QDC1 COHORT

Business Case for Customer Focus

"Satisfaction is an attitude; loyalty is a behavior" Loyal customers spend more, are willing to pay higher prices, refer new clients, and are less costly to do business with. It costs five times more to find a new customer than to keep an existing one happy. Dissatisfied customers tell at least twice as many friends about bad experiences than they tell about good ones

Describe the requirements for effective inventory management

-A system to keep track of the inventory on hand and on order. -A reliable forecast of demand that includes an indication of possible forecast error. -Knowledge of lead times and lead time variability. -Reasonable estimates of inventory holding costs, ordering costs, and shortage costs. -A classification system for inventory items.

Location Decision: General Procedure

-Decide on the criteria to use for evaluating location alternatives -Identify important factors, such as location of markets or raw materials -Develop location alternatives Identify the country or countries for location Identify the general region for location Identify a small number of community alternatives Identify the site alternatives among the community alternatives -Evaluate the alternatives and make a decision

Describe the uses of functional flowcharts.

-Identifies the sequence of activites or the flow of materials and information in a process -Helps the people involved in the process understand it better and more objectively by providing a picture of the steps

Describe the uses of control charts. How can this be used to determine if a process is acceptable or unacceptable?

-There is an upper and lower control limit depending on the capability of the process. - Over time if you have an outlier that falls above the upper control limit or below the lower control limit that will be abnormal and will help identify the variable.

A Work Group Becomes a Team When:

1)Leadership becomes a shared activity 2)Accountability shifts from strictly individual to both individual and collective 3)The group develops its own purpose or mission 4)Problem solving becomes a way of life, not a part-time activity 5)Effectiveness is measured by the group's collective outcomes and products

Attributes of High Performance Teams Research on the effectiveness of teams found these eight attributes of high performance teams.

1)Participative leadership 2)Shared responsibility 3)Aligned on purpose 4)High communication 5)Future focused 6)Focused on task 7)Creative talents 8)Rapid response

Delphi Technique

1.Manager identifies an issue to investigate 2.Questionnaire is sent to others and returned to manager 3.Manager summarizes responds and sends feedback to participants 4.Participants send their feedback and comments 5.Cycle repeats until issue is resolve or all relevant information is gathered.

This ISO certification focuses on standardization in environmental policies.

14001

What is the typical time horizon for an aggregate plan?

2 -12 Months

Structure of ISO 9000 Standards

21 elements organized into four major sections: Management Responsibility Resource Management Product Realization Measurement, Analysis, and Improvement

The EOQ includes how many order size models?

3

ISO re-certification occurs ever how many years?

3 Years

Achieving a six sigma process means you have achieved no more than ______ defects per 1 million opportunities.

3.4

To achieve a six-sigma process, how many defects for every one million opportunities can you have?

3.4

Process variation is the smallest at what sigma?

6 Sigma

When we operate within +/-2 standard deviations from the mean, what is the probability that only random variations in the process are present?

95.44%

What is the probability that errors are random at +/- 3 Sigma?

99.7%

When we operate within +/-3 standard deviations from the mean, what is the probability that only random variations in the process are present?

99.74%

What is the yield when you achieve a six sigma process?

99.9997%

What are disadvantages to having global operations?:

: Transportation cost, Unskilled labor, security costs

Requirements for Effective Strategic Planning

A definable approach for developing company strategy. A clear company strategy with action plans derived from it, and human resource plans related to the action plans. An approach for implementing action plans. An approach for monitoring company performance relative to the strategic plan. Projections of strategy-related changes in key indicators of company performance.

Lean Operations

A flexible system of operation that uses considerably fewer resources than a traditional system Tend to achieve Greater productivity Lower costs Shorter cycle times Higher quality

Total Quality Management

A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction.

Cohesiveness

A sense of "we-ness" helps the group stick together Socio-emotional cohesiveness ◦ Sense of togetherness based on emotional satisfaction Instrumental cohesiveness ◦ Sense of togetherness based on mutual dependency needed to get the job done

Describe methods for generating ideas and for identifying solution alternatives.

AFFINITY DIAGRAM, NOMINAL GROUP TECHNIQUE AND DELPHI TECHNIQUE

Appraisal vs Prevention what is the difference between the two

APPRAISAL IS THE PROCESS ALREADY IN MOTION, CHECKPOINTS ALONG THE WAY, AUDIT TO THE STANDARD PREVENTION IS BEFORE THE PROCESS IS IN MOTION. (AND AFTER A PROCESS FAILURE) AND REDUCE POTENTIAL FOR FAILURES

List some of the decision-making biases and barriers to effective decision making or problem solving.

AVAILABILITY, REPRESENTATIVENESS, CONFIRMATION, ANCHORING, OVERCONFIDENCE , HINGSIGHT, FRAMING AND ESCALATION OF COMMITMENT.

Measuring System Effectiveness

Actual output The rate of output actually achieved It cannot exceed effective capacity

Select the qualities of a good team member.

Adaptable, Positive attitude

What are attributes a team member should have?

Adaptive - Knowledgeable - Attitude

Explain how the timing and quantity of expected demand can affect aggregate planning.

Aggregate planning uses a strategic approach to calculate the important parts of the aggregate plan. Two of these are quantity of expected demand and timing. These help drive the plan across the 2-12 (and sometimes 18) months.

What are the outputs of the aggregate plan?

Aggregate units

Which communication style may use glaring eye-contact?

Aggressive

Quality and Agility

Agility - capacity for flexibility and rapid change Continual monitoring and sensing of changing customer needs and expectations Fast design changes Rapid roll out of new products and processes Cross-functional cooperation and coordination Good supplier relations

ERP = Enterprise Resource Planning

An extension of MRP Integration of financial, manufacturing, and human resources in a single database COLLAPSES A WHOLE BUNCH OF MRPS INTO ONE BIG COORDINATED SCHEDULE.

Contrast the value orientation for each decision making style.

Analytical HIGH TOLERANCE FOR AMBIGUITY, DATA DRIVEN Behavioral LOW TOLERANCE FOR AMBIGUITY, ENCOURAGING OTHERS TO ASSIST THEM WITH A DECISION. Conceptual HIGH TOLERANCE FOR AMBIGUITY, TAKES ASPECTS FROM OTHER PEOPLE Directive LOW TOLERANCE FOR AMBIGUITY, TASK DRIVEN

Select the decision making styles that have a high tolerance for ambiguity.

Analytical, Conceptual

Scheduling Services

Appointment systems Controls customer arrivals for service Reservation systems Estimates demand for service Scheduling the workforce Manages capacity for service Scheduling multiple resources Coordinates use of more than one resourc

Which cost of quality type includes inspection during the production process?

Appraisal

Select the three cost of quality types.

Appraisal, Prevention, Failure

Which communication style is expressive?

Assertive

Communication Style

Assertive: Direct language, good eye contact, and expressive but also receptive Aggressive: Abusive language, glaring eye contact, expressive but not receptive Nonassertive: Confusing language (maybe, not sure), little eye contact, and not expressive, encourages others to take advantage

hat are the key attributes of a good team member?

Attitude, knowledgeable about the problem, and adaptable.

Automation

Automation Machinery that has sensing and control devices that enable it to operate automatically Fixed automation Programmable automation Flexible automation

Decision Making Biases

Availability heuristic - use information readily available in memory Representativeness heuristic - using similar situations to predict the occurrence of an event Confirmation bias - decide before investigating then seek confirming evidence Anchoring bias - decisions are influenced by initial information, data, stereotypes Overconfidence bias - tendency to be overconfident about estimates or forecasts Hindsight bias - knowledge of an outcome influences our belief about the probability that we could have predicted the outcome earlier Framing bias - tendency to consider risks about gains differently than risks about losses Escalation of commitment bias - tendency to stick to an ineffective course of action when it is unlikely that the bad situation can be reversed Generalizing & Stereotyping

Describe conditions that encourage creative thinking.

BRAINSTORMING, CRITICISM IS WITHELD, BUILD ON OTHERS IDEAS, CREATE STATUS FREE ENVIRONMENT

When an organization shifts demand fulfillment to another period.

Back Orders

Scheduling backward from a due date What is the latest possible time you can start and still meet the due date?

Backward scheduling

What is the ultimate goal of lean?

