MKT 303 exam 3
visual signals
-communication between workstations -Kanban: -"signal" or "card" in Japanese -contains info passed between stations (usually contains info like product name, part number, and quality that needs to be produced) -authorizes production (production cannot take place unless a container is empty and kanban card has authorized production) -kanban squares or signals instead of cards sometimes -kanban mailboxes
Lean production
-coordinated system for producing the exact products desired, delivered in the right quantities to where needed just in time. -the pull system (start with the last workstation in facility and work backwards - eliminates inventory), visual signals, small lot production, uniform plant loading (making adjustments as small as possible and setting a production plan that is frozen for the month)
factors impacting product design decisions
-design for manufacture (DFM) -product life cycle
facility location
-determine best location of storage facilities -consider relation to manufacturing facilities, customers, and suppliers -up to logistics to determine the best locations of these facilities, considering modes of transportation to move good between them and to the final customer.
trust based relationships
-development of joint objectives -greater sharing of info (NPD plan, early notification about delivery problem or any other error) -elimination of duplication efforts (inspection) -easier to coordinate all the decisions through info sharing
Product life cycle
-early stage (intro, growth): production improvement/refinement based on market response -late stage (maturity, decline): may include major change/reinvention to either revitalize an old product or create a new one.
Break even analysis
-evaluate the success of a new product at the product screening stage -Break-Even Point -quantity that need to be sold to cover costs -occurs when total cost = revenue
process capability
-evaluates the variation of the process relative to product specifications -for a product to be considered acceptable, its characteristics must fall within the product specification range -product specification (ranges of acceptable quality characteristics, also called tolerances) -process variation (**all processes have natural variation, defects are produced when variation exceeds product specifications**)
partnerships
-high criticality, low scope -connote strong and enduring test, and strong commitment to relationship although they may not interact much -management of relationship is not extensive and buyer may entrust the supplier with great control
contractual relationships
-high scope, low criticality -moderate levels of communication frequency -higher level of trust and greater levels of interaction than non strategic relationships -no desire to raise commitment to more personal relationship, strictly based on formal contracts
power based relationship
-historical basis of relationships -1 partner maximizes its profit at expense of others -extracting unfair concessions hurts the company if balance of power shifts -creates competition rather than cooperation (direct channel and direct promotion) -decreases supply chain profitability
nontraditional warehouse tasks
-increasingly warehouses are being used to perform nontraditional tasks such as: -repair items -add labels and price tags -sequence items in preparation for the retail floor -put garments on hangers
process design
-involves developing a production process that can create the exact product that has been designed. -two categories of processes: -intermittent: used to produce a large variety of products with different processing requirements in lower volumes (auto shop and healthcare facility) -repetitive: used to produce one, or a few, standardized products in high volume (cars in an assembly line)
process layout
-job shop -best suited when producing many different types of products in low volume -intermittent processes -resources grouped by process -products take different routes through the operation -should design to minimize time and cost of moving materials -scheduling, planning and control of operation are difficult, and if not designed properly can become inefficient -hospital, grocery store (food items grouped together based on use), retail stores with different departments.
quality tools
-lean requirers workers to identify and correct quality problems -7 tools of Quality Control: 1)Cause and effect diagrams (fishbone diagrams - used to identify causes of a particular quality problem) 2)Flowcharts (schematic diagrams of the sequence of steps involved in an operation or process - help show where problems could arise) 3)Checklists (lists of common defects and # of times defect is observed) 4)Control Charts (charts used to determine whether a process is operating within expectations for a dimension of interest ex: customer complaints in a given week) 5)Scatter Diagrams (graphs that visually show how 2 variables are related to another) 6)Pareto Analysis (technique used to identify quality problems based on their degree of importance) 7)Histograms (show frequency distribution of observed values of a variable)
material handling
-loading and unloading goods from vehicles -placement and order picking -moving goods throughout facility -decide degree of automation vs manual labor -many warehouses today are completely automated and use very sophisticated ASRS. (automated storage and retrieval systems)
non strategic transactions
-low scope and criticality -simple commodity exchange -mutual dependance and limited communication -arms length approach dominates communication -can become a contractual relationship over time with repeat purchases
inventory control
-manage quantities of inventory -arrange for timely replenishments -maintain accurate counts of inventory -electronic tracking (the usual way to count inventory) and "cycle counting" (used periodically to make sure that the electronic tracking and cycle counting match up)
what is lean
-management approach for creating value for the end customer through the most efficient utilization of resources possible -eliminating waste of every type and involves numerous organizational efforts that work in unison -lean is an all encompassing organizational philosophy, not just another type of production process.
