Operations Management & Strategy – Key Vocabulary

These vocabulary flashcards summarize the essential terms, concepts, and tools discussed across Chapters 1–4 of the lecture notes, providing concise definitions to aid exam review and mastery of operations management, strategy, measurement, and technology topics.

Operations Management (OM)

The science and art of designing, running, and improving the systems that create and deliver an organization’s goods and services.

Efficiency–Cost–Quality Trade-off

The three core performance levers balanced in every OM decision.

Forecasting

Estimating future demand for materials, capacity, or services.

Supply Chain Management

Coordinating the flow of materials, information, and money from suppliers to customers.

Facility Layout and Design

Deciding the physical arrangement of workstations, equipment, and storage to maximize flow and safety.

Technology Selection

Choosing appropriate technologies to improve productivity and competitiveness.

Quality Management

Activities that ensure goods and services meet customer expectations and regulatory requirements.

Purchasing

The function that acquires raw materials, components, and services for operations.

Resource and Capacity Management

Planning to have the right amount of labor, equipment, and space available when needed.

Process Design

Determining the best sequence of steps and equipment to produce goods or services.

Job Design

Specifying how tasks are bundled and assigned to people.

Service Encounter Design

interactions between customers and service providers.

Scheduling

Allocating resources to tasks over time to meet demand.

Sustainability (general)

Managing operations to meet current needs without compromising environmental, social, or economic resources for the future.

Good

A tangible, physical product that can be stored or transported.

Durable Good

A product that lasts at least three years without rapid deterioration.

Nondurable Good

A consumable product that is used up or becomes obsolete in less than three years.

Service

An activity that provides value without producing a tangible product.

Service Encounter

The interaction between a customer and a service provider.

Moment of Truth

Any instantaneous interaction in which a customer forms an impression of the service.

Service Management

Integration of marketing, HR, and operations to plan and deliver services.

Tangibility (goods vs. services)

Degree to which an offering can be seen and touched; goods are tangible, services are intangible.

Customer Participation

Extent to which customers co-produce the service outcome.

Demand Variability (in services)

Short-term fluctuations in service demand that are hard to forecast.

Inventory Buffer

Physical goods stored to decouple supply from demand; in services, capacity acts as buffer.

Skill Mix

Combination of technical and behavioral skills required, higher for services.

Location (service)

Need for the service facility to be near the customer if presence is required.

Legal Protection

Ease of patenting or copyrighting; goods are easier to protect than services.

Value Equation

Value = Perceived Benefits ÷ Price (customer cost).

Customer Benefit Package (CBP)

A clearly defined set of tangible and intangible goods/service that customers receive.

Primary Good or Service

The core product that fulfills the main customer need.

Peripheral Goods or Services

Features that augment and enhance the primary offering.

Variant (in CBP)

Location- or firm-specific extra that adds uniqueness to a CBP.

Biztainment

Bundling entertainment with goods or services to increase value.

Value Chain

Network of facilities and processes describing material and information flows that create value.

Supply Chain

Portion of the value chain that deals with physical distribution of goods.

Process

A sequence of activities designed to produce a specific result.

Value-Creation (Core) Process

Activities that directly add value for the customer.

Support Process

Activities such as purchasing that aid core processes.

General Management Process

Administrative functions like accounting, HR, and IT.

Input-Output Model

Framework showing how resources are transformed into goods and services.

Preproduction & Postproduction Services

Activities that attract customers before sale and retain them after sale.

Hierarchical Supply Chain Model

Visualization of the tiers from suppliers to customers.

Distribution Center (DC)

Warehouse acting as an intermediary between plants and customers.

Inventory

Raw materials, work-in-process, and finished goods held for future use or sale.

Environmental Sustainability

Commitment to protect and improve long-term environmental quality.

Social Sustainability

Commitment to enhance community well-being and societal quality of life.

Economic Sustainability

Commitment to maintain economic vitality while meeting current business needs.

