Vocab Flashcards by Jenn Ochs

Classification of a group of items in decreasing order of annual dollar volume or other criteria

ABC CLASSIFICATION

How well did you know this?

Not at all

Perfectly

An electronic data interchange (EDI) notification of shipment of product.

ADVANCE SHIP NOTICE (ASN)

How well did you know this?

Not at all

Perfectly

1) An electronic board that provides visibility of floor status and supplies information to help coordinate the efforts to linked work centers;
2) A visual signaling system

ANDON

How well did you know this?

Not at all

Perfectly

Additional inventory above basic pipeline stock to cover projected trends of increasing sales, planned sales promotion programs, seasonal fluctuations, plant shutdowns, and vacations

ANTICIPATION INVENTORIES

How well did you know this?

Not at all

Perfectly

A production environment where a good or service can be assembled after receipt of a customer’s order.

ASSEMBLE-TO-ORDER

How well did you know this?

Not at all

Perfectly

An assembly process in which equipment and work centers are laid out to follow the sequence in which raw material and parts are assembled

ASSEMBLY LINE

How well did you know this?

Not at all

Perfectly

A source of variation in a process that can be isolated, especially when its significantly larger magnitude or different origin readily distinguishes it from random causes of variation

ASSIGNABLE CAUSE

How well did you know this?

Not at all

Perfectly

The on-hand inventory balance minus allocations, reservations, backorders, and (usually) quantities held for quality problems. Often called “beginning available balance”

AVAILABLE INVENTORY

How well did you know this?

Not at all

Perfectly

The uncommitted portion of a company’s inventory and planned production maintained in the master schedule to support customer-order promising.

The ___ quantity is the uncommitted inventory balance in the first period and is normally calculated for each period in which an MPS receipt is scheduled.

AVAILABLE-TO-PROMISE (ATP)

How well did you know this?

Not at all

Perfectly

One-half the average lot size plus the safety stock, when demand and lot sizes are expected to be relatively uniform over time.

AVERAGE INVENTORY

How well did you know this?

Not at all

Perfectly

A method of inventory bookkeeping where the book (computer) inventory of components is automatically reduced by the computer after completion of activity on the component’s upper-level parent item based on what should have been used as specified on the BOM and allocation records.

BACKFLUSH

How well did you know this?

Not at all

Perfectly

The process of a transportation vehicle returning from the original destination point to the point of origin

BACKHAULING

How well did you know this?

Not at all

Perfectly

All of the customer orders received but not yet shipped. Sometimes referred to as open orders or the order board

BACKLOG

How well did you know this?

Not at all

Perfectly

An unfulfilled customer order or commitment. A ____ is an immediate (or past due) demand against an item whose inventory is insufficient to satisfy the demand

BACKORDER

How well did you know this?

Not at all

Perfectly

A technique for calculating operation start and due dates. The schedule is computed starting with the due date for the order and working backward to determine the required start date and/or due dates for each operation

BACK SCHEDULING

BACKWARDS SCHEDULING

How well did you know this?

Not at all

Perfectly

A financial statement showing the resources owned, the debts owed, and the owner’s share of a company at a given point in time.

BALANCE SHEET

How well did you know this?

Not at all

Perfectly

A series of alternating bars and spaces printed or stamped on parts, containers, labels, or other media, representing encoded information that can be read by electronic readers

BAR CODE

How well did you know this?

Not at all

Perfectly

A quantity scheduled to be produced or in production.
For discrete products, the ____ is planned to be the standard batch quantity, but during production, the standard batch quantity may be broken into smaller lots
For nondiscrete products, the ____ is a quantity that is planned to be produced in a given time period based on a formula or recipe that often is developed to produce a given number of end items

BATCH

How well did you know this?

Not at all

Perfectly

A type of manufacturing process used to produce items with similar designs and that may cover a wide range of order volumes. Typically, items ordered are of a repeat nature, and production may be for a specific customer order or for stock replenishment

BATCH (MANUFACTURING PROCESS)

How well did you know this?

Not at all

Perfectly

A method of picking orders in which order requirements are aggregated by produce across orders to reduce movement to and from product locations. The aggregated quantities of each product are then transported to a common area where the individual orders are constructed.

BATCH PICKING

How well did you know this?

Not at all

Perfectly

A consistent deviation from the mean in one direction (high or low). A normal property of a good forecast is that it is not biased.

BIAS

How well did you know this?

Not at all

Perfectly

A carrier’s contract and receipt for goods the carrier agrees to transport from one place to another and to deliver to a designated person. In case of loss, damage, or delay, the ____ is the basis for filing freight claims.

BILL OF LADING (UNIFORM)

How well did you know this?

Not at all

Perfectly

1) A listing of all the subassemblies, intermediates, parts, and raw materials that go into a parent assembly showing the quantity of each required to make an assembly
2) A list of all the materials needed to make one production run of a product, by a contract manufacturer, of piece parts/components for its customers
AKA: formula, recipe, ingredients list.

BILL OF MATERIAL

How well did you know this?

Not at all

Perfectly

Some display formats for ____ are:

1) Single-level ____
2) Indented ____
3) Modular (planning) ____
4) Transient ____
5) Matrix ____
6) Costed ____

BILL OF MATERIAL (FORMATS)

How well did you know this?

Not at all

Perfectly

Builders or parts of builders designated by the U.S. Secretary of Treasury for storing imported merchandise, operated under U.S. Customs supervision

BONDED WAREHOUSE

A facility, function, department, or resource whose capacity is less than the demand placed upon it. For example, a ____ machine or work center exists where jobs are processed at a slower rate than they are demanded

BOTTLENECK

truckloads of homogeneous items into smaller, more appropriate quantities for use

BREAK-BULK

BREAK-EVEN POINT

A quantity of materials awaiting further processing. Can refer to raw materials, semifinished stores or hold points, or a work backlog that is purposely maintained behind a work center

BUFFER

A process in which all expediting in a shop is driven by what is scheduled to be in the buffers (constraint, shipping, and assembly buffers)

BUFFER MANAGEMENT

- An extreme change in the supply position upstream in a supply chain generated by a small change in demand downstream in the supply chain. Inventory can quickly move from being backordered to being excess. This is caused by the serial nature of communicating orders up the chain with the inherent transportation delays of moving product down the chain. To eliminate—synchronize the supply chain.

BULLWHIP EFFECT

A statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow statements.

BUSINESS PLAN

1) A ____ is usually stated in terms of dollars and grouped by product family 2) It is then translated into synchronized tactical functional plans through the production planning process 3) Though frequently stated in different terms (dollars vs. units), these tactical plans should agree with each other and the ____

BUSINESS PLAN

A document consisting of the business details (organization, strategy, and financial tactics) prepared by an entrepreneur to plan for a new business

BUSINESS PLAN

CAPABLE-TO-PROMISE (CTP)

The capacity of a system or resource to produce a quantity of output of a particular time period.

CAPACITY AVAILABLE

The process of measuring production output and comparing it with the capacity plan, determining if the variance exceeds pre-established limits, and taking corrective action to get back on plan if the limits are exceeded

CAPACITY CONTROL

The function of establishing, measuring, monitoring, and adjusting limits or levels of capacity in order to execute all manufacturing schedules. The four levels at which ____ is executed are: 1) Resource requirements planning 2) Rough-cut capacity planning (RCCP) 3) Capacity requirements planning (CRP) 4) Input/output control

CAPACITY MANAGEMENT

CAPACITY PLANNING

- The capacity of a system or resource needed to produce a desired output in a particular time period.

