MGMT 3200 exam 4

What are the three supporting goals of a lean system?

1 Eliminate disruptions. 2 Make the system flexible 3 Eliminate waste, especially excess inventory

What are the key aspects of supply chain management relative to matching supply and demand?

1) Determining the appropriate level of outsourcing. 2)Managing procurement. 3)Managing suppliers. 4)Managing customer relationships. 5)Being able to quickly identify problems and respond to them.

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

1)Eliminate disruptions. For example, try to avoid having workers who are servicing customers also answer telephones. 2)Make the system flexible. 3)Reduce setup times and processing times. Have frequently used tools and spare parts readily available. 4)Eliminate waste. This includes errors and duplicate work. Keep the emphasis on quality and uniform service. 5)Minimize work-in-process. Examples include orders waiting to be processed, calls waiting to be answered 6)Simplify the process. This works especially when customers are part of the system (self-service systems including retail operations, ATMs and vending machines, service stations, etc.).

List the key tactical responsibilities:

1)Forecasting 2)Sourcing:Choose suppliers and some make or buy decisions 3)Operations planning 4)Managing inventory 5)Transporation planning: matching capacity to demand 6)Collaborating:Work with supply chain partners

What aspects of supply chain management are often a concern of small businesses?

1)Inventory management 2)Reducing risks 3)International trade

Key elements of risk management include:

1)Know your suppliers. 2)Provide supply chain visibility. 3)Develop event-response capability

Name some obstacles to a conversion to lean operation.

1)Management may not be totally committed or may be unwilling to devote the necessary resources to conversion. This is perhaps the most serious impediment because the conversion is probably doomed without serious commitment. 2)Workers and/or management may not display a cooperative spirit. The system is predicated on cooperation. Managers may resist because lean shifts some of the responsibility from management to workers and gives workers more control over the work. Workers may resist because of the increased responsibility and stress. 3)It can be very difficult to change the culture of the organization to one consistent with the lean philosophy. 4)cultures vary from organization to organization. Some cultures relate better to the lean philosophy than others. If a culture doesn't relate, it can be difficult for an organization to change its culture within a short time. 5)manufacturers that operate with large amounts of inventory to handle varying customer demand may have difficulty acclimating themselves to less inventory. 6)Suppliers may resist for several reasons

Name some trends in supply chain management.

1)Measuring supply chain ROI.-enables managers to incorporate economics into outsourcing and other decisions, giving them a rational basis for managing their supply chains. 2)"Greening" the supply chain.-This may involve redesigning products and services; reducing packaging; near-sourcing to reduce pollution from transportation 3)Reevaluating outsourcing. 4)Integrating IT.-produces real-time data that can enhance strategic planning and help businesses to control costs, measure quality and productivity, respond quickly to problems, and improve supply chain operations 5)Adopting lean principles.- to improve the performance of their supply chains 6)Managing risks.

List the purchasing interfaces.

1)Operations constitute the main source of requests for purchased materials, and close cooperation between these units and the purchasing department is vital if quality, quantity, and delivery goals are to be met. 2)Accounting is responsible for handling payments to suppliers and must be notified promptly when goods are received in order to take advantage of possible discounts. 3)Design and engineering usually prepare material specifications, which must be communicated to purchasing. 4)Receiving checks incoming shipments of purchased items to determine whether quality, quantity, and timing objectives have been met, and it moves the goods to temporary storage. 5)Suppliers or vendors work closely with purchasing to learn what materials will be purchased and what kinds of specifications will be required in terms of quality, quantity, and deliveries

. List the main steps in the purchasing cycle.

1)Purchasing receives the requisition 2)Purchasing selects a supplier. 3)Purchasing places the order with a vendor. 4)Monitoring orders. 5)Receiving orders.

Building Blocks: Personnel/Organizational

1.Workers as assets 2.Cross-trained workers 3.Continuous improvement 4.Cost accounting 5.Leadership/project management

An event management system should have four capabilities:

1.monitoring the system; 2.notifying when certain planned or unplanned events occur 3.simulating potential solutions when an unplanned event occurs 4.measuring the long-term performance of suppliers, transporters, and other supply chain partners

List the strategic responsibilities:

