Term
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Definition
Time
On-time arrival
Delivery time
Lead time
Quality
Delivery reliability
Delivery quality
Flexibility
Delivery flexibilty
Production flexibilty
Cost
Inventory costs
Transportation costs |
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Term
| Inco Terms: International Commerce Terms |
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Definition
Who’s responsible for freight, insurance, damage, etc…the vendor, the customer, or the shipping company?
At any point in time. Who is responsible |
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Term
I2’s (JDA) Transportation Planner:
The Power of Modern Transportation Software |
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Definition
Allows forward visibility of transportation capacity requirements
Dynamic routing
Three D loading
Constraints considered:
Network capacity
Customer delivery requirements
Production constraints |
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Term
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Definition
Environmental regulations/Tort issues/ Sarbanes Oxley
Fuel
Government regulation
Driver shortages
Insurance and security issues
Rail, port, highway, and air capacity |
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Term
| hours of service regulation |
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Definition
| how long they are allowed to work or drive before being forced off the road. |
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Term
| Ways Companies are Cutting Cost |
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Definition
Use 3Pl
Consolidating orders
Increasing direct shipments
Increasing time to deliver window
Increasing control of inbound freight
Changing mode
Changing the network
Revenue generation
backhauls |
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Term
| viability is key function of Transportation |
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Definition
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Term
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Definition
Space issues: What if you are out of space?
Cost reduction: How do you reduce cost?
Capital improvements: How do you prioritize
The big flood….. |
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Term
| HR issues: What can you face? |
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Definition
Handling the stars: How do you keep them motivated
Handling the duds: How do you turn it around?
Dealing with terminations |
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Term
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Definition
Order picking and replenishment-54%
Truck loading: 4%
Packing/packaging: 4%
Receiving and put away: 24%
Other 16% |
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Term
| What if One of Your First Jobs is Managing a Warehouse? |
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Definition
What are your responsibilities
HR issues:
Objectives
What if the warehouse is flat out of space? What problems is that causing you?
What will you do about it? |
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Term
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Definition
| a way to locate items in the warehouse such that they are easy to pick |
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Term
| Non-Distribution Functions Are Often Carried On In The Warehouse |
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Definition
Customizing of units
Refurbishment of damage
Re-packaging
Storage of components to support these functions |
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Term
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Definition
It is a huge deal to improve warehouse productivity
Travel time is three times more important than search and selection time.
Locate items in a way to reduce picking time and travel distances
E.g. on a five row picking area, locate fast movers on rows 3-4 in the middle
Also related to ABC profiling
Software (WMS) is used plus a three person department at Office Max. Done manually at Cummins P&S. |
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Term
Voice Directed Picking
very high accuracy |
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Definition
To be cost effective, a warehouse needs 40-50 workers using the system
Deployment of VT is still low, used today by 3-5% of warehouses
Can generate a very high payback and high ROI in the right situation
Keeps hands free
Results in very high accuracy picks |
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Term
| Picking Technologies Used |
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Definition
RF vehicle mount - 80%
Paper pick list – 40%
Pick to light – 38%
Carousels/conveyor systems– 25%
Voice picking – 5%
A frame – 5%
ASRS – 5% |
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Term
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Definition
Receiving/Picking/Shipping – 95%
Put away – 85%
Cycle count – 70%
Slot/bin management – 50%
Dock management – 45%
Yard management – 25% |
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Term
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Definition
RFID vs. Bar Code
Holds much more information….30 times. Also can contact a web identifier which can hold unlimited information.
Does not require line of sight to be read
Works in tough environmental conditions
Can be embedded in the product or packaging
Saves time…scanning not required
Can now read 1500 tags per second |
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Term
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Definition
It is sensitive to product and packaging material to which it is applied
Glass and cardboard have little effect on readability
Metal and liquids can quickly reduce readability. But better silcon tags are overcoming this. And the readers are improving as well.
Cost is still too high. But they are steadily becoming smaller and cheaper. Moore’s Law is driving down the cost.
New generation tags such as Hitachi’s mu chip (sand grain size) can be used to label jewelry, and can be embedded in paper or plastic.
Perceived privacy issues |
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Term
2 problems holding RFID back from
widespread adaptation |
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Definition
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Term
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Definition
comparison w/ best in industry
" w/ " " class
" w/ the best. |
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Term
| A Major Manufacturer’s Metric Characteristics: |
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Definition
Must be robust
stable
understandable
accurate
can not be manipulated
Must have “intelligence”
Drill-down capability
Know cause and effect (drivers)
Must be accessible
Metric guru not necessary to obtain information
Reports developed and published with pertinent information
Frequency of reporting must be balanced with effort
Single point of responsibility
Don’t have to chase people to get information
Direct access to data and reports |
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Term
| What New Behaviors are You Trying to Create w/ metrics |
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Definition
Speed
Variability Reduction
Assets and Cost Reduction
The Customer’s View |
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Term
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Definition
Large lot sizes
High WIP/FG
Long setups
Large finished goods inventory
Delivery of material to a central warehouse
Segregated maintenance
Quality through inspection and sorting
Functional organization
Centralized data |
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Term
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Definition
Small lot sizes
Small WIP/FG
S.M.E.D.
Low finished good inventory
P.O.U.S.
