Final Exam Flashcards
TQM
Total Quality Management
Total Quality Management (TQM)
a philosophy focused on meeting customer expectations
3 Manufacturing strategies
- Make to Stock (MTS)
- Assemble to Order (ATO)
- Make to Order (MTO)
Lean
a philosophy of manufacturing that emphasizes the minimization of the amount of all resources (including time) used in the operation of a company
Make to Stock (MTS)
features economies of scale, large volumes, low variety, and distribution channels
Assemble to Order (ATO)
when base components are made and stocked to forecast, but products are not assembled until the customer order is received
Make to Order (MTO)
relies on relatively small quantities, but more complexity
- Requires interaction with customer to work out design & specification
- Usually shipped direct to customer
Six Sigma
An approach used to identify sources of variability and then systematically reduce them
Six sigma goal
is to achieve a process standard deviation that is six times smaller than the outputs allowed by the product’s design specification
Six sigma quality level
- Produces defect free product 99.99966 percent of the time
- 3.4 defects per million parts produced
Management Standards have been established by what?
the ISO (in both Quality and Environment)
ISO
International Organization for Standards (ISO) was formed after World War II
The 8 Dimensions of Product Quality
- Performance
- Features
- Aesthetics
- Reliability
- Durability
- Serviceability
- Perceived Quality
- Conformance
Categories of Forecast Techniques
- Qualitative
- Time series
- Causal
Qualitative definition
relies on expert opinion and special information
Qualitative qualities
- Costly
- Time-consuming
- Ideal for situations with little historical data
- Developed using surveys, panels, and consensus meetings
Time series
focuses entirely on historical patterns and pattern changes to generate forecasts
Time series (example)
- “The past is a good predictor of the future”
- moving averages, exponential smoothing, extended smoothing, and adaptive smoothing
Casual
uses specific information to develop relationships between lead events and forecasted activity (example simple or multiple regression)
Regression
Uses independent variables, (such as price, promotion plans, or related product volumes) to predict sales
Supply Chain Visibility
the ability to track transportation, inventory, and resources
Simultaneous Resource Consideration
the ability to include
- demand
- capacity
- material requirements
- & constraints
in defining logistics alternatives
Resource Utilization
a coordinated approach making functional logistics resource trade-offs
Logistics Planning
integrates
- overall movement demand
- vehicle availability
- & relevant movement costs
to minimize overall freight expense
Sales & Operations Planning
an integrated combination of
- Information systems (financial, marketing and supply chain planning)
- Demand forecasting
- Inventory planning
- Organization
- Personal responsibility and accountability
Logistics Forecasts are Necessary to
- Support collaborative planning
- Drive requirements planning
- Improve resource management through cost trade-offs
7 R’s
- Right product
- Right quantity
- Right quality
- Right place
- Right time
- Right customer
- Right cost
Enterprise Integration is necessary for
effective supply chain
Enterprise Integration Barriers
- Organization (silo)
- Incentives (scorecards)
- Inventory leverage (balance of positioning, MTS vs. MTO)
- Information available (systems to capture data)
- Information communicated (hoarding)
MRP
Material Requirements Plan
1970s
MRP (Material Requirements Plan)
Material Requirements Plan (MRP)
- MRP driven by MPS (Master Production Schedule) showing quantity and timing of end item production
- No constraints on shop manufacturing capacity (labor and machines)
1980s
MRP to MRPII (Manufacturing Resource Planning)
MRP to MRPII (Manufacturing Resource Planning)
- Resulting infinite capacity manufacturing schedules were infeasible because MRP ignored resource capacity
- MRPII capacity requirements plan to produce feasible schedules
- More constraints compared to MRP
1990s
ERP (Enterprise Resource Planning)
ERP (Enterprise Resource Planning)
- Coordinates firm’s entire business activities from suppliers through customer invoicing
- Centralized database (to facilitate flows across functional areas)
ERP Advantages
- Eliminate inconsistencies (standardized data)
- Combines data in new ways to create knowledge
- Forces use of “best practices”
- Allows customization
ERP Disadvantages
- Implementation is expensive and lengthy
- Maintenance is costly and time consuming
- Longer access time for data processing
ERP hidden costs (know 3)
- Training
- Integration and Testing
- Customization
- Data conversion
- Data analysis
How are the Seven R’s Met?
Integration
Free Trade Zones (FTZ) benefits
- No duty or excise tax is ever paid on foreign goods that are re-exported from the Foreign Trade Zone except NAFTA countries
- Merchandise can be brought into an FTZ to be stored, exhibited, repackaged, assembled, or used for manufacturing free of customs and other import restrictions until the decision is made to enter the goods into the U.S. market
Free Trade Zones (FTZ)
Federally sanctioned site where foreign and domestic goods are considered to be outside of the U.S. Customs territory
Incoterms
INternational COmmercial TERMS
Summary of INCO Terms
- Must go hand in hand with the contract and be part of the negotiation process
- Can mean the difference between a profit and a loss internationally
- Determines who pays for the freight, who takes the risk, who is responsible for the customs process
How Duty Drawback Works (example)
1) U.S. car manufacturer issues purchase orders to German parts manufacturers.
2) German manufacturer receives purchase order; manufactures parts.
