Final Exam! Flashcards
Total quality management definition
Managing the entire organization so that it excels on all dimensions of products that are important to the customer
TQM operational goals (2)
Careful design of the product
Systems that can consistently produce the design
Who administers the Malcolm baldrige award?
National institute or standards and technology (NIST)
And agency of the U.S. department of commerce
A total of how many awards can be given and in what categories?
18 Manufacturing Service Small business Education and healthcare Not for profit
What does it take to apply for Baldrige award?
50 page that details the Approach Deployment Results Of their quality under seven categories
Seven categories of the baldrige award?
Leadership Strategic planning Customer focus Information HR Focus Process management Business results
Baldrige scoring
Total of 1000 points
Applicants that get 650 or more points get a site visit
Who are the quality gurus?
Crosby
Deming
Juran
What do the quality gurus all believe must happen to age I’ve outstanding quality?
Leadership from management
Customer focus
Total involvement of workforce
Continuous improvement
What’re the dimensions of quality?
Performance Features Reliability Serviceability Aesthetics Perceived quality
Define quality at the source
Making the person who does the work responsible for ensuring that specifications are met
What’re the costs of quality?
Appraisal costs
Prevention costs
Internal failure costs
External failure costs
Six sigma define
Set of methods used to eliminate defects
Seeks to reduce variation
Means no more than 3.4 defects per million
Six sigma methodology (DMAIC)
Define Measure Analyze Improve Control
Developed by Motorola and GE to reduce variation and focus on the customer wants
What does define stand for (DMAIC)
Identify customers and their priorities
What does analyze stand for (DMAIC)
Determine the most likely causes of defects
What is a flow chart?
A diagram of the sequence of operations
What is a check sheet?
Basic form to standardize data collection
What is a run chart?
Depicts trends in data over time
Pareto chart
Helps break down a problem into components
Based on the rule that a large percent of problems are caused by a small percent of things
Cause and effect diagram
AKA fishbone diagram
Shows the main causes and sub causes leading to an effect using hypothetical situations
Opportunity flow diagram
A diagram used to separate value added and non value added steps
Process control chart
Used to assure that processes are in statistical control
How to properly implement six sigma
Executive leaders must champion the process improvement
Corporate wide training in six sigma
Setting objectives for improvement
Continuous reinforcement and rewards
What is the Shingo system: fail safe design
A method to prevent defects, defects arise when people make errors
Defects can be prevented by providing workers with feedback on errors
- successive checks
- self check
- source inspection
All feedback require poka yokes
(Simple practices that prevent errors)
ISO 9000 is concerned with what?
International reference for quality
ISO 14000 is concerned with what?..
Environmental management
Three forms of ISO certification
First party (firm audits itself)
Second party (customer audits it’s supplier)
Third party (a qualified national agency audits a company )
Statistical quality control (SQC)
Different techniques designed to evaluate quality from a conformance view
Uses sampling
Define assignable variation
Deviation in the output of a process that can be clearly identified and managed
Ex: improper machine adjustments
Common variation define
Deviation in the output of a process that is random and inherent in the process itself
Taguchis view of cost of variability
Being within a specification is a continuous function the farther it is from the goal, the more cost it is to society
Process VS specification limits
Process- the limits we determine
Specification- the limits that the customer wants
Statistical process control define (SPC)
Technique for testing a random sample of output from a process to determine if it is producing within a prescribed range
Attributes define
Quality characteristics that are classified as either conforming or not conforming specification
Ex: a lawn mower either runs or it doesn’t
What is a p chart and what is it used for?
Evaluated the stability of a process in terms of the percentage of the total number of units in a sample in which an event occurs over time
Used for either a yes or no decision
C chart define
When it is desired to monitor the number of defects per unit
Refers to poisson where defects occur randomly at each unit
Process control with variable measurements requirements for r and X charts
Size of sample (4 unite)
Number of samples( 25 or so)
Frequency of samples (trade off between cost of sampling and benefit of adjusting the system)
Control limits (use Z= 3)
Lean production define
Integrated activities designed to achieve high volume production using Minsk inventories
Involves elimination of waste
Lean logic
Nothing is produced until needed
A sale pulls a replacement
What two categories go into Toyota production system (TPS)
Elimination of waste
Respect for people
What goes into elimination of waste?
