Vocabulary Flashcards
ABC classification
classify into list of decreasing order by annual dollar volume. Then split into 3 classes
A is 10-20% of # of items. 50-70% projected dollar volume
B is 20% of # of items. 20% of projected dollar volume
C is 60-70% of items. 10-30% projected dollar volume
advanced planning and scheduling (APS)
Computer program that uses mathematical algorithms to simulate and optimize the production plan for the short, intermediate, and long-term time periods.
Assesses multiple scenarios
andon
system of lights at each work station used to make workers & management aware of a quality, quantity, or process problem
assignable cause
source of variation in a process that can be isolated.
Especially when of large magnitude or different origin from random variation causes
average outgoing quality limit (AOQL)
maximum average outgoing quality over all possible levels of incoming quality for a given acceptance sampling plan and disposal specification
Regardless of incoming quality the average outgoing defect rate should never be above the AOQL. An individual lot might be but the average over time shouldn’t be.
Assumes defective lots are 100% inspected.
backflush
method of inventory bookkeeping. Theoretical consumption of child items. Computer inventory automatically updated.
backlog
all customer orders received but not yet shipped.
balance sheet
financial statement showing assets, liabilities, and owner’s share of a company at any given time
batch picking
Order pick method. Pick aggregate demand for each item instead of just amount needed immediately. Reduces traffic for each product location.
bias
consistent deviation from the mean in one direction (high or low).
bonded warehouse
buildings or parts of buildings designated by US Secretary of the Treasury for storing imported merchandise. Operated by US Customs
buffer management
Theory of Constraints.
Process in which all expediting in a shop is driven by inventory quantity that is supposed to be kept in the buffers.
Expedites material into the buffers to prevent the constraint from being idle.
bullwhip effect
extreme change in supply position upstream caused by a small change in demand downstream.
business plan
Statement of long-range strategy.
Revenue, cost, and profit objectives accompanied by budgets, projected balance sheet and cash flow statements
capacity requirements planning (CRP)
Process of establishing, measuring, and adjusting limits or levels of capacity.
Determines in detail amount of labor and machine resources required to accomplish production tasks
cellular manufacturing
manufacturing process that produces families of parts within a single line (aka cell) of machines controlled by operators who work only within the line
centralized inventory control
Inventory decision making for all skus exercised from one office or department for an entire company
certified supplier
Status awarded to a supplier tha consistently meets predetermined quality, cost, delivery, financial, and count objectives.
Incoming inspection may not be required
chase production method
Goal is to produce the quantity demanded at any time. Inventory level is stable. Production adjusted to match sales requirements
closed-loop MRP
system built around MRP that also includes production planning, master production scheduling, and capacity requirements planning.
Also includes the feedback that is provided by the execution processes so that planning can be kept valid at all times.
consignment (2 definitions)
A shipment handled by a common carrier.
Also the process of a supplier placing goods at a customer location without receiving payment until after the goods are used or sold.
continuous flow production
Production system in which the productive equipment is organized and sequenced according to the steps involved in production.
Material flow is continuous during the production process.
Routing of jobs is fixed and setups seldom change.
continuous replenishment
Vendor-managed inventory
Supplier is notified daily of actual sales or warehouse shipments and commits to replenishing these without stock-outs and without replenishment orders.
control chart
Graphical comparison of process performance data with predetermined computed control limits.
Used to detect assignable causes of variation (not random variations).
control limit
Statistically determined line on a control chart. If value is outside this limit then process is deemed out of control.
cost of goods sold (COGS)
Accounting classification useful for determining amount of direct materials, direct labor, and allocated overhead associated with the products sold during a given period of time.
cost of poor quality – 4 cost categories
4 categories of cost.
1) Internal failure - found before customer receives the product.
2) External failure.
3) Appraisal costs - incurred to determine the degree of conformance to quality requirements.
4) Prevention cost.
critical chain method
AKA Critical Path Method (CPM)
In the theory of constraints this is a network planning technique for analyzing a project’s completion time.
Used for planning and controlling project activities.
Based on technological or resource constraints.
Tries to minimize or eliminate these
critical path method (CPM)
AKA Critical Chain Method
Network planning technique for analyzing a project’s completion time.
Shows each activity and the associated times in order to identify the constraint.
cumulative available-to-promise
Calculation based on the ATP figure in the master schedule.
= ATP from the previous period + the MPS of the period - the backlog of the period - the sum of the differences between the backlogs and MPSs of all future periods.
customer relationship management (CRM)
The collection and analysis of information designed for sales and marketing decision support. To understand and support existing and potential customer needs.
It includes account management, catalog and order entry, payment processing, credit and adjustments, and other functions
cycle stock
One of the two main conceptual components of any item inventory.
Cycle stock depletes gradually as customer orders are received. It is replenished cyclically when supplier orders are received.
cycle time
The length of time from when material enters a production facility until it exits.
data governance
Overall management of data’s accessibility, usability, reliability, and security. Used to ensure data record accuracy.
decentralized inventory control
Inventory decision making exercised at each stocking location for each SKU kept there.
decoupling inventory
Amount of inventory maintained between entities in a manufacturing/distribution network to create independence between processes or entities.
Objective is to disconnect the rate of use from the rate of supply.
demand lead time
Amount of time potential customer are willing to wait for a good or service.
demand management
The process of planning, executing, controlling, and monitoring the design, pricing, promotion, and distribution of products and services.
Goal is to bring about transactions that meet organizational and individual needs
demand planning
Process of combining statistical forecasting techniques and judgment to construct demand estimates for products.
From the supplier’s raw materials to the consumer’s needs
demurrage
The carrier charges and fees applied when rail freight cars and ships are retained beyond a specified loading or unloading time
detention
Carrier charges and fees applied when truck trailers are retained beyond a specified loading or unloading time
direct labor
Labor specifically applied to the good being manufactured or used in the performance of the service.
discrete manufacturing
Production of distinct items such as automobiles, appliances, or computers.
discrete order picking
A method of picking orders in which the items on one order are picked before the next order is picked
dispatching
The selection and sequencing of available jobs to be run at individual workstations and the assignment of those jobs to workers
distribution requirements planning (DRP)
The function of determining the need to replenish inventory at branch warehouses. .
dock-to-stock
Program through which specific quality and packaging requirements are met before the product is released.
Prequalified product is shipped directly into the customer’s inventory without the receiving inspection.
drop ship
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
drum-buffer-rope (DBR)
Theory of constraints method for scheduling and managing operations that have an internal constraint or capacity-constrained resource
drum schedule
The detailed production schedule for a resource that sets the pace of the entire system. Reconciles the customer requirements with the system’s constraint(s).
