Supply Chain Management Test 3

Customer management
the design and execution of the processes that provide customers with products and services they desire
Customer service
a supplier’s ability to provide product availability, led time performance, and service reliability. Involves specifying the firms commitment to availability, operational performance, and reliability
Product availability
the capacity to have inventory present when and where it is desired by a customer
Unit Fill rate
% of ordered units delivered
Order fill rate
% orders shipped complete
Lead time
the time that passes between the beginning and ending of a set of activities
Design, order, procurement, production, delivery, to calculate you multiply all of these together
Different market orientations have different elements of Order to deliver lead time
Service reliability
a firms ability to perform all order related activities order free
Perfect order
delivery without failure in any order attribute: complete, on time, damage free, and documentation correct
Customer satisfaction
meeting or exceeding customers expectations including reliability, responsiveness, access, communication, credibility, security, courtesy, competence, tangibles, and knowing the customer
Satisfaction gaps
• Knowledge- understanding of customer needs
• Standards- internal performance and customer expectations
• Performance- standard and actual performance
• Communication- actual performance and communications about actual performance
• Perception-customers view of performance and actual performance
• Satisfaction- customers perceptions and expectations of performance
Customer success
requires suppliers to have long term relationship focus, comprehensive knowledge of customer needs, considerations of customer’s customers, adapt product production and distribution
Customer relationship management
technology enabled data gathering about customers to develop strategic relationships (graph on back)
stockout
situation when a firm has depleted inventory that is supposed to be in stock
fill rate
a measure of the impact of stockouts over time or over multiple orders from customers
unit fill rate
total units delivered/ total units ordered
line fill rate
number of order lines delivered complete/ total order lines
order fill rate
a measure of the percentage of orders that are shipped complete with all items ordered by a customer
order fill rate
total complete orders delivered/ total orders
order to delivery
OTD
order to delivery lead time
the time that passes from the instant the customer places an order until the instant that the customer receives the product
engineer to order
ETO
Make to order
MTO
Assemble to order
ATO
MTS
Make to stock
bad
bad
bad
bad
bad
bad
bad
bad
bad
bad
bad
bad
Customer relationship management
CRM
Supply management
the identification, acquisition, and management of inputs and supplier relationships that a firm needs to attain its strategic objectives, also called purchasing or procurement
Purchase price
amount paid to supplier
Acquisition costs
bringing it to customers location
Usage costs
warranty training, downtime, and maintenance
End of life costs
disposal, clean up, obsolesce
In sourcing
inputs from within the firm
Outsourcing
inputs form outside the firm
Make or buy decision
choosing between in sourcing or outsourcing
Breakeven analysis
total cost curves are assume to be linear and can be created using the basic formula y= a +bx
y
total cost
a
fixed cost per unit
b
variable cost per unit
Supply base optimization
number of suppliers to use, to few increases shortages and price risks, to many and makes supply management difficult
Ad-versial
characterized by distrust and limited communications
Arms length
limited to simple purchasing transactions
Acceptance of mutual goals
lacks the commitment of a full partnership
Full partnership
have close working prelateships, trust, mutual respect, and highly integrated operations
Competitive bidding
price is most important factor, specifications clear, high value, and several qualified sources
Request for proposal
RFP
Request for quote
RFQ
RFP or RFQ
describes what customer wants, describes the purchase requirements as specifically as possible
Weighted point model
establishes performance categories that are weighted by importance
Online reverse auctions
suppliers bid in real time for buyers business, suppliers can make multiple bids and is usually price focused
Negotiation
bargaining process of planning, reviewing, analyzing, and compromise to reach an agreement
Information sharing
buyers and suppliers need to hare data about demand, supply, and delivery
Electronic data interchange
EDI
EDI
structured secure mode of transmitting data
Supplier scorecard
track and report supplier performance in key areas
Supplier certification
assessment of supplier’s ability to meet buyer’s needs
Supplier relationship management
SRM
SRM
technology enabled data gathering about suppliers to mange strategic relationships
Institute of supply management
ISM
supply risk
the probability of an unplanned event that negatively affects a firms ability to serve its customers
Total cost of ownership
TCO
TCO
all of the costs incurred before, during, and after a purchase
social responsibility
a framework of measurable corporate policies and behaviors designed to benefit related communities
fixed costs per contract
costs incurred at the start of production or the beginning of a new contract
fixed costs per order
costs incurred each time an order is placed, regardless of the size of the order
variable costs
costs that change in proportion to the quantity of units produced or service delivered
spend analysis
a process that identifies what purchases are being made in an organization
purchase requisition
a document that communicated needs between the user and supply management
supply base optimization
the determination of the number of suppliers to use
weighted point model
establishes performance categories that are weighted according to importance
CPFR
supply chain members collaborate to meet customer demand while reducing supply chain inventory and costs
Vendor managed inventory
VMI
VMI
the supplier manages its customer’s inventory
supplier certification
an assessment that verifies effective procedures related to the buyers requirements
Independent demand
demand that is beyond control of the organization, car
Dependent demand
demand is driven by demand of anther item, tires
Materials requirements planning
MRP
MRP
computes demand for dependent items. A means for determining the number of parts, components, and materials needed to produce a product. Provides time scheduling information specifying when each of the materials parts, and components that should be ordered or produced.
