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95 Cards in this Set
- Front
- Back
Waiting Line Basics
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One or more people waiting for service; partially determined by variability in demand; can be humans, machines, sales orders waiting to be shipped; inventory items waiting to be used
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Four elements of Waiting Lines
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1. an input, or customer population, that generates potential customers
2. a waiting line of customers 3. the service facility, consisting of a person, a machine, or both necessary to perform the service for the customer 4. a priority rule, which selects the next customer to be served by the service facility |
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Customer Population- Finite vs. Infinite
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Finite- if the potential number of new customers for the service system is appreciably affected by the number of customers already in the line
infinite- the number of customers in the system does not affect the rate at which the population generates new customers |
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Service Facility
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consists of the personnel and equipment necessary to perform the service for the customer.
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Priority Rule
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determines which customers to serve next; most company's use the first come, first serve rule; other rules are the earliest promised due date(EDD) and shortest expected processing time(SPT)
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Balks and Reneges
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types of impatient customers
balks- an impatient customer who doesn't enter the system reneges- an impatient customer who leaves the system before being served |
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Number of Lines- Single vs. Multiple
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single lines- airline counters, fastfood, banks; best for when customers believe they are being served fcfs
multiple lines- grocery store, drive through bank, discount stores; special services i.e. 10 items or less or cash only |
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(arrangement service facility) single channel, single phase system
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all services demanded by a customer can be done by a single server facility. i.e. drive thru car wash
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(arrangement service facility) single channel, multiple phase system
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used when services are best performed in sequence by more than one facility, yet customer constraintslimit the design to one channel. i.e. mcdonalds drive thru where first phase takes order, second takes money, third gives food
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(arrangement service facility) multiple channel, single phase system
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used when demand is large enough to warrant providing the same sevice at more than one facility or when the services offered by the facilities are different i.e. bank drive thru
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(arrangement service facility) multiple channel, multiple phase system
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occurs when customers can be served by one of the first phase facilities but then require service from a second phase facility and so on. I.e. laundromat washer then dryer but choice of large load or normal.
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operations characteristics of waiting lines
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line length, number of customer in system, waiting time in line, total time in system, service faciliy utilization(percentage of time busy)
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littles law
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a fundamental law that relates the number of customer's in a waiting line system to the waiting time of customers
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decision areas for management
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arrival rates, number of service facilities, number of phases, number of servers per facility, server efficiency, priority rule, line arrangement
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Goals and Trade-offs, Changes possible
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Find the Proper BALANCE between Long Lines/Unhappy Customers and Idle Staff/High Cost.
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jockeying
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line jumping
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how customers have effect on service rate
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Prepared/unprepared customer, Big/small orders, high/low maintenance customers, Paying cash vs. check
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Office Layout Considerations
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office layout affects productivity and quality of work life; 2 important factors:proximity and privacy;
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proximity
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accessibility to coworkers and supervisors can enhance communication and develop mutual interest
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privacy
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somewhat culturally dependent
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options in office layout
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management must arrive at a compromise between proximity and privacy because they are conflicting ideas
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online considerations
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Keep content current since online consumers browse frequently 2 aspects should be considered merchandise presentation and merchandise description; make the site easy and enjoyable to use; structure an online community where consumers can interact with one another or contribute to the site's content;
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space productivity
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represents how effectively the retailer utilizes its space and is usually measured by sales per square foor of selling space or gross margin dollars per square foot of selling space
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elements that compose the store environment
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visual communication(graphics, signage), store planning(space allocation, layout), store design(exterior design, ambiance, lighting), merchandising(fixture selection, merchandise presentation, visual merchandising all play a role in store image and productivity
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store image
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is the overall perception the consumer has of the store's environment
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consumer behavior: supermarkets
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most consumers are not only right handed but they are right headed: shoppers are prone to look right; most consumers think "neatness: counts: consumers are often tricked psychologically to think items are cheap due to messy displays or handwritten signs so it makes them likely to buy them; most consumers are likely to focus on a large central display: endcaps are a consumers focus; consumers are creatures of habit and when something is out o place they become more sensitive to their environment: by changing around the display but not changing location in store a consumer is more likely to make an impulse buy; there is a little bit of greed in every one of us: when a product has a limit the customer will usually buy the limit, when an item is 10 for 10 customers will typically purchase more of them, and if peanutbutter is on sale consumers will tend to fail to notice that the items complements jelly and bread have their prices raised
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objectives of store environment
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get customers into the store, once inside the store, convert them to customers buying merchandise, do this in the most efficient manner possible; the retailer must constantly balance the first two elements as they are often at odds.