1)Supply chain strategy alignment: Aligning supply and distribution strategies with organizational strategy and deciding on the degree to which outsourcing will be employed. 2)Network configuration: Determining the number and location of suppliers, warehouses, production/operations facilities, and distribution centers. 3)Information technology: Integrating systems and processes throughout the supply chain to share information, including forecasts, inventory status, tracking of shipments, and events. 4)Products and services: Making decisions on new product and services selection and design. 5)Capacity planning: Assessing long-term capacity needs, including when and how much will be needed and the degree of flexibility to incorporate. 6)Strategic partnerships: Partnership choices, level of partnering, and degree of formality. 7)Distribution strategy: Deciding whether to use centralized or decentralized distribution, and deciding whether to use the organization's own facilities and equipment for distribution or to use third-party logistics providers. 8)Uncertainty and risk reduction: Identifying potential sources of risk and deciding the amount of risk that is acceptable

Important steps in risk management for small businesses are:

1)Use only reliable suppliers. 2)Determine which suppliers are critical; get to know them, and any challenges they have. 3)Measure supplier performance (e.g., quality, reliability, flexibility). 4)Recognize warning signs of supplier issues (e.g., late deliveries, incomplete orders, quality problems). 5)Have plans in place to manage supply chain problems.

What are some key steps companies can take to reduce the risk of damages due to unethical supplier behavior?

1)choose those that have a reputation for good ethical behavior 2)incorporate compliance with labor standards in supplier contracts 3)develop direct, long-term relationships with ethical suppliers 4)address quickly any problems that occur.

. List the standards (guidelines) for ethical behavior in purchasing:

1. Perceived Impropreity-Prevent the intent of appearance of unethical relationships, actions, communication 2.Conflicts of Interest 3. Issues of influences 4. Responsibilities to your employer 5.Supplier and customer relationships 6.Sustainability and Social Responsibility 7.Confidential and Propriatory Information 8.Reciprocity 9. Applicable laws, regulations, and trade agreements 10.Professional Competence

Name seven benefits of small lot sizes.

1. Reduced inventory, lower carrying costs 2. Less space required to store inventory 3. Less rework if defects occur 4. Less inventory to "work off" before implementing product impovements 5. Increased visability of problems 6. Increased production flexibility 7. Increased ease of balancing operations

What are the building blocks of lean production systems Product Design? Give one example of each.

1. Standard parts. 2 Modular design 3 Highly capable production systems with quality built in 4. Concurrent engineering.

What things are considered to be wastes according to the lean philosophy?

1.Excess inventory—beyond minimal quantities, an idle resource takes up floor space and adds to cost. 2. Overproduction—involves excessive use of manufacturing resources. 3.Waiting time—requires space, adds no value. 4.Unnecessary transporting—increases handling, increases work-in-process inventory. 5.Processing waste—makes unnecessary production steps, scrap 6.Inefficient work methods—reduce productivity, increase scrap, increase work-in-process inventory. 7.Product defects—require rework costs and possible lost sales due to customer dissatisfaction. 8.Underused people—relates to mental and creative abilities as well as physical abilities.

Five principles embody the way lean systems function.

1.Identify customer values. 2.Focus on processes that create value. 3.Eliminate waste to create "flow". 4. Produce only according to customer demand. 5. Strive for perfection.

Building Blocks: MPC

1.Level loading 2.Pull systems 3.Visual systems 4.Limited work-in-process (WIP) 5.Close vendor relationships 6.Reduced transaction processing 7.Preventive maintenance and housekeeping

. List the key operational responsibilities:

1.Scheduling 2.Receiving 3.Transforming 4. Order fufilling 5. Managing inventory 6. Shipping 7. Information sharing 8. Controlling

Building Blocks: Process Design

1.Small lot sizes 2.Setup time reduction 3.Manufacturing cells 4.Quality improvement 5.Production flexibility 6.A balanced system 7.Little inventory storage 8.Fail-safe methods

The kaizen philosophy for attacking waste is based upon these ideas:

1.Waste is the enemy, and to eliminate waste it is necessary to get the hands dirty 2.Improvement should be done gradually and continuously; the goal is not big improvements done intermittently 3.Everyone should be involved 4.Kaizen is built on a cheap strategy, and it does not require spending great sums on technology or consultants 5.It can be applied everywhere 6.It is supported by a visual system 7.It focuses attention where value is created 8.It is process oriented 9.It stresses that the main effort for improvement should come from new thinking and a new work style 10.The essence of organizational learning is to learn while doing

Characteristics of Lean Systems

1.Waste reduction—A hallmark of lean systems. 2.Continuous improvement—Another hallmark; never-ending efforts to improve. 3.Use of teams—Cross-functional teams, especially for process improvement. 4.Work cells—Along with cellular layouts allow for better communication and use of people. 5.Visual controls—Simple signals that enable efficient flow and quick assessment of operations. 6.High quality—In processes and in output. 7.Minimal inventory—Excess inventory is viewed as a waste. 8.Output only to match demand—Throughout the entire system; referred to a "demand pull." 9.Quick changeovers—Enables equipment flexibility and output variety without disruption. 10.Small lot sizes—Enables variety for batch production. 11.Lean culture—The entire organization embraces lean concepts and strives to achieve them.

