Operations Management- C215

Push moves the product forward in anticipation for demand pull eliminates excessive inventory (remember that because you only take what you can to process not what is being forced or pushed to you)

Difference between the push and pull processes

manufacturing organizations must maintain tangible inventory avoid keeping large amount of inventory servicing organizations do not maintain inventory

Differences between Manufacturing and Servicing Organizations

If you don't already offer flexibility, start to do so Look for opportunities to automate Game the system Keep in touch Increase responsibility Don't skimp on training and development Show your gratitude

Eliminating Employee Boredom

tangibility, reliability, assurance, responsiveness, and empathy

Five Dimensions of Quality

Prevention, Appraisal, Internal Failure and External Failure

Four Costs of Quality

what to order how much to order when to order when to deliver when to replenish

MRP uses the concept of backward scheduling to determine activity start dates to include

Design Capacity Effective Capacity Capacity Utilization

Measuring Capacity

Kaoro Ishikawa-Fishbone Diagram Joseph Juran- Fitness for use Philip Crosby- Quality is Free Genich Taguchi- Taguchi function, design laws of quality W Edward Deming- 14 points

Quality Gurus and their contributions to TQM

Six Sigma, Lean, and Agile

Quality management tools such as _________, __________ and ___________ focus on identifying root causes of quality problems throughout the entire organization and correcting them at the source

Supply chain

Reliability Flexibility expenses and assets/utilization

DMAIC (Define, Measure, Analyze, Improve, Control)

Six Sigma and its 5 step Plan

perfect product at all times nothing can be 100% but it meets the six deviations no more than 3.4 defects per million opportunities(DPMO) this is the number that the quality strives in six sigma after 3 deviations, it just gets smaller and smaller

Six Sigma in practice

standards, procedures

Sources of Variation

Warehouse Office

Special Cases of Processes

(1) gather information about space needs, space availability, and closeness requirements of departments; (2) developing a block plan or schematic of the layout; (3) developing a detailed layout.

Steps in Designing Process Layouts

Brainstorming Defining the Product Conducting the User Research Sketching Prototyping Compiling Specifications Producing the Factory Samples Sample Testing

Steps in Product Design

Step 1: Establish the Necessary Processes with the Right Staff. ... Step 2: Ensure Complete and Up-to-Date Project Data. ... Step 3: Identify the Actually Available Capacities. ... Step 4: Consolidate Capacities and Requirements.

Steps in making Capacity Decision

Step 1 Identify Dominant Location Factors. In this step managers identify the location factors that are dominant for the business Step 2 Develop Location Alternatives Step 3 Evaluate Location Alternatives

Steps in making Location Decision

Descriptive statistics Statistical process control acceptance sampling

Three Categories of Statistical Quality Control

Process Product Hybrid Fixed-Position

Types of Layouts

a process who has a mean exactly in between the 2 specification limits (meaning halfway between the two will have a Cpk of 1.

What does Process Capability Index represent

it provides the ability to compare available production capabilities to the planned workload provides the ability to compare the actual workload

What is the importance of capacity requirements planning?

Lean Systems

a business approach to holistically apply lean principles to the way it plans, measures, prioritizes and manages work depicts what has been created to minimize waste without sacrificing productivity whole package JIT is part of this system

group technology

a company have a number of facility and each facility is responsible for a particular process ex. one facility manufacturers and another provides servicing

center-of-gravity approach

a manufacturing company decides to open a new distribution center location in order to minimize distribution costs to warehouses or stores. What tool should the manufacturing company use to determine where the new distribution center should be located? includes fixed and variable costs or changing costs, transportation cost

Productivity

a measure of how a company uses its resources output/input

process velocity

a measure of wasted time in the system throughput time/ value - added time

effective capacity

a permanent measure used to achieve design capacity lower than design capacity maximum output rate under normal (realistic) conditions; usually lower than design capacity ex. on average, a bakary can make 20 custom cakes per day

Kanban significance to the pull system

a scheduling system for lean manufacturing specifies the exact quantity of a product that needs to be produced pull system tells you how much to be produced starts when customers order it could be more expensive and custom type of items small lots mean less average inventory and shorten manufacturing lead time push system gives you a forecast forecast how much inventory you going to need

