Vocab Flashcards
Classification of a group of items in decreasing order of annual dollar volume or other criteria
ABC CLASSIFICATION
An electronic data interchange (EDI) notification of shipment of product.
ADVANCE SHIP NOTICE (ASN)
1) An electronic board that provides visibility of floor status and supplies information to help coordinate the efforts to linked work centers;
2) A visual signaling system
ANDON
Additional inventory above basic pipeline stock to cover projected trends of increasing sales, planned sales promotion programs, seasonal fluctuations, plant shutdowns, and vacations
ANTICIPATION INVENTORIES
A production environment where a good or service can be assembled after receipt of a customer’s order.
ASSEMBLE-TO-ORDER
An assembly process in which equipment and work centers are laid out to follow the sequence in which raw material and parts are assembled
ASSEMBLY LINE
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
ASSIGNABLE CAUSE
The on-hand inventory balance minus allocations, reservations, backorders, and (usually) quantities held for quality problems. Often called “beginning available balance”
AVAILABLE INVENTORY
The uncommitted portion of a company’s inventory and planned production maintained in the master schedule to support customer-order promising.
The ___ quantity is the uncommitted inventory balance in the first period and is normally calculated for each period in which an MPS receipt is scheduled.
AVAILABLE-TO-PROMISE (ATP)
One-half the average lot size plus the safety stock, when demand and lot sizes are expected to be relatively uniform over time.
AVERAGE INVENTORY
A method of inventory bookkeeping where the book (computer) inventory of components is automatically reduced by the computer after completion of activity on the component’s upper-level parent item based on what should have been used as specified on the BOM and allocation records.
BACKFLUSH
The process of a transportation vehicle returning from the original destination point to the point of origin
BACKHAULING
All of the customer orders received but not yet shipped. Sometimes referred to as open orders or the order board
BACKLOG
An unfulfilled customer order or commitment. A ____ is an immediate (or past due) demand against an item whose inventory is insufficient to satisfy the demand
BACKORDER
A technique for calculating operation start and due dates. The schedule is computed starting with the due date for the order and working backward to determine the required start date and/or due dates for each operation
BACK SCHEDULING
BACKWARDS SCHEDULING
A financial statement showing the resources owned, the debts owed, and the owner’s share of a company at a given point in time.
BALANCE SHEET
A series of alternating bars and spaces printed or stamped on parts, containers, labels, or other media, representing encoded information that can be read by electronic readers
BAR CODE
A quantity scheduled to be produced or in production.
For discrete products, the ____ is planned to be the standard batch quantity, but during production, the standard batch quantity may be broken into smaller lots
For nondiscrete products, the ____ is a quantity that is planned to be produced in a given time period based on a formula or recipe that often is developed to produce a given number of end items
BATCH
A type of manufacturing process used to produce items with similar designs and that may cover a wide range of order volumes. Typically, items ordered are of a repeat nature, and production may be for a specific customer order or for stock replenishment
BATCH (MANUFACTURING PROCESS)
A method of picking orders in which order requirements are aggregated by produce across orders to reduce movement to and from product locations. The aggregated quantities of each product are then transported to a common area where the individual orders are constructed.
BATCH PICKING
A consistent deviation from the mean in one direction (high or low). A normal property of a good forecast is that it is not biased.
BIAS
A carrier’s contract and receipt for goods the carrier agrees to transport from one place to another and to deliver to a designated person. In case of loss, damage, or delay, the ____ is the basis for filing freight claims.
BILL OF LADING (UNIFORM)
1) A listing of all the subassemblies, intermediates, parts, and raw materials that go into a parent assembly showing the quantity of each required to make an assembly
2) A list of all the materials needed to make one production run of a product, by a contract manufacturer, of piece parts/components for its customers
AKA: formula, recipe, ingredients list.
BILL OF MATERIAL
Some display formats for ____ are:
1) Single-level ____
2) Indented ____
3) Modular (planning) ____
4) Transient ____
5) Matrix ____
6) Costed ____
BILL OF MATERIAL (FORMATS)
Builders or parts of builders designated by the U.S. Secretary of Treasury for storing imported merchandise, operated under U.S. Customs supervision
BONDED WAREHOUSE
A facility, function, department, or resource whose capacity is less than the demand placed upon it. For example, a ____ machine or work center exists where jobs are processed at a slower rate than they are demanded
BOTTLENECK
truckloads of homogeneous items into smaller, more appropriate quantities for use
BREAK-BULK
BREAK-EVEN POINT
BREAK-EVEN POINT
A quantity of materials awaiting further processing. Can refer to raw materials, semifinished stores or hold points, or a work backlog that is purposely maintained behind a work center
BUFFER
A process in which all expediting in a shop is driven by what is scheduled to be in the buffers (constraint, shipping, and assembly buffers)
BUFFER MANAGEMENT
- 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. To eliminate—synchronize the supply chain.
BULLWHIP EFFECT
A statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow statements.
BUSINESS PLAN
1) A ____ is usually stated in terms of dollars and grouped by product family
2) It is then translated into synchronized tactical functional plans through the production planning process
3) Though frequently stated in different terms (dollars vs. units), these tactical plans should agree with each other and the ____
BUSINESS PLAN
A document consisting of the business details (organization, strategy, and financial tactics) prepared by an entrepreneur to plan for a new business
BUSINESS PLAN
CAPABLE-TO-PROMISE (CTP)
CAPABLE-TO-PROMISE (CTP)
The capacity of a system or resource to produce a quantity of output of a particular time period.
CAPACITY AVAILABLE
The process of measuring production output and comparing it with the capacity plan, determining if the variance exceeds pre-established limits, and taking corrective action to get back on plan if the limits are exceeded
CAPACITY CONTROL
The function of establishing, measuring, monitoring, and adjusting limits or levels of capacity in order to execute all manufacturing schedules.
The four levels at which ____ is executed are:
1) Resource requirements planning
2) Rough-cut capacity planning (RCCP)
3) Capacity requirements planning (CRP)
4) Input/output control
CAPACITY MANAGEMENT
CAPACITY PLANNING
CAPACITY PLANNING
- The capacity of a system or resource needed to produce a desired output in a particular time period.
CAPACITY REQUIRED
The function of establishing, measuring, and adjusting limits or levels of capacity. The term ____ in this context refers tot he process of determining in detail the amount of labor and machine resources required to accomplish the tasks of production
CAPACITY REQUIREMENTS PLANNING (CRP)
The cost of holding inventory, usually defined as a percentage of the dollar value of inventory per unit of time (generally one year). ____ is ultimately a policy variable reflecting the opportunity cost of alternative uses for funds invested in inventory.
The determinants of ____ are:
1) Cost of capital invested (biggest factor)
2) Taxes
3) Insurance
4) Obsolescence
5) Spoilage
6) Space occupied
CARRYING COSTS
The net flow of dollars into or out of the proposed project. The algebraic sum, in any time period, of all cash receipts, expenses, and investments.
