Chapter Seven (10/24)

service operations/production

service operations/production

activities producing intangible and tangible products, such as entertainment, transportation, and education

goods operations/production

activities producing tangible products, such as radios, newspapers, buses, and textbooks

operations/production

activities involved in making products--goods and services--for customers

utility

product's ability to satisfy a human want or need

form utility

products are in the form consumers want

time utility

products are available when different consumers want them

place utility

products are available where different consumers want them

operations/production management

systematic direction and control of the activities that transform resources into finished products that create value for and provide benefits to customers

operations/production managers

managers responsible for ensuring that operations activities create value and provide benefits to customers

intangible

services cannot be touched, tasted, smelled, or seen

unstorable

many services cannot be produced ahead of time and then stored for high-demand periods (ex. house cleaning, child care)

operations process

set of methods and technologies used to produce a good or a service

make-to-order operations

activities for one-of-a-kind or custom-made production

make-to-stock operations

activities for producing standardized products for mass consumption

extend of customer contact

how much a service can be provided without the customers' presence in the production system

low-contact system

level of customer contact in which the customer need not be part of the system to receive the service

high-contact system

level of customer contact in which the customer is part of the system during service delivery

operations/production capability

special ability that production does especially well to outperform the competition

capacity

amount of a product that a company can produce under normal circumstances

SKU

stock-keeping unit (ex. one 32oz Owala water bottle in the color black)

layout

the physical location or floor plan for service centers, machinery, equipment, customers, and supplies

process layout/custom-product layout

physical arrangement of production activities that groups equipment and people according to function

product layout/same-steps layout

physical arrangement of production steps designed to make one type of product in a fixed sequence of activities according to its production requirements

assembly line layout

a same-steps layout in which a product moves step by step through a plant on conveyor belts or other equipment until it is completed

fixed-position layout

labor, equipment, materials, and other resources are brought to the geographic location where all production work is done

quality

combination of "characteristics of a product or service that bear on its ability to satisfy stated or implied needs"

performance

dimension of quality that refers to how well a product does what it is supposed to

consistency

dimension of quality that refers to sameness of product quality from unit to unit

process flowchart

diagram used to identify the sequence of production activities, movement of materials, and work performed at each stage of the process

methods improvement

production/operation managers' process of reducing waste/inefficiency by examining procedures on a step-by-step basis

master operations schedule

schedule showing which products will be produced and when in upcoming time periods

detailed schedule

schedule showing daily work assignments with start and stop times for assigned jobs

staff schedule

assigned working times in upcoming days for each employee on each work shift

Gantt chart

production schedule that breaks down large projects into steps to be performed and specifies the time required to perform each step (named after developer)

Program Evaluation and Review Technique (PERT) chart

production schedule specifying the sequence of activities, time requirements, and critical path for performing the steps in a project

operations control

process of monitoring production performance by comparing results with plans and taking corrective action when needed

follow-up

operations control activity for ensuring that production decisions are being implemented

materials management

process of planning, organizing, and controlling the flow of materials from sources of supply through distribution of finished goods

supplier selectionn

process of finding and choosing suppliers from whom to buy

purchasing/procurement

acquisition of the materials and services that a firm needs to produce its products

transportation

activities in transporting resources to the producer and finished goods to customers

warehousing

physical distribution operation concerned with the storage of goods

inventory control

process of receiving, storing, handling, and counting of all raw materials, partly finished goods, and finished goods

lean production system

production system designed for smooth production flows that avoid inefficiencies, eliminate unnecessary inventories, and continuously improve production processes

Just-in-Time (JIT) production

type of lean production system that brings together all materials at the precise time they are required at each production stage

quality control

action of ensuring that operations produce products that meet specific quality standards

productivity

the amount of output produced compared with the amount of resources used to produce that output

labor productivity for a country

GDP for the year / total # of labor hours worked for the year

total quality management (TQM)

all activities involved in getting high-quality goods and services into the marketplace

quality ownership

principle of total quality management that holds that quality belongs to each person who creates it while performing a job

competitive product analysis

process by which a company analyzes a competitor's products to identify desirable improvements

value-added analysis

process of evaluating all work activities, materials flows, and paperwork to determine the value that they add for customers

quality improvement team

total quality management tool in which collaborative groups of employees from various work areas work together to improve quality by solving common shared production problems

ISO 9000

program certifying that a factory, laboratory, or office has met the quality management standards set by the International Organization for Standardization

ISO 1400

certification program attesting to the fact that a factory, laboratory, or office has improved its environmental performance

business process reengineering

rethinking and radical redesign of business processes to improve performance, quality, and productivity

supply chain / value chain

flow of information, materials, and services that starts with raw-materials suppliers and continues adding value through other stages in the network of firms until the product reaches the end customer

supply chain management (SCM)

principle of looking at the supply chain as a whole to improve the overall flow through the system

outsourcing

the practice of paying suppliers and distributors to perform business processes or to provide needed materials or services

5 V's of Big Data

volume, velocity, variety, veracity, value

mean

average

median

the middle score in a distribution; half the scores are above it and half are below it

standard deviation

a computed measure of how much scores vary around the mean score

correlation

a measure of the extent to which two factors vary together, and thus of how well either factor predicts the other