Module 1 Strategic Planning Flashcards
1
Q
Techniques that deal with analysis and planning of logistics and manufacturing during short, intermediate, and long-term time periods. This describes any computer program that uses advanced mathematical algorithms or logic to perform optimization or simulation on finite capacity scheduling, sourcing, capital planning, resource planning, forecasting, demand management, and others. These techniques simultaneously consider a range of constraints and business rules to provide real-time planning and scheduling, decision support, available-to-promise, and capable-to-promise capabilities. It often generates and evaluates multiple scenarios. Management then selects one scenario to use as the “official plan.” The five main components of these systems are (1) demand planning, (2) production planning, (3) production scheduling, (4) distribution planning, and (5) transportation planning.
A
advanced planning and scheduling (APS)
2
Q
A sign board with signal lights used to make workers and management aware of a quality, quantity, or process problem.
A
andon
3
Q
A production environment where a good or service can be assembled after receipt of a customer’s order. The key components (bulk, semi-finished, intermediate, subassembly, fabricated, purchased, packing, and so on) used in the assembly or finishing process are planned and usually stocked in anticipation of a customer order. Receipt of an order initiates assembly of the customized product. This strategy is useful where a large number of end products (based on the selection of options and accessories) can be assembled from common components.
A
assemble-to-order (ATO)
4
Q
An assembly process in which equipment and work centers are laid out to follow the sequence in which raw materials and parts are assembled.
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assembly line
5
Q
source of variation in a process that can be isolated, especially when its significantly larger magnitude or different origin readily distinguishes it from random causes of variation.
A
assignable cause
6
Q
A list of financial and operational measurements used to evaluate organizational or supply chain performance. The dimensions might include customer perspective, business process perspective, financial perspective, and innovation and learning perspectives. It formally connects overall objectives, strategies, and measurements. Each dimension has goals and measurements.
A
balanced scorecard
7
Q
An extreme change in the supply position upstream in a supply chain generated by a small change in demand downstream in the supply chain. Inventory can quickly move from being backordered to being excess. This is caused by the serial nature of communicating orders up the chain with the inherent transportation delays of moving product down the chain. This can be eliminated by synchronizing the supply chain.
A
bullwhip effect
8
Q
1)A statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow (source and application of funds) statement. This is usually stated in terms of dollars and grouped by product family. It is then translated into synchronized tactical functional plans through the production planning process (or the sales and operations planning process). Although frequently stated in different terms (dollars versus units), these tactical plans should agree with each other and with this. 2) A document consisting of the business details (organization, strategy, and financing tactics) prepared by an entrepreneur to plan for a new business.
A
business plan
9
Q
A tool for analyzing process dispersion. It is also referred to as the Ishikawa diagram (because Kaoru Ishikawa developed it) and the fishbone diagram (because the complete diagram resembles a fish skeleton). The diagram illustrates the main causes and subcauses leading to an effect (symptom). This diagram is one of the seven tools of quality.
A
cause-and-effect diagram
10
Q
A manufacturing process that produces families of parts within a single line or cell of machines controlled by operators who work only within the line or cell.
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cellular manufacturing
11
Q
A system built around material requirements planning that includes the additional planning processes of production planning (sales and operations planning), master production scheduling, and capacity requirements planning. Once this planning phase is complete and the plans have been accepted as realistic and attainable, the execution processes come into play. These processes include the manufacturing control processes of input-output (capacity) measurement and detailed scheduling and dispatching, as well as anticipated delay reports from both the plant and suppliers, supplier scheduling, and so on. Each of these processes is included in the overall system, but also that feedback is provided by the execution processes so the planning can be kept valid at all times.
A
closed-loop MRP
12
Q
The raw material, part, or subassembly that goes into a higher-level assembly, compound, or other item. This term may also include packaging materials for finished items.
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component
13
Q
A never-ending effort to expose and eliminate root causes of problems; small-step improvement as opposed to big-step improvement.
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continuous process improvement (CPI)
14
Q
A production system in which the productive equipment is organized and sequenced according to the steps involved to produce the product. This term denotes that material flow is continuous during the production process. The routing of the jobs is fixed and setups are seldom changed.
A
continuous production
15
Q
A graphic comparison of process performance data with predetermined computed control limits. The process performance data usually consists of groups of measurements selected in the regular sequence of production that preserve the order. The primary use of these is to detect assignable causes of variation in the process as opposed to random variations. This is one of the seven tools of quality.
