CSCP 2013 Module 3 key words summary

CSCP 2013 Module 3 key words summary Terms Definitions Assemble-to-order A production environment where a good or service can be assembled after receipt of a customer's order. The key components used in the assembly or finishing process are planned and usually stocked in anticipation of a customer order. Available inventory The on-hand inventory balance minus allocations, reservations, backorders, and (usually) quantities held for quality problems. Available-to-promise (ATP) The uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer-order promising. Backlog All the customer orders received but not yet shipped. Bill of material (BOM) 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. It is used in conjunction with the master production schedule to determine the items for which purchase requisitions and production orders must be released. 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. Bottleneck A facility, function, department, or resource whose capacity is less than the demand placed upon it. Buffer 1) A quantity of materials awaiting further processing. It can refer to raw materials, semifinished stores or hold points, or a work backlog that is purposely maintained behind a work center. 2) In the theory of constraints, these can be time or material and support throughput and/or due date performance. They can be maintained at the constraint, convergent points, divergent points, and shipping points. Business plan 1) A statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance sheet, and a cash flow statement. Usually stated in terms of dollars and grouped by product family. It is then translated into synchronized tactical functional plans through the production planning process. 2) A document consisting of the business details prepared by an entrepreneur to plan for a new business. Chase strategy A production planning method that maintains a stable inventory level while varying production to meet demand. Consignment 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 the goods are used or sold. Constraint 1) Any element or factor that prevents a system from achieving a higher level of performance with respect to its goal. 2) One of a set of equations that cannot be violated in an optimization procedure. Continuous replenishment A process by which a supplier is notified daily of actual sales or warehouse shipments and commits to replenishing these sales without stockouts and without receiving replenishment orders. Cumulative lead time The longest planned length of time to accomplish the activity in question. Define, measure, analyze, A six sigma improvement process comprised of five stages: (1) Determine the nature of the problem, (2) improve, control (DMAIC) Measure existing performance and commence recording data and facts that offer information about the process underlying causes of the problem, (3) Study the information to determine the root causes of the problem, (4) Improve the process by effecting solutions to the problem, and (5) Monitor the process until the solutions become ingrained. Demand pull 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 at the end of a previous work center. Distribution requirements 1) The function of determining the need to replenish inventory at branch warehouses. 2) More generally, 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. Engineer-to-order 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 materials, and routings. Feedback The flow of information back into the control system so that actual performance can be compared with planned performance. Just-in-Time (JIT) A philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity. It encompasses the successful execution of all manufacturing activities required to produce a final product, from design engineering to delivery, and includes all stages of conversion from raw material onward ?Kaizen The Japanese term for improvement; continuing improvement involving everyonemanagers and workers. In manufacturing, it relates to finding and eliminating waste in machinery, labor, or production methods. Kaizen event A time-boxed set of activities carried out by the cell team during the week of cell implementation. This is an implementation arm of a lean manufacturing program. Kanban A method of Just-in-Time 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. Lead time 1) A span of time required to perform a process (or series of operations). 2) In a logistics context, the time between recognition of the need for an order and the receipt of goods. Lean 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. It involves identifying and eliminating non-value-adding activities in design, production, supply chain management, and dealing with customers. Load leveling Spreading 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. Manufacturing resource A method for the effective planning of all resources of a manufacturing company. Ideally, it addresses planning (MRP II) operational planning in units, financial planning in dollars, and has a simulation capability to answer what-if questions. Master planning A group of business processes that includes the following activities: demand management; production and resource planning; and master scheduling. Master production schedule A line on the master schedule grid that reflects the anticipated build schedule for those items assigned to (MPS) the master scheduler. The master scheduler maintains this schedule, and in turn, it becomes a set of planning numbers that drives material requirements planning. Material requirements A set of techniques that uses bill of material data, inventory data, and the master production schedule to planning (MRP) 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. Materials management 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 work in process to the warehousing, shipping, and distribution of the finished product. Package to order 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. Pareto's law A concept developed by Vilfredo Pareto, an Italian economist, that states that a small percentage of a group accounts for the largest fraction of the impact, value, and so on. Planning horizon The amount of time a plan extends into the future. For a master schedule, this is normally 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 or of key suppliers. For longer term plans the planning horizon must be long enough to permit any needed additions to capacity. Process map A diagram of the flow of a production process or service process through the production system. Standardized symbols are used to designate processing, flow directions, branching decisions, input/output, and other aspects of the process. Product family A group of products with similar characteristics, often used in production planning (or sales and operations planning). Quick response program A system of linking final retail sales with production and shipping schedules back through the chain of (QRP) supply; employs point-of-sale scanning and electronic data interchange, and may use direct shipment from a factory to a retailer. Rapid replenishment A replenishment strategy in which the supplier prepares shipments at predetermined intervals and varies the quantity based on recent sales data. Resource management 1) The planning and validation of all organizational resources. 2) The effective identification, planning, scheduling, execution, and control of all organizational resources to produce a good or service that provides customer satisfaction and supports the organization's competitive edge, and ultimately, organizational goals. 3) An emerging field of study emphasizing the systems perspective, encompassing both the product and process life cycles, and focusing on the integration of organizational resources toward the effective realization of organizational goals. Six sigma A methodology that furnishes tools for the improvement of business processes. The intent is to decrease process variation and improve product quality. Supplier certification Certification procedures verifying that a supplier operates, maintains, improves, and documents effective procedures that relate to the customer's requirements. Such requirements can include cost, quality, delivery, flexibility, maintenance, safety, and ISO quality and environmental standards. Vendor-managed inventory A means of optimizing supply chain performance in which the supplier has access to the customer's (VMI) inventory data and is responsible for maintaining the inventory level required by the customer. Waste 1) Any activity that does not add value to the good or service in the eyes of the consumer. 2) A by-product of a process or task with unique characteristics requiring special management control.