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by: F.M


GPA 3.6

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Covers the notes from all of 4 chapters plus additional notes from the textbook and lecture.
SCM 301
Study Guide
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This 7 page Study Guide was uploaded by F.M on Wednesday February 17, 2016. The Study Guide belongs to 3301 at University of Houston taught by POWELL ERWIN ROBINSON in Spring 2016. Since its upload, it has received 30 views.

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Date Created: 02/17/16
SCM EXAM 1 REVIEW QUALITY- THE CHARCTERISTICS OF A PRODUCT OR SERVICE THAT BEAR ON ITS ABILITY TO SATISFY STATES OR IMPLIED NEEDS; A PRODUCT OR SERVICE THAT IS FREE DEFICIENCIES. VALUE PERSPECTIVE-A QUALITY THAT HOLDS THAT QUALITY MUST BE JUDGED, IN PART, BY HOW WELL THE CHARCTERISTICS OF A PARTICULAR PRODUCT OR SERVICE ALIGN WITH THE NEEDS OF A SPECEFIC USER. CONFORMANCE PERSPECTIVE- A QUALITY PERSPECTIVE THAT FOCUSES ON WHETHER OR NOT A PRODUCT WAS MADE OR A SERVICE WAS PERFORMED AS INTENDED. EIGHT DIMENSIONS OF QUALITY  PERFORMANCE (WHAT ARE THE BASIC OPERATING CHARCTERISTICSS OF THE PRODUCT OR SERVICE?)  FEAUTURES (WHAT EXTRA CHARACTERISTICS DOES THE PRODUCT OR SERVICE HAVE, BEYOND THE BASIC PERFORMANCE OPERATING CHARCTERISTICS?)  RELIABILITY (HOW LONG CAN A PRODUCT BETWEEN FAILURES OR THE NEED FOR MAINTENANCE?)  DURABILITY (WHAT IS THE USEFUL LIFE FOR A PRODUCT? HOW WILL THE PRODUCT HOLD UP UNDER EXTENDED OR EXTREME USE?)  CONFORMANCE (WAS THE PRODUCT MADE OR SERVICE PERFORMED TO SPECIFICATIONS?)  AESTHETICS (HOW WELL DOES THE PRODUCT OR SERVICE APPEAL TO THE SENSES?)  SERVICEABILITY (HOW EASY IS IT TO REPAIR, MAINTAIN, OR SUPPORT THE PRODUCT OR SERVICE?)  PERCEIVED QUALITY (WHAT IS THE REPUTATION OR IMAGE OF THE PRODUCT OR SERVICE?) TOTAL COST OF QUALITY INTERNAL FAILURE COSTS-COSTS CAUSED BY DEFECTS THAT OCCUR PRIOR TO DELIVERY TO THE CUSTOMER, INCLUDING MONEY SPENT ON REPAIRING OR REWORKING DEFECTIVE PRODUCTS (OR SCRAPPING THE IF THEY ARE COMPLETELY RUINED), AS WELL AS TIME WASTED ON THESE ACTIVITIES. EXTERNAL FAILURE COSTS- COSTS INCURRED BY DEFECTS THAT ARE NOT DETECTED UNTIL A PRODUCT OR SERVICE REACHES THE CUSTOMER. COSTS ARE DIFFICULT TO ESTIMATE, BUT THEY ARE INEVITABLY LARGE. THESE COSTS INCLUDE:WARRANTY COSTS AND TE HOCTS OF LOST FUTURE BUSINESS AND IN SOME CASES COSTLY LITIGATION. APPRAISAL COSTS- COSTS A COMPANY INCURS FOR ASSESSING ITS QUALITY LEVELS. EX. INSPECTIONS, THE SAMPLING OF PRODUCTS OR SERVICES, AND SURVEYING CUSTOMERS. PREVENTION COSTS- COSTS AN ORGANIZATION INCURS TO ACTUALLY PREVENT DEFECT FROM OCURRING TO BEGIN WITH. EX. INCLUDES THE COSTS FOR EMPLOYEE TRAINING, SUPPLIER CERTIFICATION EFFORTS, AND INVESTMENT INNEW PROCESSES, AND EQUIPMENT MAINTANENCE EXPENDITURE. TOTAL COST OF QUALITY CURVE-CURVE THE SUGGESTS THAT THERE IS SOME OPTIMAL QUALITY LEVEL, Q*. CALCULATED BY ADDING COSTS OF INTERNAL AND EXTERNAL FAILURES, AND PREVENTION COSTS, AND APPRAISAL COSTS. TOTAL QUALITY MANAGEMENT(TQM)- A MANAGERIAL APPROACH IN WHICH AN ENTRIE ORGANIZATION IS MANAGED SO THAT IS EXCELS IN ALL QUALITY DIMENSIONS THAT ARE IMPORTANT TO CUSTOMERS. THE SEVEN CORE PRINCIPLES:  CUSTOMER FOCUS  LEADERSHIP INVOLVEMENT  CONTINUOUS IMPROVEMENT  EMPLOYEE EMPOWERMENT  QUALITY ASSIRANCE  STRATEGIC PARTNERSHIPS  STRATEGIC PARTNERSHIPS  STRATEGIC QUALITY PLAN CUSTOMER FOCUS  EVERY EMPLOYEE HAS A CUSTOMER WHOSE EXPECTATIONS MUST BE MET WHETHER INTERNAL OR EXTERNAL TO THE COMPANY. LEADERSHIP INVOLVEMENT  CHANGE MUST BEGIN AT THE TOP  MANAGERS SHOULD CARRY THE MESSAGE THAT QUALITY COUNTS TO EVERYONE IN THE COMPANY CONTINOUS IMPROVEMENT  THERE WILL ALWAYS BE ROOM FOR IMPROVEMENT NO MATTER HOW WELL AN ORGANIZATION IS DOING. EMPLOYEE EMPOWERMENT  GIVING EMPLOYEES THE RESPONSIBILITY, AUTHORITY, TRAINING, AND TOOLS NECESSARY TO MANAGE QUALITY. QUALITY ASSURANCE  THE SPECIFIC ACTIONS FIRMS TO ENSURE THAT THEIR PRODUCTS, SERVICES AND PROCESSES MEET THE QUALITY REQUIREMENTS OF THEIR CUSTOMERS. -QUALITY FUNCTION DEPLOYMENT (QFD) -STATISTICAL QUALITY CONTROL (SQC) SUPPLIER PARTNERSHIPS  THE COMMITMENT BETWEEN COMPANIES AND SUPPLY CHAIN PARTNERS MUST BE THE SAME. STRATEGIC QUALITY PLAN  AN ORGANIZATIONAL PLAN THAT PROVIDES THE VISION, GUIDANCE, AND MEASUREMENTS TO DRIVE THE QUALITY EFFORT FORWARD AND SHIFT THE ORGANIZATION’S COURSE WHEN NECESSARY. NATIONAL QUALITY AWARD ORGANIZATIONS