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79 Cards in this Set
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Supply Chain |
a network of facilities that procure raw materials, transform them into intermediate goods, final products and deliver the products to customers. |
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4 step process for choosing a facility location |
1) Select CSFs 2) Research location specific info on the CSFs 3) Rate each locations ability to support each CSF on a scale of 1-5, 5 being best 4) Calculate locations total score by multiplying the weight by rating for each CSF and adding them together |
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Vertical Integration |
proportion of supply chain owned by the organization (make or buy) |
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Green Sourcing |
Environmentally responsible supply chain
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6 step process for green sourcing (procurement) |
1) Assess the opportunity 2) Engage Sourcing Agents 3) Asses the supply base 4) Develop sourcing strategy 5) Impement Sourcing Strategy 6) Institutionalize the strategy |
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Centralized Purchasing |
Goods for multiple locations are bought at once and distributed from a single purchase Positive: purchasing power Negative: Reduced flexibility/speed |
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Stockless Purchasing |
supplier delivers material directly to the production area rather than a stockroom |
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Blanket Purchase Orders (POs) |
Long term purchase commitment to a supplier for items that are to be delivered upon receipt of a shipping requisition Pros: Lower holding and order and unit costs Pros 4 Manufacturer: Known Demand |
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Vendor Managed Inventory (VMI) |
vendors manage customers(retailer) inventory of the products they supply, includes ordering, stocking shelves Pros: Less order costs, less chance of stockout, knowledge of customer demand Cons: need a trusting vendor, staff layoffs |
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Time Utility |
when; provides good when wanted, not produced E.G. Storage, Warehousing |
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Place Utility |
where; provides good where its needed, not produced E.G. Transportation |
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Form Utility |
What; physical/chemical change in goods and/or packaging E.G. Assembly |
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Logistics Cost (4 components) |
the sum of transportation, inventory(holding costs), packaging, and damage costs |
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Cross Docking |
Shipping strategy; remove intermediate step of storage by distributing them immediately after they are received. Reduces: product handling, holding costs Requires: tight scheduling (walmart) |
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Drop Shipping |
Retailer can tell supplier to ship directly to the customer if they don't have it in stock (apple shipping to house) |
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Postponement of place utiity |
avoid positioning the inventory down the supply chain (warehouse instead of at the retail locations) Improves flexibility and reduces inventory costs |
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4 types of postponement |
place utility, form utility(HP printers), labeling(Canned Food), packaging (batteries) |
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what are four levels of outsourcing? |
1PL(conducting everything internally), 2PL(using a carrier to transport), 3PL(outsourcing some logistical activities like warehouses), 4PL (completely outsourcing everything in supply chain) |
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differences b/w humanitarian and commercial supply chains (6) |
1) Cost not as important as speed 2) high inventory levels 3) perishable items expire and need to be replaced 4) many stakeholders 5) high visibility of performance 6) Job Satisfaction |
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prepositioning resources |
having resources ready at multiple warehouses in case of emergency; used in humanitarian supply chain |
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5 steps in reverse supply chain (retrieving a product from consumer and reusing or recycling it) Xerox, UPS returns |
1) Product Acquistion 2) Reverse Logistics 3) Testing, Sorting, Dispostion 4) Refurbishing 5) Remarketing |
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# of Suppliers is the most important part because: |
having low # of suppliers will affect everything else, and allow u to work closely with them |
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Effects of poor quality goods/services (5) |
1) higher transformation costs 2) Higher warrantee costs 3) Loss of Sales 4) Loss of Reputation 5) Lawsuits |
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Quality Management Process (3 steps) |
1) Alarm Bell 2) Investigate 3) Prevent |
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Two prevention measures |
Checklists and Failsafe |
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Two forms of Investigative Quality Analysis |
Root Cause Analysis and Fish Bone Diagrams |
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What is the cost trade off when ensuring quality? |
Tradeoff between failure costs and control costs |
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Failsafing |
creating a control condition where the customer/employee can only take correct action while performing the process |
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6 Methods of Defining Quality |
1) Design Quality 2) Conformance Quality 3) Technical Quality 4) Functional Quality 5) Customer Satisfaction 6) Service Gaurantees |
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Design Quality |
Product Quality |
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Conformance Quality |
Process Quality |
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Technical Quality |
Quality of the core elements or the product/ service |
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Functional Quality |
Customer perception of the delivery/use of product or service |
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Customer Satisfaction |
Prior Expectations and perception of performance after the fact. Satisfaction = Perception of performance - Expectations |
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5 characteristics of effective service garuntees |
1) unconditional 2) easy to understand 3) meaningful 4) easy and painless to invoice 5) Easy and quick to collect on |
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Two Quality Management Philosophies |
Six Sigma and PDCA cycle |
