Scheduling and ERP Systems Quiz

MOS 3330 Course Overview

• The course covers Introduction to Operations Management, Supply Chain Management, and Inventory Management (among other topics)
• The course is divided into various modules, each with different learning objectives.
• Tests 1 & 2 cover specific modules
• The final exam covers the entire course
• Formula sheets are provided for support

INTRODUCTION TO OPERATIONS MANAGEMENT

• Learning objectives include:
  • Defining Operations Management (OM)
  • Reasons for studying OM
  • Distinguishing goods from services
  • Current trends in OM

Operations Management (OM)

• OM is defined as the transformation of inputs into finished goods and services.
• Organizational view of OM considers the various departments in a manufacturing or service organization, like marketing, sales, and finance.
• A process view of OM focuses on the transformation of inputs into outputs.
• Inputs to the process include raw materials, employee skills, facilities, and equipment.
• Transformation includes physical location, exchange, physiological, psychological, and informational processes leading to finished goods and services.
• Operations Management involves planning, design, coordinating, and executing operations-related activities.

Why Study OM?

• OM is crucial for all organizations & contributes to overall corporate strategy
• A significant portion of the Canadian workforce (25%) works in the goods-producing sector, and is managed by OM professionals
• OM professionals manage production/service, technology, people, and projects, making strategic decisions.

Goods vs. Services

• Services are intangible, customer-interactive, and consumed immediately. Producing goods is often more automated and easier to measure quality and productivity
• Services are labor and knowledge-intensive and difficult to automate; total productivity is often Output / Input.
• Many cases may not be clear-cut.

SUPPLY CHAIN MANAGEMENT

• Learning objectives include:
  • Understanding supply chains
  • Key subjects within supply chain management
  • The bullwhip effect
  • Supply chain strategies
  • Supplier relationships

Supply Chain

• A supply chain is the network of facilities, functions, and activities involved in producing and delivering products or services from suppliers to customers.
• Supply chain management coordinates the movement of goods through the supply chain and controls information, such as sales data, forecasts, promotions, and inventory levels.

Supply Chain Subjects

• Logistics
• Purchasing
• Sourcing
• The bullwhip effect
• Sustainability

Logistics

• Shipping, delivery, transportation costs
• Traffic management (highway, rail/water, pipeline, air)
• Distribution Management (facility location, customer proximity, infrastructure, inventory)
• Third-party logistics (3PL)
• International business

Purchasing

• Ordering, receiving, quality, quantity, price, and time
• Purchasing Cycle: requisition, selection of supplier, placement of order, and receiving order.
• Interface with accounting, engineering, and legal teams
• Develop a supplier base: selection, evaluation, and maintenance

Sourcing

• Supplier selection strategies (single sourcing vs. multiple sourcing)
• Considerations such as price, quality, services, and location

Bullwhip Effect

• Information distortion along the supply chain
• Customer demand gets distorted as information reaches suppliers
• Contributing factors: batch ordering, high order cost, free return policy, promotional pricing, lack of visibility on end-demand, inaccurate forecast, long lead times, localized reaction, and mistrust

Supply Chain Strategies

• Physical proximity, plant-direct shipping, and cross-docking
• Strategies to improve supply chain and eliminate bullwhip effect

Supplier Relationships

• Collaborative Planning, Forecasting, and Replenishment (CPFR)
• Process for trading partners to share information on forecasting, replenishment, and planning for better working together.
• Guidelines for information sharing, operating agreements, and Standards (VICS) to build collaborative and strategic relationships

Business Relationships

• Open market
• Multiple suppliers
• Short term decisions
• Price based decision
• Adversarial
• Cooperative
• Fewer suppliers
• Longer term contacts
• Move away from price based purchase
• Win-win relationship
• Collaborative
• Joint Planning
• Technology Sharing
• Strategic Relationship
• Future: mass collaboration across the industry

Sustainability in Supply

• The reduced use of resources and harm to the environment.
• The efforts that businesses make to decrease the environmental and human impact of products from sourcing materials through production, to storage, delivery, and transportation
• Sustainable Supply Chain Management focuses on speed, cost, and reliability of operations, adding the preservation of environmental and societal values to those goals to address global issues such as climate change, water security, deforestation, human rights, fair labor practices, and corruption.

Inventory Management

• Learning Objectives include:
  • The purpose of inventory
  • Inventory control systems
  • Costs associated with inventory
  • Economic Order Quantity (EOQ) models
  • Safety stock

Inventory

• A stock of items or materials kept to satisfy future demand
• Raw materials, parts, and supplies; work-in-process items
• Finished goods, rework items, tools, machinery, and equipment.

