Module 2 Topic A

Lakukan tugas rumah & ujian kamu dengan baik sekarang menggunakan Quizwiz!

inventory

Those stocks or items used to support production (raw materials and work-in-process items), supporting activities (maintenance, repair, and operating supplies) and customer service (finished goods and spare parts).

Piggyback service

(truck trailer or container placed on railroad flatcar. Trailer on Flatcar( TOFC) or Container on Flatcar. (COFC) Roadrailers: trailers that ride on tires/wheels or steel wheels- cost effective when compared with simple over the road hauling

Safety stock (fluctuation inventory)

1) in general, a quantity of stock planned to be inventory to protect against fluctuations in demand or supply. 2) in the context of master production scheduling, teh additional inventory and capacity planned as protection against forecast errors and short-term changes in the backlog. overplanning can be used to create safety stock. Held as a buffer against miscalculations of timing or quantity.

Logistics

1)subset of supply chain management that controls the forward and reverse movement, handling, and storage of goods between origin and distribution points.

4th party logistics

4PL org is often a separate entity formed by a joint venture or other long term contract between one or more partners. the 4PL organization is an interface between the client and multiple logistics service providers. Ideally, all aspects of the client's supply chain are managed by the 4PL organization. It is possible for major 3PL organization to form a 4PL organization within its existing structure. *Removes all logistics functions from client company and putting them under integrated management by a general contractor

EOQ

=((2*A*S)/(i*c))^.5 A=annual usage in units S=ordering costs in $/order i=annual carrying cost rate s a percentage c=unit cost in dollars

Pareto of ABC Classification

A 80% cost, 20% part numbers B 15% cost, 30% part numbers C 5% cost, 50% part numbers

Master Planning

A group of business processes that includes: demand management; production and resource planning; and master scheduling

Using fixed location storage

A method of storage in which a relatively permanent location is assigned for the storage of each item in a storeroom or warehouse. more space is needed than in a random location storage system, but may not need a locator file. Acceptable for warehouses that do not need dense cube utilization, throughput is low, or not many SKUs. often used for slow moving items or where order pickers do not get a pick list.

Interplant Demand

A plant's need for a part or product that is produced by another plant or division within the same organization

Trainship or containership service

AKA fishyback. loaded onto truck trailer, a railcar (trainship) or container that also spends part of its shipment time on board ship or barge.

Balance Sheet

Assets=Liabilities + owner's equities

rated capacity

Available time*Utilization*Efficiency

Motor Carriers (trucking) transportation

Can be more direct than water or rail. relatively low fixed costs. Truckload (TL) Less than truckload (LTL) and Specialty segments. TL: no stopping, >15000 lb loads. faster LTL: stopping to fill truck with more goods. <10000 lbs. more cost than TL Specialty: UPS and Fedex Low fixed cost, high variable costs. More labor intensive and more sensitive to labor rates. Higher value, or less durable goods are transported with les damage than rail

Promotions

Can represent 50-80%of sales variation

Using ABC Classification

Can use secure or fast moving storage areas

Resource Planning

Capacity planning conducted at the business plan level. The process of establishing, measuring, and adjusting limits or levels of long-range capacity. Normally based on production plan, may be driven by higher level plans beyond the time horizon for the production plan (ie the business plan). It addresses resources that take a long time to acquire. Always require top management approval.

Rail transportation

Carries heavy loads of lowvalue goods over long distances at relatively low rates. Rougher ride, causes 3% of tonnage damage. minimal disruption by weather. Diversity of destinations. Considerable safety. concentrated focus on raw materials mined or harvested far from waterway. Most us rail business is from carrying coal. High fixed cost. Low variable costs. limiting expansion capability.

ABC Classification AKA ABC Analysis

Classification for a group of items in decreasing order of annual dollar volume (price multiplied by project volume) or other criteria. This array is then split into three classes called A, B, and C. A: 10%-20% by number, 50-70% by dollar volume B: 20% items, 20% Dollar volume C: 60-70% items, 10-30% volume Effort and money can be saved through applying looser controls on the low dollar volume class items than will be applied to high dollar volume class items

Contract warehousing

Conbination of public and private facility benefits Potential for cost reduction, tailored services, flexiblity, expanded geographic market

Warehouse functions

Consolidation of materials for shipping breakbulk and cross dock facilities postponement stockpiling seasonal inventory spot stocking advanced shipments assortment (similar to spot stocking) mixing (similar to break bulk)

ATA Carnet

Containers can cross several boundaries duty and tax free without customs inspection

Private warehouses

Control, no markup, market presence. Loss of budgetary flexiblity, depreciating asset. Fixed cost persists even if business turns down.

