Global Supply Chain Midterm Flash Cards
Sun Tzu
"Every minute ahead of the enemy is an advantage."
Armand V. Feigenbaum
- Control must start with identification of customer quality requirements and end only when the product has been placed in the hands of a customer who remains satisfied. - "Hidden plant" to signify that 15 to 40% of capacity exists to find & fix poor work.
Customer Experiences & Loyalty
- Defection: When customers endure a bad experience - Indifference: Experiences that meet expectations deliver satisfaction. However, if rivals are just as good, indifference results - Loyalty: Only uniquely positive experiences motivate customers to be loyal
Customer Success
- Help customers meet their customer's needs - Forward / downstream looking
Which of the following a major challenge encountered in the benchmarking process?
- Identifying an appropriate benchmarking target company - Getting a competitor to allow you to give you permission to come in and observe how it does business.
Customer Satisfaction
- Meet / exceed customer expectations - outward looking
Customer Service
- Meet / exceed industry standards - inward looking
Joseph M. Juran
- Over 80 percent of quality defects are controllable by management. - The quality trilogy: Plan, Control & Improve. - Identify the few vital projects. - Discover the causes of the problem!
Genichi Taguchi
- Quality is a virtue of design. The "robustness" of products is more a function of good design than of on-line control, however stringent, of manufacturing processes. - You gain virtually nothing in shipping a product that just barely satisfies the corporate standard over a product that just fails. Get on target, don't try to stay in-spec.
To make CPFR successful, companies should engage in which of the following collaborative activities?
- Strategy & planning - Demand & supply management - Execution - Analysis
Three questions for balanced scorecard:
- What are our goals? - What skills do we need? - What metrics do we need?
Which of the following is a type of team you are likely to encounter in today's supply chain decision-making environment?
- advisory councils - commodity team - customer relationship management team - problem-solving team - supplier development team
Scheduling has two levels
- aggregate planning to decide what needs to be produced and more or less when it needs to be produced - schedule the work to be done at any point in time, assign different priorities to each job/product/project
Factors that Affect the Selection of Forecasting
- amount and type of data - degree of required accuracy - length of forecast horizon - data patterns
Which of the following are steps in ABC classification?
- classify companies by sales - modify classifications based on strategic issues
What are some of the biggest challenges to effective order management?
- complexity - ownership - uncertainty
Which of the following is a definition of Quality?
- conformance to specifications - whether or not a product or service lives up to customer expectations
Quality Defined
- conformance to specifications - whether or not a product/service lives up to customer expectations
What is the goal of the multi-criteria analysis?
- consider likely alternatives quickly and efficiently - make your decision robust
Value Dimensions
- cost - quality - delivery - agility - innovation
Balanced Scorecard Four Distinct Measurements
- customer expectations - operational excellence - further capability development - financial performance
Which of the following are key measurement dimensions of a balanced scorecard's holistic dashboard?
- customer expectations - operational excellence - future capability development - financial performance
The lack of total costing negatively influences investments needed to improve service levels, _______________, and lifetime stream of profits.
- customer satisfaction
Total Quality Management Core Principles
- customer-focused - leadership - involvement of people - process approach - system approach to management - continuous improvement - fact-based decision making - mutually beneficial supplier relationships
Internal business perspective measures:
- cycle time - quality - core technologies - employee skills
Which of the following is a primary technology system employed in customer relationship management suites?
- data capture - data storage
Under which circumstances would you use a qualitative forecast?
- domain knowledge is critical - pertinent data is scarce - you have access to qualified key informants
Focusing on the 3M fish story, which of the following are benefits of empowerment?
- empowerment is an essential element of the learning organization - empowerment can lead to innovation and better new products
Quality three common definitions
- fitness for use - conformance to specifications - meeting customer expectations
Four Utilities of Value
- form - possession - time - place
Which of the following are discussed during the S&OP supply review meeting?
- how to prevent stockouts - manufacturing capacity - supply chain inventory - logistics/DC capacity
By changing the manufacturing environment it is possible to achieve higher levels of performance across all value dimensions. Which of the following is a critical aspect of improving the environment?
- increase process visibility - better share information - build a flexible workforce
innovation and learning perspective measure:
- innovation ability - learning - launch skills - value co-creation
Which of the following characterizes a goal-setting culture?
- innovation and change happen without coercion - passion emerges and people achiever higher levels of personal growth
To develop an aggregate plan you need:
- knowledge regarding your production capacity - a demand forecast - cost data for different recources
Customer Perspective Measures
- lead time - defect level - on-time delivery - forecast accuracy
If your product is relatively new and your data is limited, your best option is to...
- look at sales history of a similar product - use qualitative data
Costs associated with stockouts
- lost revenues - goodwill and reputation - follow-on business
Which of the following is a cost associated with stockouts?
- lost revenues - goodwill and reputation - follow-on business
Which of the following tools are bricks-and-mortar stores commonly using to improve data capture and customer profiling?
- loyalty cards - self-scan technology
Critical Steps to Agilitiy
- make it a priority - map processes - use information systems - cross-train workers - design performance measures - building learning loops
Which of the following are general drivers for global operations?
- market access - resource access
Which of the following are potential sources of variation in the Ishikawa cause-and-effect diagram?
- materials - measurements - environment
Which of the following measurement mantras focuses on how you should measure?
- measure twice; cut once
The "good" of Globalization
- more innovative products - better quality - lower costs - improved living standards
The "bad" of Globalization
- more intense competition - greater complexity - more prevalent risks - more variable lead times
Dominant Player
At the industry leader company, senior decision makers didn't see value in comparing themselves to anyone. After all, they were the best.
Create Your Forecast
At this point, you are ready to execute and generate your forecast.
Data-Capture
Critical technology that your analysis is held captive by the quality of data you possess.
Degree of Accuracy Required
Developing accurate forecasts can be expensive. If you don't need great accuracy, you can probably use a simple method. If forecast accuracy is a deal breaker, you need to invest in a more sophisticated method.
Machines
Evaluate the equipment and technology used in the process. Are there any issues like poor maintenance, worn equipment, or the use of the wrong equipment that hurt process performance?
Competitive Benchmarking
Evaluating the best practices of a rival is perhaps the most relevant approach. However, rivals that do something incredibly well may be unwilling to give you permission to come in and get an intimate look at how they do business. Exceptions do, however, exist.
Resource Access
Everyone—including your toughest rivals—has pretty much the same access to inputs
Dissatisfaction
Experiences that don't meet expectations evoke discontent. Bad experiences invite complaints.
Delight
Experiences that exceed expectations achieve delight and lead to repeat business.
Satisfaction
Experiences that meet expectations deliver satisfaction.
Easier access to talent, markets, and sources of supply globally, forces companies to focus less on the overall worldwide operations system and more on country-specific aspects.
False
Empowerment gives employees autonomy over and responsibility for decision-making related to every aspect of the value-creation process.
False
Empowerment programs/strategies are best suited for companies in high-tech, high-fashion, or other fast-past, so-called glamor industries.
False
Everyone engages in, and ultimately thrives, in an empowerment culture.
False
Finding cost savings and locating close to customers are necessary and sufficient considerations to build a winning network.
False
If you deliver to promise, exceed industry standards, and meet customers' a priori expectations, you will definitely impress the customer and entice repeat purchase.