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Six Sigma |
Quality management philosophy where organization tries to reduce process variation to only 3.4 defects/million |
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DMAIC |
derived from six sigma, it means to define, measure, analyze, improve, and control |
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PDCA Cycle |
quality process management philosophy, developed by Walter Shewhart. principle of continuous improvement: Plan, Do, Check, Act |
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3 Quality Certifications |
ISO 9000, ISO 14000, and ISO 26000 |
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ISO 9000- |
certification that the organization meets generic system process standards |
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ISO 14000 |
environmental management certification in regards to 1. minimizing harmful effects of activities 2. continual improvement on environmental performance |
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ISO 26000 |
guidance on social and environmental responsibilities |
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Steps of the Pareto Analysis |
1) Create a check sheet, with complaints and corresponding ticks in order of importance 2) Graph frequencies and cumulative % of complaints |
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How to do a Root Cause Analysis |
Fish Bone Diagram; keep asking why |
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2 subgroups of Statistical Quality Control |
Acceptance Sampling and Process Control |
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Acceptance Sampling |
A form of appraisal; acceptance or rejection of goods which already exist |
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Process Control |
A form of prevention; set standards to indicate when adjustments should be made while the service/good is being produced |
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Type I Error |
Producers risk; Say its a bad product and scrap/reject it when actually it is fine |
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Type II Error |
Consumers Risk; Accept product when it is actually defected |
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Measurement of control by Attributes |
Measuring data which is counted. use proportions; UCL/LCL = P +/- Z(SD) |
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Measurement of control by Variables |
Measuring Data which is measured (kg, cm, etc); UCL/LCL= X double bar +/- A2(Rbar) |
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External Factors Affecting Capacity (3) |
Government Regulations, Union Agreements, and Supplier Capabilities |
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5 Internal Factors Affecting Capacity (there are more) |
Product/Service Design, Quality Control Systems, Personnel and Jobs, Equipment Capabilities, and Plant Layout |
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Revenue/ Yield management |
Adjusting demand patterns to maximize capacity utilization, yielding increased revenue |
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What kinds of organizations use revenue/ yield management? |
organizations with high fixed costs and low variable; where unused revenue is lost revenue. Ex: Planes, hotels, car rentals |
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Capacity Flexibility |
Adjusting capacity to include a wider range of products and volumes with short lead times |
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internal ways of increasing capacity flexibility |
obtain flexible workers, facilities, and processes |
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external ways of increasing capacity flexibility |
use of external capacity; subcontracting; sharing equipment capacity |
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3 Capacity Strategies |
Proactive, Reactive, and Combination. |
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4 types of facility layouts |
process layout, product layout, group technology (cellular) layout, and fixed position |
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Group Technology (Cellular) Layout |
dissimilar machines grouped together to work on a product family |
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Formula to minimize C: Process Layout Design |
C= (L)*(D)*(K) ; # of loads being moved * distance * cost per distance |
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Production/ Assembly Line Balancing |
Product Layout design method which aims to assign tasks to workstations w/in a given cycle time and with minimum idle time. |
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How to calculate cycle time |
C = Time available /Demand |
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How to calculate minimum required number of stations in a product layout (N) |
N= T/C, where T is time per unit and C is cycle time |
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How to calculate efficiency |
%= T /NaC |
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Process Chart Symbols (3) |
Rectangle- task /operation Inverted Triangle- storage area/queue Diamond- decision point |
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3 categories of benchmarking |
1) Internal 2) Competitive 3) Functional |
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2 process improvement approaches |
1) Continuous process improvement 2) Business Process Improvement |
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CPI |
Continuous Process Improvement; never ending process of achieving incremental improvements |
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BPR |
Business Process Reengineering; process of rethinking and restructuring. It requires discontinuous thinking |
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Just in Time/ Lean Production |
reduces waste while also improving quality (ex. cutting unnecessary transportation) |
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Just in Time "Pull" Kanban System |
workers produce only when the kanban ahead of them is empty |
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only processes that add value to the chain |
value chain |
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Why would an organization not want to outsource? |
Control the strategic processes and avoid messy coordination |
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2 Supply Chain Designs: |
1) Functional 2) Innovative |
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Functional Supply Chain Characteristics |
- Long product life cycle - Low Contribution Margin - Low product variety - Low avg stockout rate |
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Innovative Supply Chain Characteristics |
- Short Product Life cycle - high contribution margin - high product variety - high avg stockout rate |
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