Acquisition costs

Cost required to obtain one or more units of an item. it is order quantity times unit cost. also referred to as production cost or purchase price

Increased number of warehouses in a system can affect

Customer service, transportation costs, Inventory, Setup and overhead costs

Sales and Operations Planning meetings

Data gathering Demand Planning Supply Planning Premeeting Executive Meeting

Balance sheet items

Do not impact the income statement until the inventory is sold, reduced to fair market value, or written off (when inventory becomes obsolete)

Export management companies (EMC) and Export trading companies (ETCs)

EMC: not the exporter, a consultant to exporters that hire it. provide representation in particular market due to special knowledge and connections. cultivates relationships with host governments, ease goods through customs. may also buy exporter's goods and resell them in foreighn market but generally acts as a long term consulting partner ETC: an exporter.

Receiving

Encompassing the physical receipt of material, the inspection of the shipment for conformance with the purchase order (qty and damage), the identification and delivery to destination, and the preparation of receiving reports

Supplier partnership

Establishment of working relationship with a supplier organization whereby two organizations act as one

Order to cash cycle

Execution activity; involves placing orders, preparing and delivering shipments, receiving an dstocking products at retail site, recording transactions and making payments

Demand plan inputs

Forecasting, product/brand management, marketing, sales, business plan/strategy

Demand time fence

Frozen zone. Capacity and materials committed to orders

WIP inventory

Goods in various stages of completion including all raw material that has been released for initial processing up to completely processed material awaiting final inspection and acceptance as finished goods inventory

Make to stock

High volume low variety. Mass marketing. Risks obsolescence with inventory build up

Utilization

Hours worked/available hours * 100%

Consumption driven replacement

If a customer orders an item, the sale automatically triggers an order for one more of the same item to arrive in the next delivery.

Pegging

In MRP and MPS the capability to identify for a given item the sources of its gross requirements and or allocations. pegging can be thought of as active where-used information

Water transportation

International shipping, most inexpensive method of shipping high bulk low value commodities. Barge can hold >30 fully loaded double trailor trucks worth of cargo. Loading/unloading accomplished mechanically

Manufacturer to DC to retailer

Inventory intensive. DCs and retailers need inventory. bset for mass produced, inexpensive goods with high competition. Strong product availability. Distributors provide break bulk activities and minimize inventory by using fewer more centralized warehouses.

Risk of carrying too much inventory

Inventory is an asset on the balance sheet until it is sold, at which point only its profit margin contributes to net income

Master schedule item

Item deemed critical in its impact on lower level components. planned by the master scheduler. master schedule item may be an end item, a component, a pseudo number, or a planning BOM

Make to order

Large number of products made from smaller number of components. Custom clothing is example. Low volume, high variety. Raw materials may be kept in inventory in anticipation of customer orders

Influencing demand (moderately variable capacity strategy)

Leveling production and carefully managing demand to meet optimal capacity. FOcus on influencing demand so there is little need to change capacity. AKA demand shaping. careful scheduling delivery of products and services and timing prmotions to operational requirements

MRO expenses

MRO is a period expense; expensed on the income sheet during the period in which it is purchased

Time phased order point (TPOP)

MRP-like time planning for independent demand items, where gross requirements come from a forecast not via explosion. can be useful to plan distribution center inventories as well as plan for service (repair) parts because MRP logic can readily handle items with dependent demand, independent demand, or a combination of both. Time phased order point is an approach that uses time periods, thus allowing for lumpy withdrawals instead of average demand. When used in distribution environments the planned order releases are input to the master schedule dependent demands useful for parts maintained in low volumes, slow movers, irregular demand items, and large parts taht cannot be storedin sufficient quantities.

Maximum level inventory

Maximum Level inventory=D(T+L) + SS Order quantity=Maximum level inventory-inventory on hand D=Demand per unit of time T=time interval between ordering periods L=lead time duration SS=safety stock Good for: supermarkets or retailers with many items; keeps inventory tracking costs down and helps fill truckload assortments

Manufacturer storage with direct delivery

Order comes to mnfg from customer. Direct delivery one echelon, complete control over inventory. low carrying costs. shipments are typcally a truckload or container load. logistcs costs may be high and intermediaries may be needed to reduce costs B2B or B2C. appropriate for perishable goods and suppliers that produce large lot size quantities. direct interaction with customer. B2C: low variety, make to order goods customers are willing to wait for (long lead times)

Demonstrated capacity

Output for N periods/N

Cycles

Periodic upwards, neutral, or downward shifts lasting longer than one year.

