Term
| Four Elements In Waiting Lines |
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Definition
1.an input- customer population that generates potential customers
2.a waiting line of customers
3.service facility- consists of a person (or crew), a machine (or group of machines), or both necessary to perform the service for the customer
4.priority rule- selects the next customer to be served by the service facility |
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Term
| Finite vs. Infinite Customer Populations |
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Definition
Finite Customer Population- if the potential number of new customers for the service system is appreciably affected by the number of customers already in the system. (a maintenance crew can only repair 10 machines so has a customer population of 10 that is finite)
Infinite Customer Population- the number of customers in the system does not affect the rate at which the population generates new customers. (a mail-order operation is infinite because the number of new orders is not affected by the number of orders waiting for service or being processed) |
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Term
| Single vs. Multiple Lines |
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Definition
Single Line- When multiple servers are available and each one can handle general transactions, the single-line arrangement keeps servers uniformly busy and gives customers a sense of fairness
Multiple Lines- best when some of the servers provide a limited set of services. Customers select the services they need and wait in the line where that service is provided. |
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Term
| Service Facility, Priority Rule, Balks, Reneges |
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Definition
•Service Facility- a person (or crew), a machine (or group of machines), or both necessary to perform the service for the customer.
•Priority Rule- a rule that selects the next customer to be served by the service facility.
•Balks- an impatient customer who decides not to enter the system
•Reneges- an impatient customer who leaves the system before being served.
Jockeying- the movement of entities between similar queues in the expectation of receiving earlier service. |
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Term
| Single-channel, single-phase system |
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Definition
| Single-channel, single-phase system- all services demanded by a customer can be performed by a single-server facility. Customers form a single line and go through the service facility one at a time. |
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Term
| Single-channel, multiple-phase |
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Definition
| Single-channel, multiple-phase- when the services are best performed in sequence by more than one facility, yet customer volume or other constraints limit the design to one channel. Customers form a single line and proceed sequentially from one service facility to the next. (McDonald’s drive-thru line) |
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Term
| Multiple-channel, single-phase |
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Definition
| used when demand is large enough to warrant providing the same service at more than one facility or when the services offered by the facilities are different. Customers form one or more lines, depending on design. In the single-line design, customers are served by the first available server, as in the lobby of a bank. If each channel has its own waiting line, customers wait until the server for their line can serve them, as at a bank’s drive-through facilities. |
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Term
| Multiple-Channel, multiple-phase |
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Definition
| Multiple-Channel, multiple-phase- when customers can be served by one of the first-phase facilities but then require service from a second-phase facility, and so on. (a Laundromat) |
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Term
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Definition
| waiting lines can develop in front of each facility, as in a job shop, where each customized job may require the use of various machines and different routings. |
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Term
| Operations Characteristics of Waiting Lines |
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Definition
| Operations managers can use waiting-line models to balance the gains that might be made by increasing the efficiency of the service system against the costs of doing so. In addition managers should consider the costs of not making improvements to the system (long waiting lines or long waiting times may cause customers to balk or renege) Should be concerned with line length, number of customers in the system, waiting time in line, total time in system, and service facility utilization. |
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Term
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Definition
| • Little’s Law- (not applicable in finite customer populations) a fundamental law that relates the number of customers in a waiting-line system to the waiting time of customers. Average people times average time each customer spent in the facility equals number of people waiting and being served. Also is the average number of units an hour that arrive at the process times the average lead time of a unit of product through a manufacturing process equals the average work in process. |
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Term
| Single vs. Multiple Line Systems/ Priority Discipline Rules |
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Definition
Single Lines- first come first served (FCFS) sense of fairness.
Multiple Line Systems- Line Jumping or Jockeying? Bad/Good Line
Priority Discipline Rules- 1st come first serve, earliest due date or shortest processing time, reservations or appointments possible, emergency situations, preemptive discipline- special rules (VIP lines, Frequent Fliers) |
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Term
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Definition
| Office layout can affect both productivity and the quality of work life. Factors that affect office layout are proximity, privacy and options in office layout. Different layouts are better for different people (software developers vs. marketing/sales) Different layouts are traditional layouts (closed offices for management and those employees whose work requires privacy and open areas/bullpens for all others), office landscaping (puts everyone in an open area with attractive plants, screens and portable partitions increase privacy and cluster or separate groups and movable workstations for flexibility; chosen for better cooperation), activity settings (full range of work needs covered by multiple workplaces, like library, conference room, etc., and each person gets a small, personal office as a home base) and electronic cottages (working from home or in neighborhood offices connected to the main office by computer). |
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Term
| Consumer Behavior: Supermarkets |
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Definition
Most consumers not only are right-handed, they think right handed (stock store brands to the right of name brands, display higher gross merchandise and visuals to the right side of an aisle, the area on the right side of the store is most valuable/the first place they go to is appealing, fix eyes on an object at a 45 degree angle from point of entry, use most recognizable brand to lead off the product category as walking towards it)
Most consumers think “neatness” counts- sometimes merchants make point-of-purchase displays look messy so they look cheap and a great bargain, handwritten signs create the impression of recently lowered prices
Most consumers are likely to focus on a large central display- point-of-purchase displays at end of aisle are usually focus of customers’ attention as they wheel carts through store.
