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SCM 303 Final
Terms in this set (89)
Supply chains are found in a wide variety of businesses
All major companies do not define their supply chain organizations in the same way
In a supply chain, upstream is towards suppliers while downstream is towards customers
In general, the tradability of goods has been increasing over time, spurring growth in supply chain management
Advancements in transportation and communications have enabled supply chains to expand from mostly local to be more complex and global
Supply Chain Management comprises the three major disciplines of operations, logistics, and procurement
Common challenges in SCM include how to meet customer requirements, how to lower costs while improving quality, and how to align supply chains with the corporate competitive strategy
Effective supply chains are important because they lead to better financial performance
Compared to business unit strategies and functional strategies, corporate strategy is the big picture, has less detail, and has the longest time horizon
Supply chain strategy consists of three main components
Value proposition, critical ccustomers, and capabilities
Order qualifiers are
The minimum standard to be met before customers will consider a purchase
Order winners are
Those features that convince the customer to actually make a purchase
Time to market
Lead time is the total time it takes for a firm to conceive, design, test, produce, and deliver a new or revised product.
Order to Delivery (OTD)
Lead time is the time that passes from the instant the customer places an order until the customer receives what they ordered.
Value Propositions include a variety of features that customers value and are willing to pay for.
They should be difficult to imitate so they can be a source of differentiation; satisfy financial and strategic firm objectives and deliverable using the firm's supply chain capabilities.
What are the three major competitive priorities in most supply chains?
Quality, Cost, Timeliness
Higher price does not always equal better quality
Efficient supply chain design used for functional products
Responsive supply chain design is better matched to innovative products
Triple A supply chain
Agility, Adaptability, Alignment
Ability to quickly react to short-term changes
Ability to adjust to longer-term structural changes
Having the proper incentives so that all parties in the supply chain have similar goals
Innovation, procurement, manufacturing, order fulfillment, accounts payable etc.
Process flow chart helps you ask
How is the decision being made? Is this the way we really do it? Why do we do it this way? Why do we do that step?
Sequential process flow
All tasks cannot be performed simultaneously
Parallel process flow
Multiple tasks can be done at the same time
Expressed in time per unit
Expressed in units per time
What is a bottleneck?
The task with the greatest cycle time or least capacity in a process
Examples of bottlenecks
Workers, skill types, machines, facilities
For a sequential process system cycle time is the same as the bottleneck cycle time
If a process consists of 2 parallel activities, each with equal CT, the system CT is half the CT of 1 activity
Bottlenecks cause blocking upstream and starving downstream
Both result in reduced operational efficiency
Increases in efficiency are associated with increases in productivity and increases in utilization
Produce products in batches to minimize setup time and maximize running time, and to achieve operational efficiency as well as labor efficiency- allows companies to take advantage of learning curves
It is not always efficient to produce in big batches because that means more inventory and if it is not sold in time there are consequences on the financial performancce
Being efficient is not always effective
Being effective is not always efficient
Process-focused processes are when the product or service is not repetitive enough to justify a set sequence.
Job shop or jumbled flow-routings are of critical importance so you know the required flow through the system
Product-focused processes are used when the product or service is repetitive enough to justify a set sequence.
Worker-paced lines, machine-paced lines, and continuous flow-routings are generally not needed because of all products follow the same basic flow
Continuous flow processes are used for high volume products and services. They are product focused processes.
Single piece flow is not always better than batch flow, both have advantages and disadvantages.
The time it takes for a single product to travel through the process is faster for single piece flow when compared to batch flow.
The product-process matrix plots volume versus variety- most efficient processes are located along the diagnol.
Under a high variety low volume scenario, what is the most efficient process?
Under a low variety high volume scenario, what is the most efficient process?
Process knowledge requires understanding in order to achieve improvement
This is characterized as science, not art
Understanding and proceduralizing a process requires multiple steps beyond benchmarking and research.
