Study Guide - University of Phoenix
Week 1 Study Guide: Introduction to Process Design
Readings and Key Terms
• Ch. 3 of Operations and Supply Chain Management
o Core competency
o House of Quality
o Value analysis/value engineering (VA/VE)
o Quality function deployment (QFD)
o Ecodesign
• Ch. 6
o Lead time
o Customer order de-coupling point
o Make-to-stock
o Assembly-to-order
o Make-to-order
o Engineer-to-order
o Lean manufacturing
o Workcenter
o Manufacturing cell
o Assembly line
o Continuous process
o Product-process matrix
o Breakeven analysis
• Ch. 7
o Service Triangle
o Service package
o High and low degree of customer contact
o Service blueprint
o Poka-yoke
o Service guarantee
o Pure virtual customer contact
o Mixed virtual and actual customer contact
Content Overview
• The product design process
o Core competency
• Provides potential access to a wide variety of markets
• It increases perceived customer benefits
• It is hard for competitor to imitate
o Product development process
• Phase 0: Planning
• Phase 1 Concept development
• Phase 2: System level design
• Phase 3: Design detail
• Phase 4: Testing and refinement
• Phase 5: Production ramp-up
o Economic analysis of product development projects
• Build a base-case financial model
• Understanding trade-offs
o Designing for the customer
• Quality function deployment (QFD)
• Value Analysis/Value Engineering
o Designing service products
• Service experience fit
• Operational fit
• Financial fit
• Production Processes
o Make-to-stock
• Shortest customer lead time
• Inventory may be used to buffer demand uncertainty
o Assembly-to-Order
• Have sub-assemblies in stock but postpone final assembly until receive order
• Relatively short leadtimes due to postponement strategy
o Make-to-Order
• Do not start assembly until receive order; may have components or piecepart in stock.
• Inventory held at component or piecepart level
o Engineer-to-Order
• Longest lead-times
• No inventory is able to be stored as engineering design may require components or pieceparts not yet identified.
• Production process organization
o Project layout
• Manufacturing equipment is moved to product rather than vice versa.
• Examples include construction of homes or movie shoting lots.
o Workcenter
• Sometimes referred to as job shop
• Product travels from workcenter to workcenter; where the proper machines are located for each operation
o Manufacturing cell
• Dedicated areas where products that are similar in processing requirements are produced.
• Are dedicated to a limited range of products
o Assembly line
• Work processes are arranged according to the progressive steps by which the product is made
• The path for each par tis a straight line.
• Discrete products are made by moving from workstation to workstation at a controlled rate.
o Continuous process
• Flow process is continuous, for example, liquids.
• Usually highly automated constituting one integrated “machine which may operate 24 hours per day to avoid expensive shutdowns and start-ups.
• Manufacturing Process Flow Design
o Assembly (or Gozinto) chart
• Exploded view of the product showing its component parts
o Operations and route sheet
• Specifies operations and process routing for a particular part.
• Conveys such information as the type of equipment, tooling and operations required to assemble the complete part.
o Process flowchart
• Outlines what happens to the product as it progresses through the productive facility.
• Process flowchart is analyzed; searching to identify any activities that can be minimized or eliminated to save time and resources.
• Service package
o Supporting facility
• Physical resources that must be in place before service can be offered
• Examples include golf course, ski lift, airline and auto repair facility
o Facilitation goods
• Materials purchased by buyer or brought in by customer
• Examples include golf clubs, skis, beverages and auto parts.
o Information
• Operations data or information that is provided by the customer.
• Examples include tee off times, weather reports, and medical records.
o Explicit services
• Benefits are readily observable.
• Examples are the response time of an ambulance, air conditioning in a hotel room and a smoother running car after a tune up.
o Implicit services
• Psychological benefits that the customer may sense only vaguely or in extrinsic features of the service.
• Examples include status of the degree from an Ivy League school, the privacy of a loan office or worry-free auto repair.