Consumers are creatures of habit and if something is out of place they become more sensitive to environment- supermarkets make regularly scheduled display changes for staple items to draw attention of customer for an impulse buy
There is a little bit of greed in every one of us- managers putting limit of a sale item to make it seem like a great deal and will often buy limit, 10 for a certain price even though sale price is often higher than normal sale price, sale of one item but complimentary products price went up usually goes unnoticed by customer. |
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Term
| Microretailing, stack-outs, allocating space |
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Definition
microretailing- occurs when a chain store retailer operating over a wide geographic area, usually nationally, tailors its merchandise and services in each store to the needs of the immediate trading area.
• Stack-outs- pallets of merchandise set out on the floor in front of the main shelves. (Try to reduce number of stack-outs)
• Allocating Space- starting point for developing a floor plan is figuring out how to allocate space to departments. Must determine types of space needed (backroom, offices and other functional spaces, aisles, service areas, and other nonselling areas, wall merchandise space, floor merchandise space), Space Allocation Planning (improving space productivity in existing stores, space allocations for a new store) |
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Term
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Definition
| Robert Kahn thought sales per square foot = number of customers x Length of time they spend in the store. Retailers should concentrate on the time customers spend browsing and experiencing the store, not how much merchandise they are exposed to. Said four things Wal-Mart should do was space in every aisle so two customers could pass e/o with carts, make restrooms best in town so customer won’t leave to go home to the bathroom, put at least one bench in every store and in large stores install a coffee stand near snack bar so they can recharge themselves and shop more. |
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Term
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Definition
Free flow layout- a type of store layout in which fixtures and merchandise are grouped into free-flowing patterns on the sales floor.
Grid layout- a type of store layout in which counters and fixtures are placed in long rows or “runs,” usually at right angles, throughout the store.
Loop layout- a type of store layout in which a major customer aisle begins at the entrance, loops through the store- usually in the shape of a circle, square, or rectangle- and then returns the customers to the front of the store
Spine Layout- a type of store layout in which a single main aisle runs from the front to the back of the store, transporting customers in both directions, and where on either side of this spine, merchandise departments using either a free-flow or grid pattern branch off toward the back or side walls. |
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Term
| Interior and Lighting Design |
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Definition
• Interior Design- can be broken into two types of elements: the finishes applied to surfaces and the architectural shapes. All things from floor coverings placed over concrete or wood floors (creates a different impression on the shopper), covering walls, the ceiling. Hundreds of architectural design elements that can be incorporated.
• Lighting Design- Lighting can greatly enhance store sales. Wine and movie stores use brighter lights. Department stores found that raising lighting levels in fashion departments can discourage sales because bright lighting suggests discount store image. Contemporary lighting design requires knowledge of electrical engineering and the effect of light on color and texture. Lighting is measured in foot-candles. |
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Term
| Types of Employee Turnover costs |
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Definition
Direct Cost- (reflected on retailer’s financial statements) cost of recruiting applicants, cost of evaluating applicants, cost of training classes, pay during period when new employee is taking training course, part of supervisor’s pay to cover time spent helping new employee during first few weeks of job.
Indirect Costs- (cause reduction in firm’s revenue but not shown on financial statements) loss of customers who were loyal to formal employee, lost sales from employees lack of product knowledge, lost sales from alienated customers resulting from inexperience in retail selling, decrease in employee morale caused by departure of an employee, effect of the employees’ lower morale on customers. |
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Term
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Definition
| different from typical grocery store because has a forced flow layout like Ikea, so you have to go through the whole store. They have a wide variety options/brands as well as hard to find gourmet products. |
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Term
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Definition
| prepare new merchandise for sales floor by unloading, prepping, stocking merchandise and responding to team member requests quickly. Timing is very significant and they make sure team members are attended to and right amount of products are in the right places, etc. Management challenges- staffing and scheduling, motivation and discipline, communication w/ employees, culture clash, dependence on DC and other in-store employees. |
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Term
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Definition
| • Xbox- Microsoft able to go so quickly because they outsourced the whole thing through Electronic Manufacturing Services Industry, which became so popular with everything being so digitized, things are so similar so they are easy to make. Allows the company to focus on strengths, cost advantages and higher quality. |
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Term
| The Key Financial Instrument in sending cargo |
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Definition
| Letter of Credit- document issued/written by buyer’s bank and addressed to seller. States the bank will release payment to the Seller after the bank is supplied with documents EXACTLY in accordance with the terms specified in the Document. Multiple banks may be involved. This letter is what makes business possible internationally. |
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Term
| The different parties in a Letter of Credit |
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Definition
Buyer- Applies for LoC. Provides funds for bank to hold until transaction complete.