False
In a highly coordinated network, the production activities are loosely linked.
False
In the Internet age, delivery has been called the most vital factor to long-term competitive success.
False
In the process capability ratio, six sigma captures almost 88% of the process variability.
False
Locating operations in global regions with lower cost factors is always beneficial for a company, because lower factors automatically produce benefits for the company.
False
Multi-criteria analysis is a very effective tool, because it eliminates all subjectivity.
False
Multi-criteria analysis is an appropriate tool, because the network design process considers only quantitative decision factors.
False
Productivity growth, by definition, is good.
False
S&OP is typically managed over a relatively short period of time—more often than not, six months.
False
The center-of-gravity model assigns proportionately less weight to bigger sources of supply.
False
To really execute a customer satisfaction strategy, you need to find out how customers both perceive and measure your firm's performance
False
Total Cost of Ownership is a concept relevant for accounting and economics, but it is NOT an important consideration for global network design decision-making.
False
When considering the cost of production inputs, such as labor and raw materials, it is critical that managers analyze them in isolation for the purposes of network design decision-making.
False
When it comes to data capture, bricks-and-mortar stores like Walmart have a distinct advantage over their online rivals.
False
You should treat all customers equally. This is simply fair practice and good business.
False
The Ishikawa cause-and-effect diagram is also known as the
Fishbone Diagram
Kaoru Ishikawa
Developed Quality Control Circles (QCCs) & "fishbone" diagrams. Expanded TQC to all non-specialists & labeled it Company-Wide Quality Control (CWQC). Emphasized statistical methods on factory floor.
The Scientific Model
Frederick Taylor brought an early form of continuous improvement to the factory floor. His approach of observing, training, monitoring, and improving led to standardized operations practices
Empowerment
Giving employees autonomy over and responsibility for deicison-making related to their specific organization tasks
The Global Bottom Line
Global operations are critical to competitive success. You need them to gain access to the world's best resources. You also need them to reach global consumers.
How is the statistical concept of six sigma used?
Uses tools to help you identify which type of variation is present in your processes as well as how to address that variation to improve your process
Customer Service Costs
If your costs of customer service decrease because you changed your returns policy—making it hard, if not impossible to return unwanted product—are customers more or less likely to be loyal?
Level Patterns
If your data fluctuates around a consistent mean, you have a level pattern. Many products in the maturity phase of the life cycle exhibit a level pattern. As you might guess, level patterns are pretty easy to forecast.
Seasonal Patterns
If your data plot reveals a regularly repeating pattern, you are witnessing seasonality. Think about how sales skyrocket for beach towels in summer or ski goggles in winter. Of course, a repeating pattern might occur on a weekly or even daily basis
Order-picking productivity
If your productivity improves at the expense of poorer accuracy or higher damage incidence, are you really better off?
Growing the Middle Class
In 1990, one billion human beings earned enough income to consider making discretionary purchases beyond mere necessity; by 2010, the figure had more than doubled.
Low-volume job shop
In a low-volume setting where multiple jobs might be waiting to be processed at a workstation, you sequence jobs based on customer demand and production efficiencies
Job Enlargement
Involves expanding the scope of a job duties and responsibilities by combining various activities to make a job less repetitive and more interesting
Employee Involvement
Involving workers in the decisions that affect their jobs - often used as part of continuous improvement programs.
Network Design
Is critical to your company's success, but it is hard to do.
Big Data
Is defined by the 3Vs: volume, variety, and velocity. As more data is collected at an increasing rate, new analysis approaches are needed to make good decisions.
Place Utility
Is primarily the charge of supply chain managers who assure that products and services are where customers expect to find them—when they are needed
Serviceability
Is the product relatively easy to maintain and repair?
"Quality is free"
It costs less to make quality products than it does to fix poor-quality products
Which value dimension is most important?
It depends - various dimensions are important in different buying situations
Passive Scanning
Most managers respond in an informal and ad hoc manner. Observations don't initiate analysis. Nor do they lead to improved planning.
Quantifiability
Multi-criteria analysis enables you to quantify subjective criteria. It also allows you to mesh both quantitative and qualitative issues into a cohesive story.
Disciplined
Multi-criteria analysis invites you to do your homework in a systematic way. It brings discipline and visibility to the selection process.
Intuitveness
Multi-criteria analysis is intuitive, making it a great tool for communicating your process and your results to colleagues.
Applicability
Multi-criteria analysis is widely applicable. You can use it in any situation where you have to compare alternatives (like country and site selection).
When it comes to achieving corporate goals, which of the following is more important than measurement?
NONE of these are: - setting the right strategy - hiring the right people - providing the right training
Length of Forecast Horizon
Near-term forecasts are often easier to make and require less sophisticated, data intensive methods. Complex macro-economic issues likely require more sophisticated techniques.
W. Edward Deming
No permanent impact has ever been accomplished in improvement of quality unless top management carries out their responsibilities. These responsibilities never cease; they continue forever.
Value Gaps
You may deliver to promise, exceed industry standards, and meet customers' a priori expectations. Despite your efforts, the customer may decide—having experienced both Moments of Truth—that she overestimated her anticipated benefit.
Which of the following is NOT a consideration in network design decision-making?
Scheduling of workers
Historical Focus
You may focus too much on what has worked in the past and miss opportunities to disrupt expectations and steal rivals' customers.
Advisory Councils
Senior-level steering committees, customer advisory boards, and supplier councils provide feedback, expedite communication, and garner commitment for key initiatives.
Sustainability
Since the 1980s, the earning power of consumers has increased dramatically. Higher earnings mean more disposable income. As the percent of earnings spent on food decreases, consumers can prioritize other things, including a lifestyle focused on health and sustainability. A growing population and concerns for future generations have added to the momentum to make sustainable operations a priority.
The Service Economy
Since the 1980s, services have dominated economic activity in developed economies. Services now account for 80% of gross domestic product (GDP) and employment in the U.S. By contrast, employment in U.S. manufacturing has decreased from nearly 18 million in 1990 to 12 million today.4 To drive growth—and living standards—service operations had to become more innovative and productive.
Why doesn't everyone use balanced scorecards?
You need a rare combination of vision and discipline to make the balanced scorecard-driven process work. Specifically, you must recognize that you need to measure differently.
Supplier of Choice
You need to meet their needs better than the competition
Data Patterns
You need to pick a technique that fits your data patterns.
Customer Contact
The amount of interaction between the customer and the value chain process. Customer contact is high in service industries and very low in manufacturing
Which of the following is NOT a reason to sell abroad?
To safeguard the company's dependence on the domestic economy
Comparison Shopping (showrooming)
Today's savvy shoppers still enjoy the occasional visit to bricks-and-mortar stores, but will go virtual to save money. They physically visit stores to check out a product, but buy the product from a lower-priced online retailer.
Post-Purchase Evaluation
Today's shrewd shoppers know that technology empowers them beyond the purchase. They can rate every product and every transaction at Amazon.com
Product Research
Today's smart shoppers compile and compare product specifications without leaving the comfort of home.
Unprofitable Relationships
Too much stress on satisfying customers has led even world-class firms to unknowingly invest in unprofitable relationships.
Which of the following is not one of the characteristics of an indispensable supply chain manager?