alliances
-most comprehensive, because both high scope and criticality -high interaction frequency, significant trust and commitment. -may even be legalized through incorporation
transportation
-moves products through the supply chain (which is why it is most important task logistics performs) -high cost -must decide mode of transportation (consider required speed (apple iPads need to be delivered fast to places with high demand), security(high value items like diamonds), and product characteristics/requirements(bananas need climate controlled transportation))
respect for people
-must exist for an organization to be its best: 1) flatter hierarchy than traditional organizations 2) ordinary workers given great responsibility (jidoka - if you see a problem fix as it occurs, discovering quality problems is the goal no something to cover up or blame on someone) (intelligent automation/humanized automation) (input is highly valued) 3)supply chain members work together in cross functional teams -Role of: workers (waste reduction), management (culture creation) and suppliers (visibility via info sharing)
project processes
-no standardized process across products -unique products made to customer specifications; used where there is high customization and low product volume, as each product is different -examples: construction, shipbuilding, medical procedures
cycle time
-or takt time = available production time per day / desired number of units per day
facility layout
-physical arrangement of all resources within a facility -facility layout planning is made anytime there is a change in the arrangement of resources, redesign of operations, change in resources, new hire, change in process, etc. -significant impact on performance, especially production cost, time and flexibility. -poor facility layouts are one of the most significant contributors to inefficiency and increased production cost -types: fixed position layout, process layout (job shop), product layout, cellular layout
order fulfillment
-pick and pack order -arrange for transportation -ship order -assure lead time is not exceeded -completing, shipping and delivering customers order
cross docking
-popular form of warehouses sorting that attempts to move products "cross the dock" from inbound to outbound, with out ever being stored -arriving larger shipments are broken into smaller shipments for local delivery -requires precise timing and coordination -info technology tracks inventories very effective for replenishing fast moving inventory items at the store level - and is used often in retail industry
Product design
-process of specifying the exact features and characteristics of companies product (Airplane simulation: red, green and blue plane) -product characteristics are translated into measurable dimensions the production process can use to produce the product -PD decisions drive many other decisions
designing product layouts
-product layout objective: determine the sequence of tasks to be performed by each work station -consider: 1) order of tasks 2) time required to perform each task 3) speed of the production process this process is line balancing
packaging
-protect products during transport and storage -compatible with material handling equipment -compatible with mode of transportation (will it require additional packaging to prevent water damage?)