Seller- Beneficiary of the funds once goods/services have been shipped, inspected and have met all LoC requirements
Issuing Bank- Issues LoC based on buyer’s demand
Paying Bank- Responsible for paying seller when appropriate
Advising Bank- Verifies that issuing and/or paying bank are reputable. Not responsible for payment in case of default, though.
Confirming Bank- In case of default by paying or issuing bank, this bank will pay/reimburse appropriate parties. |
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Term
| Different types of Documents |
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Definition
Commercial Invoice- summation of entire transactions (terms of sale, quantities, prices, currency, dates, references. Precise description of items, must conform to all documents Like a big receipt
Packing List- placed in each container of assorted merchandise by packer. Much more detailed than an invoice. Describes contents of each package in one or more containers.
Shipper’s Letter of Instructions- provides information on handling, payment, etc. to an intermediary. (where needs to go, basically what is good/bad with it. Hand over to “travel agent” for cargo)
Certificate of Origin- States origin of Cargo. Important to customers in collecting tariffs. Includes the origin of all different components
Bill of Lading- 3 purposes (contract of carriage between seller/shipper and the carrier, states ownership of cargo/acts as title, and receipt of goods for shipper)
Shippers Export Declaration (SED)- used by customs in recording Export Types and Quantities. Required if Cargo greater than $2500 in value or validated Export License is required or destined for countries prohibited by Export Admin. Regulations
Validated Export License- US government authorization for controlled or policed items/services like those with potential dual purpose technologies, defense, weapons, ammo, nuclear, watercraft, drugs, narcotics, processing equipment, financial assets, patent sensitive items, agricultural plants and products) If you need this you will always need SED |
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Term
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Definition
| Getting through customs- Three rules of Exporting- Assume Everything is Controlled, These Rules Apply Everywhere- exports and re-exports, and Authorization is Required before Export- license must be in hand. Do not want to be stopped because then you are fined $1000 per container. If you do not follow rules you can get into big trouble like loss of export privileges, debarment as US government contractor, no transfer of technology to any foreigner, fines per person, container, export value, prison sentence for everyone involved. |
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Term
| Steps involved in clearing customs |
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Definition
1. Who controls the product/service being exported?- Department of State (International Traffic in Arms Regulations, US Munitions List) or Department of Commerce (Export Administration Regulations, Commerce Control list where 99% of products are, like a series of phone books)
2. Classify your item- many ways to classify basic items. May want to hire a specialist in your product.
3. Get a License (if necessary)- for a new product minimum 12-16 weeks or as much as one year, consider requests to state-weapons, countries
4. Export upon receipt of customers’ approval |
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Term
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Definition
Tariffs- duties on imported (or exported) items based on location of origination, materials, labor, packaging, etc.
Quotas- limits on how much of a product can be imported based on item/service classification or nation of origin.
NAFTA- North American Free Trade Agreement- Free trade agreement between US, Mexico and Canada
WTO- World Trade Organization
EU- European Union |
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Term
| "Tricks" to exporting/importing products and Duty Drawbacks |
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Definition
“Tricks” to exporting/importing products- classifying your item, reconfiguring your product (SUV’s classified as trucks, import backseat unattached so lower tariffs, sending just engine)
Duty Drawbacks- getting a refund, utilized when an item is imported and then re-exported. Go through long paper process, takes a lot of time. (Display items, Layovers/Stopovers) |
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Term
| Commerce Control List and US Munitions List |
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Definition
•Commerce Control List- where 99% of products are stored, like a series of phone books. Describes a particular item or type of item and shows the controls placed on that item. (Department of Commerce, using ECCN Citation)
•US Munitions List- Designed or modified for military purposes. For Department of State enforced rules International Traffic in Arms Regulations. Categorize product/service using appropriate USML # |
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Term
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Definition
| Area where acceptable items can enter the country duty free for storage, display, manufacturing, transformation, assembly, repackaging, etc. Items then usually re-exported. Alternative to duty draw backs. Items can remain in country permanently if duties are levied. Many now have this, like item was never there. If sales area is in FTZ money never leaves your pocket but once item is in customer’s hand it will be charged when taken out of FTZ. |
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Term
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Definition
| • 3PL- Third Party Logistics Company- an organization that manages and executes a particular logistics function, using its own assets and resources, on behalf of another company. This party can neither be the buyer, nor the seller of the item in question. They can include packaging and container companies, and carriers. Companies from many different industries now consider themselves 3PLs |
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Term
| Basic Types of Intermediaries |
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Definition
| Third Party Logistics Company (Freight Forwarders- does everything in shipping for you , US Side of Exports “travel agents”, find most efficient/cost effective itinerary and can be considered a 4PL b/c use others’ resources) and Customs House Brokers (agent for you, act on your behalf, help items clear foreign customs, foreign side of exports) |
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Term
| Modes of Transportation for Harry Potter |
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Definition
• Differences with each mode of transportation- the truckloads were handled by Hunt, shipments for the farthest locations were moved out first, used trailer-tracking and-monitoring and satellite tracking system, about 70% were moved entirely over road, the rest were intermodal.
