Supply Chain Chapter 3 Exam

Postponement Strategy

1. Once an order is received, the product is assembled quickly and shipped to the customer. 2. Assemble to Order

Def o Make to stock

1. features economies of scale, large volumes, long production runs, low variety, and multiple distribution channels

Main concern of Make to stock

Balance inventory and demand companies struggle to correctly produce prodcut at the correct quantities as the forecast are inaccurat e

Define Assembly Line

has standard products with a limited number of variations moving through stages of production (Cars, Televisions, Smart phones)

Total cost of manufacturing

- Production and Procurement activities - Inventory and Warehousing activities - Transportation activities - TCM is generally expressed as a cost per unit for each product.

Assemble to Order

1. Assemble-to-Order (ATO) is a manufacturing strategy where final products are produced quickly as ordered by customers. This enables products to be customized to a certain extent. 2. The ATO strategy requires that the main sub assemblies for the product be completed and inventoried along with the final assembly parts. 3. Similar to MTS, demand forecasting and inventory management are key processes to a successful ATO process. The main sub assemblies and final configuration parts must be forecasted and inventoried. 4. Most high tech products with customization available (computers, audio systems), Quick serve restaurants, and individualized products are ATO.

Engineer To Order

1. Engineer-to-Order (ETO) is a manufacturing process in which the component is designed, engineered, and built to customer specifications only after the order has been received. It is an evolution of a Make-to-Order supply chain to include customization at the component level May include some common components but the use and configuration are different every time

Manufacturing Processes:

1. Job shop 2. Batch 3. Assembly 4. Continous Flow

Define Made to Order

1. Make-to-Order (MTO) is a manufacturing strategy that allows customers to purchase custom products to their specifications 2. The MTO strategy only manufactures the end product once the customer places the order. Lead time for customer delivery is longer and customers pay for the ability to customize 3. Raw materials are carried in inventory with a few common sub assemblies. 4. Highly configured products such as computer servers, aircraft, ocean vessels, houses, bridges, custom furniture and custom tooling are MTO. 5. Highly configured products such as computer servers, aircraft, ocean vessels, houses, bridges, custom furniture and custom tooling are MTO.

Define Total Cost of Manufacturing

1. Total Cost of Manufacturing (TCM) is the complete cost of producing and delivering products to your customers 2. It incorporates both fixed and variable costs used in the manufacturing, storage, and delivery of the product.

Define batch

1. manufactures a small quantity of an item in a single production run (Milk and other processed food, clothing) 2. manufacturing processes

Manufacturing strategies

Make-to-Stock (MTS) Assemble-to-Order (ATO) Make-to-Order (MTO) Engineer-to-Order (ETO)

Define Continuous Flow

Manufacturing Processes Consistent manufacturing of the same product. (gasoline, chemicals, laundry detergent, PC Boards).

Job Shop

Manufacturing processes creates a custom product for each customer. (artist, craftsman)

What is engineer to order

is building a unique product every time.

Engineer to Order (ETO)

is used when products are unique and extensively customized for the specific needs of individual customers

Def Assemble to Order

is when sub assemblies are made, stocked to forecast, but products are not assembled until customer order is received

What is Made to stock

literally means to manufacture products for stock based on demand forecasts, a push supply chain. -The accuracy of the forecasts is the key to inventory management and controlling costs. Accurate demand forecast limits excess inventory and loss sales from stock outs. Most equipment intensive manufacturing (automobiles), commodities (processed foods, sundries) and low value products are MTS.

Def of make to Order

products are not produced until customer order is received