SCM 3301 EXAM 2

Products that are customized only at the very end of the manufacturing process

ASSEMBLE-TO-ORDER (CH.3)

- A field in the master schedule record that indicates the number of units that are available for sale each week, given those that have already been promised to customers First Week ATP = EI(t-1) + MPS(t) - SUM of all BO until next positive MPS Subsequent Weeks ATP = MPS(t) - SUM of BO until next positive MPS

AVAILABLE TO PROMISE (CH.12)

MRP calculates when dependent demand items must be ordered and when sub-assembly components must be produced in order to complete the independent demand item on schedule

BACKWARD SCHEDULING (CH.12)

A process where items are moved though different manufacturing steps in groups or batches

BATCH (CH.3)

The process of identifying, understanding, and adapting outstanding practices from w/in the same organization or from other businesses to help improve performance (often results in sharing of "best practices"

BENCHMARKING (CH.4&13)

The "recipe" for an independent demand item- a list of all the dependent demand items used to create the finished product

BILL OF MATERIALS (CH.12)

Understanding all aspects of a particular sourcing category that could ultimately have an impact on the sourcing strategy

CATEGORY PROFILE (INTERNAL) (CH.7)

- Requesting bids from potential suppliers w/a formal request for quotation - Used when price is a dominant criteria, requirements are straightforward

COMPETITIVE BIDDING (CH.7)

The first of 5 phases of a project where *project planners develop a broad definition of what the project is and what its scope will be

CONCEPT PHASE (CH.14)

Quality is how closely a product or service was made or performs as measured against a pre-established standard

CONFORMANCE PERSPECTIVE (CH.4&13)

A process that produces highly standardized products using a tightly-linked, paced sequence of steps

CONTINUOUS FLOW (CH.3)

Philosophy that small, incremental improvements can add up to significant performance improvements over time

CONTINUOUS IMPROVEMENT (CH.4&13)

-Legal formalization of the buyer-supplier relationship agreements

CONTRACTING (CH.7)

The purchased cost of goods from outside suppliers

COST OF GOODS SOLD (COGS) (CH.7)

Efforts to shorten the duration of the project or to make up delayed that have occurred

CRASHING (CH.14)

A sequence of tasks for which there is no extra time available (delays on the critical path will delay the entire project)

CRITICAL PATH (CH.14)

A network-based technique in which these is a single time estimate for each activity

CRITICAL PATH METHOD (CPM) (CH.14)

The buying firm uses a single supplier for one particular part or service and another supplier w/the same capabilities for a different part or service

CROSS SOURCING (CH.7)

Typically for raw materials and WIP- components and materials used to create independent demand items

DEPENDENT DEMAND (CH.12)

A process that seeks to improve the performance of primary and support processes (process improvement)

DEVELOPMENT PROCESS (CH.4&13)

Multiple sourcing across only two suppliers

DUAL SOURCING (CH.7)

Efficiency = 100% (Actual Outputs / Standard Outputs)

EFFICIENCY (CH.4&13)

Products are designed and produced from the start to meet unusual customer needs or requirements (completely customized)

ENGINEER-TO-ORDER (CH.3)

- Ethical treatment of workers - Fair trade products - Requires verification and management

ETHICAL SOURCING (CH.7)

Costs associated w/defects in a product/service that reaches the customer

EXTERNAL FAILURE COSTS (CH.4&13)

A type of manufacturing process in which the position of the product is fixed

FIXED-POSITION LAYOUT (CH.3)

- Well defined start and finish connected by variety of process steps - Typically arranged top-down (can be left to right) - Usually involves both tasks and actions - Used to understand and simplify complex processes

FLOW CHART PROCESS MAP (CH.4&13)

- A type of layout where resources are physically grouped by function - Used for products w/high degrees of customization or expertise required - Think about the process you must go through to sign up for and pay for classes

FUNCTIONAL LAYOUT (JOB SHOP AND BATCH MANUFACTURING) (CH.3)

A graphical tool used to show expected start and end times for a project activities and to track actual progress against these time targets

GANTT CHART (CH.14)

A group of processes that seeks to combine the characteristics, and hence advantages, of more than one of the classic processes

HYBRID MANUFACTURING PROCESS (CH.3)

Typically for finished goods- products made up of purchased or produced components and materials

INDEPENDENT DEMAND (CH.12)

Profiling the major forces and trends that are impacting an industry, including pricing, competition, regulatory forces, substitution, technology changes, and supply/demand trends

INDUSTRY ANALYSIS (EXTERNAL) (CH.7)

Costs caused by defects that occur prior to delivery to the customer

INTERNAL FAILURE COSTS (CH.4&13)

A process used to make a wide variety of highly customized products in quantities as small as one

JOB SHOP (CH.3)

Small prevention costs avoid large failure costs - External Failure Costs - Internal Failure Costs - Appraisal Costs - Prevention Costs

JURAN'S COST OF QUALITY (CH.4&13)

Practice of making small, incremental process improvements over time using Lean principles (DMAIC)

KAIZEN (CH.4&13)