• Service System Design Matrix
o Degree of customer contact
• Buffered core
o Physically separated from customer
o Examples include mail contact or internet contact
• Permeable system
o Pena ratable by the customer
o Examples include phone or face-to-face (tight specs) contact
• Reactive system
o Both penatratable and reactive
o Examples include face-to-face with loose specs or total customization
o Sale opportunity
• High
• Low
o Production efficiency
• High
• Low
• Service Blueprinting and Fail-safing
o Service process design
• Service blueprint flowchart
• Describes features of the service design
• Applies poka-yoke (or fail-safing) in services – the three T’s
o Apply poka-yoke (or fail-safing) in services – the three T’s
• Task to be done
• Treatment of customer
• Tangible features
• Service designs
o Production-Line Approach
• Treats delivery of the product as a manufacturing product rather than a service
• Examples include fast food such as McDonald’s, local car wash.
o Self-Service Approach
• Customer takes on a great role and is part of the process
• Examples include automatic teller machines, salad bar, self-serve gas stations.
o Personal Attention Approach
• Develop relationship with the customer
• Examples include Nordstrom’s, Ritz- Carlton.
• Strategies for managing customer-introduced variability
o Classic accommodation
• Make sure plenty of employees are on hand
• Make sure employees on hand can adapt to customers varied skill levels
o Low Cost accommodation
• High low cost labor; automate the process; outsource; self-serve options
• Create self-serve options which require no skills
o Classic Reduction
• Require reservations; provide off peak pricing; limit service availability
• Require customers to increase their level of capability before they use the service
o Uncompromised Reduction
• Create complementary demand to smooth arrivals without requiring customers to change their behavior.
• Target customers based on their capability
Week 2 Study Guide: Process Design
Readings and Key Terms
• Ch. 4 and 4 A of Operations and Supply Chain Management
o Strategic capacity planning
o Capacity
o Best operating level
o Economies of scale
o Focused factory
o Economies of scope
o Capacity cushion
o Learning curve
o Individual learning curve
o Organizational learning curve
• Ch. 5
o Process
o Cycle time
o Utilization
o Buffering
o Blocking
o Staving
o Bottleneck
o Make-to-order
o Make-to-stock
o Pacing
o Productivity
o Efficiency
o Run time
o Setup time
o Operation time
o Flow time
o Throughput rate
o Process velocity or throughput ratio
o Value-added time
o Total average value of inventory
o Inventory turn
o Days-of-supply
o Little’s Law
• Ch. 12
o Logistics
o International logistics
o Third party logistic
o Cross-docking
o Hub-and-spoke systems
o Free trade zone
o Trading bloc
o Transportation method
o Centroid method
• Ch. 13
o Lean Production
o Customer value
o Value stream
o Value stream mapping
o Quality at the source
o Backflush
o Kanban and the kanban pull system
o Level schedule
o Group technology
o Kaizen
Content Overview
• Capacity Planning Concepts
o Economies and diseconomies of scale
o Capacity focus
• Focus on limited set of production activities
• Consider corporate objective which focus on competitive advantage
o Capacity flexibility
• Flexible plants with quick change over times
• Flexible processes with easy equipment setup.
• Flexible, cross-trained workers
o Capacity Planning
• Considerations in changing capacity
• Maintaining system balance
• Frequency of capacity additions
• External sources of operations and supply capacity
• Decreasing capacity
• Determining capacity requirements
• Using decision tree to evaluate capacity alternatives
o Planning service capacity
• Capacity planning in service versus manufacturing
o Time
o Location
o Volatility of demand
• Capacity utilization and service quality
• Process Analysis
o Types of process
• Multi-stage versus single stage
• Make to Stock versus Make to Order
o Process performance metrics
• Understand how company calculates metrics before making decisions
• Performance metrics show trends in productivity and sales
• Understand metric application and industry standards
o Process flowcharting
o Production Process Mapping and Little’s Law
o Process Flow Time Reduction
• Perform activities in parallel
• Change the sequence of activities
• Reduce interruptions
• Logistics/Distribution
o Logistics Decision Matrix
o Factory location
• Factory location issues
• Factory location decision methods
o Service facilities location considerations
• Lean Supply Chain
o How lean applies
• Lean production
• Lean logic
• Lean suppliers
• Lean procurement
• Lean manufacturing
• Lean warehousing
• Lean logistics
• Lean customers
o Toyota Production System (TPS)
• Elimination of Waste
• Respect for People
o Lean supply chain principles
• Lean layouts
o Group technology
o Quality at the source
o JIT Production
• Lean Production schedules
o Uniform plant loading
o Kanban production control system
o Determination of number of Kanbans needed
o Minimize setup times
• Lean supply chains
o Specialized plants
o Work with suppliers
o Build a lean supply chain
o Lean services
• Organize problem-solving groups
• Upgrade housekeeping
• Upgrade quality
• Clarify process flows
• Revise equipment and process technologies
• Level the facility load
• Eliminate unnecessary activities
• Reorganize physical configuration
• Introduction demand-pull scheduling
• Develop supplier networks
• Value Stream Mapping
o Flowcharting tool
o Creation of lean process
• Full understanding of business
• Production process
• Materials flow
o Current state
o Future state
• Cost Impact and Payoff Analysis
o Decision trees
o Stakeholder analysis
o Balanced scorecard
o Process dashboards
• Business Process Re-engineering
o Organize around outcomes, not tasks.