Kanban

A manual system used for controlling the movement of parts and materials that responds to signals of the need (i.e., demand) for delivery of parts or materials. This applies both to delivery to the factory and delivery to each workstation. The result is the delivery of a steady stream of containers of parts throughout the workday. Each container holds a small supply of parts or materials. New containers are delivered to replace empty containers.

What does 5W2H stand for?

A method of asking questions about a process that includes what, why, where, when, who, how, and how much.

pull system

A workstation pulls output from the preceding station as it is needed

The term 3PL is most closely associated with A) outsourcing. B) e-commerce. C) learning curves. D) mass customization. E) cross-docking.

A)

Which one is not a building block of lean production? A) large lot sizes B) personnel/organizational issues C) product design D) process design

A)

Which one of these is not necessarily a requirement of effective supply chain management? A) low cost B) trust C) event management D) visibility

A)

Which one of these relates to avoiding warehousing and holding costs? A) cross docking B) delayed differentiation C) disintermediation D) gatekeeping E) strategic partnering

A)

Which term connotes waste and inefficiency? A) muda B) kaizen C) poka-yoke D) Kanban

A)

Autonomation

Automatic detection of defects during production.

Strategic sourcing differs from more traditional sourcing in that it emphasizes __________ rather than __________. A) quality; flexibility B) total cost; price C) multiple vendors; single vendors D) global purchasing; local purchasing

B)

The letters RFID are most closely associated with A) outsourcing. B) tracking items. C) cross-docking. D) event management.

B)

The purchasing cycle ends with: A) the purchase order. B) the receipt of the item in question. C) the selection of a supplier. D) the payment for the item in question.

B)

The term bullwhip effect is most closely related to: A) assertive customers. B) demand variations. C) inventory turnover. D) return of inventory. E) inventory security.

B)

The term that relates to matching the output rate with customer demand in a lean system is: A) fill rate. B) takt time. C) closed-loop JIT. D) single-minute exchange of die.

B)

Two things that contribute to a firm's becoming leaner are __________ and __________. A) automation; push systems B) modular design; standard parts C) pull systems; automation D) large supplier base; push systems

B)

Which of the following would you not expect to see in a lean production system? A) a flexible system B) frequent schedule changes C) little waste D) low setup times E) low inventory

B)

Which one of these best describes disintermediation? A) the mediation of supply chain disputes by a disinterested third party B) elimination of supply chain middlemen C) delayed differentiation D) overcoming the bullwhip effect

B)

Which one of these is a system of lights used to signal problems in a lean production system? A) SMED B) andon C) kanban D) jidoka E) muda

B)

Relative to large firms, small businesses tend to be less effective at supply chain management, particularly with regard to: A) outsourcing. B) fill rates. C) risk management. D) currency vulnerabilities

C)

Suppose a firm gets one-fourth of its sales from product A, one-fourth from product B, and the rest from product C. Rather than producing to this schedule - ABCC - a lean firm might produce in this schedule - ACBC. This is an example of: A) lean leveling B) loaded sequencing C) level loading D) sequenced leveling

C)

Which term connotes fail-safe design? A) muda B) kaizen C) poka-yoke D) kanban

C)

With which of these functional areas would the purchasing function be unlikely to interact? A) operations B) accounting C) marketing D) receiving

C)

Kaizen

Continuous improvement of the system. There is always room for improvement, so this effort must be ongoing.

A kanban card is used to signal that: A) a machine has broken down. B) a worker is falling behind and needs help. C) a defect has occurred. D) parts are needed.

D)

Companies should formulate ethical supply chain codes that cover such issues as the: A) product cost. B) payment policies. C) fill rate expectations. D) environment.

D)

Cross-docking results in cost savings associated with: A) dock space. B) ordering goods. C) cargo ships. D) storage space. E) downtime.

D)

Lean systems typically use __________ layouts. A) job shop B) process-based C) continuous flow D) cellular

D)

Process design supporting lean production would include: A) backup equipment to guard against equipment failure. B) multiple suppliers to assure parts availability. C) maintain backlogs to assure workers have enough work to keep them busy. D) cross-trained workers to enhance system flexibility.

