SCM 301 Exam 3
System nervousness
small changes in the upper-level-production plan cause major changes in the lower-level production plan
Lean production emphasizes all of the following EXCEPT: a) Continuous improvement b) Reduction of waste c) Synchronization of material flows d) Large batch sizes
large batch sizes
lean production
refers to the operating philosophy of waste reduction & value enhancement of the Toyota Production System (TPS) in its entirety.
1. What capacity planning tool is used for finished good items? A.Resource Requirements Planning B.Rough-cut Capacity Planning C.Capacity Requirements Planning D.Master Production Scheduling
resource req
long range capacity planning
resource requirement planning (RRP) - forecasting and demand management
medium range capacity plan
rough cut capacity planning (RCCP)
To check the feasibility of the Master Production Schedule, one would look to: a) Rough-Cut Capacity Plan b) Material Requirement Plan c) Capacity Requirement Plan d) Distribution Requirement Plan
rough-cut capacity plan
what is an example of the master schedule where capacity is
skilled labor or professional service like a appointment book
disadvantages of functional project
-aspects of the project that are not directly related to the functional area get short-changed, -motivation of team members is often weak, -needs of the client are secondary and are responded to slowly
Six Major Sources of Variation
1) People 2) Machines 3) Materials 4) Methods 5) Measurement 6) Environment
time-cost relationship in CPM
cost decreases as time goes on
what method helps to identify the critical paths?
critical path method (CPM)
short range planning
days/weeks/components/sub-assemblies
5 Steps of DMAIC cycle
define, measure, analyze, improve, control
Work Breakdown Structure
defines the hierarchy of project tasks, subtasks, and work packages
time cost models
determines the optimum point in time-cost tradeoffs -activity direct costs -project indirect costs -activity completion times
process management practices
lean production (lean manufacturing) and six sigma
total quality management (TQM)
managing the entire organization so that it excels on all dimensions of products and services that are important to the customer. -a statistics based decision making framework designed to make quality improvements in the value-adding processes
medium range materials plan
master production scheduling (MPS) - comes from distribution requirements plannign (DRP)
triple constraint
schedule, cost, performance
project milestone
specific events in the life of the project
level
stable workforce with constant output, inventory and backlogs absorb fluctuations in demand
when is CPM with Three Activity Time Estimates used?
-Used when activity times are uncertain. -Used to obtain the same information as the Single Time Estimate model and probability information.
when is CPM with a single time estimate used
-Used when activity times are known with certainty. -Used to determine timing estimates for the project, each activity in the project, and slack time for activities.
firmed segment
(AKA demand time fence), from current period to several weeks into future. Can only be altered by senior management
Tentative segment
(AKA planning time fence), from end of firmed segment to several weeks into the future
when is time-cost model and project crashing used?
-Used when cost trade-off information is a major consideration in planning. -Used to determine the least cost in reducing total project time.
network-planning models
-A project is made up of a sequence of activities that form a network representing a project -The path taking the longest time through this network of activities is called the "critical path." -The critical path provides a wide range of scheduling information useful in managing a project.
functional project advantages
-A team member can work on several projects -Technical expertise is maintained within the functional area -The functional area is a "home" after the project is completed -Critical mass of specialized knowledge
disadvantages of pure project organizational structure
-Duplication of resources -Organizational goals and policies are ignored -Lack of technology transfer -Team members have no functional area "home"
matrix project organization structure advantages
-Enhanced communications between functional areas -Pinpointed responsibility -Duplication of resources is minimized -Functional "home" for team members -Policies of the parent organization are followed
statement of work
-Provides a high level view of the project -Contains information about -Objectives -Description of work to be completed -Task breakup - the high level work breakdown structure -Proposed schedule -Milestones -Performance measures -Acceptance/Signoff criteria
advantages of pure project
-The project manager has full authority over the project -Team members report to one boss -Shortened communication lines -Team pride, motivation, and commitment are high
disadvantages of matrix project organization structure
-Too many bosses -Depends on project manager's negotiating skills -Potential for sub-optimization
project crashing steps
1. Identify all project activities. 2. Sequence activities and construct network. 3. List out all paths and determine the critical path. 4. Find cost per time period to expedite = (Crash Cost - Normal Cost )/ (Normal Time - Crash Time) 5. Reduce project completion time. (Crash Project) (ONE time period at a time!) -Note that reduce on CP only and that CP may CHANGE as project is reduced.
