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Logistics is the part of supply chain management that deals with the efficient forward and reverse flow of goods, services, and related information from the point of origin to the point of consumption according to the needs of customers. Logistics management is a component that holds the supply chain together. The resources managed in logistics may include tangible goods such as materials, equipment, and supplies, as well as food and other consumable items.
Material requirements planning (MRP) is a production planning, scheduling, and inventory control system used to manage manufacturing processes. Most MRP systems are software-based, but it is possible to conduct MRP by hand as well.
Inventory or stock refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilisation.
Lean manufacturing is a production method aimed primarily at reducing times within the production system as well as response times from suppliers and to customers. It is closely related to another concept called just-in-time manufacturing. Just-in-time manufacturing tries to match production to demand by only supplying goods which have been ordered and focuses on efficiency, productivity, and reduction of "wastes" for the producer and supplier of goods. Lean manufacturing adopts the just-in-time approach and additionally focuses on reducing cycle, flow, and throughput times by further eliminating activities which do not add any value for the customer. Lean manufacturing also involves people who work outside of the manufacturing process, such as in marketing and customer service.
Kanban is a scheduling system for lean manufacturing. Taiichi Ohno, an industrial engineer at Toyota, developed kanban to improve manufacturing efficiency. The system takes its name from the cards that track production within a factory. Kanban is also known as the Toyota nameplate system in the automotive industry.
The Toyota Production System (TPS) is an integrated socio-technical system, developed by Toyota, that comprises its management philosophy and practices. The TPS is a management system that organizes manufacturing and logistics for the automobile manufacturer, including interaction with suppliers and customers. The system is a major precursor of the more generic "lean manufacturing". Taiichi Ohno and Eiji Toyoda, Japanese industrial engineers, developed the system between 1948 and 1975.
Load testing is the process of putting demand on a structure or system and measuring its response.
A warehouse is a building for storing goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial parks on the outskirts of cities, towns, or villages.
A distribution center for a set of products is a warehouse or other specialized building, often with refrigeration or air conditioning, which is stocked with products (goods) to be redistributed to retailers, to wholesalers, or directly to consumers. A distribution center is a principal part, the order processing element, of the entire order fulfillment process. Distribution centers are usually thought of as being demand driven. A distribution center can also be called a warehouse, a DC, a fulfillment center, a cross-dock facility, a bulk break center, and a package handling center. The name by which the distribution center is known is commonly based on the purpose of the operation. For example, a "retail distribution center" normally distributes goods to retail stores, an "order fulfillment center" commonly distributes goods directly to consumers, and a cross-dock facility stores little or no product but distributes goods to other destinations.
Ready-mix concrete (RMC) is concrete that is manufactured in a batch plant, according to each specific job requirement, then delivered to the job site "ready to use".
Operations management is concerned with designing and controlling the production of goods and services, ensuring that businesses are efficient in using resources to meet customer requirements.
Muda is a Japanese word meaning "futility", "uselessness", or "wastefulness", and is a key concept in lean process thinking such as in the Toyota Production System (TPS), denoting one of three types of deviation from optimal allocation of resources. The other types are known by the Japanese terms mura ("unevenness") and muri ("overload"). Waste in this context refers to the wasting of time or resources rather than wasteful by-products and should not be confused with Waste reduction.
The business terms push and pull originated in logistics and supply chain management, but are also widely used in marketing and in the hotel distribution business.
The bullwhip effect is a supply chain phenomenon where orders to suppliers tend to have a larger variability than sales to buyers, which results in an amplified demand variability upstream. In part, this results in increasing swings in inventory in response to shifts in consumer demand as one moves further up the supply chain. The concept first appeared in Jay Forrester's Industrial Dynamics (1961) and thus it is also known as the Forrester effect. It has been described as "the observed propensity for material orders to be more variable than demand signals and for this variability to increase the further upstream a company is in a supply chain". Research at Stanford University helped incorporate the concept into supply chain vernacular using a story about Volvo. Suffering a glut in green cars, sales and marketing developed a program to sell the excess inventory. While successful in generating the desired market pull, manufacturing did not know about the promotional plans. Instead, they read the increase in sales as an indication of growing demand for green cars and ramped up production.
Order fulfillment is in the most general sense the complete process from point of sales inquiry to delivery of a product to the customer. Sometimes, it describes the more narrow act of distribution or the logistics function. In the broader sense, it refers to the way firms respond to customer orders.
Production leveling, also known as production smoothing or – by its Japanese original term – heijunka (平準化), is a technique for reducing the mura (unevenness) which in turn reduces muda (waste). It was vital to the development of production efficiency in the Toyota Production System and lean manufacturing. The goal is to produce intermediate goods at a constant rate so that further processing may also be carried out at a constant and predictable rate.
Frequent deliveries are a largely ignored but powerful way of leveling apparent demand within a supply chain and thereby reducing Mura. What is perhaps not so obvious is that this will reduce inventory levels and thereby assist progress along the Lean journey at the same time. The historical focus upon carrying full loads, sometimes of only one product, reduces the unit cost of transport but has sometimes hidden the true costs associated with achieving those transport discounts. It is also possible to gain some of these benefits by 'faking' frequent deliveries at the supply site.
Order processing is the process or work-flow associated with the picking, packing, and delivery of the packed items to a shipping carrier and is a key element of order fulfillment. Order processing operations or facilities are commonly called “distribution centers” or “DC 's”. There are wide variances in the level of automation associating to the “pick-pack-and-ship” process, ranging from completely manual and paper-driven to highly automated and completely mechanized; computer systems overseeing this process are generally referred to as Warehouse Management Systems or “WMS”.
Demand Flow Technology (DFT) is a strategy for defining and deploying business processes in a flow, driven in response to customer demand. DFT is based on a set of applied mathematical tools that are used to connect processes in a flow and link it to daily changes in demand. DFT represents a scientific approach to flow manufacturing for discrete production. It is built on principles of demand pull where customer demand is the central signal to guide factory and office activity in the daily operation. DFT is intended to provide an alternative to schedule-push manufacturing which primarily uses a sales plan and forecast to determine a production schedule.
Shelf-ready packaging (SRP) and retail-ready packaging (RRP) refers to the packaging of a product so that it is delivered to a retailer in packaging which is optimized for efficient stocking and sale.