Balanced system

Challenges

Barriers to integration of organizations Getting top management on board Dealing with trade-offs Small businesses Variability and uncertainty Response time

Practices for Dealing With Suppliers

Base purchasing decisions on quality as well as cost Reduce the number of suppliers Establish long-term contracts Measure and certify supplier performance Develop cooperative relationships and strategic alliances

Non-Rational Models

Based on premise that decision making is not rational Assume that: Decision making is uncertain Not all information is available or known Making optimal decisions is difficult 1. Herbert Simon's Normative Model 2.Garbage Can Model

Simon's Normative Model of Decision Making

Based on premise that decision making is not rational Decision makers are guided by bounded rationality constraints that restrict decision making Decision making is characterized by Limited information processing Satisficing Choosing a standard that meets a minimum standard of acceptance

Garbage Can Model

Based on premise that decision making is sloppy and haphazard Decisions are made as a result of the interaction between: Problems, solutions, participants, and choice opportunities What are the implications of the Garbage Can model?

Which process type does a bakery use?

Batch

Operations Strategy

Be careful to study the requirements and benefits of lean systems before making a decision to convert operations Evaluate strengths and weaknesses of current operations The decision to convert can be sequential Weigh the pros and cons of a lean approach to inventories Supplier management is critical to a lean operation

Behavioral Issues

Behavioral problems can be created or exacerbated by Decentralized decision making Stress of achieving project milestones on time and within budget Surprises The team must be able to function as a unit Interpersonal and coping skills are very important Conflict resolution and negotiation can be an important part of a project manager's job

Select the decision making styles that are socially driven.

Behavioral, Conceptual

Barriers to Delegation

Belief in the fallacy "if you want something done right, do it yourself" Lack of confidence/trust in lower levels Low self-confidence Fear of being called lazy Vague job definition Fear of competition from those below Reluctance to take risks involved in depending on others Lack of controls that provide early warning of problems with delegated duties Poor example set by bosses who do not delegate

MRP Inputs: Bill of Materials

Bill of Materials (BOM) A listing of all of the raw materials, parts, subassemblies, and assemblies needed to produce one unit of a product Product structure tree A visual depiction of the requirements in a bill of materials, where all components are listed by levels

Select primary inputs of the MRP Choose 3

Bill of materials Master schedule Inventory reports

This decision making technique solicits ideas in very large volume and quick succession.

Brainstorming

Brainstorming

Brainstorming process to generate a quantity of ideas Quantity is more important than quality Criticism is withheld Build on others ideas Create status-free environment

What are barriers to implementing change?

Breaking tradition, No clear definition of problem, Lack of buy-in

Calculating Processing Requirements

Calculating processing requirements requires reasonably accurate demand forecasts, standard processing times, and available work time

Service Operation Problems

Cannot store or inventory services Customer service requests are random Scheduling service involves Customers Workforce Equipment

Capacity Planning

Capacity The upper limit or ceiling on the load that an operating unit can handle Goal To achieve a match between the long-term supply capabilities of an organization and the predicted level of long-run demand

Extra capacity used to offset demand uncertainty.

Capacity cushion

Capacity Decisions Are Strategic

Capacity decisions impact the ability of the organization to meet future demands affect operating costs are a major determinant of initial cost often involve long-term commitment of resources can affect competitiveness affect the ease of management are more important and complex due to globalization need to be planned for in advance due to their consumption of financial and other resources

Operations Strategy

Capacity planning impacts all areas of the organization It determines the conditions under which operations will have to function Flexibility allows an organization to be agile It reduces the organization's dependence on forecast accuracy and reliability Many organizations utilize capacity cushions to achieve flexibility Bottleneck management is one way by which organizations can enhance their effective capacities Capacity expansion strategies are important organizational considerations Expand-early strategy Wait-and-see strategy Capacity contraction is sometimes necessary Capacity disposal strategies become important under these conditions

Six Sigma: Process Improvement Teams

Champions - senior managers who promote Six Sigma Master Black Belts - highly trained experts responsible for strategy, training, mentoring, deployment, and results. Black Belts - Experts who perform technical analyses Green Belts - functional employees trained in introductory Six Sigma tools Team Members - Employees who support specific projects

Linking Human Resource Plans and Business Strategy

Changes in strategy often require changes in HR plans Examples Redesign of the work organization to increase empowerment or teamwork Changes in labor/management partnerships Directed training and education Improved processes for knowledge sharing

Matching planned output for a period to the expected demand

Chase demand strategy

Practices for Dealing With Customers

Collect information constantly on customer expectations Disseminate this information widely within the organization Use this information to design, produce, and deliver the organization's products and services. Manage customer relationships Exploit CRM technology Don't ignore internal customers

Collect Customer Information

Comment cards and formal surveys Focus groups Direct customer contact Field intelligence Complaint analysis Internet monitoring

Outcomes of Influence

Commitment - a strong positive response◦ The person will agree and carry out the request because they truly believes it is the right or best thing to do Compliance - completion of request ◦ The person will agree only because there is something positive in it for him/her or something negative will happen if they don't Resistance - a strong negative response ◦ Request will be disregarded, influence attempt is unsuccessful

Competitive Advantage

Competitive advantage: a firm's ability to achieve market superiority over its competitors. Characteristics: Is driven by customer wants and needs Makes significant contribution to business success Matches organization's unique resources with opportunities Is durable and lasting Provides basis for further improvement Provides direction and motivation

Automation Technologies

Computer-Aided Manufacturing (CAM) The use of computers in process control, ranging from robots to automated quality control Numerically Controlled (N/C) Machines Machines that perform operations by following mathematical processing instructions Robot A machine consisting of a mechanical arm, a power supply, and a controller

Service and Retail Locations

Considerations: Nearness to raw materials is not usually a consideration Customer access is a Prime consideration for some: restaurants, hotels, etc. Not an important consideration for others: service call centers, etc. Tend to be profit or revenue driven, and so are Concerned with demographics, competition, traffic/volume patterns, and convenience

Limits the performance of a process or system in achieving its goals.

Constraint

Select the process types from the list below

Continuous, Job-shop, Batch

Which step of problem solving ensures the implemented solution stays in place

Control

Which two charts are important in statistical process control (SPC)?

Control charts Run chart

Sources of Competitive Advantage

Cost Leadership Differentiation People

Select the tools for evaluating capacity alternatives.

Cost volume analysis, financial analysis, decision theory

Describe the analytical tools used for evaluating capacity alternatives.

Cost-volume analysis Estimate income under different operating conditions Internal Rate of Return Helps us analyze investments for our operations in the future, it summarizes the initial cost that we'll pay for equipment and estimates how long we can use it for. Decision Theory Identifies a set of possible future conditions that could influence results, listing alternative courses of action and developing a financial outcome Waiting Line Analysis Helping managers choose a capacity level that will be cost effective through balancing the cost of having customers wait with the cost of providing additional capacity

How can you measure internal failures?

Count the number of defects or the absence of defects

Benefits of Check Sheets

Creates easy-to-understand data Builds, with each observation, a clearer picture of the facts Makes patterns in the data become obvious quickly

Who is the primary focus when writing procedures for the purpose of ISO?

Customer

Select the 3 key elements of total quality management.

Customer Focus, Involvement of everyone, Continuous improvement

Environmental Assessment

Customer and market requirements, expectations, and opportunities Technological and other innovations Changes in global or national economy Partner and supply chain needs Strategic challenges - those pressures that exert a decisive influence on an organization's likelihood of future success

Principles of Total Quality (TQ)

Customer and stakeholder focus Process orientation supported by continuous improvement and learning Employee engagement and teamwork Management by fact A strategic focus on quality as a source of competitive advantage Visionary leadership

Who is the primary focus of process improvement teams?

Customers

Quality and Time

Cycle time - the time it takes to accomplish one cycle of a process Success in today's markets requires increasingly shorter cycle times Major improvements in response time often require work organizations, processes, and paths to be simplified and shortened. Simplified processes reduce opportunities for errors, leading to improved quality. Improvements in response time often result from increased understanding of internal customer-supplier relationships and teamwork.

What is the first of the four steps in making a location decision?

Decide on criteria

List the steps in the general procedure for making location decisions?