CAPACITY REQUIRED

The function of establishing, measuring, and adjusting limits or levels of capacity. The term ____ in this context refers tot he process of determining in detail the amount of labor and machine resources required to accomplish the tasks of production

CAPACITY REQUIREMENTS PLANNING (CRP)

The cost of holding inventory, usually defined as a percentage of the dollar value of inventory per unit of time (generally one year). ____ is ultimately a policy variable reflecting the opportunity cost of alternative uses for funds invested in inventory. The determinants of ____ are: 1) Cost of capital invested (biggest factor) 2) Taxes 3) Insurance 4) Obsolescence 5) Spoilage 6) Space occupied

CARRYING COSTS

The net flow of dollars into or out of the proposed project. The algebraic sum, in any time period, of all cash receipts, expenses, and investments. AKA: cash proceeds, cash generated

CASH FLOW

- A tool for analyzing process dispersion. Illustrates the main causes and subcauses leading to an effect (symptom) AKA: Ishikawa diagram, fishbone diagram

CAUSE-AND-EFFECT DIAGRAM

A manufacturing process that produces families of parts within a single line or cell of machines controlled by operators who work only within the line or cell

CELLULAR MANUFACTURING

Inventory decision making for all stockkeeping units exercised from one office or department for an entire company

CENTRALIZED INVENTORY CONTROL

A status awarded to a supplier who consistently meets predetermined quality, cost, delivery, financial, and count objectives. Incoming inspection may not be required

CERTIFIED SUPPLIER

A production planning method that maintains a stable inventory level while varying production to meet demand

CHASE PRODUCTION METHOD

A system built around material requirements planning (MRP) that includes the additional planning processes of production planning (S&OP), master production scheduling (MPS), and capacity requirements planning (CRP). The term ____ implies not only that each of these processes is included in the overall system, but also that feedback is provided by the execution processes so that the planning can be kept valid at all times

CLOSED-LOOP MRP

Transportation available to the public that does not provide special treatment to any one party and is regulated as to the rates charged, the liability assumed, and the service provided. A ____ must obtain a certificate of public convenience and necessity from the FTC for interstate traffic

COMMON CARRIER

The advantage a company has over its rivals in attracting customers and defending against competitors. Sources of the advantage include characteristics that a competitor cannot duplicate without substantial cost and risk, such as manufacturing technique, brand name, or human skill set

COMPETITIVE ADVANTAGE

The raw material, part, or subassembly that goes into a higher level assembly, compound, or other item. May also include packaging materials for finished items

COMPONENT

1) A shipment that is handled by a common carrier 2) The process of a supplier placing goods at a customer location without receiving payment until after goods are used or sold

CONSIGNMENT

Any element or factor that prevents a system from achieving a higher level of performance with respect to its goal. Can be physical, such as a machine center or lack of material, or managerial, such as a policy or procedure

CONSTRAINT (PROCESS ENGINEERING)

One of a set of equations that cannot be violated in an optimization procedure

CONSTRAINT (OPTIMIZATION)

CONTINUOUS IMPROVEMENT PROCESS (CPI)

A production system in which the productive equipment is organized and sequenced according to the steps involved to produce the product. This term denotes that material flow is continuous during the production process. The routing of jobs is fixed and setups are seldom changed

CONTINUOUS PRODUCTION

A process by which a supplier is notified daily of actual sales or warehouse shipments or commits to replenish these sales without stockouts, and without receiving replenishment orders. Lowers associated costs and improves inventory turnover.

CONTINUOUS REPLENISHMENT

A carrier that does not service the general public, but provides transportation for hire for one or a limited number of shippers under a specific contract

CONTRACT CARRIER

A graphic comparison of process performance data with predetermined computed control limits. The process performance data usually consist of groups of measurements selected in regular sequence of production that preserve the order. One of the seven tools of quality. The primary use of ____ is to detect assignable causes of variation in the process as opposed to random variations

CONTROL CHART

CONTROL LIMIT

An accounting classification useful for determining the amount of direct materials (DM), direct labor (DL), and allocated overhead (OH) associated with the products sold over a given period of time

COST OF GOODS SOLD

The costs associated with providing poor quality products or services. The four categories of costs of ____ are: 1) Internal failure costs 2) External failure costs 3) Appraisal costs 4) Prevention costs

COST OF POOR QUALITY

In the Theory of constraints (TOC), a network planning technique for the analysis of a project's completion time, used for planning and controlling project activities. The critical chain, which determines project duration, is based on technological and resource constraints. Strategic buffering of paths and resources is used to increase project completion success.

CRITICAL CHAIN METHOD

A network planning technique for the analysis of a project's completion time used for planning and controlling the activities of a project. By showing each of these activities and their associated times, the critical path, which identifies those elements that actually constrain the total time for the project, can be determined

CRITICAL PATH METHOD (CPM)

The concept of packing products on the incoming shipment so they can be easily sorted at intermediate warehouses or for outgoing shipments based on final destination. The items are carried from the incoming vehicle docking point to the outgoing vehicle docking point without being stored in inventory at the warehouse. ____ requires inventory investment and storage space requirements

CROSS-DOCKING

The longest planned length of time to accomplish the activity in question. The ____ is found by reviewing the lead time for each BOM path below the item; whichever path adds up to the greatest number defines the ____

CUMULATIVE LEAD TIME

A marketing philosophy based on putting the customer first. The collection and analysis of information designed for sales and marketing decision support (as contrasted to enterprise resources planning information) to understand and support existing and potential customer needs. It includes account management, catalog and order entry, payment processing, credits and adjustment, and other functions

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

The ability of a company to address the needs, inquiries, and requests from customers. A measure of the delivery of a product to the customer at the time the customer specified

CUSTOMER SERVICE

CUSTOMS BROKER

An inventory accuracy audit technique where inventory is counted on a cyclic schedule rather than once a year. A cycle inventory count is usually taken on a regular, defined basis. Most effective ____ systems require the counting of a certain number of items every workday with each item counted at a prescribed frequency. The key purpose of ____ is to identify items in error, thus triggering research, identification, and elimination of the cause of the errors

CYCLE COUNTING

One of the two main conceptual components of any item inventory, the ____ is the most active component; the ____ depletes gradually as customer orders are received and is replenished cyclically when supplier orders are received. The other conceptual component of item inventory is safety stock

CYCLE STOCK

Refers to the length of time from when material enters a production facility until it exits

CYCLE TIME

DAYS OF SUPPLY

Inventory decision making exercised at each stocking location for SKUs at that location

DECENTRALIZED INVENTORY CONTROL

An amount of inventory kept between entities in a manufacturing or distribution network to create independence between processes or entities. The objective of ____ is to disconnect the rate of use from the rate of supply of the item

DECOUPLING INVENTORY

The time from receipt of a customer order to delivery of the product.

DELIVERY LEAD TIME

The process of planning, executing, controlling, and monitoring the design, pricing, promotion, and distribution of products and services to bring about transactions that meet organizational and individual needs. Proper ____ facilitates the planning and use of resources for profitable business results

DEMAND MANAGEMENT

DEMAND PLANNING

The triggering of material movement to a work center only when that work center is ready to begin the next job. In effect, it shortens or eliminates the queue from in front of a work center, but it can cause a queue at the end of the previous work center. Demand pull can also occur within a supply chain, in which case it often is called a demand chain

DEMAND PULL

Proven capacity calculated from actual performance data, usually expressed as the average number of items produced multiplied by the standard hours per item

DEMONSTRATED CAPACITY

- The carrier charges and fees applied when rail freight cards and ships are retained beyond a specified loading or unloading time

DEMURRAGE

Demand that is directly related to or derived from the bill of material (BOM) structure for other items or end products. Such demands are therefore calculated and need not and should not be forecast. A given inventory item may have both dependent and independent demand at any given time

DEPENDENT DEMAND

- Carrier charges and fees applied when truck trailers are retained beyond a specified loading or unloading time

DETENTION

- Labor that is specifically applied to the good being manufactured or used in the performance of the service

DIRECT LABOR

- Material that becomes a part of the final product in measurable quantities

DIRECT MATERIALS

The production of distinct items such as automobiles, appliances, or computers

DISCRETE MANUFACTURING

A method of picking orders in which the items on one order are picked before the next order is picked

DISCRETE ORDER PICKING

The selection and sequencing of available jobs to be run at individual workstations and the assignment of those jobs to workers

DISPATCHING

The activities associated with the movement of material, usually finished goods or service parts, from the manufacturer to the customer. It includes all activities related to physical ____, as well as the return of goods to the manufacturer. In many cases, this movement is made through one or more levels of field warehouses. Also, The systematic division of a whole into discrete parts having distinctive characteristics. The activities of ____ encompass the functions of transportation, warehousing, inventory control, material handling, order administration, site and location analysis, industrial packaging, data processing, and the communications network necessary for effective management

DISTRIBUTION

A warehouse with finished goods and/or service items. _________ is synonymous with the term “branch warehouse,” although the former has become more commonly used recently. When a warehouse serves a group of satellite warehouses, it is usually called a regional____________________.

DISTRIBUTION CENTER

The distribution route, from raw materials through consumption, along which products travel

DISTRIBUTION CHANNEL

Inventory, usually spare parts and finished goods, located in the distribution system (in warehouses, in-transit between warehouses and the customers)

DISTRIBUTION INVENTORY

The function of determining the need to replenish inventory at branch warehouses. A time-phased order point approach is used where the planned orders at the branch warehouse level are "exploded" via MRP logic to become gross requirements on the supplying source.

