Operations Management Flashcards

Flashcards covering vocabulary and key concepts from Chapter 9 of Operations Management, including production processes, supply chain, and quality control systems.

Production

The process of transforming inputs, such as labour, capital, and raw materials, into outputs (goods and services) that a firm wishes to sell.

Value

The customer's perception of the benefits they receive compared to the cost or effort required to obtain the product, calculated as $\text{Value} = \text{Benefits}/\text{Costs}$.

Utility

The inherent usefulness or the ability of a product or service to satisfy a customer's needs and wants.

Time Utility

Utility created by making a product available when it is needed by the customer.

Place Utility

Utility created by making a product accessible in a convenient location.

Form Utility

Utility created by the design or structure of a product that meets customer needs.

Ownership Utility

The functional and emotional satisfaction gained from the benefits of owning a product.

Operations Management

The practices, techniques, and tools that organizations use to produce and deliver goods and services efficiently and effectively.

Supply Chain

A network of individuals, organizations, resources, activities, and technologies involved in every stage from sourcing raw materials to delivering the final product.

Supply Chain Management (SCM)

The monitoring and optimization of the production and distribution processes to improve efficiency and eliminate waste.

Value Chain

A framework that focuses on how each activity in the production process adds value to the product and how those costs relate to the final sale price.

Circular Economy

A regenerative approach that emphasizes the restoration and regeneration of products, materials, and energy, replacing the traditional "take-make-dispose" model.

Production Planning

The stage of operations management where managers determine how goods will be produced, where production will take place, and facility layout.

Production Control

The ongoing process of scheduling and monitoring activities, overseeing purchasing of raw materials, and handling inventories during production.

Quality Control

The process of ensuring that products or services meet predefined standards, specifications, and customer expectations.

Make-to-Order (MTO)

A production strategy where products are customized to meet the needs of buyers who ordered them, common for low-volume, high-variety goods.

Mass Production

A strategy of producing high volumes of identical goods at a low cost, often called a make-to-stock strategy.

Economies of Scale

The reduced costs per unit that are realized from an increased total number of units produced.

Mass Customization

An approach that combines customized product features with mass production efficiency by interacting with customers to determine exact requirements.

Site Selection

The process of measuring the needs of a new project against the merits of potential locations, considering factors like shipping costs and labor availability.

Enterprise Zone

An area where local governments offer financial incentives, such as tax breaks, to entice private companies to invest in the locale.

Facility Layout

The physical arrangement of resources, such as machinery and personnel, to ensure the smooth and efficient flow of production.

Process Layout

A facility layout that groups similar machines or functions together, which is best for low-volume, varied products like hospital departments.

Product Layout

A facility layout that arranges equipment in sequence for the mass production of identical items, such as an automobile assembly line.

Fixed-position Layout

A layout where the product stays in one place while workers and tools move to it, used for large-scale projects like shipbuilding.

Cellular Layout

A layout where machines are grouped into cells to produce related product families more efficiently.

Capacity Requirements

The maximum number of goods that a facility can produce over a given time under normal working conditions.

Continuous Review

An ongoing evaluation of organizational processes to identify opportunities for increased efficiency and alignment with actual demand.

Purchasing (Procurement)

The process of acquiring the materials and services to be used in production.

Electronic Data Interchange (EDI)

An electronic system used to process transactions and transmit purchasing documents between buyers and suppliers.

Outsourcing

The practice of contracting out certain business functions, tasks, or processes to external vendors or service providers.

Inventory Control

The process of striking a balance between losing production time due to material shortages and wasting money by carrying too much inventory.

Just-in-Time (JIT) Production

An inventory-control method where materials arrive at production facilities exactly when they are needed for the manufacturing process.

Material Requirements Planning (MRP)

A software tool that uses sales forecasts and lead times to calculate the quantity and timing of component parts needed for production.

Master Production Schedule (MPS)

A detailed production plan derived from sales forecasts that serves as the basis for materials planning.

Bill of Materials (BOM)

A comprehensive list of the various parts and components that make up an end product.

Gantt Chart

An easy-to-read graphical tool named after Henry Gantt that helps operations managers track the progress of a project's activities.

PERT (Program Evaluation and Review Technique)

A tool used to diagram production activities, estimate time requirements, and determine the most efficient sequence of tasks.

Critical Path

The longest sequence of activities in a PERT diagram that determines the minimum time needed to complete an entire project.

Total Quality Management (TQM)

A continual process of detecting and eliminating errors across the organization, focused on customer satisfaction, employee involvement, and continuous improvement.

Quality Circles

Teams of employees performing similar jobs who meet to identify and solve work-related problems and propose quality improvements.

Statistical Process Control (SPC)

The use of statistical techniques and tools like control charts to monitor process behavior and ensure production stays within specifications.

Six Sigma

A quality control process aimed at achieving a level where $99.99966\%$ of opportunities are defect-free, equating to only $3.4$ defects per million.

Computer-Aided Design (CAD)

The use of computer software to create, modify, analyze, or optimize precise technical drawings and 3D models.

Computer-Aided Manufacturing (CAM)

The use of computer software and hardware to control and automate manufacturing machinery based on CAD designs.

Computer-Integrated Manufacturing (CIM)

A comprehensive approach that integrates CAD, CAM, and other business functions like inventory and shipping into a single computer-controlled system.

Enterprise Resource Planning (ERP)

A broad, integrated software system that manages and automates a company's core business processes across multiple departments.

Balanced Scorecard

A model utilized by service operations to balance profitability, innovation, customer satisfaction, and associate satisfaction.

360-degree Feedback

A process of collecting feedback from all of a business's stakeholders to identify areas for operational improvement.

Moment of Truth Marketing

Marketing that occurs at the specific moment when a customer interacts with a product or service and forms their impression of the brand.

Kaizen

A Japanese term meaning "continuous improvement," referring to a mindset of making small, incremental adjustments to boost quality and efficiency.

SERVQUAL (RATER Model)

A framework used in service industries to measure quality across five dimensions: Reliability, Assurance, Tangibles, Empathy, and Responsiveness.