Decide on the criteria to use for evaluating location alternatives Identify important factors, such as location of markets or raw materials Develop location alternatives (country, region, community) Evaluate the alternatives and make a decision

Values (Guiding Principles)

Define attitudes and policies for all employees, which are reinforced through conscious and subconscious behavior at all levels of the organization. Example - Premier: Integrity of the individual and the enterprise. A passion for performance and a bias for action, creating real value for all stakeholders, and leading the pace. Innovation: Seeking breakthrough opportunities, taking risks, and initiating meaningful change. Focus on people: Showing concern and respect for all with whom we work, building collaborative relationships with the community, our customers, coworkers, and business associates.

DMAIC Approach

Define critical outputs and identify gaps for improvement Measure the work and collect process data Analyze the data Improve the process Control the new process to make sure new performance is maintained

What is the first step in problem solving?

Define the problem

What is the first step in the DMAIC process?

Define the problem

When we work in a group, what is the first step if problem solving?

Define the problem

Mission

Definition of products and services, markets, customer needs, and distinctive competencies Example - Premier: "To improve the health of communities"

Which type of group decision making requires the use of questionnaires?

Delphi

Reorder Point: Under Uncertainty

Demand or lead time uncertainty creates the possibility that demand will be greater than available supply To reduce the likelihood of a stockout, it becomes necessary to carry safety stock Safety stock Stock that is held in excess of expected demand due to variable demand and/or lead time

KEY SCM ISSUES The goal of SCM is to match supply to demand as effectively and efficiently as possible

Determining appropriate levels of outsourcing Managing procurement Managing suppliers Managing customer relationships Being able to quickly identify problems and respond to them Managing risk

Deterministic Time Estimates

Deterministic Time estimates that are fairly certain Probabilistic Time estimates that allow for variation

Manage Customer Relationships

Develop close relationships and understand moments of truth - every instance in which a customer comes in contact with an employee of the company Train customer contact employees Develop good service standards Deal with complaints

Strategy Implementation

Developing detailed action plans, defining resource requirements and performance measures, and aligning work unit, supplier, or partner plans with overall strategic objectives.

Network diagram

Diagram of project activities that shows sequential relationships by use of arrows and nodes Activity on arrow (AOA) Network diagram convention in which arrows designate activities Activity on node (AON) Network convention in which nodes designate activities Activities Project steps that consume resources and/or time Events The starting and finishing of activities

What are advantages of group decision making?

Different perspectives, Greater pool of knowledge

Benefits of Histograms

Displays large amounts of data that are difficult to interpret in tabular form Shows centering, variation, and shape Illustrates the underlying distribution of the data Provides useful information for predicting future performance Helps to answer "Is the process capable of meeting requirements?

Understand Customer Needs - the Kano Model

Dissatisfier expected requirements Satisfiers expressed requirements Exciters/delighters: unexpected features

Select the common practices you would expect an ISO certified organization to have in place.

Documents Review, Continuous Improvement, Corrective Action

Which EOQ order size model works best with batch processing?

EPQ

Which order size quantity model is used for batch processing?

EPQ

Computerized system designed to connect all parts of a business as well as key portions of the

ERP

Enterprise Resource Planning

ERP was the next step in an evolution that began with MRP and evolved into MRPII ERP, like MRP II, typically has an MRP core Represents an expanded effort to integration financial, manufacturing, and human resources on a single computer system ERP systems are composed of a collection of integrated modules

Operations Strategy

ERPERP strategic implications High initial cost High cost to maintain Need for future upgrades Intensive training required as a strategic planning tool Can improve supply chain management Stronger links between their customers and their supplier Makes the organization more capable of satisfying changing customer requirements Offers opportunities for continuous improvement

Economies and Dis-economies of Scale

Economies of Scale If output rate is less than the optimal level, increasing the output rate results in decreasing average per unit costs Diseconomies of Scale If the output rate is more than the optimal level, increasing the output rate results in increasing average per unit costs

Operations Strategy

Effective supply chains are necessary for organizational success Requires integration of all aspects of the chain Supplier relationships are a critical component of supply chain strategy Lean operations and six sigma are being employed to improve supply chain success

1. What are three goals of a lean system? (14.2)

Eliminate disruptions Make the system flexible Eliminate waste, especially excess inventory

Benefits of Cause and Effect Diagrams

Enables a team to focus on the content of a problem, not on the history of the problem or differing personal interests of team members Creates a snapshot of collective knowledge and consensus of a team; builds support for solutions Focuses the team on causes, not symptoms

Elements of Superior Service

Establish service goals that support business and product-line objectives. Identify and define customer expectations for service quality and responsiveness. Translate customer expectations into clear, deliverable, service features. Set up efficient, responsive, and integrated service delivery systems and organizations. Monitor and control service quality and performance. Provide quick but cost-effective response to customers' needs

Steps in Capacity Planning

Estimate future capacity requirements Evaluate existing capacity and facilities; identify gaps Identify alternatives for meeting requirements Conduct financial analyses Assess key qualitative issues Select the best alternative for the long term Implement alternative chosen Monitor results

What is the last of the four steps in making a location decision?

Evaluate alternatives

Discuss who has responsibility in a team.

Every member in the team.

Who is the primary focus of TQM?

Everyone in the organization Customers and stakeholders primarily

Which of the following are considered waste in a lean system?

Excess inventory, product defects, waiting time

"Hard" Influence Tactics

Exchange: Promising some benefits in exchange for complying with a request. Coalition Building: Persuading by seeking the assistance of others or by noting the support of others. Legitimating: Pointing out one's authority to make a request or verifying that it is consistent with prevailing organizational policies and practices. Pressure: Seeking compliance by using demands, threats, or intimidation.

Customer claims are which type of cost of quality?

External failure

Capacity Cushion

Extra capacity used to offset demand uncertainty Capacity cushion = 100% - Utilization Capacity cushion strategy Organizations that have greater demand uncertainty typically have greater capacity cushion Organizations that have standard products and services generally have greater capacity cushion

Priority Rules

FCFS - first come, first served SPT - shortest processing time EDD - earliest due date CR - critical ratio S/O - slack per operation Rush - emergency

Describe the factors that should be covered by a supplier audit.

FINANCIAL, INVENTORY, ORDER FULFILLEMNT, OPERATIONS

FMS and CIM

FMS (Flexible Manufacturing System) A group of machines designed to handle intermittent processing requirements and produce a variety of similar products CIM (Computer Integrated Manufacturing) A system for linking a broad range of manufacturing activities through an integrated computer system

Which of the following are techniques for evaluating location alternatives?

Factor rating, Location cost-profit-volume analysis, Center of gravity method

Incorporating design elements that prevent incorrect procedures.

Fail-safing

EOQ models also tell us "when" to order.

False

Just-in-time (JIT) does not apply to services. It only applies to production.

False

Lean operations does not include quality.

False

Which of the following is not part of a supplier audit? *

Financial

Supply Chain Auditing and Performance Metrics

Financial Return on assets Cost Cash flow Profits Suppliers Quality On-time delivery Cooperation Flexibility Operations Productivity Quality Inventory Average value Turnover Weeks of supply Order fulfillment (customer facing) Order accuracy Time to fill orders % of incomplete orders shipped % of orders delivered on time Customers Customer satisfaction % of customer complaints

High-Volume Systems

Flow system: High-volume system with Standardized equipment and activities Flow-shop scheduling: Scheduling for high-volume flow system

List the types of graphical charts used in operations management.

Flowcharts, check sheets, histograms, cause and effect diagrams(fishbone), pareto diagrams, scatter diagrams, run charts and control charts

Exploit CRM Technology (2 of 2)

Forecasting customer retention (and defection) rates and providing feedback as to why customers leave a company. Studying which goods and services are purchased together, leading to good ways to bundle them. Studying and predicting which Web characteristics are most attractive to customers and how the Web site might be improved. Streamlining processes around customers rather than traditional functions, resulting in improved flow of information and cycle times.

Net Requirements

Formula: Net Requirements = Gross Requirements - (Projected receipts + scheduled receipts) The master schedule calls for 100 shutters to be ready for delivery, and no shutters are projected to be on hand at the start of week 4, so the net requirements are also 100 shutters.

Name three attributes of high performance teams

Future focused, Shared responsibility, High communication

Visual tool for planning and scheduling a "simple" project.

Gantt

Chart used as a visual aid for loading and scheduling purposes.