DISTRIBUTION REQUIREMENTS PLANNING (DRP)

In the case of multilevel distribution networks, this explosion process can continue down through the various levels of regional warehouses (master warehouse, factory warehouse, etc) and become input to the master production system (MPS). Demand on the supplying sources is recognized as dependent, and standard MRP logic applies.

DISTRIBUTION REQUIREMENTS PLANNING (DRP)

Replenishment inventory calculations, which may be based on other planning approaches such as period order quantities or "replace exactly what was used", rather than being limited to the time-phased order point approach

DISTRIBUTION REQUIREMENTS PLANNING (DRP)

A facility that receives items in large lots, stores them temporarily, and breaks them into smaller lots destined for a variety of locations

DISTRIBUTION WAREHOUSE

A program by which specific quality and packaging requirements are met before the product is released. Prequalified product is shipped directly into the customer's inventory. ____ eliminates the costly handling of components, specifically in receiving and inspection and enables products to move directly into production

DOCK-TO-STOCK

- To take the title of the product but not actually handle, stock, or deliver it EX: to have one supplier ship directly to another or to have a supplier ship directly to the buyer's customer

DROP SHIP

- The theory of constraints (TOC) method for scheduling and managing operations that have an internal constraint or capacity-constrained resource

DRUM-BUFFER-ROPE (DBR)

The detailed production schedule for a resource that sets the pace for the entire system. The ____ must reconcile the customer requirements with the systems' constraint(s)

DRUM SCHEDULE

A type of fixed order quantity model that determines the total amount of an item to be purchased or manufactured at one time. The intent of ____ is to minimize the combined costs of acquiring and carrying inventory.

ECONOMIC ORDER QUANTITY

The basic formula of ____ is: ``` quantity = √((2AS)/iC) A: annual usage in units S: ordering costs in dollars i: annual inventory carry cost rate C: unit cost ```

ECONOMIC ORDER QUANTITY

A measurement of the actual output to the standard output expected. Efficiency measures how well something is performing relative to existing standards; in contrast, productivity measures output relative to a specific input

EFFICIENCY

The paperless (electronic) exchange of trading documents, such as purchase orders, shipment authorizations, advanced shipment notices (ASNs), and invoices, using standardized document formats

ELECTRONIC DATA INTERCHANGE (EDI)

The practice of giving non-managerial employees the responsibility and the power to make decisions regarding their jobs or tasks. It is associated with the practice of transfer of managerial responsibilities to the employee. ____ allows the employee to take on responsibility for tasks normally associated with staff specialists

EMPLOYEE EMPOWERMENT

The concept of using the experience, creative energy, and intelligence of all employees by treating them with respect, keeping them informed, and including them and their ideas in decision-making processes appropriate to their areas of improvement. ____ focuses on quality and productivity improvements

EMPLOYEE INVOLVEMENT

Products whose customer specifications require unique engineering design, significant customization, or new purchased materials. Each customer order results in a unique set of part numbers, bills of material (BOM), and routings

ENGINEER-TO-ORDER (ETO)

- Framework for organizing, defining, and standardizing the business processes necessary to effectively plan and control an organization so the organization can use its internal knowledge to seek external advantage

ENTERPRISE RESOURCE PLANNING (ERP)

To perform a bill-of-materials (BOM) explosion

EXPLODE

Costs relating to problems found after the product reaches the customer EX: Warranties, returns

EXTERNAL FAILURE COSTS

The time associated with elements of a setup procedure performed while the process or machine is running

EXTERNAL SETUP TIME

A forecasting method on a correlated leading indicator, such as estimating furniture sales based on housing starts. ____ tend to be useful for large aggregations, such as total company sales, than for individual product sales

EXTRINSIC FORECASTING METHOD

The functions of installing and maintaining a product for a customer after the sale or during the lease. ____ may also include training and implementation assistance

FIELD SERVICE

A schedule of end items to finish the product for specific customers' orders in a make-to-order (MTO) or assemble-to-order (ATO) environment. It is also referred to as the finishing schedule because it may involve operations other than the final assembly (EX: final mixing, cutting, packaging). The ___ is prepared after receipt of a customer order as constrained by the availability of material and capacity, and it schedules the operations required to complete the product from the level where it is stocked to the end-item level

FINAL ASSEMBLY SCHEDULE (FAS)

Those items on which all manufacturing operations, including final test, have been completed. These products are available for shipment to the customer as either end items or repair parts

FINISHED GOODS INVENTORY

An equipment scheduling technique that builds a schedule by proceeding sequentially from the initial period to the final period while observing capacity limits. A Gantt chart may be used with this technique

FINITE FORWARD SCHEDULING

Assigning no more work to a work center than the work center can be expected to execute in a given time period. The specific term usually refers to a computer technique that involves calculating shop priority revisions in order to level load operation by operation

FINITE LOADING

A planned order that can be frozen in quantity and time. the computer is not allowed to change it automatically; this is the responsibility of the planner in charge of the item that is being planned. This technique can aid planners working with MRP systems to respond to material and capacity problems by firming up selected planned orders. In addition, ____ are the normal method of stating the master production schedule (MPS)

FIRM PLANNED ORDER (FPO)

In the Theory of constraints (TOC), a process to continuously improve organizational profit by evaluating the production system and market mix to determine how to make the most profit using the system constraint.

FIVE FOCUSING STEPS

The ____ are: 1) Identifying the constraint to the system 2) Deciding how to exploit the constraint to the system 3) Subordinating all non constraints to the constraint 4) Elevating the constraint to the system 5) Returning to Step 1 if the constraint is broken in any previous step, while not allowing inertia to set in

FIVE FOCUSING STEPS

Five terms beginning with "S" used to create a workplace suitable for lean production. The ____ are: 1) Sort 2) Simplify 3) Scrub 4) Standardize 5) Sustain

FIVE Ss

- The common practice in Total quality management is to ask "why" five times when confronted with a problem. By the time the answer to the fifth "why" is found, the ultimate cause of the problem is identified

FIVE WHYS

A method of storage in which a relatively permanent location is assigned for the storage of each item in a storeroom or warehouse. Although more space is needed to store parts than in a random-location system, ____ become familiar, and therefore a locator file may not be needed

FIXED LOCATION STORAGE

A lot-sizing technique in MRP or inventory management that will always cause planned or actual orders to be generated for a predetermined fixed quantity, or multiples thereof, if net requirements for the period exceed the ____

FIXED ORDER QUANTITY

- Traditionally, all manufacturing costs--other than Direct labor (DL) and Direct materials (DM)--that continue even if products are not produced. Although ____ is necessary to produce the product, it cannot be directly traced to the final product

FIXED OVERHEAD

Similar to project manufacturing, this type of manufacturing is mostly used for large, complex projects, where the product remains in one location for its full assembly period or may move from location to location after considerable work and time are spent on it. EX: Shipbuilding, aircraft assembly

FIXED POSITION MANUFACTURING

The output of a flowcharting process, a chart that shows the operations, transportation, storages, delays, inspections, and so on related to a process. One of the seven tools of quality

FLOW CHART

A system in which work flows over a stationary path, usually with little variance in the rate of flow. This is known as repetitive manufacturing if discrete units are produced, and otherwise is referred to as continuous manufacturing

FLOW PROCESSING

A form of manufacturing organization in which machines and operators handle a standard, usually uninterrupted, material flow. The operators generally perform the same operations for each production run. A ____ is often referred to as a mass production shop or is said to have a continuous manufacturing layout. The plant layout is designed to facilitate a product "flow". Some process industries are extreme examples of ____. Each product, through variable in material specifications, uses the same flow pattern through the shop. Production is set at a given rate, and the products are generally manufactured in bulk

FLOW SHOP

Inventory that is carried as a cushion to protect against forecast error

FLUCTUATION INVENTORY

An estimate of future demand. Various techniques attempt to predict one or more of the four components of demand

FORECAST

The difference between actual demand and forecast demand, stated as an absolute value or as a percentage

FORECAST ERROR

A scheduling technique where the scheduler proceeds from a known start date and computes the completion date for an order, usually proceeding from the first operation to the last. Dates generated by this technique are generally the earliest start dates for operations

FORWARD SCHEDULING

A set of marketing tools to direct the business offering to the customer.