AKA: cash proceeds, cash generated
CASH FLOW
- A tool for analyzing process dispersion. Illustrates the main causes and subcauses leading to an effect (symptom)
AKA: Ishikawa diagram, fishbone diagram
CAUSE-AND-EFFECT DIAGRAM
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
CELLULAR MANUFACTURING
Inventory decision making for all stockkeeping units exercised from one office or department for an entire company
CENTRALIZED INVENTORY CONTROL
A status awarded to a supplier who consistently meets predetermined quality, cost, delivery, financial, and count objectives. Incoming inspection may not be required
CERTIFIED SUPPLIER
A production planning method that maintains a stable inventory level while varying production to meet demand
CHASE PRODUCTION METHOD
A system built around material requirements planning (MRP) that includes the additional planning processes of production planning (S&OP), master production scheduling (MPS), and capacity requirements planning (CRP). The 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 that the planning can be kept valid at all times
CLOSED-LOOP MRP
Transportation available to the public that does not provide special treatment to any one party and is regulated as to the rates charged, the liability assumed, and the service provided. A ____ must obtain a certificate of public convenience and necessity from the FTC for interstate traffic
COMMON CARRIER
The advantage a company has over its rivals in attracting customers and defending against competitors. Sources of the advantage include characteristics that a competitor cannot duplicate without substantial cost and risk, such as manufacturing technique, brand name, or human skill set
COMPETITIVE ADVANTAGE
The raw material, part, or subassembly that goes into a higher level assembly, compound, or other item. May also include packaging materials for finished items
COMPONENT
1) A shipment that is handled by a common carrier
2) The process of a supplier placing goods at a customer location without receiving payment until after goods are used or sold
CONSIGNMENT
Any element or factor that prevents a system from achieving a higher level of performance with respect to its goal. Can be physical, such as a machine center or lack of material, or managerial, such as a policy or procedure
CONSTRAINT (PROCESS ENGINEERING)
One of a set of equations that cannot be violated in an optimization procedure
CONSTRAINT (OPTIMIZATION)
CONTINUOUS IMPROVEMENT PROCESS (CPI)
CONTINUOUS IMPROVEMENT PROCESS (CPI)
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 jobs is fixed and setups are seldom changed
CONTINUOUS PRODUCTION
A process by which a supplier is notified daily of actual sales or warehouse shipments or commits to replenish these sales without stockouts, and without receiving replenishment orders. Lowers associated costs and improves inventory turnover.
CONTINUOUS REPLENISHMENT
A carrier that does not service the general public, but provides transportation for hire for one or a limited number of shippers under a specific contract
CONTRACT CARRIER
A graphic comparison of process performance data with predetermined computed control limits. The process performance data usually consist of groups of measurements selected in regular sequence of production that preserve the order. One of the seven tools of quality. The primary use of ____ is to detect assignable causes of variation in the process as opposed to random variations
CONTROL CHART
CONTROL LIMIT
CONTROL LIMIT
An accounting classification useful for determining the amount of direct materials (DM), direct labor (DL), and allocated overhead (OH) associated with the products sold over a given period of time
COST OF GOODS SOLD
The costs associated with providing poor quality products or services. The four categories of costs of ____ are:
1) Internal failure costs
2) External failure costs
3) Appraisal costs
4) Prevention costs
COST OF POOR QUALITY
In the Theory of constraints (TOC), a network planning technique for the analysis of a project’s completion time, used for planning and controlling project activities. The critical chain, which 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 network planning technique for the analysis of a project’s completion time used for planning and controlling the activities of 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
CRITICAL PATH METHOD (CPM)
The concept of packing products on the incoming shipment so they can be easily sorted at intermediate warehouses or for outgoing shipments based on final destination. The items are carried from the incoming vehicle docking point to the outgoing vehicle docking point without being stored in inventory at the warehouse. ____ requires inventory investment and storage space requirements
CROSS-DOCKING
The longest planned length of time to accomplish the activity in question. The ____ is found by reviewing the lead time for each BOM path below the item; whichever path adds up to the greatest number defines the ____
CUMULATIVE LEAD TIME
A marketing philosophy based on putting the customer first. The collection and analysis of information designed for sales and marketing decision support (as contrasted to enterprise resources planning information) to understand and support existing and potential customer needs. It includes account management, catalog and order entry, payment processing, credits and adjustment, and other functions
CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
The ability of a company to address the needs, inquiries, and requests from customers. A measure of the delivery of a product to the customer at the time the customer specified
CUSTOMER SERVICE
CUSTOMS BROKER
CUSTOMS BROKER
An inventory accuracy audit technique where inventory is counted on a cyclic schedule rather than once a year. A cycle inventory count is usually taken on a regular, defined basis. Most effective ____ systems require the counting of a certain number of items every workday with each item counted at a prescribed frequency. The key purpose of ____ is to identify items in error, thus triggering research, identification, and elimination of the cause of the errors
CYCLE COUNTING
One of the two main conceptual components of any item inventory, the ____ is the most active component; the ____ depletes gradually as customer orders are received and is replenished cyclically when supplier orders are received. The other conceptual component of item inventory is safety stock
CYCLE STOCK
Refers to the length of time from when material enters a production facility until it exits
CYCLE TIME
DAYS OF SUPPLY
DAYS OF SUPPLY
Inventory decision making exercised at each stocking location for SKUs at that location
DECENTRALIZED INVENTORY CONTROL
An amount of inventory kept between entities in a manufacturing or distribution network to create independence between processes or entities. The objective of ____ is to disconnect the rate of use from the rate of supply of the item
DECOUPLING INVENTORY
The time from receipt of a customer order to delivery of the product.
DELIVERY LEAD TIME
The process of planning, executing, controlling, and monitoring the design, pricing, promotion, and distribution of products and services to bring about transactions that meet organizational and individual needs. Proper ____ facilitates the planning and use of resources for profitable business results
DEMAND MANAGEMENT
DEMAND PLANNING
DEMAND PLANNING
The triggering of material movement to a work center only when that work center is ready to begin the next job. In effect, it shortens or eliminates the queue from in front of a work center, but it can cause a queue at the end of the previous work center. Demand pull can also occur within a supply chain, in which case it often is called a demand chain
DEMAND PULL
Proven capacity calculated from actual performance data, usually expressed as the average number of items produced multiplied by the standard hours per item
DEMONSTRATED CAPACITY
- The carrier charges and fees applied when rail freight cards and ships are retained beyond a specified loading or unloading time
DEMURRAGE
Demand that is directly related to or derived from the bill of material (BOM) structure for other items or end products. Such demands are therefore calculated and need not and should not be forecast. A given inventory item may have both dependent and independent demand at any given time
DEPENDENT DEMAND
- Carrier charges and fees applied when truck trailers are retained beyond a specified loading or unloading time
DETENTION
- Labor that is specifically applied to the good being manufactured or used in the performance of the service
DIRECT LABOR
- Material that becomes a part of the final product in measurable quantities
DIRECT MATERIALS
The production of distinct items such as automobiles, appliances, or computers
DISCRETE MANUFACTURING
A method of picking orders in which the items on one order are picked before the next order is picked
DISCRETE ORDER PICKING
The selection and sequencing of available jobs to be run at individual workstations and the assignment of those jobs to workers
DISPATCHING
The activities associated with the movement of material, usually finished goods or service parts, from the manufacturer to the customer. It includes all activities related to physical ____, as well as the return of goods to the manufacturer. In many cases, this movement is made through one or more levels of field warehouses. Also, The systematic division of a whole into discrete parts having distinctive characteristics. The activities of ____ encompass the functions of transportation, warehousing, inventory control, material handling, order administration, site and location analysis, industrial packaging, data processing, and the communications network necessary for effective management
DISTRIBUTION
A warehouse with finished goods and/or service items. _________ is synonymous with the term “branch warehouse,” although the former has become more commonly used recently. When a warehouse serves a group of satellite warehouses, it is usually called a regional____________________.
DISTRIBUTION CENTER
The distribution route, from raw materials through consumption, along which products travel
DISTRIBUTION CHANNEL
Inventory, usually spare parts and finished goods, located in the distribution system (in warehouses, in-transit between warehouses and the customers)
DISTRIBUTION INVENTORY
The function of determining the need to replenish inventory at branch warehouses. A time-phased order point approach is used where the planned orders at the branch warehouse level are “exploded” via MRP logic to become gross requirements on the supplying source.
DISTRIBUTION REQUIREMENTS PLANNING (DRP)
In the case of multilevel distribution networks, this explosion process can continue down through the various levels of regional warehouses (master warehouse, factory warehouse, etc) and become input to the master production system (MPS). Demand on the supplying sources is recognized as dependent, and standard MRP logic applies.