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increasing space productivity
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the more merchandise customers are exposed to that is presented in an orderly manner, the more they tend to buy; successful retailers design their stores to expose shoppers to as much merchandise as possible, displayed in a safe and orderly manner, while creating an uncongested shopping environment
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floor plan, exhibit 13.2-warning signs may indicate a space problem
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open spaces on the selling floor, even if the product is on hand, cluttered and disorganized aisles, hallways, and stockrooms, excessive time required to put away new receipts,insufficient staging space for large shipments of advertised products, sales associates continually required to leave the sales floor to locate additional merchandise, poor utilization of vertical space and excessive time required to retrieve products stored on high shelves, sales lag expectations for specific location where space or fixtures are a known issue, off-site storage or multiple stockrooms required for a single commodity
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floor plan
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is a schematic that shows where merchandise and customer service departments are located, how customers circulate through the store, and how much space is dedicated to each department
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microretailing
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occurs when a chain store retailer operating over wide geographic area, usually nationally, tailors its merchandise and services in each store to the needs of the immediate trading area
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merchandise placement
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I.E. placing peanutbutter near jelly, keeping all brands from the same manufacturer together, keeping toys low for kids to reach and keeping denture cream up at eye level so seniors don't have to bend down
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stack outs
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are pallets of merchandise set out on the floor in front of the main shelves; not always beneficial because it might cause women to skip the aisle; butt-brush- likelihood of a woman being converted from a browser to a buyer is inversely proportional to her being brushed on her backside while she is examining merchandise
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allocating space
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can be based on math calculation of returns generated by different types of merchandise; types of space needed: 1)backroom 2)office and other functional spaces 3) aisles, service areas, and other nonselling areas of the main sales floor 4)wall merchandise space 5)floor merchandise space
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space allocation
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for existing store- use space productivity index
for new store- base decisions off of industry standards, previous experience with similar formats, or more frequently, the space required to carry the number of items specified by the buyers. |
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Robert Khans theories
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sales per square foot= f(number of customers) * length of time spent in the store; 1. in every aisle customers should be able to comfortably pass another customer with a cart with their own cart 2. Make the restrooms the best in town so customers don't rush out of the store to use the restroom 3. put at least one bench in each store at the alcove of the front door 4. In all large stores, install a coffee stand catty corner from the snack bar so that customers could recharge themselves and do more shopping
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free flow layout
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is a type of store layout n which fixtures and merchandise are grouped into free flowing patterns on the sales floor
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grid layout
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is a type of store layout in which counters and fixtures are placed in long rows or rns, usually at right angles, throughout the store. supermarkets and drug stores
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loop layout
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is a type of layout in which a major customer aisle begins at the entrance, oops through the store-usually in the shape of a cicle, square, or rectangel- and then returns the customer to the front of the store. exposes consumers to the greatest ammount of merchandise
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spine layout
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essentially a variation of the free flow, grid, and loop and comines all of them; a type of store layout in which a snigle main aisle runs from the front to the nach of te store, transporting customers in both directions, and where on either side of this spine, merchandise departments using either a fre flow or grid pattern branch off toward the back or side walls
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interior design
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broken into two types of elements: the finishes applied to surfaces and the architectural shape
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lighting design
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lighting affects sales
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types of employee turnover costs
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direct- recruiting applicants, evaluating applicants, training classes, employees wages for training, part of supervisors pay spent helping new employee; indirect- loss of customers who were loyal to former employee, lost sales resulting from the employees intial lack of product knowledge, alienated customers, decreased employee morale due to loss of employee, effect of that morale on customers
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process integration
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coordinating and sharing information and resources to jointly manage a process.