D)

The ultimate goal in a lean system is: A) maintaining low inventory. B) producing high quality. C) eliminating waste. D) a balanced, rapid flow.

D)

Which one is not a reason for increased emphasis on supply chain management? A) increased levels of outsourcing B) increased transportation costs C) trends toward globalization D) the need to improve internal operations

D)

Which one is not included in the list of seven wastes? A) overproduction B) inefficient work methods C) product defects D) poor product design E) processing wastes

D)

Which one of these is a system for reducing changeover time? A) VMI B) JIT II C) takt time D) SMED E) JIT

D)

Which one of these would tend to lead to increased inventory costs? A) disintermediation B) delayed differentiation C) cross-docking D) bullwhip effect

D)

Which one refers to reverse logistics? A) cross docking B) delayed differentiation C) customer refusal to accept damaged goods D) returned goods E) retracing the steps in a supply chain

D)

Which term refers to a signaling device? A) muda B) kaizen C) poka-yoke D) Kanban

D)

What ability can ERP software provide for managing supply chains?

ERP software provides the ability to coordinate, monitor, and manage a supply chain. It is an integrated system that provides for system-wide visibility of key activities and events in areas such as supplier relationships, performance management, sales and order fulfillment, and customer relationships.

Supply chain functions and activities

Forecasting Purchasing Inventory management Information management Quality assurance Scheduling Production and delivery Customer service

What is JIT II?

In some instances, companies allow suppliers to manage restocking of inventory obtained from the suppliers. A supplier representative works right in the company's plant, making sure there is an appropriate supply on hand. JIT II was popularized by the Bose Corporation. It is often referred to as vendor-managed inventory (VMI).

Risks of Lean Systems

Increased stress on workers due to increased responsibilities for equipment changeovers, problem solving, and process and quality improvement. Fewer resources (e.g., inventory, people, time) available if problems occur. Supply chain disruptions can halt operations due to minimal inventory or time buffers.

Lean and Six Sigma

Lean and six sigma can be viewed as two complementary approaches to process improvement. Lean focuses on eliminating non-value-added activity to maximize process velocity. Six sigma seeks to eliminate process variation. Together the two approaches can achieve process flow and quality

Highly capable production systems with quality built in

Lean requires highly capable production systems. Quality is the sine qua non ("without which not") of lean. It is crucial to lean systems because poor quality can create major disruptions. Quality must be embedded in goods and processes.

level loading

Lean systems place a strong emphasis on achieving stable, level daily mix schedules

Contrast supplier relations in lean and traditional systems.

Lean systems typically have close relationships with vendors, who are expected to provide frequent small deliveries of high-quality goods. Traditionally, buyers have assumed the role of monitoring the quality of purchased goods, inspecting shipments for quality and quantity, and returning poor-quality goods to the vendor for rework. JIT systems have little slack, so poor-quality goods cause a disruption in the smooth flow of work. Moreover, the inspection of incoming goods is viewed as inefficient because it does not add value to the product. For these reasons, the burden of ensuring quality shifts to the vendor. Buyers work with vendors to help them achieve the desired quality levels and to impress upon them the importance of consistent, high-quality goods. The ultimate goal of the buyer is to be able to certify a vendor as a producer of high-quality goods. The implication of certification is that a vendor can be relied on to deliver high-quality goods without the need for buyer inspection.

Benefits of lower WIP

Lower carrying costs Increased flexibility Aids scheduling Saves costs of scrap and rework if there are design changes Lower cycle-time variability

Lean: Building Blocks

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

Jidoka

Quality at the source. A machine automatically stops when it detects a bad part. A worker then stops the line. Also known as autonomation.

Benefits of Lean Systems

Reduced waste due to emphasis on waste reduction. Lower costs due to reduced waste and lower inventories. Increased quality motivated by customer focus and the need for high-quality processes. Reduced cycle time due to elimination of non-value-added operations. Increased flexibility due to quick changeovers and small lot sizes. Increased productivity due to elimination of non-value-added processes.

What are the key advantages of supplier tiers?

Suppliers on each level are encouraged to work with each other, and they are motivated to do so because that increases the probability that the resulting item will meet or exceed the final buyer's expectations. In this "team of suppliers" approach, all suppliers benefit from a successful product, and each supplier bears full responsibility for the quality of its portion of the product.