DISTRIBUTION REQUIREMENTS PLANNING (DRP)
Replenishment inventory calculations, which may be based on other planning approaches such as period order quantities or “replace exactly what was used”, rather than being limited to the time-phased order point approach
DISTRIBUTION REQUIREMENTS PLANNING (DRP)
A facility that receives items in large lots, stores them temporarily, and breaks them into smaller lots destined for a variety of locations
DISTRIBUTION WAREHOUSE
A program by which specific quality and packaging requirements are met before the product is released. Prequalified product is shipped directly into the customer’s inventory. ____ eliminates the costly handling of components, specifically in receiving and inspection and enables products to move directly into production
DOCK-TO-STOCK
- To take the title of the product but not actually handle, stock, or deliver it
EX: to have one supplier ship directly to another or to have a supplier ship directly to the buyer’s customer
DROP SHIP
- The theory of constraints (TOC) method for scheduling and managing operations that have an internal constraint or capacity-constrained resource
DRUM-BUFFER-ROPE (DBR)
The detailed production schedule for a resource that sets the pace for the entire system. The ____ must reconcile the customer requirements with the systems’ constraint(s)
DRUM SCHEDULE
A type of fixed order quantity model that determines the total amount of an item to be purchased or manufactured at one time. The intent of ____ is to minimize the combined costs of acquiring and carrying inventory.
ECONOMIC ORDER QUANTITY
The basic formula of ____ is:
quantity = √((2AS)/iC) A: annual usage in units S: ordering costs in dollars i: annual inventory carry cost rate C: unit cost
ECONOMIC ORDER QUANTITY
A measurement of the actual output to the standard output expected. Efficiency measures how well something is performing relative to existing standards; in contrast, productivity measures output relative to a specific input
EFFICIENCY
The paperless (electronic) exchange of trading documents, such as purchase orders, shipment authorizations, advanced shipment notices (ASNs), and invoices, using standardized document formats
ELECTRONIC DATA INTERCHANGE (EDI)
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 responsibilities to the employee. ____ allows the employee to take on responsibility for tasks normally associated with staff specialists
EMPLOYEE EMPOWERMENT
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 improvement. ____ focuses on quality and productivity improvements
EMPLOYEE INVOLVEMENT
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 (BOM), and routings
ENGINEER-TO-ORDER (ETO)
- 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
ENTERPRISE RESOURCE PLANNING (ERP)
To perform a bill-of-materials (BOM) explosion
EXPLODE
Costs relating to problems found after the product reaches the customer
EX: Warranties, returns
EXTERNAL FAILURE COSTS
The time associated with elements of a setup procedure performed while the process or machine is running
EXTERNAL SETUP TIME
A forecasting method on a correlated leading indicator, such as estimating furniture sales based on housing starts. ____ tend to be useful for large aggregations, such as total company sales, than for individual product sales
EXTRINSIC FORECASTING METHOD
The functions of installing and maintaining a product for a customer after the sale or during the lease. ____ may also include training and implementation assistance
FIELD SERVICE
A schedule of end items to finish the product for specific customers’ orders in a make-to-order (MTO) or assemble-to-order (ATO) environment. It is also referred to as the finishing schedule because it may involve operations other than the final assembly (EX: final mixing, cutting, packaging). The ___ is prepared after receipt of a customer order as constrained by the availability of material and capacity, and it schedules the operations required to complete the product from the level where it is stocked to the end-item level
FINAL ASSEMBLY SCHEDULE (FAS)
Those items on which all manufacturing operations, including final test, have been completed. These products are available for shipment to the customer as either end items or repair parts
FINISHED GOODS INVENTORY
An equipment scheduling technique that builds a schedule by proceeding sequentially from the initial period to the final period while observing capacity limits. A Gantt chart may be used with this technique
FINITE FORWARD SCHEDULING
Assigning no more work to a work center than the work center can be expected to execute in a given time period. The specific term usually refers to a computer technique that involves calculating shop priority revisions in order to level load operation by operation
FINITE LOADING
A planned order that can be frozen in quantity and time. the computer is not allowed to change it automatically; this is the responsibility of the planner in charge of the item that is being planned. This technique can aid planners working with MRP systems to respond to material and capacity problems by firming up selected planned orders. In addition, ____ are the normal method of stating the master production schedule (MPS)
FIRM PLANNED ORDER (FPO)
In the Theory of constraints (TOC), a process to continuously improve organizational profit by evaluating the production system and market mix to determine how to make the most profit using the system constraint.
FIVE FOCUSING STEPS
The ____ are:
1) Identifying the constraint to the system
2) Deciding how to exploit the constraint to the system
3) Subordinating all non constraints to the constraint
4) Elevating the constraint to the system
5) Returning to Step 1 if the constraint is broken in any previous step, while not allowing inertia to set in
FIVE FOCUSING STEPS
Five terms beginning with “S” used to create a workplace suitable for lean production. The ____ are:
1) Sort
2) Simplify
3) Scrub
4) Standardize
5) Sustain
FIVE Ss
- 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
A method of storage in which a relatively permanent location is assigned for the storage of each item in a storeroom or warehouse. Although more space is needed to store parts than in a random-location system, ____ become familiar, and therefore a locator file may not be needed
FIXED LOCATION STORAGE
A lot-sizing technique in MRP or inventory management that will always cause planned or actual orders to be generated for a predetermined fixed quantity, or multiples thereof, if net requirements for the period exceed the ____
FIXED ORDER QUANTITY
- Traditionally, all manufacturing costs–other than Direct labor (DL) and Direct materials (DM)–that continue even if products are not produced. Although ____ is necessary to produce the product, it cannot be directly traced to the final product
FIXED OVERHEAD
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.
EX: Shipbuilding, aircraft assembly
FIXED POSITION MANUFACTURING
The output of a flowcharting process, a chart that shows the operations, transportation, storages, delays, inspections, and so on related to a process. One of the seven tools of quality
FLOW CHART
A system in which work flows over a stationary path, usually with little variance in the rate of flow. This is known as repetitive manufacturing if discrete units are produced, and otherwise is referred to as continuous manufacturing
FLOW PROCESSING
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 ____ is often referred to as a mass production shop or is said to have a continuous manufacturing layout. The plant layout is designed to facilitate a product “flow”. Some process industries are extreme examples of ____. Each product, through 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
Inventory that is carried as a cushion to protect against forecast error
FLUCTUATION INVENTORY
An estimate of future demand. Various techniques attempt to predict one or more of the four components of demand
FORECAST
The difference between actual demand and forecast demand, stated as an absolute value or as a percentage
FORECAST ERROR
A scheduling technique where the scheduler proceeds from a known start date and computes the completion date for an order, usually proceeding from the first operation to the last. Dates generated by this technique are generally the earliest start dates for operations
FORWARD SCHEDULING
A set of marketing tools to direct the business offering to the customer.
FOUR P’s
The grouping of shipments to obtain reduced costs or improved utilization of the transportation function
FREIGHT CONSOLIDATION
FREIGHT FORWARDER
FREIGHT FORWARDER
A facility configuration in which operations of a similar nature or function are grouped together; an organization structure based on departmental specialty (EX: saw, lathe, mill, press)
FUNCTIONAL LAYOUT
- 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 it’s originator, Henry L. Gantt
GANTT CHART
The two reason why a ____ is used are:
1) Machine loading: one horizontal line is used to represent capacity and another is used to represent load against that capacity
2) Monitoring job progress: 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
A Japanese word meaning “shop floor”
GEMBA
A Japanese phrase meaning “visit the shop floor to observe what is occurring”
GENCHI GENBUTSU
GENERAL AND ADMINISTRATIVE EXPENSES (G&A)
GENERAL AND ADMINISTRATIVE EXPENSES (G&A)
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
The responsibility of the supplier to dispose of packaging materials or environmentally sensitive materials such as heavy metals
GREEN REVERSE LOGISTICS
The difference between total revenue and the Costs of goods sold (COGS)
GROSS MARGIN
The total of independent and dependent demand for a component before the netting of on-hand inventory and scheduled receipts
GROSS REQUIREMENTS
A Japanese word meaning “reflection”
HANSEI
A form of inventory buildup to buffer against some event that may not happen. ____ planning involves speculation related to potential labor strikes, price increases, unsettled governments, and events that could severely impair a company’s strategic initiatives. Risk and consequence are unusually high, and top management approval is often required
HEDGE INVENTORY
In Just-in-time philosophy, an approach to level production throughout the supply chain to match the planned rate of end product sales
HEIJUNKA
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 lets people see patterns that are difficult to see in a simple table of numbers
HISTOGRAM
A Japanese word meaning “statement of objectives”
HOSHIN
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
- The available capacity that exists on nonconstraint resources beyond the capacity required to support the constraint.
