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SCM Exam two

Terms in this set (41)

Primary Process
Providing a service, educating customers, manufacturing
Support Process
Evaluating suppliers, recruiting new workers, developing sales and operation plan
Development
Developing new products performing basic research, training new workers
A process Map
identify the specific activities that make up the information, physical or monetary flow of a process
Rules for creating a process Map
1. Identify the entity that will serve as the focal point
2.Idenfy clear boundaries and starting and ending points
3. Keep it simple
Process
A set of logically related tasks or activities performed to achieve a defined business outcome
Cycle Time
Total elapsed time needed to complete a business process. Also called throughput time
Benchmarking
The process of identifying, understanding, and adapting outstanding practices from within the same organization or from other businesses to help improve performance
Competitive Benchmarking
The comparison of an organizations process with those of competing organizations
Process Benchmarking
The comparison of an organizations processes with those of non competitors that have been identified as having superior processes.
Capacity
The capability of a worker, a machine, a work center, a plant or an organization to produce output in a time period
Theoretical Capacity
The maximum output capability, allowing for no adjustments for preventive maintenance, unplanned downtime, or the like
Rated Capacity
The long-term, expected output capability of a resource or system
Lead Capacity Strategy
capacity is added in anticipation of demand
(Ensure the organization has adequate capacity to meet all demand, even during periods of high growth)
Lag Capacity Strategy
Organizations add capacity only after demand has materialized (reduce risk of overbuilding, greater productivity due to higher utilization levels and the ability to put off are investments as long as possible)
Match capacity Strategy
Avoids period of high under or over utilization
Variable Cost
expenses that are directly tied to the level of business activity
Theory of constraints (TOC)
An approach to visualizing and managing capacity which recognized that nearly all products and services are created through a series of linked, processes and in every case, there is at least one process step that limits throughput for the entire chain.
Constraint
The process step(s) that limits throughput for an entire process chain
Steps to managing a constraint
5 steps: Basically find the problem fix it, find a new problems fix it, so on
Types of Forecasts
Demand, Supply, Price
Demand Forecast
1. overall market demand
2.Firm level demand
Supply Forecast
What can affect supply
Price Forecast
Forward buying: buy large quantities and store for future use
Futures contract- buy or sell future date price fixed at time of contract
Laws of Forecasting
1. Forecasts are almost always wrong
2. For the near terms tend to be more accurate
3. For groups of products or services tend to be more accurate
4. Are no substitutes for calculated values
Quantitative Forecasting Technique: Life Cycle Analogy Method
Used when the product or service is new. Based on the observation that many products and services have a fairly well defined life cycle
Quantitative Forecasting Techniques: Market Surveys
Strutted questionnaires submitted to potential Customers
Quantitative Forecasting Techniques: Panel Consensus
Getting a group of experts from different areas and put them in the same room to forecast
Quantitative Forecasting Techniques: Delphi Method
has experts work individually to develop forecasts. Three types of participants: Decision makers, staff, respondents
Naive Forecast
Assumes demand in next period is the same as demand in most recent period
Moving Average
The simple moving average model assumes an average is a good estimate of future behavior
Weighted Moving Average
White the moving average formula implies an equal weight being placed on each value that is being average, the weighted moving average permits an unequal weighting on prior time periods
Bias
Over or under forecast
Random
Could be a random error `
Ways to measure accuracy
Mean forecast error and mean absolute deviation
S&OP
Sales and operating Plann
Level Production Plan
production level will be over every month, use when changing production levels is difficult and inventory costs are low
Chase Production Plan
Use when inventory costs are high (or impossible) and production change costs are low
Mixed Production Plan
varies both production and inventory levels
Level Production Strategy advantages
smooth level production, avoids labors costs of demands matching
Level Production Strategy disadvantages
Buildup of inventory
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