Building service activities to support a firm's product offerings. Doing the right things to create the most value for the company.

Transcription

1 Glossary CAPITOLO 1 Operations and supply chain management (OSCM) Design, operation, and improvement of the systems that create and deliver the firm's primary products and services. Servitization Building service activities to support a firm's product offerings. Efficiency Doing something at the lowest possible cost. Effectiveness Doing the right things to create the most value for the company. Value Ratio of quality to price paid. Competitive "happiness" is being able to increase quality and reduce price while maintaining or improving profit margins. (This is a way that operations can directly increase customer retention and gain market share.) Mass customization Producing products to order in lot sizes of one. Sustainability The ability to maintain balance in a system. Triple bottom line Relates to the economic, employee, and environmental impact of the firm's strategy.

2 CAPITOLO 2 Triple bottom line A business strategy that includes social, economic, and environmental criteria. Operations and supply chain strategy Setting broad policies and plans for using the resources of a firm to best support the firm's long-term competitive strategy. Straddling Occurs when a firm seeks to match what a competitor is doing by adding new features, services, or technologies to existing activities. This often creates problems if certain trade-offs need to be made. Order winner A dimension that differentiates the products or services of one firm from those of another. Order qualifier A dimension used to screen a product or service as a candidate for purchase. Activity-system maps A diagram that shows how a company's strategy is delivered through a set of supporting activities. Core capabilities Skills that differentiate a manufacturing or service firm from its competitors. Productivity A measure of how well resources are used.

3 CAPITOLO 3 Contract manufacturer An organization capable of manufacturing and/or purchasing all the components needed to produce a finished product or device. Core competency The one thing that a firm can do better than its competitors. The goal is to have a core competency that yields a long-term competitive advantage to the company. Concurrent engineering Emphasizes cross-functional integration and concurrent development of a product and its associated processes. Quality function deployment (QFD) A process that helps a company determine the product characteristics important to the consumer and to evaluate its own product in relation to others. House of quality A matrix that helps a product design team translate customer requirements into operating and engineering goals. Value analysis/value engineering (VA/VE) Analysis with the purpose of simplifying products and processes by achieving equivalent or better performance at a lower cost. Ecodesign The incorporation of environmental considerations into the design and development of products or services. These concerns relate to the entire life cycle including materials, manufacturing, distribution and the eventual disposal of waste.

4 CAPITOLO 4 Process Any set of activities performed by an organization that takes inputs and transforms them into outputs ideally of greater value to the organization than the original inputs. Cycle time The average time between completions of successive units in a process (this is the definition used in this book). The term is sometimes used to mean the elapsed time between starting and completing a job. Utilization The ratio of the time that a resource is actually activated relative to the time that it is available for use. Buffering A storage area between stages where the output of a stage is placed prior to being used in a downstream stage. Buffering allows the stages to operate independently. Blocking The activities in the stage must stop because there is no place to deposit the item just completed. Starving The activities in a stage must stop because there is no work. Bottleneck A resource that limits the capacity or maximum output of the process. Make-to-order A process that is activated only in response to an actual order. Make-to-stock A process that produces standard products that are stored in finished goods inventory. The product is delivered quickly to the customer from the finished goods inventory. Hybrid Combines the features of both make-to-order and make-to-stock. Typically, a generic product is made and stocked at some point in the process. These generic units are customized in a final process to meet actual orders. Pacing Movement of items through a process is coordinated through a timing mechanism. Most processes are not paced, but assembly lines usually are paced.

5 Productivity The ratio of output to input. Taking the dollar value of the output and dividing by the dollar value of the inputs usually measures total factor productivity. Alternatively, partial factor productivity is measured based on an individual input and often is not calculated using dollar values (an example would be units/person). Efficiency A ratio of the actual output of a process relative to some standard. Run time The time required to produce a batch of parts. Setup time The time required to prepare a machine to make a particular item. Operation time The sum of the setup time and run time for a batch of parts that are run on a machine. Flow time The average time that it takes a unit to move through an entire process. Usually the term lead time is used to refer to the total time that it takes a customer to receive an order (includes time to process the order, throughput time, and delivery time). Throughput rate The output rate that the process is expected to produce over a period of time. Process velocity or throughput ratio The ratio of the total flow time to the value-added time. Value-added time The time in which useful work is actually being done on the unit. Total average value of inventory The total average investment in raw material, work-in-process, and finished goods inventory. This is valued at the cost to the firm. Inventory turn The cost of goods sold divided by the total average value of inventory.

