Global Operations and Supply Chain Management Quiz

Operations and Supply Chain Management

• Operations and supply chain management is the design, operation, and improvement of the systems that create and deliver the firm's primary products and services.
• Operations: Manufacturing and service processes used to transform resources into products.
• Supply chain: Processes that move information and material to and from the firm.
• Process activities:
  • Planning
  • Sourcing
  • Making
  • Delivering
  • Returning
• Efficiency: Doing things right and at the lowest possible cost.
• Effectiveness: Doing the right things and creating the most value for the customer.
• Value: The attractiveness of a product relative to a cost (quality/price).

Strategy

• Sustainable strategy: The Triple Bottom Line (social, economic, and environmental).
• Risk mitigation framework:
  1. Identify sources of potential disruptions and assess type of vulnerability.
  2. Assess the potential impact of risk.
  3. Develop plans to mitigate and minimize risk.

Productivity Measurement

• Productivity is a measure of how well resources are used.
• Partial productivity measures: Compare output to a single input.
• Multifactor productivity measures: Compare output to a group of inputs.
• Total productivity measures: Compare output to all inputs.

Product Design Process

• Six phases of generic development process:
  1. Planning
  2. Concept development
  3. System-level design
  4. Design detail
  5. Testing and refinement
  6. Production ramp-up

Capacity Management

• Capacity: The amount of output a system is capable of achieving over a specific period of time.
• Capacity planning time durations:
  • Long range (greater than one year)
  • Intermediate range (monthly or quarterly plans)
  • Short range (less than one month)
• Capacity planning concepts:
  • Capacity utilization rate
  • Economies of scale
  • Diseconomies of scale
  • Capacity focus
  • Capacity flexibility
  • Capacity cushion

Project Management

• A project is a series of related jobs, usually directed toward some major output and requiring a significant period of time to perform.
• Project management is the planning, directing, and controlling of resources to meet the technical, cost, and time constraints of the project.
• Significance of project management: Different types of projects, advantages, and disadvantages.
• Types of project structures:
  • Pure project
  • Functional project
  • Matrix project

Defining the Project

• Statement of work: Written description of objectives to be achieved.
• Task: Further subdivision of a project, usually shorter than several months and performed by a single group or organization.
• Work package: Group of activities combined to be assignable to a single organizational unit.
• Project milestone: Specific events in the life of the project.
• Work breakdown structure: Defines the hierarchy of project tasks, subtasks, and activities.

Network-Planning Models and Critical Path Method

• Critical Path: The path taking the longest time through the network of activities.
• Critical Path Method helps to identify the critical path(s) in the project networks.
• Steps:
  1. Identify each activity to be done and estimate duration of time taken to complete.
  2. Determine the required sequence and construct network diagram.
  3. Determine CP.
  4. Determine ES/EF and LS/LF.

Time-Cost Models and Project Crashing

• Time-cost model: Extends the CPM model to consider the trade-off between time required to complete an activity and total project cost.
• Crashing the project: Reduce overall duration by shortening critical path at the point where costs are lowest.
• Steps:
  1. Prepare CPM network program.
  2. Determine the cost per unit of time to expedite each activity.
  3. Compute critical path.
  4. Shorten critical path at the point where costs are lowest.
  5. Plot project, indirect, and total cost curves to find the minimum-cost schedule.

Project Control Charts

• Charts provide an easily understood visual representation of project performance.### Defining the Framework
• Statement of work, task, work package, project milestone, and work breakdown are key concepts in project management.

Networking Planning Models and Critical Path

• A network is a sequence of activities within a project.
• Critical path is the longest time through the network of activities.
• Critical Path Method (CPM) involves:
  • Identifying each task and duration.
  • Determining the sequence and drawing a network diagram.
  • Calculating the critical path.
  • Identifying Early Start (ES), Early Finish (EF), Late Start (LS), and Late Finish (LF).

Project Crashing and Time-Cost Models (TCM)

• Expands CPM to consider tradeoffs between time required to complete an activity and total project cost.
• Crashing the project is reducing overall project duration.
• Time-cost CPM model is used to find the crash time, which is the shortest possible time allowed for each activity in the project.

Project Control Charts

• Provide an easily understood visual representation of project progress.

Manufacturing Process Flow Design

• Evaluates specific processes that material follow as they move through the plant.
• Focuses on identifying activities that can be minimized or eliminated.
• Aims to reduce movement and storage of materials.

Service Processes

• Customer is the focal point of all decisions and actions.
• The organization exists to serve.
• Systems and employees exist to facilitate the process of the service.
• Operations is responsible for service systems and manages the work of the service workforce.

Service Package

• Supporting facility: physical resources needed to offer a service.
• Facilitating goods: material purchased by the buyer or items provided to the customer.
• Information: data provided to the customer.
• Explicit services: benefits that are observable by the senses.
• Implicit services: psychological benefits the customer may sense.

