Final Blueprint Flashcards by Kellyn Smith

Materials and supplies that a firm carries either to sell or to provide inputs or supplies to the production process

Inventory

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Quantities of goods in stock is known as

Inventory

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What are 6 characteristics of service operations

Customer Participation
Simultaneity
Perishability
Intangibility
Heterogeneity
Nontransferable

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What are the two forms of inventory

Accounting and Operational Inventories

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Purchased items received, but not yet transformed

Raw Materials

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Raw materials that have entered the transformation process and are in process or waiting

Work-in-progress

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Products of the transformation process that are ready to be sold

Finished Goods

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Why is inventory management important throughout the entire supply chain?

Inventory management generates valuable data that can be used for forecasting, demand planning, and supply chain optimization.

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The planning and controlling of inventories to meet the competitive priorities of the organization.

Inventory Management

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What are some of the pressures for small inventories

Inventory holding cost
Cost of capital
Storage and handling costs
Taxes
Insurance
Shrinkage
Pilferage
Obsolescence
Deterioration

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What are some reasons for carrying inventory

1) Protect against lead time demand
2) Maintain independence of operations
3) Balance supply and demand
4) Buffer uncertainty (Safety Stock)
5) Economic purchase orders i.e buying in bulk to take advantage of reduced cost/unit

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What are the 5 different types of inventory we have discussed

Cycle Stock
Safety Stock
Anticipation inventory
Pipeline inventory
Maintenance, Repair and Operating Items (MRO)

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Inventory ready for immediate use, typically, produced in batches is known as

Cycle Stock

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Extra inventory carried for uncertainties in supply and demand. This is also known as buffer stock

Safety Stock

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Inventory carried in anticipation of events. This helps to smooth out the flow of products in supply chain
Also can be known as seasonal or hedge inventory

Anticipation Inventory

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Inventory in transit
Exists because points of supply and demand are not the same is also known as transportation inventory

Pipeline Inventory

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Inventory not directly related to product creation is known as

Maintenance, Repair and Operating Items (MRO)

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What are the 3 inventory costs

Holding
Ordering
Shortage

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Costs that vary with the amount of inventory held typically described as a % of inventory value
Also called carrying cost

Holding Cost

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Cost involved in placing an order also referred to as “setup cost”

Ordering Cost

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This cost occurs when we run out of stock

Shortage Cost

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How do we determine how much to order using the Fixed-Order Quantity system?

Determined using the EOQ Formula

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When do we determine to order using the Fixed-Order Quantity system?

When the Inventory Position (IP) reduces to the Reorder Point (ROP), an order is placed for the amount determined by the EOQ formula

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How do we determine how much to order using the Fixed-time period system?

The order quantity is determined by subtracting the current inventory position (IP) from the Target Level (R)

Q=IP-R

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How do we determine when to order when using a fixed time period system?

Orders are placed at fixed time intervals (T) when the Inventory Position (IP) is checked. "T" is pre-determined, i.e. every 2 weeks, every 30 days

An order of fixed quantity, Q, is placed when inventory drops to a reorder point, ROP. What system do we use to calculate the ROP?

Fixed-Order Quantity System "Q" System

Inventory is checked in fixed time periods, T, and the quantity ordered varies.What system is used to calcuate this answer?

Fixed-Time Period System "P" System

An order is only placed when inventory drops to a specified level, known as?

Reorder Point (ROP)

T/F-The amount requested in each order placed will always be the same quantity when used the fixed-order quantity system

True

T/F- the amount requested in each order placed will vary and is based refilling back up to the target inventory level "R" when using the fixed time period system

True

Demand for a finished product is known as

Independent Demand

Demand for components parts or subassemblies is known as

Dependent Demand

Relationships between independent and dependent demand is shown in a

Bill of Materials (BOM)

T/F- Dependent demand order quantities can be computed via an Materials Requirements Planning system (MRP)

True

An inventory control system used to compute order quantities for dependent demand inventory items is known as

Materials Requirements Planning

A list that shows all of the raw materials and subassemblies that go into a product. It also shows the quantities and relationships of items needed to make a final product

Bill of Materials (BOM)

Inventory management tool that classifies inventory based on its degree of importance. It gives priority to important inventory items

ABC Classification

T/F- Based on Pareto’s Law (80/20) – 20% of the inventory items (part numbers) account for 80% of the total inventory value

True

Idk just know

High Priority Items – Class A (“vital few”), Moderate Priority – Class B, and Low Priority – Class C (“trivial many”)

What formula provides the ideal quantity to be purchased that minimizes Total Cost.

EOQ Formula

What does EOQ stand for

Economic Order Quantity

***** is minimized when the ordering cost equals the holding cost. It is at this intersection that the optimal value of “Q” or EOQ is revealed.

Total Cost

storage capacity and costs should be considered when ordering large quantities this is known as

Capacity Constraints

Total cost changes little on either side of the EOQ ---managers can adjust to accommodate needs. What is the term that describes this

EOQ Adjustments

The most common metrics used to measure inventory are (4)

Units Dollars Weeks of Supply Inventory Turnover

Vendor is responsible for managing the inventory located at a customer’s facility what is this known as

Vendor Managed Inventory (VMI)

A management tool used to address, improve, and communicate supply chain management decisions within a company, with their suppliers, and with their customers. A model that describes the business processes required to satisfy a customer’s demands. Is Known as?

SCOR

What does SCOR stand for?

Supply Chain Operational Reference

T/F- SCOR is a process framework

True

What type of frameworks deliver the known concepts of business process reengineering - benchmarking - best practices and - organizational design in a cross-functional framework

Process Frameworks

Why use SCOR?