Resource management

Planning and validation of all organizational resources; effective identification, planning, scheduling, execution, and control of all resources to meet organization's goals; an emerging field of study emphasizing the systems perspective, encompassing both the product an process life cycles and focusing on the integration of organizational resources toward the effective realization of organizational goals

Time Fence

Policy or guideline established to note where various erstrictions or changes in operating procedures take place

Seasonality

Predictable repetitive pattern of demand measured within a year where demand grows and declines. Calendar related

Package to order

Production environment in which a good or service can be packaged after receipt of a customer order. package to order can be used to accommodate customer language differences and so on.

Storing

Putting items under warehouse control in a storage point upstream of a workstation

Buffer

Quantity of materiasl awaiting further processing. it can refer to raw materials, semi finished stores or hold points, or a work backlog that is purposely maintained behind a work center

Tracking signal

Ratio of the cumulative algebraic sum of the deviations between forecasts and teh actual values to the mean absolute deviation Sum forecast error/MAD Used to trigger forecast review. -4 to +4 is working correctly

Written down to fair market value

Reducing the cost to what the market will currently pay

Inventory management KPIs

Reduction of inventory cost related to holding, ordering, and transporting materials, supplies, and finished goods at various points along the supply chain. Achievement of customer service targets related to the quality, availability, and on-time delivery of products and services (which may depend upon availability of supplies)

Continuous replenishment (CR) or Rapid replenishment

Relies on sharing of POS data; process by which a supplier is notified daily of actual sales or warehouse shipments and commitments to replenish these sales without stock outs and without receiving replenishment orders.

Engineer to order

Require unique engineering design, significant customization, or new purchased materials, depending on customer specifications. Each customer order results in a unique set of part numbers, bom, and routings

S&OP Process

Reviewing performance Evaluating Demand Levels Evaluating Supply Capability Reconciling demand, supply , and financial plans

Public warehouses

Services for a fee. Refrigerated, bonded, general merchandise, household goods, other specialties. Flexiblity and potential cost reduction due to economies of scale and lower labor costs

MSE vs MAD

Squaring gives a wider range and more sensitivity measuring error rate

Efficiency

Standard hours of work/Hours actually worked * 100%

Pipeline transportation

Stationary carriers, cargo moves. highest fixed cost, lowest variable costs. Only liquids or liquefiable products can move through the pipe. construction is costly. pipes are inflexible delivery vehicles and access is limited to those with facilities adjacent to it. vulnerable to political disputes between countries whose borders they cross.

Collaborative planning, forecasting, and replenishment (CPFR) activitites

Strategy and planning demand and supply management execution analysis

Quick response program (WRP)

System of linking final sales with production and shipping schedules back through the chain of supply; uses POS and electronic data interchange. may use direct shipment from factory to retailer. Customer typically submits individual orders.

inventory planning

The activities and techniques of determining desired levels of items, whether raw materials, work in process, or finished products including order quantities and safety stock levels

Warehousing

The activities related to receiving, storing, and shipping materials to and from production or distribution locations

ORder processing

The activity required to administratively process a customer's order and make it ready for shipment or production

Planning horizon

The amount of time a plan extends into the fugure. should be at least equal to the cumulative lead time for the product

Forecast error

The difference between actual and forecast demand

Capacity management

The function of establishing, measuring, monitoring, adjusting limits or levels of capacity in order to execute all manufacturing schedules. Executed at 4 levels: Resource planning rough cut capacity planning capacity requirements planning input/output control

Consignment

The process of a supplier placing goods at a customer location without receiving payment until after the goods are used or sold.

Rough cut capacity planning (RCCP)

The process of converting the master production schedule into requirements for key resources often including labor; machinery; warehouse space; supplier' capabilities; and in some cases money. comparison to available or demonstrated capacity is usually done for each key resource. comparison assists the master scheduler in establishing feasible master production schedule

Capacity planning

The process of determining the amount of capacity required to produce in the future. May be performed at an aggregate or product line level (resources available), master schedule level (Rough Cut), and material requirements planning level (Capacity requirements)

Capacity control

The process of measuring production output and comparing it with the capacity plan, determining if the variance exceeds preestablished limits and taking corrective action to get back on plan if limits are exceeded. Takes place at the level of every day activity.

