Exam 1 - Key Terms 5 Flashcards
Leading indicator
A specific business activity index that indicates future trends. For example, housing stars is a leading indicator for the industry that supplies builders’ hardware.
Lead-time offset
A technique used in MRP where a planned order receipt in one time period requires the release of that order in an earlier time period based on the lead time for the item. Syn: component lead-time offset, offsetting
Lean production - summation
A philosophy of production that emphasizes the minimization of the amount of all the resources (including time) used in the various activities of the enterprise. Syn: lean, lean manufacturing
Lean production - key aspects
Identifying and eliminating non-value-adding activities in design, production, and supply chain management, and dealing with customers. Key objective is to reduce cost through relentless removal of waste and process simplification
Lean six sigma
A methodology that combines the improvement concepts of lean and six sigma. It uses the seven wastes of lean and the DMAIC process from six sigma, and reward recognition of competence through judo-style belts
Level of service
A measure (usually percentage) of satisfying demand through inventory or by the current production schedule in time to satisfy customer requested delivery dates and quantities.
Level of service: make-to-stock environment
Sometimes calculated as the percentage of orders picked complete from stock upon receipt of the customer order, percentage of line items picked complete, or percentage of total dollar demand picked complete
Level of service: make-to-order/design-to-order environments
Percentage of times the customer-requested or acknowledged date was met by shipping complete product quantities. See: cycle service level
Cycle service level
The probability of not having a stockout in any one ordering cycle, which beings at the time an order is placed and ends when the goods are placed in stock.
Level production method
A production planning method that maintains a stable production rate while varying inventory levels to meet demand. Syn: level strategy, production leveling. See: level schedule
Level schedule - traditional management
Production schedule/master production schedule that generates material and labor requirements that are as evenly spread over time as possible. Finished goods inventories buffer the production system against seasonal demand. Is the output of the load-leveling process
Level schedule - JIT
Usually constructed monthly; in which each day’s customer demand is scheduled to be built on the day it will be shipped. Is the output of the load-leveling process
Liabilities
An accounting/financial term (balance sheet classification of accounts) representing debts or obligations owed by a company to creditors. Short-term horizon of accounts payable or long-term such as mortgage or bonds payable.
Load
The amount of planned work scheduled for and actual work released to a facility, work center, or operation for a specific span of time. Usually expressed in terms of standard hours of work or, when items consume similar resources at the same rate, units of production
Load leveling
Spreading orders out in time or rescheduling operations so that the amount of work to be done in sequential time periods tends to be distributed evenly and is achievable.
Load leveling - material and labor
Specific business, such as service industries, may load level to material or labor exclusively, although these are ideally level loaded
Lot-for-lot (L4L)
A lot-sizing technique that generates planned orders in quantities equal to the net requirements in each period.
Lot-size inventory
Inventory that results whenever quantity price discounts, shipping costs, setup costs, or similar considerations make it more economical to purchase or produce in larger lots than are needed for immediate purposes.
Low-level code
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. Normally calculated and maintained automatically by software.
Make-or-buy decision
The act of deciding whether to produce an item internally or buy it from an outside supplier. Factors to consider: costs, capacity availability, proprietary and/or specialized knowledge, quality considerations, skill requirements, volume, and timing.
Manufacturing calendar
A calendar used in inventory and production planning functions that consecutively numbers only the working days so that the component and work order scheduling may be done based on the actual number of workdays available.
Manufacturing lead time
The total time required to manufacture an item, exclusive of lower-level purchasing lead time.
Manufacturing lead time: make-to-order products
Length of time between the release of an order to the production process and shipment to the final customer
Manufacturing lead time: make-to-stock products
Length of time between the release of an order to the production process and receipt into inventory.
Manufacturing order
A document, group of documents, or schedule conveying authority for the manufacture of specified parts or products in specified quantities. Syn: job order, manufacturing authorization, production order, production release, run order, shop order, work order
Manufacturing philosophy
The set of guiding principles, driving forces, and ingrained attitudes that helps communicate goals, plans, and policies to all employees and that is reinforced through conscious and subconscious behavior within the manufacturing organization
Manufacturing resource planning (MRP II)
A method for the effective planning of all resources of a manufacturing company. Ideally address operational planning in units, financial planning in dollars, and includes simulation capacity to answer what-ifs.
Manufacturing resource planning (MRP II) is made up of
Linked processes: business planning, production planning (S&OP), master production scheduling, material requirements planning, capacity requirements planning, and the execution support systems for capacity and material. Direct outgrowth/extension of closed-loop MRP.
Mass customization
The use of mass production techniques to create large volume of products in a wide variety keeping production costs low while enabling customized output primarily utilizing postponement or delayed differentiation.
Master data
An enterprise’s essential core data consisting of basic information needed across the enterprise to conduct business. Describes the core entities of the enterprise including products, customers, suppliers, sites, and chart of accounts
