final review
The Classical View of Quality
"99% Good" (3.8s)
The Six Sigma View of Quality
"99.99966% Good" (6s)
Short-range
- detailed planning process for components and parts to produce the master production schedule based on the demand plan e.g. - Daily production plan for every line and model at the Chattanooga, TN. Plant Includes ordering of raw materials, scheduling of human resources, delivery from suppliers, alignment of multiple production lines to feed the final assembly. Includes planning for transportation and warehouse needs Execution based plans
Scheduled Receipt
A committed order awaiting delivery for a specific period
Multilevel Bill of Materials
A comprehensive listing of all the components used in a product, the parent - component relationships along with the quantity of each component required for corresponding parent (the planning factor).
Planned Order Release
A specific order for a specific item and quantity to be released to the shop or to the supplier
Gross Requirement
A time-phased requirement prior to netting out on-hand inventory and lead-time
Mixed Production Strategy
Maintains stable core workforce while using short-term means, such as overtime, subcontracting and part time helpers to manage short-term demand fluctuations. Works well for make-to-stock firms with custom options, seasonal businesses.
What company originated the concept of Six Sigma?
Motorola
___________________ is the maximum amount an organization can complete in a given period of time based on the resources available.
Production Capacity
Projected On-Hand Inventory
Projected closing inventory at end of a period. Beginning inventory minus gross requirements, plus scheduled receipts plus planned receipts from planned order releases.
Available-to-Promise (ATP) Quantity -
The difference between confirmed customer orders & the quantity the firm planned to produce (amount available to other orders).
Sales Activity Management
Tool offering sales reps a guided sequence of sales activities
Time Bucket
Unit of time / time period used in MRP, e.g., days, weeks, months
quality gurus
W. Edwards Deming Philip Crosby Joseph Juran Kaoru Ishikawa
Resource
a source of supply, support, or aid, especially one that can be readily drawn upon when needed
Efficient Consumer Response (ECR)
a strategy to increase the level of services to consumers through close cooperation among retailers, wholesalers, and manufacturers.
Assembly Line
has standard products with a limited number of variations moving through stages of production (Cars, Televisions, Smart phones)
Single software solution
implement the desired applications from a single vendor. Resolves integration and data issues but individual system functionality may be reduced
Enterprise Resource Planning (ERP)
information system connecting all functional areas & operations of an organization via common software infrastructure and database. It ties together the specialized system needs with a common, shared centralized database
Resource Planning
is the process of determining the required resources to effectively and efficiently produce the output required.
Mid Term Business Plan
long-term focus, provides the company's direction and objectives for the long term (3 - 10 years)
Total Quality Management (TQM)
management philosophy based on the principle that every employee must be committed to maintaining high standards of work quality in every aspect of a company's operations
Make-to-Stock (MTS)
manufacture products for inventory based on demand forecasts... a push supply chain
Post-transaction elements
occur after the sale
Safety Stock
quantity of stock planned to be in inventory to protect against fluctuations in demand or supply. Over planning supply versus demand can be used to create safety stock
DPMO = Defects Per Million Opportunities
refer to DPMO equation in ppt
Supply Chain Planning
responsible for determining how operations will best satisfy the requirements created by the Demand Plan balance supply and demand and balance capacity and output
Lot Size
the required quantity of an item for ordering or production
Quick Response
- the rapid replenishment of a customer's stock by a supplier with direct access to data from the customer's point of sale.
Which of the following is an engineering document that shows an inclusive listing of all the component parts and assemblies making up the final product?
Bill of Materials
Intermediate-range
Business Plans (financial, operational, product) establishing annual goals and timing of key events (entering new market, new product introduction) e.g. - VW plans to produce 1,000 Jettas / week at its Chattanooga, TN plant. Normally 1 year - 18 months focused on quarterly goals Basis for detailed operational plans and setting individual objectives Plans are at the product category level, indicating introduction and discontinuation dates Plans are impacted by lead times
Which of the following is not an accurate statement of Customer Relationship Management?
CRM is a more costly marketing & sales process.