A
control chart
16
Q
A statistically determined line on a control chart. If a value occurs outside this limit, the process is deemed to be out of control.
A
control limit
17
Q
The cost associated with providing poor-quality products or services. There are four categories of costs: (1) internal failure costs (costs associated with defects found before the customer receives the product or service); (2) external failure costs (costs associated with defects found after the customer receives the product or service); (3) appraisal costs (costs incurred to determine the degree of conformance to quality requirements); and (4) prevention costs (costs incurred to keep failure and appraisal costs to a minimum).
A
cost of poor quality
18
Q
In the theory of constraints, a network planning technique for the analysis of a project’s completion time, used for planning and controlling project activities. This determines project duration, is based on technological and resource constraints. Strategic buffering of paths and resources is used to increase project completion success.critical chain method
A
critical chain method
19
Q
A network planning technique for the analysis of a project’s completion time used for planning and controlling the activities in a project. By showing each of these activities and their associated times, the critical path, which identifies those elements that actually constrain the total time for the project, can be determined.
A
critical path method (CPM)
20
Q
1)The ability of a company to address the needs, inquiries, and requests of customers. 2) A measure of the delivery of a product to the customer at the time the customer specified.
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customer service
21
Q
The overall management of data’s accessibility, usability, reliability, and security. Used to ensure data record accuracy.
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data governance
22
Q
The time from the receipt of a customer order to the delivery of the product.
A
delivery lead time
23
Q
The amount of time potential customers are willing to wait for the delivery of a good or a service.
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demand lead time
24
Q
The production of distinct items such as automobiles, appliances, or computers.
A
discrete manufacturing
25
Used as a relative reference within a firm or supply chain to indicate moving in the direction of the end customer.
downstream
26
The paperless (electronic) exchange of trading documents, such as purchase orders, shipment authorizations, advanced shipment notices, and invoices, using standardized document formats.
electronic data interchange (EDI)
27
The practice of giving non-managerial employees the responsibility and the power to make decisions regarding their jobs or tasks. It is associated with the practice of transfer of managerial responsibility to the employee. Empowerment allows the employee to take on responsibility for tasks normally associated with staff specialists. Examples include allowing the employee to make scheduling, quality, process design, or purchasing decisions.
employee empowerment
28
The concept of using the experience, creative energy, and intelligence of all employees by treating them with respect, keeping them informed, and including them and their ideas in decision-making processes appropriate to their areas of expertise. Employee involvement focuses on quality and productivity improvements.
employee involvement (EI)
29
Products whose customer specifications require unique engineering design, significant customization, or new purchased materials. Each customer order results in a unique set of part numbers, bills of material, and routings.
engineer-to-order
30
Framework for organizing, defining, and standardizing the business processes necessary to effectively plan and control an organization so the organization can use its internal knowledge to seek external advantage. An ERP system provides extensive databanks of information including master file records, repositories of cost and sales, financial detail, analysis of product and customer hierarchies, and historic and current transactional data.
enterprise resources planning (ERP)
31
The costs related to problems found after the product reaches the customer. This usually includes such costs as warranty and returns.
external failure costs
32
The functions of installing and maintaining a product for a customer after the sale or during the lease. Field service may also include training and implementation assistance.
field service
33
Five terms beginning with “S” used to create a workplace suitable for lean production: sort, simplify, scrub, standardize, and sustain. Sort means to separate needed items from unneeded ones and remove the latter. Simplify means to neatly arrange items for use. Scrub means to clean up the work area. Standardize means to sort, simplify, and scrub daily. Sustain means to always follow the first four Ss. Sometimes referred to by the Japanese equivalents: seiri, seiton, seiso, seiketsu, and shitsuke.