IDLE CAPACITY
The two components of ____ are:
1) Protected capacity
2) Excess capacity
IDLE CAPACITY
A financial statement showing the net income for a business over a given period of time
INCOME STATEMENT
INCOTERMS
INCOTERMS
INDENTED BILL OF MATERIAL
INDENTED BILL OF MATERIAL
The demand for an item that is unrelated to the demand for other items.
Some examples of ____ are:
1) Finished goods
2) Parts required for destructive testing
3) Service parts requirements
INDEPENDENT DEMAND
Material handling devices used in warehouses. Unlike conveyors, ____ are not confined to a fixed route
INDUSTRIAL TRUCKS
Calculation of the capacity required at work centers int eh time period regardless of the capacity required to perform the work
INFINITE LOADING
A technique for capacity control where planned and actual inputs and planned and actual outputs of a work center are monitored
INPUT/OUTPUT CONTROL (I/O)
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
What are the 6 steps in the House of Quality?
The 6 steps in the ____ are:
1) Identify customer requirements
2) Identify supporting technical design requirements
3) Compare customer requirements to the technical design requirements and assign relationship ratings
4) Assign importance to the customer requirements
5) Evaluate competitors
6) Identify technical features to be deployed in the final design of the product
1) Shipments moved by different types of equipment combining the best features of each mode
2) The use of two or more different carrier modes in the through movement of a shipment.
INTERMODAL TRANSPORT
Costs relating to problems before the product reaches the customer
EX: Rework, scrap, downgrades, reinspection
INTERNAL FAILURE COSTS
INTERNAL SETUP TIME
INTERNAL SETUP TIME
One plant’s need for a part or product that is produced by another plant or division within the same organization. Although it is not a customer order, it is usually handled by the master production scheduling system in a similar manner
INTERPLANT DEMAND
Material moving between two or more locations, usually separated geographically
IN-TRANSIT INVENTORY
A forecast based on internal factors, such as an average of past salesQ
INTRINSIC FORECAST METHOD
INVENTORY ACCURACY
INVENTORY ACCURACY
A change made to an inventory record to correct the balance, to bring it in line with actual physical inventory balances. A ____ either increases or decreases the item record on-hand balance
INVENTORY ADJUSTMENT
Inventory used to protect the throughput of an operation or the schedule against the negative effects caused by delays in delivery, quality problems, delivery of incorrect quantity, etc
INVENTORY BUFFER
The activities and techniques of maintaining the desired level of items, whether raw materials, WIP, or finished goods
INVENTORY CONTROL
The branch of business management concerned with planning and controlling inventories
INVENTORY MANAGEMENT
Inventory models for the replenishment of inventory. Independent demand inventory ordering models include
INVENTORY ORDERING SYSTEM
The number of times that an inventory cycles, or “turns over” during the year
INVENTORY TURNOVER
The Japanese term for the practice of stopping the production line when a defect occurs
JIDOKA
A Japanese word meaning voluntary study groups
JISHUKEN
A cost accounting system in which costs are assigned to specific jobs. The system can be used with either actual or standard costs in the manufacturing of distinguishable units or lots of products
JOB COSTING
An organization in which similar equipment is organized by function. each job follows a distinct routing through the shop
JOB SHOP
The production planning and control techniques used to sequence and prioritize production quantities across operations in a job shop
JOB SHOP SCHEDULING
The Japanese term for improvement; continuing improvement involving everyone-managers and workers. Finding and eliminating waste in machinery, labor, or production methods
KAIZEN
a method of JIT 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
KANBAN
A financial or nonfinancial measure, either tactical or strategic, that is linked to specific strategic goals or objectives
KEY PERFORMANCE INDICATOR (KPI)
This cost includes the product cost plus the cost of logistics, such as warehousing, transportation, and handling fees.
LANDED COSTS
A span of time required to perform a process (or series of operations). The time between recognition of the need for an order and the receipt of the goods
LEAD TIME
A technique used in MRP where a planned order receipt in one time period will require the release of that order in an earlier time period based on the lead time for the item.
LEAD TIME OFFSET
A specific business activity index that indicates future trends
LEADING INDICATOR
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
LEAN PRODUCTION
A measure of satisfying demand through inventory or by the current production schedule in time to satisfy the customers’ requested delivery dates and quantities.
LEVEL OF SERVICE
LEVEL PRODUCTION METHOD
LEVEL PRODUCTION METHOD
Each day’s customer demand is scheduled to be built on the day it will be shipped. A ____ is the output of the load-leveling process.
LEVEL SCHEDULE
An accounting/financial term representing debts or obligations owed by a company to creditors.
LIABILITIES
Within physical distribution, cost elements that vary by distance traveled and not by weight carried.
LINE-HAUL COSTS
The amount of planned work scheduled for actual work released to a facility, work center, or operation for a specific span of time. Usually expressed in terms of standard hours of work or, when items consume similar resources at the same rate, units of production
LOAD
orders out in time or rescheduling operations so that the amount of work to be done in sequential time periods tends to be distributed evenly and is achievable.
LOAD LEVELING
The art and science of obtaining, producing, and distributing material and product in the proper place and in proper quantities
LOGISTICS
A quantity produced together and sharing the same production costs and specifications
LOT
A set of procedures used to maintain lot integrity from raw materials, from the supplier through manufacturing to consumers
LOT CONTROL
A lot-sizing technique that generates planned orders in quantities equal to the net requirements in each period
LOT-FOR-LOT
amount of a particular item that is ordered from the plant or a supplier or issued as a standard quantity to the production process
LOT SIZE
Inventory that results whenever quantity price discounts, shipping costs, setup costs, or similar considerations make it more economical to purchase or produce in larger lots than are needed for immediate purposes.