warehouses in the supply chain
-provide a centralized location that stores and organizes inventories before distribution -often called distribution centers (DC) -JIT and lean manufacturing can locate warehouses near manufacturing facility for frequent deliveries -can be utilized to create product assortments (centralized warehouses can take advantage of consolidated shipments, and then products can be sorted and arranged for a particular customer and then shipped)
six sigma
-quality management process that uses measurement to reduce process variation and eliminate defects -no more than 3.4 parts pre million effective -sigma stands for # standard deviations of the process -originated at motorola in 1970s -"zero defects"
relationship dimensions
-should be segmented based on how much management is needed 2 dimensions: 1) scope (degree of responsibility assigned to supplier) 2) criticality (extent to which the sourced item or task impacts ability to perform core competencies) *as scope and criticality increase, so does the risk to the buyer* **as criticality of sourced item moves from low to high the relationship moves from transactional to more relational**
batch processes
-standardized processes within each batch, also known as job shops -small quantities produced in batches; product produced are still small, and there can still be customization -examples: bakeries and education
small lot production
-the amount of products produced at any one time is small -reduces inventory and excess processing -increases flexibility -shortens manufacturing lead time (time from sales order created to production finished: ready for delivery) -responds to customer demands more quickly -setup time must be low - so that it is easy to switch from producing one type of product to another
fixed position layout
-used when a product can't be moved during production -all resources come together at the products location -challenge to schedule the timing and sequencing of different tasks -example: construction of a house
continuous processes
-very high volume of fully standardized product -examples: liquid or gas
Storage
-where goods will be stored -# of warehouses and distribution centers -amount of inventory to store at each center -key is finding an optimal balance that minimizes costs but maximizes responsiveness to customers
repetitive processes
small product variety, high product standardization, later stage product life cycle, resources are line flow, critical resources are capital intensive, specialized equipment, shorter throughput time, low work in process inventory
Logistics tasks
transportation, storage, material handling, packaging, inventory control, order fulfillment, facility location
continuum of process types
INTERMITTENT -project processes -batch processes REPETITIVE -line processes -continuous processes
theoretical minimum number of stations
N = sum of task times / cycle time
design for manufacture
(DFM) -design simplification: reducing the number of parts and features of the product whenever possible: less mistakes and less costs -design standardization: the use of common and interchangeable parts: a variety of products with less inventory and lower costs.
costs of quality
*Prevention and appraisal incurred with the hope of preventing internal and external failure costs* -prevention (cost incurred in the process of preventing poor quality, includes costs of preparing and implementing a quality plan) -appraisal costs (costs incurred in the process of uncovering defects, includes testing, evaluating, and inspecting quality) -internal failure costs (costs of defects before they reach the customer, include scrap, rework, and material losses) -external failure costs (costs of failure at customer site, includes returns, repairs, and recalls)
operations management decisions
- Product design (designing unique product features) -Process Design (creating the production process) - Quality Management (establishing and implementing quality standards) -Inventory Management (amounts of inventory to carry and when to order) -Facility Layout (physical layout of the production facility) -Facility Location (best location for facilities) -Scheduling (schedules for workers, machines, and facilities)
3rd party logistics providers
-3PLs are companies that provide logistics and transportation services to other firms -common to outsource logistics: 1) many companies deem logistics activities as noncore activities 2) logistics activities require significant assets 3) potential for large cost savings -3PLs play comprehensive strategic role in customers supply chain activities -examples: DHS, UPS, Fed-Ex
assign tasks to workstations
-Make sure the sum of task times at any station does not exceed the cycle time -there are rules that can be followed if there is a choice of tasks to assign to a station: 1) Longest task time rule (select the task with the longest task time) 2) number of followers rule (select the task with the most number of followers)
break even math
-Total cost = Fixed costs + variable costs -Total cost = F + VcQ (where F=fixed costs, Vc= variable costs per unit, Q= # of units sold) -Revenue = SpQ (where Sp=selling price per unit) -Set total cost = total revenue -F + VcQ = SpQ - Qbe = F / Sp-Vc -where Qbe = break even quantity
sources of variation
-all processes have variation -assignable variation (caused by factors that can be clearly identifies and managed) (ex. variation in output by workers not being equally trained or improper machine adjustment) -common variation (inherent in the process, also called random variation) (ex. not 2 bottles of pop are filled to the same level) -important task in QC is to determine amount of of random variation and then monitor the process to ensure that the amount of variation does not exceed it.