Five Ss
34
The common practice in total quality management is to ask “why” five times when confronted with a problem. By the time the answer to the fifth “why” is found, the ultimate cause of the problem is identified.
five whys
35
An expenditure that does not vary with the production volume; for example, rent, property tax, and salaries of certain personnel.
fixed cost
36
Similar to project manufacturing, this type of manufacturing is mostly used for large, complex projects where the product remains in one location for its full assembly period or may move from location to location after considerable work and time are spent on it. Examples of fixed-position manufacturing include shipbuilding or aircraft assembly, for which the costs of frequent movement of the product are very high.
fixed-position manufacturing
37
In process systems development, work flows from one workstation to another at a nearly constant rate and with no delays. When producing discrete (geometric) units, the process is called repetitive manufacturing; when producing non-geometric units over time, the process is called continuous manufacturing. A physical-chemical reaction takes place in the continuous flow process.
flow processing
38
A form of manufacturing organization in which machines and operators handle a standard, usually uninterrupted, material flow. The operators generally perform the same operations for each production run. A flow shop is often referred to as a mass production shop or is said to have a continuous manufacturing layout. The plant layout (arrangement of machines, benches, assembly lines, etc.) is designed to facilitate a product “flow.” Some process industries (chemicals, oil, paint, etc.) are extreme examples of flow shops. Each product, though variable in material specifications, uses the same flow pattern through the shop. Production is set at a given rate, and the products are generally manufactured in bulk.
flow shop
39
The output of a flowcharting process; a chart that shows the operations, transportation, storages, delays, inspections, and so on related to a process. Flowcharts are drawn to better understand processes. The flowchart is one of the seven tools of quality.
flowchart
40
A facility configuration in which operations of a similar nature or function are grouped together; an organizational structure based on departmental specialty (e.g., saw, lathe, mill, heat treat, press).
functional layout
41
The earliest and best-known type of planning and control chart, especially designed to show graphically the relationship between planned performance and actual performance over time. Named after its originator, Henry L. Gantt, the chart is used for (1) machine loading, in which one horizontal line is used to represent capacity and another to represent load against that capacity; or (2) monitoring job progress, in which one horizontal line represents the production schedule and another parallel line represents the actual progress of the job against the schedule in time.
Gantt chart
42
The place where humans create value; the real workplace. Also a philosophy: “Go to the actual place, see the actual work.”
gemba
43
A Japanese phrase meaning to visit the shop floor to observe what is occurring.
genchi genbutsu
44
A Japanese word meaning reflection.
hansei
45
In just-in-time philosophy, an approach to level production throughout the supply chain to match the planned rate of end product sales.
heijunka
46
A graph of contiguous vertical bars representing a frequency distribution in which the groups or classes of items are marked on the x axis and the number of items in each class is indicated on the y axis. The pictorial nature of the histogram lets people see patterns that are difficult to see in a simple table of numbers. The histogram is one of the seven tools of quality.
histogram
47
A Japanese word meaning statement of objectives.
hoshin
48
Breakthrough planning. A Japanese strategic planning process in which a company develops up to four vision statements that indicate where the company should be in the next five years. Company goals and work plans are developed based on the vision statements. Periodic audits are then conducted to monitor progress.
hoshin planning
49
A form of manufacturing in which the jobs pass through the functional departments in lots, and each lot may have a different routing.
intermittent production
50
The cost of things that go wrong before the product reaches the customer. Internal failure costs usually include rework, scrap, downgrades, reinspection, retesting, and process losses.
internal failure costs
51
The Japanese term for the practice of stopping the production line when a defect occurs.
jidoka
52
A Japanese word meaning voluntary study groups.
jishuken
53
1)An organization in which similar equipment is organized by function. Each job follows a distinct routing through the shop. 2) A type of manufacturing process used to produce items to each customer’s specifications. Production operations are designed to handle a wide range of product designs and are performed at fixed plant locations using general-purpose equipment.
job shop
54
A philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity. It encompasses the successful execution of all manufacturing activities required to produce a final product, from design engineering to delivery, and includes all stages of conversion from raw material onward. The primary elements of just in time are to have only the required inventory when needed; to improve quality to zero defects; to reduce lead times by reducing setup times, queue lengths, and lot sizes; to incrementally revise the operations themselves; and to accomplish these activities at minimum cost. In the broad sense, it applies to all forms of manufacturing—job shop, process, and repetitive—and to many service industries as well.
just in time (JIT)
55
The Japanese term for improvement; refers to continuing improvement involving everyone—managers and workers. In manufacturing, kaizen relates to finding and eliminating waste in machinery, labor, or production methods.
