical determination of the capability of a process to meet certain quality standards
  • Goal to get greater than one- means process is capable of meeting standards being measured
196
Q

Upper Tolerance Limit (UTL)

A
  • The highest acceptable value for some measure of interest

- Ex: weight, temperature,or time

197
Q

Lower Tolerance Limit (LTL)

A

The lowest acceptable value for some measure of interest

198
Q

Process Capability Index (Cpk)

A

A mathematical determination of the capability of a process to meet certain tolerance limits

199
Q

Six Sigma Quality

A
  • Level of quality that indicates that a process is well controlled
  • Associated with Motorola, which named one of its key operational incentives Six Sigma Quality
  • Goal is to get capability ratio greater than two
200
Q

Control Chart

A
  • A specialized run chart that helps an organization track changes in key measures over time
  • Shows continuous variables and attributes
201
Q

Continuous Variable

A

A variable that can be measured along a continuous scale, such as weight, length, height, and temperature

202
Q

Attribute

A

A characteristic of an outcome or item that is accounted for by its presence or absence, such as “defective” versus “good: or “late: versus “on-time”

203
Q

Sampling

A

Using carefully selected samples to get a fairly good idea of how well a process is working

204
Q

Good Sampling is One Where

A

Every outcome has an equal chance of being selected into the sample

Random sample of the entire population

205
Q

Sample Average (X Bar)

A

A key measure that represents the central tendency of a group of samples used in conjunction with range (R)

206
Q

Range (R)

A

A key measure that represents the variation of a specific sample group, used in conjunction with sample average (x-bar)

207
Q

Proportion

A

A measure that refers to the presence or absence of a particular characteristic

208
Q

Control Limits

A
  • The upper and lower limits of a control chart

- They are calculated so that if a sample falls inside the control limits, the process is considered in control

209
Q

X Bar Chart

A

A specific type of control chart for a continuous variable that is used to track the average value of future samples

210
Q

R Chart

A

A specific type of control chart for a continuous variable that is used to track how much the individual observation within each sample vary

211
Q

P Chart

A

A specific type of control chart for attributes that is used to track sample proportions

212
Q

Acceptance Sampling

A

The process of sampling a portion of goods for inspection rather than examining the entire lot

213
Q

Acceptance Quality Level (AQL)

A
  • In acceptance sampling

- A cut-off value that represents the maximum defect level at which a coonsumer would always accept a lot

214
Q

Low Tolerance Percent Defect (LTPD)

A
  • In acceptance sampling

- The highest defect level a consumer is willing to “tolerate”

215
Q

Consumer’s Risk (B)

A
  • Acceptance sampling

- The probability of accepting a lot of quality worse than LTPD level

216
Q

Producer’s Risk

A
  • Acceptance sampling

- The probability of rejecting a lot with quality better than AQL level

217
Q

Operating Characteristics (OC) Curve

A
  • Curve in acceptance sampling
  • Used to show the probability of accepting a lot, given the actual fraction defective in the entire lot and the sampling plan being used.
  • Different sampling plans will result in different OC curves
218
Q

ISO 9000

A
  • A family of standards, supported by the International Organization for Standardization, representing an international consensus on good quality management practices.
  • Addresses business processes rather than specific outcomes
219
Q

Just in Time (JIT)

A
  • Philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity
  • Applies to all forms of manufacturing and to many service industries as ell
  • Used synonymously with lean
220
Q

Lean

A
  • A philosophy of production that emphasizes the minimization of the amount of all the resources (including time) used in the various activities of an enterprise
  • Involves identifying and eliminating non-value-adding activities in design, production, supply chain management and dealing with customers
221
Q

8 Characteristics of Waste

A
  1. ) Overproduction
  2. ) Waiting
  3. ) Unnessary transportation
  4. ) Inapproprite process
  5. ) Unnecessary Inventory
  6. ) Unnessary/Excess Motion
  7. ) Defects
  8. ) Underutalization of employees
222
Q

Waste- Overproduction

A

Inflexible and unreliable process may cause organizations to produce goods before they are required

223
Q

Waste- Waiting

A

Inefficient layouts or an inability to match demand with output levels may cause waiting

224
Q

Waste- Unnessary Transportation

A

Unnecessary transportation

225
Q

Waste- Innapropriate process

A

Companies use hard process when easier ones will work

226
Q

Waste- Unnessary Inventory

A

Uncertainty with regards to quality levels and delivery lead times

227
Q

Waste- Unnessary/Excess Motion

A

Poorly designed processes

228
Q

Waste

A

Any activity that does not add value to the goods or service in the eyes of the consumer

229
Q

Keban System

A

Production control approach that uses containers, cards, or visual cues to control the production and movement of goods through supply chain

230
Q

Characteristics of Keban System

A
  • Use signaling mechanisms to indicate when specific items should be produced or moved
    Can be used to synchronize activities either within a plant or between supply partners
  • Are not considered planning tools but control mechanisms that are designed to pull parts or goods through the supply chain based on downstream demand
231
Q

Two Card Keban System

A

Special form that uses one card to control production and another card to control movement of materials

232
Q

Cards in Two card system

A

Move and production

233
Q

Move Card

A

Used to indicate when a container of parts should be moved to the next process

234
Q

Production Card

A

Used to indicate when another container of parts should be produced

Supply Chain (2 decks)

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