Supply Chain MGT Slides 32-72 Flashcards
What is process planning concerned with
Layout planning
Process design
Define layout planning
The specific design of the physical arrangement within a facility
What is process design
Selecting the inputs , production methods and process types(mass ,batch) to be used
Define capital intensity
Proportion of tasks in a production or service process performed by machine relative to the tasks performed by humans
What does the level of capital intensity significantly impact on
Production costs
Define resource flexibility
Ease with which employees or equipment can operate a wide variety of products , functions and levels of output
Or the ease with which resources can be changed in response to changes in supply or market conditions
Benefits of a flexible workforce
Higher productivity
Better moral
Wider product range
Define vertical integration
The process of extending a firms presence in the marketing channel either forward toward the consumer or backward toward suppliers usually through ownership of new stages in the channel
What direction will firms integrate if they expand by buying a customer
Forward or downstream vertical integration
What direction will firms integrate if they expand by buying a supplier
Backward or upstream vertical integration
Define customer involvement
The degree to which the customer is allowed to interact with the process
Examples of customer involvement
Production selection
Input selection
Product design
Location of service
What is quality control
The activities for ensuring quality in products eg identifying defect in the actual products produced
What is quality assurance
Is the activities for ensuring quality in the process by which products are developed
Name the costs associated with maintaining quality
Prevention
Appraisal
Internal failure
External failure
What is prevention costs
Costs associated with stopping defects before they happen
What is appraisal costs
Costs incurred in monitoring the quality level of products and services during production
What is internal failure costs
Costs generated during the production and or rework of defective parts and services
What is external failure costs
Costs incurred when the product or service fails once it is in the consumers hands
Name the alternative quality management measures
Hazard analysis critical control point (HACCP)
Total quality management (TQM)
When was HACCP developed
1960’s
Who developed HACCP
NASA - guarantee safety of food of astronauts
What does HACCP focus on
Prevention rather than end product testing due to less wastage
Outline steps in HACCP
•Identify hazard and asses their severity and risks
•Determine critical control points
•Determine control of hazard & establish criteria to ensure control(measurable critical limits)
•Monitor critical control points
•Record data on time/ temp logs
•Take action whenever monitoring results indicate criteria are not being met
•Verify the system is functioning as planned (audit procedures & records)
What is Total Quality Management (TQM)
An integrated management concept directed towards continuous quality improvement
What does TQM view quality as
Involving groups both outside (suppliers and customers) and inside the organisation
Outline evolution of TQM
Inspection - initially quality was maintained by inspection at end of the process
More detailed monitoring of the manufacturing process
Making quality an objective throughout the organisation
What is supply chain management
The process of managing the complete input acquisition and output distribution channel for a firm; involves linking the materials and physical distribution systems of a firm directly with supplier and customer systems resulting in greater efficiencies.
What does inventory consist of
-finished products ready for sale,
–items that have been purchased for use in producing goods and services to be sold
-work in progress
What % does inventory account for of assets
35 to 50%
What is Efficient Consumer Response
A system that links food manufacturers and distributors with retail supermarkets
What does Efficient Consumer Response involve
–Replenishment of products as they are used,
–Providing the right assortment of products
–Introducing new products
–Developing Effective promotion strategies
What has played a key role in improving supply chain management
Improved information technology
How has improved information technology played a key role in improving supply chain management
Facilitates the links between suppliers, distributors and consumers
What is risk reduction in SCM
Supply chain managers may establish contracts with suppliers or customers allowing for shared information and shared investments in transportation, facilities, new technologies, inventories and product distribution.
What is Globalisation in supply chain management
An effective logistics system is vital if you are to compete globally.
•Need to be able to guarantee the timely delivery of inputs and products to export markets.
•This can be done by developing your own marketing channels or partnering with other firms.
What is forecasting demand defined as
an estimate of future customer demand.
What do short range forecasts influence
things like raw materials purchases, inventory and aggregate production planning
What do long range forecasts influence
decisions regarding distribution facilities, logistics decisions etc.
How are forecasts typically made
using scientific techniques based on historical usage and adjusted to accommodate various factors such as life cycle, cyclical usage patterns, promotions and pricing actions.
What is Aggregate production planning defined as
the process of developing time-phased specific production quantities and rates, and workforce sizes and rates, while balancing customer requirements and the capacity limitations of plant and equipment.
What does aggregate production planning combine
short and long-range forecasts with current capacity limitations, inventories and other information to plan how much ingredients, labour and equipment are required.