Gantt chart

Factor Rating

General approach to evaluating locations that includes quantitative and qualitative inputs Procedure: Determine which factors are relevant Assign a weight to each factor that indicates its relative importance compared with all other factors. Decide on a common scale for all factors Score each location alternative Calculate weighted factor sum for each alternative Choose the alternative that has the highest composite score

Tools of TQM

Generating Ideas Check sheets Scatter diagrams Cause-and-effect diagrams Organize the Data Pareto charts Flowcharts Identifying Problems Histogram Run charts Statistical process control chart

A computer based tool for collecting, storing, retrieving, and displaying demographic data on maps.

Geographical information system (GIS)

Introduction to Aggregate Planning

Goal: To plan gross work force levels and set firm-wide production plans Concept is predicated on the idea of an "aggregate unit" of production as we will see later

Benefits of Pareto Diagrams

Helps a team focus on causes that have the greatest impact Displays the relative importance of problems in a simple visual format Helps prevent "shifting the problem" where the solution removes some causes but worsens others

Describe the uses of run charts.

Helps us in measuring performance over time.

Conceptual

High tolerance for ambiguity and tend to focus on people or social aspects of a work situation; take broad perspective to problem solving and like to consider many options and future possibilities. Adopt long-term perspective and rely on intuition and discussion with others to acquire information; willing to take risks and are good at finding creative solutions to problems; can foster an idealistic and indecisive approach to decision making.

Scheduling Manufacturing Operations

High-volume Intermediate-volume Low-volume Service operations

Problem solving Methods

Historical Cues Scenario Technique Perception of others

Cost to carry an item in inventory for a length of time, usually a year.

Holding cost

Cyclical Scheduling

Hospitals, police/fire departments, restaurants, supermarkets Rotating schedules Set a scheduling horizon Identify the work pattern Develop a basic employee schedule Assign employees to the schedule

self management

How you control your reaction to a feeling.

What is the Economic Order Quantity (EOQ) model?

IT IS USED TO FIND A FIXED ORDER QUANTITY THAT WILL MINIMIZE TOTAL ANNUAL INVENTORY COSTS. i. Assumptions 1. Only one product is involved 2. Annual demand requirements are known 3. Demand is even throughout the year 4. Lead time does not vary 5. Each order is received in a single delivery 6. There are no quantity discounts

Rational Choice Model

Identifying the problem Generating alternative solutions Selecting solution Implementing and evaluating the solution

List the four steps in the rational model of decision making.

Identifying the problem , generating alternative solutions, selecting a solution and implementing and evaluating the solution.

Operations Strategy

Improving inventory processes can offer significant cost reduction and customer satisfaction benefits Areas that may lead to improvement: Record keeping Records and data must be accurate and up-to-date Variation reduction Lead variation Forecast errors Lean operations Supply chain management

MRP Inputs: Inventory Records

Includes information on the status of each item by time period, called time buckets Information about Gross requirements Scheduled receipts Expected amount on hand Other details for each item such as Supplier Lead time Lot size Changes due to stock receipts and withdrawals Canceled orders and similar events

Continuous Improvement and Learning

Incremental and breakthrough improvement enhancing value to the customer through new and improved products and services; improving productivity and operational performance through better work processes and reductions in errors, defects, and waste; improving flexibility, responsiveness, and cycle time performance; and improving organizational management processes through learning Learning - why changes are successful through feedback between practices and results

If your boss holds you accountable for a decision, but you choose to make it in a group, which type of decision it?

Individual

Loading

Infinite loading - jobs are assigned to work centers without regard for the capacity of the work center. Finite loading - jobs are assigned to work centers taking into account the work center capacity and job processing times Vertical loading Horizontal loading

List some of the factors involved in choosing a supplier.

Information, communication, cooperation, and trust

Quality and Innovation

Innovation is vital to competing in today's world Innovation creates new customer needs and expectations and leads to higher levels of performance Creativity and breakthrough thinking are encouraged

Appraisal Costs - Costs of activities designed to ensure quality or uncover defects

Inspection equipment Testing Labs Inspectors Interruption of production to take samples

How to measure quality?

Internal - Absence of Defects External - Customer claims/returns

Describe the practices employed by the International Organization for Standards (ISO).

Internal auditing continuous improvement documents review customer focus recertification in 3 years.

Which financial analysis includes initial cost, expected annual cash flows, estimated future salvage value in an equivalent interest rate?

Internal rate of return

What is the difference between external and internal failure costs?

Internal- Has not shipped to the customer. Failure is kept in house. -Production and material costs increase External -Shipped to the customer. -Risk increased for loss of business

Making a choice without the use of conscious thought or logical inference

Intuition

Intuition in Decision Making

Intuition is making a choice without the use of conscious thought or logical inference. Intuition is automatic and involuntary and there are two types: Represents a judgment that is based on a subconscious integration of information stored in memory. It just "feels right." Represent a choice that is based on a familiar situation and partially subconscious application of previously learned information related to that situation, such as driving a car and riding a bike. Intuition comes from two sources: expertise and feelings The intuitive response is based on an interaction between one's expertise and feelings in a given situation. Drawbacks with this approach include the difficulty in getting others to agree with you based on known logic or information. It is also susceptible to the availability and representativeness heuristics. On the positive side, however, using intuition is a fast

Inventory

Inventory A stock or store of goods Independent demand items Items that are ready to be sold or used

Ratio of annual cost of goods sold to average inventory investment.

Inventory turnover

The speed at which goods move through a supply chain

Inventory velocity

Describe the role of the International Organization for Standards (ISO).

It defines quality system standards, based on the premise that certain generic characteristics of management practices can be standardized. This helps ensures that outputs will always meet customer expectations and requirements.

Describe the process types and when these would be used?

Job shop, batch, repetitive, continuous and project. i. Job shop is used on a small scale, intermittent and each job has different processing requirement (tool and die shop, or a vet) ii. Batch is used when a moderate volume of goods or services is desired and can candle a moderate variety in products or services. (Bakeries, movie theaters, airlines iii. Repetitive is used when higher volumes of more standardized goods or services are needed. (cars, tvs, computers) iv. Continuous is used when a very high volume of nondiscrete, highly standardized out is desired, (petroleum products, steel, sugar, flour, and salt) v. Project is used for jobs that is non routine, with a qunique set of objective to be accomplished in a limited time frame(building a bridge, making a movie)

Johnson's Rule Conditions

Job time must be known and constant Job times must be independent of sequence Jobs must follow same two-step sequence Job priorities cannot be used All units must be completed at the first work center before moving to second

Two Work Center Sequencing

Johnson's Rule: technique for minimizing completion time for a group of jobs to be processed on two machines or at two work centers. Minimizes total idle time Several conditions must be satisfied

Quality and Superior Service

Key components of service quality: employees and information technology Dimensions of service quality Reliability - ability to provide what was promised Assurance - knowledge and courtesy of employees and ability to convey trust Tangibles - physical facilities and appearance of personnel Empathy - degree of caring and individual attention Responsiveness - willingness to help customers and provide prompt service

Facilities Layout

Layout the configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system Facilities layout decisions arise when: Designing new facilities Re-designing existing facilities

Types of Teams

Leadership teams Steering committees, quality councils, executive leadership teams Problem solving teams Corrective action teams, quality circles Natural work teams Organized to perform a complete unit of work with extensive cross-training and sharing of responsibilities Self managed teams Have broad responsibilities, including the responsibility to manage themselves; generally more productive than conventional teams Virtual teams◦ Groups of people who work closely together despite being geographically separated; use technology to share information

Capacity Strategies

Leading Build capacity in anticipation of future demand increases Following Build capacity when demand exceeds current capacity Tracking Similar to the following strategy, but adds capacity in relatively small increments to keep pace with increasing demand

Reduced Transaction Processing

Lean systems seek to reduce costs associated with the 'hidden factory': Logistical transactions Balancing transactions Quality transactions Change transactions

Select two strategies for meeting uneven demand

Level Capacity, Chase demand

Johnson's Rule Optimum Sequence

List the jobs and their times at each work center Select the job with the shortest time Eliminate the job from further consideration Repeat steps 2 and 3 until all jobs have been scheduled

Scheduling Low-Volume Systems

Loading - assignment of jobs to process centers Sequencing - determining the order in which jobs will be processed Job-shop scheduling Scheduling for low-volume systems with many variations in requirements

Location Decisions: Objectives

Location decisions are based on: Profit potential or cost and customer service Finding a number of acceptable locations from which to choose Position in the supply chain Web-based retail organizations are effectively location independent Supply chain management issues such as supply chain configuration

The Need for Location Decisions

Location decisions arise for a variety of reasons: Addition of new facilities As part of a marketing strategy to expand markets Growth in demand that cannot be satisfied by expanding existing facilities Location decisions are strategically important: Are closely tied to an organization's strategies Effect capacity and flexibility Represent a long-term commitment of resources Impact competitive advantage Importance to supply chains

Locational Cost-Profit-Volume Analysis

Locational Cost-Profit-Volume Analysis Technique for evaluating location choices in economic terms Steps: Determine the fixed and variable costs for each alternative Plot the total-cost lines for all alternatives on the same graph Determine the location that will have the lowest total cost (or highest profit) for the expected level of output

List some of the tools that are used for evaluating location alternatives.