Topper
Lean Six Sigma
Toyota energized a paradigm shift, demonstrating that if you build the right manufacturing environment, your people can come up with the ideas needed to continuously find and eliminate waste. Lean Six Sigma made it possible to produce high-quality products at low costs, quashing the belief that a tradeoff always exists between quality and costs.
Assembly Line
Toyota mastered the pull system to automate massive assembly lines to build automobiles.
Shigeo Shingo
Toyota's engineering genius who developed JIT philosophy, Single-minute Exchange of Die (SMED), & "Zero Quality Control" which aims to eliminate inspection through "poka-yoke"—mistake proofing production operations.
Cross training only works when you 1) give workers the chance to make real decisions that make an impact and 2) reward them for the value they create.
True
Customers should really be at the center of your decision-making world because they are the only entity that puts money into a supply chain.
True
Effective measurement helps managers make better decisions by helping them understand how processes work.
True
Even a bad scorecard is better than traditional measurement.
True
Every touch point is a moment of truth. To be successful over the long haul, a company needs to win what A.G. Laffley called the "two moments of truth."
True
Higher coordination of production activities globally can create economies of scale.
True
If you want to catch new trends quickly and you are using exponential smoothing, your alpha should be larger than .5.
True
In the process capability ratio, if the upper and lower specification limits are greater than the process variability, you can be pretty confident that the process can achieve your desired quality level.
True
Multi-criteria analysis can be a very effective tool to evaluate potential facility locations.
True
Non-competitive benchmarking focuses on benchmarking practices/process that are not essential to your firm's competitive success.
True
People mold their expectations and behavior to measures; therefore, you need to measure the right things..
True
Quality has more influence on a company than any other value-added dimensions.
True
Reliability defines the user's ability to count on the product not to fail.
True
The center-of-gravity model requires that you place locations on a grid coordinate system.
True
The core objective in six sigma is to reduce variation in processes.
True
To find the relative grid position of existing markets, you can place a grid over an ordinary map.
True
You need to evaluate services quality a little differently than you evaluate product quality.
True
You want to use a correlation-based forecast when you can identify variables that predict the behavior you are interested in.
True
Three Steps of Resource Orchestration
1. select team members 2. assign team roles 3. build team cohesion
Evaluating Your Data
1. select your data 2. identify and understand any patterns that exist in your data
Three realities of service setting
1. services are consumed as they are produced 2. services cannot be inventoried 3. because customers are involved, each instance of service delivery is unique
Collaborative Planning, Forecasting, and Replenishment (CPFR) process
1. strategy & planning 2. demand & supply management 3. execution 4. analysis
Service Quality Dimensions
1. tangibles 2. reliability 3. responsiveness 4. assurance 5. empathy
Research has shown that when a scorecard is not in use, up to ___ of your workforce can't articulate the company's strategy
95%
Information technology
builds and maintains the systems needed to capture and communicate information among decision makers.
Serviceability
is the speed and ease of repair when problems occur.
In the process capability ratio, the farther off center the process is operating, the more likely it is to produce unacceptable parts. This adjustment is represented by which symbol?
k
In terms of configuration, if you are mainly concerned with scale economies...
locate larger facilities in fewer places
Accounting
maintains business records that provide information needed to control operations.
order winner
makes your product attractive, differentiate it in a way that makes customers want to purchase it
Marketing
manages the upstream relationships with customers, identifying their needs and communicating to them how the company can meet those needs.
Logistics
moves and stores materials so they are available when and where they are needed.
The answer to the question, "Does strategic intent translate into results?" is ___________.
no, not very often
GM's global plants typically operate with certain autonomy from each other, because________.
none of the above
_______________ and _______________ are primarily responsible for creating form utility.
operations; purchasing
Which of the following is a major regional determinant for warehouse placement?
proximity to markets
Perceived Quality
refers to a product or brand's quality reputation.
Durability
refers to a product's life expectancy (also, mean time between failure).
Performance
refers to a product's operating characteristics.
Qualitative Forecasts
rely on experts' opinions
Research and Development (R&D)
responsible for new product design.
If your data plot reveals a regularly repeating pattern, you are witnessing ____________ pattern.
seasonal
You can reduce the bullwhip effect by
sharing point-of-sale information immediately and simultaneously with all members of the chain and developing collaborative forecasts with supply chain partners
The balanced scorecard was developed to help companies avoid the counterproductive decisions that emerged from too much emphasis on ______________ and ______________ measures.
short-term, financially orientated
Six Sigma Statistical Significance
six sigma performance produces fewer than 3.4 defects per million opportunities for an error or defect
Operations and Supply Chain Management
the business function responsible for acquiring materials, transforming those materials into higher-valued outputs, and delivering the finished product to customers; creating customer value
The only person that puts money into a supply chain
the customer
Forecast Error
the difference between what your predict and what actually happens - naturally occurs when you use historical data to predict the future
hidden plant
the fact that 15-40% of a firm's capacity is used to find and fix poor-quality work
If special cause variation is present in a process
then the process is out of control
Business Purpose
to create a customer. What the customer buys and considers value is never just a product. It is always a utility, that is, what a product or service does for him.
Operations
transforms the inputs acquired from suppliers into more highly valued products.
correlation models
use when you can identify variables that predict the behavior you are trying to understand
time series models
use when your primary source of data is historical track record of the variable being predicted
Industrial Revolution
when machine power substituted for human power, enabling huge improvement in productivity
Reorder Point
when to produce - compares the amount of inventory currently available to the rate of demand
Empowerment can lead to
winning results in almost any setting
Since we know our forecast is going to be __________, we _______________.
wrong, should frequently update it with the most current information
A control chart that is constructed using a mean is called a/an...
x̄ chart
If you can't measure it...
you don't understand it, so you can't manage it
Once you have calculated the coordinates for a new facility...
you must consider additional factors before making a decision
Pilot Test
you want to know how the process is going to work in real life
Cognitive Level
your mind processes information—e.g., advertising and memories—for each experience, creating a learned expectation
What are the four stems to E. Edward Deming's four-step continuous improvement processes?
Plan, Do, Check, Act
The following indicate that any process is out of control:
- A single point plots outside the control limits. - Two out of three successive points are on the same side of the centerline and farther than 2 σ from it. - Four out of five successive points are on the same side of the centerline and farther than 1 σ from it. - A run of eight in a row are on the same side of the centerline. - Any consistent or persistent pattern tells you that your process includes systematic variation.
Four Key Points about Forecasting
1. History 2. Accuracy 3. Confidence 4. Ownership
Which of the following initiatives represents a true customer-success strategy?
- At the customer, for the customer - six sigma at the customer
Which of the following are elements of an empowerment culture?
- Communicate the right expectations - Measure the right things - Reward the right behavior - Support with the right resources - Give employees the right opportunity
Acquisition touch points
- occur as customers learn about and make purchase decisions - process of learning about a product and making the decision to buy it
Which of the following is a cost associated with overstock situations?
- opportunity costs - holding costs - markdown costs - disposal costs
Which of the following is a characteristic of a pet project program?
- pet-project champions recruit team members to join the team - the pet-project team sets its own performance goals - The pet-project team builds its own plan, including the identification of performance milestones.