FOUR P's

The grouping of shipments to obtain reduced costs or improved utilization of the transportation function

FREIGHT CONSOLIDATION

FREIGHT FORWARDER

A facility configuration in which operations of a similar nature or function are grouped together; an organization structure based on departmental specialty (EX: saw, lathe, mill, press)

FUNCTIONAL LAYOUT

- The earliest and best-known type of planning and control chart, especially designed to show graphically the relationship between planned performance and actual performance over time. Named after it's originator, Henry L. Gantt

GANTT CHART

The two reason why a ____ is used are: 1) Machine loading: one horizontal line is used to represent capacity and another is used to represent load against that capacity 2) Monitoring job progress: one horizontal line represents the production schedule and another parallel line represents the actual progress of the job against the schedule in time

GANTT CHART

A Japanese word meaning "shop floor"

GEMBA

A Japanese phrase meaning "visit the shop floor to observe what is occurring"

GENCHI GENBUTSU

GENERAL AND ADMINISTRATIVE EXPENSES (G&A)

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The responsibility of the supplier to dispose of packaging materials or environmentally sensitive materials such as heavy metals

GREEN REVERSE LOGISTICS

The difference between total revenue and the Costs of goods sold (COGS)

GROSS MARGIN

The total of independent and dependent demand for a component before the netting of on-hand inventory and scheduled receipts

GROSS REQUIREMENTS

A Japanese word meaning "reflection"

HANSEI

A form of inventory buildup to buffer against some event that may not happen. ____ planning involves speculation related to potential labor strikes, price increases, unsettled governments, and events that could severely impair a company's strategic initiatives. Risk and consequence are unusually high, and top management approval is often required

HEDGE INVENTORY

In Just-in-time philosophy, an approach to level production throughout the supply chain to match the planned rate of end product sales

HEIJUNKA

A graph of contiguous vertical bars representing a frequency distribution in which the groups or classes of items are marked on the x-axis and the number of items in each class is indicated on the y-axis. The pictorial nature lets people see patterns that are difficult to see in a simple table of numbers

HISTOGRAM

A Japanese word meaning "statement of objectives"

HOSHIN

Breakthrough planning. A Japanese strategic planning process in which a company develops up to four vision statements that indicate where the company should be in the next five years. Company goals and work plans are developed based on the vision statements. Periodic audits are then conducted to monitor progress

HOSHIN PLANNING

- The available capacity that exists on nonconstraint resources beyond the capacity required to support the constraint.

IDLE CAPACITY

The two components of ____ are: 1) Protected capacity 2) Excess capacity

IDLE CAPACITY

A financial statement showing the net income for a business over a given period of time

INCOME STATEMENT

INCOTERMS

INDENTED BILL OF MATERIAL

The demand for an item that is unrelated to the demand for other items. Some examples of ____ are: 1) Finished goods 2) Parts required for destructive testing 3) Service parts requirements

INDEPENDENT DEMAND

Material handling devices used in warehouses. Unlike conveyors, ____ are not confined to a fixed route

INDUSTRIAL TRUCKS

Calculation of the capacity required at work centers int eh time period regardless of the capacity required to perform the work

INFINITE LOADING

A technique for capacity control where planned and actual inputs and planned and actual outputs of a work center are monitored

INPUT/OUTPUT CONTROL (I/O)

A form of manufacturing in which the jobs pass through the functional departments in lots, and each lot may have a different routing

INTERMITTENT PRODUCTION

What are the 6 steps in the House of Quality?

The 6 steps in the ____ are: 1) Identify customer requirements 2) Identify supporting technical design requirements 3) Compare customer requirements to the technical design requirements and assign relationship ratings 4) Assign importance to the customer requirements 5) Evaluate competitors 6) Identify technical features to be deployed in the final design of the product

1) Shipments moved by different types of equipment combining the best features of each mode 2) The use of two or more different carrier modes in the through movement of a shipment.

INTERMODAL TRANSPORT

Costs relating to problems before the product reaches the customer EX: Rework, scrap, downgrades, reinspection

INTERNAL FAILURE COSTS

INTERNAL SETUP TIME

One plant's need for a part or product that is produced by another plant or division within the same organization. Although it is not a customer order, it is usually handled by the master production scheduling system in a similar manner

INTERPLANT DEMAND

Material moving between two or more locations, usually separated geographically

IN-TRANSIT INVENTORY

A forecast based on internal factors, such as an average of past salesQ

INTRINSIC FORECAST METHOD

INVENTORY ACCURACY

A change made to an inventory record to correct the balance, to bring it in line with actual physical inventory balances. A ____ either increases or decreases the item record on-hand balance

INVENTORY ADJUSTMENT

Inventory used to protect the throughput of an operation or the schedule against the negative effects caused by delays in delivery, quality problems, delivery of incorrect quantity, etc

INVENTORY BUFFER

The activities and techniques of maintaining the desired level of items, whether raw materials, WIP, or finished goods

INVENTORY CONTROL

The branch of business management concerned with planning and controlling inventories

INVENTORY MANAGEMENT

Inventory models for the replenishment of inventory. Independent demand inventory ordering models include

INVENTORY ORDERING SYSTEM

The number of times that an inventory cycles, or "turns over" during the year

INVENTORY TURNOVER

The Japanese term for the practice of stopping the production line when a defect occurs

JIDOKA

A Japanese word meaning voluntary study groups

JISHUKEN

A cost accounting system in which costs are assigned to specific jobs. The system can be used with either actual or standard costs in the manufacturing of distinguishable units or lots of products

JOB COSTING

An organization in which similar equipment is organized by function. each job follows a distinct routing through the shop

JOB SHOP

The production planning and control techniques used to sequence and prioritize production quantities across operations in a job shop

JOB SHOP SCHEDULING

The Japanese term for improvement; continuing improvement involving everyone-managers and workers. Finding and eliminating waste in machinery, labor, or production methods

KAIZEN

a method of JIT production that uses standard containers or lot sizes with a single card attached to each. It is a pull system in which work centers signal with a card that they wish to withdraw parts from feeding operations or suppliers

KANBAN

A financial or nonfinancial measure, either tactical or strategic, that is linked to specific strategic goals or objectives

KEY PERFORMANCE INDICATOR (KPI)

This cost includes the product cost plus the cost of logistics, such as warehousing, transportation, and handling fees.

LANDED COSTS

A span of time required to perform a process (or series of operations). The time between recognition of the need for an order and the receipt of the goods

LEAD TIME

A technique used in MRP where a planned order receipt in one time period will require the release of that order in an earlier time period based on the lead time for the item.

LEAD TIME OFFSET

A specific business activity index that indicates future trends

LEADING INDICATOR

A philosophy of production that emphasizes the minimization of the amount of all the resources (including time) used in the various activities of the enterprise

LEAN PRODUCTION

A measure of satisfying demand through inventory or by the current production schedule in time to satisfy the customers' requested delivery dates and quantities.

LEVEL OF SERVICE

LEVEL PRODUCTION METHOD

Each day's customer demand is scheduled to be built on the day it will be shipped. A ____ is the output of the load-leveling process.

LEVEL SCHEDULE

An accounting/financial term representing debts or obligations owed by a company to creditors.

LIABILITIES

Within physical distribution, cost elements that vary by distance traveled and not by weight carried.

LINE-HAUL COSTS

The amount of planned work scheduled for actual work released to a facility, work center, or operation for a specific span of time. Usually expressed in terms of standard hours of work or, when items consume similar resources at the same rate, units of production

LOAD

orders out in time or rescheduling operations so that the amount of work to be done in sequential time periods tends to be distributed evenly and is achievable.

LOAD LEVELING

The art and science of obtaining, producing, and distributing material and product in the proper place and in proper quantities

LOGISTICS

A quantity produced together and sharing the same production costs and specifications

LOT

A set of procedures used to maintain lot integrity from raw materials, from the supplier through manufacturing to consumers

LOT CONTROL

A lot-sizing technique that generates planned orders in quantities equal to the net requirements in each period

LOT-FOR-LOT

amount of a particular item that is ordered from the plant or a supplier or issued as a standard quantity to the production process

LOT SIZE

Inventory that results whenever quantity price discounts, shipping costs, setup costs, or similar considerations make it more economical to purchase or produce in larger lots than are needed for immediate purposes.

