LOW-LEVEL CODING ORDER RELEASES
Restructuring the bill of materials so that multiple the process of officially placing an order with a
occurrences of a component all coincide with the supplier.
lowest level at which the component occurs.
FORWARD SCHEDULING
INTERVIEWING
Scheduling ahead from a point of time.
refers to the process of gathering information
from individuals—typically employees, BACKWARD SCHEDULING
managers, or stakeholders—to understand
Scheduling backward from a due date
operations, identify challenges, and improve
processes. GROSS REQUIREMENTS
GANTT CHART Total expected demand for an item or raw
material in a time period.
Chart used as visual aid for loading and
scheduling purposes. KANBAN
CPM A manual system used for controlling the
movement of parts and materials that responds
CPM Critical path method, for planning and
to signals of the need (i.e., demand) for delivery
coordinating large projects.
of parts or materials.
It identifies the longest sequence of
dependent tasks (the critical path) and RETURN ON QUALITY
determines the minimum project duration.
An approach that evaluates the financial return
CAPACITY REQUIREMENTS PLANNING of investments in quality.
Capacity requirements planning is the process of VALUE STREAM MAPPING
determining short-range capacity requirements.
The necessary inputs include planned-order A visual tool to systematically examine the flow
releases for MRP, the current shop load, routing of materials and information.
information, and job times.
It provides a comprehensive view of the entire
SCHEDULING process, from the beginning (supplier) to the end
(customer), identifying value-added and non-
process of establishing the operational timing for value-added activities.
activities and the use of resources
DISTRIBUTION REQUIREMENTS PLANNING (DRP)
JOHNSON’S RULE
Distribution Resource Planning (DRP), also
Technique for minimizing makespan for a group referred to as distribution requirements planning,
of jobs to be processed on two machines or at is a method used for planning orders in a supply
two work centers. chain.
A business process that helps companies
MUDA
determine how much of a product to produce
Muda: Waste and inefficiency. Perhaps the and send to distribution centers to meet
driving philosophy. Waste and inefficiency customer demand.
a Japanese word that means "waste," "futility,"
INFINITEC LOADING
or "uselessness".
It refers to activities or processes that don't add Infinite loading Jobs are assigned to work
value to the customer and should be eliminated centers without regard to the capacity of the
or minimized. work center.
SINGLE-MINUTE EXCHANGE OF DIE (SMED)
LOAD REPORTS (SMED) A system for reducing changeover time.
Department or work center reports that compare CLOSED-LOOP SUPPLY CHAIN
known and expected future capacity
requirements with projected capacity availability. A manufacturer controls both the forward and
refers to documents or reports that track and reverse shipment of product.
manage the distribution and allocation of
ACTIVITIES
workloads, resources, or tasks across various
functions or departments within an organization. Activities Project steps that consume resources
and/or time.
ENTERPRISE RESOURCE PLANNING (ERP)
PULL SYSTEM
Integration of financial, manufacturing, and
human resources on a single computer system. Replacing material or parts based on demand;
Integrated software systems used by produce only what is needed.
organizations to manage and automate core
business processes across different ACTIVITY-ON-NODE (AON)
departments, such as finance & supply chain.
Activity-on-node (AON) Network diagram
SCATTER DIAGRAM convention in which nodes designate activities.
A graph that shows the degree and direction of JIDOKA
relationship between two variables. Quality at the source. A machine automatically
stops when it detects a bad part. A worker then
PLANNED-ORDER RELEASES stops the line. Also known as autonomation.
Planned amount to order in each time period; AFFINITY DIAGRAM
planned-order receipts offset by lead time.
Orders are generated to procure or produce NET-CHANGE SYSTEM
materials needed for manufacturing. These are
A approach that updates MRP records
planned orders that are scheduled based on
continuously.
future demand and inventory levels and released
for action. FLOW-SHOP SCHEDULING
ACTIVITY-ON-ARROW (AOA) High-volume systems, where jobs follow the
same sequence, are often referred to as flow
Network diagram convention in which arrows
systems; scheduling in these systems is referred
designate activities.
to as flow-shop
It is a technique used to represent the activities
and their relationships in a project using arrows DEPENDENT DEMAND
and nodes.
Demand for items that are subassemblies or
PROCESS VARIABILITY component parts to be used in the production of
finished goods.
Reflects the natural or inherent (i.e., random)
variability in a process. It is measured in terms of SAFETY STOCK
the process standard deviation.
Safety stock, also known as buffer stock or
LOADING backup inventory, is extra inventory that a
business keeps to prevent stockouts and
The assignment of jobs to processing centers.
overpromising to customers.