Hunt provided the drayage and Burlington Northern Santa Fe and Norfolk Southern railroads handling the rail linehaul, all deliveries by appointment.
The LTL Shipments- Yellow Transportation, east and west coast went out first, 60% of shipments were able to move direct to destination terminals, involved 270-275 Yellow Terminals. Set up special toll free number for drivers to call if they had any problems/delivery issues.
Air Shipments- decided to use a single provider, ActivAir based in the UK, this way could control the timing of the release. All air shipments moved on pallets, built for air export. Moved by Hunt to ActivAir facilities. Moved in wide-body aircraft. Moved on 17 airlines and all-cargo carriers |
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Term
| Harry Potter Security/Precautionary Measures and modes of transportation used |
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Definition
•Types of security/precautionary measures- they tried to have the books out there for the least amount of time possible, carriers bound by strict confidentiality agreements, tried to maximize shipping density so least amount of shipments. Those involved with security were invited into the planning meetings so they could put their views in. They wrapped the pallets very tightly and designed package so it would be easy to tell if something was missing. Hunt brought all of its staged trailers to company facilities chosen for their tight security, with people onsite 24 hours a day. Used trailer-tracking and-monitoring technology to provide geo-fencing around each trailer. Security personnel checked trailers’ seals several times a day. Also used satellite tracking system. Labels did not identify the book and opaque black shrink wrap obscured contents and made any tampering evident. Drivers were told only that they were picking up printed material. Yellow Transportation designed a special label for shipments that included delivery date and instructions, retrained workforce that early is not good.
•Modes of Transportation Utilized- truckload, less-than-truckload, rail, and air and in one case in Michigan by horse and wagon |
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Term
| Harry Potter info required to calculate load plan and types of technology used in shipment |
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Definition
•Key bits of info required to calculate load plan- Need actual size and weight of book, then plug into a formula to see how many books to get on a truck and then need to reserve the capacity. (their plan was 1,000 pounds of legal maximum allowable weight)
•Types of technology used in shipment of books- trailer-tracking and-monitoring technology to provide geo-fencing around trailers, Qualcomm satellite tracking system to alert if trailer strayed from prescribed route. |
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Term
| Hau Lee’s Triple-A supply chain |
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Definition
Agility-respond to short-term changes in demand or supply quickly; handle external disruptions smoothly (information flow, relationships, inventory buffers, crisis management, teams/plans, postponement)
Adaptability- adjust supply chain’s design to meet structural shifts in markets; modify supply network to strategies, products and technologies. (monitor global economies, use intermediaries, evaluate END-customer needs, flexible product design)
Alignment- create incentives for better performance. Exchange info freely with vendors/customers, clear roles and responsibilities; share risks, costs, gains. Alignment- just like your body, everyone must be in shape, ready for what’s asked of them. |
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Term
| Front-End of SC, Back-end of SC, Upstream, Downstream |
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Definition
• Front-End of Supply Chain- what the customer can see
• Back-end of SC- what the customer cannot see
• Upstream- purchasing, production, distribution
• Downstream-retail sales |
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Term
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Definition
• Push System- companies that manufacture many of the same product that are all uniform. They have the product ready on the shelves waiting for the customer, before they are ordered. (Sony) Pros- high inventories, shorter lead times, mistakes and defects tolerable, Cons- High Inventories, Low Customization Flexibility, Forecasting Miscalculations can be costly, mistakes and defects tolerable.
• Pull System- complete opposite of push system, items are made to order. (Dell) Pros-Low Inventories, Demand Driven System, Flexible Manufacturing Possible, closer Supplier ties are Developed. Cons- sometimes you don’t know exactly what you’re getting until you get it, low inventories, risky customer service rates, forecasting miscalculations can be costly, possibly tougher sell. Better value, maybe price, customized but downside is time. |
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Term
| Old School vs New School philosophies (Push vs Pull) |
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Definition
•Old School Philosophies- Push system, inventory is necessary to be high, quality control defects are inspected out, suppliers are adversaries, supply chain communication is nearly nonexistent, company dictates what the market will offer not the customer, best is always best.