Customer-Service Horror Stories
- poor service - bad attitude - misguided policies
To achieve quality at the source, you need to focus on which of the following?
- prevention - personal responsibility - standardization
The total-cost-of quality framework breaks out quality costs into which four categories
- prevention costs, appraisal costs, internal failure costs, external failure costs
Which of the following is not one of the steps in W. Edward Deming's PDCA cycle?
- procrastinate - calculate
Quality Dimensions
- product quality - service quality
Financial Perspective Measures
- profitability - return on assets - growth - share value
Which of the following are intangible benefits of collaborative planning?
- quicker implementation of new ideas - more trust
Why do companies go global?
- resource access: companies seek access to global resources - market access: companies want access to global customers
Which of the following is one of the fundamental steps in resource orchestration?
- select team members - assign team roles
Ways retailers are using data to change business:
- targeted promotions - product selection - new product development - pricing
S&OP is used to bring the customer-facing and supply-facing sides of your company together to get everyone to agree to which of the following? a. The nature of the business environment b. A single forecast c. How to increase the profit margin d. All of the above e. Only A and B
- the nature of the business environment - a single forecast
Which of the following are reasons to set up global operations?
- unique resources - closeness to the most important markets - new sources of revenue
Statistical process control charts measure what?
- variables - attributes
Which of the following measurement mantras focuses on what you should measure?
- what gets measured gets done - if you can't measure it, you can't manage it
The "ugly" of Globalization
- worker exploitation - elevated carbon footpring
Which of the following is the missing phrase in this extended measurement mantra: "If you can't measure it, _________________________, therefore, you can't manage it."
- you don't understand it
Costs associated with an overstock
-opportunity costs -holding costs -markdown costs - disposal costs
Improving Process Capability
1. Change the specifications 2. Modify the process 3. outsource
ABC Classification three-step process
1. Classify Companies by Sales 2. Modify Classification based on strategic issues 3. Periodically Re-evaluate
Benchmarking Pitfalls to Avoid
1. Complacency I: Living in the past 2. Complacency II: Ignorance is bliss 3. Complacency III: Always in 2nd place
A Weighted-Factor Approach Steps
1. Decide on Criteria 2. Set Weights 3. Define Scoring System 4. Evaluate Options 5. Calculate Results 6. Conduct After-action Analysis
Goal-Setting initiative adhere's to two principles:
1. Don't Punish Failure 2. Don't Give Up
Scott Adams' Ten Great Management Lies
1. Employees are our most valuable asset 2. I have an open-door policy 3. You could earn more money under the new plan 4. We're reorganizing to better serve our customers 5. The future is bright 6. We reward risk takers 7. Performance will be rewarded 8. We don't shoot the messenger 9. Training is a high priority 10. I haven't heard any rumors 11. We'll review your performance in six months 12. Our people are the best 13.Your input is important to us
Seven Rights of empowerment
1. Get the right people on the team 2. Communicate the right expectations 3. Provide the right training 4. Measure the right things 5. Reward the right behavior 6. Support with the right resources 7. Give them the right opportunity (i.e., get out of the way).
Product Quality Dimensions
1. Performance 2. Features 3. Flexibility 4. Durability 5. Conformance 6. Serviceability 7. Aesthetics 8. Perception
A proven path to people empowement
1. coaching 2. goal setting 3. measuring
W. Edward Deming's four-step—Plan, Do, Check, Act (PDCA)
1. Plan - define the problem and identify the root cause. 2. Do - implement your corrective action to solve the problem. 3. Check - check to see if the corrective action really solved the problem. 4. Act - if your solution worked, make it a formal part of the process. Share your process, solution, and results wherever and whenever possible.
Cost Strategies
1. Process Improvement 2. Automation 3. Offshoring 4. Outsourcing
Sales and Operations Planning (S&OP) Planning Process
1. Product Management Review 2. Demand Review 3. Supply Review 4. Integrated Reconciliation 5. Management Business Review
Productivity Measurement Process
1. Recognize - treat change in productivity measure as a red flag that went up. 2. Go and Find Out What Happened - ou will want to talk to the people who do the work. You may want to observe how they do the work 3. Take Action - Once you truly understand what is going on, you can take action.
Successful companies talk to customers for two reasons:
1. They want to learn about customer needs. 2. They also want to convince customers they are committed to fulfilling those needs.
Steps in the forecasting Process
1. decide what to forecast 2. evaluate and analyze appropriate data 3. select and test the forecasting model 4. generate the forecast 5. assess forecast accuracy
The Market Chaser
1. Where the people are 2. Where the money is
Anatomy of a Supply Chain
1. You begin with the "focal firm"—that is, the company in the middle. 2. Suppliers are on the left and customers on the right. 3. Suppliers and customers are organized in columns, called "tiers," which are numbered in sequence moving away from the focal firm. 4. Demand information flows from right to left; that is, from the end customer all the way up the chain to raw materials. 5. Purchased goods and services flow the opposite direction—from upstream suppliers, through the focal firm, to downstream customers. 6. Money flows from right to left; that is, from the end customer all the way up the chain to the raw material suppliers?
Benchmarking Process
1. define your goal - What practice/process are you benchmarking? 2. document BIC practice - Who does it the best? 3. develop an implementation strategy - How can we adopt best practices to improve your firm's own process and performance?
The new environment dictates two rules:
1. everything happens faster 2. anything that can be done will be done, if not by you, then by someone else, somewhere.
Cross training only works when you:
1. give workers the change to make real decisions that make an impact 2. reward them for the value they create
Avoid two mistakes in data
1. looking backward - ast buying behavior does not always predict future behavior. 2. looking beyond the mark - don't forget, low levels of shopping activity may reflect more on your company's service offering than on the quality or profitability of a customer.
Two downsides to basic service strategies
1. performing to the common denominator - emphasis on short-term costs down leads to the lowest service levels. 2. doing the wrong things - if your service strategy loses line of sight to customer expectations, you create service gaps.
To consistently achieve quality at the source:
1. prevention - avoid problems in the first place 2. personal responsibility - promote a "stop and fix-it" mentality 3. standardization - standardized work makes defects more obvious when they occur
Demand Balancing two options
1. price 2. lead time
OSCM input-output model
1. purchasing acquires inputs 2. operations manages the transformation process 3. logistics moves materials into and out of the company
Value Propositions serve two purposes:
1. they shape customer expectations 2. they communicate what your company must do to earn a customer's business
Cultivate a culture that:
1. values people as your most valuable asset 2. invest in a great measurement system
Three core questions to get forecasts right:
1. what does a well-designed forecasting process look like? 2. How can you effectively coordinate forecasting across decision makers - both within the firm and with supply chain partners? 3. How can you improve the quality of your forecasts?
Rotation Programs
12-24 month program that gives new hires first-hand experience in four to six different assignments in the assembly line, production control, purchasing, logistics, marketing, accounting, and finance
Bullwhip-related costs can be as high as
12-25% for each member of the supply chain
A Center-Of-Gravity Approach
1: Identify and Map Sources of Economic Activity 2. Calculate the Economic Center of Gravity 3. Map Your Economic Center of Gravity
90% of the world's data was created in the last ____ years
2
U.S represents
20% of the world's GDP
A well-designed scorecard should consist of about ______________ distinctive measures.