kaizen
56
A method of just-in-time production that uses standard containers or lot sizes with a single card attached to each. It is a pull system in which work centers signal with a card that they wish to withdraw parts from feeding operations or suppliers. The Japanese word kanban, loosely translated, means card, billboard, or sign, but other signaling devices such as colored golf balls have also been used. The term is often used synonymously for the specific scheduling system developed and used by the Toyota Corporation in Japan.
kanban
57
A financial or non-financial measure that is used to define and assess progress toward specific organizational goals and typically is tied to an organization’s strategy and business stakeholders. A KPI should not be contradictory to other departmental or strategic business unit performance measures. A metric used to measure the overall performance or state of affairs. SCOR level 1 metrics are considered KPIs.
key performance indicator (KPI)
58
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. It involves identifying and eliminating non-value-adding activities in design, production, supply chain management, and dealing with customers. Lean producers employ teams of multi-skilled workers at all levels of the organization and use highly flexible, increasingly automated machines to produce volumes of products in potentially enormous variety. Lean production contains a set of principles and practices to reduce cost through the relentless removal of waste and through the simplification of all manufacturing and support processes.
lean production
59
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 awards recognition of competence through judo-style belts.
lean six sigma
60
1)In a supply chain management context, it is the subset of supply chain management that controls the forward and reverse movement, handling, and storage of goods between origin and distribution points. 2) In an industrial context, the art and science of obtaining, producing, and distributing material and product in the proper place and in proper quantities. 3) In a military sense (where it has greater usage), its meaning can also include the movement of personnel.
logistics
61
The act of deciding whether to produce an item internally or buy it from an outside supplier. Factors to consider in the decision include costs, capacity availability, proprietary and/or specialized knowledge, quality considerations, skill requirements, volume, and timing.
make-or-buy decision
62
A production environment where a good or service can be made after receipt of a customer’s order. The final product is usually a combination of standard items and items custom-designed to meet the special needs of the customer. Where options or accessories are stocked before customer orders arrive, the term assemble-to-order is frequently used.
make-to-order
63
A production environment where products can be and usually are finished before receipt of a customer order. Customer orders are typically filled from existing stocks, and production orders are used to replenish those stocks.
make-to-stock
64
The total time required to manufacture an item, exclusive of lower-level purchasing lead time. For make-to-order products, it is the length of time between the release of an order to the production process and shipment to the final customer. For make-to-stock products, it is the length of time between the release of an order to the production process and receipt into inventory. Included are order preparation time, queue time, setup time, run time, move time, inspection time, and put-away time.
manufacturing lead time
65
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 philosophy
66
A closed-loop information system that includes the planning functions of production planning (sales and operations planning), master production scheduling, material requirements planning, and capacity requirements planning. Once the plan has been accepted as realistic, execution begins. The execution functions include input-output control, detailed scheduling, dispatching, anticipated delay reports (department and supplier), and supplier scheduling. A closed-loop MRP system is one example of a manufacturing planning and control system.
manufacturing planning and control system (MPC)
67
The series of operations performed upon material to convert it from the raw material or a semifinished state to a state of further completion. Manufacturing processes can be arranged in a process layout, product layout, cellular layout, or fixed-position layout. Manufacturing processes can be planned to support make-to-stock, make-to-order, assemble-to-order, and so forth, based on the strategic use and placement of inventories.
manufacturing process
68
A method for the effective planning of all resources of a manufacturing company. Ideally, it addresses operational planning in units and financial planning in dollars, and has a simulation capability to answer what-if questions. It is made up of a variety of processes, each linked together: business planning, production planning (sales and operations planning), master production scheduling, material requirements planning, capacity requirements planning, and the execution support systems for capacity and material. Output from these systems is integrated with financial reports such as the business plan, purchase commitment report, shipping budget, and inventory projections in dollars. Manufacturing resource planning is a direct outgrowth and extension of closed-loop MRP.
manufacturing resource planning (MRP II)
69
The creation of a high-volume product with large variety whose manufacturing cost is low due to the large volume, allowing customers to specify an exact model out of a large volume of possible end items. An example is a personal computer order in which the customer specifies processor speed, memory size, hard disk size and speed, removable storage device characteristics, and many other options when PCs are assembled on one line and at low cost.
mass customization
70
A group of business processes that includes the following activities: demand management (which includes forecasting and order servicing); production and resource planning; and master scheduling (which includes the master schedule and the rough-cut capacity plan).