Total Productive Maintenance
Quality at the source
Decentralized organization
Point of use information |
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Term
| The Three Deadly Sins of Systems Implementation |
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Definition
Inappropriate Use of Beta Technology
Not realizing that people issues are tougher than technical issues
No clear business case: Technology for the sake
of technology |
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Term
| Questions to Ask Regarding New Supply Chain Technology |
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Definition
Who else has implemented this technology, and have you spoken with them?
Does sufficient support exist when we encounter problems?
What is the complete cost/benefit business case for this project?
What is the business case vs. the next best option?
Can we eliminate the need for the technology
Are you implementing a change management communication plan and is it tailored to the individuals critical to this effort?
Will this make line jobs easier or more complex?
Do you have a plan for sustaining the change once it is made? |
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Term
| What is the Next Big Thing in Supply Chain Software? |
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Definition
As software capability continues to advance, concepts like
optimization technology will become more prevalent. Years ago,
the limited power of computers made practical optimization
impossible. But, Moore’s Law (i.e. computing power doubles
every eighteen months) made a huge impact on that problem, and
today, companies achieve great benefit using software technology
with optimization capability. |
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Term
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Definition
| computing power doubles every 18 months. |
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Term
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Definition
FM, OM, MM, PM
Legacy systems
WMS
TMS
YMS |
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Term
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Definition
decision support
best level of inventory, production support |
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Term
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Definition
materials requirement planning
Calculates component requirements based on MPS, BOM, IOH
Determines batch sizes for purchasing and manufacturing to meet customer demand
Assesses whether work should be rescheduled in order to smooth out any peaks in capacity utilization |
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Term
aps system
automated production system |
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Definition
| decides how much to make and where to place inventory |
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Term
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Definition
Automates and integrates the majority of its transaction-oriented business processes
Share common data and practices across the entire enterprise
Produce and access information in a real-time environment |
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Term
| Concepts Important to Supply Chain People |
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Definition
Total landed cost
Cost to serve
Cost of complexity
Cost of quality |
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Term
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Definition
instead of doing costs by traditional accounting categories we cost on the activities.
I.E. take orders, fill orders, collect |
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Term
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Definition
Working definition: Inventory plus receivables minus payables
Classical definition: CA-CL. (About the same except CA includes “cash equivalents”, like bearer bonds, or money funds, which can be turned into cash quickly.
Also known as cash to cash cycle time if expressed |
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Term
EBIT = Earnings before interest and taxes
EBITDA = EBIT minus depreciation/amoritization
Free cash flow = EBITDA plus depreciation minus CAPEX minus increase in WC |
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Definition
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Term
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Definition
Cost of capital
Insurance, taxes
Obsolescence, damage
Cost of building
Cost of labor
warehouse space
covers up processes |
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Term
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Definition
| inventory + receivables - payables |
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Term
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Definition
minimize operation costs
minimize inventory
maximize customer service |
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Term
| Trends: Are Inventory Levels Getting Larger or Smaller? |
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Definition
For the first time in 20 years, inventory in industry in general increased in 2006. Why?
JIT deliveries and milk runs are beginning to reduce.
Fuel may triple in the next ten years….$9.00 by 2017
Outsourcing is a huge trend |
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Term
| What Is Driving the Inventory Trend? |
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Definition
time
service
uncertainty
economics |
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Term
Service
Customers expect that some portion of their demand will be met within a time period
OTTR
Unit fill-rate
Order fill-rate |
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Definition
Time
Customer expected lead-time is shorter than lead-time it takes to respond to the demand
Planning Time
Procurement Time
Production Time
Fulfillment Time
Transit Time
Versus
Customer Requested Lead Time |
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Term
Uncertainty
Unanticipated changes in supply and demand jeopardizes desired customer service levels
Demand (Quantities, Timing)
Supply (Quantities, Timing |
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Definition
Economics
Economic replenishment quantities & asset utilization offset inventory costs
Purchase Quantity Discounts
Economic Lot Sizes (manufacturing)
Handling Quantities
Transportation Quantities
Capacity Balancing
Customer Opportunity Costs |
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Term
| What Specifically Drives Inventory In Your Business Unit? |
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Definition
Customer response requirements?
Quarter end spikes?
Too many SKU’s?
Too many warehouses?
Forecast error?
Too much excess and obsolete?
Long replenishment cycle times?
Locally
Globally |
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Term
| way around customer response requirements |
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Definition
segmentation
know who to serve first |
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Term
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Definition
carry more inventory
understand underlying demand |
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Term
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Definition
| inventory increases w/ too many skus |
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Term
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Definition
inv=f(square root of warehouses)
too many warehouses spreads out inventory and forces you to carry more |
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Term
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Definition
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Term
| too much excess and obsolete inventory |
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Definition
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Term
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Definition
| amount of inventory used before being replenished |
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Term
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Definition
| prepare for spikes because dont have capacity to build for spikes |
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Term
Physical pipeline stock
Represents the inventory in-transit |
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Definition
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Term
Safety Stock
The additional ‘cushion’ of inventory kept to deal with uncertainties due to demand and supply |
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Definition
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Term
Merchandising (Retail) Stock
Cushion kept to maintain required minimum on hand inventories. |
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Definition
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Term
to cut cycle stock cut lead time
" saftey " cut forecast error |
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Definition
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Term
meio
multi echelon inventory optimization |
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Definition
| a way of determining the best place in the supply chain to carry inventory |
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