Operations managers are continuously involved in planning operations and resources to balance _________ and output.
Capacity
Continuous Flow
Consistent manufacturing of the same product. (gasoline, chemicals, laundry detergent, PC Boards).
Companies work very hard to reduce the number of their present customers which never return. This customer defection is often referred to as?
Customer churn
Customer Relationship Management (CRM) relationships should be built with strategically significant customers. Strategically significant customers are:
Customers with high life-time value Customers who serve as role models for other customers. Customers who inspire change in the supplier and/or the supply chain.
Six Sigma has two key methodologies
DMADV Methodology: DMAIC Methodology:
The Eight Wastes ("DOWN TIME")
Defects Overproduction Waiting Non-Utilized Talent Transportation Inventory Motion Extra-Processing
DMADV
Define, measure, analyze, design, verify For new processes
DMAIC
Define, measure, analyze, innovate, control For current processes
Capacity Planning
Determining the amount of capacity required to produce a good or service in the future.
Three basic production strategies:
Level Chased and Mixed
The basic production strategy that relies on a constant output rate and capacity while varying inventory and backlog levels to handle the fluctuating demand pattern is called:
Level Production Strategy
Supply chain planning is usually hierarchical and can be divided into three broad categories:
Long-range Intermediate-range Short-range
Which of the following MRP terms is the required quantity of an item for ordering or production.
Lot size
The manufacturing strategies include
Make-to-Stock (MTS) Assemble-to-Order (ATO) Make-to-Order (MTO) Engineer-to-Order (ETO)
_______________ is a manufacturing strategy that allows customers to purchase custom products to their specifications.
Make-to-order
Planning factor
Number of components needed to produce a unit of the parent item
Supply Chain Planning in a wholesale / retail environment uses a smaller combination of the planning processes:
Overall company Business Planning (MTP, S&OP) Supply Order Planning Supplier Capacity Planning Distribution Requirements Planning (DRP)
Which of the following is NOT one of the eight wastes of Lean manufacturing?
Overspending
Which quality guru (i.e. expert) is credited with the concept that 'quality is free; defects are costly'
Philip Crosby
The key output from the Material Requirements Plan (MRP) is:
Planned Order Release
MRP output
Planned order releases (purchase & produce)
Which of the following MRP terms represents the number of components needed to produce a unit of the parent item?
Planning Factor
You are a manager at Sunnydale Appliances. A customer who recently purchased a dishwasher contacts you with a problem and requests warranty information. This is an example of?
Post-transaction customer service
Key Tools and Components of CRM
Predicting Customer Behaviors Segmenting Customers Target Marketing Event Based Marketing Cross Selling and Up-Selling Personalizing Customer Communications Relationship or Permission Marketing Analyzing Customer Defection Customer Lifetime Value (CLV)
Lead Management
Prescribed tactics to convert prospects into customers.
Production Planning Strategies
Primary purpose is to establish the production methodology
There are three main foundational aspects of Six Sigma:
Quality is defined by the customer Use of technical tools People involvement
Which of the following is not a Call Center's Tool to improve efficiency and effectiveness?
Reduced hours of operation
Pegging
Relates the gross requirements for a component part to the planned order releases of the parent item, so as to identify the source(s) of the item's gross requirements
Level Production Strategy
Relies on a constant output rate over an extend period of time based on worker productivity while varying inventory and backlog according to fluctuating demand. Works well for make-to-stock firms
The medium-range capacity planning technique used to check the feasibility of the Master Production Schedule (MPS) is called?
Rough-cut Capacity Planning (RCCP)
The Sales Force Automation tool offering sales reps a guided sequence of sales activities is called
Sales Activity Management
Waste Reduction - The Five-S's
Sort - Straighten - Shine - Standardize - Sustain - and safety
Long-range
Strategic Plans involves planning for investments in markets, facilities and major equipment purchase Multi-year plans establishing overall business goals driven by top executives e.g.- VW groups wants to be the #1 car company in the world All division, department complete a plan to achieve the overall goal Normally 3-5 years, top down direction
Which of the following is NOT one of the five pillars of workplace management & organization.