Inventory Control Systems

• Q System (fixed quantity)
• P System (fixed time period)
• ABC System

Inventory Costs

• Ordering costs (fixed costs), holding costs (keeping items in inventory), and shortage costs (loss of sales, production)

Economic Order Quantity (EOQ) Models

• A mathematical model for determining order quantity and when to reorder inventory
• Assumptions made: constant, known demand; certain supply received in a batch; known, constant lead time between order placement and order receipt; and, fixed costs, information and no shortages and no back orders.

Safety stock

• Safety stock is excess inventory. It's used to buffer against demand/supply variability during lead time, and increase in order quantity.
• It minimizes shortage costs and is also used in the EOQ model for anticipation inventory

Forecasting

• Learning Objectives include:
  • Understanding qualitative and quantitative methods
  • Overview of the forecasting process
  • Time series methods
  • Forecast error measures

Forecasting

• Translation of past experiences & present events into future predictions.
• Strategic: future products and markets
• Planning: product demand
• Forecasting horizon: short-, mid-, and long-range

Types of forecasting methods

• Qualitative (subjective or judgment based)
• Quantitative (numerical data and mathematical models)
• Causal methods (looking for a relationship between factors to be forecasted and other factors, external or internal)
• Time series methods

Forecasting Process

• Identifying the purpose
• Gathering historical data
• Examining the data (plotting)
• Selecting suitable models
• Computing forecasts for historical data and validating accuracy
• Assessing forecast accuracy & adjusting as needed
• Including qualitative information
• Monitoring forecast results

Time Series Forecasting Models

• Using statistical analysis of historical data; past demand as a predictor
• Considering average, trend, seasonality, cycles, and random variations in demand patterns

Time series forecasting models

• Naïve model
• Simple moving average
• Weighted moving average
• Exponential smoothing
• Adjustment for seasonality

Time Series Analysis

• The average
• Trend
• Seasonality
• Cycles
• Random movement

Forecast Accuracy

• Evaluation of forecasts through error measures like Mean Absolute Deviation (MAD), Mean Absolute Percentage Deviation (MAPD), Mean Squared Error (MSE), and Cumulative Error

Machine Learning (ML) in Demand Forecasting

• AI-enabled systems learn from data instead of pre-defined rules to make predictions regarding future trends and demand

Machine Learning Forecasting Process

• Data gathering
• Data pre-processing
• Model training
• Model evaluation

Aggregate Planning

• Learning Objectives include:
  • Definition of aggregate production plan
  • Aggregate planning strategies
  • Generating basic aggregate plans
  • Modifying/improving plans
  • Capacity strategies

Aggregate Planning

• A business plan for the production plan to meet aggregate demand.
• Planning horizons: long-term (2-10 years), medium-term (6-18 months), and short-term (weekly/daily).
• Basic planning is the creation of a plan to meet demand

Aggregate planning strategies

• Active strategy (influencing demand) and Reactive strategy (managing supply and capacity).
• Techniques: incentives, sales promotions, advertising, and pricing, product strategy, overtime and undertime, hiring and hiring, subcontracting and inventory levels (to compensate for demand variability) - approaches: Level approach (constance rate of production)
• and Chase approach (variable production rate)

Generating basic aggregate plans

• Choosing either a level or chase approach
• Determining the production rate (regular, overtime, subcontracting), inventory level and backorders, and workforce levels (hiring/firing) to balance total cost (production, inventory, and workforce)

Modifying/Improving plans

• Including organization policies & physical constraints as needed

Capacity strategies

• Assessing and adjusting production capacity.
  • Techniques: analyzing capacity efficiency, capacity lead, capacity lag, and incremental expansion strategies

Material Requirements Planning (MRP)

• Learning Objectives include:
  • What MRP is and does
  • Inputs and outputs of MRP
  • Scheduling basics
  • Scheduling sequencing rules

Material Requirements Planning (MRP)

• Computerized system for inventory control and production planning.
• Determined requirements of dependent demand inventory (parts, components, and raw materials)
• Explosions: breaking down products
• Netting: calculating materials required
• Offsetting: scheduling orders
• Lot-sizing: determining batch sizes for production/procurement.

Master Production Schedule (MPS)

• A plan for individual products that states the requirements for individual end items and the quantities required by a given date

Inventory Master File (IMF)

• A detailed record of components, information needed for ordering from customers, and scheduling of production and delivery of products

Product Structure File (PSF)

• A record of the relationships between products
• The various components (parts & materials) required for a product

MRP as an Analysis Tool

• MRP is not a demand planning tool
• It's a tool to determine the required materials and components, based on production plans, and determine shortage issues ahead of actual production.
• Planning actions to get the right material at the right time
  • Example: Estimate production outcome & identify potential shortage before actual production, to purchase or produce more ahead of time, to move jobs forward (expediting) or backward (de-expediting) to see if the solution would work

Production Scheduling

• Allocation of resource to tasks, the last planning stage before production
• Objectives: meet customer due dates; minimize job lateness and response time, completion time, overtime, idle time, work in progress (WIP) inventory, maximize labor or equipment utilization.
• Scheduling Techniques: method analysis, time study method.

