1.

Cellular layout - it is the design that is based on self-contained groups of

equipment - called cells - needed for producing a particular set of goods or
services.
2. Custom goods and services - these are generally produced and delivered as
one of a kind or in small quantities and are designed to meet specific
customers’ specifications.
3. Facility layout - it refers to the specific arrangement of physical facilities.
4. Fixed-position layout - it consolidates the resources necessary to
manufacture a good or deliver a service, such as people, materials, and
equipment, in one physical location
5. Option goods and services - these are configurations of standard parts,
subassemblies, or services that can be selected by customers from a limited
set.
6. Process layout - it consists of a functional grouping of equipment or
activities that do similar work.
7. Product layout - it is an arrangement based on the sequence of operations
that is performed during the manufacturing of a good, a delivery, or a
service
8. Facility operation - Facilities operations refer to the management of all the
people, processes, services, and tools needed to run a facility at the level it
is meant to function at.
9. Forecasting - Forecasting is the process of projecting past sales demand
into the future. Implementing a forecasting system enables you to assess
current market trends and sales quickly so that you can make informed
decisions about the operations.
10.Scheduling - Scheduling is the process of arranging, controlling and
optimizing work and workloads in a production process or manufacturing
process.
11.Service Encounter - Service encounter is generally defined as a consumer's
direct contact with a service provider, including both face-to-face
interaction and experience.
12.Service Encounter Design - Service encounter design creates a customer
experience that will meet or exceed customer expectations. This includes
 determining what the customer will see and feel when they interact with a
specific company and what they will experience after the interaction is
over.
13.Job Design - Job design is the specification of contents, methods and
relationship of jobs in order to satisfy technological and organizational
requirements as well as the social and personal requirements of the job
holder.
14.Value Chain - The term value chain refers to the various business activities
and processes involved in creating a product or performing a service Supply
Chain
15.Competitive priorities -Represent the strategic emphasis that a firm places
on certain performance measure and operational capabilities within a value
chain.
16.Mass Customization -Is being able to make whatever goods and services
the customer want, at any volume, at any time for anybody and for a global
organization from any place in the world.
17.Operation Strategy -Is the set of decisions across the value chain that
supports the implementation of higher level business strategies.
18. Robot -It is a programmable machine design to handle materials or tools in
the performance of a variety of tasks.
19. Projects -Are large-scale, customized initiatives that consist of many
smaller tasks and activities that must be coordinated and completed to
finish on time and within budget.
20. Flow shop processes - Are organized around a fixed sequence of activities
and process steps, such an assembly line, to produce a limited variety of
similar goods or services.
21. Customer relationship management (CRM) -Is a business strategy
designed to learn more about customers wants, needs, and behaviors in
order to build customer relationships and loyalty, and ultimately enhance
revenues and profits.
22. OPERATION MANAGEMENT- is the science and art of ensuring that goods
and services are created and delivered successfully to customers.
23. CUSTOMER BENEFIT PACKAGE - bundling tangible goods and intangible
services content features that the customer recognizes pays for, uses or
experience.
24. SUPPLY CHAIN- is the portion of the value chain that focuses primarily on
the physical movement of goods and materials, and supporting flows of the
financial transactions through the supply, production and distribution
process.
25.SEARCH ATTRIBUTES- products that are able to be discerned and evaluated
prior to being bought.
26.EXPERIENCE ATTRIBUTES- products and services that are evaluated during
or after the consumption.
27.CREDENCE ATTRIBUTES- the aspect of the product or service that the
customers must believe in after purchase or consumption.
28.Hard Technology - refers to equipment and devices that perform a variety
of tasks in the creation and delivery of goods and services.
29.Soft Technology - refers to application of the internet, computer software,
and information systems to provide data, information, analysis and to
facilitate the creation and delivery of goods and services.
30.Information System Framework - it is a conceptual model that consist set
of interrelated components that collect, manipulate, store and disseminate
information and provide a feedback mechanism to achieve a goal.
31.Quality Function Deployment (QFD) - An approach to guide the design,
creation, and marketing of goods and services by integrating the voice of
the customer into all decisions.
32.Computer-Integrated Manufacturing Systems (CIMSs) - Combination of
hardware, software, database management, and communications to
automate and regulate production processes.
33.Flexible manufacturing systems (FMSs) - Machines that are controlled by
computers and connected by automated handling equipment including
conveyors, transfer machines, and transport systems.
34.Nanotechnology - Involves the manipulation of matter on atomic,
molecular, and supra molecular scales, thus bringing with it super-precision
manufacturing.
35. Utilization - it is the fraction of time a workstation or individual is busy
over the long run.
36.Process Design -The goal of process design is to create the right
combination of equipment, labor, software, work methods, and
environment to produce and deliver goods and services that satisfy both
internal and external customer requirements.
37.Scalability - is a measure of the contribution margin (revenue minus
variable costs) required to deliver a good or service as the business grows
and volumes increase.
38. E-service- refers to using the Internet and technology to provide services
that create and deliver time, place, information, entertainment, and
exchange value to customers and/or support the sale of goods.
39. Reliability- the probability that a manufactured good, piece of equipment,
or system performs its intended function for a stated period of time under
specified operating conditions.
40. Design for manufacturability (DFM)- is the process of designing a product
for efficient production at the highest level of quality. One way of doing this
