SCM 300 Module 5-8
Outpost Factory
A factory whose primary role is to collect information -placed in an area where advanced suppliers are located and also have secondary strategic role
Diversified multinational corporations
Corporations that use production establishments located in different countries but are neither horizontally nor vertically integrated
What are the four elements of waiting in lines?
1) An input, or customer population, that generates customers 2) A waiting line of customers 3) The service facility, consisting of a person, machine or both necessary to perform the service for the customer. 4) Priority rule, which selects which customer to be served by the service facility.
Three elements of supply chain sustainability
1) Financial Responsibility- addresses the financial needs of shareholders or any body relying on firm for wages 2) Environmental responsibility- addresses the ecological need 3) Social responsibility- addresses the moral and ethical and philanthropic needs
Contributor Factory
A factory that also serves a specific national or regional market, but whose responsibilities extend to product or process engineering and to the development and choice of suppliers.
Lead factory
A factory that creates new processes, products, and technologies for the entire company
Littles Law
A fundamental law that relates the number of customers in a waiting line system to the arrival rate and waiting time of customers. L=lamda*W Only need to know two of the parameters to solve for the third
Pull Method
A method in which customer demand activates production of the service or item. Ex: ordering food at a restaurant
Service Facility
A person (or crew), a machine or group of machines, or both necessary to perform the service for the customer.
Lot Size
A quantity of items that are processed together
Priority Rule
A rule that selects the next customer to e served by the facility.
Customer Population
An input that generates potential customers
Demand Management
Balancing customer demand with the firms output capacity; forecasting demand and coordination with the production, purchasing and distribution.
Activities causing the bull whip effect
Demand Forecasting, order batching, price fluctuations, rationing and shortage gaming
Manufacturing Flow Management
Determining manufacturing process requirements to enable the right mix of flexibility and velocity to satisfy demand.
Product Development and Commercialization
Developing new products frequently and getting them to market effectively; integrating suppliers and customers into the process to reduce time to market.
Short gaming
Inflating orders to satisfy their needs
Lack of knowledge
Lack of process and information system skills and lack of knowledge regarding the benefits of SCM among management and other employees, within the firm and among partners
Supplier Relationship Management
Managing product and service agreements with suppliers; developing close working relationships with key suppliers.
Returns Management
Managing used product disposition, product recalls, packaging requirements, and minimizing future returns
Order Fulfillment
Meeting customer requirements by synchronizing the firms marketing and production and distribution plans.
Rationing
Occurs when demand exceeds a suppliers finished goods available and in this case, the supplier may allocate product in proportion to what buyers ordered.
Channel
One or more facilities required to perform a given service
Lean Systems
Operations systems that maximize the value added by each of a company's activities by removing waste and delays from them.
Customer Service Management
Providing information to customers such as product availability, shipping dates and order status; and administering product and service agreements.
Preemptive Discipline
Rule that allows a customer of higher priority to interrupt the service of another customer
Phase
Single step in providing a service. example: McDonalds has a single channel, multiple phase arrangement.
just-in-time (JIT) Philosophy
The belief that waste can be eliminated by cutting unnecessary capacity or inventory and removing non-value-added activities.
Single-digit-setup
The goal of having a setup time of less than 10 minutes
Service System
The number of lines and the arrangement of the facilities.
Lack of Trust
Unwillingness to work together or share information because of the fear that the other party will take advantage of them or use the info unethically
Offshore Factory
a factory established to produce specific items at low cost
Push method
a method in which production of the item begins in advance of customer needs. Use of demand forecasting (buffet eating)
Aggregation
achieving economies of scale by creating regional or global operations.
Best use of single channel, single phase system
all services demanded by a customer can be performed by a single server facility like a drive through car wash.
Customer Relationship Management Process (CRM)
allows companies to prioritize their marketing focus on different customer groups according to each groups long term value to the company or supply chain
Insourcing
an operations strategy in which distribution company performs on behalf of another company(UPS,FedEx)
Jidoka
automatically stopping the process when something is wrong and then fixing the problems on the line itself as they occur
Adaption
boosting revenue and market share by maximizing local presence in a country
Sustainability
characteristic of processes that are meeting humanities needs without harming future generations
Vertically Integrated multinational corporations
corporations that use production establishments in a certain country or countries to produce products that serve as inputs to their production establishments in one or more countries
Horizontally Integrated multi national corporations
corporations that use productions establishments located in different countries to produce the same or similar products
Server Factory
factory that supplies specific national or regional markets; it typically provides a way to overcome tariff barriers and to reduce taxes, logistics costs, or exposure to foreign exchange fluctuations
Source factory
factory whose primary purpose is low cost production but who strategic role is broader than that of an offshore factory
Silo Mentality
failing to see the big picture, and acting only in regard to a single department within the firm, or single firm within the supply chain. -decisions must be made with long term goal in mind
Lack of supply chain visibility
inability to easily share or retrieve trading partner information in real time
Order Batching
making large orders for goods on an infrequent basis to reduce costs -contributes to bull whip effect
poka-yoke
mistake-proofing methods aimed at designing fail-safe systems that minimize human error
Humanitarian logistics
process of planning, implementing, and controlling the efficient, cost-effective flow and storage of goods .... for suffering people
Forward Buying
stock up products at discount price and buy smaller amounts at list price-contributes to bull whip
Arbitrage
the exploitation of differences among national or regional markets, often by locating separate parts of the supply chains in different places.
Business Process outsourcing
the outsourcing of routine financial and accounting operations, such as payroll, accounts payable and receiving, insurance, and property accounting, to another company
Globalization
the process by which the experience of everyday life, marked by the diffusion of commodities and ideas, can foster a standardization of cultural expressions around the world.
Process Integration
the sharing of information and coordinating resources to jointly manage a process
Offshoring
transferring production from one country to another, with or without outsourcing to a supplier organization
Outsourcing
turning over all or part of an organizational activity to an outside vendor
Demand Forecast Updating
using varying customer orders to update forecast/purchase
Best use of a multiple channel, multiple phase arrangement
when customers can be served by one of the first phase facilities but then require service from a second phase facility. Example: Laundromats. Washing is first phase and dryers are second phase and there are different size machines.
Best use of multiple channel, single phase
when demand is large enough to warrant providing the same service at more then one facility or when services offered by the facilities are different. Lobby of a bank is an example
When is a mixed arrangement required
when it is complex like an emergency room. People are all in line but there are rules that allow people with worse conditions jumping to the front
Best use of single channel, multiple phase arrangement
when services are best performed in sequence by more than one facility. McDonalds is an example. Pay at one window get food at the next