LOT SIZE INVENTORY

Items used in support of general operations and maintenance such as maintenance supplies, spare parts, and consumables used in the manufacturing process and supporting operations

MAINTENANCE, REPAIR, AND OPERATING SUPPLIES

The act of deciding whether to produce an item internally or buy it from an outside supplier. Some factors to consider in the ____ decision are: 1) Costs 2) Capacity availability 3) Proprietary and/or specialized knowledge 4) Quality considerations 5) Skill requirements 6) Volume 7) Timing

MAKE OR BUY DECISION

A production environment where a good or service can be made after receipt of a customer's order

MAKE TO ORDER

A production environment where products can be and usually are finished before receipt of a customer order

MAKE TO STOCK

A calendar used in inventory and production planning functions that consecutively numbers only the working days so that the component and work order scheduling may be done based on the actual number of workdays available

MANUFACTURING CALENDAR

The total time required to manufacture an item, exclusive of lower level purchasing lead time

MANUFACTURING LEAD TIME

A document, group of documents, or schedule conveying authority for the manufacture of specified parts or products in specified quantities

MANUFACTURING ORDER

The set of guiding principles, driving forces, and ingrained attitudes that helps communicate goals, plans, and policies to all employees and that is reinforced through conscious and subconscious behavior within the manufacturing organization

MANUFACTURING PHILOSOPHY

The series of operations performed upon material to convert it from the raw material or a semi-finished state to a state of further completion

MANUFACTURING PROCESS

A method for the effective planning of all resources of a manufacturing company

MANUFACTURING RESOURCE PLANNING (MRP II)

Responding to customers' needs

MARKET DRIVEN

The basic plan marketing expects to use to achieve its business and marketing objectives in a particular market

MARKET STRATEGY

The creation of a high-volume product with large variety so that a customer may specify an exact model out of a large volume of possible end items while manufacturing cost is low due to large volume

MASS CUSTOMIZATION

A group of business processes that includes the following activities: 1) Demand management 2) Production and resource planning 3) Master scheduling

MASTER PLANNING

A line on the master schedule grid that reflects the anticipated build schedule for those items assigned to the master scheduler. It represents what the company plans to produce expressed in specific configurations, quantities, and dates

MASTER PRODUCTION SCHEDULE (MPS)

A format that includes time periods, the forecast, customer orders, projected available balance (PAB), ATP, and the MPS. Some of the things that the ____ takes into account are: 1) The forecast 2) The production plan 3) Backlog 4) Availability of resources 5) Availability of capacity 6) Management policies and goals

MASTER SCHEDULE

A set of techniques that uses bill of materials (BOM) data, inventory data, and the MPS to calculate requirements for materials. It makes recommendations to release replenishment orders for material. Further, because it is time-phased, it makes recommendations to reschedule open orders when due dates and need dates are not in phase

MATERIAL REQUIREMENTS PLANNING

The movement of items from one point to another inside a facility or between facilities

MATERIALS HANDLING

The grouping of management functions supporting the complete cycle of material flow, from the purchase and internal control of production materials to the planning and control of WIP to the warehousing, shipping, and distribution of the finished product

MATERIALS MANAGEMENT

The average of the absolute values of the deviations of observed values from some expected value

MEAN ABSOLUTE DEVIATION (MAD)

A paradigm of how the world works formed by a person's experiences and assumptions

MENTAL MODEL

A regular route for pickup of mixed loads from several suppliers

MILK RUN

A type of order point replenishment system where the min is the order point, and the max is the "order up to" inventory level

MIN-MAX SYSTEM

Making several different parts or products in varying lot sizes sot hat a factory produces close tot eh same mix of products that will be sold that day. The goal of ____ is to build every model every day, according to daily demand

MIXED-MODEL PRODUCTION

MIXED MODEL SCHEDULING

Using the same set of components in a variety of finished goods

MODULARIZATION

The time that a job spends in transit from one operation to another in the plant

MOVE TIME

Waste; in lean manufacturing, costs are reduced by reducing waste within a system. The 7 categories of ____ are: 1) Overproduction (excess or too early) 2) Waiting 3) Transportation (unneeded movements) 4) Processing 5) Motion (activities that do not add value) 6) Inventory 7) Defective units

MUDA

A display of all of the components directly or indirectly used in a parent, together with the quantity required of each component

MULTILEVEL BILL OF MATERIAL

Procurement of a good or service from more than one independent supplier

MULTISOURCING

A Japanese word meaning unevenness or variability

MURA

A Japanese word meaning strain or overburden

MURI

Costs associated with the formal evaluation and audit of quality in the firm EX: Inspection, quality audits, testing, calibration, checking time

APPRAISAL COSTS

The act of combining several small processes to form one larger process

NESTING

In MRP, the ____ for a pat or an assembly are derived as a result of applying gross requirements and allocations against inventory on hand, scheduled receipts, and safety stock

NET REQUIREMENTS

The quantity shown in the inventory records as physically being in stock

ON-HAND BALANCE

A measure (percentage) of meeting the customer's originally negotiated delivery request date

ON-TIME SCHEDULE PERFORMANCE

- A kanban system where only a move card is employed. Typically, the work centers are adjacent, therefore no production card is required

ONE-CARD KANBAN SYSTEM

A released manufacturing order or purchase order; an unfulfilled customer order

OPEN ORDER

All the money an organization spends in generating "goal units"

OPERATING EXPENSE

The planning, scheduling, and control of the activities that transform inputs into finished goods and services

OPERATIONS MANAGEMENT

Machine operators having the flexibility to solve problems and to do other tasks beyond their immediate responsibilities

OPERATOR FLEXIBILITY

The process of accepting and translating what a customer wants into terms used by the manufacturer or distributor. The commitment should be based on the ATP line in the master schedule.

ORDER ENTRY

Selecting or "picking" the required quantity of specific products for movement to a packaging area and documenting that the material was moved from one location to shipping

ORDER PICKING

A set inventory level where, if the total stock on hand plus on order falls to or below that point, action is taken to replenish the stock

ORDER POINT

The process of making a delivery commitment (IE: Answering "when can you ship?")

ORDER PROMISING

Those competitive characteristics that a firm must exhibit to be a viable competitor in the marketplace

ORDER QUALIFIERS

Those competitive characteristics that cause a firm's customers to chose that firm's goods and services over those of its competitors. ____ can be considered a competitive advantage for the firm

ORDER WINNERS

Used in calculating order quantities, the costs that increase the number of orders placed increases

ORDERING COST

The process of having suppliers provide goods or services that were previously provided internally

OUTSOURCING

The costs incurred in the operation of a business that cannot be directly related to the individual goods or services produced

OVERHEAD

OVERLAPPED SCHEDULE

An accounting/financial term representing the residual claim by the company's owners or shareholders, or both, to the company's assets less its liabilities

OWNER'S EQUITY

In lean the philosophy is to produce at the market rate of consumption. Because lines cannot be perfectly balanced, the ____ is the resource requiring the longest time to produce among the set of activities in a line or cell. This operation determines the flow through the line or cell

PACEMAKER

ORDER POINT FORMULA

OP = DDLT + SS

A production environment in which a good or service can be packaged after receipt of a customer order. The item is common across many different customers; packaging determines the end product

PACKAGE TO ORDER

a calculation of the space needed to store a certain number of pallets

PALLET POSITIONS

The item produced from one or more components

PARENT ITEMS

PARETO'S LAW

PARTICIPATIVE DESIGN/ENGINEERING

In MRP and MPS, the capability to identify for a given item the sources of its gross requirements and/or allocations. ____ can be thought of as active where-used information

PEGGING

PERFORMANCE STANDARD

A lot-sizing technique under which the lot size is equal to the net requirements for a given number of periods

PERIOD ORDER QUANTITY

A method of aggregating requirements to place deliveries of varying quantities at evenly spaced time intervals, rather than variably spaced deliveries of equal quantities

PERIODIC REPLENISHMENT

A computer record or manual document on which each inventory transaction is posted so that a current record of the inventory is maintained

PERPETUAL INVENTORY RECORD

Determination of inventory quantity by actual count. The 3 types of ____ are: 1) Continuous 2) Periodic 3) Annual

PHYSICAL INVENTORY

The transportation of goods from supplier to buyer

PHYSICAL SUPPLY

A document that lists the material to be picked for manufacturing or shipping orders

PICKING LIST

Transportation costs based on the number of pick ups and the weight of the cargo

PICKUP AND DELIVERY COSTS

- Inventory in the transportation network and the distribution system, including the flow through intermediate stocking points. Some flow time factors that influence the amount of ____ are: 1) Order transmission 2) Order processing 3) Scheduling 4) Shipping 5) Transportation 6) Receiving 7) Stocking

PIPELINE STOCK

A four-step process for quality improvements. | AKA: Shewhart cycle, Deming circle

PLAN-DO-CHECK-ACTION (PDCA)

- A suggested order quantity, release date, and due date created by the planning system's logic when it encounters net requirements in processing MRP

PLANNED ORDER

- The quantity planned to be received at a future date as a result of a planned order release. ____ differ from scheduled receipts in that they have not been released

PLANNED ORDER RECEIPT

A row on an MRP table that is derived from planned order receipts by taking the planned receipt quantity and offsetting to the left by the appropriate lead time

