Part I Strategic Planning Flashcards
Production Line
A series of pieces of equipment dedicated to the manufacture of a specific number of products or families.
advanced planning and scheduling (APS)
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. [This] 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.
andon
A sign board with signal lights used to make workers and management aware of a quality, quantity, or process problem.
assemble-to-order (ATO)
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.
assembly line
An assembly process in which equipment and work centers are laid out to follow the sequence in which raw materials and parts are assembled.
assignable cause
A 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.
bullwhip effect
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.
business plan
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. [It] 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 concept]. 2) A document consisting of the business details (organization, strategy, and financing tactics) prepared by an entrepreneur to plan for a new business.
cause-and-effect diagram
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] is one of the seven tools of quality.
closed-loop MRP
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. [This term] implies not only that 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.
component
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.
continuous process improvement (CPI)
A never-ending effort to expose and eliminate root causes of problems; small-step improvement as opposed to big-step improvement.
continuous production
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.
control chart
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.
control limit
A statistically determined line on a control chart […]. If a value occurs outside this [upper or lower] limit, the process is deemed to be out of control.
cost of poor quality
The costs associated with performing a task incorrectly and/ or generating unacceptable output. These costs would include the costs of nonconformities, inefficient processes, and lost opportunities.
customer service
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.
data governance
The overall management of data’s accessibility, usability, reliability, and security. Used to ensure data record accuracy.
delivery lead time
The time from the receipt of a customer order to the delivery of the product.
demand lead time
The amount of time potential customers are willing to wait for the delivery of a good or a service.
discrete manufacturing
The production of distinct items such as automobiles, appliances, or computers.
electronic data interchange (EDI)
The paperless (electronic) exchange of trading documents, such as purchase orders, shipment authorizations, advanced shipment notices, and invoices, using standardized document formats.
employee empowerment
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. [This] 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 involvement (EI)
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. [It] focuses on quality and productivity improvements.
engineer-to-order
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.
enterprise resources planning (ERP)
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. [This type of] 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.
external failure costs
The costs related to problems found after the product reaches the customer. This usually includes such costs as warranty and returns.
field service
The functions of installing and maintaining a product for a customer after the sale or during the lease. [It] may also include training and implementation assistance.
five Ss
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 whys
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.
fixed-position manufacturing
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…include] shipbuilding or aircraft assembly, for which the costs of frequent movement of the product are very high.
flow processing
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 [when this process is continuous.]
flow shop
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. [This] 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 [this]. 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.
flowchart
[A] chart that shows the operations, transportation, storages, delays, inspections, and so on related to a process. [This is] drawn to better understand processes [and is] one of the seven tools of quality.
functional layout
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).
Gantt chart
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. [This] 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.
gemba
The place where humans create value; the real workplace. Also a philosophy: “Go to the actual place, see the actual work.”
genchi genbutsu
A Japanese phrase meaning to visit the shop floor to observe what is occurring.
hansei
A Japanese word meaning reflection.
heijunka
In just-in-time philosophy, an approach to level production throughout the supply chain to match the planned rate of end product sales.
histogram
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 [this] lets people see patterns that are difficult to see in a simple table of numbers. [It] is one of the seven tools of quality.
hoshin
A Japanese word meaning statement of objectives.
hoshin planning
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.
intermittent production
A form of manufacturing in which the jobs pass through the functional departments in lots, and each lot may have a different routing.
internal failure costs
The cost of things that go wrong before the product reaches the customer. [These] usually include rework, scrap, downgrades, reinspection, retesting, and process losses.
jidoka
The Japanese term for the practice of stopping the production line when a defect occurs.
jishuken
A Japanese word meaning voluntary study groups.
job shop
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.
kaizen
The Japanese term for improvement; refers to continuing improvement involving everyone—managers and workers. In manufacturing, [this] relates to finding and eliminating waste in machinery, labor, or production methods.
kanban
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. [This] Japanese word, 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.
key performance indicator (KPI)
A financial or nonfinancial 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. [This] 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 [these].
lean production
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. [It also employs] teams of multiskilled workers at all levels of the organization and use highly flexible, increasingly automated machines to produce volumes of products in potentially enormous variety. [It] 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 six sigma
A methodology that combines [two] improvement concepts […]. It uses the seven wastes of lean and the DMAIC process from six sigma, and awards recognition of competence through judo-style belts.
logistics
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.
make-or-buy decision
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-to-order
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.
