Production Systems Flashcards
System
An interconnected and coordinated set of elements and processes that converts inputs to desired outputs
Supply Chain
A set of connected systems that coordinates the flow of goods and materials from suppliers all the way through to final customers
Supply Chain Management (SCM)
The business procedures, policies, and computer systems that integrate the various elements of the supply chain into a cohesive system
Production and Operations Management
Oversees all the activities involved in producing goods and services
- Facilities location and design
- Forecasts and does capacity planning
- Does scheduling
- Lean systems
Capacity Planning
Establishing the overall level of resources needed to meet customer demand
Importance in MikesBikes:
- Impact ability to meet future requirements (demand; lost sales; delivery index)
- Relationship between capacity and operating costs (efficiency/ wastage costs; overhead costs)
- Initial cost of capacity (commitment of resources)
How many SCUs (Standard capacity units) are needed for each bike segment?
Road: 1.0 SCU
Mountain: 0.5 SCU
Youth: 0.25 SCU
Total/Theoretical Capacity
the maximum output per unit of time the process can achieve for a short period of time under ideal operating conditions
Zero wastage & idle time (the “ideal” world)
Effective Capacity
the actual output per unit of time that the organization can reasonably be expected to sustain in the long run under normal operating conditions
Total Capacity minus Allowances for maintenance, set-up time, and equipment breakdowns ect.
Actual Output
What is actually produced
Efficiency Rate
Effective Capacity (Or the proportion of your effective capacity that was actually used for production)
Idle Time
The part of your total capacity that could be used but is currently unused because of your current actual production level
How to find Capacity Requirements:
Capacity Requirements =
(Forecasted sales)x(Required SCUs)
———————————
Production Efficiency
Note: If you have two different types of bikes, you need to do this calculation for each type of bike and add together the capacity requirements
Productivity
the efficiency with which an organization can convert inputs to outputs
Lean Systems
Systems that maximize productivity by reducing waste and delays
Lean System:
Just-In-Time (JIT)
Inventory management in which goods and materials are delivered throughout the production process right before they are needed
