SCM 303
Just-in-time
An older name for lean systems, move product very fast
Benefit of lean systems
1. Across SC: 2. purchase for lowest total cost (not price) 3. Geographically close partners 4. Fewer suppliers 5. Focus on root cause 6. Work with, not against, suppliers 7. Product Innovation: 8. Exactly meet customer needs 9. Support corporate strategy Reduce opportunities of waste
Components of a process
1. Activities 2. Inputs, outputs, and flows 3. Process structures 4. Management policies
Supplier quality assurance
1. Buyer establishes required quality specifications 2. Supplier determines process capability a. Identify common or chance causes of variation b. Identify special or assignable causes of variation c. Eliminate special causes 3. Compare buyer's quality requirements to the supplier's process capability 4. Make necessary adjustments a. Negotiate process improvements with supplier b. Seek alternate supplier
Lean systems objectives
1. Only products that customers want 2. Only as quickly as customers want them 3. With only features that customers want, and no others 4. With perfect quality 5. In minimum possible lead times 6. With no waste of labor, materials, or equipment, and 7. Using methods that reinforce the occupational development of workers
PDCA/DMAIC
1. Plan: identify problem and actions for improvement 2. Do: implement formulated plan 3. Check: monitor results 4. Act: take corrective action and institutionalize changes 1. Define: determine critical to quality (CTQ) characteristics from customer's perspective 2. Measure: gather data on CTQ processes 3. Analyze: determine cause of defects 4. Improve: modify processes 5. Control: ensure improvements are maintained
Juran's Law and Little's Law
15 percent of operational problems are the result of human errors, the other 85 percent are due to systemic process errors, there is a relationship between flow time (F), inventory (I) and throughput rate (TH): F = I/TH
Enterprise
A company, non-profit organization, non-governmental organization, or a government with the key activities - procurement, operations/manufacturing, customer services, logistics
Operations Strategy
A set of competitive priorities coupled with supply chain structural and infrastructural design choices intended to create capabilities that support a set of value propositions targeted to address the needs of key customers.
Generalized SC model, and the five steps
A set of three or more entities (organizations and individuals) directly involved in the up and downstream flows of products, services, finances, and/or info from source to customer (Steps: raw materials, supply network, enterprise, distribution network, customer/ consumer)
Black swan event
An event that is not likely, but which can be very catastrophic
Customer service
An example of a functional group that has customer management in mind, and must think about ways to improve customer satisfaction in efficient ways.
ISO defined risk source, event, disruption
An object or activity which may cause risk, or an element which alone or in combination has the potential to give rise to risk; An occurrence or change of a particular set of circumstances; Creates the effect of an anticipated or unanticipated event that interrupts normal functions, operations, or processes (Severe weather, political or labor unrest, utility outage, criminal/terrorist attack, technology failure, or earthquake)
Bottleneck, wait time, yield rate
Anyplace demand is greater than/equal to capacity, limits the ability of the process to generate output, ?, percentage of units produced as a percentage of inputs
Standard operating procedures
As part of assessing change in vulnerability: confirm current standard operating procedures are still in practice (ask AND confirm) a. Procurement, supplier on-boarding the same b. Procurement, approved supplier processes followed c. Supplier quality assurance, same practices d. Risk management, complaints are investigated
Economies of scale
As production volumes increase with additions to capacity, unit cost to produce a product decreases to an optimal level
Corporate risk map
Basic foundation that applies to any new or emerging questions AND a recognized financial analysis using the axes "likelihood" and "consequence"
"Amazoniation" and "Uberization"
Buying online when you don't need the product in the same day, increasing efficiency - Instead of waiting several days, deliveries are happening very quickly (food delivery, curbside pickup)
Direct SC
Consists of a company, a supplier, and a customer involved in the upstream and/or downstream flows of products, services, finances, and/or info
Lean systems
Corporate wide approach to identify, control, and eliminate waste, within firm and across supply chain
Activity types: quality assurance
Ensure that the quality of other activities, such as monitoring, inspecting, testing, reviewing, checking, and reworking (not the same as quality management)
Customer: order winners, qualifiers, losers
For the customer, these are reasons why a customer would choose your firm, the minimum standards for the firm, and why customers may avoid your firm.
Supply chain management/supply management
Global network of organizations and activities involved in (1) designing a set of goods and services and their related processes, (2) transforming inputs into goods and services, (3) consuming these goods and services, and (4) disposing of these goods and services
Capacity: maximum, effective
Highest achievable level under ideal conditions, for a limited time, achievable level under normal conditions, for an extended time
Product-related priorities: quality, timeliness, cost
How 'fit' is your product according to customer's needs? (performance, features, conformance), !!!!!!!!!!!!!
Utilization
How much available capacity is actually used
Purchasing/procurement
Identifying suppliers, bidding, and on-boarding, as well as managing the flow of supplies through the enterprise
Ultimate SC
Includes all the organizations involved in the upstream and downstream flows of products, services, finances, and info from ultimate supplier to ultimate customer
Extended SC
Includes suppliers of the immediate supplier and customers of the immediate customer, all involved in the upstream and/or downstream flows of products, services, finances, and/or info
Activity types: direct
Involved in creating value for the buyer, such as assembly, parts machining, salesforce operation, advertising, product design, etc.