•New School Philosophies- pull system, inventory should be minimized, quality at the source not waiting for the end product to be tossed, suppliers are partners, open communication required, customer dictates what supply chain must produce, best today won’t be best tomorrow (everyone has to find it’s own best, “only the paranoid survive”-Intel) |
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Term
| Primary goals of JIT Systems |
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Definition
•Primary Goals of JIT systems- minimize inventories, short lead times, high quality
•JIT more of a business philosophy¬- not a checklist. No two companies would utilize same practice. Best practice for one company not ideal for another. (Toyota letting Ford come see how they run and ask any questions they want)
- The belief that waste can be eliminated by cutting unnecessary capacity or inventory and removing non-value-added activities in operations. A JIT system organizes the resources, information flows, and decision rules that enable a firm to realize the benefits of JIT principles. |
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Term
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Definition
| different than US because value system- working in teams, keeping work, help team not the geography. Small space and expensive to hold inventory. They focused on what people are good for and what machines are good for, rather than just trying to use more machines like US was doing. Originally created by an American but adopted and spread by Japanese. |
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Term
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Definition
| combine push/pull delaying final assembly of end item. Allows some degree of customization and standardization. Like power chords and putting them in last depending on orders from which country. Speed and customization. Push through standardized portions of manufacturing and pull only the customization options offered to customers. Inventories: WIP (Push elements) and Components (Pull Elements). Push/Postponement Low Customization vs. High Customization (a lot more of quality of product at distribution center) For more look at drawings on slides 18-25. |
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Term
| Centralizing your warehouse |
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Definition
| Pros- lower required stock levels. Less likely to stock out. Warehouse operating costs decrease. Con- distance/responsiveness, transportation costs. |
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Term
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Definition
very high and very low supply levels despite fairly constant demand levels. Some of its causes- poor forecasting, poor analysis, poor communication, order batching- trying to place large orders, price fluctuations, rationing, shortage gaming. Can be minimized through sharing sales and other information with suppliers. Also, communication and everyday low prices minimize bullwhip effect.
variations in demand cause problems with capacity planning, inventory control, and workforce and production scheduling and ultimately result in lower levels of customer service and higher total supply chain costs. Bullwhip effect increases costs and reduces service to the customer. |
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Term
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Definition
| coordinating and sharing information and resources to jointly make a process, requires proper training and preparedness; willing and competent trading partners; trust and potentially a change in one or more organizational cultures. |
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Term
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Definition
| (part of the supply chain integration model) Identifying only the primary trading partners allows the firm to concentrate its time and resources on managing the important process links with these companies, enabling supply chain to perform well. Mapping the network of primary trading partners is something that should be done to help the firm decide which businesses to include in its supply chain management efforts. |
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Term
| Importance of Performance Measurement |
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Definition
| Measurement- Before measuring performances among supply chain partners, must first have good internal performance measurement capabilities. Measures need to drive a consistent emphasis on the overall strategy and corresponding process objectives. Performance is continually measured using a set of metrics designed for each process. ERP systems help performance measures improve. Performance measures similarly designed for each of the key processes and their corresponding functional objectives. |
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Term
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Definition
| (radio frequency identification tags) tiny microchip device that can be attached to a product to relay information on the product’s whereabouts as it moves through the supply chain. This way supply chain can access real-time inventory information and instigate a replenishment order when inventories get low. Price of RFID has become low enough to be used economically. |
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Term
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Definition
| Bulgari is third-largest luxury goods company in the world. Sells products through retail stores and a select group of independent retailers (slow moving high-end fashion items) Forecasting is a trouble spot, insisting on the best adds complexity to supply chain, as well as new product lines in recent years. To take control of complexity, use an optimization solution from 4R Systems Inc. Designed to help them improve demand forecasting and inventory planning at the store level. Enabled to slash jewelry and accessory inventories by a lot, and able to meet customer demand better. System uses point-of-sales data to take into account past sales, seasonality, and trends, as well as items that are more in demand, etc. Also corrects for past stock-outs. Bulgari continues to do well in many thanks to this system |