is through product simplification.
41. Customer contact - refers to the physical or virtual presence of the
customer in the service-delivery system during a service experience.
42. Service guarantee - is a promise to reward and compensate a customer if a
service upset occurs during the service experience.
43. Customer-routed services - are those that offer customers broad freedom
to select the pathways that are best suited for their immediate needs and
wants from many possible pathways through the service delivery system.
44. Provider-routed services - constrain customers to follow a very small
number of possible and pre-defined pathways through the service system.
45. Process map (flowchart) - describes the sequence of all process activities
and tasks to create and deliver a desired output or outcome.
46. Value stream - refers to all value-added activities involved in designing,
producing, and delivering goods and services to customers.
47.Flow time, or cycle time - is the average time it takes to complete one cycle
of a process.
48. Bottleneck - is the work activity that effectively limits the throughput of
the entire process.
49. Standard Goods - are made in anticipation of customer demand.
50. Option - are configuration of standard parts, sub assembles, or services
that can be selected by customers from a limited set.
51. Pathway - is a unique route through service systems.
52. Continuous flow processes - create highly standardized goods or services,
usually around the clock in very high volumes.
53. Product life cycle - is a characterization of product growth, maturity, and
decline over time.
54. Assembly-line balancing - is a technique to group tasks among
workstations so that each workstation has-in the ideal case-the same
amount of work.
55. Customer contact - it refers to the physical or virtual presence of the
customer in the service-delivery system during a service experience
56.Customer-contact requirements - these are measurable performance levels
or expectations that define the quality of customer contact with
representatives of an organization.
57. Empowerment - it means giving people authority to make decisions based
on what they feel is right, to have control over their work, to take risks and
learn from mistakes, and to promote change.
58. High-contact systems - these are systems in which the percentage of
customer contact is high.
59. Low-contact systems - these are systems in which the percentage of
customer contact is low.
60. Service recovery - it is the process of correcting a service upset and
satisfying the customer.
61. Service upset - it is any problem a customer has-real or perceived-with the
service-delivery system and includes terms such as service failure, error,
defect, mistake, and crisis.
62. High scalability - it is the capability to serve additional customers at zero or
extremely low incremental costs.
63. Infrastructure - it focuses on the non process features and capabilities of
the organization and includes the workforce, operating plans and control
systems, quality control, organizational structure, compensation systems,
learning and innovation systems, and support service.
64. Innovation - it is the discovery and practical application or
commercialization of a device, method, or idea that differs from existing
norms.
65. Prototype testing - it is the process by which a model is constructed to test
the product’s performance under actual operating conditions, as well as
consumer reactions to the prototypes.
66. Rapid prototyping - it is the process of building prototypes quickly to
reduce product development cost and time to market.
67. Servicescape - it is all the physical evidence a customer might use to form
an impression.
68. Strategy - it is a pattern or plan that integrates an organization’s major
goals, policies, and action sequences into a cohesive whole
69. Strategic Planning - it is the process of determining long-term goals,
policies, and plans for an organization.
70. Voice of the Customer - it is a customer requirement which is expressed in
the customer’s own word.
71.Forecasting is the process of projecting the values of one or more variables
into the future Good forecasts are needed in all organizations to drive
analysen and decisions related to operations.
72.Poor forecasting can result in poor inventory
and staffing decisions, resulting in part shortages inadequate customer
service, and many customer
73. Planning horizon is the length of time on which a forecast is based. –
74. Long-range forecasts cover a planning horizon of 1 to 10 years and are
necessary to plan for the expansion of facilities and to determine future
needs for land, labor, and equipment.
75. time bucket is the unit of measure for the time period used in a forecast
76. Statistical methods of forecasting are based on the analysis of historical
data, called a time series.
77. time series is a set of observations measured at successive points in time
or over successive per ods of time
78.Trend is the underlying pattern of growth or decline in a time series.
79. Seasonal patterns are chemoterioed by repeatable periods of time ups and
downs or short periods of Seasonal patterns you’re a year. You sent
80. Cyclical patterns are regular patterns in a data series that take place over
long periods of time.
81. Random variation (sometimes called noise) is the unexplained deviation of
a time series from a predictable pattern such as a trend seasonal or cyclical
pattern.
82.Irregular variation as a one-time variation that is explainable For example,
a cane can cause a surge in demand for balding materials
83. Forecast error a the difference between the observed value of the time
series and the forecaster A-F. Suppose that a forecasting method prodded
the forecasts in column
84. Single exponential smoothing (SES) is a forecasting technique that uses a
weighted average
85. Time-series values to forecast the value of the time series in the next
period.
86. Regression analysis is a method for building a statistical model that defines
a relationship between a single dependent variable and one or more
independent variables
87. Multiple linear regression model A linear regression model with more
than one independent variable is called a multiple linear regression model.
88. tracking signal provides a method for doing this by quantifying bias-the
tendency of forecasts to consistently be larger or smaller than the actual
values of the time series The tracking method med most often is to cognate
 the cumulative fine cast error divided by the value of MAD at that point in
time,
89.Capacity is the capability of a manufacturing or service recess as a facility
process, workstation piece of equipment to accomplish in specified time
period .
Capacity can be viewed in one of two ways