critical path method steps
1. identify each activity to be done and estimate how long it will take 2. determine the required sequence and construct a network diagram 3. determine the critical path 4. determine the early start/finish and late start/finish schedule
task
A further subdivision of a project - usually shorter than several months and performed by a single group or organization
project
A series of related jobs usually directed toward some major output and requiring a significant period of time to perform.
An integral part of Six Sigma is: a) Firms committing to a program of continual reassessment and improvement b) Using ABC analysis to divide on-hand inventory into three classes c) Moving new products to market more quickly d) Enterprise resource planning
Firms committing to a program of continual reassessment and improvement
project management
The management activities of planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project.
work package
a group of activities combined to be assignable to a single organizational unit
pre-recs for the critical path method
a project must have: well-defined activities whose completion marks the end of the project; independent activities; and activities that follow a given sequence.
An integral part of Six Sigma is: a) Firms committing to a program of continual reassessment and improvement b) Using ABC analysis to divide on-hand inventory into three classes c) Moving new products to market more quickly d) Enterprise resource planning
a) Firms committing to a program of continual reassessment and improvement
Bill of Materials (BOM)
document that shows an inclusive listing of all component parts & assemblies making up the final product
pure project organizational structure
each department reports to one project manager
The common term across the seven wastes is: Overspending Keiretsu Excess Robust
excess
project manager
he juggles the triple constraint
Which tool is useful for presenting data in an organized fashion, indicating process problems from most to least severe: Pareto Charts Check Sheets Cause-and-Effect Diagrams Fishbone Diagrams
pareto charts
activities
pieces of work that consume time
basic assumption of time-cost models
relationsihp between activity completion time and project cost
The Malcolm Baldrige National Quality Award recognizes firms for their quality achievements and is only given to U.S. firms. True False
true
The primary design objective with lean layouts is to reduce wasted movements of workers, customers, and/or work-in-process. True False
true
Conformance quality:
Degree to which the product or service design specifications are met
Kanban
-A "pull" production system -A physical control system (typically visual in nature) -Composed of cards and containers (production card and withdrawal card)
Six Sigma quality definition
-A philosophy and set of methods companies use to eliminate defects in their products and processes -Seeks to reduce variation in the processes that lead to product defects -The name, "six sigma" refers to the variation that exists within plus or minus three standard deviations of the process outputs
Advantages of ERP systems
-Added visibility reduce supply chain inventories -Helps to standardize manufacturing processes -Measure performance & communicate via a standardized method
Kanban process
-Authorizes production and controls materials movement -Work centers generate production orders for previous work centers -As parts are used - empty containers with production authorization are returned to the work center -Production fills up the container and is sent to the downstream work center
Basic assumptions of Process quality control?
-Every process has random variation in it. -Production processes are not usually found in a state of control.
SPC R chart
-One of two control charts for variables. Shows sample ranges over time.( Difference between smallest & largest values in inspection sample) -Monitors variability in process (Example: Weigh samples of coffee & compute ranges of samples; Plot)
Kanban objectives
-Reduce time it takes to circulate a container (Machine setup time, run time, wait time, transit time) -Reduce the number of containers and number of parts in each container
SPC X Chart
-Second control chart for variables -Shows sample means over time -Monitors process average (Example: Weigh samples of coffee & compute means of samples; Plot)
disadvantages of ERP systems
-Substantial time & capital investment -Complexity -Firms adapt processes to meet ERP system
SPC types of control charts
-Variable (Continuous): Usually measured by the mean and the standard deviation. X-bar and R chart applications -Attribute (Go or no-go information). Defectives refers to the acceptability of product across a range of characteristics. p-chart application c-chart application
How do firms use statistical process control?