master planning
71
In product development, the use of standardized parts for flexibility and variety. Permits product development cost reductions by using the same item(s) to build a variety of finished goods. This is the first step in developing a planning bill of material process.
modularization
72
In lean manufacturing, costs are reduced by reducing waste within a system. There are seven categories of waste: (1) overproduction—excess or too early; (2) waiting—queuing delays; (3) transportation—unneeded movements; (4) processing—poor process design; (5) motion—activities that do not add value; (6) inventory—stock that is sitting and is accumulating cost without necessarily providing value; (7) defective units—scrap or rework.
muda (waste)
73
A Japanese word meaning unevenness or variability.
mura
74
A Japanese word meaning strain or overburden.
muri
75
The act of combining several small processes to form one larger process.
nesting
76
A kanban system where only a move card is employed. Typically, the work centers are adjacent; therefore, no production card is required. In many cases, squares located between work centers are used as the kanban system. An empty square signals the supplying work center to produce a standard container of the item.
one-card kanban system
77
All the money an organization spends in generating goal units.
operating expense
78
1)The planning, scheduling, and control of the activities that transform inputs into finished goods and services. 2) A field of study that focuses on the effective planning, scheduling, use, and control of a manufacturing or service organization through the study of concepts from design engineering, industrial engineering, management information systems, quality management, production management, inventory management, accounting, and other functions as they affect the operation.
operations management
79
Training machine workers to perform tasks outside their immediate jobs and in problem-solving techniques to improve process flexibility. This is a necessary process in developing a fully cross-trained workforce.
operator flexibility
80
Those competitive characteristics that a firm must exhibit to be a viable competitor in the marketplace. For example, a firm may seek to compete on characteristics other than price, but in order to “qualify” to compete, its costs and the related price must be within a certain range to be considered by its customers.
order qualifiers
81
Those competitive characteristics that cause a firm’s customers to choose that firm’s goods and services over those of its competitors. Order winners can be considered to be competitive advantages for the firm. Order winners usually focus on one (rarely more than two) of the following strategic initiatives: price/cost, quality, delivery speed, delivery reliability, product design, flexibility, after-market service, and image.
order winners
82
The process of having suppliers provide goods and services that were previously provided internally. Outsourcing involves substitution—the replacement of internal capacity and production by that of the supplier.
outsourcing
83
A production environment in which a good or service can be packaged after receipt of a customer order. The item is common across many different customers; packaging determines the end product.
package to order
84
A concept that refers to the simultaneous participation of all the functional areas of the firm in the product design activity. Suppliers and customers are often also included. The intent is to enhance the design with the inputs of all the key stakeholders. Such a process should ensure that the final design meets all the needs of the stakeholders and should ensure a product that can be quickly brought to the marketplace while maximizing quality and minimizing costs.
participative design/engineering
85
In a performance measurement system, the accepted, targeted, or expected value for the criterion.
performance standard
86
A four-step process for quality improvement. In the first step (plan), a plan to effect improvement is developed. In the second step (do), the plan is carried out, preferably on a small scale. In the third step (check), the effects of the plan are observed. In the last step (action), the results are studied to determine what was learned and what can be predicted. The plan-do-check-action cycle is sometimes referred to as the Shewhart cycle (because Walter A. Shewhart discussed the concept in his book, Statistical Method from the Viewpoint of Quality Control) or as the Deming circle (because W. Edwards Deming introduced the concept in Japan and the Japanese subsequently called it the Deming circle).
plan-do-check-action (PDCA)
87
A product design or supply chain strategy that deliberately delays final differentiation (assembly, production, packaging, tagging, etc.) until the latest possible time in the process. This shifts product differentiation closer to the consumer to reduce the anticipatory risk, eliminating excess inventory in the form of finished goods in the supply chain.
postponement
88
The costs caused by improvement activities that focus on the reduction of failure and appraisal costs. Typical costs include education, quality training, and supplier certification. Prevention costs are one of four categories of quality costs.
prevention costs
89
The activities, including adjustments, replacements, and basic cleanliness, that forestall machine breakdowns. The purpose is to ensure that production quality is maintained and that delivery schedules are met. In addition, a machine that is well cared for will last longer and cause fewer problems.
preventive maintenance
90
The design of the manufacturing system, including operators and machinery, that allows quick changeovers to respond to near-term changes in product volume and mix.A necessary tool in lean and just in time.