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Term
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Definition
| “I win, you lose” mentality is from firms not considering the impact of their actions on the supply chain and its long-term competitiveness and profitability. Using cheapest suppliers, paying little attention to needs of customers and assigned few resources to new product and service design. To overcome, firm must strive to align supply chain goals and goals of the firm. Managers must also educate customers and suppliers about their impact. |
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Term
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Definition
| (obstacle to supply chain integration) the inability to easily share or retrieve trading partner information in real time, as desired by the supply chain participants. RFID technology helps overcome this obstacle. Technology boards and user boards are being formed now to develop standards and electronic product codes for the RFID industry. |
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Term
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Definition
| (vendor-managed inventory) when buyers allow suppliers to observe their demand, create a forecast and determine their resupply schedules. This can generally reduce inventories substantially. |
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Term
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Definition
| amplifies demand variability and adds to the bullwhip effect; occurs when demand draws down inventories until point reached where buyer places orders. Orders may be infrequent and different amounts each time. At one point supplier gets an order of some magnitude, then until next order placed there is no demand at all for supplier’s goods. Can also occur when salespeople need to fill end-of-quarter or end-of-year sales quotas, or when buyers desire to finish year-end budget allotments. Salespeople may generate production orders to fill future demand and buyers may make excess purchases to spend budget money. |
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Term
| Forward Buying and Every Day Low Prices |
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Definition
| forward buying activities when suppliers have special promotions/discounts and buyers stock up to take advantage of low price offers; occur between retailers and consumers, between distributors and retailers and manufacturers and distributors due to pricing promotions at each stage of supply chain all contributing to erratic buying patterns and in turn the bullwhip effect. Everyday low prices- eliminating price discounting among the supply chain members to reduce problems caused by fluctuating prices. |
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Term
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Definition
| when buyers figure out the relationship of the rationing (if supplier does not have enough they ration out how much goods they have throughout their total demand ie 75% and 75%) of their orders and what is supplied, they tend to inflate their orders to satisfy their real needs. Pg 77 |
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Term
| Efficient vs. Responsive Supply Chains |
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Definition
| Efficient supply chains are designed for efficiency and low cost by minimizing inventory and maximizing efficiencies in process flow. Responsive supply chains focus on flexibility and responsive service and are able to react quickly to changing market demand and requirements. |
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Term
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Definition
| ranked #1 in global sales, with a supply chain that offers a wide range of goods and services at low prices in the shortest possible time drives Wal-Mart’s great growth. Due to integrated supply system replenishes its stores within 2 days while competitors take at least 5. Owns and operates trucks and outsources remaining shipping to third party vendors. Uses cross-docking, manufactured goods never see warehouse or DC. Supplier partnerships help understand cost structure of supplier and work together to drive out costs. DCs run on real time information system, very efficient. Most supplier factories are tied directly to Wal-Mart’s store info so know what’s going on. Prices avg 14 percent lower than competing stores. |
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Term
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Definition
| used as key outsourcing strategy; a firm that specializes in certain types of goods-producing activities, such as customized design, manufacturing, assembly and packaging, and works under contract for end users. (example-Flextronics working for Microsoft) |
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Term
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Definition
| (TPS) exemplary of excellence in automobile manufacturing, at forefront of firms developing lean systems for manufacturing. One of most admired lean manufacturing systems ever. Through continuous improvement, build a learning organization over 50 years. Require constant improvements to increase efficiency and reduce waste. Stimulates employees to experiment to find better ways of doing jobs. All operations are “experiments” teaches problem solving. Four principals- all work completely specified as to content sequence timing and outcome; every customer-supplier connection must be direct; pathway for every service and product simple and direct; any improvement to the system must be in accordance with scientific method, under guidance of a teacher at lowest possible organizational level and then hypothesis tested under many conditions. Employees actually doing work are involved in making improvements. Managers are advised to only coach. |
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Term
| Quality at the Source and Poka Yoke |
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Definition
• Quality at the Source- an organization-wide effort to improve the quality of a firm’s products by having employees act as their own quality inspectors.
