Variations in process are either natural variation or assignable variations

Variations in process are either natural variation or

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process variability, then collect sample measurements of process over time. Variations: in process are either natural variation or assignable variations. Natural variation: random environmental noise that is expected. Assignable variation: can be traced to specific cause & fixed Samples: Either Variable data: continuous, such as weight, time, and length. Attributable data: indicate presence of some attribute such as color, satisfaction, workability, or beauty. Statistical Process control: Control chart: x-chart-used to track central tendency of sample means. R-chart- used to track sample ranges. 1. Gather data if process is already in control. 2. Calculate mean and range for each sample. 3. Calculate overall mean of all samples and avg. range of all samples. Use the x means to calculate upper and lower control limits 4. Use means and control limits to construct control chart. Supply chain design: designing a firms supply chain to meet the competitive priorities of firms operations strategy. Creating an effective supply chain: Link services/products with internal processes. Link services/products with external supply chain. Link services/products with customers, suppliers, and supply chain processes. Supply Chain Design procedures: Dynamic sales volume: most costly aspects of supply chain is trying to meet needs of volatile sales volumes. Involves excessive inventories, unrutilized personnel, or more expensive delivery options to meet customer demands on time. Can be caused internally by end of month promotions. Customer service levels: Focus on organizational pressures emanating from sales and marketing groups for superior service levels for organizations customers. Service/product proliferation: momentum to create new products/services by sales and marketing because they are closely in touch with customers and their needs. This can add to complexity of supply chain. Services/products usually have low volumes and cost more to produce, market, and deliver. Measures of supply chain financial performance: total revenue, COGS, operating expenses, Cash Flow, Working Capital, ROA. Inventory Placement: Centralized placement: keeping all inventory of product at a single location. Inventory pooling: reduction in inventory and safety stock because of the merging of variable demands from customers. Forward Placement: Locating stock closer to customers at a warehouse, DC, wholesaler, or retailer. Mass customization: Strategy where a firms highly divergent processes generate a wide variety of customized services, or products at reasonably low costs. Competitive Advantages: managing customer relationships. Eliminating finished goods inventory.
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Increasing perceived value of services/products. Supply chain design for mass customization: Assemble to order strategy: underlying process involves 2 stages in provision or service of product: 1. Standardized components are produced or purchased and held in stock. 2. Assembles standard components to a specific customer order;must be flexible. Modular design: Service/product must have modular design the enables customer customization (desires). Final service/product can be assembled from set of standardized modules economically, and fast response to C.O.
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