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Process Strategy: Involve determining how to produce a product or provide a service. Objective is to meet or exceed customer requirements.

Or Meet cost and managerial goals. For main Process strategies:  Process Focused Strategy: aka: Job shop, batch process, or intermittent process. Facilities organized by process where similar processes are combined together (all drill presses are together) Ex: Auto-Repair, accounting dept, grocery store.  Repetitive Focused: aka: assembly line/ production line, mass production. Ex: cars, tv, computers. Facilities are characterized by modules and parts. Assemblies are made previously.  Product Focused: aka: line flow production, continuous production (also a type of mass production) Facilities are organized by products; the products are characterized by high volume and low variety. Discrete unit manufacturing and continuous process manufacturing. Ex: flour, sugar, metal, oil, chemical. Soft Drinks Continuous then discrete  Mass Customization: mass produce catered products to unique customer desires. Three process strategies under mass customization: Process, repetitive, and product. Major Factors in Process Selection: Volume of production/service, Product variety, Equipment flexibility, Fixed and variable costs associated with the process. Service Process- usually it is important to split a service process into tow parts: Front Office operations and back office. Poke-Yoke- a procedure that blocks the inevitable mistake from becoming a service defect. Capacity: “throughput” or the number of units a facility can hold, receive, store or produce in a given time.  APICS: Capacity is the ability of a worker, machine center, process, plant, or organization to produce output per unite time  Designed Capacity: Is the maximum output that can be attained for a process given the current product design, product mix, operations policies, workforce, facility, and equipment.  Effective Capacity: Is the highest reasonable output rate that can be achieved assuming performing preventative maintenance and making adjustments when a company is changing the process from one product to another.  Actual (available) capacity: Is often less than effective or designed capacity due to demand fluctuations, need to maintain extra capacity, possible breakdowns, defective output, shortages of materials, and other factors. Measuring Capacity: Capacity Utilization Proportion (percentage) of designed capacity that has been actually achieved Utilization = Actual Output/Designed Capacity Capacity Efficiency Proportion (percentage) of effective capacity that has been actually achieved Efficiency = Actual Output/Effective Capacity Supply-Chain Management: is a term that describes how organizations (suppliers, manufacturers, distributors, and customers) are linked together. The flow of materials, information, money, and services from raw material suppliers through factories and warehouses to the end customers Supplier: firm that provides essential inputs of materials, expertise and services to an operations management system. Supply Chain parts: Upstream supply chain: activities of a manufacturing company with its suppliers. Supply management: purchasing, procurement, sourcing. Logistics management of supplies: transportation, warehousing. Internal supply chain: in-house processes for transforming the inputs from the suppliers into the outputs. Production/Service Management. Downstream supply chain: activities involved in delivering the products to the final customers. Logistics management of finished products and service parts: Transportation, warehousing. Distribution and retail management. Customer Relationship: marketing, sales, satisfaction of customers Inventory Turnover= COGS/ Average aggregate inventory value Weeks in supply= [Average aggregate inventory value]52 The bullwhip effect means the increase in order and inventory variability in the upstream of supply chain. The inventory orders placed to a manufacturing organization will fluctuate much more than retail sales to the customers Reducing the number of suppliers ; PartnershipsStrategic/Group Purchasing Organizations (GPO)- Outsource purchasing function to third-party purchasing organization (provider) with global outreach. Participate in a group purchasing organization (GPO) to negotiate volume deals and lower prices with suppliers Vendor-managed inventory (VMI)- Suppliers assume the responsibility for managing their inventories inside a manufacturing or distributor organization Vertical integration-Buy the actual supplier or logistics/transportation company Virtual Corporation-Virtual corporation is a partnership so close that two or more partners become for all operational purposes a single firm. Sustainable supply chain-Management of raw materials and services from suppliers to manufacturer/service provider to customer and back with improvement of the economic, social and environmental impacts E-commerce supply chain-transactions include the flow of information, products, expertise and funds:

The production cost per unit is constant regardless of the production quantity. and low dollar volume (C) The A classification group usually contains from approximately 70 to 85 % of items’ annual dollar usage The B classification group usually contains around 15-25% of the items’ annual dollar usage The C classification group usually contains up to 5% of the items’ annual dollar usage Inventory accuracy: refers to how well agree inventory records and actual physical count. Demand During Lead Time (DDLT) -amount of inventory that will be demanded while waiting for an order to arrive and replenish inventory. Lead Time Reduction-Omark in Guelph. waiting. and technical operations Kanban is a system of control cards that govern material (inventory) movements through the production/service process . moderate dollar volume (B). The price per unit is constant regardless of the order quantity. overproduction. Canon. Multiple Improvements-General Electric in Louisville: Lead time to build dishwasher was reduced from 6 days to 18 hours. Lead Time (LT) -time between placing an order and getting it in stock. The accuracy levels recommended by APICS (American Production and Inventory Control Society) are the following: 0. Eliminate waste that stops. Inventory replenishment is instantaneous. Inventory Planning: Total inventory costs may include: Carrying (holding) costs/Ordering costs /Setup costs/Shortage costs/Purchase price (Production costs) EOQ Assumptions: The demand of inventory is constant over time. Reduce variability of the production process (caused by both internal and external factors). work in process. raw and in-process stock cut by more than half. Inventory Models with Probabilistic Demand and/or Lead Time ROP = EDDLT + SS EDDLT = expected demand during lead time SS = safety stock Inventory Savings-Hewlett-Packard: Work-in-process inventory was cut from 22 days of on-hand inventory to one day. Reorder Point (ROP) -amount of inventory in stock (on hand) which indicates that a new order should be placed. processing. Produce with methods that involve workers in decision making process JIT fights 7 wastes: motion. conveyance. Concentrate on removing waste rather than speeding up value-added operations. Black & Decker. No excess inventories or shortages are needed. Ontario: Lead time was cut from 21 days to one day. GE. reach zero-idle inventory. Safety Stock (SS) -additional inventory stock which is needed to compensate uncertainty in demand and/or lead time. Sharp. etc. The carrying cost per unit and setup cost per setup are constant regardless of the production quantity. procedural.Network of steps from the beginning to the end of the process that provides results for the customer Principles: Keep the value stream moving at maximum velocity. The demand of inventory is known with certainty (in any period of time). correction Value Stream.2 percent for A items/1. inventory.0 percent for B items/5. Produce products only as quickly as customers want to use them. finished goods) JIT pull system-Nothing will be produced until needed JIT objectives: Produce only the products (goods or services) that customers want. The carrying cost per unit and ordering cost per order are constant regardless of the order quantity. Look for waste in the factory. No excess inventories or shortages are needed. Companies that successfully implemented JIT-Toyota. Dell.0 percent for C items Policies based on ABC analysis: Careful attention to class A suppliers Give tighter physical control of A items Forecast A items more carefully Cycle Counting: Is a physical inventory-taking technique in which inventory is counted on a frequent basis rather than once or twice a year. Produce products with perfect quality Produce in the minimum possible lead times. Produce with no waste of labor. physical. or equipment.Inventory Control: ABC inventory classification The ABC classification scheme divides inventory items into three groupings: high dollar volume (A).Integrated set of activities designed to achieve high-volume production using minimal resources (labor resources. The demand of inventory is known with certainty (in any period of time). materials. JIT Management. office. GM. or diverts the value stream. Inventory replenishment is noninstantaneous. scrap and rework was reduced by 51%. slows down. POQ Assumptions: The demand of inventory is constant over time. raw materials. HP.