● As the Maximum rate output per unit and time

● As the Unit of resource availability

90.Short-term capacity decisions usually involve adjusting schedules se

staffing levels
91.Longer-term decisions typically involve major capital investments. To
satisfy customers in the long run, capacity must be at least as large as the
average demand.
92.Capacity decisions are often influenced by economies and diseconomies of
scale.
93. Economies of scale are achieved when the average unit cost of a good or
service decreases as the capacity and/ or volume of throughput increases.
94. Court systems in most major cities are strained past their capacity with
case backlogs and long delays often resulting in freeing criminals before
they go to trial or incarcerating defendants who are subsequently acquitted
for long periods of time.
95. Diseconomies of scale occur when the average unit cost of the good or
service begins to increase as the capacity and/or volume of throughput
increases.
96. Focused factory is a way to achieve economies of scale without extensive
investments in facilities and capacity, by focusing on a narrow range of
goods or services, target market segments, and or dedicated processes to
maximize efficiency and effectiveness.
97. Focused factory argues to "divide and conquer by adopt smaller, more
focused facilities dedicated to (1) a few key products, (2) a specific
technology 3. a specific process design and capability, (4) a specific
competitive priority objective such as next-day delivery, and (5) specific
market segments or customers and associated volumes
98. Capacity measures are used in many ways in long-term planning and
short-term management activities.
99. Safety capacity (often called capacity cushion), defined as an amount of
capacity reserved for unanticipated events such as demand surges,
materials shortages, and equipment break downs, is normally planned into
a process or facility.
Capacity Measurement A work order is a specification of work to be
performed for a customer or a client. It generally includes the quantity to
be produced, the processing requirements, and resources needed
Long-Term Capacity Strategies
In developing a long-range capacity plan, a firm must make a basic
economic trade-off between the cost of capacity and the opportunity cost
of not having adequate capacity
Long-term capacity planning must be closely tied to the strategic direction
of the organization-what products and services it offers.

Four basic strategies for expanding capacity over some fixed time horizon
these concepts can also be apply to risk reduction
1. ONE LARGE CAPACITY INCREASE - this strategy involves one large
capacity over a specified period.
2. SMALL CAPACITY INCREASE THAT MATCH –is demonstrate the
strategy of matching capacity additions with demand as closely as possible
this also called a capacity straddle strategy.
3. SMALL CAPACITY INCREASE that leads demand- its shows a capacity-
expansion strategy with the goal of maintaining enough capacity to reduce
the chances of not being able to meet demand Here, capacity expansion
leads or comes before demand; for this reason, it is referred to as a
capacity lead strategy.
4. SMALL CAPACITY INCREASE THAT LAG DEMAND – it shows a policy of a
capacity lag strategy that leads to continuous capacity shortages. Such a
plan waits until the level of demand necessitates the installation of more
capacity. With low capital outlay and better capacity utilization, it offers a
higher rate of return on investment. However, if the company struggles to
meet demand, it may also result in productivity losses, overtime, and
subcontracting, which would lower long-term profitability. Such a strategy can
eventually result in a permanent loss of market position.