Process

a sequence of events or steps

mean

a statistic that measures the central tendency of a set of data

Material Requirements Planning (MRP)

a system that uses the MRP, inventory record data and BOM to calculate material requirements MPS- check to ensure work is feasible determine how much material is needed and bringing in the materials needed BOM- Bill of Material model contains the product structures for each model organized priorities looks at demand and schedules to meet the demand designed to calculate material requirements from dependent demand items

observed time

actual time

Enterprise Resource Planning (ERP)

an information system designed to integrate internal and external members of the supply chain software used to organize and manage processes through information sharing management control decisions can be made quickly systems can be replaced and eliminated resulting in save money reduction in inventory reduction in number of staffs increased production better order management reduce purchasing costs better cashflow reduction logistics and transportation costs customers are happier due to on-time deliveries

Respect for people

and element of JIT that considers human resources an an essential part of the JIT philosophy third basic element of JIT first element in TQM and second is JIT manufacturing

you are shipping finished goods, if they are sold, it is sunk costs

at which stage of the firms inventory management system would the statement "percentage of line items shipped on schedule" be used?

Throughput time/value-added time

average amount of product takes to move through the system the time it takes from raw materials to finished goods

common causes or random

causes that cannot be identified these causes are unavoidable they are caused by slight differences in processes

Flowchart

chart showing the sequence of steps in producing the product or service

vertical integration

company acquires another company that is not the same industry ex. Google purchased Motorola IKEA purchased forests in Africa to get their own wood

Horizontal Integration

company acquires another company that is the same industry ex. Facebook acquisition of instagram

finished goods

completed goods from the manufacturing process that have not yet been sold to distributed to end users ex. a manufacturing firm uses warehouses and shippers in their supply chain

Perpetual Review system

constant moving things inventory is going to be updated every transaction

JIT system influence all functional areas within a company

control inventory levels in order to eliminate excess inventory or lower than required inventory companies can reduce waste companies develop new ways to generate revenue

Process Capability

defined as a statistical measure of the inherent process variability of a given characteristic. to assess the ability of a process to meet specifications

break-even analysis

determines the units needed to manufacture in order to break even

ISO 9000

developed to establish agreement on international quality standards TQM process consists of 13 published standards and guidelines these are published and can be used in all industries businesses are to measure themselves against if the criteria are met, then the businesses can become ISO 9000 certified it helps control standard businesses must meet specific values and are audited to those standards comparative to joint commissions who got o hospitals and measures how they do procedures environmental systems standards measure emissions, effluents and other waste systems

duration of the change

duration represents length of stay how long does the change last or stay

service location decision

factors affecting include: proximity to customers quality of life issues

revised or implemented new operations

follow up to make sure the new operation resolves quality problems

scatter diagram

graph that show how two variables are related to each other

control chart

graph that shows whether a sample of data falls within the common or normal range of variation

Philosophy of TQM

is a comprehensive system for achieving continuous improvement in customer satisfaction. It is a philosophy of total integration of the business to achieve the required result. The goal is to achieve greater efficiency and effectiveness, lower operating cost and increased market share

labor specialization

is most often known as the division of labor and refers to a process in business in which large tasks are divided into smaller tasks, and different employees or different groups of employees complete those tasks.

Plan-To-Do-Study-Act Cycle

is shorthand for testing a change — by planning it, trying it, observing the results, and acting on what is learned. This is the scientific method, used for action-oriented learning.

status of overall customer satisfaction support supply chain objectives

it measures efficiency overall customer service is important

checklist

list of common defects and the number of observed occurrences of these defects

proximity to customers

major factor in the decision to locate a business near its primary market territory

the marketing plan provides insights into operations goals and activities for the eyar aggregate- everything together taking all different components and putting them together tell the other departments what their goals, sales quarters, etc are for the upcoming period

marketing plan essential to the creation of aggregate plan

design capacity

maximum output rate attainable under ideal conditions ex. a bakery can make 30 custom cakes per day when pushed at holiday time

center of gravity

means placing yourself in the middle ex. take all the people with whom business you do the business and put yourself in the middle of it location in the middle and circle around it

capacity utilization

measures how much of the available capacity is actually being used measures effectiveness use eithe effective or design capacity denomination

Efficiency

measures performance relative to a standard actual output/standard output

Capacity Requirements Planning (CRP)

method used to calculate the production capacity availability need to look at how much capacity is available uses planned orders releases from the MRP output to calculate the workload *think about how much capacity do you need to make 100 cakes per day. Can you do this in your home?

job enrichment

motivational tool used to give employees greater satisfaction in their work ex. giving an employee an additional work reserved for more skilled or manager level employees