20-25
Suppose that the design engineering team set the specifications for length of a stamped sheet-metal part at 10 inches (T) with acceptable tolerances of ±.05 inches (USL and LSL). The average length of the products produced by the actual stamping process is 9.995 inches (m) with a standard deviation of .005 inches (s). What is your Cp?
3.33
Statistically, six-sigma performance produces fewer than _____ defects per million opportunities for an error for defect.
3.4
Control Chart for Attributes
A characteristic that has a discrete value and can be counted (e.g., is the product "good" or "defective" or how many blue M&Ms are in the package).
Six Sigma
A disciplined, data-driven approach for improving quality by removing defects and their causes
Bullwhip Effect
A distribution channel phenomenon. As a company responds to shifts in customer demand, the initial response is amplified as one moves up the supply chain.
Simple Definition of Forecasting
A forecast is an educated guess about the future
Collaborative Planning, Forecasting, and Replenishment (CPFR)
A formal process aligning supply and demand across buyer/supplier relationships to help trade partners work effectively together to build a single, agreed-upon forecast and operating plan.
Sales and Operations Planning (S&OP)
A formal process of aligning customer-facing and supply-facing sides of a company to build a single forecast and plan to fulfill customer orders
Integrated Business Planning (IPB)
A formal process to help you align supply and demand across functions within your firm as well as with your trading partners
Reverse Auctions
A lower price charged by the supplier is a more preferred offer
Coach
A manager who empowers others to ideate and initiate, inspiring both individual excellence and team cohesion. The coach praises often, corrects as needed, and teaches always.
Catalyst
A manager who not just embraces change when change is needed but helps drive the right changes throughout the organization.
Choreographer
A manager who sees the big picture and understands how individual pieces fit into the pattern. The choreographer rigorously analyzes design tradeoffs and executes with discipline while cultivating creative and collaborative relationships.
Cross-Functionalist
A manager with deep functional skills who works fluidly with colleagues from other disciplines, understanding their needs and earning their respect.
Broken Trust
A misguided desire to satisfy customers can lead you to make promises that you cannot fulfill. When this happens, service failures inevitably occur. The result: Your company breaks a promise. Trust is damaged and deep dissatisfaction emerges.
Pet Project
A program where every member of the team is expected to identify an improvement opportunity that is personally important and then recruit a team to develop and execute the project.
Industry Standards
A set of standard metrics exists for key value-added activities.
Exponential Smoothing
A simple time series technique that allows you to balance stability and responsiveness by weighting your last period's demand with your last period's forecast
Weighted Moving Average
A simple time series technique that applies larger weights to data from more recent periods to better reflect future demand based on past experience.
Customer Relationship Management (CRM)
A software system that enables a company to accurately profile customers by tracking the customers' wants and buying habits. The software is a sophisticated form of customer segmentation
Balanced Scorecards
A strategic planning and management system that takes a holistic approach to measurement to create a complete picture of how the company is peforming
What are the two types of touch points?
Acquisition; Utilization
Which of the following is not one of the steps in the DMAIC quality methodology?
Act
Stockouts
AKA out-of-stock event, occurs when demand for an item cannot be filled from existing inventory
Which "Quality of Product" dimension would you be assessing when asking the question, "Does the product look, sounds, taste, or smell the way it should?"
Aesthetics
Variability
All processes, no matter how well they are performing, include some variation. The amount of random variability in a process will largely determine how far the upper and lower limits are from the target.
Revelant Costs
All the costs that should make a difference in a decision
Forecasting is one of the most important things your company does
Almost every decision you make in business is based on a forecast of the future
Newcomer
An upstart rival constantly, and aggressively, sought better ways to manage key processes.
Business forecasting is the process of using _____________, _____________, ____________, and experience to make predictions and respond to various business needs.
Analytics, data, insights
Delivery
Any activity that lengthens the time or increases the variability of the order cycle damages your firm's ability to deliver on time.
Touch Point
Any interaction between a business and a customer or a potential customer.
Perception Gaps
Arise when customer metrics don't capture actual performance. Sometimes, customers treat you as if, "You are only as good as your last performance."
Critical Warning
As you evaluate resources, you need to take a total cost approach. That is, you can't afford to look at costs in isolation. Never forget that your true cost is the sum of all relevant costs.
Site Decision
Ask, "Does a specific site location offer advantages?" Don't forget, not all industrial parks are the same. Nor are they all equally accessible.
Measurements
Ask, "What data do you have to help you better understand process relationships and performance?"
Community Decision
Ask, "Where does it make sense to operate within the country?" This decision often comes down to operating on the border or in the interior.
Country Decision
Ask, "Which country offers the best operating conditions (i.e., labor, energy, regulation, supply base)?"
Coordination Decision
Asks, "How can you connect geographically dispersed activities so that they work as seamlessly as possible to create value?"
Configuration Decision
Asks, "Where in the world should you locate value-added activities?"
Materials
Assess ALL of the materials used in the process. How do defective, damaged, or poorly specified materials affect performance?
Executive Judgement Forecasting
Based on Executive Experience
Site Analysis
Begins with understanding the geography of supply and demand. Simply put, where do you buy from and where do you sell to? Your goal is to find the geographic center; that is, the location that minimizes the distance between you and your supply chain partners.
Customer Engagement
Benihana engages customers in the preparation of delicious meals.
The Institute of Business Forecasting and Planning definition of Forecasting
Business Forecasting is the process of using analytics, data, insights, and experience to make predictions and respond to various business needs. The insight gained by Business Forecasting enables companies to automate and optimize their business processes. A Forecaster's goal is to go beyond knowing what has happened and provide the best assessment of what will happen in the future to drive better decision-making
Capital Equipment
Capital equipment teams design and acquire needed equipment, defining necessary specifications, selecting suppliers, conducting negotiations, and installing and maintaining equipment.
The location that minimizes the weighted distance or cost between a facility and the market is the...
Center of Gravity
A control chart that measures attributes measures what?
Characteristic that has a discrete value and can be counted
_______________ processes influence how you deal with information; ________________ processes influence how you react to experiences.
Cognitive; Affective
The Hybrid Model
Most companies that go global evolve their strategies—and their networks—to gain access to both resources and markets.
Commodity
Commodity teams develop the expertise and relationships to assure an uninterrupted flow of high-quality, low-cost materials to the operating system.
The Computer Revolution
Computational power transformed operations from an art to a science. Computers made it possible for complex algorithms to be applied routinely in situations where judgment and guessing previously prevailed. Computers also made smart machines a reality. Robots took over many mundane and hazardous jobs.
Quality management can make or break your company's future
Customers don't just value quality - they expect it
Your company decides to locate an R&D center in Campo Grande, Brazil; a Design Center in Cupertino, California; and an assembly plant in Xi'an, Shaanxi. This is a(n) _________ decision.
Configuration
People
Consider everyone who touches the process. What are the sources of human error? Some classic issues include poor training, fatigue, and lack of experience.
The Global Network Design Process Phase I:
Corporate and Supply Chain Strategy: Strategy is all about deciding how to use worldwide resources to meet your corporate goals; i.e., meet customers' real needs efficiently and profitably
Prevention or Avoiding Quality Problems
Costs of designing and maintaining the quality management system.