LOT SIZE INVENTORY
Items used in support of general operations and maintenance such as maintenance supplies, spare parts, and consumables used in the manufacturing process and supporting operations
MAINTENANCE, REPAIR, AND OPERATING SUPPLIES
The act of deciding whether to produce an item internally or buy it from an outside supplier. Some factors to consider in the ____ decision are:
1) Costs
2) Capacity availability
3) Proprietary and/or specialized knowledge
4) Quality considerations
5) Skill requirements
6) Volume
7) Timing
MAKE OR BUY DECISION
A production environment where a good or service can be made after receipt of a customer’s order
MAKE TO ORDER
A production environment where products can be and usually are finished before receipt of a customer order
MAKE TO STOCK
A calendar used in inventory and production planning functions that consecutively numbers only the working days so that the component and work order scheduling may be done based on the actual number of workdays available
MANUFACTURING CALENDAR
The total time required to manufacture an item, exclusive of lower level purchasing lead time
MANUFACTURING LEAD TIME
A document, group of documents, or schedule conveying authority for the manufacture of specified parts or products in specified quantities
MANUFACTURING ORDER
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
The series of operations performed upon material to convert it from the raw material or a semi-finished state to a state of further completion
MANUFACTURING PROCESS
A method for the effective planning of all resources of a manufacturing company
MANUFACTURING RESOURCE PLANNING (MRP II)
Responding to customers’ needs
MARKET DRIVEN
The basic plan marketing expects to use to achieve its business and marketing objectives in a particular market
MARKET STRATEGY
The creation of a high-volume product with large variety so that a customer may specify an exact model out of a large volume of possible end items while manufacturing cost is low due to large volume
MASS CUSTOMIZATION
A group of business processes that includes the following activities:
1) Demand management
2) Production and resource planning
3) Master scheduling
MASTER PLANNING
A line on the master schedule grid that reflects the anticipated build schedule for those items assigned to the master scheduler. It represents what the company plans to produce expressed in specific configurations, quantities, and dates
MASTER PRODUCTION SCHEDULE (MPS)
A format that includes time periods, the forecast, customer orders, projected available balance (PAB), ATP, and the MPS. Some of the things that the ____ takes into account are:
1) The forecast
2) The production plan
3) Backlog
4) Availability of resources
5) Availability of capacity
6) Management policies and goals
MASTER SCHEDULE
A set of techniques that uses bill of materials (BOM) data, inventory data, and the MPS to calculate requirements for materials. It makes recommendations to release replenishment orders for material. Further, because it is time-phased, it makes recommendations to reschedule open orders when due dates and need dates are not in phase
MATERIAL REQUIREMENTS PLANNING
The movement of items from one point to another inside a facility or between facilities
MATERIALS HANDLING
The grouping of management functions supporting the complete cycle of material flow, from the purchase and internal control of production materials to the planning and control of WIP to the warehousing, shipping, and distribution of the finished product
MATERIALS MANAGEMENT
The average of the absolute values of the deviations of observed values from some expected value
MEAN ABSOLUTE DEVIATION (MAD)
A paradigm of how the world works formed by a person’s experiences and assumptions
MENTAL MODEL
A regular route for pickup of mixed loads from several suppliers
MILK RUN
A type of order point replenishment system where the min is the order point, and the max is the “order up to” inventory level
MIN-MAX SYSTEM
Making several different parts or products in varying lot sizes sot hat a factory produces close tot eh same mix of products that will be sold that day. The goal of ____ is to build every model every day, according to daily demand
MIXED-MODEL PRODUCTION
MIXED MODEL SCHEDULING
MIXED MODEL SCHEDULING
Using the same set of components in a variety of finished goods
MODULARIZATION
The time that a job spends in transit from one operation to another in the plant
MOVE TIME
Waste; in lean manufacturing, costs are reduced by reducing waste within a system. The 7 categories of ____ are:
1) Overproduction (excess or too early)
2) Waiting
3) Transportation (unneeded movements)
4) Processing
5) Motion (activities that do not add value)
6) Inventory
7) Defective units
MUDA
A display of all of the components directly or indirectly used in a parent, together with the quantity required of each component
MULTILEVEL BILL OF MATERIAL
Procurement of a good or service from more than one independent supplier
MULTISOURCING
A Japanese word meaning unevenness or variability
MURA
A Japanese word meaning strain or overburden
MURI
Costs associated with the formal evaluation and audit of quality in the firm
EX: Inspection, quality audits, testing, calibration, checking time
APPRAISAL COSTS
The act of combining several small processes to form one larger process
NESTING
In MRP, the ____ for a pat or an assembly are derived as a result of applying gross requirements and allocations against inventory on hand, scheduled receipts, and safety stock
NET REQUIREMENTS
The quantity shown in the inventory records as physically being in stock
ON-HAND BALANCE
A measure (percentage) of meeting the customer’s originally negotiated delivery request date
ON-TIME SCHEDULE PERFORMANCE
- A kanban system where only a move card is employed. Typically, the work centers are adjacent, therefore no production card is required
ONE-CARD KANBAN SYSTEM
A released manufacturing order or purchase order; an unfulfilled customer order
OPEN ORDER
All the money an organization spends in generating “goal units”
OPERATING EXPENSE
The planning, scheduling, and control of the activities that transform inputs into finished goods and services
OPERATIONS MANAGEMENT
Machine operators having the flexibility to solve problems and to do other tasks beyond their immediate responsibilities
OPERATOR FLEXIBILITY
The process of accepting and translating what a customer wants into terms used by the manufacturer or distributor. The commitment should be based on the ATP line in the master schedule.
ORDER ENTRY
Selecting or “picking” the required quantity of specific products for movement to a packaging area and documenting that the material was moved from one location to shipping
ORDER PICKING
A set inventory level where, if the total stock on hand plus on order falls to or below that point, action is taken to replenish the stock
ORDER POINT
The process of making a delivery commitment (IE: Answering “when can you ship?”)
ORDER PROMISING
Those competitive characteristics that a firm must exhibit to be a viable competitor in the marketplace
ORDER QUALIFIERS
Those competitive characteristics that cause a firm’s customers to chose that firm’s goods and services over those of its competitors. ____ can be considered a competitive advantage for the firm
ORDER WINNERS
Used in calculating order quantities, the costs that increase the number of orders placed increases
ORDERING COST
The process of having suppliers provide goods or services that were previously provided internally
OUTSOURCING
The costs incurred in the operation of a business that cannot be directly related to the individual goods or services produced
OVERHEAD
OVERLAPPED SCHEDULE
OVERLAPPED SCHEDULE
An accounting/financial term representing the residual claim by the company’s owners or shareholders, or both, to the company’s assets less its liabilities
OWNER’S EQUITY
In lean the philosophy is to produce at the market rate of consumption. Because lines cannot be perfectly balanced, the ____ is the resource requiring the longest time to produce among the set of activities in a line or cell. This operation determines the flow through the line or cell
PACEMAKER
ORDER POINT FORMULA
OP = DDLT + SS
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
a calculation of the space needed to store a certain number of pallets
PALLET POSITIONS
The item produced from one or more components
PARENT ITEMS
PARETO’S LAW
PARETO’S LAW
PARTICIPATIVE DESIGN/ENGINEERING
PARTICIPATIVE DESIGN/ENGINEERING
In MRP and MPS, the capability to identify for a given item the sources of its gross requirements and/or allocations. ____ can be thought of as active where-used information
PEGGING
PERFORMANCE STANDARD
PERFORMANCE STANDARD
A lot-sizing technique under which the lot size is equal to the net requirements for a given number of periods
PERIOD ORDER QUANTITY
A method of aggregating requirements to place deliveries of varying quantities at evenly spaced time intervals, rather than variably spaced deliveries of equal quantities
PERIODIC REPLENISHMENT
A computer record or manual document on which each inventory transaction is posted so that a current record of the inventory is maintained
PERPETUAL INVENTORY RECORD
Determination of inventory quantity by actual count. The 3 types of ____ are:
1) Continuous
2) Periodic
3) Annual
PHYSICAL INVENTORY
The transportation of goods from supplier to buyer
PHYSICAL SUPPLY
A document that lists the material to be picked for manufacturing or shipping orders
PICKING LIST
Transportation costs based on the number of pick ups and the weight of the cargo
PICKUP AND DELIVERY COSTS
- Inventory in the transportation network and the distribution system, including the flow through intermediate stocking points. Some flow time factors that influence the amount of ____ are:
1) Order transmission
2) Order processing
3) Scheduling
4) Shipping
5) Transportation
6) Receiving
7) Stocking
PIPELINE STOCK
A four-step process for quality improvements.