Streamline
Closed Loop MRP system
System for production planning and inventory control. Synchronizes the purchasing of materials with the master production schedule
Some of the ways customers evaluate the customer service capabilities of an organization are through their experiences with human response call centers, automated response call centers, and consumer web sites
TRUE
Aggregate Production Plan (APP)
The Intermediate to long range plan that translates annual business plan & demand forecasts into a production plan for a product family (products that share similar characteristics) in a plant or facility *at least one year*
Master Production Schedule (MPS)
The Intermediate-range plan that provides a detailed breakdown of the aggregate production plan, listing the exact end items to be produced by a specific period.
Sales & Operations Planning (S&OP)
The annual business plan simulates the business for a year - 18 months
Planning factor
The number/quantity of each component or material needed to produce a single unit of the parent item
The Available to Promise calculation represents:
The portion of a company's inventory and planned production to support promising future customer orders
Explosion
The process of converting a parent item's planned order releases into component gross requirements
Material Requirements Planning (MRP)
The short-range plan from a computer-based materials management system that calculates the exact quantities, need dates, & planned order releases for subassemblies & materials required to manufacture a final product
Net Requirement
The unsatisfied item requirement for a specific time period. Gross requirement for period minus current on-hand inventory
The Elements of LEAN Manufacturing
Waste Reduction LEAN Layouts Inventory & Setup / Changeover Time Reduction Small Batch Scheduling and Uniform Plant Loading LEAN Supply Chain Relationships Workforce Commitment Continuous Improvement (Kaizen)
Which one of the following is among the most important elements of the LEAN manufacturing philosophy?
Waste reduction and continuous improvement
Acceptance Sampling
When a shipment is received from a supplier, a statistically significant representative sample is taken and measured against the quality acceptance standard Supplier's Risk: The buyer rejects a shipment of good-quality units because the sample quality level did not meet the acceptance standard (type I error) Buyers's Risk: The buyer accepts a shipment of poor-quality units because the sample quality level did meet the acceptance standard (type II error)
Six Sigma certification levels based on training, knowledge, and experience.
Yellow (Basic) Green (trained and can lead small projects) Brown (passed black belt exam but hasn't done 2nd project) Black (has lead 2 or more projects) Master Black (led ten or more teams, mentor)
Customer Relationship Management (CRM)
aligning the people, process, and technology of a company to be a customer-centric organization, focusing on customer requirements, rather than internal company goals
Field service
allows customers to interact directly with the company's service personnel
Just-in-Time (JIT)
an inventory strategy to decrease waste by receiving materials only when and as needed in the production process, thereby reducing inventory costs
LEAN
an operating philosophy of waste reduction and value enhancement NOT a tool box of methods, ideas, or methodologies
Supply Chain Planning in a manufacturing environment
combination of the planning processes: Overall company Business Planning (MTP, S&OP) Capacity Planning (RRP, RCCP, CRP) Production Planning (APP, MPS, MRP) Distribution Requirements Planning (DRP) Enterprise Resource Planning (ERP)
Keiretsu Relationships
cooperative coalitions with cross financial dependence involves companies throughout the value chain, remaining independent but working closely together for mutual benefit
Job Shop
creates a custom product for each customer. (artist, craftsman)
Operations Management
design, execution, and control of the operations that convert resources into desired goods and services, aligned with the company's business strategy controlling costs to maximize profits
Firm Time Fence
established as the period when changes can no longer be made by the planning system. Changes during this period must be reviewed and approved by the Production Manager or an authorized person.
Independent Demand
external demand for the final product affected by trends, seasonal patterns, & general market conditions
Batch
manufactures a small quantity of an item in a single production run (Milk and other processed food, clothing)
Engineer-to-Order (ETO)
manufacturing process in which the component is designed, engineered, and built to customer specifications only after the order has been received; unique product every time
Make-to-Order (MTO)
manufacturing strategy that allows customers to purchase custom products to their specifications
Assemble-to-Order (ATO)
manufacturing strategy where final products are produced quickly as ordered by customers
Production Capacity
maximum amount an organization can complete in a given period of time based on the resources available.