6 Days-of-supply The number of days of inventory of an item. If an item were not replenished, this would be the numbers of days until the firm would run out of the item (on average). Also, the inverse of inventory turn expressed in days. Little's law States a mathematical relationship between throughput rate, flow time, and the amount of work-in-process inventory. Flow time is equal to work-in-process divided by the throughput rate. Job design The function of specifying the work activities of an individual or group in an organizational setting. Sustainable workplace A workplace that fully supports the organization without compromising future generations. Specialization of labor Simple, repetitive jobs are assigned to each worker. Job enrichment Specialized work is made more interesting by giving the worker a greater variety of tasks or by getting a worker involved in planning, organization, and inspection. Sociotechnical systems A philosophy that focuses on the interaction between technology and the work group. The approach attempts to develop jobs that adjust the production process technology to the needs of the worker and work group. Work measurement Job analysis for the purpose of setting time standards. Time study Separation of a job into measurable parts, with each element timed individually. The individual times are then combined, and allowances are added to calculate a standard time. Work sampling Analyzing a work activity by observing an activity at random times. Statements about how time is spent during the activity are made from these observations. Predetermined motiontime data systems Systems for deriving a time for a job by summing data from tables of generic movement times developed in the laboratory.

7 (PMTS) Elemental data Used to derive a job time by summing times from a database of similar combinations of movements. Normal time The time that a normal operator would be expected to take to complete a job without the consideration of allowances. Standard time Calculated by taking the normal time and adding allowances for personal needs, unavoidable work delays, and worker fatigue.

8 CAPITOLO 5 Lead time The time needed to respond to a customer order. Customer order decoupling point The place where inventory is positioned to allow processes or entities in the supply chain to operate independently. Make-to-stock A production environment where the customer is served on-demand from finished goods inventory. Assemble-to-order A production environment where preassembled components, subassemblies, and modules are put together in response to a specific customer order. Make-to-order A production environment where the product is built directly from raw materials and components inresponse to a specific customer order. Engineer-to-order Here the firm works with the customer to design the product, which is then made from purchased materials, parts, and components. Lean manufacturing The attempt to achieve high customer service with minimum levels of inventory investment. Project layout The product, because of its sheer bulk or weight, remains fixed in a location. Equipment is moved to the product rather than vice versa. Workcenter A process structure suited for low-volume production of a great variety of nonstandard products. Workcenters sometimes are referred to as departments and are focused on a particular type of operation Manufacturing cell An area where simple items that are similar in processing requirements are produced. Assembly line A process structure designed to make discrete parts. Parts are moved through a set of specially designed workstations at a controlled rate.

9 Continuous process An often automated process that converts raw materials into a finished product in one continuous process. Product process matrix Shows the relationships between different production units and how they are used depending on product volume and the degree of product standardization. Workcenter Also called a job-shop or functional layout; a format in which similar equipment or functions are grouped together. Assembly line Equipment or work processes are arranged according to the progressive steps by which the product is made. Manufacturing cell Groups dissimilar machines to work on products that have similar shapes and processing requirements. Project layout The product remains at one location, and equipment is moved to the product. Systematic layout planning (SLP) A technique for solving process layout problems when the use of numerical flow data between departments is not practical. The technique uses an activity relationship diagram that is adjusted by trial and error until a satisfactory adjacency pattern is obtained. Workstation cycle time The time between successive units coming off the end of an assembly line. Assembly-line balancing The problem of assigning all the tasks to a series of workstations so that each workstation has no more than can be done in the workstation cycle time, and so that idle time across all workstations is minimized. Precedence relationship The order in which tasks must be performed in the assembly process

