Exam 3 Flashcards
1
Q
Total quality management
A
Managing the entire organization so that it excels on all dimensions of products and services that are important to the customer
2
Q
TQM 2 fundamental operational goals
A
Careful design of the product or service
Ensuring that the organization’s systems can consistently produce the design
3
Q
TQM Commitments
A
Commitment to total customer satisfaction
Commitment to understanding and improving the organization’s processes
Commitment to employee involvement
Commitment to data-based decision making
4
Q
Crosby Definition of Quality
A
Conformance to requirements
5
Q
Deming Definition of Quality
A
A predictable degree of uniformity and dependability at low cost and suited to the market
6
Q
Juran Definition of Quality
A
Fitness for use (satisfies customer’s needs)
7
Q
Design quality
A
inherent value of the product in the marketplace
8
Q
Conformance quality
A
degree to which the product or service design specifications are met
9
Q
Types of variations/defects
A
Common cause variation (random variation)
Special cause variation (assignable variation)
10
Q
Common cause/random variation
A
natural variation inherent in any system
11
Q
special cause/assignable variation
A
changes in process outcomes that can be tied to a specific cause, such as: equipment/personnel/material issues
12
Q
Types of quality processes
A
Detection-reacting to problems as they arise
Prevention- Taking care of special cases by removing assignable or identifiable causes of system variation
13
Q
Quality Costs
A
Appraisal costs
Prevention costs
Internal failure costs
External failure costs
14
Q
Appraisal costs
A
costs of the inspection and testing to ensure that the product or process is acceptable
15
Q
Prevention costs
A
sum of all the costs to prevent defects
16
Q
Internal failure costs
A
costs for defects incurred within the system
17
Q
Eternal failure costs
A
costs for defects that pass through the system
18
Q
ISO 9000 (International organization for standardization)
A
directs you to “document what you do and then do as you documented”
19
Q
Six Sigma seeks to:
A
improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes.
20
Q
Six Sigma key concepts
A
Critical to quality: attributes most important to customer
Defect: failing to deliver what the customer wants
Process Capability: what your process can deliver
Variation: what the customer sees and feels
Stable operations: ensuring consistent, predictable processes to improve variations
Design for Six Sigma: designing to meet customer needs and process capability
21
Q
Six Sigma Methodology
A
Define Measure Analyze Improve Control (Developed by GE)
22
Q
Define
A
identify customers and their priorities
23
Q
Measure
A
determine how to measure the process and how it is performing
24
Q
analyze
A
determine the most likely causes of defects
25
improve
identify means to remove the causes of defects
26
control
determine how to maintain the improvements
27
Cause and effect (Fishbone) diagram
Broken up into:
- Machinery/equipment
- People
- Methods
- Materials
28
Upper Specification
the maximum acceptable value for a characteristic
29
Lower specification
the minimum acceptable value for a characteristic
30
Process capabilty
the ability of a process to consistently produce a good or deliver a service with a low probabilty of generating a defect
31
specification limits
range of variation that is considered acceptable by the designer or customer
32
process limits
range of variation that a process is able to maintain with a high degree of certainty
33
Process Capability index
ratio of the range of values produced divided by the range of values allowed.
Shows how well the parts being produced fit into the range specified by the design specifications
Cpk larger than one indicates process is capable
When the two numbers are not close, indicates mean has shifted
34
Statistical process control
testing a sample of output to determine if the process is producing items within a preselected range
35
attributes
quality characteristics that are classified as either conforming or not conforming
36
variable
characteristics that are measured using an actual value
37
p Charts
used when an item is defined as either good/bad, pass/fail, yes/no
38
Acceptance sampling
performed on goods that already exist to determine what percentage of the products conform to specifications. Accept, reject, or retest
- Determines quality level
- Ensures quality is within predetermined level
39
Disadvantages of acceptance sampling
Risks of accepting “bad” lots and rejecting “good” lots
Added planning and documentation
Sample provides less information than 100-percent inspection
40
Advantages of acceptance sampling
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Economy
Less handling damage
Fewer inspectors
Upgrading of the inspection job
Applicability to destructive testing
Entire lot rejection (motivation for improvement)
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41
Designing a sampling plan
Determine (1) how many units, n, to sample from a lot, and (2) the maximum number of defective items, c, that can be found in the sample before the lot is rejected
42
Lean
Preserving value with less work
43
Lean logic
- Nothing will be produced until it is needed
- A sale pulls a replacement from the last position in the system
- This triggers an order to the factory production line
- Each upstream station then pulls from the next station further upstream
44
Value chain
each step in the supply chain should create value
45
customer value
something for whith the customer is willing to pay
46
waste
anything that does not add value from the customer's perspective
47
Examples of waste
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Defects
Overproduction
Excessive inventories
Excess motion
Excess process activity
Transportation
Waiting time
Idle employees
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48
Toyota Production System
Elimination of waste
| Respect for people
49
Value stream
the value-adding and non-value-adding activities required to design, order, and provide a product or service
50
Waste reduction
the optimization of the value-adding activities and the elimination of non-value-adding activities
51
Lean suppliers
Able to respond to changes.