• Poka-yoke- (an approach for implementing quality at the source) mistake-proofing methods aimed at designing fail-safe systems that minimize human error. (marble 94) |
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Term
| Value of small lot sizes and short setup times |
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Definition
| small lots have advantage of reducing the average level of inventory relative to large lots, pass through system faster than large lots, if any defective items are discovered, large lots cause longer delays because entire lot needs to be examined for defects. Small lots help achieve a uniform workload on the system. Large lots- complicate scheduling, small lots juggled more effectively. Disadvantages- increased setup frequency, idle employees and equipment. Small lot sizes need brief setups, which requires close cooperation among engineering, management and labor. Goal of single-digit setup means having setup times of less than 10 minutes. |
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Term
| Standardized Components and Work Methods |
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Definition
| great efficiencies can be gained by analyzing work methods and documenting improvements for all employees to use. Standardization of components is called part commonality or modularity and increases repeatability (each worker performs standardized task or work method more often each day.) Productivity tends to increase with increased repetition workers learn to do tasks more efficiently. Helps a firm achieve high-productivity, low-inventory objectives of a learn system. |
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Term
| Close Supplier Ties and Flexible Workforce |
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Definition
| firms with low levels of capacity slack or inventory must have close relationship with suppliers. Supplies must be shipped frequently, short lead times, arrive on schedule and be high quality. Three ways to tighten up ties- reduce the number of its suppliers, use local suppliers and improve supplier relations. Extend contracts with supplier to give firm advance requirements. Include suppliers in early phases of product design to avoid problems after production begins. Try to create synchronized flows. Close cooperation is win-win for everyone, should consider each other partners. Flexible workforce- workers can be trained to perform more than one job. Ability to shift workers among workstations to avoid bottlenecks. This way workers can step in when workers are gone. May reduce efficiency or relieve boredom and refreshes workers. The more customized the service or product, the more need for a multiskilled workforce, workers can do a lot more, unlike mail-processing operations at large post office |
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Term
| Line Flows and Automation |
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Definition
| Line flows can reduce the frequency of setups, wasted employee times. If number of products are large enough, groups of machines and workers can be organized into a line-flow layout to eliminate setups (group technologies). Also used is one worker multiple machines approach (same product made repeatedly, setups are eliminated.) Automation-plays big role in lean systems and key to low-cost operations. Money in less inventory can be used to make automated systems leading to greater profits, greater market share, or both. Needs to e planned carefully, a lot of automation is not always best. |
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Term
| Maintenance in Lean Systems |
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Definition
| in lean systems machine downtime can be disruptive. Preventative maintenance can reduce frequency and duration of downtime. Checking and replacing parts during routine maintenance is easier and quicker than when they fail. Maintenance done on a schedule that balances cost of machine failure. Also can make employees responsible for routinely maintaining own equipment and maintaining pride of keeping their own equipment looking good. Requires trained specialists. Even simple maintenance goes a long way. |
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Term
| Continuous Improvement and Kaizen |
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Definition
| Japanese term for approach to process improvements is kaizen, continuous improvements. At heart of continuous improvement- maintaining low inventories, periodically stressing the system to identify problems and focusing on elements of lean system. Many firms use trial and error. Services processes can be improved with lean systems also. Eliminating too much scrap, eliminating capacity imbalances for improving flexibility of workforce. |
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Term
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Definition
| In services the surface represents service system capacity such as staff levels. In manufacturing, the water surface represents product and component inventory levels. The rocks represent problems encountered in the fulfillment of services or products. When the water surface is high enough, boat passes over the rocks because the high level of capacity or inventory covers hit a rock if the water surface falls far enough. Through lean systems, workers, supervisors, engineers and analysts apply methods for continuous improvement to demolish the exposed rock. Coordination required for pull system of material flow sin lean systems identifies problems in time for corrective action to be taken. |
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Term
| Barriers/arguments against companies acting in a SP manner |
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Definition
| Reduces profits, increases costs, takes focus away from business core competencies, company may get too much social power (SRP), Problems solved according to Western values. Barriers- lack of knowledge/education, perception vs. reality, lack of measurements, scrutiny by media/special interest groups, long and complex chain of partners/supplies |
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Term
| Issues SCM can help in developing countries |
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Definition
| corruption, black market, counterfeit drugs, drugs going to US market, procurement (purchasing drugs at low prices), distribution (lack of infrastructure), lack of supply chain consistency. SCM can teach practices, procurement and distribution expertise, infrastructure development, security expertise. |
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Term
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Definition
| coffee origin is in high risk areas, make sure farmers are stronger by instituting social change, improving livelihood of farmers, land environmentally stable, sustainable chain, increased supply chain visibility; help them help you. Encourage suppliers to do CAFÉ practices (pay more money) preferential buying status. Best suppliers get long-term contracts, those short of standards get help. |
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Term
| How can green be good for business and environment? |
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Definition
| Goals of organization and sustainability are very similar. It can minimize waste, minimize costs, positive marketing, public relations, avoid regulation, safety and health, clean environment, future considerations. |
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Term
| Two opposing design mindsets |
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Definition
| cradle to grave- designing products and services with only the useful life of the product/service and its materials in mind, manufacture to disposal (old way of thinking.) Cradle to Cradle- considers useful life of product but also recovery, disposal, and reuse of materials and components that make up product (new way of thinking) |
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Term
| Sustainable development/design |
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Definition
| “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs” Tree is a sustainable system because it makes oxygen, uses solar energy as fuel, etc. |
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Term
| Humans usually do not create sustainable SC's/products |
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Definition
