ECO Study Guide

8/4/2019 ECO Study Guide

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infinite loading -Calculation of the capacity required at work centers in the time

periods required regardless of the capacity available to perform this work. Syn:

infinite scheduling. With infinite loading, the load on the plant is determined by the

customer due date, scheduled backward without regard to standard capacity

available to perform the work. Capacity is then reviewed for potential improvements

through overtime, subcontracting, etc

purchasing lead time - The total lead time required to obtain a purchased item.

Included here are order preparation and release time; supplier lead time;

transportation time; and receiving, inspection, and put-away time. See: lead time,

supplier lead time, time-to-product.

Routing - 1) Information detailing the method of manufacture of a particular item.

It includes the operations to be performed, their sequence, the various work centers

involved, and the standards for setup and run. In some companies, the routing also

includes information on tooling, operator skill levels, inspection operations and

testing requirements, and so on. Syn: bill of operations, instruction sheet,manufacturing data sheet, operation chart, operation list, operation sheet, route

sheet, routing sheet. See: bill of labor, bill of resources. 2) In information systems,

the process of defining the path a message will take from one computer to another

computer. -- Routings include Operations to be performed and their sequence and

Work centers involved in manufacturing as well as setup and run time. They often

include inspection operations, testing, and tooling information.

Queue - A waiting line. In manufacturing, the jobs at a given work center waiting to

be processed. As queues increase, so do average queue time and work-in-process

inventory -- Queue time is the time a job waits at a work center before work on

setups are performed on the job. By reducing queue time, manufacturing lead timecan be shortened. This is quite often the longest portion of the lead time in a

factory. -- The priority of the job is the most important factor affecting the queue

time at a work center. The queue time will be eliminated if the priority of the job is

high enough to bypass all the other jobs waiting for the work center. (e.g. President

says to make the job next.)-- Queue size and lead time are interconnected since an

increase in queue size will increase lead time. However, if a job is a high priority by

management, the queue size won't matter.

Backward scheduling - A technique for calculating operation start dates and due

dates. The schedule is computed starting with the due date for the order and

working backward to determine the required start date and/or due dates for each

operation. Syn: backward scheduling. Ant: forward scheduling.

Forward scheduling - A scheduling technique where the scheduler proceeds from

a known start date and computes the completion date for an order, usually

proceeding from the first operation to the last. Dates generated by this technique


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are generally the earliest start dates for operations. See: forward pass. Ant: back

scheduling.

cycle time - 1) In industrial engineering, the time between completion of two

discrete units of production. For example, the cycle time of motors assembled at a

rate of 120 per hour would be 30 seconds. 2) In materials management, it refers tothe length of time from when material enters a production facility until it exits. Syn:

throughput time.

gapped schedule - A schedule in which every piece in a lot is finished at one work

center before any piece in the lot can be processed at the succeeding work center;

the movement of material in complete lots, causing time gaps between the end of

one operation and the beginning of the next. It is a result of using a batched

schedule at each operation (work center), where process batch and transfer batch

are assumed to be the same or equal. Syn: gap phasing, straight-line schedule. Ant:

overlapped schedule.

Capacity requirements planning (CRP)- The function of establishing, measuring,

and adjusting limits or levels of capacity. The term capacity requirements planning

in this context refers to the process of determining in detail the amount of labor and

machine resources required to accomplish the tasks of production. Open shop

orders and planned orders in the MRP system are input to CRP, which through the

use of parts routings and time standards translates these orders into hours of work

by work center by time period. Even though rough-cut capacity planning may

indicate that sufficient capacity exists to execute the MPS, CRP may show that

capacity is insufficient during specific time periods. See: capacity planning. --

Capacity requirements planning or infinite loading is based on the customer due

date. Operations scheduling plans each operation to arrive at a completion date

based on a finite capacity.

lead time - 1) A span of time required to perform a process (or series of

operations). 2) In a logistics context, the time between recognition of the need for

an order and the receipt of goods. Individual components of lead time can include

order preparation time, queue time, processing time, move or transportation time,

and receiving and inspection time. Syn: total lead time. See: manufacturing leadtime, purchasing lead time. -- The more work held on the production floor, the

longer the lead time will be. This happens because jobs begin to get moved to meet

customer demands. The result is that parts get moved and shuffled, reducing

capacity.