High Volume vs. Low Volume Production

• High volume has repetitive processes and optimized production technology (OPT)
• Low volume has intermittent operations involving coordination difficulty for diverse orders

Sequencing Rules

• First come, first served (FCFS)
• Last come, first served (LCFS)
• Earliest due date first (EDD)
• Shortest processing time first (SPT)
• Longest processing time first (LPT)

Other Types of Operations Scheduling

• Scheduling service operations
  • Complicated because demand is often variable and hard to forecast
  • Service scheduling (appointments, reservations, posted schedules)
• Staff Scheduling (peak demand, floating, on call, seasonal)
• Maintenance (repair & preventative maintenance)

Enterprise Resource Planning (ERP)

• Learning Objectives include:
  • Definition of enterprise resource planning
  • Historical development of ERP
  • ERP enablers
  • Implementation issues
  • Project management basics

Enterprise Resource Planning (ERP)

• Integrated software modules controlling and coordinating business processes in an enterprise, extending from the manufacturing origins.
• MRP, MRP II, and CRP
• Technological enablers include electronic communications and advances in computer-to-computer data sharing (EDI).
• Success and Mixed Results (in 1990s)

ERP Implementation Issues

• Technical (data handling, inaccuracy, training)
• Behavioral (lack of management or employee support, unrealistic expectations, etc.)

Project Management

• Project life cycle phases (concept, feasibility analysis, planning, execution, and termination)
• Scope management (identifying needs and constraints)
• Human resource management (allocation of roles and responsibilities)
• Time management (schedules, estimation techniques, etc.)

Process and Product Design

• Learning Objectives include:
  • Classifying process types
  • Classifying facility layout types
  • Understanding manufacturing technology
  • Product design basics

Process

• A process is a way of transforming inputs into outputs, with types such as:
  • fixed position, jumbled flow, line flow, and continuous flow
• Approaches to customer orders (make-to-order, make-to-stock, or assemble-to-order)
• Amount of customization
• Understanding product variety and standardisation

Product Design

• Defining product characteristics
• General steps: idea development, screening, preliminary design & testing, and final design
• Techniques: concurrent engineering & CAD methods

Just-In-Time (JIT) Systems

• Learning Objectives include:
  • JIT origins & philosophy
  • JIT key elements
  • Implementation issues
  • Job design basics

Just-In-Time Systems

• A philosophy that eliminates waste in manufacturing or service process
• Need only what, when it is needed

JIT Systems Origins and Philosophy

• Origins in the Japanese manufacturing industries, particularly Toyota (reducing inventory to improve efficiency and performance)
• Focus on eliminating all waste within the organization

Types of Waste

• Process waste
• Waiting time
• Extra/unnecessary inventory
• Poor layout
• Transportation waste
• Overproduction
• Movement
• Inventory

Key Elements of JIT System

• Work cells, pull production system, reducing variability in components (supply), and improving quality/reliable suppliers

Alternative Job Designs

• Job rotation, enlargement, and enrichment
• Use of Teams:
  • Problem-solving Teams
  • Special-purpose Teams
  • Self-directed Teams
• Work measurement: Method analysis & Time study

Quality

• Learning Objectives include:
  • What is quality
  • Quality measures
  • Costs of quality
  • Process improvement
  • Continuous improvement

Quality

• Producer's perspective: quality of design and quality of conformance
• Consumer's perspective: fitness for use
• Overall features and characteristics to satisfy different needs

Quality Measures

• Scrap, rework, errors, shipping costs, productivity, quality index

Costs of Quality

• Tangible and intangible costs related to managing product/service quality
  • Internal failure costs (scrap, rework, downtime)
  • External failure costs (returns, repairs, warranty, lost sales)
  • Appraisal costs (testing, inspection, etc.)
  • Prevention costs (design, training, quality planning)

Quality and Profitability

• Improved quality leads to higher sales, lower costs, higher prices, and greater efficiency

Quality Improvement

• Continuous improvement ("kaizen"), process improvement, innovation, specific tools for measurement and improvement

Statistical Process Control (SPC)

• To prevent poor product quality and use process improvement tools
• To monitor production process, especially in terms of quality and pattern detection
• Statistical measures of the production process (pattern tests)
• Processes that can be controlled, using various charts:
  • p-chart: Proportion of defectives in a sample
  • c-chart: Number of defective features in a sample
  • R-chart: Range (difference between largest and smallest values)
  • X-chart: Average of a sample of values

Test your knowledge on Enterprise Resource Planning (ERP) systems and various scheduling methods. This quiz covers key concepts such as task prioritization, job tardiness, and scheduling performance measures. Perfect for students and professionals looking to deepen their understanding of these critical business topics.