Bill of materials
detailed description of an end item and list of all of its raw materials parts, and subassemblies. Mocular- subassemblies, Super- fractional options
master production schedule
MPS
MPS
the quantities of each finished product to be completed each period
Inventory records files
each inventory item carried as a separate file according to time buckets, pegging identifying each parent item that created demand
Master requirements planning system
based on production schedule, a material requirements planning system
• Creates schedules indentifying the specific parts and materials required to produce end items
• Determines exact unit numbers needed
• Determines the dates when orders fo a phased plan specifying how many and when the firm plans to build each end r those materials should be released, based on lead times
Time
a phased plan specifying how many and when the firm plans to build each end item
Frozen fence
no schedule changes allowed within this window
Moderately firm
specific changes allowed within product groups as long as parts are avail be
Flexible
significant variation allowed as long as overall capacity requirements remain at the same levels
Distribution Requirements Planning
DRP
DRP
computes demand for finished goods in the distribution system
Capacity requirements planning
CRP
CRP
determines if sufficient resources are available
MRP components
• Gross requirement- number needed per MPS (usage)
• Beginning inventory
• Ending inventory
• Net requirements- how short I might be (Gross req- beginning inv)
• Planned order receipts- number I expect to receive
• Planned order release- number of unites I need to order this week in order to be ready for next weeks demand
Enterprise resource planning systems
ERP
ERP
planning for a resource done form common database, allows decisions to be made from the enterprise perspective, everyone uses the same numbers. Major providers sap, jd Edwards, people soft, oracle
MRP
computes demand for dependent items.
MPS
the quantities of each finished product to be completed each period
Triple bottom line
TBL
TBL
full impact of activities on people, plant, profit, firms have responsibilities to all stakeholders
Bill of materials
BOM
BOM
a detailed description of an “end item” and list of all of its raw materials, parts, and subassemblies
time bucket
the individual time period for planning
planning horizon
the entire time period covered by the MPS
cumulative lead time
the longest lead time path in the BOM
available to promise
the part of planned production that is not committed to a customer
rough cut capacity planning
an estimation of the availability of the critical resources needed to support the MPS
inventory status file
a file that contains detailed inventory and procurement records
scheduled receipts
the quanitity that has been order but not yet received
lot for lot
an order for the exact amount needed
fixed order quantity
an order for the same amount each time
fixed order quantity
FOQ
periodic order quantity
POQ
POQ
an order for an amount that covers a fixed period of time
gross requirements
the total amount of an end item that is required
requirements explosion
the determination of how many additional units are needed
net requirements
the minimum amount needed in the period
planned order receipt
the amount that is planned to arrive at the beginning of a period
planned order release
the amount of an item that is planned to be ordered in a period
nervousness
inconsistencies in the plan caused by changes to the MPS
infinite loading
the assumption that there is an infinite amount of capacity available
load profile
a comparison of production needs to actual capacity
advanced planning and scheduling
APS
APS
systems that integrate materials and capacity planning into one system
Business model
combination of customer segments and supply chain capabilities, trends that influence are rapid technological change, sustainability, national and corporate culture
Sustainability
meeting today’s needs without compromising the ability to meet tomorrows
Life cycle analysis
evaluate cost of waste throughout product life cycle: extraction, production, packaging and transport, usage, disposal/recycle
ISO 14000
international standards and certification for environmental management: identify and control impact of activities, continuous improvement of environmental performance, systemizing approach to setting and achieving goals
Culture
a learned and shared human patter for living that defines how people make sense of things around them and how they interact with others
operations management
OM
OM
the management of processes used to design, supply, produce, and deliver valuable goods and services to customers
supply chain
SC
SC
the global network of organizations and activities involved in designing, transforming, consuming, and disposing of goods and services
supply chain management
SCM
SCM
the design and execution of relationships and flows that connect the parties and processes across a supply chain
strategic business unit
SBU
SBU
Strategic business unit- the semi-independent organizations used to manage different products and market segments
plan do check act
PDCA
PDCA
circular, never ending problem solving process
define measure analyze improve control
DMAIC
DMAIC
developed by GE as a measure of focusing efforts on quality using a methodological approach
D
Define customers and their priorities
M
Measure process and its performance
A
Analyze cause of defects
I
Improve remove cause of defects
C
Control maintain quality
global trade item number
GTIN
GTIN
identification system for finished goods sold to customers
maintenance repairs and office supplies
MRO
IMS dependent demand
used when the demand beyond the control of the organization, bmw cars
MS dependent demand
used when the demand for an item is driven by demand of another item
total ordering costs
TC= CD/Q + QUC/2
Total annual acquisition costs
TAC
TAC
the sum of all relevant annual inventory costs
TAC
total ordering costs+ total carrying costs + annual costs
Ro ro
roll on roll off
Ro ro
large ferry that facilitates the loading processes by using drive on/off raps, has capacity to haul containers
Mean forecast error
MFE
MFE
tendency to over or under predict future demand
Mean absolute deviation
MAD
MAD
average of forecast errors irrespective of their direction
sales and operations planning
S&OP
S&OP
process for integrating marketing and operations plan to develop a tactical plan in attempt to balance supply and demand.
statistical process control
SPC
ETO
design and make to customer specifications
MTO
make to customer demand from raw materials and components
ATO
assemble to customer demand from generic subassemblies
MTS
Make to stock, build and stock in anticipation of customer demand
DRP
computes demand for finished goods in the distribution system
CRP
determines if sufficient resources are available
Point of sale
POS