PLANNED ORDER RELEASE

``` An artificial grouping of items or events in the BOM format used to facilitate master scheduling and master planning. It does not represent a buildable product, but is used to simplify forecasting, master production scheduling, and MRP. The book example for ____ is a bicycle, with: Color 30% Blue 30% Red 40% White ``` Size 25% Small 50% Medium 25% Large

PLANNING BILL OF MATERIAL

- The amount of time a plan extends into the future. For a Master schedule, the ____ is usually set to cover a minimum of cumulative lead time plus time for lot sizing low-level components and for capacity changes of primary work centers of key suppliers

PLANNING HORIZON

The relief of inventory and computation of sales data at the time and place of sale, generally through the use of bar coding or magnetic media and equipment

POINT OF SALE (POS)

A product design strategy that shifts product differentiation closer to the consumer by postponing identity changes, such as assembly or packaging, to the last possible supply chain location

POSTPONEMENT

The costs caused by improvement activities that focus on the reduction of failure and appraisal costs. Some examples of ____ are: 1) Education 2) Quality training 3) Supplier certification

PREVENTION COSTS

The activities, including adjustments, replacements, and basic cleanliness, that forestall machine breakdown. The purpose of ____ is to ensure that production quality is maintained and that delivery schedules are met. In addition, a machine that is well cared for will last longer and cause fewer problems

PREVENTATIVE MAINTENANCE

The process of communicating start and completion dates to manufacturing departments in order to execute a plan. The Dispatch list is the tool normally used to provide start and completion dates and priorities for ____, and it is based on the current plan and status of all open orders

PRIORITY CONTROL

The function of determining what material is needed and when. MPS and MRP are the elements used for the planning and replanning process to maintain proper due dates on required materials.

PRIORITY PLANNING

- A group that provides transportation exclusively within an organization

PRIVATE CARRIER

A planned series of actions or operations that advances a material or procedure from one stage of completion to another

PROCESS

- The quantity or volume of output that is to be completed at a workstation before switching to a different type of work or changing an equipment setup

PROCESS BATCH

The speed and ease with which the manufacturing transformation tasks can respond to internal or external changes

PROCESS FLEXIBILITY

The business functions of procurement planning, purchasing, inventory control, traffic, receiving, incoming inspection, and salvage operations

PROCUREMENT

The time required to design a product, modify or design equipment, conduct market research, and obtain all necessary materials. ____ begins when a decision has been made to accept an order to produce a new product, and ends when production commences

PROCUREMENT LEAD TIME

Any good or service produced for sale, barter, or internal use

PRODUCT

Cost allocated by some method to the products being produced. Initially recorded in asset (inventory) accounts, product costs become an expense (cost of sales) when the product is sold

PRODUCT COST

A strategy of making a product distinct from the competition on a nonprice basis such as availability, durability, quality, or reliability

PRODUCTION DIFFERENTIATION

A group of products with similar characteristics, often used in production planning (or S&OP)

PRODUCT FAMILY

Layout of resources arranged sequentially based on the product's routing

PRODUCT LAYOUT

The stages a new product goes through from beginning to end. The 5 stages in the ____ are: 1) Introduction 2) Growth 3) Maturity 4) Decline 5) Phase-out

PRODUCT LIFE CYCLE

The proportion of individual products that make up the total production or sales volume. Changes in the ____ can mean drastic changes in the manufacturing requirements for certain types of labor and material

PRODUCT MIX

The function of routing and dispatching the work to be accomplished through the production facility and of performing supplier control. ____ encompasses the principles, approaches, and techniques needed to schedule, control, measure, and evaluate the effectiveness of production operations

PRODUCTION ACTIVITY CONTROL (PAC)

A series of pieces of equipment dedicated to the manufacture of a specific number of products or families

PRODUCTION LINE

The agreed-upon plan that comes from the production planning (S&OP) process, specifically the overall level of manufacturing output planned to be produced, usually stated as a monthly rate for each product family

PRODUCTION PLAN

A process to develop tactical plans based on setting the overall level of manufacturing output (production plan) and other activities to best satisfy the current planned level of sales (sales planes or forecasts), while meeting general business objectives of profitability, productivity, competitive customer lead times, etc as expressed in the overall business plan

PRODUCTION PLANNING

- In the Theory of constraints (TOC), the inventory required to meet production requirements without allowances for unplanned delays

PRODUCTIVE CAPACITY

An overall measure of the ability to produce a good or a service. It is the actual output of production compared to the actual input of resources. ____ is a relative measure across time or against common entities (labor, capital, etc)

PRODUCTIVITY

The difference between the sales and Cost of goods sold (COGS) for an organization, sometimes expressed as a percentage of sales

PROFIT MARGIN

An inventory balance projected into the future. The running sum of on-hand inventory minus requirement plus scheduled receipts and planned orders

PROJECTED AVAILABLE BALANCE (PAB)

The resource capacity needed to protect system throughput-ensuring that some capacity above the capacity required to exploit the constraint is available to catch up when disruptions inevitably occur

PROTECTIVE CAPACITY

In the Theory of constraints (TOC) the amount of inventory required relative to the protective capacity in the system to achieve a specific throughput rate at the constraint

PROTECTIVE INVENTORY

- Protecting items by surrounding them with impact absorbing material. The protected package must be small enough to be transported and stored

PROTECTIVE PACKAGING

The production of items only as demanded for use or to replace those taken for use

PULL SYSTEM

- The purchaser's authorization used to formalize a purchase transaction with a supplier. When given to a supplier, a ____ should contain statements of: 1) The name 2) Part number 3) Quantity 4) Description 5) Price of goods or services ordered 6) Terms as to payment 7) Discounts 8) Dates of performance 9) Transportation

PURCHASE ORDER

An authorization to the purchasing department to purchase specified materials in specific quantities within a specified time

PURCHASE REQUISITION

The total lead time required to obtain a purchased item

PURCHASING LEAD TIME

The production of items at times required by a given schedule planned in advance

PUSH SYSTEM

Conformance to requirements or fitness for use. The 5 principle approaches to ____ are: 1) Transcendent quality is an ideal, a condition of excellence 2) Product-based quality is based on a product attribute 3) User-based quality is fitness for use 4) Manufacturing-based quality is conformance to requirements 5) Value-based quality is the degree of excellence at an acceptable price

QUALITY

A producer's responsibility to provide 100% acceptable quality material to the consumer of the material. The objective of ____ is to reduce or eliminate shipping or receiving inspections and line stoppages as a result of supplier defects

QUALITY AT THE SOURCE

The process of measuring quality conformance by comparing the actual with a standard for the characteristic and acting on the difference

QUALITY CONTROL

The overall costs associated with prevention activities and the improvement of quality throughout a firm before, during, and after production of a product. The 4 ____ are: 1) Internal failure 2) External failure 3) Appraisal 4) Preventative

QUALITY COSTS

A price reduction allowance determined by the quantity or value of a purchase

QUANTITY DISCOUNT

A waiting line. In manufacturing, the jobs at a given work center waiting to be processed. As ____ increase, so do average queue time and WIP inventory

QUEUE

Having a small setup time in order to have small production batches and small WIP inventory

QUICK CHANGEOVER

A system of using electronic tags to store data about items. Accessing these data is accomplished through a specific radio frequency and does not require close proximity or line-of-site access for data retrieval

RADIO FREQUENCY IDENTIFICATION (RFID)

A storage technique in which parts are placed in any space that is empty when they arrive at the storeroom. Although ____ method requires the use of a locator file to identify part locations, it often requires less storage space than a fixed-location storage method

RANDOM-LOCATION STORAGE

A fluctuation in data that is caused by uncertain or random occurrences

RANDOM VARIATION

The expected output capability of a resource or system. Capacity is traditionally calculated from data such as planned hours, efficiency, and utilization

RATED CAPACITY

Purchased items or extracted materials that are converted via the manufacturing process into components and parts

RAW MATERIALS

The function encompassing the physical receipt of material, the inspection of the shipment for conformance with the PO (quantity and damage), the identification and delivery to destination, and the preparation of receiving reports

RECEIVING

A measure of the conformity of recorded values in a bookkeeping system to the actual values

RECORD ACCURACY

An industrial process in which worn-out products are restored to like-new condition. In contrast, a repaired product normally retains its identity and only those parts that have failed or badly worn are replaced ore serviced

REMANUFACTURING

The fixed quantity that should be ordered each time the available stock (on-hand plus on-order) falls to or below the reorder point.

REORDER QUANTITY

The repeated production of the same discrete products or family of products