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critical ratio - A dispatching rule that calculates a priority index number by

dividing the time to due date remaining by the expected elapsed time to finish the

job. For example,

CR = (Date required - Current date)/(Days required to complete a job)

A ratio less than 1.0 indicates the job is behind schedule, a ratio greater than 1.0

indicates the job is ahead of schedule, and a ratio of 1.0 indicates the job is on

schedule.

Master Production Schedule (MPS) - The master production schedule is a line on

the master schedule grid that reflects the anticipated build schedule for those items

assigned to the master scheduler. The master scheduler maintains this schedule,

and in turn, it becomes a set of planning numbers that drives material requirements

planning. It represents what the company plans to produce expressed in specific

configurations, quantities, and dates. The master production schedule is not a sales

item forecast that represents a statement of demand. The master production

schedule must take into account the forecast, the production plan, and other

important considerations such as backlog, availability of material, availability of

capacity, and management policies and goals. See: master schedule. -- When the

Master Production Schedule is overstated, due dates will become invalid and dates

will be missed. Also, the quantities needed will not be valid as partial orders will be

completed to partially satisfy customer demands.

primary operation - A manufacturing step normally performed as part of a

manufacturing part's routing. Ant: alternate operation.

released order - Syn: open order. - 1) A released manufacturing order or purchase

order. Syn: released order. See: scheduled receipt. 2) An unfilled customer order.

--- Prior to releasing an order to the shop floor, components must be available, the

required due date should be known, and the tooling must be available. If these

requirements are not ready, then the order should not be released. Only jobs which

can be worked on should be released to the floor.

Overlapped schedule - A manufacturing schedule that "overlaps" successive

operations. Overlapping occurs when the completed portion of an order at one work

center is processed at one or more succeeding work centers before the pieces left

behind are finished at the preceding work centers. Syn: lap phasing, operation

overlapping, telescoping. See: send ahead. Ant: gapped schedule, overlappedproduction. -- The more repetitive the job is and the longer the order quantity must

run, the more often this would occur. In selecting software to do this, one must be

careful, as not all software can do this.

Mixed-model scheduling - The process of developing one or more schedules to

enable mixed-model production. The goal is to achieve a day's production each day.

See: mixed-model production. --- Mixed-model scheduling allows the factory to


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make every model every day so the mix mirrors the sales for the day. This is

especially useful in flow manufacturing through an assembly line.

Line balancing - 1) The balancing of the assignment of the tasks to workstations in

a manner that minimizes the number of workstations and minimizes the total

amount of idle time at all stations for a given output level. In balancing these tasks,the specified time requirement per unit of product for each task and its sequential

relationship with the other tasks must be considered. 2) A technique for

determining the product mix that can be run down an assembly line to provide a

fairly consistent flow of work through that assembly line at the planned line rate. ---

Line balancing refers to the fact that the time taken to perform tasks at each work

station is equal or very nearly so. This results in no bottlenecks between work

stations and no buildup of work in process inventory.

Linearity - 1) Production at a constant quantity. 2) Use of resources at a level rate,

typically measured daily or more frequently. --- Linearity is the use of resources at

a level rate or maintaining a constant rate. The rate of the production in this kind ofenvironment is controlled by the technology in place to maintain the flow of

product, and the maintenance of the technology to avoid disruption.

Capacity - is calculated based on the machine efficiency, operator efficiency, and

number of shifts being worked. The number of orders released to the floor have no

bearing on the availability of capacity to produce the orders. It would just mean the

shop is overloaded.

Production activity control (PAC) - The function of routing and dispatching the

work to be accomplished through the production facility and of performing supplier

control. PAC encompasses the principles, approaches, and techniques needed toschedule, control, measure, and evaluate the effectiveness of production

operations. See: shop floor control. -- Production activity control is concerned with

the execution of the material plans. It includes the shop floor scheduling as well as

the supplier follow-up to ensure material availability.

