2. Disclaimer
This is not intended to be a condensed outline of the course,
but simply what I took as key takeaways. In some courses
there are many areas discussed that aren’t contained in these
slides, as they are items I was already familiar with and didn’t
feel the need to document or felt they wouldn’t be useful to me
in my current career. I think of these as my “cheat sheet” of
material that can help me in my current & future roles and are
DRAFT…like Google’s Beta are subject to change – Matt
Crane
Newman, Rocky. (2010). Course presented on Supply Chain &
Operations Management. Miami University, Oxford &
Cincinnati, OH.
3. • Core Competencies: build organizational
competencies, outsource the rest
– Management should be focusing on adding new
competencies
• Order qualifier: table stakes to enter the market
• Order winner: differentiator
• Mfg types: Projects – Job – Cell – Flow –
Continuous process (Make-to-order…Make-to-
stock)
• Product life cycle mirrors mfg types (initiation –
expansion – maturity)
4. Optimization & Effectiveness
• Line balancing: avail work time / units demanded
• # of workstations = task time / cycle time
• Efficiency = output / input = total task time /
stations x cycle time
• Stages of Operational Effectiveness:
– Internally Neutral (don’t screw up)
– Externally Neutral (follow industry best practices)
– Internally Supportive (mfg supports strategy)
– Externally Supportive (mfg sets strategy)
5. Process Variation
• Process control: reducing difference
between plan and reality for each process
• Chance variation: variation built into the
system
• Assignable variation: some element of
system is out of control
• Quality control: identify when Assignable
variation is present and apply corrective
action
6. Supply Chain Management
• SCM: coordination & integration of all supply
chain activities into seamless process
• Bullwhip Effect: further down supply chain
magnifies changes made upstream
• Purchasing: mfg organizations spend ~55% of
revenue for outside materials/services
– They also spend only ~6% and ~3% on labor and
overhead, respectively
7. Ways to Double profits
• Increase sales by 100 percent
• Increase selling price by 5 percent
• Decrease labor and salaries by 25 percent
• Decrease overhead by 100 percent
• Decrease purchase cost by 7.1 percent
8. Purchasing Best Practices
• Leverage buying power
• Commit to Small number of dependable
suppliers
• Work with/help suppliers reduce total cost
9. Lean’s 5 Principles
• Specify value from customer’s point of view
• Identify the value stream
– activities required to create the output valued by the customer
• Make value flow through the value stream
– eliminating non-value added activities and streamlining the
remaining steps
• Have the customer pull value through the value stream
• Pursue perfection
*Lean production: aka synchronous mfg, aka Toyota
Production System
10. Lean vs. Traditional
• Limited target market and options
• Engineering designs standard outputs, incrementally improves each
design
• Excess capacities are minimized
– Especially WIP
• Equipment is close together
• Broadly skilled and flexible workforce
• Frequent/small deliveries from Suppliers
– No inspection of deliveries (assumed ok)
• Procedures are simple, visual, routine
• Respond to what actually happens vs. plan for uncertainty
• 0 defects vs. inspecting at various intervals
• Relies on operator for preventative maintenance
11. Production Planning
• Aggregate plan: prod planning (2-18 mths)
• Master plan: plan for prod, inv, staffing (weekly)
• Rough-cut capacity plan: feasibility of master schedule
(workload checking)
• Priority planning: when/where materials are needed
• Capacity planning: load on workstations
• Loading: what work to what workstations
• Sequencing: what order jobs processed at workstations
• Dispatching: releasing work order from planning
• Expediting: getting job done/delivered on time