PROJECT CHAMPION
ENTERPRISE RESOURCE PLANNING (ERP)
A person who promotes and supports a project.
Integration of financial, manufacturing, and
human resources on a single computer system.
KAIZEN a high-level plan that outlines what products to
produce, when, and how much to produce.
Kaizen: Continuous improvement of the system.
There is always room for improvement, so this FINITE LOADING
effort must be ongoing.
Finite loading Jobs are assigned to work centers
HOLDING (CARRYING) COSTS taking into account the work center capacity and
job processing times.
Also known as carrying costs, holding costs refer
to the amount of money that needs to be paid in PROJECTS
order to store unsold inventory.
Projects are a unique aspect of business
WORK BREADOWN STRUCTURE (WBS) operations that require a special management
approach.
A hierarchical listing of what must be done
during a project. NETWORK (PRECEDENCE) DIAGRAM
PLANNING REPORTS Diagram of project activities that shows
sequential relationships by use of arrows and
Data useful for assessing future material nodes.
requirements.
GATEKEEPING SCREENING
PERT
Gatekeeping Screening returned goods to
Program evaluation and review technique, for prevent incorrect acceptance of goods.
planning and coordinating large projects.
FLOW SYSTEM
AVAILABLE-TO-PROMISE (ATP)INVENTORY
Flow system High-volume system in which jobs
Uncommitted inventory all follow the same sequence.
the amount of products a company can promise
to sell or ship to new customers while still EVENTS
meeting existing commitments.
Events The starting and finishing of activities,
JUST-IN-TIME (JIT) designated by nodes in the AOA convention.
Just-in-time (JIT) A highly coordinated NET REQUIREMENTS
processing system in which goods move through
the system, and services are performed, just as The actual amount needed in each time period.
they are needed.
PEGGING
JOB-SHOP SCHEDULING
The process of identifying the parent items that
Scheduling for low-volume systems with many have generated a given set of material
variations in requirements. requirements for an item.
HEIJUNKA P CHART
Variations in production volume lead to waste. Control chart for attributes, used to monitor the
The workload must be leveled; volume and proportion of defective items in a process.
variety must be averaged to achieve a steady
LOAD CHART
flow of work.
A Gantt chart that shows the loading and idle
CHANNEL
times for a group of machines or list of
A server in a service system departments.
MASTER SCHEDULING POKA-YOKE
Safeguards built into a process to reduce the 5. Limited liability company
possibility of errors. 6. Nonprofit organization
CUMULATIVE LEAD TIME COMMON APPROACHES IN ORDER FULFILLMENT
The sum of the lead times that sequential 1. Engineer-to-Order (ETO)
phases of a process require, from ordering of 2. Make-to-Order (MTO)
parts or raw materials to completion of final 3. Assemble-to-Order (ATO)
assembly. 4. Make-to-Stock (MTS)
PROJECTED ON HAND PROJECT LIFE CYCLE (in order)
Expected amount of inventory that will be on 1. Definition
hand at the beginning of each time period. 2. Planning
3. Execution
LEAN OPERATION 4. Termination
Lean operation A flexible system that uses ELEMENTS OF PRODUCTIVE SYSTEM
minimal resources and produces high-quality
goods or services. STEPS IN CREATING A SUPPLY CHAIN (In order)
ENUMERATION DIFFERENT TYPES OF INVENTORIES
TOYOTA APPROACH IN PRODUCTION 1. Raw materials and purchased parts.
1. Muda 2. Partially completed goods, called work-in-
2. Pull system process (WIP).
3. Kanban
4. Heijunka 3. Finished-goods inventories (manufacturing
5. Kaizen firms) or merchandise (retail stores).
6. Jidoka
4. Tools and supplies.
METHODS OF INVENTORY COSTING (‘di sure)
5. Maintenance and repairs (MRO) inventory.
1. Average-Cost Method
6. Goods-in-transit to warehouses, distributors, or
2. First-In, First-Out (FIFO) Method
customers (pipeline inventory).
3. Last-In, First-Out (LIFO) Method
4. Moving-Average Method
5. Specific Identification Method
BUSINESS CYCLE
WASTES IN LEAN PHILOPHY
WHERE TO INSPECT IN THE PROCESS
In the lean philosophy, there are seven wastes:
1. Raw materials and purchased parts
1. Inventory 2. Finished products
2. Overproduction 3. Before a costly operation
3. Waiting time 4. Before and irreversible process
4. Unnecessary transporting 5. Before covering process
5. Processing waste
6. Inefficient work methods
7. Product defects
FORMS OF BUSINESS ORGANIZATION
1. Sole proprietorship
2. Partnership
3. Corporation
4. Cooperative