Appraisal Costs
Costs of evaluating produced or purchased information, processes, products, and services
Which of the following customer-service strategies focuses on meeting industry standards in key operational areas like product quality, productivity, product availability, on-time delivery, and service reliability?
Customer Service Strategy
Deloitte's CEO Survey of Global Manufacturing Competiveness
Deloitte surveys CEOs to assess the manufacturing attractiveness of different countries. The survey asks about business confidence and the current environment, manufacturing competitiveness, and demographics.
Which of the following primary technology systems is needed to make sense of data by making hidden relationships visible?
Data Display
Holistic Decisions
Decisions that take into account how the entire network works together
Customer Relationship
Dedicated customer teams work to meet the needs of specific customer, resolving problems and designing tailored services.
DMAIC
Define Measure Analyze Improve Control
Amount and type of data
Different forecasting techniques require different types and quantities of data. Simpler methods—like the time series methods discussed below—don't require a lot of data. Sophisticated models are data intensive.
Conformance
Does the product conform to design specifications?
Reliability
Does the product consistently perform as it is supposed to over time?
Performance
Does the product do what you want it to?
Aesthetics
Does the product look, sound, taste, or smell the way it should?
Features
Does the product possess the features you are looking for?
Philip Crosby
Doing things right the first time adds nothing to the cost of your product or service. Doing things wrong is what costs money.
Which of the following is not a key benefit of a measurement strategy that is based on the use of balanced scorecards?
Drives a fundamental focus on financial performance
Which "Quality of Product" dimension would you be assessing when asking the question, "How long will the product perform or last, and under what conditions?"
Durability
Moment of truth
Each touch point between a customer and a company is a moment of truth - an experience that might influence and customers feelings/perception of the company.
Venetian Shipbuilders
Early assembly line - people have been using great operation practices since the dawn of civilization
Economic Cycle Patterns
Economic events like recessions or inflation that affect your business - and the forecasting tool you should use
Fixed Location
Embraer, the Brazilian aircraft manufacturer, uses semi-fixed assembly process to produce regional jets.
Performance Gaps
Emerge when you fail to execute to customer expectations—e.g., the customer expects 98% on-time delivery, but you only deliver 95% of shipments on time.
Translation/Specification Gaps
Emerge when you focus too intently on industry standards or internal capabilities that are not aligned with customers' real needs.
Communication Gaps
Emerge when you overpromise and under deliver. These gaps sour a relationship quickly.
Time Utility
Emerges from effective management of all value-added processes that influence when a product is available for purchase.
Agility
Enables your company to deal with the risk inherent in lean, global operations. It also enables you to recover from the unexpected more quickly and resume operations faster than rivals
Guardbanding
Engineers set product specifications tighter than they need to be - increases production costs and lengthens lead times without improving quality
Consistent repeat business is a clear and unambiguous signal that a customer is loyal.
False
Mean Absolute Percentage Error (MAPE)
Expresses forecast error as a percentage from the actual demand
Possession Utility
Falls within marketing's domain and consists of efforts to communicate (i.e., promote) a product's value and then facilitate the exchange process.
According to Scott Adams, creator of the Dilbert comic strip, "Employees are our most valuable asset" is the great management truth.
False
According to the courseware, an ugly aspect of the "flattening" of the global economic playing field is that companies can access sources of innovation and cost reduction around the globe.
False
According to the courseware, the main strategic driver for global operations is market access.
False
Aggressive benchmarking will enable you to become the best-in-class company on the practice/process you are benchmarking.
False
As a rule of thumb, a Cpk of less than 1.5 indicates that your process can meet your desired quality levels.
False
Because of the intimate interaction involved in using a product, utilization touch points are more important than acquisition touch points.
False
Perception
For any dimension that cannot be observed directly, does the product seem like a high-quality product?
High-volume assembly
For high-volume assembly operations, you define product routing when you design your assembly line. You will mix products based on customer demand.
Logistical Support
For the operation to work well, information must be shared in real time and parts must arrive on time—always.
Having good data is critical to building accurate forecasts. But, data availability isn't sufficient. You need to choose the right _______________ to make the most of your data.
Forecasting Technique
Goal Setting
Great coaches are systematic goal setters - "begin with the end in mind."
Measuring
Great coaches build the team even as they motivate the individual. That's one reason they clearly communicate expectations
Pareto Charts
Helps you make priorities visible by showing the frequency at which each cause occurs. You can then rank order the causes of variability.
Which of the following is not a fundamental question you should ask as you design your company's balanced scorecard?
How can we maximize share price?
Reliability
How dependably can the service provider provide promised service?
Assurance
How knowledgeable and courteous are the service employees and how well do they convey trust and confidence?
Durability
How long will the product perform or last, and under what conditions?
Tangibles
How pleasing is the appearance of the physical facilities, equipment, personnel, and communication materials?
Process Design
How should you make things? Part I: Process design focuses on the technology and work design you use to make things.
Facility Layout
How should you make things? Part II: Facility layout focuses on how you will use your plant and equipment to make things efficiently.
Empathy
How well does the service provider provide caring, individualized attention to its customers?
Scheduling
How will you use your resources? Scheduling helps you prioritize what you will produce
Responsiveness
How willing, able, and promptly is the service provider to help you?
Customer Feedback
If you look at the mission statements of winning companies, you will consistently find five essential words, "meet or exceed customer expectations." To get the real skinny on what your customers expect, you need to talk to them and earn their trust.
Cyclical Patterns
If you see a repeating pattern, but it doesn't recur regularly—that is, its duration or magnitude are less predictable—you are probably observing the effects of an economic cycle. Recessions, inflation, or even product development cycles (think iPhone introductions) can create fluctuations that affect your business.
Return on Investment
If your ROI goes up because you skimp on needed investment, have you improved your firm's ability to win tomorrow's competitive battles?
By investing in prevention and appraisal costs, your real goal is what?
Identify and eliminate the causes of problems before they occur
Your real goal
Identify and eliminate the causes of problems before they occur
Good productivity growth
If the order-picking process has improved because of better training, more clearly marked racks, or the use of radio frequency technology, you are excited about the progress. Your next steps are to document the performance improvements, determine what changed, and make sure the changes are adopted elsewhere.
Bad productivity growth
If the so-called better results come from counterproductive behaviors, you need to take corrective action. You will have to show people why what they are doing to "improve" their performance is counterproductive.
Trend Patterns
If you look at a plot of your data and see an upward or downward pattern, your data is revealing a trend. Many products show a linear trend. Hit products may show an exponential trend.
Project Management
In one-of-a-kind projects such as the construction of an apartment complex, you use project-planning tools to schedule resources and activities.
SWOT Analysis
Internal: Strengths, Weaknesses External: Opportunities, Threats
Job Enlargement
Increasing the scope of a job through combining various activities. The goal is to create ownership and alleviate monotony.
Information Systems
Information systems teams design and implement the systems needed to collect and analyze information managers need to make great decisions.
Delphi Forecasting
Interactive polling and pooling of expert opinion
Select the most appropriate answer about bringing components from other continents.
It potentially results in better products for the customer.
Safety stock
Kept on hand to compensate for poor information sharing, possible transportation delays, and other unexpected events
The Global Network Design Process Phase II:
Location Decision: are all about where to set up operations.