-gather process performance data -create control charts to monitor process variability -monitor the process by collecting sample measurements of the process over time and plot on charts.
2 causes of variation in statisitical process control (SPC)?
1. Assignable causes are factors that can be clearly identified and possibly managed. These can be eliminated. 2. Natural/common causes are inherent to the production process. In order to reduce variation due to common causes, the process must be changed.
Continuous Improvement Methodology: PDCA Cycle
1. Plan a change aimed at improvement 2. Execute the change 3. study the results; did it work? 4. institutionalize the change or abandon. REPEAT
Which of the following is the hierarchical operations planning process order? a) 1st - Resource requirements plan (RRP), 2nd - Rough-cut capacity plan (RCCP), 3rd - Capacity requirements plan (CRP) b) 1st - Rough-cut capacity plan (RCCP), 2nd - Resource requirements plan (RRP), 3rd - Capacity requirements plan (CRP) c) 1st - Capacity requirements plan (CRP) 2nd - Resource requirements plan (RRP), 3rd - Rough-cut capacity plan (RCCP), d) None of these
1st - Resource requirements plan (RRP), 2nd - Rough-cut capacity plan (RCCP), 3rd - Capacity requirements plan (CRP)
medium range planning
6-18 months, end items/level 0
Aggregate Planning
Chase, level, and combination are the 3 strategies for meeting demand using aggregate planning
Defects Per Million Output (DPMO)
Common metric used to describe and compare process performance
Six Sigma DMAIC Cycle
Define, Measure, Analyze, Improve, Control -focus efforts based on math -overall focus is to understand and achieve what the customer wants
True or false The process of converting a parent item's planned order releases into component gross requirements is referred to as the ERP Implosion.
False
MRP inputs
MPS, inventory records, bill of material
Master Production Schedule
Master Production Schedule (MPS) - A detailed disaggregation of the aggregate production plan, listing the exact end items to be produced by a specific period.
chase
Match production to customer order rate by hiring and laying off employees
MRP explosion
Process of converting planned production of parent item into component gross requirements.
internal failure costs
Scrap, Rework, Process failure, Process downtime, Price-downgrading
combination of level and chase
Stable workforce, variable hours - vary output through overtime or flexible schedules
Distribution requirement planning (DRP)
describes the time-phased net requirements from warehouses & distribution centers. Links production with distribution planning
costs relevant to aggregate planning?
direct and indirect labor costs and overtime, changing production rate (hiring, training, layoffs), inventory holding costs, back ordering costs
Which of the following is a Long Range Materials Plan: a) Aggregate Production Plan b) Master Capacity Plan c) Materials Requirements Plan d) Capacity Requirements Plan
aggregate production plan
long range materials plan
aggregate production planning (APP) - forecasting and demand management
costs of quality
appraisal costs, prevention costs, internal failure costs, external failure costs
Assemble-to-order products
basic parts for the product are produced, but final assembly doesn't occur until of customer order
An important outcome of statistical process control is: a) Firms can take corrective actions before process variabilities get out of control b) Firms can visually monitor process performance c) Firms can minimize total inventory cost d) Both A & B e) None of these
both A & B
short range capacity planning
capacity requirements planning (CRP)
Which of the following basic production strategies used for addressing the aggregate planning problem would work best with make-to-order manufacturing firms? a) Capacity Production Strategy b) Chase Production Strategy c) Level Production Strategy d) Backlog Production Strategy
chase production strategy
key strategies for meeting demand
chase, level, and a combo
Manufacturing resource planning (MRP II)
combined MRP with master production scheduling, rough- cut capacity planning, capacity requirement planning, and other operations planning software modules
what is the primary focus of 6 sigma and lean projects?
conformance quality
What demand drives MRP?
