lead times: In purchasing control, the gap between the customer's placement of an order and the seller's shipment of
supplier selection: Finding and determining suppliers to buy from.
just-in-time (JIT) production systems: A method of inventory control in which materials are acquired and put into
production just as they are needed.
material requirements planning (MRP): A method of inventory control in which a computerized bill of materials is
used to estimate production needs so that resources are acquired and put into production only as needed.
bill of materials: Production control tool that specifies the necessary ingredients of a product, the order in which they
should be combined, and how many of each are needed to make one batch.
manufacturing resource planning (MRP II): An advanced version of MRP that ties together all parts of the
organization into the company's production activities.
quality control: The management of the production process so as to manufacture goods or supply services that meet
specific quality standards.
productivity: A measure of efficiency that compares how much is produced with the resources used to produce it.
quality: A product's fitness for use in terms of offering the features that consumers want.
labour productivity: Partial productivity ratio calculated by dividing gross domestic product by total number of workers.
level of productivity: The dollar value of goods and services produced by each worker.
total quality management (TQM): A concept that emphasizes that no defects are tolerable and that all employees are
responsible for maintaining quality standards.
performance quality: The overall degree of quality; how well the features of a product meet consumers' needs and how
well the product performs.
quality reliability: The consistency of quality from unit to unit of a product.
quality ownership: The concept that quality belongs to each employee who creates or destroys it in producing a good or
service; the idea that all workers must take responsibility for producing a quality product.
competitive product analysis: Process by which a company analyzes a competitor's products to identify desirable
value-added analysis: The evaluation of all work activities, material flows, and paperwork to determine the value they
add for customers.
statistical process control (SPC): Statistical analysis techniques that allow managers to analyze variations in production
data and to detect when adjustments are needed to create products with high quality reliability.
process variation: Any change in employees, materials, work methods, or equipment that affects output quality.
control chart: A statistical process control method in which results of test sampling of a product are plotted on a diagram
that reveals when the process is beginning to depart from normal operating conditions.
quality/cost study: A method of improving product quality by assessing a firm's current quality-related costs and
identifying areas with the greatest cost-saving potential.
internal failures: Expenses incurred during production and before bad product leaves the plant.
external failures: Allowing defective products to leave the factory and get into consumers' hands.
quality improvement (QI) team: TQM tool in which groups of employees work together to improve quality.
benchmarking: Comparing the quality of the firm's output with the quality of the output of the industry's leaders.
ISO 14000: Certification program attesting to the fact that a factory, laboratory, or office has improved environmental
ISO 9000: Program certifying that a factory, laboratory, or office has met the quality management standards of the
International Organization for Standardization.
business process re-engineering: Redesigning of business processes to improve performance, quality, and productivity.
supply chain: Flow of information, materials, and services that starts with raw-materials suppliers and continues through
other stages in the operations process until the product reaches the end customer.
supply chain management (SCM): Principle of looking at the chain as a whole to improve the overall flow through the