o Have those who use the output of the process perform the process
o Merge information processing work into real work that produces information
o Link parallel activities
o Put the decision point where the work is performed
o Capture information once – at the source
Week 3 Study Guide: Supply Chain Design
Readings and Key Terms
• Ch. 11 of Operations and Supply Chain Management
o Strategic sourcing
o Vendor managed inventory.
o Bullwhip effect
o Functional products
o Innovative products
o Outsourcing
o Logistics
o Total cost of ownership (TOC)
o Inventory turnover and weeks of supply
o Cost of goods sold
o Average aggregate inventory value
o Weeks of supply
• Ch. 15
o Strategic forecasts
o Tactical forecasts
o Dependent demand
o Independent demand
o Tracking signal
o Causal relationship
o Exponential smoothing
• Ch. 16
o Aggregate operations plan
o Sales and operations planning
o Inventory on hand
o Yield management
o Production rate
o Long-range planning
o Intermediate-range planning
o Short-range planning
• Ch. 17
o Inventory
o Independent demand
o Dependent demand
o Safety stock
o Cycle counting
• Ch. 18
o Materials requirement planning (MRP)
o Master resource planning (MRPII)
o Master production schedule (MPS)
o Available to promise (ATP)
o Bill of Materials (BOM)
Content Overview
• Capacity Utilization
o Capacity Utilization Rate
• Effective capacity = Design capacity x Utilization
o Capacity Planning
• Workforce scheduling
• Quality management and process improvement
o Gap errors and bottlenecks
o Service quality
o Performance Dashboards
• Customer service
• Operations
• Key processes
• Supplier Management Relationships and Performance
o Strategic sourcing
• The bullwhip effect
• Demand and supply uncertainty characteristics
o Outsourcing
• Financial reasons
• Improvement reasons
• Organizational reasons
• Trade reasons
• Green reasons
• Sourcing performance metrics
o Measuring sourcing performance
• Inventory turnover
• Average aggregate inventory value
• Demand Management and Forecasting
o Demand management
• Independent demand
• Dependent demand
o Types of forecasting methods
• Linear regression
• Simple moving average
• Weighted moving averag4e
• Simple exponential smoothing
• Exponential smoothing with trend
o Forecast errors
• Sources of errors
• Measurement of errors
• Sales and Operations Planning
o Sales and Operations Planning
• Long-range planning
• Intermediate range planning
• Short-range planning
• Aggregate production planning
o Production Planning Strategies
• Chase strategy
• Stable workforce – variable hours
• Level strategy
o Relevant costs
• Basic production costs
• Costs associated with changes to production rate
• Inventory holding costs
• Backordering costs
o Aggregate production planning and services
o Yield Management
• Inventory Control
o Purpose of inventory
• Maintain independence of operation
• Meet variation in product demand
• Allow flexibility in production scheduling
• Safeguard for variation in raw materials delivery time
• Take advantage of economic purchase order size
o Inventory costs
• Holding or carrying costs
• Set up costs
• Ordering costs
• Shortage costs
o Inventory Systems
• Single –period inventory model
• Multi-period inventory system
• Fixed order quantity models
• Fixed order quantity with safety stock
• Fixed time period with safety stock
o Inventory control and Supply Chain Management
• Price break models
• ABC inventory planning
• Inventory accuracy and cycle counting
• Materials Requirements Planning
o Master Production Scheduling (MPS)
• Time fences
• Available to promise
o Material Requirements Planning (MRP)
• Industry applications
• Product hierarchy (product tree)
• MRP example
• Forecasting Demand
• Developing master production schedule (MPS)
• Bill of Material (Product Structure)
• Inventory Records
• Materials Requirements Plan
o Lot sizing
• Lot-For-Lot
• Economic order quantity
• Least total cost
• Least unit cost
• Choosing the best lot size
Week 4 Study Guide: Project Management
Readings and Key Terms
• Ch. 10 of Operations and Supply Chain Management
o Project
o Project management
o Pure project
o Functional project