A structured approach used by decision makers to develop a sourcing strategy for a product or service, based on the value potential and the relative complexity or risk represented by a sourcing opportunity

KRALJIC'S PORTFOLIO ANALYSIS (CH.7)

A "perspective" that identifies and removes waste from processes and build a culture where everyone in the organization is involved in improvement

LEAN (CH.4&13)

A conscious effort to incorporate both Lean and Six Sigma in the way an org. is measured

LEAN SIX SIGMA (LEANSIGMA) (CH.4&13)

- Lists all individual tasks of all the functions/ppl involved in a process - Graphically describes how long each function/person takes to complete a process compared to a target rate for the process - Used to "rebalance" process by changing responsibilities of individual functions/ppl: allows overworked functions/ppl to transfer some responsibilities to underutilized functions/ppl

LINE BALANCING PROCESS MAP (CH.4&13)

A high-level, strategic decision regarding which products or services will be provided internally (Make) and which will be provided by external supply chain patterns (Buy)

MAKE-OR-BUY (CH.7)

Products that use standard components but the final configuration of those components is customer-specific (customized from a standard "menu" of options)

MAKE-TO-ORDER (CH.3)

Products that require no customization

MAKE-TO-STOCK (CH.3)

The process of developing graphic representations of the organizational relationships and/or activities w/in a business process

MAPPING (CH.4&13)

The amount of product that will be finished and available for sale at the beginning of each week

MASTER PRODUCTION SCHEDULE (MPS) (CH.12)

A detailed planning process that tracks production output and matches this output to actual customer orders

MASTER SCHEDULE (CH.12)

A planning process that translates the master production schedule (Independent Dmd Items) into planned orders for the actual parts and components needed (Dependent Dmd Items) to produce the master schedule

MATERIAL REQUIREMENTS PLANNING (MRP) (CH.12)

Spending that occurs when internal customers purchase directly from nonqualified suppliers and bypass established purchasing procedures

MAVERICK SPENDING (CH.7)

Related to customer needs and desires (quality, cost, time, flexibility)

MEASURES OF PERFORMANCE (CH.4&13)

A balance sheet item that shows the amount a company paid for the inventory it has on hand at a particular point in time

MERCHANDISE INVENTORY (CH.7)

The buying firm shares its business across multiple suppliers

MULTIPLE SOURCING (CH.7)

1. Ordering 2. Follow-Up and Expediting 3. Receipt and Inspection 4. Settlement and Payment 5. Records Maintenance

PROCURE-TO-PAY CYCLE (CH.7)

Graphical or "outline" representation of all the components involved in building the independent demand item

PRODUCT TREE STRUCTURE (CH.12)

- A types of layout where resources are arranged sequentially, according to the steps required to make a product - Used for products w/identical or highly similar designs - Think about the process used to make sandwiches at Subway

PRODUCT-BASED LAYOUT (CON'T FLOW AND PRODUCTION LINES) (CH.3)

A process used to produce a narrow range of standard items w/identical or highly similar designs

PRODUCTION LINE (CH.3)

Productivity = Outputs/Inputs

PRODUCTIVITY (CH.4&13)

- Decreasing the money spent on purchasing functions increases profit FASTER than increasing revenue as a result of marketing and sales - Every $1 saved in purchasing, lowers COGS by $1 and directly contributes $1 to bottom line profits

PROFIT LEVERAGE EFFECT (CH.7)

The ratio of earnings (profit) to sales (revenue) for a given time period

PROFIT MARGIN (CH.7)

temporary endeavor undertaken to create a unique product, service, or result

PROJECT (CH.14)

The second of 5 phases of a project where *project planners identify how to accomplish the work, how to organize for the project, the key personnel and resources required to support the project, tentative schedules, and tentative budget requirements* (budget estimates become more accurate)

PROJECT DEFINITION PHASE (CH.14)

The application of knowledge, skills, tools, and techniques to project activities to meet project requirements

PROJECT MANAGEMENT (CH.14)

- Concept Phase - Project Definition Phase - Planning Phase - Performance Phase - Postcompletion Phase

PROJECT PHASES (CH.14)

Best estimate of what inventory levels will look like at the end of each planning period based on current info.

PROJECTED ENDING INVENTORY (CH.12)

- A document that authorizes a supplier to deliver a product or service and often includes key terms and conditions such as price, delivery, and quality requirements [details taken from the Quotation or Proposal] -Legally binding agreement when formally accepted by the supplier

PURCHASE ORDER (PO) (CH.7)

%COGS = COGS/Sales Revenues

% COGS FORMULA (CH.7)

Supplier Relationship Management (SRM) Software

RECORD MAINTENANCE (CH.7)

- May be paid through Electric Funds Transfer (EFT) - Payment is aligned w/Quotation, Receipt, and Inspection

SETTLEMENT AND PAYMENT (CH.7)

The buying firm depends on a single company for all or nearly all of a particular item or service

SINGLE SOURCING (CH.7)

An improvement framework that targets problem-solving and consistency using a well-defined set of analytical tools- many o f which are based on statistics

SIX SIGMA (CH.4&13)

