MGMT 339 FINAL EXAM COMPLETE
SOLUTION GRADED A+
Centralized purchasing - Purchasing is handled by one special department
benefits of centralized purchasing - may be able to obtain lower prices than decentralized
units if the higher volume created by combining orders enables it to take advantage of
quantity discounts offered on large orders
may also be able to obtain better service and closer attention from suppliers
often enables companies to assign certain categories of items to specialists, who tend to be
more efficient because they are able to concentrate their efforts on relatively few items
instead of spreading themselves across many items
Decentralized purchasing - Individual departments or separate locations handle their own
purchasing requirements
benefits of decentralized purchasing - advantage of awareness of differing "local" needs
and being better able to respond to those needs
can offer quicker response than centralized purchasing
may be able to save on transportation costs by buying locally, which has the added attraction
of creating goodwill in the community
Strategic sourcing - a systematic process for analyzing the purchase of products and
services to reduce costs by reducing waste and non-value-added activities, increase profits,
reduce risks, and improve supplier performance
,- seeks to consolidate purchasing power to achieve lower prices
- relies on fewer suppliers and collaborative relationships
- works to eliminate redundancies
- employs cross-functional teams to help overcome traditional organizational barriers
benefits of effective supply chain management - Lower inventory, transportation,
warehousing, and packaging costs
Greater supply chain flexibility
Improved customer service
Higher revenues
Increased performance and profitability
Lean operation - A flexible system of operation that uses considerably less resources than a
traditional system
- Greater productivity
- Lower costs
- Shorter cycle times
- Higher quality
Characteristics of Lean Systems - Waste reduction
Continuous improvement
Use of teams
Work cells
,Visual controls
High quality
Minimal inventory
Output only to match demand
Quick changeovers
Small lot sizes
Lean culture
Waste reduction - A hallmark of lean systems
Use of teams - Cross-functional teams, especially for process improvement
Work cells - Along with cellular layouts, they allow for better communication and use of
people
Visual controls - Simple signals that enable efficient flow and quick assessment of
operations
High quality - In suppliers' parts, in processes, and in output
Minimal inventory - Excess inventory is viewed as a waste
Output only to match demand - Throughout the entire system; referred to as "demand
pull"
Quick changeovers - Enables equipment flexibility and output variety without disruption
Small lot sizes - Enables variety for batch production
, Lean culture - The entire organization embraces lean concepts and strives to achieve them
Benefits of Lean Systems - Reduced waste due to emphasis on waste reduction.
Lower costs due to reduced waste and lower inventories.
Increased quality motivated by customer focus and the need for high-quality processes.
Reduced cycle time due to elimination of non-value-added operations.
Increased flexibility due to quick changeovers and small lot sizes.
Increased productivity due to elimination of non-value-added processes.
Risks of Lean Systems - Increased stress on workers due to increased responsibilities for
equipment changeovers, problem solving, and process and quality improvement.
Fewer resources (e.g., inventory, people, time) available if problems occur.
Supply chain disruptions can halt operations due to minimal inventory or time buffers.
building blocks of the lean philosophy - Product design
Process design
Personnel/organizational elements
Manufacturing planning and control (MCP)
Four elements of product design important for lean systems: - 1. Standard parts
2. Modular design
SOLUTION GRADED A+
Centralized purchasing - Purchasing is handled by one special department
benefits of centralized purchasing - may be able to obtain lower prices than decentralized
units if the higher volume created by combining orders enables it to take advantage of
quantity discounts offered on large orders
may also be able to obtain better service and closer attention from suppliers
often enables companies to assign certain categories of items to specialists, who tend to be
more efficient because they are able to concentrate their efforts on relatively few items
instead of spreading themselves across many items
Decentralized purchasing - Individual departments or separate locations handle their own
purchasing requirements
benefits of decentralized purchasing - advantage of awareness of differing "local" needs
and being better able to respond to those needs
can offer quicker response than centralized purchasing
may be able to save on transportation costs by buying locally, which has the added attraction
of creating goodwill in the community
Strategic sourcing - a systematic process for analyzing the purchase of products and
services to reduce costs by reducing waste and non-value-added activities, increase profits,
reduce risks, and improve supplier performance
,- seeks to consolidate purchasing power to achieve lower prices
- relies on fewer suppliers and collaborative relationships
- works to eliminate redundancies
- employs cross-functional teams to help overcome traditional organizational barriers
benefits of effective supply chain management - Lower inventory, transportation,
warehousing, and packaging costs
Greater supply chain flexibility
Improved customer service
Higher revenues
Increased performance and profitability
Lean operation - A flexible system of operation that uses considerably less resources than a
traditional system
- Greater productivity
- Lower costs
- Shorter cycle times
- Higher quality
Characteristics of Lean Systems - Waste reduction
Continuous improvement
Use of teams
Work cells
,Visual controls
High quality
Minimal inventory
Output only to match demand
Quick changeovers
Small lot sizes
Lean culture
Waste reduction - A hallmark of lean systems
Use of teams - Cross-functional teams, especially for process improvement
Work cells - Along with cellular layouts, they allow for better communication and use of
people
Visual controls - Simple signals that enable efficient flow and quick assessment of
operations
High quality - In suppliers' parts, in processes, and in output
Minimal inventory - Excess inventory is viewed as a waste
Output only to match demand - Throughout the entire system; referred to as "demand
pull"
Quick changeovers - Enables equipment flexibility and output variety without disruption
Small lot sizes - Enables variety for batch production
, Lean culture - The entire organization embraces lean concepts and strives to achieve them
Benefits of Lean Systems - Reduced waste due to emphasis on waste reduction.
Lower costs due to reduced waste and lower inventories.
Increased quality motivated by customer focus and the need for high-quality processes.
Reduced cycle time due to elimination of non-value-added operations.
Increased flexibility due to quick changeovers and small lot sizes.
Increased productivity due to elimination of non-value-added processes.
Risks of Lean Systems - Increased stress on workers due to increased responsibilities for
equipment changeovers, problem solving, and process and quality improvement.
Fewer resources (e.g., inventory, people, time) available if problems occur.
Supply chain disruptions can halt operations due to minimal inventory or time buffers.
building blocks of the lean philosophy - Product design
Process design
Personnel/organizational elements
Manufacturing planning and control (MCP)
Four elements of product design important for lean systems: - 1. Standard parts
2. Modular design