Operations is usually associated with the Make and Plan Process
Operations, planning and control includes many steps
Strategic capacity planning, sales and operations planning, long-term forecasting, master production scheduling, material requirements planning, demand forecasting, and inventory management
Marketing is often heavily involved in
Forecasting and S&OP
Day to Day operations are often managed by using some version of the
SPQRC acronym, safety, people, quality, responsiveness, and cost
Operations apply to
manufacturing and services
Differences between manufacturing and services include
1. services cannot be stored or inventoried
2. cycle times are typically shorter in manufacturing than services
If processes are designed and developed correctly
the resources will be used efficiently and safely
Current operations challenges include
Automation/Technology, increasingly outsourced both domestic and offshore, globalization, and competitive pressures
Quality can be considered as
utility or usefulness to specific customers
Value=(quality or quantity)/(cost or price)
Thus for a given level of quality, increasing prices will lower value. For a given level of price, increasing quality will increase value. If both quality and price increase (or decrease) at the same rate the value will remain the same.
Plan, Do, Check, and Act
define the problem
implement and collect data
Study and analyze
If successful, follow the new standard
Deming red bead experiment
1. Trying your hardest doesnt garauntee quality
2. Rating the outcomes doesnt solve problems
3. Dont blame the workers
4. Management would like to resort to slogans to control quality
5. Management is responsible for the process
6. Dont source on price alone
Theme thru Demings 14 pts.
Workers are intelligent and valuable resources that need to be respected, trained, developed, and included
Control Chart in quality management to tell if the process is in control or not.
If the process is in control, we can predict the future performance based on the current control chart. We can also tell if any of the data points are outliers and do further investigation.
Just because a process is in control using a control chart
doesnt mean that this process is producing good products.
Total quality management (TQM)
Differs from traditional quality management in that TQM manages the entire organizations to excel in all dimensions of products and services that are important to customers.
Six Sigma refers to
The variation that exists within +- 6 std deviations from the process average
Effective TQM requires
employee involvement, process management, top management support, supplier quality, etc.
The four elements that six sigma adds to effective TQM are
Specific metrics, focus on financial results, full-time improvement specialists, and structured method
DMAIC is the structured problem solving method in six sigma
Define, Measure, Analyze, Improve, and control
Measure is the step that diffes the most from PDCA
Bottom to top hierarchary
Yellow belt, Green belt, Black belt, Master Black Belt
Six Sigma Facts
1. Can use both basic and advancced statistical tool
2. Developed by motorola in 1980s
3. Builds upon the base of an effective TQM program
4. Includes a focus on financial results
Lean is a management philosophy based on two central tenents
Elimination of waste and respect for people
Muda includes the following 7 deadly wastes (COMMWIP)
4. Material Movement
What is the worst of the seven deadly wastes?
The real usefulness of COMMWIP is that
It serves as a memory prompt for the types of waste to look for in any product.
To eliminate waste we use
1. Continuous improvement
3. JIT production and material flow
4. Kanban production control system
5. Quality at the source
6. Minimized setup times
Many managers prefer the hare rather than the tortoise because
Hares are flashier, faster, and more attractive
Important parts regarding 5S
1. It is a lean tool to minimize waste
2. Promotes the idea that there is a place for everything and everything should be in its place
3. It is more than a housekeeping issues
4. Sustain is the most difficult S to achieve because it requires time and effort to standardize the current or future processes
5. Critical foundation for a pull system
Kanbans regulate material flow because they are a signal to pull the right amount of material
Kaizen is the Japanese word for continuous movement
In a pure pull system
businesses build in response to orders
All else being equal the longer the transit time
the greater the inventory
JIT is likely to be more successful if a company has suppliers and warehouses closeby
Properly executed Andon decreases Muda because it prevents defects from moving downstream.
Reduces the waste of correction
The root cause for most lean implementation failures is
ineffective management and leadership.
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