dependent demand
Super Bill of Materials (AKA planning BOM, pseudo BOM, phantom BOM, or family BOM)
enables the firm to forecast the total demand end products
A lean system is also known as a push system. True False
false
A type of card called a kanban is used to signal when a process is out of control in the production process. True False
false Kanban is used for lean just in time manufacturing
Aggregate Production Plan (APP)
hierarchical planning process that translates annual business plans & demand forecasts into a production plan for a product family (products that share similar characteristics) in a plant or facility leading to the APP
enterprise resource planning systems (ERP)
information system connecting all functional areas and operations of an organization and in some cases, suppliers and customers via common software infrastructure and database
Enterprise Resource Planning Systems (ERP)
information system connecting all functional areas and operations of an organization and in some cases, suppliers and customers via common software infrastructure and database
design quality
inherent value of the product in the marketplace -components: Performance, Features, Reliability, Durability, Serviceability, Response, Aesthetics, and Reputation.
appraisal costs
inspections, audits
process management
is the application of knowledge, skills, tools, techniques, and systems to define, visualize, measure, control, report, and improve processes with the goal to meet customer requirements efficiently. -it also enables firms to achieve desired levels of customer service (low cost, quality, responsiveness).
Materials requirements planning (MRP)
is the logic for determining the number of parts, components, and materials needed to produce a product.
two types of operations planning
materials plans and capacity plans
short range materials plan
materials requirements planning (MRP) - bills of material and inventory status. leads to production activity control and purchase planning and control
capacity
maximum workload that an organization is capable of completing in a given period of time.
ERP provides
means for supply chain members to share information so that scarce resources can be fully utilized to meet demand, while minimizing supply chain inventories
What are the goals of aggregate scheduling?
meet demand, use capacity efficiently, meet inventory policy, minimize costs (labor, inventory, plant and equipment, subcontract)
long range planning
more than a year, it is product groups/families
items in a central database and servers
operations, logistics and warehouse, sales and marketing, data support system, finance and accounting, headquarters and branches, human resources, engineering
ERP software providers
oracle, SAP, microsoft
the 7 wastes
overproduction, waiting time, unnecessary transportation, excess processing, too much inventory, unnecessary motion, defects
MRP outputs
planned orders to be released at a future time, order release notices to execute the planned orders, changes in due dates of open orders do to rescheduling, cancellations or suspensions of open orders due to cancellation or suspensions of orders on the master production schedule, inventory status data.
resource planning
process of determining the production capacity required to meet demand.
Make-to-stock products -
produces produced ahead of customer order so it is immediately available for delivery
Make-to-order products
products produced at time of customer order
prevention costs
quality planning supplier capability quality improvement
Material Requirements Plan (MRP)
system of converting the end items from the master production schedule into a set of time-phased component part requirements
According to the textbook, which of the following is considered a reason that ERP implementations fail? a) The organization may lack the necessary workforce and expertise to properly implement the system b) Top management becomes overcommitted to the point where they constantly encourage the employees during implementation c) Organizations tend to spend too much time and money training their employees on the new system d) All of these
the organization may lack the necessary workforce and expertise to properly implement the system
MRP provides
time scheduling information specifying when each of the materials, parts, and components should be ordered or produced.
True or false A Mixed Production Strategy uses a blend of chase and level strategies by striving to maintain a stable core workforce while using other means like temporary workers to manage short-term high demand.
true
True or false A master production schedule is a medium range materials plan
true
True or false According to the text, resource planning is the process of determining the production capacity required to meet demand.
true
True or false System nervousness is when even small changes to upper-level production plans cause major changes in lower-level production plans.
true
True or false Planning horizon is shorter than APP, but longer than the lead time to produce the item.
true
true or false the More detailed than APP & easier to plan under stable demand.
true
Available to promise
uncommitted portion of firms planned production
Time fence system
used to deal with nervousness by separating the planning horizon into: firmed segment and tentative segment
external failure costs
warranty costs, returns, customer complaints, recalls and lawsuits
elements of lean
waste reduction, lean supply chain relationships (channel integration), lean layouts (visual), inventory and setup time reductions, small batch scheduling, continuous improvement, workforce empowerment