Lower prices.
Higher quality.
52
Lean procurement
Key is automation (e-procurement).
| Suppliers must see into the customers' operations and customers must see into their suppliers' operation.
53
Opportunities in an Integrated Supply Chain
Collaborative planning, forecasting, and replenishment (CPFR)
Vendor managed inventory (VMI)
Improved Inventory Tracking (RFID)
54
Value stream mappnig
a special type of flowcharting tool used to analyze where value is or is not being added as material flows through a process.
Requires a full understanding of the business, including production processes.
55
Principles of Lean Supply Chain Design
Lean layouts (mfg. cells, quality at the source, JIT production)
Lean Production Schedules (Uniform plant loading, kanban production control system)
Lean supply chains (Specialized plants, work w/ suppliers, building a lean supply chain system)
56
Lean manufacturing concepts
Plant layout designed to ensure balanced work flow with a minimum of WIP inventory.
Preventive maintenance is emphasized to avoid downtime
57
Quality at the source
do it right the first time and if something goes wrong, stop the process immediately
Workers are personally responsible for the quality of their output
Workers become their own inspectors
Workers are empowered to do their own maintenance
58
Just in Time production
producing what is needed when needed and nothing more
Anything over the minimum is waste
Typically applied to repetitive manufacturing
Vendors ship several times a day, or whenever demanded by the customer
JIT exposes problems otherwise hidden by inventory
59
Kanbans
Slides 19-22 Ch. 12
60
Building a lean supply chain
Value must be defined jointly for each product family based on the customer’s perception
All firms along the value stream must make an adequate return on their investments
Firms must work together to eliminate waste (fyi, this is muda)
When cost targets are met, the firms will conduct new analyses to identify remaining waste and set new targets = benefits for all firms to practice continuous improvement
Every participating firm has the right to examine every activity relevant to the value stream as part of the joint search for waste
61
Specialized plants
plants that perform tasks they are most efficient at. Outsourcing as opposed to vertically integrated manufacturing facilities doing everything
62
Service operation waste (uncertainty)
- Uncertainty in task times (Time)
- Volatility in demand
- Service location related to demand
63
strategic sourcing
the development and management of supplier relationships to acquire goods and services in a way that aids in achieving the immediate needs of the business
64
Request for proposal (RFP)
used for purchasing items that are more complex or expensive and where there may be a number of potential vendors
65
Vendor Managed Inventory
when a customer actually allows the supplier to manage an item or group of items for them
66
Strategic sourcing key phases
- Concept development/strategy
- Market research
- Requirements gathering
67
Concept development/ strategy
What do we want to achieve ?
| Make vs. Buy (in house or Vendor solution ?
68
Market research
Vendor Pool and Capabilities
Subject matter literature search
Gartner – “Magic Quadrant”
69
Requirements gathering
What do we want to achieve ?