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the eight key supply chain busies processes
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Customer relationship management, Customer service management, demand management, order fulfillment, manufacturing flow management, supplier relationship management, product development and commercialization, returns management
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importance of performance measurements
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used to assure that processes are supporting th supply chain strategy, performance is continuously measured using a set of metrics designed for each process
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RFID tags
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attached to a product to relay information on the products whereabouts as it moves through the supply chain
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Bulgari story
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luxury items, extremely difficult to predict demand, difficult to manage the supply chain because they demand the highest quality for their luxury items, implemented a system by 4r systems; they needed to improve the reliability and accuracy of their demand forecasting tools, gain a better understanding of new product, improve inventory planning at the store level; the 4r system takes into account pos sales data to take into account past sales, seasonality, and trends. It also corrects for past stock outs. The 4r sytem predicts demand for Bulgari now.
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Obstacles to supply chain integration
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silo mentality lack of supply chain visibility, lack of trust, lack of knowledge, activities causing the bullwhip effect
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silo mentality
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filing to see the big picture and acting only in regard to a single department within the firm or a single firm within the supply chain
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lack of supply chain visibility
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the inability to easily share or retrieve trading partner information in real time, as desired by the supply chain participants
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lack of trust
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unwillingness to work together or share information because of the fear that the other party will take advantage of them or use the information unethically
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lack of knowledge
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lack of process and information system skills and lack of knowledge regarding the benefits of SCM among management and other employees, within the firm and among partners
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activity causing the bullwhip effect- demand forecast updating
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using varing customer orders to create and update forecasts, production schedules, and purchases requirements
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activity causing the bullwhip affect- order batching
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making large orders for goods from suppliers on an infrequent basis to reduce order and transportation costs
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activity causing the bullwhip affect- price fluctuations
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offering price discounts to buyers, causing erratic buying patterns
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activities causing the bullwhip effect- rationing and shortage gaming
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allocating short product supplies to byers, causing buyers to increase future orders beyond what they really need
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vendor managed inventory
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a way that buyers allow suppliers to obseve their demand, create forecasts, and determine resupply schedules. reduces iventory substantially.
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forward buying
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purchasing more due to significant price decreases
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everyday low prices
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offering uniform wholesale prices to customers. eliminates safety stock and problems by stopping the fluctuation of prices
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shortage gaming
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the strategy that is used when demand exceeds the supply. if supply is 75% of total demand buyers would be allocated 75% of what they ordered. when buyers figure out the relationship between their orders and what is supplied, they tend to inflate their orders to satisfy their real needs.
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figure 9.7 bullwhip affect
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the amplitude of sales over time is smaller than the variation in the order quantity. time lags associated with information and material flow cause a mismatch between the actual customer demand and the supply chain's ability to satisf that demand.
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efficient supply chains
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designed for efficiency and low cost by minimizing inventory and maximizing efficiencies in process flow
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responsive supply chains
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focus on flexibility and responsive service and are able to react quickly to changing market demand and requirements
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walmart
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hooked up to suppliers via supply chain information systems that let suppliers know sales data for walmart. increases efficiency and helps walmart lower costs for consumers
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push system
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produces goods in advance of customer demand using a forecast of sales and moves them through supply chain to points of sale where they are stored as finished goods inventory
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pull system
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produces only what is needed at upstream stages in the supply chain in response to customer demand signals from downstream stages
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push-pull boundary
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the point in a supply chain that separates the push system from the pull system
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postponement
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the process of delaying product customization until the product is closer to the customer at the end of the supply chain
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contract manufacturing
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a firm that specializes in certain types of goods-producing activities, such as customized design, manufacturing, assembly, and packaging, and works under contract for end users
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toyota production system
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one of the most admired lean manufacturing systems in existence; doesn't work for others; lean systems require constant improvements to increase efficiency and reduce waste; 4 principles: 1) all work must be completely specified as to content, sequence, timing, and outcome 2)every customer supplier connection must be direct and unambiguous 3) the pathway for every service and product must be simple and direct 4) any improvement to the system must be mde in accordance with the scientific method, under the guidance of a teacher, at the lowest possible organizational level.