Service Design and Product Design

• The process and product must be developed simultaneously.
• The process is the product.
• Service operations lack legal protection commonly available to products.

Production Processes

• Make-to-stock: services customers from finished goods inventory.
• Make-to-order: makes the customer's product from raw materials, parts, and components.
• Assemble-to-order: combines preassembled modules to meet a customer's specific specifications.
• Engineer-to-order: works with the customer to design and make the project.

How Production Processes are Organised

• Project: the product remains in a fixed location, and manufacturing equipment is moved to the product.
• Workcenter (job shop): similar equipment or functions are grouped together.
• Manufacturing cell: a dedicated area where products that are similar in processing requirements are produced.
• Assembly line: work processes are arranged according to the progressive steps by which the product is made.

Break-Even Analysis

• Models seek to determine the point in units produced where:
  • A company will start to make a profit.
  • Revenue and total cost are equal.

Manufacturing Process Flow Design

• A method to evaluate specific processes that material follow as they move through the plant.
• Focuses on identifying activities that can be minimized or eliminated.

Process Analysis

• A step-by-step breakdown of the phases of a process, used to convey the inputs, outputs, and operations that take place during each phase.

Process Design and Analysis

• Helps to know about the process.
• Determine flow of materials.
• Helps set up work standard.

Process Flowcharting and Symbols

• Process flowcharting is the use of a diagram to represent the major elements of a process.

Types of Processes

• Single-stage process: a process with one stage.
• Multi-stage process: a process with multiple stages.
• Serial flow process: a single path for all stages of production.
• Parallel process: some of production has alternative paths.

Logistics Processes

• Movement of things such as materials, people, or finished goods.

Buffering, Blocking, Starving

• Buffer: a storage area between stages where the output of a stage is placed prior to being used in a downstream stage.
• Blocking: occurs when the activities in a stage must stop because there is no place to deposit the item.
• Starving: occurs when the activities in a stage must stop because there is no work.

Measuring Process Performance

• Operation time = setup time + run time.
• Flow time = average time for a unit to move through the system.
• Velocity = (value-added time) / (flow time).
• Efficiency = (actual output) / (standard output).
• Utilisation = (time activated) / (time available).

Process Mapping and Little's Law

• Total average value of inventory = value of raw materials + work-in-process + finished goods inventory.
• Inventory returns = (COGS) / (average inventory value).
• Days of supply = inverse of inventory returns scaled to days.
• Little's Law: Inventory = throughput rate x flow time.

Work Measurement and Standards

• Work measurement is a process of analysing jobs for the purpose of setting time standards.

Six Sigma Quality

• Assists in understanding the importance of quality management.
• Helps determine costs in quality and quality aspects.
• Helps to understand different analytical tools applicable in real-life situations.

Total Quality Management

• Managing the entire organisation so that it excels on all dimensions of products and services that are important to the customer.
• Quality specifications: design quality, conformance quality.
• Costs of quality: appraisal, prevention, internal, external.### Lean Production and Supply Chain Management
• Lean production aims to eliminate waste and maximize value-added activities
• Principles of lean production:
  • Eliminate waste from overproduction, waiting, transportation, inventory, processing, and motion
  • Respect for people and lifetime employment for permanent positions
  • Maintain level payrolls even during economic downturns
  • View workers as assets, not liabilities
• Key components of lean supply chain management:
  • Lean suppliers able to respond to changes with lower prices and higher quality
  • Lean procurement through automation (e-procurement)
  • Lean warehousing eliminates non-value-added steps and waste in storage processes
  • Lean logistics optimized for mode selection, pooling orders, and cross-docking

Lean Supply Chain Design

• Lean layouts and plant layouts designed for balanced workflow with minimal WIP inventory
• Lean production schedules with uniform plant loading and minimized setup time
• Lean supply chains built on partnerships with suppliers and customers

Lean Concepts

• Group technology: grouping similar parts into families to minimize inventory and reduce waste
• Quality at the source: producing high-quality products the first time, with personal responsibility for quality
• JIT (Just-In-Time) production: producing what is needed, when needed, and in the correct quantities

Value Stream Mapping

• A flowcharting tool used to analyze where value is added or wasted in the production process
• Two-part process: depict the current state, then map the process with suggested improvements using symbols

Logistics, Distribution, and Transportation

• Logistics: obtaining, producing, and distributing materials and products in the right place and quantities
• International logistics: managing functions on a global scale
• Third-party logistics: outsourcing logistics functions to an outside company

Facility Location Issues

• Proximity to customers and suppliers
• Business climate and total costs
• Quality of labor and infrastructure
• Political risks and government barriers
• Environmental regulation and host community interests
• Competitive advantage and free trade zones

Plant Location Methods

• Factor rating system: evaluating locations based on multiple factors
• Transportation method (linear programming): minimizing costs or maximizing profits of shipping
• Centroid method: locating facilities based on existing facilities, distances, and volumes of goods