o Matrix project
o Work breakdown structure
o Earned value management
o Critical path
o Slack time
o Early start schedule
o Late start schedule
o Time-cost models
• Ch. 12 of Survival Guide for Project Managers
o Project plan
o Initiation phase
o Planning phase
o Work breakdown structure (WBS)
o Project team
• Ch. 13 of Survival Guide for Project Managers
o Implementation/Execution phase
o Monitoring and controlling
o Variance
o Scope
o Risk
o Risk Management
• Ch. 14 of Survival Guide for Project Managers
o Termination/Closing phase
o Project audit
o Project audit report
Content Overview
• Implementation
o Responsibility charts
o Project management tools and techniques
• Project Management
o Right mix of projects to support company’s strategy
• Breakthrough
• Platform
• Derivative
o Structuring Projects
• Pure project
• Functional project
• Matrix project
• Project planning
o Initiation
• Project starts as a statement of work (SOW)
• Project RASIC (roles/responsibilities)
• Project kickoff
o Planning
• SOW is broken down into tasks, sub-tasks, work packages and milestones
• Work breakdown structure outlines the hierarch of the tasks, sub-tasks, work packages and milestones
• Risk management
• Communication plan
• Quality plan
o Execution
o Monitoring and Control
• Control charts, referred to as Gantt charts, are used to monitor progress of the project
• Earned Value Management
• Critical Path Method
• Time cost models and Project Crashing
o Closing
• Get signoff from customer
• Close accounts and reassign project team members
Week 5 Study Guide: Introduction to Process Improvement
Readings and Key Terms
• Ch. 9 of Operations and Supply Chain Management
o Total Quality Management (TQM)
o Design Quality
o Conformance quality
o Quality at the source
o Dimensions of Quality
o Cost of Quality
o Six Sigma
o DMAIC.
o PDCA cycle
o Continuous Improvement
o Kaizen
o Lean Six Sigma
o Fail-safe or Poka-yoke procedures
o ISO-9000
o External benchmarking
Content Overview
• International Standards
o ISO 9000
o ISO 14000
o Three forms of certification
• First party
• Second party
• Third party
• Total Quality Management
o Quality specifications
• Conformance quality
• Quality at the source
• Dimensions of quality
o Cost of quality
• Appraisal costs
• Prevention costs
• Internal failure costs
• External failure costs
• Six Sigma
o Methodology
• DMAIC
• PDCA cycle
o Analytical tools
• Flow charts
• Run charts
• Pareto charts
• Check sheets
• Cause and effect diagrams
• Opportunity flow diagram
• Control charts
• Failure mode and effect analysis
• Design of Experiments (DOE)
o Shingo System: Fail-safe design (poka yoke)
Week 6 Study Guide: Process Improvement
Readings and Key Terms
• Ch. 9 of Operations and Supply Chain Management
o Total Quality Management (TQM)
o Design Quality
o Conformance quality
o Malcolm Baldrige National Quality Award
o Quality at the source
o Dimensions of Quality
o Cost of Quality
o Six Sigma
o DMAIC
o PDCA cycle
o Continuous Improvement
o Kaizen
o Lean Six Sigma
o Fail-safe or Poka-yoke procedures
o ISO-9000
o External benchmarking
• Ch. 20
o Synchronous manufacturing
o Throughput
o Operating Expenses
o Productivity
o Bottleneck
o Nonbottleneck
o Capacity-constrained resource (CCR)
Content Overview
• Total Quality Management
o Quality specifications
• Conformance quality
• Quality at the source
• Dimensions of quality
o Cost of quality
• Appraisal costs
• Prevention costs
• Internal failure costs
• External failure costs
• Six Sigma
o Methodology
• DMAIC
• PDCA cycle
• Continuous improvement
• Kaizen
o Analytical tools p293
• Flow charts
• Run charts
• Pareto charts
• Check sheets
• Cause and effect diagrams
• Control charts
• Failure mode and effect analysis
• Design of Experiments (DOE)
o Shingo System: Fail-safe design (poka yoke)
• Constraint Management
o Performance Measurements
• Financial Measurements
• Net profit
• Return on Investment (ROI)
• Cash flow
• Operational Measurements
• Throughput
• Inventory
• Productivity
o Bottlenecks and Capacity Constraints
• Time components
• Finding the bottleneck
• Saving time
• Batch sizes
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