10 CAPITOLO 6 Service package A bundle of goods and services that is provided in some environment. High and low degree of customer contact The physical presence of the customer in the system and the percentage of time the customer must be in the system relative to the total time it takes to perform the service. Service blueprint The flowchart of a service process, emphasizing what is visible and what is not visible to the customer. Poka-yokes Procedures that prevent mistakes from becoming defects. They are commonly found in manufacturing but also can be used in service processes. Service guarantee A promise of service satisfaction backed up by a set of actions that must be taken to fulfill the promise. Queue A line of waiting persons, jobs, things, or the like. Queuing system Consists of three major components: (1) the source population and the way customers arrive at the system, (2) the serving systems, and (3) how customers exit the system. Arrival rate The expected number of customers that arrive each period. Exponential distribution A probability distribution often associated with interarrival times. Poisson distribution Probability distribution often used to describe the number of arrivals during a given time period. Service rate The capacity of a server measured in number of units that can be processed over a given time period.

11 CAPITOLO 7 Total quality management (TQM) Managing the entire organization so that it excels on all dimensions of products and services that are important to the customer. Malcolm Baldrige National Quality Award An award established by the U.S. Department of Commerce and given annually to companies that excel in quality. Design quality The inherent value of the product in the marketplace. Conformance quality The degree to which the product or service design specifications are met. Quality at the source The person who does the work is responsible for ensuring that specifications are met. Dimensions of quality Criteria by which quality is measured. Cost of quality Expenditures related to achieving product or service quality such as the costs of prevention, appraisal, internal failure, and external failure. Six Sigma A statistical term to describe the quality goal of no more than four defects out of every million units. Also refers to a quality improvement philosophy and program DPMO (defects per million opportunities) A metric used to describe the variability of a process. DMAIC An acronym for the D efine, M easure, A nalyze, I mprove, and C ontrol improvement methodology followed by companies engaging in Six-Sigma programs. PDCA cycle Also called the "Deming cycle or wheel"; refers to the plan do check act cycle of continuous improvement.

12 Continuous improvement The philosophy of continually seeking improvements in processes through the use of team efforts. Kaizen Japanese term for continuous improvement. Lean Six Sigma Combines the implementation and quality control tools of Six Sigma with the materials management concept of lean manufacturing with a focus on reducing cost by lowering inventory to an absolute minimum. Black belts, master black belts, green belts Terms used to describe different levels of personal skills and responsibilities in Six-Sigma programs. Fail-safe or poka-yoke Simple practices that prevent errors or provide feedback in time for the worker procedures to correct errors. ISO 9000 Formal standards used for quality certification, developed by the International Organization for Standardization. External benchmarking Looking outside the company to examine what excellent performers inside and outside the company's industry are doing in the way of quality. Assignable variation Deviation in the output of a process that can be clearly identified and managed. Common variation Deviation in the output of a process that is random and inherent in the process itself. Upper and lower specification or tolerance limits The range of values in a measure associated with a process that are allowable given the intended use of the product or service. Capability index (C pk) The ratio of the range of values produced by a process divided by the range of values allowed by the design specification.

13 Statistical process control (SPC) Techniques for testing a random sample of output from a process to determine whether the process is producing items within a prescribed range. Attributes Quality characteristics that are classified as either conforming or not conforming to specification. Variables Quality characteristics that are measured in actual weight, volume, inches, centimeters, or other measure

14 CAPITOLO 8 Operations consulting Assisting clients in developing operations strategies and improving production processes. "Finders" Partners or senior consultants whose primary function is sales and client relations. "Minders" Managers of a consulting firm whose primary function is managing consulting projects. "Grinders" Junior consultants whose primary function is to do the work. Reengineering (or business process reengineering) The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, service, and speed