Extra time that is available for task completion (tasks w/available slack may be delayed w/o delaying the entire project)

SLACK (CH.14)

The application of quantitative techniques purchasing data in an effort to better understand spending patterns and identify opportunities for improvement

SPEND ANALYSIS (CH.7)

*S*afety: Internal and External *S*ustainability: Green and Ethics *Q*uality: Consistency, Conformance, Service *D*elivery: Reliability, Speed, Capacity *C*ost: Total Cost of Ownership

SSQDC (CH.7)

Terms and conditions for a purchased service that indicate, among other things, what services will be performed and how the service provider will be evaluated

STATEMENT/SCOPE OF WORK (CH.7)

A process that performs necessary, albeit not value-added activities: creating value for internal customers

SUPPORT PROCESS (CH.4&13)

- Green purchasing - Sustainability

SUSTAINABLE SOURCING (CH.7)

- Well defined start and finish connected by variety of process steps (parallel work flows clearly seen) - Typically arranged left to right to describe process start to finish (arranged on a timeline: tasks on left must occur prior to tasks on right) - Various functions/ppl/specialties each have horizontal "swimlane" w/in which all of their responsibilities are listed - Often used to describe processes that are managed by software

SWIM LANE PROCESS MAP (CH.4&13)

- Continuous Flow - Production Line - Batch Manufacturing - Job Shop - Fixed Position Layout

PROCESS TYPES (CH.3)

Intentionally making a small change in your process at the beginning of each day - PDCA - PDSA - FOCUS

2 second lean (CH.4&13)

1. The nature of the service package 2. The degree of customization 3. The level of customer contact

3 DIMENSIONS ON WHICH SERVICES CAN DIFFER AND COMPETE (CH.3)

1. Make-to-Stock (MTS) 2. Assemble-to-Order (ATO) 3. Make-to-Order (MTO) 4. Engineer-to-Order (ETO)

4 LEVELS OF CUSTOMIZATION (CH.3)

1. Performance 2. Features 3. Reliability 4. Durability 5. Conformance 6. Aesthetics 7. Serviceability 8. Perceived Quality

8 DIMENSIONS OF QUALITY (CH.4&13)

- Interactive and iteractive process for determining purchase conditions - Used when exact specification and performance is unknown (new product development) and the buyer needs input or guidance or collaboration from the supplier

NEGOTIATING (CH.7)

PO(new) = max (0, PP-RM (available) - SR)

NEW PURCHASE ORDERS (CH.12)

The fourth of 5 phases of a project where *the organization actually starts to execute the plan

PERFORMANCE PHASE (CH.14)

PP = max (0, FC-FG-RP)

PLANNED PRODUCTION ORDERS (CH.12)

A set of tactical and execution-level business activities that includes: - Master scheduling - Material requirements planning - Production activity control - Vendor order management

PLANNING AND CONTROL (CH.14)

The amount of time the master schedule record or material requirements planning record extends into the future

PLANNING HORIZON (CH.12)

The time from when a component is ordered (or produced) until it arrives and is ready to use

PLANNING LEAD TIME (CH.12)

The third of 5 phases of a project where *project planners prepare detailed plans that identify activities, time and budget targets, and the resources needed to complete each task, while also putting into place the organization that will carry out the project*

PLANNING PHASE (CH.14)

The fifth of 5 phases of a project where *the project manager or team confirms the final outcome, conducts a post-implementation meeting to critique the project and personnel, and reassigns project personnel*

POSTCOMPLETION PHASE (CH.14)

Pretax Profit Margin = Pretax Profit / Sales Revenue

PRETAX PROFIT MARGIN FORMULA (CH.7)

A process that addresses the main value-added activities of an org.: creating value for external customers

PRIMARY PROCESS (CH.4&13)

A set of logically related tasks or activities performed to achieve a defined business outcome...to create a value for a customer

PROCESS (CH.4&13)

A process by which a firm seeks to identify and quantify all of the major costs associated w/various sourcing options

TOTAL COST ANALYSIS (CH.7)

Quality is how well the characteristics of a product or service align w/the needs of a specific customer

VALUE PERSPECTIVE (CH.4&13)

- Diagrams entire creation of value through a co. (each product category is mapped separately) - Arranged left to right , starting at raw materials and tracking creation of value through customer - Describes who does the work, in what quantities, time it takes to do the work, and delays encountered - Describes how info. from customer influences process - Used to decrease process delays and waste and make sure process can meet customer requirements

VALUE STREAM PROCESS MAP (CH.4&13)

Score(x) = Sum of Rated Performance x Assigned Weight for Performance

WEIGHTED POINT EVALUATION SYSTEM (CH.7)

- Flexibility in response to unique customer needs will be greater - Lead times to the customer will tend to be longer - Products will tend to be more costly

WHEN CUSTOMIZATION OCCURS *EARLY* IN THE SUPPLY CHAIN... (CH.3)

- Flexibility in response to unique customer needs will be limited - Lead times to the customer will tend to be shorter - Products tend to be less costly

WHEN CUSTOMIZATION OCCURS *LATE* IN THE SUPPLY CHAIN... (CH.3)