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Vocab

Terms

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how to implement prinicple 4
1 capture quality data at the source 2 share data via IT to minimizw data re entery 3 Use error prood ahah poka yok devices or procedures
total slack
clack shared by other activities calculated as S=LS - ES
Time between orders
The average elapsed time between receivig replenishment order of Q units for a particular lot size---(EOQ/D*) where D* is the uni of period
five s
a method consisting of the workplace practives sorting straightening shining standardizing and sustaining that are conductive to visual controls and lean production
P systems two key parameters
order recieved and orders placedmso ntot that the order quanity caries while the TBO is fixed
other things that should be taken in effect when making cp
budget and cash flow, balancing due date and cost, priority which should be crashed first
two bin
a visual system version of Q i which an inters inventory is stored at two different locations
repeatability
the degree to which the same work can done again
Method to enable 1 peice flow
1 qucik step (3 factors in the EOQ formula) ///single mintue exchange of dies (SMED) ////insert examples 2 Level ro Even lading "Heijunka" loading 3 Kanban pull for materials
product proliferation
caused by competition--more variety lower volume and short life cycles
economic order quantity
the lot size that minimizes total annual inventory holding and ordering costs a simple rule to determine the optimal batch size for cycle inventory--so the formula is sqr rt of 2 *Demand per year*Set up costs or ordering costs / Holding costs per one unit
is it possible to have more then one critical path?
yes!!!
normal time
the time necessary to complete an activity under normal conditions
sort
two thinds 1 categorize for frequency of use 2 determine and mark a location
uniform load
load smoothing production--spread out volume and mixture evenly and use small batch size-->instead of producing in large batches AAAAAA, BBBB., CC change to mixed mofel assembly AABBC
lot
a quantity of items that are processed together
operations
design and operates processes that transform inputs to outputs (products or services)
examples of poka yoke devices in the real world
airplane restroom doors camera battery light--learn from Amazon and Expedia on their user entry must do **--how the line stop cord at H2 and Toyota planets empowered workers
Gantt Chart
A project schedule usually created by the project manager using computer software that superimposes project activities with their precedence relationships and estimated duration times on time line
activity on node
aon an approach used to create a network diagram in which nodes represent activities and arcs represent the precedence relationship between them
what are typical inventory costs?
fixed and variable
stream
includes all the processes and flows of materials and information
what are some examples of notorious project delays
Bostons Big Dig, Airbus 380, Boeing 787
value stream mapping
a qualitative lean tool for eliminating waste or muda that inolves a current state drawing a future state drawing and an implentation plan
shift or straigten
is the first of the five ss it is also known as orderliness a place for everythign and everything has a place
7 wasts
the "muda" in manufactoring and the more in services processes---> 1 excesss inventory and storage 2 defects 3 waiting / delay 4 excess motion (for people) 5 excess transportation (of the job) 6 over processing 7 over production
IP
Inventory Position and it is a measurement of an iteams ability to satisfy furter items
JIT/Lean Manufacturing/Lean Retailing
the suppliers are keeping inventory for customers
project management
a systematized phased approach to defining organizing planning monitoring and controlling projects
free slack
the amount of time that an activity's earliest finish time can be delayed without delaying the earliest start time of any activity that immediately follows
Two basic inventory control systems for uncertain demand
since demand us now uncertain we can estimate the distribution mean and standard dev based on past records the two systems to do this is the Q system and P system
shrinkage
damaged goods, lost goods or misplaced
what do the 5 s enable
visual workplace or visual control
program evaluation and review technique PERT
A network planning method created for the us navy plaris missile project in the 1950s which involved 3000 separate contracts and suppliers
poka yoke
mistake proofing methods aimed at designing fall safe systems that minimize human error
what has to be moveable in order to reduce inventory
supply and demand must be variances that are reducable s if not not then inventory can only be moved around not eliminated
Project
An interrelated set of activities with a definite starting and ending point which results in a unique outcome for a specific allocation of resources
activity slack