15 CAPITOLO 9 Project A series of related jobs usually directed toward some major output and requiring a significant period of time to perform. Project management Planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project. Pure project A structure for organizing a project where a self-contained team works full time on the project. Functional project A structure where team members are assigned from the functional units of the organization. The team members remain a part of their functional units and typically are not dedicated to the project. Matrix project A structure that blends the functional and pure project structures. Each project uses people from different functional areas. A dedicated project manager decides what tasks need to be performed and when, but the functional managers control which people to use. Project milestone A specific event in a project. Work breakdown structure The hierarchy of project tasks, subtasks, and work packages. Activities Pieces of work within a project that consume time. The completion of all the activities of a project marks the end of the project. Gantt chart Shows in a graphic manner the amount of time involved and the sequence in which activities can be performed. Often referred to as a bar chart. Earned value management Technique that combines measures of scope, schedule, and cost for evaluating project progress.

16 Critical path The sequence of activities in a project that forms the longest chain in terms of their time to complete. This path contains zero slack time. It is possible for there to be multiple critical paths in a project. Techniques used to find the critical path are called CPM or Critical Path Method techniques. Immediate predecessor Activity that needs to be completed immediately before another activity. Slack time The time that an activity can be delayed; the difference between the late and early start times of an activity. Early start schedule A project schedule that lists all activities by their early start times. Late start schedule A project schedule that lists all activities by their late start times. This schedule may create savings by postponing purchases of material and other costs associated with the project. Time cost models Extension of the critical path models that considers the trade-off between the time required to complete an activity and cost. This is often referred to as "crashing" the project.

17 CAPITOLO 10 Strategic sourcing The development and management of supplier relationships to acquire goods and services in a way that aids in achieving the immediate needs of a business. Vendor managed inventory When a customer allows the supplier to manage an item or group of items Bullwhip effect The variability in demand is magnified as we move from the customer to the producer in the supply chain. Functional products Staples that people buy in a wide range of retail outlets, such as grocery stores and gas stations. Innovative products Products such as fashionable clothes and personal computers that typically have a life cycle of just a few months. Outsourcing Moving some of a firm's internal activities and decision responsibility to outside providers. Logistics Management functions that support the complete cycle of material flow: from the purchase and internal control of production materials; to the planning and control of work-in-process; to the purchasing, shipping, and distribution of the finished product. Total cost of ownership (TCO) Estimate of the cost of an item that includes all the costs related to the procurement and use of the item including disposing of the item after its useful life. Inventory turnover and weeks of supply Measures of supply chain efficiency that are mathematically the inverse of one another. Cost of goods sold The annual cost for a company to produce the goods or services provided to customers.

18 Average aggregate inventory value The total value of all items held in inventory for the firm, valued at cost. Weeks of supply A measure of how many weeks' worth of inventory is in the system at a particular point in time.

19 CAPITOLO 11 Logistics (1) In an industrial context, the art and science of obtaining, producing, and distributing material and product in the proper place and in the proper quantities. (2) In a military sense (where it has greater usage), its meaning also can include the movement of personnel. International logistics All functions concerned with the movement of materials and finished goods on a global scale. Third-party logistics company A company that manages all or part of another company's product delivery operations. Cross-docking An approach used in consolidation warehouses where rather than making larger shipments, large shipments are broken down into small shipments for local delivery in an area. Hub-and-spoke systems Systems that combine the idea of consolidation and that of cross-docking. Free trade zone A closed facility (under the supervision of government customs officials) into which foreign goods can be brought without being subject to the payment of normal import duties. Trading bloc A group of countries that agree on a set of special arrangements governing the trading of goods between member countries. Companies may locate in places affected by the agreement to take advantage of new market opportunities. Factor-rating system An approach for selecting a facility location by combining a diverse set of factors. Point scales are developed for each criterion. Each potential site is then evaluated on each criterion and the points are combined to calculate a rating for the site. Transportation method A special linear programming method that is useful for solving problems involving transporting products from several sources to several destinations.

20 Centroid method A technique for locating single facilities that considers the existing facilities, the distances between them, and the volumes of goods to be shipped.