Is Aggregate Production Planning monthly ,quarterly or annual
All of the above
What should Aggregate Production Planning aim to maximise
Customer service
What should Aggregate Production Planning aim to minimise while aiming to maximise customer service
inventories, production rates and workforce levels.
What provides the exact quantities of stock keeping units
The sales forecasts and actual orders
What is Stock Keeping Units
specific items of goods for sale for which individual records are kept and that is tracked throughout a firm’s logistics system.
What is Master Production Schedule (MPS)
detailing the final quantities stock keeping units that are to be made in specific blocks of time; created once specific orders for products have been received and /or short-range sales forecasts have been determined.
MPS details weekly requirements for how many months
6-12 months
Define Purchasing
all tasks involved in procuring the raw materials and inputs necessary to meet the requirements of the production schedule.
Name the 4 types of products agribusiness typically buy
–Products used for further processing
–Products that are resold
–Products used directly in the firm’s final products
–Products used to make the product but not used in the product itself
What are the activities carried out by the purchasing function
–Receive a purchase requisition and look for cheaper alternatives
–Select a qualified supplier based on price, quality, timeliness and customer service
–Place the order
–Track the order monitor deliveries and production schedules to try to avoid a delay in delivery that could disrupt production and future sales.
–Receive the order and approve payment works with receiving and accounting to ensure goods are received satisfactorily before authorising payment
What is production control defined as
all activities related to:
–controlling raw materials inventory,
–providing detailed production scheduling information,
–controlling work-in-process inventory,
–communicating changes to master production scheduling and purchasing,
–controlling finished goods inventory.
What system might companies used to control production
Just-in-Time systems
What is Just-in-Time
defined as an operating philosophy and production system with the goal of producing and/or delivering goods just as they are needed, in effect eliminating inventories.
What is the aim of Just-in-Time operation
eliminate waste, inefficiencies and unproductive time
What is inventory defined as
items that are held for sale in the ordinary course of business, that have been purchased for use in producing goods and services to be sold, and work in progress.
From an accounting perspective what is inventory viewed as
An asset
If there is a cost associated with holding inventory why do it?
1.Customer service so you have stock to meet customer demand immediately.
2.Speculative, you may choose to hold inventory because you are speculating on what will happen to future demand.
3.Inventory may be held to reduce ordering costs, transportation costs or to get the input for a lower unit cost e.g. by buying bulk.
4.Precautionary – inventory or stocks may be held to reduce future risk of running out.
Name the three main categories of inventory
–Unprocessed raw materials
–Work in progress
–Finished goods
Name the two types of inventory management systems
Periodic Inventory
Continuous Inventory
What is Periodic Inventory
is a physical count of the stock on hand, conducted at regular intervals.
Advantage of Periodic Inventory
It minimises record keeping
Disadvantage of Periodic Inventory
The day to day stock levels are uncertain
What is Continuous Inventory
is a constant monitoring of the stock on hand.
Name the developments that have facilitated continuous inventory
information technology - bar code scanners
Advantage of Continuous Inventory
In theory the quantity on hand is always up to date
Disadvantage of Continuous Inventory
System is only as good and reliable as the people operating it
What are Physical Distribution Systems defined as
the series of marketing channels through which parts, products and finished inventory are stored and moved from suppliers, between outlets and ultimately to consumers.
What does the Physical Distribution System include
–Transportation
–Storage/warehousing
–Delivery of finished products
What should be considered when planning distribution system
–Location of customers
–Level of customer service required
–Need to control or influence the image with the customer
Name the three basic categories of Physical Distribution System
–Warehousing – where finished goods will be stored
–Transportation – how goods will be moved
–Carrier – the scheduling, routing and selection of the carrier
What does warehousing represent
a substantial operating cost as well as capital investment
When choosing where to locate finishing goods what are the types of placement you should choose
Forward
Backward
What is Forward Placement in relation to locating finished goods
locating finished goods in a warehouse close to customers
Advantages of forward placement
–This allows for very quick delivery times
–In turn can lead to increased sales
What is Backward Placement in relation to locating finished goods
locating finished goods at the production facility
Advantage of Backward Placement
By centralising your warehousing system may be able to reduce the overall number of goods held in inventory.
Disadvantage of Backward Placement
overall customer service offered may be reduced.
When choosing the method of transportation what should the choice of method be based on
–Length of Transit time
–Geographic and Product Flexibility
–Cost
–Damages in Transit
–Number of times goods are re-handled in transport
What are customers
those who purchase outputs (products, services and or information) from a firm.
What is the final link of the supply chain
customers
