GSCM Exam 2

Reorder point (formula)

(Avg daily usage) * (lead time)

Cycle time

Frequency of units produced

Process control

Monitoring a process for its efficacy in terms of cost, timeliness, and quality

PDCA (Shewhart)

Plan [what changes/data are desirable] Do [carry out the change/test] Check [see effects of change/test] Act [learn from data to improve]

Examples of services

accounting, air transportation, auto repair, consulting, dentistry, education, legal services, healthcare

Aesthetics (dimension of quality)

looks, feels, sounds, tastes, smells; subjective dimensions of quality

Job-shop production process

low production volume, little standardization, one of a kind products

Types of inputs

not just physical , can be things like information or customers

Transactional relationships

typically short-term relationships based on cost advantages

Control Charts

used to plot time series data

Total Quality Control, TQC, philosophy (Feigenbaum)

"Quality is everybody's job but because it is everybody's hob , it can become nobody's job without the proper leadership and organization."

Key points of Juran's approach to quality improvement

- Create awareness of the need for quality improvement - Make quality improvement everyone's job - Create infrastructure for quality improvement - Train the organization in quality improvement techniques - Review progress towards quality improvement regularly - Recognize winning teams - Institutionalize quality improvement by including quality - Concentration on both external and internal customers

Crosby

- Four absolutes of quality management (zero defects) - 14 steps to quality improvement

Bottleneck items

- High supply risk, low profit impact - Low control of suppliers - Innovation and product substitution and replacement - Production-based scarcity

PCN strategic implications

- Positioning steps toward provider's process domain gives better economies of scale - Positioning toward customer's process domain gives greater opportunity for customization

Histograms

- a graphical representation of data using bar charts - width of bars must be consistent - classes must be mutually exclusive and all-inclusive

Market analysis (Phase 2)

- assess supplier strength and company strength - assess things like availability or product in terms of both quality and quantity

System Design

- development of a basic functional prototype design - determination of materials, part, and assembly system - determination of the manufacturing process involved

Flowcharts

- help see the current process clearly - brainstorm improvements to develop a new process map

Strategic items (Krajic's Matrix)

- high supply risk, high profit impact - development of long-term relationships - collaboration and innovation - natural scarcity

Cause and Effect diagrams (aka fish bone, Ishikawa)

- identify underlying causes - "5 Whys" are a helpful tool here

Leverage items (Krajic's Matrix)

- low supply risk, high profit impact - exploitation of full purchasing power - targeted pricing strategies - abundant supply

Non-critical items (Krajic's Matrix)

- low supply risk, low profit impact - product standardization - process efficiency - abundant supply

Scatter diagrams

- used to study the relationship between variables - indicator variables can predict other variables

Check sheets

- used to tally defects/problems by occurrence - data source for histograms and pareto analysis

Supply strategy phases

1. Classification 2. Market Analysis 3. Strategic Positioning 4. Action Plans

PCN regions

1. Direct Interaction 2. Surrogate Interaction 3. Independent Processing

Quality tools (7)

1. Flowcharts 2. Check sheets 3. Pareto diagram 4. Cause and effect diagrams 5. Histograms 6. Scatter diagrams 7. Control charts

Forecasting Models

1. Naive forecasting 2. Simple linear regressions 3. Trend and seasonality

SCOR model

1. Plan 2. Source 3. Make 4. Deliver 5. Return

Production processes

1. Project 2. Job-shop production process 3. Batch production process 4. Mass production process 5. Flow production process

Four absolutes quality management (Crosby)

1. Quality is conformance to requirements 2. Quality prevention is preferable to quality inspection 3. Zero defects is the quality performance standard 4. Quality is measured in monetary terms (the price of non-conformance)

SRM steps

1. Supplier segmentation 2. Supplier strategy development 3. Supplier strategy execution

Three-stage design process (Taguchi)

1. System Design 2. Parameter Design 3. Tolerance Design

14 Obligations of Top Management (Deming)

1. constancy of purpose 2. new philosophy 3. cease dependency on mass inspection 4. end the practice of awarding business on the basis of price tag alone 5. improve every process 6. institute training on the job 7. institute leadership 8. drive out fear 9. break down barriers 10. eliminate slogans and exhortations 11. eliminate arbitrary numerical targets 12. remove barriers to pride in workmanship 13. encourage education 14. top management's permanent commitment

EOQ Model Assumptions

1. demand is uniform and known 2. delivery is perfectly reliable & instant 3. Carrying cost, ordering cost, and unit price are constant

14 Steps to Quality Improvement (Crosby)

1. management is committed to quality (and this is clear to all) 2. Create quality improvement teams with senior reps from all depts 3. Measure processes to determine current & potential quality issues 4. Calculate the cost of quality 5. Raise quality awareness of all emps 6. Take action to correct quality issues 7. Monitor progress of quality improvement - establish a zero defects committee 8. Train employees in quality improvement 9. Hold "zero defects" days 10. Encourage emps to create their own quality improvement goals 11. Encourage emp communication with management about obstacles to quality 12. Recognize participants' effort 13. Create quality councils 14. Do it all over again

Different types of transformation

1. manufacture 2. transport 3. supply 4. service

Feigenbaum's steps to quality

1. quality leadership 2. modern quality technology 3. organizational commitment

ABC values and numbers

A = significant few B = moderately important, some C = insignificant many

EOQ Model

A formula for determining the order quantity that will minimize total inventory costs.