Build reqts to meet the need/desire, vs. conform to vendor solution
May involve extensive EPO involvement
70
Contracting will have one or more of the following contract documents:
Master Services Agreement
| Statement of Work
71
Master Services agreement
general agreement between parties, overrides all other documents
72
Statement of Work
specific agreement, with time and/or deliverable parameters
73
Sourcing/Purchasing design matrix
Request for proposal
Strategic alliance
Request for bid and reverse auctions
Vendor managed inventory
74
Bullwhip Effect
phenomenon of variability magnification as we move from the customer to the producer in the supply chain
75
Functional products
the staples that people buy in a wide range of retail outlets, such as grocery stores and gas stations
76
Innovative products
Innovation can enable a company to achieve higher profit margins
Newness of the innovative products makes demand for them unpredictable
Typically have a life cycle of just a few months
Imitators quickly erode the competitive advantage that innovative products enjoy
Companies are forced to introduce a steady stream of newer innovations
The short life cycles and the great variety typical of these products further increase unpredictability
77
Functional vs. innovative demand characteristics
Ch. 13 slide 13
78
Supply chain strategies
Efficient supply chains
Risk-hedging supply chains
Responsive supply chains
Agile supply chains
79
Efficient supply chains
utilize strategies aimed at creating the highest cost efficiency
80
Risk-hedging supply chains
utilize strategies aimed at pooling and sharing resources in a supply chain to share risk
81
Responsive supply chains
utilize strategies aimed at being responsive and flexible
82
Total cost of ownership (TCO)
an estimate of the cost of an item that includes all the costs related to the procurement and use of an item, including any related costs in disposing of the item
83
Outsourcing
moving some of a firm’s internal activities and decision responsibility to outside providers
An entire function may be outsourced, or some elements of an activity may be outsourced, with the rest kept in-house
84
Outsourcing advantages
- Focus on core activities/competencies
- Cost and efficiency savings
- Reduced overhead
- Operational control
- Staffing flexibility
- Continuity and risk management
- Develop internal staff
85
Disadvantages of outsourcing
- Loss of managerial control
- Hidden costs
- Threat to security and confidentiality
- Quality problems
- Tied to the financial well being of another company
- Bad publicity and ill will
86
Procure to pay
- sourcing
- procurement/contracting process
- execution of goods transfer and receipt
- invoice process
- payment and reconciliation process
87
Potential improvements to procure to pay
- E-procurement
- Vendor managed inventories
- Blanket purchase orders
88
Logistics
the art and science of obtaining, producing, and distributing material and product in the proper place and in the proper quantities
89
International logistics
managing logistic functions when the movement is on a global scale
90
Third-party logistics company
an outside company used to manage all or part of another company’s logistics functions
91
Transportation options
Truck (very flexible)
Ship (high capacity and low cost, but slow)
Plane (fast but expensive)
Train (low cost but slow and variable)
Pipeline (highly specialized and limited to liquids, gases, and solids in slurry form)
Hand delivery (last step in many supply chains)
92
Facility location issues
Free trade zones - a closed facility into which foreign goods can be brought without being subject to the normal customers requirements
Political risk - risks in both the country of location and the host country influence the decision
Government barriers - barriers in many countries are being removed
Trading blocs - firms locate within a block to take advantage of new markets or lower total cost
Environmental regulation - these impact a certain industry in a given location and must be included in the decision
Host community - host community’s interest is part of the evaluation process
Competitive advantage - the location should provide the company with a competitive advantage
Proximity to customers - makes rapid delivery easier
Business climate - can include presence of similar-sized businesses, businesses in the same industry, and other foreign companies
Total costs - object is to minimize overall cost
Infrastructure - adequate road, rail, air, and sea transportation along with energy and telecommunications
Quality of labor - educational and skill levels must match needs
Suppliers - proximity of important suppliers supports lean production
Other facilities - location of other facilities can influence a location decision
93
Service location approaches
Competitive clustering
| Saturation marketing
94
Competitive clustering
Competitors in the same service industry locating close together
Synergistic effect attracts more customers
Facilitates comparison shopping
95
Saturation marketing
Multiple facilities of the same company locating close together
Segments a high-density area into small, focused markets
Cannibalization offset by closer proximity to more customers
96
Co-location
putting personnel in (very near) a customer's facility
- assembly
- design
- quality
- logistics
- inventory planning and control
97
Sources of data
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Syndicated date (commercially available at a cost)
Primary research
Point-of-sale data
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98
Distribution objectives
Greatest ease of entry against the competition
Lowest costs of entry compared to the competition
Least financial risk and commitment to the trade
Sufficient volume potential to reach short-term company goals
Pricing levels to provide acceptable company revenues and profit margins
99
Warehouse activities
Cross-docking
| Hub-and-spoke systems
100
Cross-docking
large shipments are broken down into small shipments for local delivery in an area
Minimizes inventory in the warehouse
101
Hub-and-spoke systems
the sole purpose of the warehouse (the hub) is sorting goods to consolidation areas, where each area is designed for shipment to a specific location
102
Distribution channel options
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Retail outlets
Wholesale outlets
sales force
Distributors
Direct mail
Telemarketing
Internet marketing
Tv/cable
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103
Plant location methods
Factor-rating system
| Centroid method
104
Factor-rating system
Most widely used
List of factors is developed
Range of possible points assigned to each factor
Each site is rated against each factor
The sums of assigned points for each site are computed
The site with the most points is selected
105
Centroid method
Used for locating single facilities that considers existing facilities, the distances between them, and the volumes of goods to be shipped between them
Assumes inbound and outbound transportation costs are equal
Does not include special shipping costs for less than a full load
This methodology involves formulas used to compute the coordinates of the two-dimensional point that meets the distance and volume criteria stated above