the maximum length of time that an activity can be delayed without delaying the entire project
reorder point
average demand (aka the middle line) plus the saftey stock
cirtical path method
CPM a network planning method developed in the 1950s as a means of scheduling maintenance shutdowns at chemical processing plants
Why is EOQ still popular after 50 years
the simple formula gives wuick ad not so dirty estimates//the insensitivity effect///works in the real world almost all the time if off by 20% doesnt matter because of the bathtub effect
inventroy holding cost
the sum of the cost od capital and the variable cost of keeping items on hand such as storage and handling taxes insurance and shrinkage
just in time JIT philosophy
the belief that waste can be eliminated by cutting unnecessary capacity or inventory and removing non value added activities in operations
mixed model assembly
a type of assembly that produces a mix of models in smaller lots
q system
aka fixed order quantity...continuous or preptual review...reorder point system this is like putting in a 3/4 of a tank everytime
process
is a set of actions steps wach of which must be done in the proper sequence to create value
push method
a method in which production of the item begins in advance of customer needs
Inventory management
the planning and controlling of inventories in order to meet the competitive priorities of the organization
what are the relationshops between these factors
production set up costs, inventory carrying costs, lot / batch size, average inventory level--->EOQ equation
kanban system
each container must have a card//assembly always withdraws from fabrication (pull system)//containers cannot be moved without kanban//containser should contain the same number of parts//only good parts are passed along//production should not exceed authorization
Special
an item made to order if purchased it is bought to order
work breakdown structure (wbs)
a statement of all work that has to be complete
principle 4 of value stream
error proof the process
P system
fixed order Period--you always fill up on Tuesday
reorder point system
same as continuous review
fixed inventory costs
set up or change over if produce in house/ ordering if produced from the outside/ transporting
set up
the group of activites needed to change or readjust a process between successive lots of items
the product processes matrix
highest up the more customized
Annual Dollar Usage
Unit Value * volume is very common way to classify inventory
safety stock inventory
surplus inventory that a compan holds to protect against uncertainty in demand lead time and supply changes
activity
the smallest unit of work effort consuming both time and resources that the project manager can schedule and control
critical path
the sequence of activities between a project's start and finish that takes the longest time to complete
what are come common tools used to describe the value stream
flow chart (macro level) oricess chart(micro level) and value stream map
Pipeline inventory
inventory moving from point to point in the materials flow system
principle 2 of the value stream
indentify 7 wastes and ask 5 whys (ask a person five times and they think more about it)
Cycle Inventory
the time period and amount are the same (is both P and Q)
process chart
5 types of activities and symbols, operate, transport, inspect, delay, store aka they track one time entry
inventory driven cost
the total operating margin-->is ordering cost and set up cost transportation aka all the fixed costs
what is a real world example of the EOQ
SBC Ameritech warehouse in south bend
if lay out by job shop
its organized by job but less can get done-->more FLEXIBLE
group technology cells
each cell is independent seperated by parts so allows-->quicker but workers have to mutli task
Critical path
consists of all the activites that have no slack--so cp is the longest path through a network diagram that determine the earliest completion of a project--critical path =no margin of error
single digit set up
the goal of having a set up time of less than 10 minutes
network diagram
a network planning method designed to depict the relationships between activities that consists of nodes (circles) and arcs (Arrows)
lot sizing
the determination of how frequently and in what quanity order inventory
ABC analysis
the process of dividing items into three clases according o their dollar usage so that managers can docus on items that have the highest dollar value so this uses the 80 /20 rule so its only 20% of total quanity but 80% of profits B is 15% profits and 30% of quantity C is the rest 50% of Q and 5% of $ (this is subjective isnt always the same)
why is inventory control still so challenging
JIT/Lean Manufacturing/Lean Retailing and Competition drives product proliferation
continuous review system
a system designed to track the remainign inventory of an item each time a withdrawl is made to determine whether it is time to reorder
lay changes may be necessary to be more productive
U shape lines manufacturing cells
what is principle 1 of the value stream?