ELIGIBLE: BUSINESS, EDUCATION, AND HEALTHCARE CATEGORIES:  LEADERSHIP  STRATEGIC PLANNING  CUSTOMER AND MARKET FOCUS  MEASUREMENT, ANALYSIS, AND KNOWLEDGE MANAGEMENT  HUMAN RESOURCE FOCUS  PROCESS MANAGEMENT  BUSINESS RESULTS Upstream – a term used to describe activities or firms that are positioned earlier in the supply chain relative to some other activity or firm of interest. For example, corn harvesting takes place upstream of cereal processing, and cereal processing takes place upstream of cereal packaging. Downstream – a term used to describe activities or firms that are positioned later in the supply chain relative to some other activity or firm of interest. For example, sewing a shirt takes place downstream of weaving the fabric, and weaving the fabric takes place downstream of harvesting the cotton. First-tier supplier – a supplier that provides products or services directly to a firm (Ball Corporation is a firsttier supplier to Anheuser-Busch because it supplies materials directly to the brewer). Second-tier supplier – a supplier that provides products or services to a firm’s first-tier supplier (Alcoa is a second-tier supplier; it provides goods to the first-tier supplier). Supply chain management – the active management of supply chain activities and relationships in order to maximize customer value and achieve a sustainable competitive advantage. It represents a conscious effort by a firm or group of firms to develop and run supply chain in the most effective and efficient way possible. Supply Chain Operations Reference (SCOR) model – a framework developed and supported by the Supply Chain Council that seeks that seeks to provide standard descriptions of the processes, relationships, and metrics that define supply chain management. Important Trends 1. Electronic Commerce (e-commerce) – the use of computer and telecommunications technologies to conduct business via electronic transfer of data and documents. Information Technology (IT) can link together suppliers, manufacturers, distributors, retail outlets, and ultimately customers, regardless of location. -Such systems can also provide visibility into incoming shipments and delays and can even tell planners how many units of products are on any given store shelf location in the world. 2. Increasing competition and globalization The rate of change in markets, products, and technology continues to escalate, leading to situations where managers must make decisions on shorter notice, with less information, with higher penalty costs if they make mistakes. 3. Relationship Management Of all the activities operations and supply chain personnel perform, relationship management is perhaps the most difficult and therefore the most susceptible to breakdown. -Poor relationships within any link of the supply chain can have disastrous consequences for all other supply chain members. Elements of the business Structural element – one of the two major decision categories addressed by a strategy. Includes tangible resources, such as building, equipment, and computer systems. These recourses typically require large capital investments that are difficult to reverse. Infrastructural element – one of the two major decision categories addressed by a strategy. Includes the policies, people, decision rules, and organizational structure choices made by a firm. These elements are not as visible as structural elements, but they are just as important. Mission statement – a statement that explains why organization exists. It describes what is important to the organization, called its core values, and identifies the organization’s domain. Business strategy – the strategy that identifies a firm’s targeted customers and sets time frames and performance objectives for the business. The business strategy must: -Clearly identify the firm’s targeted customers and broadly indicate what the operations and supply chain functions need to do to provide value to these customers; -Set time frames and performance objectives that managers can use to track the firm’s progress toward fulfilling its business strategy; and -Identify and support the development of core competencies in the operations and supply chain areas Functional strategies should align with the overall business strategy and with each other. An operational and supply chain strategy might address the manufacturing or service processes needed to make a specific product, how