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What does the term Downstream mean?
When information is going in the direction of the customer
What does the term Upstream mean?
When information is going in the direction of the suppliers.
Explain the PUSH system
Work is pushed to the next station as it is completed
Purchasing => Production => Distribution => Retail
What are some Pros of the Push system
- - High inventories
- - Shorter Lead time
- - Mistakes and defects are tolorable
What are some Cons of the Push system?
- - High inventory
- - Low Customization flexibility
- - Forcasting miscalculations are costly
Explain the PULL system
A workstation pulls output from the preceding station as it is needed.
Customers => Sales Order Processing => Production => Purchasing
What are some Pros of the Pull system?
- - Low Inventories
- - System driven by Demand
- - Flexible manufacturing
- - Closer supplier tiers
What are some Cons of the Pull system?
- - Longer Lead times
- - Risky customer service rates
- - Tougher to sell goods
- - Forcasting miscalculations can be costly
What was the older American Supply Chain strategy?
- - Push strategy
- - High inventory
- - Suppliers are enemies
- - Silo Mentality
- - Company dictates market
What is the Newer Supply Chain strategy?
- - Lean Manufacturing
- - Pull system
- - Inventory is evil (minimize it)
- - Suppliers are partners
- - Open communication
- - Supplier dictates market
What is NUMMI?
- - A Joint Venture between GM and Toyota
- - Succesfully implemented Lean Principles
- - Didnt succesfully get transfered to GM because it didnt align with their operations strategy
When customization occurs early in the supply chain:
- - Flexibility in response to unique customer needs will be greater.
- -Lead times to the customer will tend to be longer.
- - Products will tend to be more costly
When customization occurs late in the supply chain:
- - Flexibility in response to unique customer needs will be limited.
- - Lead times to the customer will tend to be shorter.
- - Products will tend to be less costly.
What is the Bullwhip affect?
- Very high and very low supply levels despite fairly constant demand levels
- (Due to poor forcasting, order batching, price fluctuations)
Why would a company manufacture Abroad?
- - Low cost of Labor
- - Might be close to their suppliers
What are some risks associated with Outsourcing?
- - Quality control (Must protect brand)
- - Capacity and growth concerns
- - Loss of streategic control
What is CT-PAT
- ( Customs-Trade Partnership Against Terrorism )
- - developed to help minimize the risk of terrorist activity via US port Ports but with minimum disruption to supply chains
What are some requirements of good metrics?
- - Strategically Oriented
- - Ease of measurement
- - Provides Value
- - Cheater Proof
What are KPI's
- ( Key Performance Indicator )
- - Tool used by executives to get a “snap shot” look of
- key organizational process and system metrics.
- - Manage performance measurement data and allow users to “drill down” to see data in more detailed format
What is the SCOR Model?
- ( Supply Chain Operations Reference Model )
- - Integrates supply chain members
- - Links Sourcing needs of Buyer with Delivery operations of the Seller
- - Complex System/Software package
What are the 5 categories of the SCOR model?
- - Plan: Demand and supply chain planning
- - Source: Purchasing Process
- - Make: Manufacturing Process
- - Deliver: Logistics and Transportation
- - Return: Reverse Logistics
What is Reliability?
The probability that a product, piece of equipment, or system performs its intended function for a stated period of time under specified operating conditions
What is a Series System?
All components must function or the system will fail
What is a Parallel system?
The system will successfully operate as long as one component functions
What are Internal failure costs?
- - Problems addressed before they reach the customer
- - Not ideal, but at least the customer was not affected
- - Costs Related to Fixing or Throwing out Defects
What are External Failure Costs
- - Worst case scenario – Highest potential for losses
- - Costs associated with “repairing” damage caused from delivering substandard items or services
- - All other costs resulting from sale
What are Appraisal costs?
- - Before you fix the problem you need to identify the root causes.
- - Costs associated with finding causes of quality deficiencies
- - Measuring, Evaluating, Auditing , Assess Business
What are prevention costs?
- - Attempts to eliminate quality related problems
- - Costs Related to reducing potential for quality problems
What is the Pareto diagram?
- - Purpose: Identify where to focus
- - Function: Bar chart with categories ranked from most to least frequent
- - Premise: States that 80% of a system’s behavior is due to 20% of its dimensions
Activities that take place prior to the point of customization are called upstream activities. (T / F)
How much of the full ticket retail price does Zara collect from its clothing?
Which quality cost category best describes the costs associated with replacing a car battery with a 2 year warranty that fails 13 months after purchase?
External Failure Costs
Which of the following is a bar-chart that would be used track and categorize customer complaints (Examples: Damaged during shipment, wrong item shipped, item shipped to wrong address)
Which of the following is true regarding the Ford Rouge factory?
Ford focused on the wrong life cycle stage of gas vehicles in its environmental sustainability efforts
What is PDSA?
What is the major role of a pareto diagram?
Identify the major causes of a problem to focus the improvement effort.
What is the major role of a run chart?
Shows how data changes over time
Which type of cost arises when the firm assesses the level of performance of its processes.