Short-Term Capacity Management If short-term demand is stable and sufficient

capacity is available, then managing operations to ensure that demand is satisfied
is generally easy

Short term adjustments to capacity can be slone in a variety of ways and are
summarized as

Add or share equipment- Capacity levels that are limited by machine and
equipment availability are more difficult to change in the sheet rom because of
high digital expense

Sell used capacity: Some firms might well idle capacity, such as computer storage
space and computing capacity, to outside buyers and even to competitors.

Change labor capacity and schedules: Labor capacity can usually be managed eas
ily through short-term changes in workforce levels and schedules.

Change labor skill mix: Hiring the right people who can learn quickly and adjust to
changing job requirements and cross-training them to perform different tasks
provides the flexibility to meet fluctuating demand.

Shift work to slack period Another strategy is to shift work to slack periods. For
example, hotel clerks prepare bills and perform other paperwork at night, when
chock in and checkout activity is light.

Theory of Constraints The theory of constraints (TOC) is a set of principles that

focuses on increasing total process throughput by maximizing the utilization of all
bottleneck work activities and workstations.

Constraint is anything in an organization that limits it from moving toward or

achieving its goal Constraints determine the throughput of a facility because they
limit production output to their own capacity.
1. PHYSICAL CONSTRAINT

- associated with the capacity of a resource (e.g., machine, employee

Bottleneck work activity

- is one that effectively limits the capacity of the entire process.

Non bottleneck work activity

- is one in which idle capacity exists

2. NON PHYSICAL CONSTRAINT

- is environmental or organizational (e.g., low product demand or an

inefficient management policy or procedure).

BINNEY AND SMITH

maker of Crayola crayons and Procter & Gamble

CHAPTER 9&10

Managing Inventory in Supply Chain & Supply Chain Management and Logistics
Topic 9-1: Understanding Inventory

● Raw materials, component parts, subassemblies, and supplies

● Work-in-process (WIP) inventory

● Finished goods inventory

● Safety stock inventory

Managing Inventories in Global Supply Chain

Key Features of effective Inventory Management:

● Inventory Tracking

● Order Management

● Transfer Management

● Reporting and analytics

● Purchasing

● Shipping Capabilities
Inventory Management Decisions and Costs

Inventory manager’s deals with two fundamental decisions:

● when to order items from a supplier or when to initiate production
runs if the firm makes it's own items.
● How to order or produce each time a supplier or production order is
placed.

Inventory Costs;
● Ordering or set up costs.
● Inventory holding costs.
● Shortage Costs.
● Unit Cost of SKUs.

Inventory Characteristics;
● Number of Items
● Nature of Demand
- Independent Demand
- Dependent Demand
- Static Demand
- Dynamic Demand
● Number and Duration of Time Period
● Lead Time
● Stock outs

Topic 9-3: ABC Inventory Analysis

● an application of "Pareto Principle".

ABC Category of Inventory or SKUs.

● "A" items account for a large dollar value but a relatively small
percentage of total items.
● "C" items account for a small dollar value but a large percentage of
total items.
● "B" items are between A and C.
Limitations;
● Instability.
● Stationary-only
● Blindness.
● Static

Benefits;
● Increased Inventory Optimization:
● Strategic Resource Allocation
● Better Customer Service

Managing Fixed-Quantity Inventory Systems

● Fixed-Quantity system (FQS)

Advantages;
● Each Material can be procured
● Purchasing and Inventory control
● Positive Control

Disadvantages;
● The orders place at irregular time
● The Items can't be grouped and ordered
● Pendings

Process of ABC Inventory Analysis;

● ABC Inventory; Before and After Sorting
● ABC Histogram for the results from Sorting
● Summary of Fixed-Quantity System (FQS)
● Fixed-Quantity System (FQS) Under System Demand
● Fixed-Quantity System (FQS) with Highly Variable Demand

The Economic order quantity (EOQ) Model;

● Only Single item (SKU) is Considered.
● The entire order quantity (Q) arrives in the inventory at one time.

● Only two types of costs are relevant—order/setup, and inventory-

holding costs.
● No stockouts are allowed.
● The demand for the item is constant and continuous over time.
● Lead time is constant.