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lean systems
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operations sysems that mazimize the value added by each of a companies activities by paring unneccessary resources and delays for them.
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JIT philosophy
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the belief that wste can be eliminated by cutting unneccessary capacity or inventory and removing non-value-added activities in operations.
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push method
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a method in which production ofthe item begins in advance of customer need
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pull method
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a method in which customer demand activates production of the service or item.
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quality at the source
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an organization wide effort to improve the quality of a firm's products by having employees act as their own quality inspectors
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poka-yoke
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mistake proofing methods aimed at designing fail-safe systems that minimize human error
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value of small lot sizes
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a lot is a quantity of items that are processed together. small lots have the advantage of reducing the average level of inventory relative to large lots. small lots pass through the system faster. if a defect is found it is much quicker to examine all items in a small lot.
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short setup times
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setup times must be brief for small lot sizes otherwise it creates waste in the form of idle employees. achieving brief setup times often requres close cooeration among engineering, management, and labor
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standardized components and work methods
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example: a firm producing 10 products from 1000 different components could redesign its products so that they consist of only 100 different components with larger daily requequirements. since requirement per component increases, so does repeatability. each worker performs a standardized task or work method more often each day. help a firm to achieve the high productivity, low inventory objectives of a lean system
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close supplier ties
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three ways: reduce the number of suppliers, use local suppliers, improve supplier relations.
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flexible workforce
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train employees to perform more than one job
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line flows
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eliminate wasted employee time, can eliminate setups
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automation
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key to low cost operations. lead to greater profits and greater market share because prices can be cut. ATM
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maintenance
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preventitive maintenance prevents machine failures
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Continuous improvement and Kaizen
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by spotlighting areas that need improvement, lean systems lead to continuous improvement in quality and productivity. This is called Kaizen. Key to Kaizen- the understanding that excess capacity or inventory hides underlying problems with the processes that produce a service or product.
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rocks water level picture
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water- inventory
rocks-underlying problems that need to be fixed |
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New Balance article
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uses lean manufacturing; 25% of shoes made in us; migrated away from traditional shoe manuf. to small-lot, cellular flow production; ship directly to retailers and customers without the intervening intermediaries who may discount their products
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triple bottom line
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a theory by john elkington, requires that companies track their performance on all three dimensions.
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cost of non compliance
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failing to report hazardous chemicals results in gvt fines; basically fines surmount if companies dont comply with federal law
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cost savings through good environmental practices
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delta- pioneered the practice of using only one engine while taxiing. Reduced fuel consumption by 40 million gallons per year.
Home Depot- commits to the efforts of sustainable forestry offers environmentally preferred products in their stores UPS- teamed with alliance for environmental innovation to redesign packaging. It made packaging lighter and reusable. Conserved energy, saved trees, and saved them money. |
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environmental services square
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y axis- degree of labor intensity, x axis- degree of interaction and customization
From top left, clockwise- service factory, service shop, professional service, mass service |
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environmental concerns for buildings
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Five design areas recognized by LEED: 1)building site 2) water efficiency 3)energy and atmosphere 4)materials and resources 5)indoor environmental quality
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environmental improvement strategies and options
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process improvement, process certification, e commerce; product redesign, value added services, dematerialize
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ISO14000
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the most common environmental certification. looks at 6 major areas: environmental management systems, environmental auditin investigations, environmental labels and declarations,environmental performance evaluation,life cycle assessment, terms and definitions
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