AKA: Shewhart cycle, Deming circle
PLAN-DO-CHECK-ACTION (PDCA)
- A suggested order quantity, release date, and due date created by the planning system’s logic when it encounters net requirements in processing MRP
PLANNED ORDER
- The quantity planned to be received at a future date as a result of a planned order release. ____ differ from scheduled receipts in that they have not been released
PLANNED ORDER RECEIPT
A row on an MRP table that is derived from planned order receipts by taking the planned receipt quantity and offsetting to the left by the appropriate lead time
PLANNED ORDER RELEASE
An artificial grouping of items or events in the BOM format used to facilitate master scheduling and master planning. It does not represent a buildable product, but is used to simplify forecasting, master production scheduling, and MRP. The book example for \_\_\_\_ is a bicycle, with: Color 30% Blue 30% Red 40% White
Size
25% Small
50% Medium
25% Large
PLANNING BILL OF MATERIAL
- The amount of time a plan extends into the future. For a Master schedule, the ____ is usually set to cover a minimum of cumulative lead time plus time for lot sizing low-level components and for capacity changes of primary work centers of key suppliers
PLANNING HORIZON
The relief of inventory and computation of sales data at the time and place of sale, generally through the use of bar coding or magnetic media and equipment
POINT OF SALE (POS)
A product design strategy that shifts product differentiation closer to the consumer by postponing identity changes, such as assembly or packaging, to the last possible supply chain location
POSTPONEMENT
The costs caused by improvement activities that focus on the reduction of failure and appraisal costs. Some examples of ____ are:
1) Education
2) Quality training
3) Supplier certification
PREVENTION COSTS
The activities, including adjustments, replacements, and basic cleanliness, that forestall machine breakdown. The purpose of ____ 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
PREVENTATIVE MAINTENANCE
The process of communicating start and completion dates to manufacturing departments in order to execute a plan. The Dispatch list is the tool normally used to provide start and completion dates and priorities for ____, and it is based on the current plan and status of all open orders
PRIORITY CONTROL
The function of determining what material is needed and when. MPS and MRP are the elements used for the planning and replanning process to maintain proper due dates on required materials.
PRIORITY PLANNING
- A group that provides transportation exclusively within an organization
PRIVATE CARRIER
A planned series of actions or operations that advances a material or procedure from one stage of completion to another
PROCESS
- The quantity or volume of output that is to be completed at a workstation before switching to a different type of work or changing an equipment setup
PROCESS BATCH
The speed and ease with which the manufacturing transformation tasks can respond to internal or external changes
PROCESS FLEXIBILITY
The business functions of procurement planning, purchasing, inventory control, traffic, receiving, incoming inspection, and salvage operations
PROCUREMENT
The time required to design a product, modify or design equipment, conduct market research, and obtain all necessary materials. ____ begins when a decision has been made to accept an order to produce a new product, and ends when production commences
PROCUREMENT LEAD TIME
Any good or service produced for sale, barter, or internal use
PRODUCT
Cost allocated by some method to the products being produced. Initially recorded in asset (inventory) accounts, product costs become an expense (cost of sales) when the product is sold
PRODUCT COST
A strategy of making a product distinct from the competition on a nonprice basis such as availability, durability, quality, or reliability
PRODUCTION DIFFERENTIATION
A group of products with similar characteristics, often used in production planning (or S&OP)
PRODUCT FAMILY
Layout of resources arranged sequentially based on the product’s routing
PRODUCT LAYOUT
The stages a new product goes through from beginning to end. The 5 stages in the ____ are:
1) Introduction
2) Growth
3) Maturity
4) Decline
5) Phase-out
PRODUCT LIFE CYCLE
The proportion of individual products that make up the total production or sales volume. Changes in the ____ can mean drastic changes in the manufacturing requirements for certain types of labor and material
PRODUCT MIX
The function of routing and dispatching the work to be accomplished through the production facility and of performing supplier control. ____ encompasses the principles, approaches, and techniques needed to schedule, control, measure, and evaluate the effectiveness of production operations
PRODUCTION ACTIVITY CONTROL (PAC)
A series of pieces of equipment dedicated to the manufacture of a specific number of products or families
PRODUCTION LINE
The agreed-upon plan that comes from the production planning (S&OP) process, specifically the overall level of manufacturing output planned to be produced, usually stated as a monthly rate for each product family
PRODUCTION PLAN
A process to develop tactical plans based on setting the overall level of manufacturing output (production plan) and other activities to best satisfy the current planned level of sales (sales planes or forecasts), while meeting general business objectives of profitability, productivity, competitive customer lead times, etc as expressed in the overall business plan
PRODUCTION PLANNING
- In the Theory of constraints (TOC), the inventory required to meet production requirements without allowances for unplanned delays
PRODUCTIVE CAPACITY
An overall measure of the ability to produce a good or a service. It is the actual output of production compared to the actual input of resources. ____ is a relative measure across time or against common entities (labor, capital, etc)
PRODUCTIVITY
The difference between the sales and Cost of goods sold (COGS) for an organization, sometimes expressed as a percentage of sales
PROFIT MARGIN
An inventory balance projected into the future. The running sum of on-hand inventory minus requirement plus scheduled receipts and planned orders
PROJECTED AVAILABLE BALANCE (PAB)
The resource capacity needed to protect system throughput-ensuring that some capacity above the capacity required to exploit the constraint is available to catch up when disruptions inevitably occur
PROTECTIVE CAPACITY
In the Theory of constraints (TOC) the amount of inventory required relative to the protective capacity in the system to achieve a specific throughput rate at the constraint
PROTECTIVE INVENTORY
- Protecting items by surrounding them with impact absorbing material. The protected package must be small enough to be transported and stored
PROTECTIVE PACKAGING
The production of items only as demanded for use or to replace those taken for use
PULL SYSTEM
- The purchaser’s authorization used to formalize a purchase transaction with a supplier. When given to a supplier, a ____ should contain statements of:
1) The name
2) Part number
3) Quantity
4) Description
5) Price of goods or services ordered
6) Terms as to payment
7) Discounts
8) Dates of performance
9) Transportation
PURCHASE ORDER
An authorization to the purchasing department to purchase specified materials in specific quantities within a specified time
PURCHASE REQUISITION
The total lead time required to obtain a purchased item
PURCHASING LEAD TIME
The production of items at times required by a given schedule planned in advance
PUSH SYSTEM
Conformance to requirements or fitness for use. The 5 principle approaches to ____ are:
1) Transcendent quality is an ideal, a condition of excellence
2) Product-based quality is based on a product attribute
3) User-based quality is fitness for use
4) Manufacturing-based quality is conformance to requirements
5) Value-based quality is the degree of excellence at an acceptable price
QUALITY
A producer’s responsibility to provide 100% acceptable quality material to the consumer of the material. The objective of ____ is to reduce or eliminate shipping or receiving inspections and line stoppages as a result of supplier defects
QUALITY AT THE SOURCE
The process of measuring quality conformance by comparing the actual with a standard for the characteristic and acting on the difference
QUALITY CONTROL
The overall costs associated with prevention activities and the improvement of quality throughout a firm before, during, and after production of a product. The 4 ____ are:
1) Internal failure
2) External failure
3) Appraisal
4) Preventative
QUALITY COSTS
A price reduction allowance determined by the quantity or value of a purchase
QUANTITY DISCOUNT
A waiting line. In manufacturing, the jobs at a given work center waiting to be processed. As ____ increase, so do average queue time and WIP inventory
QUEUE
Having a small setup time in order to have small production batches and small WIP inventory
QUICK CHANGEOVER
A system of using electronic tags to store data about items. Accessing these data is accomplished through a specific radio frequency and does not require close proximity or line-of-site access for data retrieval
RADIO FREQUENCY IDENTIFICATION (RFID)
A storage technique in which parts are placed in any space that is empty when they arrive at the storeroom. Although ____ method requires the use of a locator file to identify part locations, it often requires less storage space than a fixed-location storage method
RANDOM-LOCATION STORAGE
A fluctuation in data that is caused by uncertain or random occurrences
RANDOM VARIATION
The expected output capability of a resource or system. Capacity is traditionally calculated from data such as planned hours, efficiency, and utilization
RATED CAPACITY
Purchased items or extracted materials that are converted via the manufacturing process into components and parts
RAW MATERIALS
The function encompassing the physical receipt of material, the inspection of the shipment for conformance with the PO (quantity and damage), the identification and delivery to destination, and the preparation of receiving reports
RECEIVING
A measure of the conformity of recorded values in a bookkeeping system to the actual values
RECORD ACCURACY
An industrial process in which worn-out products are restored to like-new condition. In contrast, a repaired product normally retains its identity and only those parts that have failed or badly worn are replaced ore serviced
REMANUFACTURING
The fixed quantity that should be ordered each time the available stock (on-hand plus on-order) falls to or below the reorder point.