Locational cost-volume-profit analysis Factor rating Center of gravity method Transportation model

Evaluating Location Alternatives

Locational cost-volume-profit analysis Factor rating Center of gravity method Transportation model

MRP Considerations

Lot sizing Choosing a lot size for ordering or production Common lot sizing rules: Lot-for-Lot (L4L) ordering Economic Order Quantity (EOQ) Fixed Period Ordering

Directive

Low tolerance for ambiguity, oriented toward task and technical concerns when making decisions, efficient, logical, practical, systematic, action oriented and decisive, focus on facts; tend to be autocratic, exercise power and control, and focus on short run; best suited for air-traffic controller and other jobs when decisions must be made split-second.

MRP & ERP, Ch. 12

MRP = Materials Requirements Planning A computer-based information system that translates the finished product requirements of the master schedule into time-phased requirements for subassemblies, component parts, and raw materials, working backward from the due date using LEAD TIMES and other information to determine when and how much to order. It works backward. TAKES THE FINISHED PRODUCT AND WORKS BACKWARDS AND PUTS IT INTO A SCHEDULE.

MRP Processing

MRP processing takes the end item requirements specified by the master schedule and "explodes" them into time-phased requirements for assemblies, parts, and raw materials

Data-Driven Practices (2 of 2)

Make needed data and information available and accessible Ensure that organizational data, information, and knowledge are accurate, reliable, timely, secure, and confidential

Location: Identifying a Community

Many communities actively attempt to attract new businesses they perceive to be a good fit for the community Businesses also actively seek attractive communities based on such factors such as: Quality of life Services Attitudes Taxes Environmental regulations Utilities Development support

Avoiding Problems

Many problems can be avoided or mitigated by: Effective team selection Leadership Motivation Maintaining an environment of Integrity Trust Professionalism Being supportive of team efforts

Understanding Variation

Many sources of uncontrollable variation exist in any process Excessive variation results in product failures, unhappy customers, and unnecessary costs Statistical methods can be used to identify and quantify variation to help understand it and lead to improvements

Quantity and completion time of an end item *

Master schedule

MRP Inputs: Master Schedule

Master schedule: One of three primary inputs in MRP; states which end items are to be produced, when these are needed, and in what quantities. Managers like to plan far enough into the future so they have reasonable estimates of upcoming demands The master schedule should cover a period that is at least equivalent to the cumulative lead time Cumulative lead time The sum of the lead times that sequential phases of a process require, from ordering of parts or raw materials to completion of final assembly.

Defining and Measuring Capacity

Measure capacity in units that do not require updating Why is measuring capacity in dollars problematic? Two useful definitions of capacity Design capacity The maximum output rate or service capacity an operation, process, or facility is designed for Effective capacity Design capacity minus allowances such as personal time and maintenance

TRENDS IN SCM Trends affecting supply chain design and management:

Measuring supply chain ROI. • "Greening" the supply chain. • Reevaluating outsourcing. • Integrating IT. • Adopting lean principles. • Managing risks.

Center of Gravity Method

Method for locating a distribution center that minimizes distribution costs Treats distribution costs as a linear function of the distance and the quantity shipped The quantity to be shipped to each destination is assumed to be fixed The method includes the use of a map that shows the locations of destinations The map must be accurate and drawn to scale A coordinate system is overlaid on the map to determine relative locations

Poka-yoke is a fail-safe method which is focused on which of the following?

Mistake-proofing

Benefits of Control Charts

Monitors performance of one or more processes over time to detect trends, shifts, or cycles Distinguishes special from common causes of variation Allows a team to compare performance before and after implementation of a solution to measure its impact Focuses attention on truly vital changes in the process

Lean Operations: Terminology

Muda-Waste and inefficiency Kanban-A manual system that signals the need for parts or materials Pull system-Replacing material or parts based on demand Heijunka-Workload leveling Kaizen-Continuous improvement of the system Jidoka-Quality at the source (worker) Poka-yoke-Safeguards built into a process to reduce the possibility of errors Team concept-Use of small teams of workers for process improvement

What are some ways lean benefits can be achieved in services? (14.6)

Name at least two. Eliminate disruptions Make the system flexible Reduce set up times and processing times Simplify the process

Select two reasons to be close to your raw materials.

Necessity, Perishability

Gross requirements - (projected inventory + Safety stock) *

Net requirements

MRP Record

Net requirements Actual amount needed in each time period Planned-order receipts Quantity expected to received at the beginning of the period offset by lead time Planned-order releases Planned amount to order in each time period

Which communication style uses words like "maybe"?

Non-assertive

Define why a Geographical Information System (GIS) is advantageous for location analysis.

Obtain detailed information on factors such as population density, age, incomes, ethnicity, traffic patterns, competitor locations, educational institutions, shopping centers, crime statistics, transportation resources, utilities, recreational facilities, maps and images, and a wealth of other information associated with a given location.

Where do internal audits occur?

On-site

Economic Production Quantity (EPQ)

Only one product is involved Annual demand requirements are known Usage rate is constant Usage occurs continually, but production occurs periodically The production rate is constant Lead time does not vary There are no quantity discounts

The processes involved in responding to customer orders

Order fulfillment

Intermediate-Volume Systems

Outputs are between standardized high-volume systems and made-to-order job shops Run size, timing, and sequence of jobs Economic run size:

Discuss the steps of the Deming Cycle.

PDSA plan, do , study, act

The primary tool for determining the time and flow of a project is

PERT

PERT and CPM

PERT (program evaluation and review technique) and CPM (critical path method) are two techniques used to manage large-scale projects Managers can obtain: A graphical display of project activities An estimate of how long the project will take An indication of which activities are most critical to timely project completion An indication of how long any activity can be delayed without delaying the project

Select the three metrics that are used for project management. How do we measure ourselves?

Performance objective, cost, time

Emotional IntelligencePersonal and Social Competence

Personal Competence Self Awareness: Awareness of emotions (Gut feel) Self Management: Control over emotions Social Competence Social Awareness: Sensing other's emotions Social Management: Guiding and motivating

Goals of Strategic Planning

Plan for the long term, and understand the key influences, risks, challenges, and other requirements that might affect the organization's future opportunities and directions. Project the future competitive environment to help detect and reduce competitive threats, shorten reaction time, and identify opportunities. Develop action plans and deploy resources—particularly human resources—to achieve alignment and consistency, and provide a basis for setting and communicating priorities for ongoing improvement activities. Ensure that deployment will be effective—that a measurement system enables tracking of action plan achievement in all areas.

Select the steps of the Deming Cycle.

Plan, Do, Study Act

Learning Cycle

Planning Execution of plans Assessment of progress Revision of plans based upon assessment findings

Phases in the Auditing Process

Planning Phase - during this phase, audit objectives and scope and developed, and management is notified of the planned audit. Organizing Phase - during this phase, the assigned auditor organizes the audit and prepares detailed plans. Audit notification letter is issued. Preliminary Audit Phase - beginning the work discussed in the planning phase. Conducting Phase - approval of audit program is granted. Auditor carries out the audit. Summarizing Phase - completes the final report.

Discuss at least two things that can make teams fail.

Poor interpersonal skills, goals not clearly defined, and no long term commitment

The varying degrees of empowerment

Power Distribution Followers are granted authority to make decisions Delegation Power Sharing Manager/leader and followers jointly make decisions Participation Influence Sharing Manager/leader consults followers when making decisions Consultation Authoritarian Power Manager/leader impose decisions Domination

Expresses in current value the sum of all future cash flows of an investment proposal.