Cycle Inventory (order or lot size inventory)

This management helps to;
● Avoid Overstocking
● Reducing costs
● Increase Customer Satisfaction
● Improving Cash flow

Safety Stock and Uncertain Demand in a Fixed-Order-Quantity System

● Safety stock,
● Service Level

Managing Fixed-Period Inventory System

● Fixed Period System
● Periodic

Two main decision in Fixed Periodic System

● The time Interval between review
● The Replenishment level

Single Period Inventory Model

● Seasonal
● Newsvendor Problem
● Sold out or Surplus
● Salvage Value
Single-Period Inventory Main Problem:
- How many product/inventory must be order?

Other models:
● Backorder Model
● Quantity Discount Model
- BUY 1 TAKE 1

Marginal Economic Analysis

Cu = Salvage Cost (Add but can’t be sold)
Cs = Shortage cost (Didn’t add but can be sold)

Supply Chain Management and Logistics

● Supply Chain Management
● Managing Supply Chain
● Supply chain
● Logistics

Managing Supply Chain

SCOR Model (Supply Chain Operations Reference Model)

Five Basic Function:
● Plan
● Source
● Make
● Deliver
● Return
*Sourcing & Purchasing
● Supplier
● Raw materials ,tools, equipment and employees
● Services
Managing Supplier Relationship
Three Principle in working with supplier
● Recognizing their importance
● Develope a win-win relationship
● Establish a trust through openness and honesty

Supply and Value Chain Integration

● Supply Chain Integration
● Value Chain Integration

Logistics

Three primary responsibilities of Logistic Manager

● Purchasing transportation services
● Managing the transportation materials and good through the supply
chain
● Managing Inventories

TRANSPORTATION COST

Modes of Transportation
● Rail
● Truck
● Air
● Water (Ship & Barge)
● Pipeline

Factors in selecting Transportation

● Speed - Cost
● Accessability - Capability

Inventory Management
● Vendor-Managed Inventory (VMI)
● Bullwhip effect
- Changes in supply chain
● Order Amplification

Tactical Supply Chain Risk

Inventory Risk
● Inventory and warehouse stockouts
● Inventory Backorders
● Imbalances between work centers

Capacity Risk
● Equipment Shortage
● Production capacity Shortage
● Overproduction
● Equipment Breakdowns
● Employee shortage, strikes, and layoffs

Logistics and Scheduling Risks

● Supplier quality problem

● Supplier delivery problem
● Long lead time for order cycles
● Poor transportation infrastructure by country

Global Economic Risk

● Population and wealth forecast by the country
● Monetary exchange rates and market size

Government Risk
● Intellectual/patent rights and protection
● Man-made disasters e.g wars, government instability, and terrorist
attacks
Product Risk
● Product modification due to cultural differences.
● Major forecasting error by product by country

Security Risk
● E-commerce system downtime
● Cybersecurity
● Theft fraud, and payoff practices by country

Supply Chains in E-commerce

Major e-commerce relationship and supply chain structures include;
● B2C (business to customer
● B2B (business to business)
● C2C (customer to customer)
● G2C (government to customer)
● G2G (government to government)
● G2B (government to business)

Measuring Supply Chain

Performance

Performance Measures of Supply Chain

● Delivery Reliability
● Responsiveness
● Customer-related measures
● Supply Chain Efficiency Measures
● Sustainability Measures
● Financial Measures

Total Supply Chain Cost

● Direct cost of procurement
● Cost of transportations
● Tariffs and fees
● Inventory
● Management oversight

Supplier Evaluation and

Certification
Importance of Supplier Evaluation
● To Ensure that the suppliers are meeting your standards.
● To identify potential problems.
● To make sure that they're performing at their best, and to take
actions to correct any problems.

Sustainability in Supply Chains

● Green Sustainable Supply Chains
● Sustainable Supply Chain Practices

Manufactured Goods Recovery and Reverse Logistics

Manufactured goods recovery consist of the following;

● Reuse or resell
● Repair
● Refurbish
● Remanufacture
● Cannibalize
● Recycle
● Incineration

Reverse Logistics includes the following;

● Logistics
● Marketing/sales
● Accounting/finance
● Call center service
 ● Legal/regulatory compliance

Trends in Supply Chain Management

- Supply chain managers need to recognize that;
● shorter product life cycles;
● service value chains;
● social media is playing an ever-increasing role;
● sustainability is increasingly important;
● certified supply chain managers.