Methods
Look at every aspect of the process. How is it performed? How do policies, procedures, et cetera affect process performance?
When measuring forecast error, which forecasting error expresses the forecast error as a percentage from the mean?
MAPE
If I'm going to be wrong, why should I bother with forecasting?
Making decisions based on a good forecast is better than being blind.
Sources of Problems
Measurement helps you identify why things aren't working so you can root out the causes of failures, enabling more effective problem solving.
Progress Toward Goals
Measurement tells you how much progress you are making toward your goals.
Partner Expectations
Measurement tracks customer expectations and satisfaction levels as well as supplier capabilities.
Quality
Meeting Customers Expectations
Satisfaction/Service Quality Gaps
Occur when the customer's perception of service and expectations are not aligned.
Knowledge Gaps
Often exist between customers' real expectations and your perceptions of those expectations. You need to accurately assess what customers really want.
Empowered Customers
On the output side, you need to remember that your customers have information and options. They can buy from someone else—and will—if you don't meet their needs.
Hand Crafted
Orrefors, the Swedish producer of fine leaded crystal uses an artisan-based, glass-blowing process.
"B" Customers
Other key accounts that receive very high levels of service.
Productivity =
Outputs / Inputs
Which of the following tools would you use to identify the most-likely cause of a quality problem?
Pareto Chart
Which of the following helps you make priorities visible by showing the frequency at which each cause occurs?
Pareto diagram
Which of the following represents the dark side of modern data analytics and the trend toward customer profiling?
Past buying behavior does not always predict future behavior
By asking "what if" questions when using the multi-criteria tool, you are doing what?
Performing the all-important sensitivity analysis
Which of the following is not one of the core value dimensions?
Process Improvement
Target
Processes are designed to produce to a specific quality target. You build your control chart—i.e., the upper and lower limits—around this target.
Product Development
Product development teams ideate, design, and develop new products; that i.e., they reduce the time needed to bring a product from concept to market.
Supplier Development
Supplier development teams help suppliers upgrade process engineering, manufacturing, and quality capabilities.
Cross Training
Providing the skills needed for workers to become proficient at different usual related skills, tasks, and jobs
Environment
Question how environmental conditions—e.g. location, time, temperature, et cetera—influence the process.
A control chart that is constructed using a range is called a/an...
R-Chart
Job Enrichment
Redesigning jobs so that they are more challenging and interesting. A motivational technique to help create more meaningful jobs
Six Sigma's Core Objective
Reduce process variation
ABC Classification
Relies on the Pareto Principle (80/20) - 80% of your sales are driven by your most important 20% of customers
Internal Failure Cosrts
Remedying defects before delivery to customer: costs of failure that are detected before they are transferred to the customer
External Failure Costs
Remedying defects discovered by that customer: Costs failures that are detected after they are transferred to the customer
Key Point
Resource availability, costs, and quality can vary greatly around the world.
Which "Quality of Service" dimension would you be assessing when asking the question, "How willing, able, and promptly is the service provider to help you?"
Responsiveness
Internal Benchmarking
Some large, global companies make it a point to look for and disseminate best practices found within their own operating network.
Proactive Scanning
Some managers, however, proactively search for new ideas and potential opportunities and threats
Non-competitive Benchmarketing
Sometimes your best learning opportunity is found in another industry.
The tool that monitors processes and keeps them production high-quality products is?
Statistical process control
Which of the following is not one of the eight factors used to assess quality?
Statistics
Innovation
Staying relevant means you need to innovate. The time between new product introduction and product "obsolescence" is constantly shrinking. Rivals can copy and introduce their own "new-and-improved" version within six to nine months
"A" customers
Strategic key accounts—the most important 5-10% of your customers—typically make up a huge share of sales, profits, and growth. You do everything possible to make sure their experiences are remarkable.
How, Not What.
Success is driven more by how you use resources than by what you make. Rivals can, and will, copy products and services. It is much harder to copy processes and culture.
Cultural Support
Supporting any large-scale production or service operation is hard. The logistics are a mess. Building a talented team is a challenge. Doing this across continents becomes a nightmare.
Market Research Forecasting
Surveys, Focus Groups
With respect to control chart logic, processes that are designed to produce to a specific quality number is called?
Target
Environmental Scan (aka, Strengths, Weaknesses, Opportunities, and Threats analysis)
Take a close look at your competitive environment to spot things or trends that might change the rules of the competitive game.
Gross Roots Forecasting
Talk to Customers
Expert Panels Forecasting
Talk to the experts
Problem Solving
Task forces are put together to solve specific problems (e.g., reduce costs, improve quality, or shorten cycle times), implement new technologies, or drive the adoption of strategic initiatives.
Globalization
The 1980s ushered in a new era of economic globalization. Now, companies worldwide depend on global resource and consumer markets for growth and profits. Consider, for example, that 95% of the potential consumers for American companies live outside the U.S. Global manufacturing and supply networks make it possible to reach these customers. The result: Sales of U.S. foreign affiliates of multinational enterprises (MNEs) plus goods and services exports exceed $8 trillion—that's 53% of total sales
BCG's Global Manufacturing Cost-Competiveness Index
The Boston Consulting Group publishes an index of comparative manufacturing costs for the world's top 25 exporting economies. The index includes manufacturing wages, productivity, energy costs, and currency exchange rates. With a score of 100, the U.S. is the baseline.
eCommerce
The Internet made eCommerce a reality. Today, you can go to a store to check out the new TV (or whatever else) you're shopping for and then do all of your comparison-shopping online. The convenience of shopping at your leisure and having products delivered to your door has led to dramatic growth in eCommerce. However, companies are still trying to figure out how to manage eCommerce operations profitably
World Economic Forum's Global Competitiveness Report
The WEF combines 114 indicators. No doubt, the quality and quantity of suppliers will impact your network's cost, quality, and delivery performance.
Mean Squared Error (MSE)
The average of all squared errors
Mean Absolute Deviation (MAD)
The average of the absolute values of the difference between actual demand and forecast demand
Control Decisions
The day-to-day decisions you make that define how you make things
A forecast error is
The difference between what your predict and what actually happens
Benchmarking
The formal process of comparing the attributes of one organization to those of another.
Best-in-class Benchmarks (best of breed)
The highest performance level in an industry, which is used as the target standard.
Coss-experienced manager
The manager who is well rounded, well connected, and ready for a senior leadership role
Economic Order Quantity (EOQ)
The order quantity that minimizes total costs of cycle inventory and placing orders. The amount of inventory to make (or buy) that minimizes total inventory costs. Occurs at the point where carrying costs (holding costs) are equal to set up costs (order costs)
Predictive Analytics
The practice of looking for hidden patterns from very large data sets to identify trends and predict outcomes.
Form Utility
The primary responsibility of purchasing and operations managers who acquire inputs and transform them into products or services of greater customer value.
Value Chain
The process or activities by which a company adds value to product/service and thus meet customer needs.
Consumer Society and Scale Economies
The productivity gains of the Industrial Revolution increased prosperity, giving birth to our modern consumer society. Consumers began to buy in large enough quantities to create economies of scale. They also demanded efficient operations to produce a greater variety of affordable products.
total cost of ownership (TCO)
The purchase price of an asset plus the costs of operation and disposal
"C" Customers
The remaining 80% of your customers. You provide them high levels of standardized service.