Present value

Training is which type of cost of quality?

Prevention

Select three factors to be considered when selecting a supplier.

Price, Location, Quality

Location: Identifying a Region

Primary regional factors: Locating near the raw materials Locating near of markets Distribution costs and perishability Labor factors Other factors Climate and taxes may play an important role in location decisions

Location: Identifying a Site

Primary site location considerations are Land Transportation Zoning Other restrictions

Sequencing

Priority rules: Simple heuristics used to select the order in which jobs will be processed. Job time: Time needed for setup and processing of a job.

This type of team creates and implements corrective actions.

Problem solving teams

Which layout design requires relative placement of departments?

Process

High-volume Intermediate-volume Low-volume Service operations

Process and product design Preventive maintenance Rapid repair when breakdown occurs Optimal product mixes Minimization of quality problems Reliability and timing of supplies

List some of the issues that influence the scheduling function.

Process and product design. Preventive maintenance. Rapid repair when breakdowns occur. Optimal product mixes. Minimization of quality problems. Reliability and timing of supplies.

Which layout design includes an assembly line?

Product

Lean: Building Blocks

Product design Process design Personnel/organizational elements Manufacturing planning and control

Basic Layout Types

Product layouts Process layouts Fixed-Position layout Combination layouts

Product Quality and Business Performance - PIMS Studies

Product quality is the most important determinant of business profitability. Businesses offering premium quality products and services usually have large market shares and were early entrants into their markets. Quality is positively and significantly related to a higher return on investment for almost all kinds of products and market situations. A strategy of quality improvement usually leads to increased market share but at a cost in terms of reduced short-run profitability. High-quality producers can usually charge premium prices.

Operations Strategy

Projects present both strategic opportunities and risks It is critical to devote sufficient resources and attention to projects Projects are often employed in situations that are characterized by significant uncertainties that demand Careful planning Wise selection of project manager and team Monitoring of the project Project software can facilitate successful project completion Be careful to not focus on critical path activities to the exclusion of other activities that may become critical Slack management can offer benefits to project management

Measuring the outcome of a paint job on your car would be qualitative or quantitative?

Qualitative

Prevention Costs - Costs of preventing defects from occurring

Quality improvement programs Training Monitoring Data collection and analysis Design costs

What is the point at which costs associated with improvement are no longer warranted?

Quality management stops when it is no longer able to return a profit.

The Importance of Suppliers

Quality of the supply chain affects the quality that customers receive "Superior quality, consistent service, and competitive pricing are just the price of entry to get into the game." Suppliers must continually improve and align their operations with customer needs.

What are the five bases of power?

REWARD, COERCIVE, LEGITIMATE, EXPERT AND REFERENT.

Which model of decision making has a four step approach?

Rational model

"Soft" Influence Tactics

Rational persuasion: Using logical arguments and facts to persuade another that a desired result will occur. Inspirational Appeal: Arousing enthusiasm by appealing to one's values and beliefs Consultation: Asking for participation in decision making or planning a change Ingratiation: Getting someone to do what you want by putting that person in a good mood or getting him or her to like you. Personal appeal: Appealing to feelings of loyalty and friendship before making a request

Principles for Customer-Supplier Relationships

Recognition of the strategic importance of customers and suppliers Development of win-win relationships between customers and suppliers Establishing relationships based on trust

Guiding Principles in Supplier Relationships

Recognizing the strategic importance of suppliers in accomplishing business objectives, particularly minimizing the total cost of ownership, Developing win-win relationships through partnerships rather than as adversaries, and Establishing trust through openness and honesty, thus leading to mutual advantages.

Process Selection

Refers to the deciding on the way production of goods or services will be organized It has major implications for Capacity planning Layout of facilities Equipment Design of work systems

When to Reorder

Reorder point When the quantity on hand of an item drops to this amount, the item is reordered. Determinants of the reorder point The rate of demand The lead time The extent of demand and/or lead time variability The degree of stockout risk acceptable to management

Describe the challenges associated with implementing a solution to a problem.

Resistance to change and breaking tradition and takes time and patience.

External Failure Costs - Failures discovered after delivery to the customer

Returned goods Reworking costs Warranty costs Loss of goodwill Liability claims Penalties

Internal Failure Costs - Failures discovered during production

Rework costs Problem solving Material and product losses Scrap Downtime

What is the costs of customer dissatisfaction?

Risk increased for loss of business.

Risk Management

Risks are an inherent part of project management Risks relate to occurrence of events that have undesirable consequences such as Delays Increased costs Inability to meet technical specifications Good risk management involves Identifying as many risks as possible Analyzing and assessing those risks Working to minimize the probability of their occurrence Establishing contingency plans and budgets for dealing with any that do occur

Relationships to Organization Theory

Roles for customers Resource Worker (or coworker) Buyer Beneficiary (or user) Outcome or product of value-creating transformation activities Resource dependence perspective Integrative bargaining

Explain five recent trends in supply chain management.

SUPPLY CHAIN ALIGNMENT, NETWORK CONFIGURATION, INFORMATION TECHNOLOGY, PRODUCT SERVICES AND CAPACITY PLANNING

Scheduling Services Considerations

Scheduling services different from manufacturing Inability to store or inventory services Random nature of customer requests for service Point of customer contact Back-office operations Front-office operations

Scheduling

Scheduling: Establishing the timing of the use of equipment, facilities and human activities in an organization Effective scheduling can yield Cost savings Increases in productivity

Exploit CRM Technology (1 of 2)

Segmenting markets based on demographic and behavioral characteristics. Tracking sales trends and advertising effectiveness by customer and market segment. Identifying and eliminated non-value-adding products that would waste resources as well as those products that better meet customers' needs and provide increased value. Identifying which customers should be the focus of targeted marketing initiatives with predicted high customer response rates.

Data-Driven Practices (1 of 2)

Select, collect, align, and integrate data and information for tracking daily operations and overall organizational performance

Which personal competence is it when you have a gut feeling?

Self-Awareness

What are some of the problem solving skills that show competence through emotional intelligence? (p. 144 Organizational Behavior)

Self-awareness Awareness of emotions (gut feeling) & sensing other's emotion Self-management Control over emotions & guiding and motivating

Sequencing

Sequencing: Determine the order in which jobs at a work center will be processed. Workstation: An area where one person works, usually with special equipment, on a specialized job.

Minimizing Scheduling Difficulties

Set realistic due dates Focus on bottleneck operations Consider lot splitting of large jobs

Participative Management the process whereby employees play a direct role in:

Setting goals Making decisions Solving problems Making changes in the organization

Disseminate Customer Information

Share information with employees Provide data to product designers and service managers

Cost resulting when demand exceeds the supply of inventory

Shortage Cost

Aggregate Planning Strategies

Should inventories be used to absorb changes in demand during planning period? Should demand changes be accommodated by varying the size of the workforce? Should part-timers be used, or should overtime and/or machine idle time be used to absorb fluctuations? Should subcontractors be used on fluctuating orders so a stable workforce can be maintained? Should prices or other factors be changed to influence demand?

Describe the uses of histograms.

Shows the frequency of occurrences of a variable.

Benefits of Flowcharts

Shows unexpected complexity, problem areas, redundancy, unnecessary loops, and where simplification may be possible Compares and contrasts actual versus ideal flow of a process Allows a team to reach agreement on process steps and identify activities that may impact performance Serves as a training tool

Run Charts

Similar to a LINE GRAPH Tool for tracking results over time Used to identify patterns Easy to construct and easy to interpret

Slack and the Critical Path

Slack can be computed one of two ways: Slack = LS - ES Slack = LF - EF Critical path The critical path is indicated by the activities with zero slack

Relevant Costs

Smoothing Costs changing size of the work force changing number of units produced Holding Costs primary component: opportunity cost of investment $'s tied up in inventory Shortage Costs Cost of demand exceeding stock on hand. Why should shortages be an issue if demand is known? Other Costs: payroll, overtime, subcontracting

Important Issues

Smoothing. Refers to the costs and disruptions that result from making changes from one period to the next Bottleneck Planning. Problem of meeting peak demand in the face of capacity restrictions Planning Horizon. Assumed given (T), but what is "right" value? Rolling horizons and end of horizon effect are both important issues Treatment of Demand. Assume demand is known. Ignores uncertainty to focus on the predictable or systematic variations in demand, such as seasonality

Power Concepts

Social Power: The ability to get things done with human, informational, and material resources ◦ Power is not power OVER others ◦ Power is the ability to GET THINGS DONE

What are disadvantages of group decision making?