Resource Profile

The standard hours of load placed on a resource by time period. production lead time data are taken into account to provide time phased projections of the capacity requirements for individual production facilities

Total cost of ownership (TCO)

The sum of all teh costs associated with every activity of the supply stream. The main insight that TCO offers to the SCmanager is the understanding that the acquisition cost is often a very small portion of the total cost of ownership Includes: Purchase price/prduction cost, landed cost, and lifetime ownership such a durability, ongoing maintenance costs, and responsible disposal

Air transportation

Well suited to carry valuable, fragile, and perishable cargoes. Military is world's first and best logistics manager. low fixed cost, second only to motor carriers. Variable cost of fuel and labor intensive business are high 3X cost road carriage, 30x cost per ton-mile rail.

Mean absolute percentage error

Useful variant of MAD calculation, showing ratio or percentage of absolute errors to the actual demand for a given forecast

Simple moving average

Useful when demand is relatively constant from period to period. Prevent ovrreation to random or irregular spike or dip bc it smooths.

Functions of logistics

Warehousing transportation import/export packaging materials handling inventory management logistics information systems

Movement of one ton per gallon

Water: 616 miles Rail: 478 miles Truck: 150 miles

Trading bloc

an agreement between countries intended to reduce or remove barriers to trade within member countries. frequently but not always countries are geographically close

3rd party logistics

a buyer and supplier team with a third party that provides product delivery services. this third party may provide added supply chain expertise *long term contractual relationships with providers of integrated services, such as transportation plus storage.

ATR certificate

a certificate that is required for trade between the EU and turkey. it grants zero duty to free circulating goods in the EU which are goods originating in the EU or imported to the EU with all import duties and taxes paid. Agricultural goods, minerals, and steel are excluded and must use EUR1

Inventory adjustments

a change made to an inventory record to correct the balance, to bring it in line with actual physical inventory balances. the adjustment either increases or decreases the item record on hand balance

Product Family

a group of end items whose similarity of design and manufacture facilitates their being planned in aggregate whose sales performance is monitored together, and occasionally, whose cost is aggregated at this level

Bill of resources (bill of capacity)

a listing of the required capacity and key resources needed to mnfg one unit of a selected item. RCCP uses these bills to calculate the approximate capacity requirements of the master production schedule.

Distribution center

a location used to store inventory

Blanket purchase order

a long term commitment to a supplier for material against which short term releases will be generated to satisfy requirements; it often covers only one item with predetermined delivery dates

Lot for lot

a lot sizing technique that generates planned orders in quantities equal to the net requirements in each period. used for JIT mnfg environments and ordering A items of ABC classifications

MRP II

a method for effective planning of all resources of a manufacturing company. Ideally, it addresses operational planning in units, financial planning in dollars, and has a simulation capability to answer what-if questions

Risk pooling

a method often associated with the management of inventory risk. manufacturers and retailers that experience high variability in demand for their products can pool together common inventory components associated with a broad family of products to buffer the overall burden of having to deploy inventory for each discrete product.

carrying cost

a percentage of the dollar value of inventory per unit of time generally one year) it is a variable cost that increases at the level of inventory increases. carrying costs may be as high as 40% of the value of the inventory and are unlikely to be less than 15%. they include all expenses involved in housing the inventory including: Storage costs Capital costs Risk costs

Sales and Operations Planning (S&OP)

a process to develop tactical plans that provide management the ability to strategically direct its businesses to achieve competitive advantage on a continuous basis by integrating customer focused marketing plans for new and existing products within the management of the supply chain. brings together plans for business into one set of integrated plans. performed at least once a month. reviewed by management at an aggregate (product family) level. Both a plan and a process that creates, implements, monitors, and continuously improves the plan.

strategic alliance

a relationship formed by two or more organizations that share information (proprietary), participate in joint investments, and develop linked and common processes to increase the performance of both companies. Many organizations form strategic alliances to increase the performance of their common supply chain

Master Schedule

a schedule format that includes time periods (dates) the forecast, customer orders, projected available balance, ATP, and the master production schedule. it takes into account the forecast; the production plan; and other important considerations such as backlog, availability of material, availability of capacity, and management policies and goals.

Intercoms (international commercial terms)

a set of rules established by the international chamber of commerce that provides internationally recognized rules for interpretation of the most commonly used trade terms in foreign trade and are routinely incorporated in the contracts for the sale of goods worldwide to provide guidance to all parties involved in the transaction

Material requirements planning

a set of techniques that uses bill of material data, inventory data, and the master production schedule to calculate requirements for materials

Anticipation inventory

additional inventory above basic pipeline stock to cover projected trends of increasing sales, planned sales promotion programs, seasonal fluctuations, plant shutdowns and vacations. Intended to cover demand projection in tthe demand plan.