Process-related priorities: innovation, flexibility, risk management, sustainability
Longer-term initiatives including the radical or incremental changes in processes and products; an operation's ability to respond efficiently to changes in products, processes, and competitive environments; and the building of processes in anticipation of problems that could arise from natural events, social factors, geo-political issues, Econ issues, and/or tech issues
Activity types: indirect
Make it possible to perform direct activities on the continuing basis, such as maintenance, scheduling, operation of facilities, salesforce administration, research administration, etc.
Industry 1.0/2.0/3.0/4.0
Mechanization, water power, steam power - mass production, assembly line, electricity - computer and automation - Cyber physical systems
Stakeholders
Other groups that have an interest in the well-being of a firm
Dimensions of quality
Performance, features, reliability, durability, conformance, aesthetics, support, perceived quality
Lean systems approach
Philosophy of minimizing the resources needed for processes
TPM - Total Productive Maintenance
Prevention of breakdowns
Pull vs push system (regarding lean)
Pull - processes are activated by actual, not forecasted demand (Customers get what they want, when/where they want it)
Total Product Experience (TPE)
Refers to all of the outputs of an operation, both goods and services, that are combined to define a customer's complete consumption experience
Tier/echelon
Refers to how directly the supplier works with the firm
Role of Board of directors - and you investors - in decision making
Set success metrics (Stock price, revenue growth, risk/risk tolerance), YOU expect BOD to protect your investment, hold C-suite accountable
Strategic planning hierarchy: corporate planning, strategic business unit, functional planning
Strategic planning hierarchy in which corporate is the most broad, SBU is a semi-independent organization constrained by corporate plan, and functional planning is the most specific, with the most restraints from the strategic plans that come before it in the hierarchy.
TAKT time flow balancing
Synchronizing output rate with demand rate
Process, process thinking
System of structured activities that use resources to turn inputs into valuable outputs, views activities in an organization as a collection of processes
SPC
Technique that involves testing a random sample of output from a process in order to detect if nonrandom changes in the process are occurring
Lead time, time to market, order-to-delivery time
The amount of time that passes between the beginning and ending of a set of activities, total time a firm takes to conceive, design, test, produce, and deliver new/revised product, and the time it takes between customer's ordering of a product and them taking delivery.
Value: Key customer, value-proposition, capabilities
The customer segment that is responsible for a large portion of the firms revenue and therefore receives priority when the strategy is formed, the statement of product and service features that the firm offers to customers, and the firm's ability to fulfill that proposition.
Sustainability, triple bottom line, 3 Ps
The increasing importance of sustainability has caused many companies to adopt a "triple bottom line" approach to performance measurement. This approach includes three different measures of profit and loss: Profit—monetary results of operations People—social impacts of operations Planet—environmental impacts of operations
Supply Chain Risk
The likelihood and impact of unexpected macro and/or micro-level events or conditions that adversely influence any part of a supply chain leading to operational, tactical, or strategic level failures irregularities
Operations/operations management
The management of processes used to design, supply, produce, and deliver valuable goods and services to customers
Integrated Supply Chain & ISCM Management
The overall corporate structure, including things such as marketing, finance, management, etc.
Value activities; value chain
The physically and technologically distinct activities that a firm performs; activities that are performed to design, produce, market, deliver, and support a product
Total Cost of Ownership (TCO)
The total cost of a product: how much it costs to hold it, process it, and get it to customers
Logistics/distribution
The way in which products and services are moved to and from the firm, to or from customers/suppliers
Flow time, cycle time
Time for one unit to get through a process, time it takes to process one unit at an operation in the overall process
TCO, TPE, and associated application of "risk"
Total cost of ownership, total product experience, risk - small unexpected costs can really throw off the SC
Enterprise risk management
US regulatory requirement for the public companies 1. Reducing operational surprises and losses 2. Identifying and managing multiple and cross-enterprise risks 3. Improving deployment of capital
Risk Management/inherent variability
Understanding what could go wrong and how it will impact you and other players in a marketplace
Supply chain disruption
Unplanned and unanticipated (event) that disrupts the normal flow of goods and materials within a SC
SPC, Quality at the source, Poka-Yoke
Use of statistical tools to monitor processes, eliminating defects at their origination points, redesign so mistakes are impossible or immediately detectable
CPFR, collaborative planning, forecasting and replenishment
i. A shared process of creation between two or more parties with diverse skills and knowledge delivering a unified approach that provides the optimal framework for customer satisfaction (voluntary InterIndustry commercial standards - VICS)
TQM - compare and contrast definitions
i. Philosophy and system of management focused on long-term success through customer satisfaction 1. Quality integrated throughout the organization's activities 2. Employee commitment to continuous improvement 3. Suppliers are partners in the TQM process 4. Uses tools including continuous improvement or kaizen, quality function deployment (QFD), and statistical process control (SPC) to achieve performance improvements
Total Quality Management (TQM)
integrated strategy aimed at embedding awareness of quality (Word "total" has important connotations)
ISO 9000
internationally accepted standards for quality management systems 1. Fulfilling customer's quality requirements 2. Meeting applicable regulatory requirements 3. Enhancing customer satisfaction 4. Achieving continuous improvement of its performance in pursuit of these objectives
Six sigma, statistics
quality improvement through elimination of defects and variation
