MGSC 395 Exam 1 (Ch 1-5)

What is Chapter 1 about?

Using operations to create value.

What do processes do?

Processes turn inputs into outputs.

Inputs consist of what?

Workers; managers; equipment; energy; etc.

Outputs consist of what?

Goods and services.

Manufacturing or service: Physical, durable output

Manufacturing

Manufacturing or service: Output can be inventoried

Manufacturing

Manufacturing or service: Low customer contact

Manufacturing

Manufacturing or service: Long response time

Manufacturing

Manufacturing or service: Capital intensive

Manufacturing

Manufacturing or service: Quality is easily measured

Manufacturing

Manufacturing or service: Intangible, perishable output

Service

Manufacturing or service: Output cannot be inventoried

Service

Manufacturing or service: High customer contact

Service

Manufacturing or service: Short response time

Service

Manufacturing or service: Labor intensive

Service

Manufacturing or service: Quality is not easily measured

Service

What are the four core processes?

Supplier relationship process; new service/product development; order fulfillment process; customer relationship process.

What is productivity?

The idea of creating more or more valuable outputs from fixed inputs.

What is the equation for productivity?

Productivity = Output / Input

What is the equation for labor productivity?

Labor Productivity = Output / Person, Hours Worked, or Labor Cost

What is the equation for multifactor productivity?

Multifactor Productivity = Output / (Labor + Material + Overhead)

What are core competencies?

The unique resources and strengths that an organization's management considers when formulating strategy.

What are the four types of core competencies?

Workforce; facilities; market and financial know-how; systems and technologies.

What does the workforce competency enable?

Access to skills and knowledge.

Apple is an example of which core competency?

Workforce.

What does the facilities competency enable?

Access to location and manufacturing factors.

Walmart is an example of which core competency?

Facilities.

What does the market and financial know-how competency provide?

Financial resources.

What does the systems and technologies competency provide?

Data and data-generated insights.

AI companies are examples of which core competency?

Systems and technologies.

How do we use core competencies to meet market demand?

Consider how to qualify as a viable product or service.

What are order qualifiers?

Minimum standards required to compete in a market.

What is an example of an order qualifier?

Reliable on-time delivery.

What are order winners?

Key factors that differentiate a product or service and drive customer purchase decisions.

What is an example of an order winner?

Delivery speed.

What is a competitive priority?

A sought-after need that is planned for.

What is a competitive capability?

A have that is developed over time.

What is the difference between a competitive priority and a competitive capability?

A priority is a sought-after need planned for; a capability is a have developed over time.

What are the four broad competitive priorities and capabilities?

Cost; quality; time; flexibility.

IKEA is an example of what specific Cost priority/capability?

Low-cost operations.

Rolls Royce is an example of what specific Quality priority/capability?

Top quality.

Toyota is an example of what specific Quality priority/capability?

Consistent quality.

Amazon is an example of what specific Time priority/capability?

Delivery speed.

UPS is an example of what specific Time priority/capability?

On-time delivery.

Zara is an example of what specific Time priority/capability?

Development speed.

TikTok is an example of what specific Flexibility priority/capability?

Customination.

Spotify is an example of what specific Flexibility priority/capability?

Variety.

USPS is an example of what specific Flexibility priority/capability?

Volume flexibility.

What is a preference matrix?

A tool for scoring alternatives against weighted criteria.

What types of alternatives can a preference matrix evaluate?

Locations; suppliers; new product ideas.

What are the four steps of creating a preference matrix?

1. Choose the criteria that matter for the decision. 2. Assign each criterion a weight. 3. Score each alternative on each criterion. 4. Calculate the weighted score and compare alternatives or screen against a minimum threshold.

What must the weights in a preference matrix sum to?

A fixed total, usually 100.

What is the preference matrix weighted-score formula?

Weighted score = Σ(weight × score).

How are preference matrix weighted scores used?

Compare alternatives or screen them against a minimum threshold.

What four features can make a new offering competitive?

Product variety; design; innovation; service.

What is product variety?

A wide range of offerings without sacrificing cost, quality, or speed; for example, the Apple iPhone lineup uses one platform with many variants.