Truck-plane service

air transport requires some intermediary surface travel (birdyback).

Grouping reserve stock separately

can include bulk storage of items when working stock is considered a partial pallet for picking; can also refer to defective or obsolete items and returns. can be stored out of way. working stock can be replenished reserve stock.

foreign freight forwarder

an entity that picks u goods at the production site and coordinates transport to the foreign customer's location

ship broker

an independent contractor that brings exporters together with ship operators that have appropriate vessels available to carry the shipper's freight.

Harmonized system classification codes

an internationally standardized description of goods that uses a system of numbers to provide increasingly detailed clasification and descriptions

Cycle counting

an inventory accuracy audit technique where inventory is counted on a cyclical schedule rather than once a year. Key purpose: identify items in error, thus triggering research, identification, and elimination of the cause of the errors

Scheduled receipt

an open order that has an assigned due date

Customs house broker

assist importers by moving shipment through customs. pays all import duties under power of attorney from importer. Liability of unpaid duties lies with importer, not broker

Mean absolute deviation (MAD)

average of abs values of the deviation of observed values from the expected value. =(Sum |A-F|)/n absolute value of actual-forecast/number of periods

line haul costs

basic costs of carrier operation to move a container of freight, including driver's wages and usage depreciation. these vary with the cost per mile, the distance shipped, and the weight moved

Min-max system

both ordering timing and order amount are allowed to vary. Orders are submitted after inventory has fallen below the minimum point, but inventory isn't allowed to go over a maximum.

Forecasting

business function that attempts to predict sales and use of products so they can be purchased or manufactured in appropriate quantities in advance

Nonvessal operating common carrier (NVOCC)

buys space on inland carriers and resells it to shippers at a markedup price. only handle the part of the shipment traveling from a port to the importer's dock or form an exporter's dock to a port performs physical work of consolidating, loading, and unloading cargo. buy and resell spae on carriers. can handle freight in many cases. regulated in the US by Federal maritime commission. required to publish rates and not discriminate in hiring.

Independent Distributor with omni channel network

channel master; buys goods from multiple mnfg or distributors in bulk and aggregates for a one stop shop for retailers, local DCs, wholesalers, or direct customers. Hold high inventory for fast moving items. can provide value added services and bulk shipping. large number of suppliers to coordinate and partner with

Nonbonded logistics parks

cheaper than BLPs rates and are increasingly being developed on expanding road network in China

Hybrid strategy

combines elements of level and chase production. Plant runs near full capacity for part of the cycle to build up inventory, slows or shuts down to let inventory to shrink. Ex: Lego runs one shift first half of the year, adds another shift second half of the year for holiday season demand

Payment terms

conditions surrounding payment for a sale, providing a time frame in which a customer can pay without late penalties or additional fees

Managing and prioritizing demand (fixed average capacity strategy)

controlling demand to the maximum extend through scheduling, promotions, queues, and rationing. focus on managing and prioritizing demand because fixed average capacity will results in periods of insufficient supply. Beneficial for products or services that require development and retention of expert personnel or other expensive resources. Example: Airline seats.

Joint replenishment

coordinating the lot sizing and order release decision for related items and treating them as a family of items. objective is to lower costs because of ordering, setup, shipping, and quantity discount economies. applies equally to joint ordering and composite part (group technology) fabrication scheduling

Decoupling

creating independence between supply and use of material. commonly denotes providing inventory between operations so that fluctuations in the production rate of the supplying operation do not constrain production or use rates of the next operation

Dependent demand

demand taht is directly related to or derived from the BOM structure for other items or end products. such demands re thesefore calculated and eed not and should not be forecasted

Order point system

determines the inventory level, or point, at which a reorder must be placed. =Demand during lead time+safety stock

Economic Order Quantity (EOQ)

determines the most cost effective number of items to order when replenishing inventory using a fixed order quantity model. The order size that gives you the lowest total cost for carrying and ordering (setup) costs.

Independent aggregator with ebusiness network.

direct marketing to indiiduals through its own heavily banded website. IE amazon and alibaba. direct shipment is common, may also sell or ship through local DCs they own. Move slow moving goods directly from mnfg through local DC rather than carry the inventory. often use loyalty programs for free shipping for an annual membership fee. high levels of customer service. many retailers adopting some form of this model, selling online and in retail stores.