3) Germanparts shipped via ocean enter the U.S.port.
4) U.S. manufacturer produces cars using U.S.-made and German parts.
5) U.S. manufacturer ships cars to port of export.
6) Export cars containing U.S.-made and German parts to Australia.
Direct Global Costs
- Inventory carrying costs
- Transportation
- Quality
- Customs duty
- Insurance premiums
Indirect Global Costs
- Communication costs
- Supply reliability
- Social/cultural misunderstandings
- Legal recourse
- Political risk
Five major differences between domestic and international operations
- Performance cycle structure
- Transportation
- Operations
- Information systems integration
- Alliances
CUSTOMS BROKER (CHB)
A person licensed by the U.S. Treasury Department acting on behalf of exporters and importers in clearing shipments for international moves.
FREIGHT BROKER
A licensed independent middleman between buyers and sellers of transportation services.
CONSOLIDATOR
A company that combines shipments to realize cost savings and service improvements
(for what would normally be less-than-truckload or containerload moves)
FREIGHT FORWARDER
A common carrier that consolidates freight, performs breakbulk and distribution services and assumes responsibility for freight from origin to destination
INTERNATIONAL FREIGHT FORWARDER (IFF)
Specialized channel participant that arranges international freight movement.
- (e.g) Prepares necessary documentation, arranges transportation, interface with government officials.
NVOCC (w definition)
Non-vessel-operating common carrier acts as a middleman between shippers (with small loads and carriers that prefer to receive cargo in full containers)
Weber’s Classification of Industries
- weight losing (raw materials <– markets)
- weight gaining (raw materials –> markets)
- weight sustaining (raw materials <–> markets)
Hoover’s Tapered Rates moral
Total transportation cost will be minimized at either the raw-material source or the consumer.
Factors to consider when locating a facility
Dynamic Facility Location and Variations on Facility Location
Dijkstra’s algorithm Purpose
to find the shortest distance between two vertices on a graph
Dijkstra’s algorithm Pros
it guarantees the shortest path
Dijkstra’s algorithm Cons
it does a blind search there by consuming a lot of time waste of necessary resources
Dijkstra’s algorithm real world examples
google maps
Postman Problem Purpose
Finding the tour of least cost that will traverse every edge of the graph at least once
Euler Tour Purpose
a circuit which traverses every edge of a graph exactly once, beginning and ending at the same point
Spanning Tree Purpose
A sub-graph such that all nodes are connected and there are no cycles
Center of Gravity Method
seeking to minimize the sum, over all demand and supply points, of the volume at that point multiplied by the transportation rate multiplied by the distance from this point to the facility
Postman Problem Pros
- Easy to create, share, test, and document APIs.
- Store data for use in other tests.
Postman Problem Cons
incapable of handling Global variables
Postman Problem real world
Street cleaning or snow plowing
odd degree node
a node with an odd number of edges emanating from it
Euler Tour Pros
efficient, parallel computation of solutions
Euler Tour real world
coding
Two Important Results
- A graph possesses an Euler tour if and only if the graph contains no nodes of odd degree.
- If a graph contains an Euler tour, then this tour is the solution to the postman problem.
A spanning tree will always contain exactly what?
exactly n-1 edges
Minimum spanning tree
finding the spanning tree with minimum total length
Variations on Facility Location
- k-Median
- k-Center
- Set Covering
- Maximal Covering
Dynamic Facility Location
- Find a solution for this year, find a solution for a future year and average them.
- Find a solution for this year and then calculate a new solution every year
- Build a multi-period integer program that uses forecasted demand and/or costs
2 Heuristics
Sweep Method & Savings Approach
Sweep Method (Pros & Cons)
Pros: Easy to learn, a computer program would run quickly.
Cons: Timing issues such as time windows are not handled well.
Sweep Method (Phases)
Stops are assigned to vehicles & Stop sequences are determined.
The role of Outsourcing as a Risk Management technique
- Use of third-party logistics (3PL) firms or logistics integrators to provide services on a contractual basis
- Shift risk of a supply chain activity to an outsourcing partner with expertise
- Integrated service providers
The impact of Product Complexity on Supply Chain Risk
higher supply chain costs, meaning more inventory and fewer economies of scale, and more management attention
What is the triple bottom line?
a sustainability framework that measures a business’s success in three key areas that overlap:
- economic growth
- social progress
- environmental stewardship
How sustainability can be implemented in the components of logistics
- Green Purchasing
- Green Warehousing
- Green Transportation
- Green Packaging
How does more or less product complexity affect sales?
Increase complexity often results in increased revenue
which may improve profitability and asset utilization
Sustainability
Meeting the needs of the present without compromising the ability of future generations to meet their own needs
Where does the sustainability definition come from
“Brundtland definition” of the 1987 Report of the World Commission on Environment and Development
What is a “Green Supply Chain”?
Integrating environmental thinking into supply chain management
(including product design, material sourcing and selection, manufacturing processes, delivery of the final product to the consumers, and end-of-life management of the product after its useful life)
Why Go Green?
- Social Factors (People)
- Environmental Factors (Planet)
- Economic Factors (Profit)
- The Triple Bottom Line
LEED Certification
To ensure that your building was designed and built with environmental stewardship in mind