What does design include as a competitive feature?

Aesthetic appeal; safety; ease of use; ease of maintenance. Example: the OXO Good Grips peeler.

What is process strategy?

The pattern of decisions made in managing processes so that processes will achieve their competitive priorities.

High customer contact and individualized flexible flows describe what office?

Front office.

Low customer interaction and standardized routine work describe what office?

Back office.

Some customer interaction with standard services and some options describe what office?

Hybrid office.

Low-volume made-to-order customized work describes what process?

Job process.

Low-to-moderate volume with disconnected, moderately repetitive flows describes what process?

Batch process.

Few major products at higher volume with a connected, highly repetitive line describes what process?

Line process.

High-volume standardized commodity products with continuous flows describe what process?

Continuous flow process.

Which policy uses continuous flow for the same high-volume output?

Make-to-stock strategy.

Which policy creates more customized outputs using a job process?

Design-to-order strategy.

Which policy allows some customization using a batch process?

Make-to-order strategy.

Which policy allows a tiny bit of customization using line processes?

Assemble-to-order strategy.

What are the five DMAIC steps?

Define; Measure; Analyze; Improve; Control.

What is a flowchart?

A diagram of information, customers, equipment, or materials through a process.

What do boxes and diamonds represent in a flowchart?

Boxes represent steps; diamonds represent decision points.

What is a service blueprint?

A flowchart that highlights customer contact.

What is a swim lane flowchart?

A flowchart that groups functional areas together.

Which tools can measure a process?

Checklists; histograms and pie charts; Pareto charts; scatter diagrams; cause-and-effect diagrams; graphs.

What is the Pareto principle?

80% of the consequences come from 20% of the causes.

Which diagram is also called a fishbone or Ishikawa diagram?

Cause-and-effect diagram.

What are the cause categories in a fishbone diagram?

Other; Machines; Methods; People; Materials.

What do the cause categories connect to in a fishbone diagram?

The effect.

How is a process improved in DMAIC?

Triangulate data from Define, Measure, and Analyze, then redesign the process using what the analysis found.

What is a prevention cost?

A cost of ensuring high quality from the start; training employees is an example.

What is an appraisal cost?

A cost of checking for quality; regular inspections of raw materials are an example.

What is an internal failure cost?

A cost caused by defects found before the product reaches the customer; scrapping defective items is an example.

What is an external failure cost?

A cost caused by defects found after the product reaches the customer; product recalls are an example.

What is an ethical failure cost?

A cost related to ethical harm from a poor-quality product; a product-safety lawsuit is an example.

How do prevention costs differ from failure costs?

Prevention costs aim to ensure quality from the start, while failure costs result from delivering defective products or services.

What is the core of TQM (Top Quality Management)?

Customer satisfaction.

What supports TQM?

Employee involvement and continuous improvement.

Which quality dimension means meeting the advertised requirements?

Conformance to specifications, such as a smartphone battery lasting the advertised 12 hours.

Which quality dimension means providing an acceptable offering for the price?

Value, such as a budget airline offering affordable flights with acceptable service.

Which quality dimension means a product does the job the customer needs?

Fitness for use, such as a winter coat keeping you warm in freezing temperatures.

Which quality dimension refers to help after a product is bought?

Support, such as 24/7 customer service for troubleshooting.

Which quality dimension concerns how a product or service makes the customer feel?

Psychological impressions, such as an elegant luxury hotel making guests feel special and valued.

What does employee involvement in TQM include?

Cultural change and teams, including employee empowerment.

What types of teams can support employee involvement?

Problem-solving teams, special-purpose teams, and self-managed teams.

What is continuous improvement also called?

Kaizen.

What are the four steps of the PDSA cycle?

Plan, Do, Study, Act.

What happens in the Plan step of PDSA?

Select a process to improve, document it, analyze data, set goals, and develop a plan with measurable improvement goals.

What happens in the Do step of PDSA?

Implement the plan, monitor progress, and collect data.

What happens in the Study step of PDSA?

Compare the results with the goals set during planning.