Operations Management Flashcards

Flashcards to help you review key vocabulary and concepts from your Operations Management lecture notes.

Operations Management

Getting your goods and services in the right way + factors of production, adding value of them to create an output that comes a sellable good or service. Providing the right goods and services in the right quantities and at the right quality in a cost-effective and timely manner. operations management impact all functional areas of a business.

Factors of production

The resources needed to produce a good or service, namely land, labour, capital and enterprise

Operations management (or production)

Concerned with providing the right goods and services in the right quantities and at the right quality level in a cost effective and timely manner

Production process (or transformation process)

The method of turning factor inputs into outputs by adding value in a cost-effective way

Productivity

A measure of a firms operational efficiency level, calculating the rate at which inputs (factors of production) are transformed into outputs (good and services)

Sustainability

The practice of enabling production and consumption of goods and services for the people of today without compromising the needs of future generation

Value added

Occurs during the production process when the value of output is greater than the costs of production. Firms earn profit if value added exists in the production process.

The Five Ms

A tool in devising marketing and production plans by viewing factors of production as inputs in the production process: materials, man power, money, machines, management

Selecting an appropriate operations method

Production methods can either be labour or capital intensive

Sectors of the Economy

Primary: extraction, harvesting and conversion of natural resources. Secondary: manufacturing or construction of products. Tertiary: providing services to the general public. Quaternary: intellectual, knowledge based activities that generate and share information

Job Production

Creating an individual product from start to finish to meet specific customer needs

Batch Production

Producing a limited number of identical products. One batch is produced at a time

Flow/Mass Production

A continuous production process of standardized products in large quantities. Relies on automated systems with few workers required.

Mass Customization

Occurs for businesses that produce large quantities of goods via batch or mass/flow production, but products are tailored the customers exact needs.

Labour Intensive Production

Uses a greater proportion of labour than any other factor input

Capital Intensive Production

Has a high proportion of capital costs compared to labour costs

Lean Production

The process of streamlining operations and processes to reduce all forms of waste and achieve greater efficiency. Leads to improved quality and reduced costs.

MUDA

Japanese term for waste: Adding more features or functions than necessary, Production delays, inefficient delivery and production movement, Sub-standard and defective output may need to be reworked, Leaving lights, air con, etc, on when unnecessary, From underproduction and overproduction

KAIZEN

Continuous improvement: the Japanese philosophy of continuing movement

JIT - Just In Time

Having stocks delivered as and when they are needed. Only the absolute minimum level of stock are held, and finished goods are dispatched as soon as they have been produced.

Cradle to Cradle

A circular approach where products are designed so that, at the end of their useful life, all materials can be fully reclaimed, reused, or recycled into products of equal or greater value

Cradle to Grave

Refers to the traditional linear life cycle of a product, starting from raw material extraction (the cradle), through manufacturing, use, and finally disposal (the grave)

Quality

The product fulfils it purpose and meets the expectations of the consumer

Quality Circle

Small groups of people that meet regularly. They examine issues related to the quality of output and make recommendations for improvement

Benchmarking

The comparison of products, operations, processes and financial data with others in the same firm

Total Quality Management (TQM)

An approach to quality management that involves all workers having responsibility for maintaining quality standards throughout the production process

Supply Chain Management (SCM)

The sequence of activities from a production of a good or service to it being delivered to the end customer. SCM is the art of managing and controlling these logistics which must be ef icient and cost ef ective for a business to be profitable.

Just in Time Stock Control (JIT)

Based upon having stocks delivered as and when they are needed throughout the entire production process.

Just in Case Stock Control (JIC)

Recognising the need to maintain large amounts of stock in case there are supple or demand fluctuations.

Capacity Utilization Rate

Measures how much a firm produces as a percentage of how much it could possibly produce. Measures efficiency and where they could be more efficient

Defect Rate

Occur when the quality of a particular product is unacceptable. Represent waste and inefficiency.

Labour Productivity

Measure the efficiency of the work place.

Capital Productivity

Measures how well a firm uses its physical resources e.g. machinery

Productivity Rate

Measures the degree of efficiency in the use of resources in the production process