Business Analytics

Transforming data into insights and actions for decision making.

Measurement

Quantifying the performance of organizational units.

Financial Measures

Metrics such as revenue, profit, and ROI used to gauge economic performance.

Customer Satisfaction Measurement System

Structured approach to gather customer ratings and predict future buying behavior.

Goods Quality

Physical performance and characteristics of a manufactured product.

Service Quality

Consistently meeting or exceeding customer expectations in all service encounters.

Tangibles (SERVQUAL)

Appearance of facilities, equipment, and personnel.

Reliability (SERVQUAL)

Ability to perform the promised service dependably and accurately.

Responsiveness (SERVQUAL)

Willingness to help customers promptly.

Assurance (SERVQUAL)

Knowledge and courtesy of employees that inspire trust and confidence.

Empathy (SERVQUAL)

Caring, individualized attention given to customers.

Service Upset / Service Failure

Error in service creation or delivery that reduces customer satisfaction.

Processing Time

Time actually spent performing a task.

Queue Time

Time an item or customer waits before processing.

Flexibility

Ability to adapt quickly and effectively to changing requirements.

Goods & Service Design Flexibility

Capability to develop a wide range of customized offerings.

Volume Flexibility

Capacity to adjust production quickly to demand changes.

Innovation

Ability to create goods or services that differ from existing norms.

Learning

Creating, acquiring, and transferring knowledge to improve performance.

Productivity

Ratio of output produced to input used.

Operational Efficiency

Providing goods and services with minimum waste of resources.

Triple Bottom Line (TBL)

Measurement of environmental, social, and economic sustainability outcomes.

Descriptive Statistics

Methods for summarizing and describing data sets.

Interlinking

Quantitative modeling of cause-and-effect relationships between internal and external performance criteria.

Value of a Loyal Customer (VLC)

Total expected revenue or profit from a customer over the buyer life cycle.

Customer Defection Rate

1 minus the customer retention rate; proportion of customers lost.

Actionable Measure

Performance metric that guides decisions at the level it is applied.

Competitive Advantage

Market and financial superiority over competitors.

Order Qualifier

Minimum performance level required to be considered by a customer.

Order Winner

Characteristic that differentiates a CBP and secures the sale.

Search Attributes

Features a customer can evaluate before purchase.

Experience Attributes

Features discernible only during or after consumption.

Credence Attributes

Features difficult for a customer to evaluate even after consumption.

Competitive Priorities

Strategic emphasis a firm places on performance measures such as cost, quality, time, flexibility, or innovation.

Mass Customization

Ability to efficiently produce goods or services tailored to individual customers.

Strategy

Coordinated plan that integrates goals, policies, and actions into a cohesive whole.

Core Competency

Unique strength or capability that provides competitive advantage.

Strategic Planning

Process of determining an organization’s long-term goals, policies, and plans.

Corporate Strategy

Decisions about the overall direction and resource allocation of a firm.

Business Strategy

Plan that defines how a strategic business unit competes in its market.

Functional Strategy

Decisions made in each operational area to support the business strategy.

Operations Strategy

Set of decisions across the value chain that enable operations to support business strategy.

Multinational Enterprise (MNE)

Organization that sources, produces, and markets goods or services in several countries.

Operations Design Choices

Decisions about process structure, technology, and capacity that shape how products are made.

Infrastructure (operations)

Non-process features such as workforce policies, quality systems, and organization structure.

Hard Technology

Physical devices and equipment used to perform tasks.

Soft Technology

Application of information technologies (e.g., Internet) to support human work.

Numerical Control (NC)

Machine-tool control system that follows programmed instructions.

Computer Numerical Control (CNC)

Computer-based NC capable of multiple operations on a part.

Robot

Programmable machine that manipulates materials or tools for varied tasks.

Automated Material Handling System

Equipment such as automated guided vehicles or automated storage/retrieval systems that move and store materials.

Computer-Aided Manufacturing (CAM)

Computer control and monitoring of the manufacturing process.