Social pressure, Goal displacement

Determining the Critical Path

Step 3: Calculate the slack time for each activity by: Slack = (Latest Start) - (Earliest Start), or (Latest Finish) - (Earliest Finish). USUALLY THE LONGEST TIME

Strategic Planning

Strategy - the pattern of decisions that determines and reveals a company's goals, policies, and plans to meet the needs of its stakeholders Strategic planning - the process by which members of an organization envision its future and develop the necessary procedures and operations to carry out that vision

Quality and Differentiation Strategies

Superior product and service design Outstanding service High agility Continuous innovation Rapid response

Benefits of Scatter Diagrams

Supplies the data to confirm a hypothesis that two variables are related Provides both a visual and statistical means to test the strength of a relationship Provides a good follow-up to cause and effect diagrams

Overview of the Aggregation Problem

Suppose that D1, D2, . . . , DT are the forecasts of demand for aggregate units over the planning horizon (T periods.) The problem is to determine both work force levels (Wt) and production levels (Pt ) to minimize total costs over the T period planning horizon.

Every team member should have a clearly defined responsibility.

TRUE

Team Effectiveness Criteria

Teams must achieve their goals Teams should make progress quickly Teams must maintain or increase their strength as units Teams must preserve or strengthen their relationships with the rest of the organization

Technology

Technology The application of scientific discoveries to the development and improvement of products and services and operations processes Technological Innovation The discovery and development of new or improved products, services, or processes for producing or providing them

Technology Acquisition

Technology acquisition decisions must be weighed carefully What are the upside and downsides of the technology? What can and can't a technology do? Economic considerations Integration considerations Human considerations

ERP Project Organization

The 'big bang' Companies cast off all of their legacy systems at once and implement a single ERP system across the entire company The most ambitious and difficult implementation approach Franchising strategy Independent ERP systems are installed in each business unit of the enterprise while linking common processes across the enterprise Suits large or diverse companies that do not share many common processes across business units Slam Dunk ERP dictates the process design where the focus is on a few key processes More appropriate for smaller companies expecting to grow into ERP

Theory of Constraints

The Theory of Constraints Goal is to maximize flow through the entire system Emphasizes balancing flow Improve performance of bottleneck: Determine what is constraining the operation Exploit the constraint Subordinate everything to the constraint Determine how to overcome the constraint Repeat the process for the next constraint

How Much Safety Stock?

The amount of safety stock that is appropriate for a given situation depends upon: The average demand rate and average lead time Demand and lead time variability The desired service level

Basic Economic Order Quantity (EOQ) Model

The basic EOQ model is used to find a fixed order quantity that will minimize total annual inventory costs Assumptions Only one product is involved Annual demand requirements are known Demand is even throughout the year Lead time does not vary Each order is received in a single delivery There are no quantity discounts

Lean: Supporting Goals

The degree to which lean's ultimate goal is achieved depends upon how well its supporting goals are achieved: Eliminate disruptions Make the system flexible Eliminate waste, especially excess inventory

Designing Product Layouts: Line Balancing

The goal of a product layout is to arrange workers or machines in the sequence that operations need to be performed

Designing Process Layouts

The main issue in designing process layouts concerns the relative placement of the departments Measuring effectiveness A major objective in designing process layouts is to minimize transportation cost, distance, or time

Aggregate Units

The method is (fundamentally) based on notion of aggregate units. They may be: Actual units of production Weight (tons of steel) Volume (gallons of gasoline) Dollars (Value of sales) Fictitious aggregated units they are a composite that estimates a tangible 'input constant'

Behavioral

The most people oriented of the four styles, works well with others and enjoy social interactions in which opinions are openly exchanged; supportive, receptive to suggestions, show warmth, prefer verbal to written information; likes to hold meetings; tendency to avoid conflict and to be too concerned about others; leads to adopt a wishy-washy approach to decision making and a hard time saying no to others and to have difficulty making difficult decisions.

Nominal Group Technique

The nominal group technique brings together a small number of individuals (usually 7 to 10) who systematically offer their individual solutions to a problem and share their personal reactions to those solutions. This technique can lead to: A group decision in only a few hours Discourages any pressure to conform Requires a trained group leader Requires only one narrowly defined problem be considered at a time.

Line balancing

The process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements Why is line balancing important? It allows us to use labor and equipment more efficiently. To avoid fairness issues that arise when one workstation must work harder than another.

Procurement

The purchasing department is responsible for obtaining the materials, parts, and supplies and services needed to produce a product or provide a service. The goal of procurement Develop and implement purchasing plans for products and services that support operations strategies

Net Requirements

The requirements that cannot be met with projected on-hand or scheduled receipts are the net requirements. These must be satisfied from production during the time horizon Formula: Net Requirements = Gross Requirements - (Projected receipts + scheduled receipts) The master schedule calls for 100 shutters to be ready for delivery, and no shutters are projected to be on hand at the start of week 4, so the net requirements are also 100 shutters.

Assumptions of Priority Rules

The setup of jobs is known Setup time is independent pf processing sequence Setup time is deterministic There will be no interruptions in processing such as: Machine breakdowns Accidents Worker illness

Supply Chain Management

The strategic coordination of business functions within a business organization and throughout its supply chain for the purpose of integrating supply and demand management

What are the three costs of quality? Explain each.

The three costs off quality are appraisal, prevention and failure. -Appraisal is a process already in motion, checkpints along the way -Prevention is before the process is in motions. -Failure is costs caused by defective parts or products or faulty service

Theory of Constraints Metrics

Throughput - the rateat which the system generates money through sales Physical assets - the total system investment Inventory Buildings and land Plant and equipment Operating expense - money the system spends to convert inventory into throughput

What are the three metrics of theory of constraints?

Throughput, Inventory, Operating expense

What are the three basic issues of scheduling batch systems?

Timing of jobs, Sequencing of jobs, Run size of jobs

What is the primary purpose of aggregate planning?

To plan gross work force levels and set firm wide production plans

"There are no quantity discounts", is an assumption of the EOQ model.

True

A classification system is a requirement for effective inventory management.

True

All team members should have knowledge of the problem.

True

Change requires breaking tradition

True

ISO is intended to assist in trade between countries.

True

If internal failures are high, cost of quality will also be high?

True

Reorder point will increase if the lead time increases.

True

Requirements for an ISO certification is the same in every country.

True

Six sigma is a lean tool.

True

The more the price elasticity, the more effective pricing will be in influencing demand.

True

Theoretically, safety stock above the end item level is not needed when utilizing a MRP effectively. *

True

When using cost-volume analysis we assume everything produced can be sold.

True

Complementary Leadership Styles ◦

Unable and unwilling - Directing ◦ Unable but willing - Coaching ◦ Able but unwilling - Supporting ◦ Able and willing - Delegating

Quality and Product Design

Understanding customer needs and expectations Systematic processes for design and product improvement Tools and techniques Concurrent engineering Value analysis Design reviews Experimental design

Deriving EOQ

Using calculus, we take the derivative of the total cost function and set the derivative (slope) equal to zero and solve for Q. The total cost curve reaches its minimum where the carrying and ordering costs are equal.

Discuss and contrast the dimensions of the decision making styles. (CH 12 Organizational Behavior)

Value Orientation ANALYTICAL- data driven Behavioral- encouraging others to assist them with a decision Conceptual- take aspects from other people Directive-task driven Tolerance for Ambiguity ANALYTICAL & CONCEPTUAL - HIGH TOLERANCE DIRECTIVE & BEHAVIORAL - LOW TOLERANCE

Scheduling Difficulties

Variability in Setup times Processing times Interruptions Changes in the set of jobs No method for identifying optimal schedule Scheduling is not an exact science Ongoing task for a manager

Process Selection

Variety How much? Equipment flexibility To what degree? Volume Expected output?

The Deming Cycle

What are we trying to accomplish? What changes can we make that will result in improvement? How will we know that a change is an improvement? PDSA plan do study act

Capacity Planning Questions

What kind of capacity is needed? How much capacity is needed to match demand? When is it needed? Related Questions: How much will it cost? What are the potential benefits and risks? Are there sustainability issues? Should capacity be changed all at once, or through several smaller changes Can the supply chain handle the necessary changes?