Repetitive manufacturing- The repeated production of the same discrete

products or families of products. Repetitive methodology minimizes setups,

inventory, and manufacturing lead times by using production lines, assembly lines,

or cells. Work orders are no longer necessary; production scheduling and control are

based on production rates. Products may be standard or assembled from modules.

Repetitive is not a function of speed or volume. Syn: repetitive process, repetitiveproduction. See: project manufacturing. --- is defined as "a form of manufacturing

where various items with similar routings are made across the same process

whenever production occurs." (APICS Dictionary) Schedules are used rather than job

orders, work-in-process inventory is backflushed very often, and the number of

transactions is minimal. The whole process of tracking the production is easier than

a job shop.


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Setup reduction - is very important as it allows manufacturing flexibility, reduces

lead times, and allows for small lots to be produced. This in turn, allows quality

problems to be detected quickly.

lean manufacturing - Syn: lean production. - A philosophy of production that

emphasizes the minimization of the amount of all the resources (including time)used in the various activities of the enterprise. It involves identifying and

eliminating non-value-adding activities in design, production, supply chain

management, and dealing with the customers. Lean producers employ teams of

multiskilled workers at all levels of the organization and use highly flexible,

increasingly automated machines to produce volumes of products in potentially

enormous variety. It contains a set of principles and practices to reduce cost

through the relentless removal of waste and through the simplification of all

manufacturing and support processes. Syn: lean, lean manufacturing.

JIT - Transaction processing, paperwork, and tracking of operations become much

simpler with a JIT operation. Because the flow of materials becomes faster and morereliable, the need for WIP tracking, for example, is unnecessary. Purchasing can be

done through vendor managed inventories whereby the parts are paid for as they

are consumed, eliminating the need for purchase orders and invoices. In the quality

control area, simplified operations eliminate the need for multiple inspections and

the paperwork associated with those inspections

Simulations - consist of three components: system model and control procedures,

exogenous (external) inputs, and performance measures. Exogenous inputs are

inputs that are not controllable by the systems designers. For example, the number

of customers and their arrival patterns, job orders and equipment failures are all

examples of exogenous inputs. Performance measures might include throughputtime, facility utilization, and due date performance as examples.

takt time - Sets the pace of production to match the rate of customer demand and

becomes the heartbeat of any lean production system. It is computed as the

available production time divided by the rate of customer demand. For example,

assume demand is 10,000 units per month, or 500 units per day, and planned

available capacity is 420 minutes per day. The takt time = 420 minutes per day/

500 units per day = 0.84 minutes per unit. This takt time means that a unit should

be planned to exit the production system on average every 0.84 minutes. Syn: tact

time.

rate-based scheduling - A method for scheduling and producing based on a

periodic rate, e.g., daily, weekly, or monthly. This method has traditionally been

applied to high-volume and process industries. The concept has also been applied

within job shops using cellular layouts and mixed-model level schedules where the

production rate is matched to the selling rate.


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lot splitting - Dividing a lot into two or more sublots and simultaneously

processing each sublot on identical (or very similar) facilities as separate lots,

usually to compress lead time or to expedite a small quantity. Syn: operation

splitting.

overlapped schedule - A manufacturing schedule that "overlaps" successiveoperations. Overlapping occurs when the completed portion of an order at one work

center is processed at one or more succeeding work centers before the pieces left

behind are finished at the preceding work centers. Syn: lap phasing, operation

overlapping, telescoping. See: send ahead. Ant: gapped schedule, overlapped

production.

pull system - 1) In production, the production of items only as demanded for use

or to replace those taken for use. See: pull signal. 2) In material control, the

withdrawal of inventory as demanded by the using operations. Material is not issued

until a signal comes from the user. 3) In distribution, a system for replenishing field

warehouse inventories where replenishment decisions are made at the fieldwarehouse itself, not at the central warehouse or plant. -- In a "pull" system, the

manufacturing should be completed to meet actual demand. That means the actual

orders from the customer is driving the demand for final assembly. The final

assembly is driving the previous work center, and so forth. This customer order

ultimately "pulls" the manufacture of the product.

cellular manufacturing - A manufacturing process that produces families of parts

within a single line or cell of machines controlled by operators who work only within

the line or cell.

