Introduction to Operations Management, Supply Chain Management, and ERP

Vocabulary practice flashcards covering core concepts of Operations Management, Productivity, Supply Chain Management, and Enterprise Resource Planning based on lecture notes.

Operations Management (OM)

The set of activities that create value in the form of goods and services by transforming inputs into outputs.

Production

The creation of goods and services, serving as a direct measure of output quantity rather than efficiency or effectiveness.

Marketing (Essential Function)

One of the three core organizational functions that generates customer demand for products and services.

Operations (Essential Function)

One of the three core organizational functions responsible for creating the product or delivering the service.

Finance/Accounting (Essential Function)

One of the three core organizational functions that tracks performance, pays bills, and collects funds to sustain production.

Early Concepts Era (1776–1880)

A stage in OM history driven by a cost focus, introducing key principles such as interchangeable parts and labour specialization.

Scientific Management Era (1880–1910)

An OM era focused on cost reduction through Gantt charts, motion and time studies, process analysis, and queuing theory.

Mass Production Era (1910–1980)

An OM era focused on cost reduction using assembly lines, statistical sampling, EOQ, linear programming, CPM, MRP, and control charts.

Lean Production Era (1980–1995)

An OM era centered on quality focus, introducing Just-in-Time (JIT), CAD, EDI, Total Quality Management (TQM), employee empowerment, and kanbans.

Mass Customization Era (1995–Present)

The current OM era characterized by a customization focus, globalization, e-commerce, ISO standards, SCM, sustainability, and Lean Six Sigma.

Productivity

The ratio of outputs (goods and services) divided by inputs (resources such as labour and capital).

Labour (Productivity Variable)

A productivity factor contributing approximately $10\%$ of annual productivity growth, driven by education, diet, sanitation, and skill development.

Capital (Productivity Variable)

A productivity factor contributing approximately $38\%$ of annual productivity growth, affected by inflation, taxes, and interest rates.

Management (Productivity Variable)

A productivity factor contributing approximately $52\%$ of annual productivity growth by efficiently combining labour and capital in a knowledge society.

Starbucks Operations Improvements

Operational changes such as resizing ice scoops (saving $14\,s$ per Venti drink) and using new espresso machines (saving $12\,s$ per shot), raising store revenue from $\$200,000$ to $\$940,000$ and boosting productivity by $27\%$.

Taco Bell Operations Improvements

Process redesigns that reduced food prep time to $8\,s$, increased manager span of control from $5$ to $30$ stores, and cut in-store labour by $15\,h/\text{day}$, saving $\$17\text{ million}$ annually.

Product-Process Matrix

A matrix aligning process types (Project, Job shop, Batch, Assembly line, Continuous) with product structure, volume, and life cycle stages.

Demand/Supply Uncertainty Matrix

A model created by Hau Lee (2002) that categorizes supply chain strategies based on demand uncertainty (Low/Functional vs High/Innovative) and supply uncertainty (Low/Stable vs High/Evolving).

Strategic Fit

The consistency between customer priorities established by competitive strategy and the operational capabilities of the supply chain.

Supply Chain Management (SCM)

The integration of activities that procure materials and services, transform them into intermediate goods and final products, and deliver them through a distribution network to maximize customer value.

SCOR Model

The Supply Chain Operations Reference framework defining Level I functions: Plan, Source, Make/Repair, Deliver, Return, and Enable.

Enterprise Resource Planning (ERP)

Software systems that allow organizations to automate, integrate, and share a common database across business processes in real time.

Manufacturing Planning System

An integrated subsystem of ERP where the Master Production Schedule (MPS) flows into MRP, CRP, and Order Scheduling with capacity adjustments.

SAP R/3 Modular Integration

An ERP client/server architecture integrating key modules such as SD, MM, PP, QM, PM, HR, IS, WF, PS, AM, CO, and FI around a central database.

Master Records (ERP)

The persistent foundational data set in an ERP system containing entities such as Item, Customer, Vendor, Bill of Material, Routing, Work Centres, and General Ledger.

Transaction Processing (ERP)

The execution layer in an ERP system managing routine operations like Purchase Orders, Sales Orders, Production Orders, and Job activities.

Decision Support (ERP)

The analytical module in an ERP system providing functionality for Inventory Management, Production Planning/Scheduling, Sales Analysis, and Purchase Analysis.

Organizational Chart - Airline Operations

The functional operations breakdown of an airline, encompassing Spare Parts Inventory Management, Maintenance Scheduling, Ground operations, Flight operations, and Optimization & Yield Management.

Organizational Chart - Commercial Bank Operations

The operational branch of a bank consisting of teller scheduling, cheque clearing, collection, transaction processing, facilities design/layout, vault operations, maintenance, and security.