walk the value stream
Principle 5 of value stream
Enable one piece flow aka EOQ
Earliest Finish Time EF
an activity's earliest start time plus its estimated duration
ordering cost
the cost of preparing a purchase order for the supplier or a production order for the shop
Earliest Start Time ES
an earliest finish time of the immediately preceding activities
program
an interdependent set of projects that have a common strategic purpose
Real world implentation of Q an P system
many hybrid systems suech as min-max system or the two bin system //inventory is a resule of symptom of process design and flow effects on inventory///cycle count to verify discrepancy
manufacturing cells
1 one worker with multi machines cells for short process 2 group technology cells
standard normal variate
has a mean of 0 and a standard dev of 1
Three things to consider when making a project
operations to compete-->managing processes-->managing value chains
lean system
operations systems that maximize the value added by each of a company's activities by paring unnecessary resources and delays from them
using operations to compete
operations as a competitive weapon operations strategy and project management
u shape lines
sace space than a straight line and co locate team members
what must be impmace to make mixed model scedule
flexible cross trained workers to react to deamnd fluctuation
kanban
a japanese word meaning card or visable record that refers to cards used to control the flow of production through a factory
path
the sequence of activities between a project's start and finish
what are the two key control parameters of the Q system?
EOQ can be first guesses and can you realistic constraints to settle the EOQ then determine the reorder point
JIT System
a system that organizes the resources information flow and decisions rules that enable a firm to realize the benefits of JIT principles
set up cost
the cost involved in changing over a machine to produce a different item
who defines value in the value stream?
the customer
standard
develop rules for the first three ss (straighten sort shine) and monitor their progress
sustain
the 5th s self discipline sollow the rules and continue to improve
flow charts
show you the process showing handoffs between departments (with in production/finace/sales/and customer)
minimum cost schedule
a schedule determined by starring with the normal time schedule crashing activities long the critical path in such a way that the costs of crashing do not exceed the savings in indirect and penalty costs
What is inventory like
the water bed effect
independent demand items
items for which demand is influenced by maket condition and is not relatted to inventory decisions for any other item held in stock
variable inventory costs
aka storage costs--interest storage handling taxes insurance...loss of value(if high tech)...shrinkage
Standard
an item that is made to stcok or ordered to stock and normally is available upon request
principle 3 of the value stream
be productive via the 5 s's straighten sort shine standardize sustaing
latest start time LS
the latest finish time minus its estimated duration
precedence relationship
a relationship that determines a sequence for undertaking activities it specifies that one activity cannot start until a preceding activity has been completed
How do we find the best Q
in the simplest case we assume that there is uniform demand rate..fixed delivery or manufacturing lead time...no quanity discount...no constraints on truck sixe or storage size...and only consider two major costs (setup and holding costs)
normal cost
the activity cost associated with the normal time
pull method
a method in which customer demand activates production of the service or item
group technology cells
are when each cell is dedicated to a product family or a part family with similar processing needs a cell tends to be self suddicient with minimal inter cell movement
latest finish time LF
the latest start time of the activitiy that immediately follows
base stock
every time you sell something you replace it
Cycle inventory
the portion of total inventory that varies directly with lot sizes
safty stock
extra stock just to make sure you dont run out-->its the amount under curve between .5 and the reorder point
balancing due date and cost
a penalty for completing the project after certain day or reward for completing due date early overhead or fixed costs per day
crash time
the shortest possible time to complete an activity
why is inventory refered to as a double edged sword
inventory driven costs (fixed) and then inventory carrying cost estimates (variable)--its balancing the two because of fixed costs you want to order the most inventory so only pay once varaible want to but least amount so dont have to pay high variable costs
min max
like the p system but only check it occasionally

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