Backlog - All the customer orders received but not yet shipped. Sometimesreferred to as open orders or the order board. See: order backlog, past due order.

By keeping the backlogs in production control, the floor will not be overloaded with

work which cannot be completed, thereby rendering due dates invalid on the floor.

When the shop is overloaded, product gets moved more frequently and

changeovers become more frequent, reducing the available capacity.

operations scheduling - The actual assignment of starting or completion dates to

operations or groups of operations to show when these operations must be done if

the manufacturing order is to be completed on time. These dates are used in the

dispatching function. Syn: detailed scheduling, order scheduling, shop scheduling.

Dispatch list - A listing of manufacturing orders in priority sequence. The dispatch

list, which is usually communicated to the manufacturing floor via paper or

electronic media, contains detailed information on priority, location, quantity, and

the capacity requirements of the manufacturing order by operation. Dispatch lists

are normally generated daily and oriented by work center. Syn: work center

schedule, priority report. -- Dispatch lists display the priority sequences of the

manufacturing order. The "list" is printed in hard copy or displayed on a terminal


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and contains information regarding the priority, location, and operation required. It

is generally produced daily in work center sequence. -- The purpose of the dispatch

list is to provide a list of jobs for each work center in the priority sequence by which

they are to run.

move time - The time that a job spends in transit from one operation to another inthe plant.

Due dates - are provided by MRP which maintains the priority, not MPS.

shop packet - generally contains all of the above items plus others, such as

engineering drawings, manufacturing orders, and labor tickets.

Just-in-Time (JIT) - A philosophy of manufacturing based on planned elimination of

all waste and on continuous improvement of productivity. It encompasses the

successful execution of all manufacturing activities required to produce a final

product, from design engineering to delivery, and includes all stages of conversion

from raw material onward. The primary elements of Just-in-Time are to have only

the required inventory when needed; to improve quality to zero defects; to reduce

lead times by reducing setup times, queue lengths, and lot sizes; to incrementally

revise the operations themselves; and to accomplish these activities at minimum

cost. In the broad sense, it applies to all forms of manufacturing-job shop, process,

and repetitive-and to many service industries as well. Syn: short-cycle

manufacturing, stockless production, zero inventories. -- In a Just-in-Time

environment, inventory is not built to level load the factory. Inventory reduction and

increased throughput are more important. -- Just-in-Time has little to no impact on

the accuracy of the forecast. However, with the ability of production to meet

demand as it is needed, the need for short term forecasting for the master schedulebecomes much less important--- In a Just-in-Time manufacturing environment,

operations control is simplified to visual methods. This means eliminating expensive

exception reporting generated from MRP systems. In place of the shop floor control

system are kanban cards to authorize production and moves. The move card is the

signal for the work center to produce more product in the priority of the cards

zero defects - A performance standard developed by Philip B. Crosby to address a

dual attitude in the workplace: people are willing to accept imperfection in some

areas, while in other areas, they expect the number of defects to be zero. This dual

attitude has developed as a result of the conditioning that people are human and

humans make mistakes. However, the zero-defects methodology states that ifpeople commit themselves to watching details and avoiding errors, they can move

closer to the goal of zero defects. The performance standard that must be set is

"zero defects," not "close enough."

stockless production - Syn: Just-in-Time. - A philosophy of manufacturing based

on planned elimination of all waste and on continuous improvement of productivity.

It encompasses the successful execution of all manufacturing activities required to


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produce a final product, from design engineering to delivery, and includes all stages

of conversion from raw material onward. The primary elements of Just-in-Time are

to have only the required inventory when needed; to improve quality to zero

defects; to reduce lead times by reducing setup times, queue lengths, and lot sizes;

to incrementally revise the operations themselves; and to accomplish these

activities at minimum cost. In the broad sense, it applies to all forms ofmanufacturing-job shop, process, and repetitive-and to many service industries as

well. Syn: short-cycle manufacturing, stockless production, zero inventories.

slack time - In project management, the amount of time that an activity may be

delayed from its early start without delaying the project finish date. Syn: slack.

shortest processing time rule (SPT) - A dispatching rule that directs the

sequencing of jobs in ascending order by processing time. If this rule is followed, the

most jobs at a work center per time period will be processed. As a result, the

average lateness of jobs at that work center is minimized, but some jobs will be

very late. Syn: smallest processing time rule.

lot traceability - The ability to identify the lot or batch number of product in terms

of one or all of the following: its composition, purchased parts, manufacturing date,

or shipped items. In certain regulated industries, lot traceability may be a legislative

requirement.