Breakbulk

dividing truckloads, railcars, or containers of homogenous items into smaller, more appropriate quantities for use

Lagging indicators

economic and financial factors that reflect the changes that have already occurred in the economy

warehouses

facilities used to store inventory. decisions driving warehouse management includes site selection, umber of facilities in the system, layout, and methods of receiving, storing, and retrieving goods.

finished goods inventory

finished, ready to use products waiting to be purchased by the customer

Mix forecast

forecast of the proportion of products that will be sold in a given product family

Free trade zones

foreign trade zone in the US where some normal trade barriers such as tariffs and quotas are eliminated and bureaucratic requirements are lowered.

Export processing zone (EPZ)

goods may be landed, handled, manufactured, or reconfigured and reexported w/o the intervention of customs authorities.

Assemble to order

goods or services assembled after receipt of order. mass customization without long lead times. large number of end items, components may be limited.

grouping items by similar physial characteristics

hazardous materials stored with security measures; frozen or refrigerated items. Bulky or odd shaped items such as couches

Bonded logistics parks (BLPs)

in china, located near ports and serve as cost effective holding areas where shipping orders can be consolidated from various locations before being exported

planning factors

include safety stock concerns and lead times

Intermodal transport

includes package delivery and container services. integrates different modes of transportation in various combinations to take advantage of specific capabilities. Piggyback service Tranship or containership service truck-plane services freight truck on railcar Container provides maximum flexibility as it can be loaded onto trucks, trains, barges, or oceangoing chips.

Raw materials inventory

includes purchased parts, materials or subassemblies to a production process that have been acquired but have not yet entered production

Projected available balance (PAB)

inventory balance projected into the future

In-transit (distribution or pipeline) inventory

inventory in the transportation network and teh distribution system, including the flow through intermediate stocking points. In transit inventory is measured by the average annual inventory in transit, which is a function of transit time in days and annual demand. Reducing this cost requires finding ways to reduce transit time, because less volume needs to be in transit at a given time. Includes raw material, WIP, finished goods, or MRO inventory

inventory ordering systems

inventory models for replenishment of inventory

Cycle stock

inventory that depletes gradually as customer orders are received and is replenished cyclically when supplier orders are received

grouping high velocity items together

items arrive and leave quickly, but not quickly enough for crossdocking, can be plaed in locations near the outbound staging area

echelon

level of supply chain nodes. Each echelon adds operating expense, holds inventory, and adds to the cycle time, and expects to make a profit

Master production schedule (MPS)

line on the master schedule grid. reflects the anticipated build schedule for those items assigned to the master scheduler. Master schedule maintains this schedule and it becomes a set of planning numbers that drives material requirements planning. it represents what the company plans to produce expressed in specific configurations, quantitates, and dates

Cumulative lead time

longest planning length of time to accomplish the activty in question. review lead time for each BOM path below the item

Fixed order quantity

lot sizing technique in MRP or inventory management that will always cause planned or actual orders to be generated for a predetermined fixed quantity or multiples thereof if net requirements for the period exceed the fixed order quantity.

Mean squared error (MSE)

magifies errors by squaring before adding and dividing by number of forecast periods (sum(errors for each period)^2)/Number of forecast periods

Communicating demand (highly variable capacity strategy)

matching supply to demand as closely as possible by being flexible enough to increase or reduce capacity spontaneously. May employ contract work, outsourcing, and flexible work schedule to support.

Harmonized tarrif schedule

mechanism by which international tariffs are standardized. importers and exporters classify all goods moved across international boarders using the harmonized system of teh country of import.

Planning demand (fixed high capacity strategy)

meeting demand to maximum extent possible by providing capacity necessary to meet peek demand. Pursued if cost of maintaining excess capacity considered less than those of losing business

Kanban

method of JIT production uses standard containers or lot sizes with a single card attached to each. Pull system in which work centers signal with a card they wish to withdraw parts from feeding operations or suppliers

Demand

need for a particular product or component. could be from customer order, forecast, interplant requirement, branch warehouse request, etc.

COntract carriers

not required to make services available to general shipping public. required to have government authorization to do business. governed by economic regulations. enter contracts with terms, receive permits to carry business out defined by contract. Rates generally lower than common carriers. rival privage carrier with regard to flexibility. independent trucker is a special type of contract carrier that subcontracts to other type of carriers (contract, private, exempt or public. )

Exempt carriers

not subjected to economic regulations of their rates and terms of service. responsible for compliance with state laws. must publish their rates if they operate across state lines. most operate locally. granted for specific commodities and certain areas of operations. relied upon for significant amount of business in niche markets such as local transport of agricultural products. lower rates. primary drawback is limited availability for many products and limited range of operations.