21 CAPITOLO 12 Lean production Integrated activities designed to achieve high-volume, high-quality production using minimal inventories of raw materials, work-in-process, and finished goods. Customer value In the context of lean, something for which the customer is willing to pay. Waste Something that does not add value from the customer's perspective. Value stream These are the value-adding and non-value-addingactivities required to design, order, and provide a product from concept to launch, order to delivery, and raw materials to customers. Waste reduction The optimization of value-adding activities and elimination of non-value-adding activities that are part of the value stream. Value stream mapping A graphical way to analyze where value is or is not being added as material flows through a process. Kaizen Japanese philosophy that focuses on continuous improvement. Preventive maintenance Periodic inspection and repair designed to keep equipment reliable. Group technology A philosophy in which similar parts are grouped into families, and the processes required to make the parts are arranged in a specialized work cell. Quality at the source Philosophy of making factory workers personally responsible for the quality of their output. Workers are expected to make the part correctly the first time and to stop the process immediately if there is a problem. Level schedule A schedule that pulls material into final assembly at a constant rate. Freeze window The period of time during which the schedule is fixed and no further changes

22 are possible. Backflush Calculating how many of each part were used in production and using these calculations to adjust actual on-hand inventory balances. This eliminates the need to actually track each part used in production. Uniform plant loading Smoothing the production flow to dampen schedule variation. Kanban and the kanban pull system An inventory or production control system that uses a signaling device to regulate flows Kanban and the kanban pull system An inventory or production control system that uses a signaling device to regulate flows.

23 CAPITOLO 13 Strategic forecasts Medium and long-term forecasts that are used to make decisions related to design and plans for meeting demand. Tactical forecasts Short-term forecasts used as input for making day-to-day decisions related to meeting demand. Dependent demand Requirements for a product or service caused by the demand for other products or services. This type of internal demand does not need a forecast, but can be calculated based on the demand for the other products or services. Independent demand Demand that cannot be directly derived from the demand for other products. Time series analysis A type of forecast in which data relating to past demand are used to predict future demand. Linear regression forecasting A forecasting technique that assumes that past data and future projections fall around a straight line. Exponential smoothing A time series forecasting technique in which each increment of past demand data is decreased by (1 -α). Smoothing constant alpha (α) The parameter in the exponential smoothing equation that controls the speed of reaction to differences between forecasts and actual demand. Smoothing constant delta (δ) An additional parameter used in an exponential smoothing equation that includes an adjustment for trend. Mean absolute deviation (MAD) The average forecast error using absolute values of the error of each past forecast.

24 Mean absolute percent error The mean absolute deviation divided by the average demand. The (MAPE) average error expressed as a percentage of demand. Tracking signal A measure that indicates whether the forecast average is keeping pace with any genuine upward or downward changes in demand. Causal relationship A situation in which one event causes another. If the event is far enough in the future, it can be used as a basis for forecasting. Collaborative Planning, Forecasting, and Replenishment (CPFR) An Internet tool to coordinate forecasting, production, and purchasing in a firm's supply chain.

25 CAPITOLO 14 Aggregate operations plan Translating annual and quarterly business plans into labor and production output plans for the intermediate term. The objective is to minimize the cost of resources required to meet demand. Sales and operations planning A term that refers to the process that helps companies keep demand and supply in balance. The terminology is meant to capture the importance of crossfunctional work. Long-range planning Activity typically done annually and focusing on a horizon of a year or more. Intermediate-range Activity that usually covers a period from 3 to 18 months with weekly, monthly, planning or quarterly time increments. Short-range planning Planning that covers a period less than six months with either daily or weekly increments of time. Production rate The number of units completed per unit of time. Workforce level The number of production workers needed each period. Inventory on hand Unused inventory carried from a previous period. Production planning strategies Plans that involve trade-offs among workforce size, work hours, inventory, and backlogs. Pure strategy A plan that uses just one of the options available for meeting demand. Typical options include chasing demand, using a stable workforce with overtime or parttime work, and constant production with shortages and overages absorbed by inventory.

26 Mixed strategy A plan that combines options available for meeting demand. Yield management Allocating the right type of capacity to the right type of customer at the right price and time to maximize revenue or yield.