suppliers will be evaluated and selected, and how the products will be distributed. A firm’s strategy should also be aligned across the functional areas. Many so-called functional-level strategies – such as new product development and information technology – are really better described as cross-functional, as the responsibility, authority, and resources for these activities often reside in multiple areas. Order winners – a performance dimension that differentiates a company’s products and services from its competitors. Firms win a customer’s business by providing superior levels of performance on order winners. Order qualifiers – a performance dimension on which customers expect a minimum level of performance. Superior performance on an order qualifier will not, by itself, give a company a competitive advantage. Understanding what the relevant order qualifiers and order winners are helps operations and supply chain managers to formulate strategy in three ways: 1. It helps identify potential problem areas, as well as strengths. 2. It clarifies the issues surrounding decisions on trade-offs. 3. It helps managers to prioritize their efforts. Four stages of alignment with the business strategy: Management should be able to state how each operations and supply chain structural and infrastructural choice supports the customer’s order winners and order qualifiers and what trade- offs had to be considered when making these choices. 1. Internally neutral – In this stage, management seeks only to minimize any negative potential in the operations and supply chain areas. There is no effort made to link these areas with the business strategy. 2. Externally neutral – Here industry practice is followed, based on the assumption that what works for competitors will work for the company. Still, there is no effort made to link the operations and supply chain areas with overall business strategy. 3. Internally supportive – At this stage, the operations and supply chain areas participate in the strategic debate. Management recognizes that the operations and supply chain structural and infrastructural elements must be aligned with the business strategy. 4. Externally supportive – At this stage, the operations and supply chain areas do more than just support the business strategy: the business strategy actively seeks to exploit the core competencies found within these areas. A few general principles to keep in mind when selecting and implementing a manufacturing process: -Selecting an effective manufacturing process means much more than just choosing the right equipment. Manufacturing processes also include people, facilities, and physical layouts, and information systems. These pieces must work together for the manufacturing process to be effective. -Different manufacturing processes have different strengths and weaknesses. Some are best suited to make small numbers customized products, while others excel at producing large volumes of standard items. -The manufacture of a particular item might require many different types of manufacturing processes, spread over multiple sites and organizations in the supply chain. Demand Forecast When we talk about demand forecast, we need to distinguish between overall market demand and firm-level demand. Once firms have accurately forecasted this firm-level demand, they can begin to plan their business activities accordingly. Supply forecast A supply forecast might provide information on the number of current producers and suppliers, projected aggregate supply levels, and technological and political trends that might affect supply. Price forecast Many businesses need to forecast prices for key materials and services they purchase. When commodity prices are expected to increase, a good strategy is forward buying, in which companies buy larger quantities than usual, store them in inventory for future use, and save on prices they pay. Alternatively, companies can use futures contracts to protect themselves. A futures contracts is a legal agreement to buy or sell a commodity at a future date at a price that is fixed at the time of the agreement. If the prices are falling, a better strategy is to buy more frequently in smaller quantities than usual, with the expectation that prices will go down over time. In order to decide on purchasing strategy, firms must first have the price forecasts.


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