REORDER QUANTITY
The repeated production of the same discrete products or family of products
REPETITIVE MANUFACTURING
The total period of time that elapses from the moment it is determined that a product should be reordered until the product is back on the shelf, available for use
REPLENISHMENT LEAD TIME
A document used to solicit vendor responses when a product has been selected and price quotations are needed from several vendors
REQUEST FOR QUOTE (RFQ)
The process of calculating the demand for the components of a parent item by multiplying the parent item requirements by the component usage quantity specified in the BOM
REQUIREMENTS EXPLOSION
Capacity planning conducted at the business plan level. The process of establishing, measuring, and adjusting limits or levels of long-range capacity
RESOURCE PLANNING
An internet auction in which suppliers attempt to underbid their competitors. Company identities are known only by the buyer
REVERSE AUCTION
A complete supply chain dedicated to the reverse flow of products and materials for the purpose of returns, repair, remanufacture, and/or recycle
REVERSE LOGISTICS
Analytical methods to determine the core problem(s) of an organization, process, product, market, etc
ROOT CAUSE ANALYSIS
- The process of converting the MPS into requirements for key resources, including labor, machinery, warehouse space, suppliers’ capacity, and money. The 3 approaches to performing ____ are:
1) Bill of labor approach
2) Capacity planning using overall factors approach
3) Resource profile approach
ROUGH-CUT CAPACITY PLANNING
Information detailing the method of manufacturing of a particular item. ____ includes
1) Operations to be performed
2) The sequence of these operations
3) The various work centers involved
4) Standards for setup and run
ROUTING
- The time required to process a piece or lot at a specific operation. ____ does not include setup time
RUN TIME
A quantity of stock planned to be in inventory to protect against fluctuations in demand or supply. The additional inventory and capacity planned as protection against forecast errors and short-term changes in the backlog. Overplanning can be used to create ____
SAFETY STOCK
A process to develop tactical plans that provide management the ability to strategically direct its businesses to achieve competitive advantage on a continuous basis by integrating customer-focused marketing plans for new and existing products with the management of the supply chain.
SALES & OPERATIONS PLANNING (S&OP)
A time-phased statement of expected customer orders anticipated to be received (incoming sales, not outgoing shipments) for each major product family or item
SALES PLAN
A quantity-versus-time graphic representation of the order point/order quantity inventory system showing inventory being received and then used up and reordered
SAWTOOTH DIAGRAM
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
SCATTER CHART
SCATTERPLOT
An open order that has an assigned due date
SCHEDULED RECEIPT
- The act of creating a schedule, such as a shipping schedule, master production schedule, maintenance schedule, or supplier schedule`
SCHEDULING
Material outside of specifications and possessing characteristics that make rework impractical
SCRAP
Inventory built up to smooth production in anticipation of a peak seasonal demand
SEASONAL INVENTORY
A repetitive pattern of demand from year to year with some periods considerably higher than others
SEASONALITY
a Japanese word meaning teacher or one with experience
SENSEI
- Sometimes used to describe those activities that support the production or distribution functions in any organization
EX: Customer service, field service
SERVICE
An organization that provides an intangible product; all organizations except farming, mining, and manufacturing
SERVICE INDUSTRY
Those modules, components, and elements that are planned to be used without modification to replace an original part
SERVICE PARTS
SETUP
SETUP
The time required for a specific machine, resource, work center, process, or line to convert from the production of the last good piece of item A to the first good piece of item B
SETUP TIME
Shigeo Shingo, a pioneer of the Japanese JIT philosophy, identified seven barriers to improving manufacturing.
SHINGO’S SEVEN WASTES
____ are:
1) Overproduction
2) Motion
3) Transportation
4) Stocks
5) Motion
6) Making defects
7) Processing itself
SHINGO’S SEVEN WASTES
A document that lists the pieces in a shipment. A ____ usually covers an entire load regardless of whether the load is to be delivered to a single destination or many destination. ____ usually list (for each destination in the load):
1) Items
2) Piece count
3) Total weight
4) Destination name and address
SHIPPING MANIFEST
Using the operational data to perform what-if evaluations of alternative plans. ___ answer the questions:
1) “Can we do it?”, if yes…
2) “Do we really want to?” (does it make financial sense)
SIMULATIONS
A display of components that are directly used in a parent item. It shows only the relationships one level down
SINGLE-LEVEL BILL OF MATERIAL
A company that is selected to have 100% of the business for a part although alternative suppliers are available
SINGLE-SOURCE SUPPLIER
A set of concepts and practices that key on reducing variability in processes and reducing deficiencies in the product
SIX SIGMA
Simple, measurable, achievable, reasonable, and trackable
SMART
A manufacturing order quantity that has been divided into two or more smaller quantities, usually after the order has been released. The purpose of ____ is to reduce the lead time of the order
SPLIT LOT
Variability of an action. Often measured by the range of standard deviation of a particular dimension
SPREAD
- The target costs of an operation, process, or product including direct materials, direct labor, and overhead charges
STANDARD COSTS
The length of time that should be required to:
1) Set up a given machine or operation and
2) Run one batch or more of parts, assemblies, or end products through that operation
STANDARD TIME
In project management, the time an activity begins; this may be defined as an actual ____ or a planned ____
START DATE
The application of statistical techniques to monitor and adjust an operation
AKA: Statistical quality control (SQC)
STATISTICAL PROCESS CONTROL (SPC)
An item at a particular geographical location
STOCK KEEPING UNIT
The costs associated with a stockout. Examples of ____ are:
1) Lost sales
2) Backorder costs
3) Expediting
4) Additional manufacturing and purchasing costs
STOCKOUT COSTS
A measure of the effectiveness with which a company responds to actual demand or requirements
STOCKOUT PERCENTAGE
A storage point located upstream of a work station intended to make it easier to see customer requirements
STORE
The plan for how to marshal and determine actions to support the missions, goals, and objectives of an organization
STRATEGIC PLAN
Sending production work outside to another manufacturer
SUBCONTRACTING
SUMMARIZED BILL OF MATERIAL
SUMMARIZED BILL OF MATERIAL
Provider of goods or services; the seller with whom the buyer does business
SUPPLIER
Certification procedures verifying that a supplier operates, maintains, improves, and documents effective procedures that relate to the customers’ requirements
SUPPLIER CERTIFICATION
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
The establishment of a working relationship with a supplier organization whereby two organizations act as one
SUPPLIER PARTNERSHIP
A comprehensive approach to managing an enterprise’s interactions with the organizations that supply the goods and services the enterprises uses. The goal of ____ is to streamline and make more effective the processes between an enterprise and its suppliers
SUPPLIER PARTNERSHIP MANAGEMENT (SRM)
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
The design, planning, execution, control, and monitoring of supply chain activities. The objectives of ____ are:
1) Creating net value
2) Building a competitive infrastructure
3) Leveraging worldwide logistics
4) Synchronizing supply with demand
5) Measuring performance globally
SUPPLY CHAIN MANAGEMENT
SUSTAINABILITY
SUSTAINABILITY
- The set of functional plans 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 PLANS
Sets the pace of production to match the rate of customer demand and becomes the heartbeat of any lean production system
TAKT TIME
An official schedule of taxes and fees imposed by a country on imports or exports
TARIFF
A place where vehicles are loaded and unloaded. Several functions such as weighing cargo and rerouting cargo are performed at __________
TERMINAL
Charges based on the number of times a package is loaded or unloaded. These costs may be reduced by combining shipments
TERMINAL HANDLING COSTS
All the provisions and agreements of a contract
TERMS AND CONDITIONS
A holistic management philosophy developed by Dr. Eliyahu M. Goldratt that is based on the principle that complex systems exhibit inherent simplicity
THEORY OF CONSTRAINTS (TOC)
A cost and managerial accounting system that accumulates costs and revenues into 3 areas:
1) Throughput
2) Inventory
3) Operating expense
THEORY OF CONSTRAINTS ACCOUNTING
A buyer and supplier team with a third party that provided product delivery services
THIRD PARTY LOGISTICS (3PL)
The rate at which the system generates “goal units”
THROUGHPUT
A number of days of data summarized into a columnar or row-wise display. A weekly time bucket would contain all of the relevant data for an entire week. Weekly time buckets are considered to be the largest possible to permit effective MRP.