27 CAPITOLO 15 Inventory The stock of any item or resource used in an organization. Independent demand The demands for various items are unrelated to each other. Dependent demand The need for any one item is a direct result of the need for some other item, usually an item of which it is a part. Fixed order quantity model (or Q-model) An inventory control model where the amount requisitioned is fixed and the actual ordering is triggered by inventory dropping to a specified level of inventory. Fixed time period model (or P-model) An inventory control model that specifies inventory is ordered at the end of a predetermined time period. The interval of time between orders is fixed and the order quantity varies. Inventory position The amount on-hand plus on-order minus backordered quantities. In the case where inventory has been allocated for special purposes, the inventory position is reduced by these allocated amounts. Safety stock The amount of inventory carried in addition to the expected demand. Cycle counting A physical inventory-taking technique in which inventory is counted on a frequent basis rather than once or twice a year.

28 CAPITOLO 16 Material requirements planning (MRP) The logic for determining the number of parts, components, and materials needed to produce a product. MRP also provides the schedule specifying when each of these materials, parts, and components should be ordered or produced. Master production schedule (MPS) A time-phased plan specifying how many and when the firm plans to build each end item. Available to promise A feature of MRP systems that identifies the difference between the number of units currently included in the master schedule and the actual (firm) customer orders. Bill of materials (BOM) A computer file that contains the complete product description, listing the materials, parts, and components and the sequence in which the product is created. Net change system An MRP system that calculates the impact of a change in the MRP data (the inventory status, BOM, or master schedule) immediately. This is a common feature in current systems

29 CAPITOLO 17 Work center An area in a business in which productive resources are organized and work is completed. Infinite loading Work is assigned to a work center based on what is needed over time. Capacity is not considered. Finite loading Each resource is scheduled in detail using the setup and run time required for each order. The system determines exactly what will be done by each resource at every moment during the working day. Forward scheduling Schedules from now into the future to tell the earliest that an order can be completed. Backward scheduling Starts from some date in the future (typically the due date) and schedules the required operations in reverse sequence. Tells the latest time when an order can be started so that it is completed by a specific date. Machine-limited process Equipment is the critical resource that is scheduled. Labor-limited process People are the key resource that is scheduled. Dispatching The activity of initiating scheduled work. Parameters Properties of a simulation model that are fixed. Variables Properties of a simulation model that are allowed to vary throughout the simulation run. The results of the simulation are analyzed through these variables.

30 Decision rules Logic that controls the behavior of a simulation. Distributions The probability distributions that are used to model the random events in a simulation. Time incrementing The process of moving through time in a simulation. Run length (or run time) Sequencing The duration of a simulation in simulated time or number of events. The process of determining which job to start first on a machine or work center. Priority rules The logic used to determine the sequence of jobs in a queue. Johnson's rule A sequencing rule used for scheduling any number of jobs on two machines. The rule is designed to minimize the time required to complete all the jobs. Assignment method A special case of the transportation method of linear programming that is used to allocate a specific number of jobs to the same number of machines. Shop-floor (production activity) control A system for utilizing data from the shop floor to maintain and communicate status information on shop orders and work centers. Input/output (I/O) control Work being released into a work center should never exceed the planned work output. When the input exceeds the output, backlogs build up at the work center that increase the lead time.

31 CAPITOLO 18 Synchronous manufacturing A production process coordinated to work in harmony to achieve the goals of the firm. Throughput The rate at which money is generated by the system through sales (Goldratt's definition). Inventory All the money that the system has invested in purchasing things it intends to sell (Goldratt's definition). Operating expenses All the money that the system spends to turn inventory into throughput (Goldratt's definition). Productivity All the actions that bring a company closer to its goals (Goldratt's definition). Bottleneck Any resource whose capacity is less than the demand placed upon it (Goldratt's definition). Nonbottleneck Any resource whose capacity is greater than the demand placed on it (Goldratt's definition). Capacity-constrained resource (CCR) A resource whose utilization is close to capacity and could be a bottleneck if not scheduled carefully (Goldratt's definition).