Tarriff

official schedule of taxes and fees imposed by a country on imports or exports

Periodic review system

order intervals are fixed (week/month/quarter, etc.) and order quantities are allowed to vary. Warehouse determines a base stock level, or maximum level of inventory. Base stock is the inventory target or "order up to" level. Reviewed each period and the warehouse orders enough to raise inventory position to the base stock (target) level

Manufacturer storage with drop ship

orders go from customer to DC or retailer. manufacturer ships DC or Retailer may have floor model but no inventory. Use transload and crossdock facilities; best for high value, sporadic demand items; may be make to order, customized, or postponed items. shipments may be small lots; transportation costs can be higher and lead times longer.

Offshoring

outsourcing a business function ot another company in a different company than the original company's cuntry

Private carrier

owns fleet, incurs cost of owenership. cannot be in primarily transportation business to be considered private. May carry other company's products during backhaul trips or to fill truck loads.

Firm planned orders (FPOs)

planned orders that can be frozen in time and quantity. computer is not allowed to change them automatically.

4th party v 3rd party

presence of subcontractors. typically charges a fee for its services, not a markup.

Demand planning

process of combining statistical forecasting techniques and judgement to construct demand estimates for products or services across the supply chain.

Demand management process

process that weighs customer demand and firm's output capabilities and balances the two. planning demand, communicating demand, influencing demand, and prioritizing demand

landed cost

product cost plus the cost of logistics such as warehousing, transportation, and handling fees. For purchased inventory, sum of all direct costs including the price paid, transportation to the site, customs, and insurance. Landed costs for internally sourced inventory include direct labor, direct materials, and factory overhead costs.

Chase production method

production planning method that maintains a stable inventory level while varying production to meet demand

Prepackaging

products are receivedin bulk froma supplier an dsubsequently packaged into smaller quantities or combined with other products to form kits or assortments

Periodic counting

prone to inaccuracy because of the low expertise of counters. Retailers and small companies lacking proper technology may still rely on periodic counting

Export packing companies

provide specialized packgaing services for cargo that may have to undergo long journeys and pass customs in another country.

Duty drawback

refund of alll or part of duty paid on goods that were first imported and then reexported. importer pays import duty when goods come in, then applies for drawback after reexporting.

grouping functionally related items together

related storage type called point of use storage

Open order (released order)

released manufacturing order or purchase order

Liquid zone

remaining planning horizon after planning time fence.

Put-away

removing the material from the dock, transporting the material to a storage area, placing tat material in a staging area, and then moving it to a specific location and recording the movement and identification of the location where the material has been placed.

trade credit

sale of goods or services in which payment is not due right away. Encourages sales, effectivly offering free financing over teh payment period.

order picking

selecting or picking the required quantity of a specific product for moving to a packaging area and documenting that the material was moved from one location to shipping

Subcontracting

sending work outside to another manufacturer

Planning time fence

slushy zone. Capacity and materials not as strongly committed. Room to negotiate

MRO (maintenance/repair/operations supplies) inventory

spare parts, lubricants, hand tools, and cleaning supplies needed to maintainproduction but are not in teh final product. because of this, MRO is expensed rather than being an asset like other types of inventory. maintaining reliable production requires keeping an inventory of suppliers for both routine maintenance and emergency repairs. attn to production machinery and MRO forecasting can reduce equipment costs and downtime

leading indicator

specific vusiness activity index that indicates future trends

Using random location storage

storage technique in which parts are placed in any space that is empty when they arrive at the storeroom. although random method requires use of locator file to identify part locations, often requires less storage space than fixed location storage method. also called floating inventory location. maximizes cube utilization and can be rapid if the organization uses warehouse automation systems such as directed pick and put away

Demurrage fees

temporary storage parking for rail freight cars or ships

Detention fees

temporary storage parking for truck trailers

freight forwarders

the 'middle man' between the carrier and the organization shipping the product. often combines smaller shipments to take advantage of lower bulk costs

Inventory control

the activities and techniques of maintaining the desired levels of items, whether raw materials, work in progress, or finished products. Determines: how much to order and when (how often) to order

packaging and marking includes all

the activities of packaging for safe shipping and unitizing one or more items of an order, placing them into an appropriate container, and marking and labeling the container with customer shipping destination data as well as other information that may be required

Inventory management

the branch of business management concerned with planning and controlling inventories. Required at any organization that caries inventory. Role involves planning and controlling inventory from a supply chain perspective and an internal process perspective

allocation

the classification of resources or item quantitites that have been assigned to specific orders but not released from stockroom to productinon. also a process used to distribute materials in short supply

cross docking

the concept of packing products on the incoming shipments so they can be easily sorted at intermediate warehouses or for outgoing shipments based on final destination. items are carried from incoming vehicle docking point to the outgoing vehicle docking point without being stored in inventory at the warehouse. crossdocking reduces inventory investment and storage space requirements.

