Operations and Supply Chain Management Test 2 (CH 12,13,14)

Malcolm Baldridge National Quality Award

An award established in 1987 to promote quality awareness, to recognize quality achievements of U.S. companies, and to publicize successful quality strategies

Kanban Pull system

An inventory or production control system that uses a signaling device to regulate flows.

Waste

Anything that does not add value from the customer's perspective

Lean Six Sigma

Combines the implementation and quality control tools of Six Sigma and the inventory management concept of lean manufacturing

Defects per million opportunities

Common metric used to describe process performance

Appraisal Costs

Costs of the inspection, testing, and other taks to ensure that the product or process is acceptable

Assignable Variation

Deviation in the output of a process that can be clearly identified and managed.

Common Variation

Deviation in the output of a process that is random and inherent in the process itself.

Cost of Quality (COQ)

Expenditures related to achieving product or service quality, such as the costs of prevention, appraisal, internal failure, and external failure.

Quality at the source

The philosophy of making each worker responsible for the quality of his or her work

Quality at the Source

The philosophy of making each worker responsible for the quality of his or her work.

Value Stream

The processes of creating, producing, and delivering a good or service to the market. For a good, this encompasses the raw material supplier, the manufacturing and assembly of the good, and the distribution network. For a service, this consists of suppliers, support personnel and technology, the service "producer," and the distribution channel.

Upper and lower specification limits

The range of values in a measure associated with a process that are allowable given the intended use of the product or service

Capability Index

The ratio of the range of values allowed by the design specifications divided by the range of values produced by a process.

Prevention Costs

The sum of all the costs to prevent defects, such as the costs to identify the cause of the defect, to implement corrective action to eliminate the cuase, to train personnel, to redesign the product or system, and to purchase new equipment or make modifications.

Average aggregate Invetory value

The total value of all items held in inventory for the firm, valued at cost.

Bullwhip effect

The variability in demand is magnified as we move from the customer to the producer in the supply chain.

External benchmarking

Looking outside the company to examine what excellent performers inside and outside the company's industry are doing in the way of quality.

Total Quality Management

Managing the entire organization so that is excels on all dimensions of products and services that are important to the customer.

Preventive maintenance

Periodic inspection and repair designed to keep equipment reliable.

Innovative products

Products such as fashionable clothes and personal computers that typically have a life cycle of just a few months.

Variables

Quality Characteristics that are measured in actual weight, volume, inches, centimeters, or other measure.

Atrributes

Quality characteristics that are classified as either conforming or not conforming to specification.

Fail-Safe procedures and poja-yokes

Simple practices that prevent errors or provide feedback in time for the worker to correct errors

Uniform plant Loading

Smoothing the production flow to dampen schedule variation.

Value Stream mapping

a graphical way to analyze where value is or is not being added as material flows through a process

Level Schedule

a schedule that pulls material into final assembly at a constant rate

Statistical Process Control

Techniques for testing a random sample of output from a process to determine whether the process is producing items within a prescribed range

Conformance Quality

The degree to which the product or service design specifications are met.

Strategic Sourcing

The development and management of supplier relationships to acquire goods and services in a way that aids in achieving the immediate needs of a business.

Customer Value

The difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits

Backflush

calculating how many of each part were used in production and using these calculations to adjust actual on-hand inventory balances. This eliminates the need to actually track each part used in production

Dimensions of Quality

criteria by which quality is measured

Vendor Managed inventory

is an inventory- management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items.

Weeks of supply

preferred measure of supply chain efficiency that is mathematically the inverse of inventory turnover times 52

Functional Products

staples that people buy in a wide range of retail outlets, such as grocery stores and gas stations

Design Quality

the inherent value of the product in the marketplace

Waste Reduction

the optimization of value-adding activities and elimination of non-value-adding activities that are part of the value stream

Freeze Window

the period of time during which the schedule is fixed and no further changes are possible

Statistical Quality Control

the process some managers use to continually monitor all phases of the production process to assure that quality is being built into the product from the beginning

Cost of Goods Sold

the total cost of buying raw materials and paying for all the factors that go into producing finished goods

Value

A customer's subjective assessment of benefits relative to costs in determining the worth of a product

Outsourcing

A decision by a corporation to turn over much of the responsibility for production to independent suppliers.

Inventory Turnover

A liquidity ratio. COGS / Inventory. How many times company turns its inventory annually.

Lean Production

A management approach that organizes resources such as people and machines around the flow of business processes and that only produces units in response to customer orders

Kanban

A method of Just-in-Time production that uses standard containers or lot sizes with a single card attached to each. It is a pull system in which work centers signal with a card that they wish to withdraw parts from feeding operations or suppliers.

Kaizen

A quality technique from Japan meaning continuous improvement in Japanese. With this technique, all project team members and managers should be constantly watching for quality improvement opportunities. The approach states that you should improve the quality of the people first, then the quality of the products or service.

ISO 9000

A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of producers and consumers.

Six Sigma

A statistical term to describe the euqality goal of no more than 3.4 defeects out of every million units. Also refers to a quality improvement philosphy and program.

logistics

A subset of supply chain management that focuses largely on the tactics involved in moving products along the supply chain.

Total Cost of ownership

All of the costs associated with the design, development, testing, implementation, documentation, training and maintenance of a software system.

DMAIC

An acronym for the Define, Measure, Analyze, Improve, and Control improvement methodology followed by companies engaging in Six-Sigma programs.