supply chain test 2
sources of CI
1. competitor web site
steps to be considered value-added
1. physically change the product 2. the customer must care about and want this change 3. rework does NOT count
sources of CI
2. phantom shopping
make to stock
A production environment where the customer is served "on-demand" from finished goods inventory. not a lot of customization
Make-to-order
A production environment where the product is built directly from raw materials and components in response to a specific customer order. Ex. car production
Lead Capacity
An adding capacity in anticipation of an increase in demand
assemble to order
Combine a number of preassembled modules to meet a customer's specifications. Ex. pc builds
Step 4 Theory of Constraints
Elevate the constraint(long-term increase)
Percent value-added time
The percentage of total cycle time that is spent on activities that actually provide value
Work in Process(WIP)
Units of product that are only partially complete and will require future work(builds up at the bottleneck)
Indifference Point Formula
Units= (FC2 -FC1)/ (VC1-VC2)
most processes are
a complete mess and needs improvement
Job Shop
a flexible process structure for products that require different inputs and have different flows through the process
Process Map
a flowchart, which shows the steps in a process
Value Stream Mapping
a lean tool that employs a flow diagram documenting in high detail every step
Capacity
a process is the amount of output that it can produce in a time period
mass customization
a strategy that uses technology to deliver customized services on a mass basis
process step
activity(task) denoted by a rectangle
Efficiency equation
actual output/ standard output
Lag Strategy
adding capacity AFTER demand has already increased
Match Strategy
adding or reducing capacity in small increments
fixed cost
amount of cost that does not vary with level of input
decision
branch point denoted by a diamond
Internal Benchmarking
comparing a process in one function with that of another function
Benchmarking
comparing business processes
functional benchmarking
comparing processes to other organizations with similar processes in the same function, but outside the industry
competitive benchmarking
comparing with direct competitors either locally, nationally or worldwide
engineer to order
complete customization, with the product designed from scratch to meet the customer's needs
Productivity
describes various measures of the efficiency of production
Bottleneck
dictates the speed of the entire process
Step 2 Theory of Constraints
exploit the constraint(short-term increase)
Generic Benchmarking
finding organizations that have best in class processes and approach from one may learn and translate to improvement at ones own organization
pros of lead capacity
first to market, deman met immediately, dont miss any sales
total cost=
fixed cost + variable cost
Break-Even point formula
fixed cost / (unit price - unit variable cost)
cons of lead capacity
forecasting may be incorrect
pros of lag strategy
hiring and inventory only come after demands increase
Hybrid Strategy
hiring permanent staff only to the minimum expected.
cons match strategy
hiring when deman increases, layoffs when demand decreases, lowers employee statisfaction(turnover)
Step 1 Theory of Constraints
identify the bottleneck(slowest)
cons hybrid strategy
increased training for workers, outsourcing is expensive, quality may suffer
Sources of CI
interview customers
Business Process
is a collection of related, structured activities or tasks that produce a specific service or product
Efficiency
is a measure of the extent to which input is well used for an intended task
support process
is a process that may be necessary but is not one of the main value added activites
Theory of Constraints
is an approach to process improvement that focuses on the weakest link in the chain
primary process
is one that addresses the main value-added activities of an organization
competitive intelligence (CI)
is the action of defining, gathering, analyzing, and distributing intelligence about products customers, competitiors
effective capacity
is the normal operating output possible in a time period
indifference point
is the number of units of demand where the total cost is equal between two capacity alternatives
cons of lag strategy
may come to scene to late, stress from employees
pro match strategy
no excess inventory or labor, output matches demand
pros hybrid strategy
no excessive inventory or labor, output matches demand
labor productivity
output/ hours of labor
multi-factor productivity
output/ total input cost
Productivity measure
output/input
swim lane flowchart
parrallel lines divided into lanes. one lane for each process
Batch production
producing a limited number of identical products - each item in the batch passes through one stage of production before passing on to the next stage
mass prodcution
production of goods in large numbers through the use of machinery and assembly lines
Step 5 Theory of Constraints
repeat the process
Step 3 Theory of Constraints
subordinate to the constraint( slow down)
Design Capacity
the maximum output possible in a time period
break-even point
the number of units where the company makes zero point
the weakest link
the slowest step(Bottleneck)
Cyle Time
the time required or spent to convert raw materials into finished goods( total time spent)
common denominator of multi-factor
total cost of all factors of input
Single-factor productivity measures
use one class of inputs or factors
variable cost =
variable cost/ unit * units
Starved
wasted time in between steps