Chapter 11: Production, Operations, and Supply Chain Management

Materials Requirement Planning (MRP)

A computer-based operations management system that uses sales forecasts to make sure that needed parts and materials are available at the right time and place.

Six Stigma

A disciplined, data-driven approach for improving quality by removing defects and their causes.

Enterprise Resource Planning (ERP)

A newer version of Materials Requirement Planning (MRP), that combines the computerized functions of all the divisions and subsidiaries of the firm--such as finance, human resources, and order fulfillment--into a single integrated software program that uses a single database.

Loading

Assigning a job to a specific machine or an entire work center.

Sequencing

Assigning the order in which jobs are processed.

Gantt Chart

Bar graph showing production managers what projects are being worked on and what stage they are in at any given time.

Computer-Integrated Manufacturing

Combine design and manufacturing functions with other automated functions; such as order taking, shipment, and billing, for the complete automation of a manufacturing plant.

Supply Chain

Consists of all parties involved in the procurement of a product or raw material.

Make-or-Buy Decision

Decision concerning whether an item should be produced internally or purchased from an outside supplier.

Statistical Quality Control (SQC)

Describes the set of statistical tools used to analyze each stage of the production process to ensure that quality standards are being met.

Just-In-Time Inventory Management

Enables a firm to maintain the smallest amount of inventory possible, with inventory being ordered as it is actually needed.

Flexible Manufacturing System

Enables manufacturers to produce large quantities of customized products.

Backwards Scheduling

Given shipping or due date and determine the start date and the most efficient production schedule based on when everything must be finished.

Product Layout

Groups different workstations together according to the products they work on, generally used for high volume standardized products.

Process Layout

Groups workstations together according to the activity being performed, regardless of which product each workstation is working on.

ISO 9001

Implements a quality management system.

ISO 14001

Implements an environmental management system.

Inventory Control

Includes receiving, storing, handling, and tracking everything in a company's stock. Main types include raw materials, unfinished products, finished products and consumables.

PDCA Cycle

Involves first formulating a plan to reduce potential errors, carrying out the plan on a small scale, checking the outcome and effectiveness of the change, and then implementing the plan on a larger scale while monitoring the results continually.

Program Evaluation and Review Technique (PERT)

Maps out the various steps involved in a process, differentiating tasks that must be completed in a certain order from those that may be completed simultaneously, identifies critical path.

Continuous Flow Production

Method that produces discrete units of products in large numbers one by one continuously and rapidly.

Capacity Planning

Process of determining how much of a product can be produced to meet demand.

Mass Production

Producing large quantities of goods at a low cost.

Assembly Line

Production method that breaks down a complex job into a series of smaller tasks. Cost efficient because machines do most of the work and the need for skilled laborers are low.

Mass Customization

Production of goods or services tailored to meet customers' individual needs cost efficiently. Ranges from bulk customization of industrial supplies to individual customization.

Determining Facility Location

Proximity to market, raw materials, utilities, and hazardous waste disposal.

Facility Layout

Refers to physical arrangement of resources and people in the production process and how they interact.

Production Management

Refers to the planning, implementation, and control measures used in the process to convert resources into finished products.

Computer-Aided Design

Refers to using computer software to create two-dimensional or three-dimensional virtual models of parts or products.

Lean Production

Set of principles concerned with reducing waste and improving the flow of processes, focuses on efficiency.

Cellular Layout

Small teams of workers are grouped together in work stations and handle all aspects of the assembly of a product.

Forward Scheduling

Start with the date that materials are available to create the most efficient schedules and then determine shipping date based on that schedule.

Purchasing

Task of acquiring the materials and services needed in the production process.

Operations Management

The administration and planning of business operations to produce and distribute goods and services as efficiently as possible.

Supply Chain Management

The management of activities from all organizations involved in the production process. Important to improving efficiencies among components of production and distribution process.

Total Quality Management (TQM)

The philosophy that everyone in the organization is concerned about quality, throughout all of the firm's activities, to better serve customer needs.

Production

The process of creating goods and services.

Statistical Process Control (SPC)

The process of testing statistical samples of product components at each stage of the production process and plotting those results on a graph. Any variances from quality standards are recognized and can be corrected if beyond the set standards.

Quality Control

The techniques, activities, and processes used to guarantee products meet specified levels of quality.

Fixed-Position Layout

Used to manufacture large items; such as ships, airplanes, and modular homes.

Intermittent Processes

Used to produce a large variety of products with different processing requirements in lower volumes.

Computer-Aided Manufacturing

Uses design data to control the manufacturing machinery.

Radio Frequency Identification

Uses electronic tags and labels to identify objects wirelessly over short distances.