Process design

Configuring inputs and resources to provide value, enhance quality, and be productive

Quality experts

Crosby, Deming, Feigenbaum, Ishikawa, Juran, Shewhart, Taguchi

Supplier Strategy Development

Distribute internal resources and plans to meet business needs

Process management

Executing and controlling the productive functions of a firm

Strategic positioning (Phase 3)

Identify areas of opportunity or vulnerability, assess supply risks, and derive basic strategies by placing items from phase one into the purchasing portfolio matrix

Pareto Law

In any large group there are "significant few" and "insignificant many"

Supplier segmentation

Map suppliers against profitability and risk exposure

ABC analysis is based on _________ Law

Pareto Law

Pareto diagram

Pareto's Law- based on the 80/20 rule which states that 80% of quality problems are caused by a small number of causes -Helps identify and prioritize problems -Fixing a few major problems can have a large impact

Process improvement

Proactive effort to enhance process performance based on consumer needs/complaints or competition

Minimizing deviation (Taguchi)

Quality is best achieved by minimizing the deviation from the target (minimizing variation). The lack of quality should be measured as a function of deviation from the nominal value of the quality characteristic.

Quality Trilogy (Juran)

Quality planning Quality control Quality improvement

Takt time

Rate you need to produce to meet customer demand available production time/unit demand

Lead time

Time between order time and delivery time

Simple linear regression (forecasting)

U statistic that compares with Naïve forecasting, known Y's =Demand **more complex

Collaborative supplier relationship

a business relationship between two organizations where both parties work together to improve the quality of products and services, while also reducing costs

Batch production process

a process that produces batches of different products that are identical in many ways but differ in others

ABC Analysis

a technique of inventory control

supply (transformation types)

change in ownership of goods

Action plans (Phase 4)

company explores scenarios and lays out plans for securing long-term supply and for exploiting short-term opportunities

Quality planning (Juran)

create process that will enable one to meet the desired goals

Service supply chains

customer input > action > service output

Perceived Quality (dimension of quality)

customer's own inferences on quality of product's or service's attributes

Tolerance Design

deals with tightening tolerances and upgrading materials

Conformance (dimension of quality)

degree to which a product's design and operating characteristics meet established standards

Complementary relationships

each company needs the core competency of the other in order to maintain customer value

Supplier strategy executiion

effectively put the devised strategy into action to obtain desired outcomes

Arm's Length Supplier Relationship

firms wants and needs supplier but does not want to let the supplier in on the business secrets

Trend and seasonality (forecasting)

forecasting based on seasons or trends

Definition of services

include a customer input, which is then acted upon to create a service output

Components of operations

inputs transformation processes outputs

ISO 9000

international standards on quality management and assurance - help companies document quality system elements - needed to maintain efficient quality system - not specific to any one industry/organization/size

Supplier Relationship Manage

involves taking care of the most important suppliers; it also includes the overall management and strategic decision making that goes into a company's purchasing strategy

Strategic alliance relationship

long-term partnerships between two or more organizations working together to achieve mutual benefits more strategic and highly relational

Durability (dimension of quality)

measure of product life; amount of use before deteoriaing

Quality control (Juran)

monitor and adjust the process

Project production process

more variety, small volume

Quality improvement (Juran)

move the process to a better and improved state of control through projects

Synergistic relationships

multiple companies work together to create something that is worth more than the sum of the individual parts

Transformation processes

part of manufacturing where raw materials are converted into finished products using machinery, processes, and labor resources

Company Wide Quality Control (Ishikawa)

participation from the top to the bottom of an organization and from the start to the finish of the product life cycle

Dimensions of quality

performance features reliability conformance durability serviceability aesthetics perceived

Performance (dimension of quality)

primary operating characteristics

Reliability (dimension of quality)

probability of a product malfunctioning or failing within a specific time period

Surrogate interaction

region includes process steps in which one process entity is acting on another entity's resources such as their belongings, information, or technologies.

Direct interaction

region includes process steps that involve person-to-person interactionbetween entities.

Independent processing

region includes steps in which the entity is acting on resourcesowned and controlled by that same entity. A lot of make-to-stock manufacturing fits in thisregion.

Features (dimension of quality)

secondary aspects of performance, supplement the

Parameter Design

selecting the nominals selecting the nominals of the system by running statistically planned experiments (DFSS/DOE)

Serviceability (dimension of quality)

speed, courtesy, competence, and ease of repair

Classification (Phase 1)

strategic, bottleneck, non-critical, leverage

Naive forecasting (forecasting)

technique in which the last period's actuals are used as this period's forecast

Reorder point

the level of inventory that triggers a new purchase

transport (transformation types)

the movement of materials or customers

manufacture (transformation types)

the physical creation of products

service (transformation types)

the treatment of customers or the storage of materials

Transformed resources

those that are transformed in some way by the operation to produce the goods or services that are its outputs

Transforming resources

those that are used to perform the transformation process; staff or facilities

Types of supplier relationships

transactional arm's length collaborative strategic alliance