- Helps explain the processes along the entire supply chain - Provides a basis for how to improve processes along the entire supply chain - It is has been described as the “most promising model for supply chain strategic decision making”

T/F- SCOR has been described as the “most promising model for supply chain strategic decision making”

True

Who developed the SCOR model?

Developed by the Supply Chain Council along with 70 of the world’s leading manufacturing companies

Who uses the SCOR model?

Manufacturing and Service Firms

T/F- Intel was one of the first major US corporations to adopt SCOR (~1999)

True

Benefits recorded using the SCOR model included for this type of business is faster cycle times less inventories improved supply chain visibility timely access to important customer information Is this a manufacturing example or service

Manufacturing

T/F- A service example of using the SCOR model is A New York hospital used the SCOR model to define, measure, and improve SC

True

Benefits recorded using the SCOR model included for this type of business is less inventories increased capacity increase in demand reduced labor cost reduced prep times for key procedures Is this a manufacturing example or service

Service

T/F- The SCOR process framework combines 4 techniques into one integrated approach

True

What part of the SCOR process framework captures the "as-is" business activity and design the future "to be" state

Business Process Re-engineering

What part of the SCOR process framework quantifies relative performance of similar supply chains and establish internal targets

Performance Benachmarking

What part of the SCOR process framework identifies practices and software solutions that result in significantly better performance

Best Practices Analysis

What part of the SCOR process framework technique assesses skills and performance needs and align staff and staffing needs to internal targets

Organizational Design

What is the process reference framework for business process re-engineering

Processes

What is the process reference framework for performance benchmarking?

Performance (metrics)

What is the process reference framework that identifies practices and software solutions that result in significantly better performance

Practices

What is the process framework that assesses skills and performance needs and align staff and staffing needs to internal targets

People (skills)

SCOR defines this word as The processes that plan and execute the acquisition of materials, transformation of materials in sellable products, delivery and return of products and services in support of customer orders

SCOR definition of Supply Chain

End-to-End Supply Chain

Supplier's Supplier - Components PLAN Supplier- Subassemblies PLAN My organization- manufactures PLAN Customer-Retailer PLAN Customer's Customer- Consumer

What are the SCOR Processes

Plan Source Make Deliver Return Enable

Which SCOR process objective is determining capacity, materials, staffing  and resource needed to achieve supply chain targets and  the identification of corrective actions to address shortages  in supply or demand.

Plan

Which SCOR process objective is the ordering, receipt, inspection and transfer of raw materials,  subassemblies, products, packaging and/or services -Used for receiving from suppliers and/or from internal nodes

Source

Which SCOR process objective is The conversion of adding value to products through mixing, separating, forming, machining, and chemical processes, repair, refurbishment, and/or decomposition

Make

What is an example of the SCOR process plan?

Forecasting, S&OP, MRP? Likely “Plan” in SCOR

What is an example of the SCOR process Source

Receiving processes? Probably “Source” in SCOR

What is an example of the SCOR process "Make"

Item number change? Probably “Make” in SCOR

Which SCOR process objective is the (customer-facing) process of managing orders, scheduling deliveries, picking, packing and shipping and invoicing customers for products and services delivered

Deliver

Which SCOR process objective is returning materials or products to address defects in product, ordering, or manufacturing, or to perform upkeep activities (addresses both physical and logical returns).

Return

What is an example of the SCOR process Deliver

Order taking or Shipping? Probably Deliver in SCOR

What is an example of the SCOR process Return

Reverse material flow? Probably “Return” in SCOR

How does SCOR help companies that have implemented the model?

- Translates business strategy to supply chain strategy (Formulate strat) - Measure supply chain performance - Understand relative performance compared to competitors  – How are we doing compared to our supply chain strategy - Identify and monitor processes that most likely cause the  performance gaps – What improvement targets should we pursue?

A characteristic to describe a strategy.  Performance attributes serve as classification for metrics and  formulate strategic direction

Performance Attribute

A metric to measure the  overall performance or state-of-affairs. SCOR level-1 metrics  are considered KPIs

Key Performance Indicator

A standard of measurement is known as

Metric

An observation that reduces the amount  of uncertainty about the value of a quantity is known as

Measurement

JUST KNOW

SCOR METRICS- Level 1 are first selected and then diagnostic metrics follow Level 2 and Level 3

What monitors and diagnoses overall supply chain health

SCOR Metrics

A visual display of the most important information  needed to achieve one or more objectives, consolidated and  arranged in a single view

Scorecard

A scorecard providing metrics related to  four organizational strategies: financial, customer satisfaction, internal process excellence/efficiency, and employee learning  and growth

Balanced Scorecard

A scorecard providing metrics related to the five  SCOR supply chain strategies (attributes): reliability, responsiveness, Agility, cost and assets

SCORcard

Comparing an organization’s performance, products, practices, and/or services with those of other organizations that operate in the same or comparable industry

Benchmarking

What are 3 SCORcard metric requirements

Measurable and quantifiable Linkage to responsibility Ensure metric is well-defined

What SCORcard metric requirement should Avoid 'feel good' metrics like supplier satisfaction or customer satisfaction, unless they are an aggregation of well-defined detail metrics. Framework-based metrics simplify the selection process

Measurable and quantifiable

What SCORcard metric requirement should Avoid metrics that have no impact on performance reviews (supplier or employee), ensure the metric is linked to the (right) process owner at the right level

Linkage to responsibility

Multiple interpretations of a metric may lead to 'workarounds' and negation of the effort. SCOR metric this is known as

Ensure metric