Moving Average
The simplest time series technique that takes the average of several recent periods of demand
Resource Orchestration
The skill that enables companies to bring the resources of the entire supply network together
Forecast Horizon
The span of time for which you are forecasting. Shorter-term forecasts are usually more accurate.
A successful supply chain leader achieves key goals through the people you work with.
True
Supply Chain Management
The value creation engine of every organization, it involves collaboratively managing value-added processes and projects to meet the real needs of customers profitability
Open Systems
The view that companies are "open" and affected by changes in their environment. Managers need to recognize emerging opportunities and threats and be able to effectively respond.
ABC classification relies on the Pareto principle. The Pareto principle observes that 80% of your customers drive 20% of the benefits.
True
Control Chart for Variables
Things that can be measured on a continuum of values like weight and volume.
Almost every decision you make in business is based on a forecast
True
Any activity that increases ____________ and/or ____________ of the order cycle hinders your delivery capability.
Time; Variability
Goal as an OSCM professional:
To design a network that enables your company to use worldwide inputs to create value for global customers. Your success depends not only on the cost and quality of the inputs but also the efficiency and effectiveness of your operating network.
Coaching
To empower workers you have to be a coach—not a command-and-control boss. Coaching begins with recruiting.
Loyalty Card Programs
Track your behavior, making it easy for your favorite stores to get to know your buying habits.
A bad scorecard is worse than no scorecard.
True
A core, fundamental reason escape rooms a ropes courses fail to change work culture and promote teams is that don't change measurement systems to support these socialization efforts.
True
Winning Results =
Understanding + Behavior + Execution
Historical Analogy Forecasting
Use similar "product" from past
Assess Forecast Accuracy
Use this insight to improve the forecasting process. Don't forget, forecasting is an ongoing process—one you want to continuously improve via more appropriate methods and better data.
Value Analysis
Value analysis teams study a product or process to determine how to produce the product at a lower cost or with improved quality.
With respect to control chart logic, processes performed include some variation is called?
Variability
Six Sigma is built on which very critical fact?
Variability in a process produces defects, errors, and waste
Process Capability Analysis
Verify that the process is capable of consistently producing product within the design specifications your engineers have set
What does a process capability analysis allow you to do?
Verify that your process is capable of performing at your desired quality level
Which quality guru is responsible for the four step—Plan, Do, Check, Act (PDCA)—cycle that is used by almost every global manufacturer today?
W. Edward Deming
Decide What to Forecast
What forecast do you really need as an input into your planning process?
Result
What happened? The industry "leader" suffered stagnant sales and a growing expenses-to-sales ratio. The "inquisitive upstart" benchmarked aggressively to improve customer service and SC productivity, achieving double digit sales growth and higher profit margins.
Product Design
What should you make?
Facility Location
Where should you make things? You want to locate your operations in places that give you access to either factor inputs (e.g., low-cost labor or materials) or consumer markets
Inventory Control
Will you have enough materials—when you need them? Inventory decisions help you decide how much and when to make specific products.
Forecasting
Will you have the right materials—when you need them? Forecasting helps you estimate what products you need to produce and when you need to produce them. Forecasting is your tool for guessing what products are going to sell.
Quality Control
Will your product meet customer expectations? Quality control helps you design, build, and inspect quality into both the transformation process and the produc
1st moment of truth achieved when:
You have the right product, at the right place, at the right time, at the lowest possible cost. To do this, demand and supply must be balanced.
Sensitivity Analyis
You identify various likely scenarios, asking "What if . . .?" for each possibility. Then you can change the weights or scores in your evaluation system to reflect those likely alternatives
Confidence
You set control limits based on the level of confidence you want to have that the process really is out of control (typically 3 or 99.74%). If a sample of data you collect from the process falls above the upper limit or below the lower limit, you can be confident something unusual is going on—that is, the process is out of control and you need to fix it.
Responsive
You want to catch new trends quickly
Stable
You want to smooth out noise
Under what circumstances would you use process capability analysis?
You want to verify that the process is capable of consistently producing good outputs
SKU proliferation
Your desire to meet every customers' needs promotes excessive product/service proliferation, undermining operating efficiencies and performance.
Simpler forecasting methods don't require _______________. Sophisticated models are _______________.
a lot of data, data intensive
order loser
a product characteristic that disqualifies your product from purchase consideration
order qualifier
a product characteristic that is required for a customer to consider it
The Ishikawa cause-and-effect diagram (aka the fishbone diagram)
a simple tool that helps you identify, isolate, and break down the major causes of variation
Expectancy Disconfirmation
a theory that seeks to explain post-purchase satisfaction as a function of expectations, perceived performance, and disconfirmation of beliefs.
SCOR Model
a tool that benchmarks best practices across a company's core value added activities, including sourcing, operations, logistics, and product return - plan - source - make - deliver
Finance
acquires and controls the capital required to operate the business.
Quantitative Forecasting
are data - rather than experience - driven
Aesthetics
are perceptions of fit and finish (also, artistic value).
Features
are the unique characteristics that distinguish a product from rivals' products.
process capability ratio
compares acceptable tolerances (set by your engineers) with the process' actual variation so you can assess the process' ability to achieve required quality levels
Supply management
coordinates the upstream supply base, finding the right suppliers and building the right relationships with them.
CPFR helps trading partners work together to build a single, agreed-upon forecast. CPFR argues that someone already knows what your company's sales will be. Who is that someone?
customers
Executive Management
defines company strategy and allocates resources to achieve it.
Reliability
defines the user's ability to count on the product not to fail.
Design for Manufacturability (DFM)
designing products so they can be easily and inexpensively made. DFM often involves current and simultaneous design - designing product and process at the same time
Human resources
designs the systems used to hire, train, and develop the company's employees.
Design Decisions
determine where and how you deploy your assets—especially plant and equipment (i.e., your infrastructure)—to create value over the long haul. These decisions are resource-intensive, hard-to-change in the short term, and have a long-term impact on your firm's competitiveness. You want to make these decisions very carefully
Affective Level
emotions drive the process, leading to a "gut" reaction to what you are experiencing.
Total costing is hard because relevant costs can arise in _________________ or at other ________________.
functions; times
Efforts to creative value in one area....
influence the other areas
Too often, companies sacrifice __________ measurement on the altar of __________ measurement.
insightful, easy
Conformance
is how well a product conforms to design specifications.
Alleviating Extreme Poverty
percent of people living on a dollar a day or less—a traditional poverty measure—has fallen by 80%. . . .This is the greatest antipoverty achievement in world history
transformation processes
processes that take a set of purchased inputs and turns them into something that possesses greater value
In order for a company to win the "first moment of truth" it needs to have the right _______ at the right _______ at the right _______ at the lowest possible _______.
product, place, time, cost
Quality has been called
the most vital factor in long-term success.
Utilization Touch Points
the process of actually using the product - after you have purchased it
The Internet of Things (IOT)
the process of connecting different devices to the internet, creating smart devices
Environmental Scanning
the process of systematically seeking, acquiring, and interpreting relevant data to identify external opportunities and threats
value proposition
the promise that you make to customers about how your firm will meet their needs
Value Propositions
the promises you make to customers about how your firm will meet their needs