process flexibility
91
A graphical and progressive representation of the various steps, events, and tasks that make up an operations process. Provides the viewer with a picture of what actually occurs when a product is manufactured or a service is performed.
process flow diagram
92
The time required to design a product, modify or design equipment, conduct market research, and obtain all necessary materials. Lead time begins when a decision has been made to accept an order to produce a new product and ends when production commences.
procurement lead time
93
A strategy of making a product distinct from the competition on a non-price basis such as availability, durability, quality, or reliability.
product differentiation
94
Another name for flow process layout. A system that is set up for a limited range of similar products. Focused-factory production is also considered to be in this category.
product layout
95
1)The stages a new product goes through from beginning to end (i.e., the stages that a product passes through from introduction through growth, maturity, and decline). 2) The time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) The period of time during which a product can be produced and marketed profitably.
product life cycle
96
The proportion of individual products that make up the total production or sales volume. Changes in the product mix can mean drastic changes in the manufacturing requirements for certain types of labor and material.
product mix
97
A series of pieces of equipment dedicated to the manufacture of a specific number of products or families.
production line
98
The use of skills and knowledge in coordinating the organizing, planning, scheduling, directing, controlling, monitoring, and evaluating of prescribed activities to ensure that the stated objectives of a project, manufactured good, or service are achieved.
project management
99
1)In production, the production of items only as demanded for use or to replace those taken for use. 2) In material control, the withdrawal of inventory as demanded by the using operations. Material is not issued until a signal comes from the user. 3) In distribution, a system for replenishing field warehouse inventories where replenishment decisions are made at the field warehouse itself, not at the central warehouse or plant.
pull system
100
The total lead time required to obtain a purchased item. Included here are order preparation and release time; supplier lead time; transportation time; and receiving, inspection, and put-away time.
purchasing lead time
101
1)In production, the production of items at times required by a given schedule planned in advance. 2) In material control, the issuing of material according to a given schedule or issuing material to a job order at its start time.3)In distribution, a system for replenishing field warehouse inventories where replenishment decision making is centralized, usually at the manufacturing site or central supply facility.
push system
102
A producer’s responsibility to provide 100 percent acceptable quality material to the consumer of the material. The objective is to reduce or eliminate shipping or receiving quality inspections and line stoppages as a result of supplier defects.
quality at the source
103
The process of measuring quality conformance by comparing the actual with a standard for the characteristic and taking corrective actions on the difference.
quality control
104
The overall costs associated with prevention activities and the improvement of quality throughout the firm before, during, and after production of a product. These costs fall into four recognized categories: internal failure costs, external failure costs, appraisal costs, and prevention costs. Internal failure costs relate to problems before the product reaches the customer. These usually include rework, scrap, downgrades, re-inspection, retest, and process losses. External failure costs relate to problems found after the product reaches the customer. These usually include such costs as warranty and returns. Appraisal costs are associated with the formal evaluation and audit of quality in the firm. Typical costs include inspection, quality audits, testing, calibration, and checking time. Prevention costs are those caused by improvement activities that focus on reducing failure and appraisal costs. Typical costs include education, quality training, and supplier certification.
quality costs
105
A methodology designed to ensure that all the major requirements of the customer are identified and subsequently met or exceeded through the resulting product design process and the design and operation of the supporting production management system. QFD can be viewed as a set of communication and translation tools. QFD tries to eliminate the gap between what the customer wants in a new product and what the product is capable of delivering. QFD often leads to a clear identification of the major requirements of the customers. These expectations are referred to as the voice of the customer (VOC).
quality function deployment (QFD)
106
The ability to shorten machine setups between different machine operation requirements to increase process flexibility. Highest concentration is on first reducing external setup time, then on internal setup issues. This reduces economic order quantity, queue and manufacturing lead times, and work-in-process inventory; it improves quality, process, and material flows.
quick changeover
107
A fluctuation in data that is caused by uncertain or random occurrences.
random variation
108
The repeated production of the same discrete products or families of products. Repetitive methodology minimizes setups, inventory, and manufacturing lead times by using production lines, assembly lines, or cells. Work orders are no longer necessary; production scheduling and control are based on production rates. Products may be standard or assembled from modules. Repetitiveness is not a function of speed or volume.
repetitive manufacturing
109
The identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities.
risk management
110
Analytical methods to determine the core problem(s) of an organization, process, product, market, and so forth.
root cause analysis
111
A graphical technique to analyze the relationship between two variables. Two sets of data are plotted on a graph, with the y axis used for the variable to be predicted and the x axis used for the variable to make the prediction. The graph will show possible relationships (although two variables might appear to be related, they might not be—those who know most about the variables must make that evaluation). The scatter chart is one of the seven tools of quality.
scatter chart
112
Material outside of specifications and possessing characteristics that make rework impractical.
scrap
113
A Japanese word meaning teacher or one with experience.