Andon

System of lights used at each workstation to signal problems or slowdowns.

Takt time

The cycle time needed to match customer demand for final product.

The Toyota Approach

Toyota Production System (TPS), and it has served as a model for many implementations of lean systems, particularly in manufacturing. Many of the terms Toyota used are now commonly used in conjunction with lean operations, especially the following: Muda Kanban Heijunka Kaizen Jidoka

What is value stream mapping?

Value stream mapping is a visual tool to systematically examine the flow of materials and information involved in bringing a product or service to a consumer.

Heijunka

Variations in production volume lead to waste. The workload must be leveled; volume and variety must be averaged to achieve a steady flow of work.

Muda

Waste and inefficiency. Perhaps the driving philosophy. Waste and inefficiency can be minimized by using the following tactics.

push system

Work is pushed to the next station as it is completed.

lean operation is

a flexible system of operation that uses considerably fewer resources (i.e., activities, people, inventory, and floor space) than a traditional system. Moreover, lean systems tend to achieve greater productivity, lower costs, shorter cycle times, and higher quality than nonlean systems.

Modular design

an extension of standard parts. Modules are clusters of parts treated as a single unit. This greatly reduces the number of parts to deal with, simplifying assembly, purchasing, handling, training, and so on. Standardization has the added benefit of reducing the number of different parts contained in the bill of materials for various products, thereby simplifying the bill of materials.

Concurrent engineering.

bringing design and manufacturing engineering people together early in the design phase to simultaneously develop the product and the processes for creating the product.

Poka-yoke

fail-safe tools and methods to prevent mistakes.

Activity-based costing

first identifies traceable costs and then assigns those costs to various types of activities such as machine setups, inspection, machine hours, direct labor hours, and movement of materials.

What advantage is associated Decentralized approach to purchasing decision making?

has the advantage of awareness of differing "local" needs and being better able to respond to those needs. Decentralized purchasing usually can offer quicker response than centralized purchasing. Where locations are widely scattered, decentralized purchasing may be able to save on transportation costs by buying locally, which has the added attraction of creating goodwill in the community.

What advantage is associated Centralized approach to purchasing decision making?

may be able to obtain lower prices than decentralized units if the higher volume created by combining orders enables it to take advantage of quantity discounts offered on large orders. Centralized purchasing may also be able to obtain better service and closer attention from suppliers. In addition, centralized purchasing often enables companies to assign certain categories of items to specialists, who tend to be more efficient because they are able to concentrate their efforts on relatively few items instead of spreading themselves across many items.

Supply chain visibility

means that a major trading partner can connect to any part of its supply chain to access data in real time on inventory levels, shipment status, and similar key information. This requires data sharing.

Decentralized purchasing

means that individual departments or separate locations handle their own purchasing requirements.

Centralized purchasing

means that purchasing is handled by one special department.

just-in-time (JIT) systems

owing to their highly coordinated activities and delivery of goods that occur just as they are needed.

Single-minute exchange of dies (SMED)

system for reducing changeover time. It involves first categorizing changeover activities as either "internal" or "external" activities. Internal activities are those that can only be done while a machine is stopped (i.e., not running). Hence, they contribute to long changeover times. External activities are those that do not involve stopping the machine; they can be done before or after the changeover.

Resiliency

the ability of a business to recover from an event that negatively impacts the supply chain. Recovery is a function of the severity of the impact and the plans that are in place to cope with the event. Businesses can reduce, but not eliminate, the need for resiliency by managing risks.

Event-response capability

the ability to detect and respond to unplanned events such as delayed shipment or a warehouse running low on a certain item

What is logistics?

the part of a supply chain involved with the forward and reverse flow of goods, services, cash, and information.

In lean systems, quality is ingrained in both

the product and the process.

What is a supply chain?

the sequence of organizations—their facilities, functions, and activities—that are involved in producing and delivering a product or service. The sequence begins with basic suppliers of raw materials and extends all the way to the final customer.

Supply chain management is

the strategic coordination of business functions within a business organization and throughout its supply chain for the purpose of integrating supply and demand management. Supply chain managers are people at various levels of the organization who are responsible for managing supply and demand both within and across business organizations.

What might businesses seek to shorten their supply chains?

using nearby suppliers, storage facilities, and processing centers. Others are finding savings by consolidating their supply chains

Standard parts

workers have fewer parts to deal with, and training times and costs are reduced. Purchasing, handling, and checking quality are more routine and lend themselves to continual improvement. Another important benefit is the ability to use standard processing.