Exam 3 Flashcards
Supply Chain Management
The Coordination of all supply chain activities involved in enhancing customer value
Make-or-buy decision
A Choice between producing a component or service in-house or purchasing it from an outside source
Outsourcing
Transferring a firm’s activities that have traditionally been internal to external suppliers
Vertical Integration
Developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor
Keiretsu*
A Japanese term that describes suppliers who become part of a company coalition
Virtual Companies
Companies that rely on a variety of supplier relationships to provide services on demand. Also known as hollow corporations or network companies.
Cross-sourcing
Using one supplier for a component and a second supplier for another component, where each supplier acts as a backup of the other.
Bull whip Effect
The increasing fluctuation in orders that often occurs as orders move through the supply chain
Pull data
Accurate sales data that initiate transactions to “pull” product through the supply chain
Single - stage control of replenishment
Fixing responsibility inventory for monitoring and managing inventory for the retailer
Vendor-managed inventory (VMI)
A system is which a supplier maintains material for a buyer, often delivering directly to the buyer’s using department
Collaborative Planning, forecasting, and replenishment (CPFR)
A system in which members of a supply chain share information in a joint effort to reduce supply chain cost
E-procurement
purchasing facilitated through the internet
Supply Chain Operations Reference (SCOR) model*
A set of processes, metrics, and best practices developed by the APICS supply chain council
Blanket Order
A long term purchase commitment to a supplier for items that are to be delivered against short term releases to ship
Postponement
Delaying any modifications or customization to a product as long as possible in the production process
Drop Shipping
Shipping directly from the supplier to the end consumer rather than from the seller, saving both time and reshipping costs
Logistics Management
An approach that seeks efficiency of operations through the integration of all material acquisition, movement, and storage activities
Channel assembly
Postpones final assembly of a product so the distribution channel can assemble it
Reverse Logistics
The process of sending returned products back up the supply chain for value recovery or disposal
Closed-loop supply chain
A supply chain designed to optimize both forward and reverse flows
What is the purpose of SCOR?
used to identify, measure, reorganize, and improve supply chain processes
What are the 5 components of SCOR
Plan: Demand/Supply Planning and Management
Source: Identify, select, manage, and asses sources
Make: Manage, production execution, testing, and packing
Deliver: Invoice, warehouse, transport, and install
Return: Raw material, Finished goods
Raw material inventory
Material that are usually purchased but have yet to enter the manufacturing process
Work-in-process (WIP)
Products or components that are no longer raw materials but have yet to become finished products
Maintenance/repair/operating (MRO) inventory
maintenance, repair, and operating materials
Finished-goods inventory
An end item ready to be sold, but still an asset on the company’s books
ABC analysis
A method for dividing on-hand inventory into three classifications bases on annual dollar volume
Cycle counting
A continuing reconciliation of inventory with inventory records
Shrinkage
Retail inventory that is unaccounted for between receipt and sale
Pilferage
a small amount of theft
Holding cost
The cost to keep or carry inventory in stock
Ordering cost
the cost of the ordering process
Setup cost
the cost to prepare a machine or process for production
setup time
the time required to prepare a machine or process for production
Economic order quantity (EOQ) model
An inventory-control technique that minimizes the total of ordering and holding costs
Robust
Giving satisfactory answers even with substantial variation in the parameters
Lead time
In purchasing systems, the time between placing an order and receiving it; in production systems, the wait, move, queue, setup, and run times for each component produced
Reorder point (ROP)
The inventory level (point) at which action is taken to replenish the stocked item
Safety stock (ss)
Extra stock to allow for uneven demand; a buffer
Production order quantity model
An economic order quantity technique applied to production orders
Quantity discount
A reduced price for items purchased in large quantities
Probabilistic model
A statistical model applicable when product demand or any other variable is not known but can be specified by means of a probability distribution
Service Level
The probability that demand will not be greater than supply during lead time, it is the complement of the probability of a stock out
Fixed quantity (Q) system
An ordering system with the same order amount each time
Perpetual inventory system
A system that keeps track of each withdrawal or addition to inventory continuously, so records are always current
Fixed-period (P) system
A system in which inventory orders are made at regular time intervals
Material requirements planning (MRP)
A dependent demand technique that uses a bill-of-material, inventory, expected receipts, and a master production schedule to determine material requirements
Master production schedule (MPS)
A timetable that specifies what is to be made (usually finished goods) and when
Bill of material (BOM)
A listing of the components, their description, and the quantity of each required to make on unit of product