Sensei
114
Sometimes used to describe those activities that support the production or distribution functions in any organization, such as customer service and field service.
service
115
1)In its narrowest sense, an organization that provides an intangible product (e.g., medical or legal advice). 2) Inits broadest sense, all organizations except farming, mining, and manufacturing. Includes retail trade; wholesale trade; transportation and utilities; finance, insurance, and real estate; construction; professional, personal, and social services; and local, state, and federal governments.
service industry
116
Shigeo Shingo, a pioneer in the Japanese just-in-time philosophy, identified seven barriers to improving manufacturing. They are the waste of overproduction, waste of waiting, waste of transportation, waste of stocks, waste of motion, waste of making defects, and waste of the processing itself.
Shingo’s seven wastes
117
A methodology that furnishes tools for the improvement of business processes. The intent is to decrease process variation and improve product quality.
six sigma
118
Abbreviation for organizational goals that are specific, measurable, achievable/attainable, relevant/realistic, and timely.
SMART
119
Variability of an action. Often measured by the range or standard deviation of a particular dimension.
spread
120
The application of statistical techniques to monitor and adjust an operation. Often used interchangeably with statistical quality control, although statistical quality control includes acceptance sampling as well as statistical process control.
statistical process control (SPC)
121
The plan for how to marshal and determine actions to support the mission, goals, and objectives of an organization. Generally includes an organization’s explicit mission, goals, and objectives and the specific actions needed to achieve those goals and objectives.
strategic plan
122
Sending production work outside to another manufacturer.
subcontracting
123
The amount of time that normally elapses between the time an order is received by a supplier and the time the order is shipped.
supplier lead time
124
The establishment of a working relationship with a supplier organization whereby two organizations act as one.
supplier partnership
125
The global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution, and cash.
supply chain
126
The design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.
supply chain management
127
A process reference model developed and endorsed by the APICS Supply Chain Council (SCC) as the standard cross-industry diagnostic tool for supply chain management. The SCOR model describes the business activities associated with satisfying a customer’s demand, which include plan, source, make, deliver, and return. Use of the model includes analyzing the current state of a company’s processes and goals, quantifying operational performance, and comparing company performance to benchmark data. SCOR has developed a set of metrics for supply chain performance, and APICS SCC members have formed industry groups to collect best practices information that companies can use to evaluate their supply chain performance.
Supply Chain Operations Reference (SCOR) model
128
An organizational focus on activities that provide present benefit without compromising the needs of future generations.
sustainability
129
The set of functional plans (e.g., production plan, sales plan, marketing plan) synchronizing activities across functions that specify production levels, capacity levels, staffing levels, funding levels, and so on, for achieving the intermediate goals and objectives to support the organization’s strategic plan.
tactical plan(s)
130
Sets the pace of production to match the rate of customer demand and becomes the heartbeat of any lean production system. Computed as the available production time divided by the rate of customer demand. For example, assume demand is 10,000 units per month, or 500 units per day, and planned available capacity is 420 minutes per day. The takt time = 420 minutes per day ÷ 500 units per day = 0.84 minutes per unit. This takt time means that a unit should be planned to exit the production system on average every 0.84 minutes.
takt time
131
A cost and managerial accounting system that accumulates costs and revenues into three areas—throughput, inventory, and operating expense. Does not create incentives (through allocation of overhead) to build up inventory. Is considered to provide a truer reflection of actual revenues and costs than traditional cost accounting, and is closer to a cash flow concept of income than is traditional accounting. Provides a simplified and more accurate form of direct costing that subtracts true variable costs (those costs that vary with throughput quantity). Unlike traditional cost accounting systems in which the focus is generally placed on reducing costs in all the various accounts, the primary focus of TOC accounting is on aggressively exploiting the constraint(s) to make more money for the firm.