product layout
-arranges in sequence to enable efficient production of the product -repetitive processes -every product is almost exactly the same -processing times are minimized -not flexible (no variety) and highly dependent upon one another - stoppage at one workshop can stop the whole line -assembly line, buffet, car wash
line processes
-assembly line -large volume of standardized product for mass production -examples: cars and computers
cellular layout
-attempt to combine efficiency of product layouts and flexibility of process layouts -items grouped into a product family according to processing requirements -workstations arranged in small assembly lines called cells -each cell is dedicated to a price family (similar shapes, sizes, process flows or demand)
product design process
1) Idea development (marketing, R&D, engineering and suppliers, early supplier involvement- upper get involved early, competitors, reverse engineering- buy customers product and analyze it) 2) Product screening (viability of the product - break even analysis) (What is the potential size of the market for the proposed product? (marketing) do we have the facilities, equipment, and labor skills needed? (operations), How easy is it to obtain available materials? (sourcing), What are the financial requirements of the new product? (finance)) 3) Preliminary design and testing (performance specifications translated into technical specifications) 4) Final designs (specification translated into production instructions)
tenets of lean
1) elimination of waste (eliminate all "non-value" adding activities) 2) a broad view (all supply chain members responsible for adding value, decisions made for the success of the entire supply chain, overall goals should drive all tasks) 3) simplicity (the simpler the solution the better (beeper number in hospital)) 4) continuous improvement (emphasis on quality and continuous improvement, called kaizen, apply the idea of never ending improvement) 5) Visibility (visible problems are identified and solved) 6) Flexibility (easily with from one product type to another, using flexible workers that perform many different tasks, quickly adapt to changing customer needs)
Line balancing steps
1) identify task times and precedence relationships (what task need to be performed, their duration, and sequence in which they need to be done) 2) determine cycle time (Takt time) (the maximum of amount of time each station on the assembly line has to complete its assigned tasks) 3) determine theoretical minimum number of workstations 4) assign tasks to workstations 5) compute efficiency
relationship matrix
1) low scope, low criticality = non-strategic transactions 2) high scope, low criticality = Contractual relationships 3)low scope, high criticality = partnerships 4) high scope, high criticality = alliances
compute efficiency
= (sum of task times / #of workstations * cycle time) * 100
Process Capability index
Cp = (product specification range / process variation range) = (USL-LSL) / (6 standard deviations) Cp = 1 -> process variation just meets specifications, process is "minimally capable" Cp less than or = to 1 -> process variation EXCEEDS specification range and is not capable of producing within specifications Cp greater than or = to 1 -> process is NARROWER than specification range and exceed minimal capability
six sigma 5 step plan
DMAIC 1) Define (define the quality problem (CTQ: critical-to-quality characteristics) of the process) 2) Measure (measure the current performance of the process) 3) Analyze (analyze to root out cause of quality problem) 4) Improve (improve process by eliminating root causes) 5) Control (control process to ensure continued improvement) **First 3 steps provide study of existing process, whereas the last 2 steps are involved in process change** **This is a continuous process**
managing a trust based relationship
Factors: 1)Commitment (top management commitment is crucial, clearly identify the value of the partnership for each party) 2) Clear Method of Communication ((two major factors that lead to the breakdown of partnerships are: 1)lack of information sharing 2)inability to resolve conflicts), define how to communicate when some issues occur) 3)Performance Visibility (helps identify defective processes, makes it harder for either party to be opportunistic) 4) Fairness (most relationships involve parties with unequal power, fairness influences relationship strength)
developing a trust based relationship
key steps: 1) assessing the relationship (identify the mutual benefit, equity: fairness of the division of the total profits between the parties involved) 2) identifying operational roles (sequential interdependence (activities and info of one partner precedes the other - traditional approach), reciprocal interdependence(parties exchange info in both directions)) 3) Creating effective contracts (contracts that encourage negotiation as unplanned events arise (incomplete contract)) 4) designing effective conflict resolution mechanisms (specify rules and guidelines, frequent meetings)
intermittent processes
large product variety, low product standardization, early stage product life cycle, resources grouped by function, critical resources are labor intensive, type of equipment is general purpose, throughput time is longer, high work in process inventory
