SCM 300 Module 5-8

Outpost Factory

A factory whose primary role is to collect information -placed in an area where advanced suppliers are located and also have secondary strategic role

Diversified multinational corporations

Corporations that use production establishments located in different countries but are neither horizontally nor vertically integrated

What are the four elements of waiting in lines?

1) An input, or customer population, that generates customers 2) A waiting line of customers 3) The service facility, consisting of a person, machine or both necessary to perform the service for the customer. 4) Priority rule, which selects which customer to be served by the service facility.

Three elements of supply chain sustainability

1) Financial Responsibility- addresses the financial needs of shareholders or any body relying on firm for wages 2) Environmental responsibility- addresses the ecological need 3) Social responsibility- addresses the moral and ethical and philanthropic needs

Contributor Factory

A factory that also serves a specific national or regional market, but whose responsibilities extend to product or process engineering and to the development and choice of suppliers.

Lead factory

A factory that creates new processes, products, and technologies for the entire company

Littles Law

A fundamental law that relates the number of customers in a waiting line system to the arrival rate and waiting time of customers. L=lamda*W Only need to know two of the parameters to solve for the third

Pull Method

A method in which customer demand activates production of the service or item. Ex: ordering food at a restaurant

Service Facility

A person (or crew), a machine or group of machines, or both necessary to perform the service for the customer.

Lot Size

A quantity of items that are processed together

Priority Rule

A rule that selects the next customer to e served by the facility.

Customer Population

An input that generates potential customers

Demand Management

Balancing customer demand with the firms output capacity; forecasting demand and coordination with the production, purchasing and distribution.

Activities causing the bull whip effect

Demand Forecasting, order batching, price fluctuations, rationing and shortage gaming

Manufacturing Flow Management

Determining manufacturing process requirements to enable the right mix of flexibility and velocity to satisfy demand.

Product Development and Commercialization

Developing new products frequently and getting them to market effectively; integrating suppliers and customers into the process to reduce time to market.

Short gaming

Inflating orders to satisfy their needs

Lack of knowledge

Lack of process and information system skills and lack of knowledge regarding the benefits of SCM among management and other employees, within the firm and among partners

Supplier Relationship Management

Managing product and service agreements with suppliers; developing close working relationships with key suppliers.

Returns Management

Managing used product disposition, product recalls, packaging requirements, and minimizing future returns

Order Fulfillment

Meeting customer requirements by synchronizing the firms marketing and production and distribution plans.

Rationing

Occurs when demand exceeds a suppliers finished goods available and in this case, the supplier may allocate product in proportion to what buyers ordered.

Channel

One or more facilities required to perform a given service

Lean Systems

Operations systems that maximize the value added by each of a company's activities by removing waste and delays from them.

Customer Service Management

Providing information to customers such as product availability, shipping dates and order status; and administering product and service agreements.

Preemptive Discipline

Rule that allows a customer of higher priority to interrupt the service of another customer

Phase

Single step in providing a service. example: McDonalds has a single channel, multiple phase arrangement.

just-in-time (JIT) Philosophy

The belief that waste can be eliminated by cutting unnecessary capacity or inventory and removing non-value-added activities.

Single-digit-setup

The goal of having a setup time of less than 10 minutes

Service System

The number of lines and the arrangement of the facilities.

Lack of Trust

Unwillingness to work together or share information because of the fear that the other party will take advantage of them or use the info unethically

Offshore Factory

a factory established to produce specific items at low cost

Push method

a method in which production of the item begins in advance of customer needs. Use of demand forecasting (buffet eating)

Aggregation

achieving economies of scale by creating regional or global operations.

Best use of single channel, single phase system

all services demanded by a customer can be performed by a single server facility like a drive through car wash.

Customer Relationship Management Process (CRM)

allows companies to prioritize their marketing focus on different customer groups according to each groups long term value to the company or supply chain

Insourcing

an operations strategy in which distribution company performs on behalf of another company(UPS,FedEx)

Jidoka

automatically stopping the process when something is wrong and then fixing the problems on the line itself as they occur

Adaption

boosting revenue and market share by maximizing local presence in a country

Sustainability

characteristic of processes that are meeting humanities needs without harming future generations

Vertically Integrated multinational corporations

corporations that use production establishments in a certain country or countries to produce products that serve as inputs to their production establishments in one or more countries

Horizontally Integrated multi national corporations

corporations that use productions establishments located in different countries to produce the same or similar products

Server Factory

factory that supplies specific national or regional markets; it typically provides a way to overcome tariff barriers and to reduce taxes, logistics costs, or exposure to foreign exchange fluctuations

Source factory

factory whose primary purpose is low cost production but who strategic role is broader than that of an offshore factory

Silo Mentality

failing to see the big picture, and acting only in regard to a single department within the firm, or single firm within the supply chain. -decisions must be made with long term goal in mind

Lack of supply chain visibility

inability to easily share or retrieve trading partner information in real time

Order Batching

making large orders for goods on an infrequent basis to reduce costs -contributes to bull whip effect

poka-yoke

mistake-proofing methods aimed at designing fail-safe systems that minimize human error

Humanitarian logistics

process of planning, implementing, and controlling the efficient, cost-effective flow and storage of goods .... for suffering people

Forward Buying

stock up products at discount price and buy smaller amounts at list price-contributes to bull whip

Arbitrage

the exploitation of differences among national or regional markets, often by locating separate parts of the supply chains in different places.

Business Process outsourcing

the outsourcing of routine financial and accounting operations, such as payroll, accounts payable and receiving, insurance, and property accounting, to another company

Globalization

the process by which the experience of everyday life, marked by the diffusion of commodities and ideas, can foster a standardization of cultural expressions around the world.

Process Integration

the sharing of information and coordinating resources to jointly manage a process

Offshoring

transferring production from one country to another, with or without outsourcing to a supplier organization

Outsourcing

turning over all or part of an organizational activity to an outside vendor

Demand Forecast Updating

using varying customer orders to update forecast/purchase

Best use of a multiple channel, multiple phase arrangement

when customers can be served by one of the first phase facilities but then require service from a second phase facility. Example: Laundromats. Washing is first phase and dryers are second phase and there are different size machines.

Best use of multiple channel, single phase

when demand is large enough to warrant providing the same service at more then one facility or when services offered by the facilities are different. Lobby of a bank is an example

When is a mixed arrangement required

when it is complex like an emergency room. People are all in line but there are rules that allow people with worse conditions jumping to the front

Best use of single channel, multiple phase arrangement

when services are best performed in sequence by more than one facility. McDonalds is an example. Pay at one window get food at the next