REPETITIVE MANUFACTURING

The total period of time that elapses from the moment it is determined that a product should be reordered until the product is back on the shelf, available for use

REPLENISHMENT LEAD TIME

A document used to solicit vendor responses when a product has been selected and price quotations are needed from several vendors

REQUEST FOR QUOTE (RFQ)

The process of calculating the demand for the components of a parent item by multiplying the parent item requirements by the component usage quantity specified in the BOM

REQUIREMENTS EXPLOSION

Capacity planning conducted at the business plan level. The process of establishing, measuring, and adjusting limits or levels of long-range capacity

RESOURCE PLANNING

An internet auction in which suppliers attempt to underbid their competitors. Company identities are known only by the buyer

REVERSE AUCTION

A complete supply chain dedicated to the reverse flow of products and materials for the purpose of returns, repair, remanufacture, and/or recycle

REVERSE LOGISTICS

Analytical methods to determine the core problem(s) of an organization, process, product, market, etc

ROOT CAUSE ANALYSIS

- The process of converting the MPS into requirements for key resources, including labor, machinery, warehouse space, suppliers' capacity, and money. The 3 approaches to performing ____ are: 1) Bill of labor approach 2) Capacity planning using overall factors approach 3) Resource profile approach

ROUGH-CUT CAPACITY PLANNING

Information detailing the method of manufacturing of a particular item. ____ includes 1) Operations to be performed 2) The sequence of these operations 3) The various work centers involved 4) Standards for setup and run

ROUTING

- The time required to process a piece or lot at a specific operation. ____ does not include setup time

RUN TIME

A quantity of stock planned to be in inventory to protect against fluctuations in demand or supply. The additional inventory and capacity planned as protection against forecast errors and short-term changes in the backlog. Overplanning can be used to create ____

SAFETY STOCK

A process to develop tactical plans that provide management the ability to strategically direct its businesses to achieve competitive advantage on a continuous basis by integrating customer-focused marketing plans for new and existing products with the management of the supply chain.

SALES & OPERATIONS PLANNING (S&OP)

A time-phased statement of expected customer orders anticipated to be received (incoming sales, not outgoing shipments) for each major product family or item

SALES PLAN

A quantity-versus-time graphic representation of the order point/order quantity inventory system showing inventory being received and then used up and reordered

SAWTOOTH DIAGRAM

A graphical technique to analyze the relationship between two variables. Two sets of data are plotted on a graph, with the y-axis used for the variable to be predicted, and the x-axis used for the variable to make the prediction

SCATTER CHART SCATTERPLOT

An open order that has an assigned due date

SCHEDULED RECEIPT

- The act of creating a schedule, such as a shipping schedule, master production schedule, maintenance schedule, or supplier schedule`

SCHEDULING

Material outside of specifications and possessing characteristics that make rework impractical

SCRAP

Inventory built up to smooth production in anticipation of a peak seasonal demand

SEASONAL INVENTORY

A repetitive pattern of demand from year to year with some periods considerably higher than others

SEASONALITY

a Japanese word meaning teacher or one with experience

SENSEI

- Sometimes used to describe those activities that support the production or distribution functions in any organization EX: Customer service, field service

SERVICE

An organization that provides an intangible product; all organizations except farming, mining, and manufacturing

SERVICE INDUSTRY

Those modules, components, and elements that are planned to be used without modification to replace an original part

SERVICE PARTS

SETUP

The time required for a specific machine, resource, work center, process, or line to convert from the production of the last good piece of item A to the first good piece of item B

SETUP TIME

Shigeo Shingo, a pioneer of the Japanese JIT philosophy, identified seven barriers to improving manufacturing.

SHINGO'S SEVEN WASTES

____ are: 1) Overproduction 2) Motion 3) Transportation 4) Stocks 5) Motion 6) Making defects 7) Processing itself

SHINGO'S SEVEN WASTES

A document that lists the pieces in a shipment. A ____ usually covers an entire load regardless of whether the load is to be delivered to a single destination or many destination. ____ usually list (for each destination in the load): 1) Items 2) Piece count 3) Total weight 4) Destination name and address

SHIPPING MANIFEST

Using the operational data to perform what-if evaluations of alternative plans. ___ answer the questions: 1) "Can we do it?", if yes... 2) "Do we really want to?" (does it make financial sense)

SIMULATIONS

A display of components that are directly used in a parent item. It shows only the relationships one level down

SINGLE-LEVEL BILL OF MATERIAL

A company that is selected to have 100% of the business for a part although alternative suppliers are available

SINGLE-SOURCE SUPPLIER

A set of concepts and practices that key on reducing variability in processes and reducing deficiencies in the product

SIX SIGMA

Simple, measurable, achievable, reasonable, and trackable

SMART

A manufacturing order quantity that has been divided into two or more smaller quantities, usually after the order has been released. The purpose of ____ is to reduce the lead time of the order

SPLIT LOT

Variability of an action. Often measured by the range of standard deviation of a particular dimension

SPREAD

- The target costs of an operation, process, or product including direct materials, direct labor, and overhead charges

STANDARD COSTS

The length of time that should be required to: 1) Set up a given machine or operation and 2) Run one batch or more of parts, assemblies, or end products through that operation

STANDARD TIME

In project management, the time an activity begins; this may be defined as an actual ____ or a planned ____

START DATE

The application of statistical techniques to monitor and adjust an operation AKA: Statistical quality control (SQC)

STATISTICAL PROCESS CONTROL (SPC)

An item at a particular geographical location

STOCK KEEPING UNIT

The costs associated with a stockout. Examples of ____ are: 1) Lost sales 2) Backorder costs 3) Expediting 4) Additional manufacturing and purchasing costs

STOCKOUT COSTS

A measure of the effectiveness with which a company responds to actual demand or requirements

STOCKOUT PERCENTAGE

A storage point located upstream of a work station intended to make it easier to see customer requirements

STORE

The plan for how to marshal and determine actions to support the missions, goals, and objectives of an organization

STRATEGIC PLAN

Sending production work outside to another manufacturer

SUBCONTRACTING

SUMMARIZED BILL OF MATERIAL

Provider of goods or services; the seller with whom the buyer does business

SUPPLIER

Certification procedures verifying that a supplier operates, maintains, improves, and documents effective procedures that relate to the customers' requirements

SUPPLIER CERTIFICATION

The amount of time that normally elapses between the time an order is received by a supplier and the time the order is shipped

SUPPLIER LEAD TIME

The establishment of a working relationship with a supplier organization whereby two organizations act as one

SUPPLIER PARTNERSHIP

A comprehensive approach to managing an enterprise's interactions with the organizations that supply the goods and services the enterprises uses. The goal of ____ is to streamline and make more effective the processes between an enterprise and its suppliers

SUPPLIER PARTNERSHIP MANAGEMENT (SRM)

The global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution, and cash`

SUPPLY CHAIN

The design, planning, execution, control, and monitoring of supply chain activities. The objectives of ____ are: 1) Creating net value 2) Building a competitive infrastructure 3) Leveraging worldwide logistics 4) Synchronizing supply with demand 5) Measuring performance globally

SUPPLY CHAIN MANAGEMENT

SUSTAINABILITY

- The set of functional plans synchronizing activities across functions that specify production levels, capacity levels, staffing levels, funding levels, and so on, for achieving the intermediate goals and objectives to support the organization's strategic plan

TACTICAL PLANS

Sets the pace of production to match the rate of customer demand and becomes the heartbeat of any lean production system

TAKT TIME

An official schedule of taxes and fees imposed by a country on imports or exports

TARIFF

A place where vehicles are loaded and unloaded. Several functions such as weighing cargo and rerouting cargo are performed at __________

TERMINAL

Charges based on the number of times a package is loaded or unloaded. These costs may be reduced by combining shipments

TERMINAL HANDLING COSTS

All the provisions and agreements of a contract

TERMS AND CONDITIONS

A holistic management philosophy developed by Dr. Eliyahu M. Goldratt that is based on the principle that complex systems exhibit inherent simplicity

THEORY OF CONSTRAINTS (TOC)

A cost and managerial accounting system that accumulates costs and revenues into 3 areas: 1) Throughput 2) Inventory 3) Operating expense

THEORY OF CONSTRAINTS ACCOUNTING

A buyer and supplier team with a third party that provided product delivery services

THIRD PARTY LOGISTICS (3PL)

The rate at which the system generates "goal units"

THROUGHPUT

A number of days of data summarized into a columnar or row-wise display. A weekly time bucket would contain all of the relevant data for an entire week. Weekly time buckets are considered to be the largest possible to permit effective MRP.

TIME BUCKET

Protection against uncertainty that takes the form of time

TIME BUFFER

A policy or guidelines established to note where various restrictions or changes in operating procedures take place

TIME FENCE

MRP-like time planning logic for independent demand items, where gross requirements come from a forecast, not via explosion