| humans usually want bigger, better, stronger which unfortunately last forever. Examples- textiles stronger/brighter clothing fabrics, detergent- one size fits all laundry detergent means more chemicals that stay long after clothes are washed, vehicles- size performance, safety, fuel efficiency. |
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Term
| Herman Miller- The “Greenhouse” features, benefits |
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Definition
| The Greenhouse is a 295000 sq ft factory and office building near its headquarters, provides and urbane, pleasant environment for all employees, fresh air and sunlight, easy access between admin and manuf. staff, wetlands and swales that purify storm water run-off and provide habitat for local birds, flowers and grasses. Measured increase in productivity, job satisfaction and positive social and ecological impacts. |
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Term
| Herman Miller in materials selection |
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Definition
| needed a thorough knowledge of the materials that went into furniture and a way to measure environmental performance in order to make company more sustainable/environmental; analysis by McDonough Braungart Design Protocol (ongoing longterm engagement). Created team to analyze and implement new measures recommended by MBDC staff. Used full time skilled staff dedicated to gathering and assessing materials. |
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Term
| Herman miller- DFE Team, goals and outcomes |
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Definition
| Design for Environment Team. A chemical engineer incorporates findings from MBDC assessments in materials database. Purchasing agent acts as a connection and data source between SC and Herman Miller’s entire purchasing team to create coherent communication network transforming info into profitable opportunities and consistent procurement choices. Goal to establish a good link between assessment process and an engineer working on a new product design. Became a remarkably useful tool, can put some data against, track progress and something and engineer can understand. |
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Term
| Herman Miller "engaging supply chain" |
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Definition
| Engaged suppliers as partners; selected more than 100 materials for MBDC to assess, masking identity of supplier. Findings from assessments logged onto new database, provided summary assessment results to engineers. Results sent to suppliers along with request to investigate certain aspects. MBDC answers questions about assessment results. |
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Term
| Herman Miller Growing Economic Value and opportunities for creating value |
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Definition
| streamlining and added coherence of purchasing process makes company more active in market, gives purchasing power and may yield more competitive prices for materials. Since choose a few suppliers, better relationships and better for everyone. A product with strong environmental performance does better in marketplace= higher sales, possibly lower costs. Benefiting from long-term value of materials is most significant economic gain. |
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Term
| Design for disassembly importance |
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Definition
| design for disassembly important because this way product materials remain renewable, valuable commodities for industry. Leasing rather than selling develops means for reclamation and reuse. |
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Term
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Definition
| attempt to balance economic, social and environmental concerns. |
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Term
| Cost savings gained through good environment decisions examples |
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Definition
| Delta Air Lines achieved cost reductions when using only one engine while taxiing. Home Depot offers environmentally preferred products for sale in their stores. UPS redesigned much of their packaging to be environmentally friendly. |
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Term
| Environmental Concerns for Buildings |
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Definition
| building site selection and erosion control, water efficiency, energy and atmosphere, materials and resources, indoor environmental quality. |
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Term
| Environmental impacts of services |
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Definition
| almost every professional service generates significant waste and office waste, may dispose of hazardous chemicals/materials, may use a lot of gas. |
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Term
| Environmental improvement strategies and options |
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Definition
| Process focused environmental strategies include process improvements, process certification, and implementing e-commerce models and methods. Product focused environmental strategies include redesigning the service offering, offering new value-added services and “dematerializing” the product. |
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Term
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Definition
| a standard of the International Organization for Standardization. requires companies to document the way they manage environmental issues. Looks at six major areas: environmental management systems, environmental auditing investigations, environmental labels and declarations, environmental performance evaluation, life cycle assessment and terms and definitions. |
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Term
| Strategies utilized and benefits in Nike's Netherlands Complex |
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Definition
| strategy that celebrates human creativity and abundance of innovative culture. (innovation and abundance). Benefits were please place to work, connect with colleagues and friends, to come to know the surrounding natural world-to find inspiration. |
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Term
| How did Nike get a better design? |
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Definition
| first step was materials assessments undertaken with MBDC. Sought to determine chemical composition and environmental effects of materials and processes used. When materials meet standards they are added to a “positive list” Nike can start to use. Designed to flow in closed loop cycles, eliminating concept of waste while enhancing commerce/nature. |
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Term
| Biological vs. Technical nutrients |
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Definition
| biological- those designed to be metabolized by nature’s biological systems at the end of a product’s useful life (something biodegradable). Technical- designed to be perpetually recovered and reutilized for new products (recycled plastic). |
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Term
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Definition
| Eliminate concept of waste in product designs, eliminate all substances known to be harmful to human health or health of natural systems, close the loop and take full responsibility for products at all stages of product and process lifecycle up until the end and develop financial structures that promote greater product stewardship in design, engineering and manufacturing and create new financial models to reflect full cost of doing business. |
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Term
| Cotton a concern for Nike |
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Definition
| Nine of the most toxic pesticides are used on cotton, producing a lot of contamination and community pollution. Using organically grown cotton helps a lot. |
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Term
| Challenges Nike faces in drive toward sustainability |
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Definition
| not all Nikes designers have completely come to the idea of sustainability, and how to apply it today. Also, no one quite certain how to guarantee every producer is using materials selected from preferred palette. Logistic challenges of management of labor practices in factories of its suppliers. |
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