Line balancing - 1) The balancing of the assignment of the tasks to workstations in

a manner that minimizes the number of workstations and minimizes the total

amount of idle time at all stations for a given output level. In balancing these tasks,

the specified time requirement per unit of product for each task and its sequential

relationship with the other tasks must be considered. 2) A technique fordetermining the product mix that can be run down an assembly line to provide a

fairly consistent flow of work through that assembly line at the planned line rate. ---

Line balancing in an assembly operation distributes the work in order to maximize

the lines' output. Each operation in the line would take approximately the same

amount of time to complete. This would minimize the work in process and create no

bottlenecks in the line.

alternate routing - A routing, usually less preferred than the primary routing, but

resulting in an identical item. Alternate routings may be maintained in the computer

or off-line via manual methods, but the computer software must be able to accept

alternate routings for specific jobs.

alternate operation - Replacement for a normal step in the manufacturing

process. Ant: primary operation.

Internal setup time - The time associated with elements of a setup procedure

performed while the process or machine is not running. Ant: external setup time.


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Internal setup time occurs when setups are completed while the machine is down.

External setups occur while a machine is operating.

External setup time - The time associated with elements of a setup procedure

performed while the process or machine is running. Ant: internal setup time. --

External setup time occurs when a setup is completed while the machine isoperating. Internal setup time occurs when the machine is down. Often, reducing

setup time involves moving internal setups to external through advanced

preparation.

open order - 1) A released manufacturing order or purchase order. Syn: released

order. See: scheduled receipt. 2) An unfilled customer order.

unplanned issue - An issue transaction that updates the quantity on hand but for

which no allocation exists. -- An unplanned issue is an issue transaction from

inventory which is not on the pick list.

Downtime - Time when a resource is scheduled for operation but is not producing

for reasons such as maintenance, repair, or setup.--- Idle time or downtime is the

amount of time, machines or people are idle due to setup, maintenance, tooling, or

waiting for material. An inaccurate planning bill would not directly cause idle time.

Autonomation- Automated shutdown of a line, process, or machine upon detection

of an abnormality or defect.

Andon - 1) An electronic board that provides visibility of floor status and provides

information to help coordinate the efforts to linked work centers. Signal lights are

green (running), red (stop), and yellow (needs attention). 2) A visual signaling

system. --

Electronic Data Interchange (EDI) - The paperless (electronic) exchange of

trading documents, such as purchase orders, shipment authorizations, advanced

shipment notices, and invoices, using standardized document formats. -- EDI, or

Electronic Data Interchange allows electronic "hookup" for the quick, accurate

exchange of information such as schedules, invoices, receiving data, and any other

information. It is completed using direct links between computers or through third

party translators. It does not ensure error free work. In fact, errors will just be

transmitted faster.

design engineering - The discipline consisting of process engineering and productengineering. -- Design engineering can improve manufacturability by reducing the

number of different components and engineering the cost down through value

engineering. By not releasing the design until it is correct, ongoing engineering

changes while the product is being produced can be eliminated.

focused factory - A plant established to focus the entire manufacturing system on

a limited, concise, manageable set of products, technologies, volumes, and markets


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precisely defined by the company's competitive strategy, technology, and

economics. See: cellular manufacturing.-- A focused factory would have a restricted

variety of products which flow down the line. This smaller variety would allow a

simplified approach to the factory and make flow manufacturing easier to

implement. The simplification would require fewer transactions and inspections.

poka-yoke (mistake-proof) - Mistake-proofing techniques, such as manufacturing

or setup activity designed in a way to prevent an error from resulting in a product

defect. For example, in an assembly operation, if each correct part is not used, a

sensing device detects that a part was unused and shuts down the operation,

thereby preventing the assembler from moving the incomplete part to the next

station or beginning another operation. Sometimes spelled poke-yoke. Syn: failsafe

techniques, failsafe work methods, mistake-proofing.