Demand forecasting

the demand for a particular good or service

Independent demand

the demand for an item that is unrelated to the demand for other items. demand for finished goods, parts required for destructive testing, and service parts requirements are examples of independent demand.

inventory visibility

the extent to which inventory information is shared within a firm and with supply chain partners

Distribution requirements planning (DRP)

the function of determining the need to replenish inventory at branch warehouses, AKA distribution centers

Demand management

the function of recognizing all demands for goods and services to support the market place.

shipping

the function that performs tasks for the outgoing shipment of parts, components, and products. it includes packaging, marking, weighing, and loading for shipment

Total cost concept of ligistics

the idea that all logistical decisions that provide equal service levels should favor the option that minimizes the total of all logistical costs and not be used on cost reduction in one area alone, such as lowering transportation costs

global trade management

the management and optimization of shipments across international borders including: ensuring compliance with all international regulations and documentation, streamlining and accelerating the movement of goods, to improve operating efficiencies and cash flows

packaging

the material surrounding an item to protect it from damage during transportation

moving

the physical transportation of inventory from one location to another within a facility

Executive sales and operations planning

the portion of the sales and operations planning that defines executive decision making processes to balance supply and demand at the volume level in families, fully integrates financial planning and operational planning, and that provides a forum for establishing and linking high level strategic plans with day to day operations

outsourcing

the process of having suppliers provide goods and services that were previously provided internally. outsourcing involves substitution - the replacement of internal capacity and production by that of the supplier

operating exposure

the risk introduced by flexible exchange rates when operating in the global environment including production, storage, and buying and selling prices

Available to Promise

the uncommitted portion of inventory and planned production

Common carrier

transportation available to the public that does not provide special treatment to one party and is regulated to the rates charged, liability assumed, and service provided. must obtain certificate of public convenience nd necessity from Federal Trade Commission for interstate traffic

Freight truck on railcar

truck loaded onto a flatbed railroad car while truck driver sleeps on train to continue moving during prohibited hours

backorder (AKA stockout)

unfulfilled customer order or commitment, an immediate or past due demand against an item whose inventory is insufficient to satisfy the demand. can be difficult to quantify financially but can be measured using various means such as percentage of orders shipped on schedule, which can help quantify the safety stock investment needed for a particular item at a particular location to keep this risk at acceptable levels.

ordering costs

used in calculating order uantities; the cost that increase sas the number of orders placed increases. includes costs related to the clerical work of preparing, releasing, monitoring, and receiving orders, the physical handling of goods, inspections, and setup costs, as applicable

insourcing

using a firm's internal resources to provide goods and services

Associateive forecasting (causal, correlation, explanatory, or extrinsic forecasting)

using data from one or more internal or external sources as a predictor of something that is presumed to be correlated

Shipping associations

usually nonprofit organizations to negotiate with carriers for rate discounts on the same terms as larger shipping companies

Inventory status

what materials are already available for use in manufacturing the finished good sand what finished goods exist now

Inventory accuracy

when the on hand quantity is within an allowed tolerance of the recorded balance. measured as the percent of items with inventory levels that fall within tolerance. Target is usually 95-99 depending on the value of the items. For logistical operations it is sometimes measured as the number of storage locations with errors divided by the total number of storage locations.

Ship agent

works for carrier- arranges for ships arrival, berthing, and clearance. while in port, coordinates unloading, loading, and fee payment.


Set pelajaran terkait

Biology Chapter 49: Osmoregulation

View Set

Anatomy of Abdomen Part 1- Peritoneum

View Set

Health and Society Exam 2 Review

View Set

Comparing Poetry: Poetic Devices

View Set

BYU APUSH/APHIST Part 1 All Questions

View Set

Health Assessment Exam 3 - Neurological

View Set

IBM (Chapter 4 Connect Assignment 4)

View Set

RD Exam - Inman's domain all domain numerical problems

View Set

Matthew 24 - Flashcard MC questions - Ted Hildebrandt

View Set