Overproduction Time Transportation Inventory waste Processing Motion Product defects
What goes into respect for people
Lifetime employment
Level payroll
Bonuses
Consider workers a part of the family
Lean focused supply chain components
Suppliers Procurement Warehousing Logistics Customers
Chacteristics of lean suppliers
Able to respond to changes
Lowe prices
Higher quality
What goes into lean procurement
Key is automation
Supplies must see into the customers operations
What goes into lean warehousing
Eliminate non value added
What goes into lean logistics
Looking orders
Multi ship truck loads
Optimized routing
Cross docking
Lean customers
Understand their business needs and value speed and flexsbility
Principles of lean supply chain design (3)
Lean layouts
Lean production schedules
Lean supply chain
What goes into lean layouts?(3)
Group technology
Quality at source
JIT
What is group technology
Philosophy in which similar parts are grouped into families and arranged in a specialized work cell
What’s is quality at the source
Do it right the first time and when something goes wrong, stop the process
Level schedule
A schedule that pulls material into final assembly st a constant rate
Backflush define
Using calculations to determine how much of each part were used in production and using these calculations to adjust inventory
Uniform plant loading define
Smoothing the production flow to dampen schedule variation
Kanban pull system
A control system that uses a signaling device to regulate flows
How god accomplish a stable schedule (3)
Level scheduling
Freeze windows
Underutilization of capacity
Value stream mapping as a two part process
It depicts the current state of the process
It shows a map of the same process with suggested improvements
Kaizen bursts define
Identify specific short term projects that teams work on to implement changes to the process
What are the uncertainty in SERVICES
Uncertainty in task times
In demand
Customers production roles
Define logistics
Obtaining, producing, and distributing material in the proper place and quantities
Third party logistics define
An outside company is used to manage all parts of another company’s logistic functions
Ex: UPS
Logistic strategy
A plan for the logistics elements of a business including warehousing, info systems, and transportation
Logistics management covers a wide range of business activities including..
Transportation Warehousing Handling Packaging Inventory management Information systems
In 1980 what marked the beginning of deregulation in logistics?
MCA- 80
Staggers rail act
Different transportation modes
Truck Ship Plane Train Pipeline Hand delivery
Cross docking define
Large shipments are broken down into small shipments for local delivery in an area
Minimized inventory
Hub and spoke system define
Combine consolidation and cross docking
Sole purpose is sorting goods to consolidation areas
Consolidation warehousing
Pulls together shipments from a number of sources and combines them into larger and more economical loads
Break bulk define
A separation of a single consolidated bulk load into smaller individual shipments
Facility location issues
Proximity to customers Business climate Total costs Infrastructure Quality of labor Suppliers Free trade zones Political risk Government barriers Trading blocs Enviromental regulation Host community Competitive advantage
Trading blocs define
Grins within a block take advantage of new markets or lower total costs
Factor rating system define
List of factors is developed, range of possible points is assigned to each factor
Strategic forecasts define
Medium to long term forecasts that are used for decisions related to strategy and aggregate demand
Tactical forecasts
Short term forecasts used for making day to day decisions
Decoupling point
Point war which inventory is stored which allows SC to operate independently
The four basic types of forecasts are?…
Qualitative
Time series analysis
Casual relationships
Simulation
Time series analysis define
Past demand can be used to predict future data
Components of demand
Average demand Trend Seasonal element Cyclical elements (political elections) Random variation Autocorrelation
What’re the common trend types?
Linear
S curve
Asymptotic
Choosing an appropriate forecasting model depends upon
Time horizon Data availability Accuracy required Size of forecasting budget Availability of qualified personnel
Sales and operations planning
Process that companies use to keep demand and supply in balance and to coordinate distribution, financial, and marketing plans
Focuses on cross functional work
Aggregate operations plan
A plan for labor and production at the intermediate term with an objective to minimize costs of resources needed to meet demand
Aggregation on the supply side is done by who?
Aggregation on the demand side is done by who?
Supply side: product families
Demand side: groups of customers
What is the main purpose of the aggregate operations plan?
To specify the optimal combination of…
Production rate
Workforce level
Inventory on hand
With services, cycles are more often measure in hours than in months
True
Complementary products may work for firms facing cyclical demand fluctuations
Ex: lawn mowers for summer and snow blowers for winter
Production planning strategies define
The plans for meeting demand that involve trade offs in the number of workers employed, work hours, inventory and shortages
What are the actual production planning strategies? (4)
Chase strategy
Stable workforce
Level strategy
Sub contracting
Define chase strategy
Matches the production rate by hiring and laying off employees
What is stable workforce strategy?
Vary the number of hours work through flexible work schedules or overtime
Define level strategy.
Demand changes are absorbed by fluctuating inventory levels, order backlogs, and lost sales
Relevant costs to the aggregate production plan
Basic production costs
Costs with changes in production rates
Inventory holding costs
Backorder costs
Aggregate planning techniques (3)
Cut and try approach
Linear programming
Simulation
Alternative plan 1 to cut and try approach.