TIME-PHASED ORDER POINT (TPOP)

Allowable departure from a nominal value established by design engineers that is deemed acceptable for the functioning of the good or service over its life cycle

TOLERANCE

In breakeven analysis, the ____ is composed of total fixed and variable costs per unit, multiplied by the number of units provided. Breakeven quantity occurs where the total cost curve and total sales revenue curve intersect. (Cost-Volume Profit) Also, The sum of the costs of acquiring and carrying the item.

TOTAL COST CURVE

The sum of all costs associated with every activity of the supply chain. The acquisition cost is often a very small portion of the total cost of ownership

TOTAL COST OF OWNERSHIP (TOC)

All the costs of operating a firm; total variable costs plus total fixed costs

TOTAL COSTS

The essential costs to move a freight cargo including driver's wages, and depreciation of the vehicle; these costs vary with the distance shipped

TOTAL LINE-HAUL COSTS

Preventative maintenance plus continuing efforts to adapt, modify, and refine equipment to increase flexibility, reduce material handling, and promote continuous flows. It is operator-oriented maintenance with the involvement of all qualified employees in all maintenance activities

TOTAL PRODUCTIVE MAINTENANCE (TPM)

Japanese-style management approach to quality improvement; a management approach to long-term success through customer satisfaction

TOTAL QUALITY MANAGEMENT (TQM)

The registration and tracking of parts, processes, and materials used in production, by lot or serial number

TRACEABILITY

The ratio of the cumulative algebraic sum of the deviations between the forecasts and the actual values to the mean absolute deviation. Used to signal when the validity of the forecasting model might be in doubt

TRACKING SIGNAL

A department or function charged with the responsibility for arranging the most economic classification and method of shipment for both incoming and outgoing materials and products.

TRAFFIC

A distribution network that deals with change of ownership of goods and services including the activities of negotiation, selling, and contracting

TRANSACTION CHANNEL

- Inventory in transit between manufacturing and stocking locations

TRANSIT INVENTORY

A standard allowance that is assumed on any given order for the movement of items from one operation to the next

TRANSIT TIME

The function of planning, scheduling, and controlling activities related to mode, vendor, and movement of inventories into and out of an organization

TRANSPORTATION

Inventory that is in transit between locations

TRANSPORTATION INVENTORY

General upward or downward movement of a variable over time

TREND

Carriers that deliver/charge only for full truckload shipments

TRUCKLOAD CARRIERS

A type of fixed-order system in which inventory is carried in two bins. A replenishment quantity is is ordered when the first bin is empty

TWO-BIN INVENTORY SYSTEM

A kanban system where a move card and production card are employed. The move authorizes the movement of a specific number of parts from a source to a point of use. The production card authorizes the production of a given number of parts for use or replenishment

TWO-CARD KANBAN SYSTEM

- Production lines shaped like the letter "U". The shape allows workers to easily perform several non-sequential tasks without much walk time

U-LINES

- In lean, the distribution of work between work stations so that the time required for each station to complete all tasks is as close to equal as possible

UNIFORM PLANT LOADING

Total labor, material, and overhead cost for one unit of production

UNIT COST

- A unit to be transported that consists of several items arranged so the package can be moved as a single unit

UNIT LOADS

The unit in which the quantity of an item is managed

UNIT OF MEASURE

The consolidation of several units into larger units for fewer handlings

UNITIZATION

Used as a relative reference within a firm or supply chain to indicate moving in the direction of the raw material supplier

UPSTREAM

A measure of how intensively a resource is being used to produce a good or service. ____ compares actual time used to available time

UTILIZATION

- The actual increase of utility from the viewpoint of the customer as it is transformed from raw material to finished inventory

VALUE ADDED

VALUE ANALYSIS

An examination of all links a company uses to produce and deliver its products and services, starting from the origination point and continuing through delivery to the final customer

VALUE CHAIN ANALYSIS

The process of creating, producing, and delivering a good or service to the market. The value stream may be controlled by a single business or a network of several businesses. Encompasses the raw material supplier, the manufacture and assembly of the good, and the distribution network. Consists of suppliers, support personnel and technology, the service "producer" and the distribution channel

VALUE STREAM

A graph displaying the sequence of operations needed to produce and deliver a product or service. Drawing the current production process/flow and then attempting to draw the most effective production process/flow

VALUE STREAM MAPPING

An operating cost that varies directly with a change of one unit in the production volume

VARIABLE COST

The difference between the expected (budgeted or planned) value and the actual

VARIANCE

The relative speed of all transactions, collectively, within a supply chain community. A maximum ____ is desirable because it indicates higher asset turnover for stockholders and faster order-to-delivery response for customers

VELOCITY

A means of optimizing supply chain performance in which the supplier has access to the customer's inventory data and is responsible for maintaining the inventory level required by the customer

VENDOR-MANAGED INVENTORY (VMI)

A simple inventory control system where the inventory reordering is based on actually looking at the amount of inventory on hand. Usually used for low-value items, such as nuts and bolts

VISUAL REVIEW SYSTEM

Actual customer descriptions in words for the functions and features customers desire for goods and services

VOICE OF THE CUSTOMER (VOC)

- The time a job remains at a work center after an operation is complete until it is moved to the next operation

WAIT TIME

An inventory management technique in which material enters a plant and is processed through the plant into finished goods without ever having entered a formal stock area

WALL-TO-WALL INVENTORY

- The activities related to receiving, storing, and shipping materials to and from production or distribution locations

WAREHOUSING

- Any activity that does not add value to the good or service in the eyes of the consumer

WASTE

- A method of selecting and sequencing picking lists to minimize the waiting time of the delivered material. Shipping orders may be picked in waves combined by common carrier or destination, and manufacturing orders in waves related to work centers

WAVE PICKING

A document containing a list of goods with shipping instructions related to a shipment

WAYBILL

Paths over which a transportation company moves cargo, including right-of-way, roadbed, and railroad tracks. ____ may be publicly or privately owned

WAYS

The process of evaluating alternate strategies by answering the consequences of changes to forecasts, manufacturing plans, inventory levels, and so forth

WHAT-IF ANALYSIS

- A listing of every parent item that calls for a given component, and the respective quantity required, from a BOM file

WHERE-USED LIST

Dissimilar machines grouped together into a production unit to produce a family of parts having similar routings

WORK CELL

A specific production area, consisting of one or more people and/or machines with similar capabilities, that can be considered as one unit for purposes of capacity requirements planning and detailed scheduling

WORK CENTER

A good or goods in various stages of completion throughout the plant, including all material from raw material that has been released for initial processing up to completely processed material awaiting final inspection and acceptance as finished goods inventory

WORK IN PROCESS (WIP)

An authorization to start work on an activity or product

WORK AUTHORIZATION

The amount of good or acceptable material available after the completion of a process

YIELD

A warehouse location methodology that includes some of the characteristics of fixed and random location methods

ZONE

- A method of subdividing a picking list by areas within a storeroom for more efficient and rapid order picking

ZONE PICKING

A graphical and progressive representation of the various steps, events, and tasks that make up an operations process. This diagram provides the viewer with a picture of what actually occurs when a product is manufactured or a service is performed.

PROCESS FLOW DIAGRAM

A voluntary initiative whereby companies embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labor standards, the environment, and anticorruption.

UNITED NATIONS GLOBAL COMPACT

A framework for guiding companies through the process of formally committing to, assessing, defining, implementing, measuring, and communicating the UN Global Compact and its principles.

UN GLOBAL COMPACT MANAGEMENT

– In the theory of constraints, a procedure for determining the general flow of parts and products from raw materials to finished products (logical product structure). A V logical structure starts with one or a few raw materials, and the product expands into a number of different products as it flows through divergent points in its routings. The shape of an A logical structure is dominated by converging points. Many raw materials are fabricated and assembled into a few finished products. A T logical structure consists of numerous similar finished products assembled from common assemblies, subassemblies and parts. An I logical structure is the simplest of production flows, where resources are shared between different products and the flow is in a straight line sequence, such as an assembly line. Once the general parts flow is determined, the system control points (gating operations, convergent points, divergent points, constraints, and shipping points) can be identified and managed.

VATI ANALYSIS

Vocab Flashcards

(458 cards)