Modular bills
Bills of material organized by major subassemblies or by product options
Planning bills (or kits)
Material grouping created in order to assign an artificial parents to a bill of material; also called “pseudo” bills
Phantom bills of material
Bills of material for components, usually assemblies, that exist only temporarily; they are never inventoried
Low-level coding
A number that identifies items at the lowest level at which they occur
Lead time
In purchasing systems the time between recognition of the need for an order and receiving it; in production systems, it is the order, wait, move, queue, setup, and run times for each component
Gross Material requirements plan
A schedule that shows the total demand for an item (prior to subtraction of on-hand inventory and scheduled receipts) and (1) when it must be ordered from suppliers (2) when production must be started to meet its demand by a particular date
Net requirements plan
The result of adjusting gross requirements for inventory on hand and scheduled receipts
System nervousness
Frequent changes in an MRP system
Time Fences
A means for allowing a segment of the master schedule to be designated as “not to be rescheduled”
Pegging
In material requirements planning systems, tracing upward the bill of material from the component to the parent item
Buckets
Time units in a material requirements planning systems
Lot-sizing decision
The process of, or techniques used in, determining lot size
Lot-for-lot
A lot-sizing technique that generated exactly what is required to meet the plan
Periodic order quantity (POQ)
An inventory ordering technique that issues order on a predetermined time interval, with the order quantity covering the total of the interval’s requirements
Material requirements planning II (MRP II)
A system that allows, with MRP in place, inventory data to be augmented by other resource variables; in this case, MRP becomes material resource planning
Closed - loop MRP systems
A system that provides feedback to the capacity plan, master production schedule, and production plan so planning can be kept valid at all times
Load report
A report showing the resource requirements in a work center for all work currently assigned there as well as all planned and expected orders
Distribution resources planning (DRP)
A time-phased stock replenishment plan for all levels of a distribution network
Enterprise resource planning (ERP)
An information system for identifying and planning the enterprise-wide resources needed to take, make, ship, and account for customer orders
Efficient consumer response (ECR)
Supply chain management systems in the grocery industry that tie sales to buying, to inventory, to logistics, and to production
Loading
The assigning of jobs to work or processing centers
input-output control
A system that allows operations personnel to manage facility work flows
ConWIP-cards
Cards that control the amount of work in a work center, aiding input-output control
Gantt Charts*
planning charts used to schedule resources and allocate time
Assignment method*
A special class of linear programming models that involves assigning tasks or jobs to resources
Sequencing*
Determining the order in which jobs should be done at each work center
Priority rules
rules used to determine the sequence of jobs in process-oriented facilities
Flow time
The time between the release of a job to a work center until the job is finished
Critical ration (CR)
A sequencing rule that is an index number computed by dividing the time remaining until due date by the work time remaining
Johnson’s rule*
An approach that minimized the total time for sequencing a group of jobs through two work centers while minimizing total idle time in the work centers.
Finite capacity scheduling (FCS)
Computerized short-term scheduling that overcomes the disadvantage of rule-based systems by providing the used with graphical interactive computing
Lean operations
Eliminates waste through continuous improvement and focus on exactly what the customer wants
Just-in-time (JIT)
Continuous and forced problem solving via focus on throughout and reduced inventory
Toyota Production System (TPS)*
Focus on continuous improvement, respect for people, and standard work practices
Seven Wastes
Overproduction, Quese, Transportation, Inventory, Motion, Over processing, Defective product
Variability
Any deviation from the optimum process that delivers a perfect product on time, every time
5Ss
A lean production checklist: Sort Simplify Shine Standardize Sustain
Throughput
The rate at which units move through a process
Manufacturing cycle time
the time between the arrival of raw materials and the shipping of finished products
Pull system
A concept that results in material being produced only when requested and moved to where it is needed just as it is needed
Supplier partnerships
Partnerships of suppliers and purchasers that remove waste and drive down costs for mutual benefits
Consignment inventory
An arrangement in which the supplier maintains title to the inventory until it is used
Lean inventory
The minimum necessary to keep a perfect system running
Level Schedules
Scheduling products so that each day’s production meets the demand for the day
Kanban**
The Japanese word for “card” which has come to mean “Signal”; Kanban system moves parts through production via a “pull” from a signal
Kaizen**
A focus on continuous improvement
Kaizen Event**
Members of work cell or ream meet to develop improvements in the process
Gemba or Gemba walk*
going to where the work is actually preformed