theory of constraints (TOC) accounting
132
Allowable departure from a nominal value established by design engineers that is deemed acceptable for the functioning of the good or service over its life cycle.
tolerance
133
Preventive maintenance plus continuing efforts to adapt, modify, and refine equipment to increase flexibility, reduce material handling, and promote continuous flows. It is operator-oriented maintenance with the involvement of all qualified employees in all maintenance activities.
total productive maintenance (TPM)
134
A term coined to describe Japanese-style management approaches to quality improvement. Since then, total quality management (TQM) has taken on many meanings. Simply put, TQM is a management approach to long-term success through customer satisfaction. TQM is based on the participation of all members of an organization in improving processes, goods, services, and the culture in which they work. The methods for implementing this approach are found in teachings of such quality leaders as Philip B. Crosby, W. Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa, J.M. Juran, and Genichi Taguchi.
total quality management (TQM)
135
A kanban system where a move card and production card are employed. The move card authorizes the movement of a specific number of parts from a source to a point of use. The move card is attached to the standard container of parts during movement of the parts to the point of use. The production card authorizes the production of a given number of parts for use or replenishment.
two-card kanban system
136
Production lines shaped like the letter “U.” The shape allows workers to easily perform several nonsequential tasks without much walk time. The number of workstations in a U-line is usually determined by line balancing. U-lines promote communication.
U-lines
137
A framework for guiding companies through the process of formally committing to, assessing, defining, implementing, measuring, and communicating the United Nations Global Compact and its principles.
UN Global Compact Management Model
138
A voluntary initiative whereby companies embrace, support, and enact, within their sphere of influence, a set of core values in the areas of human rights, labor standards, the environment, and anticorruption.
United Nations Global Compact
139
Used as a relative reference within a firm or supply chain to indicate moving in the direction of the raw material supplier.
upstream
140
The systematic use of techniques that identify a required function, establish a value for that function, and finally provide that function at the lowest overall cost. Focuses on the functions of an item rather than the methods of producing the present product design.
value analysis
141
An examination of all links a company uses to produce and deliver its products and services, starting from the origination point and continuing through delivery to the final customer.
value chain analysis
142
The processes of creating, producing, and delivering a good or service to the market. For a good, the value stream encompasses the raw material supplier, the manufacture and assembly of the good, and the distribution network. For a service, the value stream consists of suppliers, support personnel and technology, the service “producer,” and the distribution channel. May be controlled by a single business or a network of several businesses.
value stream
143
A lean production tool to visually understand the flow of materials from supplier to customer that includes the current process and flow as well as the value-added and non-value-added time of all the process steps. Used to lead to reduction of waste, decrease flow time, and make the process flow more efficient and effective.
value stream mapping
144
An operating cost that varies directly with a change of one unit in the production volume (e.g., direct materials consumed, sales commissions).
variable cost
145
In the theory of constraints, a procedure for determining the general flow of parts and products from raw materials to finished products (logical product structure). A V logical structure starts with one or a few raw materials, and the product expands into a number of different products as it flows through divergent points in its routings. The shape of an A logical structure is dominated by converging points. Many raw materials are fabricated and assembled into a few finished products. A T logical structure consists of numerous similar finished products assembled from common assemblies, subassemblies, and parts. An I logical structure is the simplest of production flows, where resources are shared between different products and the flow is in a straight line sequence (e.g., an assembly line). Once the general parts flow is determined, the system control points (gating operations, convergent points, divergent points, constraints, and shipping points) can be identified and managed.
VATI analysis
146
Actual customer descriptions in words for the functions and features customers desire for goods and services. In the strict definition, as related to quality function deployment (QFD), the term customer indicates the external customer of the supplying entity.
voice of the customer (VOC)
147
1)Any activity that does not add value to the good or service in the eyes of the consumer. 2) A by-product of a process or task with unique characteristics requiring special management control. Waste production can usually be planned and somewhat controlled. Scrap is typically not planned and may result from the same production run as waste.
waste
148
The process of evaluating alternate strategies by answering the consequences of changes to forecasts, manufacturing plans, inventory levels, and so forth.
what-if analysis
149
Dissimilar machines grouped together into a production unit to produce a family of parts having similar routings.
work cell