SCOR Supply Chain Operations Reference

name of the model that has been created to examine the four different supply chain

determine the quantity and timing of material requirements and to keep schedule priorities updated and valid

objective of MRP

Periodic Review System

physical verification ex. done every friday of the month. The inventory will be physically counted on that specified day

to manage the demand for promised deliveries

primary purpose in using the master production schedule in the marketing department of an organization manage the demand of delivery system because the objective is to manage not to create something new

Project process

process used to make a one a a time product exactly to customer specifications

Repetitive Processes

process used to produce one or a few standardized products in high volume. Ex. a production line making nothing but Oreo cookies

conducting a location analysis

proximity to sources of supply site consideration

focuses on customer driven quality manage inventory levels satisfied the customer through product availability

role of Marketing in JIT

forward scheduling

schedule that determines the earliest possible completion date for a job starts as soon as the job is received

infinite loading

scheduling that calculates the capacity needed at work centers in the time period needed without regard to the capacity available to do the work entails working backwards ex. if the customer needs X products build in Y time, we tell customer what the end result is and identify the resources needed to get there

finite loading

scheduling that loads work centers up to a predetermined amount of capacity entails working forward calculation of capacity is based on the capacity available start and finish time of each activity ex. a doctor can spend 10 minutes with a patient, they can schedule 6 patients per hour

Job Design

specifies the work activities or contents of the job doesn't have anything to do with people

ISO 14000

standards for evaluating a company's environmental responsibility three major areas: management systems standards measure systems development an integration of environmental responsibility into the overall business operations standards include the measurement of consumption of natural resources and energy

an organization can designate employees to communicate alternative ways to complete a job in a methods analysis helps make business better identify different ways to communicate

suggestions for improving the operation

Tier One Supplies

supplier supplies directly to the processor supplies component (automobiles) tot he manufacturer (that's the start)

Tier two suppliers

supplier supplies directly to tier one supplies a lot of non automotive customers they do not have the ability or desire to produce automobile parts. They are not supplying actual parts of automobile to manufacturer

Tier Three suppliers

supplies directly to tier two supplier directly supplies materials or services to a processing and packaging plant suppliers of raw materials like plastic

below distance model

tells how far the facility location from other stores

termination

the final stage of the project life cycle end of the project after this date, resources can b used for different activities

conception

the first stage of the project life cycle identifies the need for a project ex. a company decides to enter into a new market

execution

the fourth stage of the project life cycle carrying out the activities that make up the project ex. completing the product design, obtaining the material and equipment needed, setting up the process, writing job instructions and making the product

standard time

the length of time it takes to finish a task or complete one's work ex. measure how long it takes a qualified operator to perform a duty of the job requirements under the assumption that the operator is working at a sustainable pace with the proper tools for the process

performance time

the length of time to completion

Utilization

the proportion of time a resource is actually used time a resource used/ time a resource available

External Distributors

the role third party logistics providers play in the supply chain outside the company could include another company transportation, suppliers

Feasibility Analysis

the second stage of product life cycle evaluate expected costs, benefits and risks of the project ex. a company launching a new product- a feasibility study means examining the potential market, the market share, and profits for the new product compared to the costs

Planning

the third stage of the product life cycle analyze the work to be done and develop time estimates for completing each of the activities plan what must be done, by whom and when ex. company must design the new product, source and order the materials, choose process, design layout, do a pilot run, evaluate the process and transistion to manufacturing

Six Sigma

the use of technical tools for identify and eliminate the causes of quality problems people involvement-able to use technical tools and solve problems the empirical rule: 3 standard deviations is 3 sigma 6 standard deviations is almost at 100%

compute process velocity

throughput time/value-added time determines speed of process (how fast we are going)

their control over internal operations influence and leverage over supplies

two areas managers should consider in order to adapt to the business dynamics affecting their company

takes a long time to implement and see any benefits requires extensive, often complex training

two common drawbacks of implementing enterprise resource planning

overtime is not a long term solution quality of product due to employee overworked and exhaustion

two reasons a company might be hesitant to provide overtime as a capacity based option

increasing cost effectiveness becoming more efficient

two strategic objectives for every member of the supply chain include

ensure that workers receive multi-functional training develop an incentive system to reward workers for their efforts

two ways management can assist employees focus in JIT processing environment

labor specialization

work system acknowledges the benefits of employee proficiency if an employee is good at doing one thing, they will be asked to keep on doing it