Product to exact production requirements by varying workforce size
Cut and try alternative plan 2
Product to meet demand by maintaining a constant workforce
Cut and try alternative plan 3
Product to meet the minimum expected demand using a constant workforce and subcontract to need additional requirements
Cut and try alternative plan 4
Produce to meet expected demand for all but the first two months using a constant work for and overtime to need additional requirements
Advantages of level scheduling
Entire system can minimize inventory
Product modifications are up to date
Smooth flow in production process
Purchased items can be delivered when needed
Level scheduling requirements
Production shouldn’t be repetitive
Must contain excess capacity
Output must be fixed
Cost of carrying inventory must be high
Equipment costs must be low
Workforce must be multi skilled
Yield management define
Process of allocating the right type of capacity to the right type of customer at the right price and time to maximize revenue
Where did yield management start?
Started with American Airlines (SABRE)
When is yield management most successful?
Demand can be segmented by customers Fixed costs are high, variable costs are low Inventory is perishable Product can be sold in advance Demand is highly variable
Yield management is most common when…
Price is variable and duration is predicable (hotels, airlines, rental cars, cruise lines)
Inventory velocity
Speed at which inventory passes through an organization measured by inventory turnover
Inventory models (3)
Single period model
Fixed order quantity model
Fixed time period model
Single period inventory model define
Used when making a one time purchase of an item
Super bowl t shirt
Fixed order quantity inventory model define
Used when we want to maintain an item in stock and when we restock a certain number of units must be ordered
Fixed time period inventory model
Items are ordered at certain intervals in time
Inventory system define
Set of policies and controls that monitor levels of inventory
Determines what levels should be maintained, when it should be replenished, and how much to order
What is the purpose of inventory? (5)
To maintain independence of operations
To meet variation in product demand
Allow flexibility
Provide safeguard for variation in raw material delivery time
To take advantage of economic purchase order size
What are the different inventory costs?
Carrying costs
Setup costs
Ordering costs
Shortage costs
Single period model applications
Overbooking is airline flights
Ordering of clothing
One time order for events
Characteristics of fixed order quantity models?
Also called economic order quantity (EOQ)
Event triggered
Fixed time period models characteristics
Also called periodic system
Time triggered
What are some examples that use a fixed order model
Small average inventory
Favors more expensive items
More automated
More expensive to implement
What are some examples of fixed time period model?
Larger inventory
Favors less expensive items
Less expensive to implement
Enterprise resource planning (ERP)
Framework for organizing, defining, and standardizing the business process
Material requirements planning (MRP)
A mean for determine the number of material needed to produce a product
Time phased MRP begins with the items listed on the MPS and determines….
The quantity needed
The date they are required
Master schedule define
A format that includes dates, forecasts, customer orders and the master production schedule
Master production schedule (MPS)
It represents what the company plans to produce expressed in specific configurations
Dependent demand drives the MPR system
True
Top down model of manufacturing
Sales and operations planning
Master schedule
Material requirements planning
Aggregate plan vs MPS
Aggregate: shows overall quantities to produce without specifying type
MPS: shows quantities of each type with info about production time frame
Ex ability with a master production schedule depends on…
Lead time Commitment of parts to a end item Relationship with vendor Amount of excess capacity Willingness of management to make changes
What is the purpose of time fences?
To maintain a reasonably controlled flow through the production system
Product demand sources (2)
Customers
Aggregate production plan
Bill of materials
AKA product structure, product tree
Shows how the product is put together listing the materials needed and the sequence in which the product is created
Bill of materials can be stocked as a sub assembly
True
Gross requirements define
End items
Net requirements
Calculated with on hand balance and schedule of orders
Lot sizing strategies (4)
Lot for lot
Last total cost
Least unit cost
Economic order quantity
Lot for lot define
Produces exactly what is needed each week
Does not take into account setup costs or capacity limitations
Goldratts rules of production scheduling
Don’t balance capacity balance flow
An hour saved at a non bottleneck is a mirage
Bottlenecks Dover throughput and inventory
Process batch define
Volume of output that is to be completed st a workstation before switching to a different type of work
Goldratts theory of constraints (TOC)
Identify system constraints
Decide how to exploit them
Support everything to that decision
Elevate the constraints
Throughput define
Rate at which money is generated by the system through sales
Productivity does not guarantee profitability
Throughput needs to increase
Inventory needs to decrease
Operational expenses need to decrease
Capacity constrained resource define
When capacity is close to demand and could become a bottleneck
Drum-buffer-rope
Drum: bottleneck
Buffer: inventory
Rope: communication
