Seminar 1

Question 1

Focus factory definition

Answer 1

A factory that focuses on a narrow product mix for a particular market niche will outperform the conventional plant, which attempts a broader mission.

Focused manufacturing is based on the concept that simplicity, repetition, experience, and homogeneity of tasks breed competence.

Question 2

Multispecialty operation

Answer 2

Composed of at least two units, each of which realizes benefits from being focused on a relatively narrow set of activities.

Question 3

How to manage a multispecialty operation? (4)

Answer 3

Establish and communicate clear objectives for each unit

Aligning performance metrics with unit objectives

Managing actively and transparently across units

Setting boundaries between units

Question 4

Bullwhip effect

Answer 4

When the order volatility increases upstream in the supply chain, due end customer demand

Refers to the product shortages and overstocks that increase in severity as one moves up the supply chain and away from the retail customer

A boom and bust phenomenon

Question 5

Causes of bullwhip effect in supply chains

Answer 5

Demand forecast updating

Order batching, placing frequent orders is expensive

Price fluctuation (sales department/ monthly/ quarterly)

Rationing and shortage gaming, customers try to game and beat the rationing system, by ordering extra quantity in advance. Manufacturers do not get a realistic sense of the size of the actual demand

Question 6

Solutions to minimize the bullwhip effect

Answer 6

Improving information sharing from downstream to upstream participants, such as points of sale

Improving channel alignment, encouraging distributors to order a mix of products to get around the full truckload constraint to batch ordering

Improving operational efficiency

Question 7

Postponement

Answer 7

Deliberate action to delay final manufacturing or distribution of a product until receipt of a customer order

Question 8

Different demand components (4)

Answer 8

Random demand
Seasonal component
Trend component
Cyclical component

Question 9

Push

Answer 9

Make to stock, production plans without clear knowledge of demand

Question 10

Pull

Answer 10

Make to order, production plans are made with clear knowledge of demand