TIME BUCKET
Protection against uncertainty that takes the form of time
TIME BUFFER
A policy or guidelines established to note where various restrictions or changes in operating procedures take place
TIME FENCE
MRP-like time planning logic for independent demand items, where gross requirements come from a forecast, not via explosion
TIME-PHASED ORDER POINT (TPOP)
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
In breakeven analysis, the ____ is composed of total fixed and variable costs per unit, multiplied by the number of units provided. Breakeven quantity occurs where the total cost curve and total sales revenue curve intersect. (Cost-Volume Profit)
Also, The sum of the costs of acquiring and carrying the item.
TOTAL COST CURVE
The sum of all costs associated with every activity of the supply chain. The acquisition cost is often a very small portion of the total cost of ownership
TOTAL COST OF OWNERSHIP (TOC)
All the costs of operating a firm; total variable costs plus total fixed costs
TOTAL COSTS
The essential costs to move a freight cargo including driver’s wages, and depreciation of the vehicle; these costs vary with the distance shipped
TOTAL LINE-HAUL COSTS
Preventative 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)
Japanese-style management approach to quality improvement; a management approach to long-term success through customer satisfaction
TOTAL QUALITY MANAGEMENT (TQM)
The registration and tracking of parts, processes, and materials used in production, by lot or serial number
TRACEABILITY
The ratio of the cumulative algebraic sum of the deviations between the forecasts and the actual values to the mean absolute deviation. Used to signal when the validity of the forecasting model might be in doubt
TRACKING SIGNAL
A department or function charged with the responsibility for arranging the most economic classification and method of shipment for both incoming and outgoing materials and products.
TRAFFIC
A distribution network that deals with change of ownership of goods and services including the activities of negotiation, selling, and contracting
TRANSACTION CHANNEL
- Inventory in transit between manufacturing and stocking locations
TRANSIT INVENTORY
A standard allowance that is assumed on any given order for the movement of items from one operation to the next
TRANSIT TIME
The function of planning, scheduling, and controlling activities related to mode, vendor, and movement of inventories into and out of an organization
TRANSPORTATION
Inventory that is in transit between locations
TRANSPORTATION INVENTORY
General upward or downward movement of a variable over time
TREND
Carriers that deliver/charge only for full truckload shipments
TRUCKLOAD CARRIERS
A type of fixed-order system in which inventory is carried in two bins. A replenishment quantity is is ordered when the first bin is empty
TWO-BIN INVENTORY SYSTEM
A kanban system where a move card and production card are employed. The move authorizes the movement of a specific number of parts from a source to a point of use. The production card authorizes the production of a given number of parts for use or replenishment
TWO-CARD KANBAN SYSTEM
- Production lines shaped like the letter “U”. The shape allows workers to easily perform several non-sequential tasks without much walk time
U-LINES
- In lean, the distribution of work between work stations so that the time required for each station to complete all tasks is as close to equal as possible
UNIFORM PLANT LOADING
Total labor, material, and overhead cost for one unit of production
UNIT COST
- A unit to be transported that consists of several items arranged so the package can be moved as a single unit
UNIT LOADS
The unit in which the quantity of an item is managed
UNIT OF MEASURE
The consolidation of several units into larger units for fewer handlings
UNITIZATION
Used as a relative reference within a firm or supply chain to indicate moving in the direction of the raw material supplier
UPSTREAM
A measure of how intensively a resource is being used to produce a good or service. ____ compares actual time used to available time
UTILIZATION
- The actual increase of utility from the viewpoint of the customer as it is transformed from raw material to finished inventory
VALUE ADDED
VALUE ANALYSIS
VALUE ANALYSIS
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
The process of creating, producing, and delivering a good or service to the market. The value stream may be controlled by a single business or a network of several businesses. Encompasses the raw material supplier, the manufacture and assembly of the good, and the distribution network. Consists of suppliers, support personnel and technology, the service “producer” and the distribution channel
VALUE STREAM
A graph displaying the sequence of operations needed to produce and deliver a product or service. Drawing the current production process/flow and then attempting to draw the most effective production process/flow
VALUE STREAM MAPPING
An operating cost that varies directly with a change of one unit in the production volume
VARIABLE COST
The difference between the expected (budgeted or planned) value and the actual
VARIANCE
The relative speed of all transactions, collectively, within a supply chain community. A maximum ____ is desirable because it indicates higher asset turnover for stockholders and faster order-to-delivery response for customers
VELOCITY
A means of optimizing supply chain performance in which the supplier has access to the customer’s inventory data and is responsible for maintaining the inventory level required by the customer
VENDOR-MANAGED INVENTORY (VMI)
A simple inventory control system where the inventory reordering is based on actually looking at the amount of inventory on hand. Usually used for low-value items, such as nuts and bolts
VISUAL REVIEW SYSTEM
Actual customer descriptions in words for the functions and features customers desire for goods and services
VOICE OF THE CUSTOMER (VOC)
- The time a job remains at a work center after an operation is complete until it is moved to the next operation
WAIT TIME
An inventory management technique in which material enters a plant and is processed through the plant into finished goods without ever having entered a formal stock area
WALL-TO-WALL INVENTORY
- The activities related to receiving, storing, and shipping materials to and from production or distribution locations
WAREHOUSING
- Any activity that does not add value to the good or service in the eyes of the consumer
WASTE
- A method of selecting and sequencing picking lists to minimize the waiting time of the delivered material. Shipping orders may be picked in waves combined by common carrier or destination, and manufacturing orders in waves related to work centers
WAVE PICKING
A document containing a list of goods with shipping instructions related to a shipment
WAYBILL
Paths over which a transportation company moves cargo, including right-of-way, roadbed, and railroad tracks. ____ may be publicly or privately owned
WAYS
The process of evaluating alternate strategies by answering the consequences of changes to forecasts, manufacturing plans, inventory levels, and so forth
WHAT-IF ANALYSIS
- A listing of every parent item that calls for a given component, and the respective quantity required, from a BOM file
WHERE-USED LIST
Dissimilar machines grouped together into a production unit to produce a family of parts having similar routings
WORK CELL
A specific production area, consisting of one or more people and/or machines with similar capabilities, that can be considered as one unit for purposes of capacity requirements planning and detailed scheduling
WORK CENTER
A good or goods in various stages of completion throughout the plant, including all material from raw material that has been released for initial processing up to completely processed material awaiting final inspection and acceptance as finished goods inventory
WORK IN PROCESS (WIP)
An authorization to start work on an activity or product
WORK AUTHORIZATION
The amount of good or acceptable material available after the completion of a process
YIELD
A warehouse location methodology that includes some of the characteristics of fixed and random location methods
ZONE
- A method of subdividing a picking list by areas within a storeroom for more efficient and rapid order picking
ZONE PICKING
A graphical and progressive representation of the various steps, events, and tasks that make up an operations process. This diagram provides the viewer with a picture of what actually occurs when a product is manufactured or a service is performed.
PROCESS FLOW DIAGRAM
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
A framework for guiding companies through the process of formally committing to, assessing, defining, implementing, measuring, and communicating the UN Global Compact and its principles.
UN GLOBAL COMPACT MANAGEMENT
– 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, such as 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