Transaction elements
occur during the sale
Components
parts demanded by a parent
Best-of-breed
pick the best application for each individual function. Challenge - integrating the software, data duplication, support resource requirements, training
Pre-transaction elements
precede the sale
Six Sigma
quality philosophy that emphasizes a commitment toward excellence
Dependent Demand
the calculated internal demand for subassemblies and component parts based on the demand of the final product and the planning factor of each part
Total Cost of Manufacturing (TCM)
the complete cost of producing and delivering products to your customers
Production Capacity
the maximum amount an organization can complete in a given period of time based on the resources available.
Capacity
the maximum amount or number that can be received or contained
The goal of supply chain planning is to balance supply and demand in a way that realizes the financial and service objectives of the company
true
Two Types of Software Implementation
Best-of-breed Single software solution
Manufacturing Resource Planning (MRP II)
A computer-based system that creates detail production schedules using realtime data.
Sales Force Automation (SFA)
A core component of CRM systems used to document and measure sales team activities
Bill of Materials (BOM)
A document that shows an inclusive listing of all component parts and assemblies making up the final product
Resource Requirement Planning (RRP)
A long-range capacity plan used to check whether aggregate resources (i.e., labor and manpower) are capable of satisfying the Aggregate Production Plan
Rough-Cut Capacity Planning (RCCP)
A medium-range capacity plan used to check the feasibility of the Master Production Schedule. Converts MPS from the production needed to the capacity required, then compares it to capacity available
Firmed Planned Order
A planned order that can be frozen in quantity and time so that the MRP computer logic cannot automatically change when conditions change
Capacity Requirement Planning (CRP)
A short-range capacity plan used to check the feasibility of the Material Requirements Plan.
Chase Production Strategy
Adjusts capacity to match demand. Firm hires and lays off workers to match output to demand. Finished goods inventory remains consistent based on worker productivity. Works well for make-to-order firms
In the DMAIC Methodology, the "A" stand for:
Analyze
_______________ is a manufacturing strategy where final products are produced quickly as ordered by customers. It is often called a "Postponement" Strategy
Assemble-to-Order (ATO)
Knowledge Management
Establish data repository that can be used by all areas of the company to improve sales and supply chain performance.
Distribution Requirements Planning (DRP)
Establish requirements for the distribution network and balances warehouse capacity with production plans
When lawyers send advertisements to the homes of people who recently received a traffic ticket, this is considered:
Event-based marketing
On the "Magic Beanstalk" customer loyalty scale, the top type of customer is called an Advocate.
FALSE
Segmenting customers on the basis of demographic information is considered profiling and is an illegal practice.
FALSE
Master Production Schedule (MPS) - Time Fencing
Firm (Fixed) Time Period: Planned Time Period:
Production Planning Strategies - Supply Side
Fluctuating inventory levels Change capacity
Firm (Fixed) Time Period:
From the current date into the future covering the lead time of the major production cost components.
Planned Time Period:
From the end of the Firm Time Period to the end of the planning horizon.
Developing the Production Plan
Gather the demand for each product by period covered by the planning horizon. Compare to the available capacity for each period in planning horizon. Develop the capacity plan. Identifying constraints / risks which may influence the plan. Determining the labor and material requirements to achieve the production plan. Calculate the production costs each product (labor, materials, overhead). Develop the detailed Materials Requirements Plan for execution
LEAN History
Henry Ford's mass production line Toyota Production System The Machine that Changed the World Quick Response Efficient Consumer Response (ECR) - Just-in-Time (JIT) - Keiretsu Relationships -
Which one of the following is NOT a quality tool of Six Sigma?
Hysterical Charts
Production Planning Strategies - Demand Side
Influence demand Back-ordering during high demand periods Counter-seasonal product mix
Parent
Item generating demand for lower-level components
Manufacturing processes:
Job Shop Batch Assembly Line Continuous Flow
LEAN manufacturing emphasizes all of the following EXCEPT?
Large Batch Sizes