Automation Questions

What level of automation is appropriate? How would automation affect system flexibility? How can automation projects be justified? How should changes be managed? What are the risks of automating? What are the likely effects of automating on: Market share Costs Quality Customer satisfaction Labor relations Ongoing operations

Explain how price elasticity affects demand.

When price gets greater than demand decreases.

Vision

Where the organization is headed and what it intends to be Brief and memorable - grab attention Inspiring and challenging - creates excitement Descriptive of an ideal state - provides guidance Appealing to all stakeholders - employees can identify with Example - Premier: "Premier's Owners will be the leading healthcare systems in their markets, and, with them, Premier will be a major influence in reshaping healthcare"

A hierarchical listing of what must be done during a project.

Work breakdown structure

Affinity diagram

Write ideas on sticky notes and tack them to a board in related groupings This method allows ideas to be organized and allows members of the group time to think and process the ideas of other group members

Can an aggregate plan be longer than 12 months?

Yes

Is ISO 9000 a type of supplier certification?

Yes

Yield Management

Yield Management - the application of pricing strategies to allocate capacity among various categories of demand. The goal is to maximize the revenue generated by the fixed capacity Fixed capacity Hotel, motel rooms Airline seats Unsold rooms or seats cannot be carried over

Six Sigma

a business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers and a clear financial return for the organization. Based on a statistical measure that equates to 3.4 or fewer errors or defects per million opportunities Pioneered by Motorola in the mid-1980s and popularized by the success of General Electric

Value Stream Mapping

a visual tool to systematically examine the flows of materials and information Its purpose is to help identify waste and opportunities for improvement Data collected: Times Distances traveled Mistakes Inefficient work methods Waiting times Information flows

Describe the uses, advantages/disadvantages, and criteria for team decision-making.

a. Advantages-greater pool of knowledge, different perspectives, greater comprehension, increased acceptance, and training ground. b. Disadvantages- social pressure, domination by a vocal few, logrolling, goal displacement, and groupthink.

what is the key difference between MRP and ERP?

a. An extension of MRP b. Integration of financial, manufacturing, and human resources in a single database

List the key metrics that are utilized when employing project management. How could you measure each of these?

a. Cost stay within in budget b. Time/Schedule completed on time c. Performance objectives are realized

Describe the basic steps in problem solving.

a. Define the problem b. Collect data c. Analyze the problem d. Generate solutions e. Choose a solution f. Implement a solution g. Monitor the solution to see if achieves the goal.

Define the DMAIC process.

a. Define the problem b. Measure the problem c. Analyze the problem d. Improve the problem e. control

What are the three types of EOQ? Which one is used for batch processing?

a. EOQ, EPQ, QUALITY DISCOUNTS MODELS b. EPQ

Define at least two types of waste in a lean philosophy. (14.2)

a. Excess inventory b. overproduction

Differentiate between forward scheduling and backward scheduling.

a. Forward scheduling ahead to some point and time b. Backward scheduling, pick a due date and work backwards in time to meet the due date

List the three primary questions that bear on process selection.

a. How much variety will the process need to be able to handle? b. How much volume will the process need to be able to handle? c. How much personnel and equipment is needed?

What are the differences between infinite loading and finite loading?

a. Infinite loading is jobs are assigned to work center without worrying about the capacity. b. Finite load is where you have to worry about the capacity.

Explain some of the issues to consider when developing an alternative layout appropriate for an organization's operations.

a. Initial costs in setting up the layout b. Expected operating costs c. Amount of effective capacity created d. The ease of modifying the system

List the steps to receive quality certification through the International Organization for Standards (ISO).

a. Management responsibility b. Resource management c. Product realization d. Measurement, analysis, and improvement.

List the seven categories of constraints that can limit the performance of a process or system.

a. Market- Insufficient demand b. Resource- Too little of one or more resources c. Material- Too little of one or more materials d. Financial- Insufficient funds e. Supplier-Unreliable, long lead time, substandard quality f. Knowledge or competency- Needed knowledge or skills missing or incomplete g. Policy- Laws or regulations interfere

Compare and contrast personalized power and socialized power and the effect of each on decision making.

a. PERSONALIZED POWER IS HELPING ONE SELF , Focus more on satisfying their own needs, Focus less on the needs of their underlings, AND Act like "the rules" others are expected to follow don't apply to them b. SOCIALIZED POWER IS HELPING OTHERS, plans, self-doubts, mixed outcomes and concerns for others

Describe the tools used in project management.

a. PERT b. CPM

List the key elements of total quality management (TQM).

a. Process orientation supported by continuous improvement and learning b. Employee engagement and teamwork c. Management by fact d. Strategic focus on quality as a source of competitive advantage e. Visionary leadership

Describe what is meant by "Sustainable Production Processes" and identify goals of such processes.

a. refers to service and production processes that use resources in ways that do not harm ecological systems that support both current and future human existence. b. reducing packaging, materials, water and energy use, and the environmental impact of the supply chain, including buying locally. Other possibilities include reconditioning used equipment (e.g., printers and copiers) for resale, and recycling

high tolerence

analytical and conceptual

decision making styles

analytical, behavioral, conceptual, and directive.

Nominal technique

anonymous, no pressure to conform to popular opinion

Good costs of quality

appraisal prevention

Which style is expressive?

assertive and aggressive

3 communication styles

assertive, aggressive and not assertive

not clear in making decisions ambiguity

behavioral and directive

group decision making techniques

brainstorming, delphi and nominal

Name the above quality tool.

cause and effect

Name the above quality tool. columns and rows organizing and collecting data

check sheet

Name the above quality tool.

control chart

This tool assist in displaying if a process is acceptable or unacceptable has boundries (abnormal variations)

control chart

Customer engagement -

customers' investment in or commitment to a brand and product offerings Characteristics customer retention and loyalty customers' willingness to make an effort to do business with the organization customers' willingness to actively advocate for and recommend the brand and product offerings

EPQ

d = demand p = production capacity

Which group decision making techniques uses questionairres?

delphi

Who in the organizations should be involved in TQM?

employees

Bad costs of quality

failure costs (internal and external) Costs caused by defective parts or products or by faulty service

Name the above quality tool.

flow chart

We may use this chart in training to demonstrate steps in a process

flowchart identifies the sequence of activities or the flow of materials and information in a process. Flowcharts help the people involved in the process understand it much better and more objectively by providing a picture of the steps needed to accomplish a task.

Delegation:

granting decision-making authority to people at lower levels The highest degree of empowerment is delegation. When the employee is competent, the employee shares the manager's task objectives, the manager has a long-standing and positive relationship with the employee, and when the lower-level person was also a supervisor.

What are the advantages of group decision making?

greater pool of knowledge different perspective greater comprehension increased acceptance training ground

Analytical

high tolerance for ambiguity, tendency to overanalyze a situation, considers more information and alternatives than do directives, careful decision makers who take longer to make decisions but also respond well to new or uncertain situations, can be autocratic.

Name the above quality tool.

histogram

What are the 4 key steps which describe a logical, data-driven process for solving problems? What is important about the solution?

i. Redefining and analyzing the perceived problem ii. generating ideas iii. evaluating ideas and selecting a workable solution iv. implementing the solution. b. Solution needs to be workable, tested and monitored.

Self awareness

intuition (feeling)

What are the different ways to define units?

inventory, gallons, pounds, inches

What does the term quality mean?

is the ability of a product or service to consistently meet or exceed customer expectations.

Which style is passive?

non assertive

The worst communicator to have in your company

non assertive communicator

This tool assist in ordering our measurements in highest to lowest order.

pareto

What is good for creativity?

recognizing the person's ideas

A chart used to measure performance over time

run chart

Name the above quality tool. no boundries

run chart

A chart used to determine the relationship between two variables

scatter

Name the above quality tool * relationship between two variables.

scatter diagram

Empowerment:

sharing varying degrees of power with lower-level employees to tap their full potential

What are the disadvantages?

social pressure domination by a vocal few logrolling goal displacement groupthink

Supply Chain:

the sequence of organizations - their facilities, functions, and activities - that are involved in producing and delivering a product or service Sometimes referred to as value chains

Brainstorming technique

throw out ideas and then puts into an affinity diagram

Personalized Power

used for personal gain

Socialized Power

used to create motivation ◦ used to accomplish group goals