Paypoint backflushing- (also called count point or key point) allows inventory to

be automatically removed from inventory with one transaction at a point in the

routing. This form of backflushing will charge inventory to the order for all previous

operations up to the paypoint. It is very useful in repetitive environments where the

inventory moves consistently and quickly through the operations. It is less useful

when the cycle times are long and inventory moves in large lots from operation to

operation.

The problem solving process is to:

Define the real problem

Determine the root cause of the problem

Eliminate the root cause

Evaluate the results

Only by evaluating the solution can you ensure the root cause has been eliminated

permanently.

project plan - In project management, a document that has been approved by

upper management that is to be used in executing and controlling a project. It

documents assumptions, facilitates communication, and documents the approved

budget and schedule. It may exist at a summary or a detailed level.

continuous improvement - The act of making incremental, regular improvements

and upgrades to a process or product in the sarch for excellence. -- Continuous

improvement requires that a company first recognize the need for improvement.

Once the recognition for improvement has occurred, a shared vision needs to be

developed. This is usually done by a cross functional team of mid-level managers.


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They need to decide together what the company stands for, and to remain

competitive where the company needs to go.

prevention costs - The costs caused by improvement activities that focus on the

reduction of failure and appraisal costs. Typical costs include education, quality

training, and supplier certification. Prevention costs are one of four categories ofquality costs prevention, internal failure, appraisal, and external failure. --

Prevention quality costs are the only desirable category of quality costs. It includes

quality engineering, reliability studies, and design of experiments.

appraisal costs - Those costs associated with the formal evaluation and audit of

quality in the firm. Typical costs include inspection, quality audits, testing,

calibration, and checking time.

internal failure cost - The cost of things that go wrong before the product

reaches the customer. Internal failure costs usually include rework, scrap,

downgrades, reinspection, retest, and process losses.

external failures cost - The cost related to problems found after the product

reaches the customer. This usually includes such costs as warranty and returns. --

include warrant costs, customer returns and recalls, and product liability costs.

Quality at the source - A producer's responsibility to provide 100% acceptable

quality material to the consumer of the material. The objective is to reduce or

eliminate shipping or receiving quality inspections and line stoppages as a result of

supplier defects.

Input/output control (I/O) - A technique for capacity control where planned and

actual inputs and planned and actual outputs of a work center are monitored.

Planned inputs and outputs for each work center are developed by capacity

requirements planning and approved by manufacturing management. Actual input

is compared to planned input to identify when work center output might vary from

the plan because work is not available at the work center. Actual output is also

compared to planned output to identify problems within the work center. Syn:

input/output analysis. See: capacity control. Four Basic Principles

I. Never load in more than you expect out

II. Separate the planning and control of capacity from the planning and

control of production

III. Place the due date on the order at the last possible moment

IV. capacity should be planned in the largest possible group of items

absorption costing - An approach to inventory valuation in which variable costs

and a portion of fixed costs are assigned to each unit of production. The fixed costs


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are usually allocated to units of output on the basis of direct labor hours, machine

hours, or material costs. Syn: allocation costing. See: activity-based costing. --- The

absorption rate is calculated based on the budgeted overhead costs divided by the

budgeted labor hours. If either of these factors change through increased or

decreased unit volume, then the overhead variance will be under or over absorbed.

Sales can remain unchanged even though the unit volume has changed. (Pricingcan change with the market.)

mean time between failures (MTBF) - The average time interval between

failures for repairable product for a defined unit of measure (e.g., operating hours,

cycles, miles). See: reliability.

ISO 9000 - series standards provide the structure and guidelines for maintaining an

effective set of documented procedures for ensuring consistent quality products. A

company must successfully pass an independent quality audit which reviews the

quality system and the adherence to the system. An audit review must be

conducted each year or semi-annually to maintain the certification.

Documents

ECO Study Guide