OM Final Review Guide Classes 12 20 OM 12 Logistics Logistic Concepts Terminology o RFID Radio Frequency Identification the use of tags that project information via radio waves to track goods in the supply chain o 3PL Third party logistics outsourcing logistics management to another company o Reverse logistics Closed Loop Supply Chain the backward flow of goods being returned to the supply chain defective unsold o Gatekeeping screening the returned goods to prevent incorrect acceptance of goods o Cross docking when goods arriving at a warehouse from a supplier are unloaded from the supplier s truck and loaded onto outbound trucks thereby avoiding warehouse storage o Delayed Differentiation holding off on the production of standard components and subassemblies so that they can be differentiated o Pallet allows shippers to unitize goods moved by a forklift o Containers allows unitization in larger quantities can be moved from ship to rail to truck Order Fulfillment the processes involved in responding to customers orders o ETO Engineer to Order products are designed and built according to customer specifications fulfillment time can be relatively lengthy used for custom homebuilding large scale construction projects o MTO Make to Order uses standard product design but production of final product is linked to final customer s specifications faster than ETO but still relatively long o ATO Assemble to Order products are assembled to customer specifications from a stock of standard and modular components used for custom Dell computers o MTS Made to Stock production is based on forecast and products are sold to the customer from finished goods stock Modes of Transportation Read Slate Magazine Article OM 13 Location Layout Steps in decision making process for location o Decide the criteria that will be used for evaluating locations o Identify important factors such as location of raw materials market o Develop location alternatives o Evaluate the alternatives and make a selection Center of gravity a method that locates a distribution center that minimizes transportation costs using coordinates to find a centralized location based on the weighted average of the number of units being shipped from each place Factor Rating System general approach to evaluating locations that includes quantitative and qualitative outputs o Determine relevant factors o Assign weight to each factor o Decide on a common scale for all factors o Score each location alternative o Multiply the factor weight by the score o Choose alternative that has highest composite score Location Options o Expand an existing facility o Add new locations while retaining existing ones o Shut down at one location and move to another o Do nothing Factors of Determining Location o Regional location of raw materials markets taxes climate and labor considerations o Community deciding whether a community is welcoming new businesses with incentives environmental regulations opinions of local residents o Site Location land transportation room for expansion zoning other restrictions Process Types adv disadv o Job Shop small scale highly flexible one of a kind tools used o Batch moderate volume of goods services desired can handle moderate variety in production airlines bakeries o Repetitive assembly line high volume of more standardized products only slightly flexible automatic carwash automobile assembly lines o Continuous highest volume of non discrete highly standardized output used for raw materials petroleum steel sugar flower no need for equipment flexibility o Project a non repetitive set of activities directed toward a unique goal within a limited time a one time job Layout Types o Product Layout sequential Assembly line High utilization of labor and special equipment Low material handling costs and WIP Routine scheduling Low unit costs o Process Layout Functional Can handle a variety of jobs Used for intermittent processing non repetitive processing Not very vulnerable to equipment failure General purpose equipment is less costly o Fixed Position Layout Ex construction site Product remains stationary Equipment and workers are brought to site o U Shaped Production Line Many workers do several tasks on the line able to be more Reduces problem of workers being too specialized to one task efficient o Cellular Production Workstations are grouped into a cell that can process items that have similar processing requirements Process Analysis Job Design Process Analysis Terminology and Concepts pg 624 o Process a means for converting various inputs into outputs o Tasks operations to be performed o Work Center people equipment that perform a task o Work Order specifies the number of units to be produced at a time and the sequence of steps required flow o Batches specific number of units to be produced at a time o Run Time the sum of the times required to complete the work for each task o Setup Time the time needed to prepare or clean up after the task o Time Standards the expected amount of time for completing a task o Throughput Time the time it takes for one unit to pass through the entire o Cycle Time the time between job completions the rate at which items are process including wait time produced o Capacity the ability to process units of work per unit of time Capacity in units time available cycle time Capacity Utilization capacity required capacity available o Bottleneck the work center with the lowest capacity o Balance when the capacities of different work centers are similar o Yield the percent of good items o Scrap Rate percent of bad items 1 yield Job Design Terminology and Concepts o Efficiency Job Design emphasizes specialization work that concentrates on some aspect of a product or service One person does a single task over and over and only knows how to do that task o Method Analysis analyzing how a job is done moving from general operations to specific details of tasks o Behavior Job Design emphasizes making jobs more interesting and meaningful to workers Job Enlargement giving a worker a larger portion of the total task by horizontal loading Job Rotation workers periodically exchange jobs Job Enrichment increasing responsibility for planning and coordination of tasks Use of teams focus on motivation of workers o Ergonomics incorporation of human factors in the design of the workplace considering human constraints of production optimizes human well being and overall system performance Forms of Compensation o Time Based hourly