Operations Management and Supply Chain Review

Flashcards covering key concepts in operations management and supply chain management, including layouts, work measurement, outsourcing, global logistics, and job design.

Break-even analysis (Outsourcing)

Used to compare the total cost of making in-house versus outsourcing, showing the volume at which both options cost the same.

Product layout

Key trait: Resources are arranged in a sequence that matches the steps of production.

-for products that are more standardized

Process layout

Similar machines or resources are grouped together; jobs move based on their unique routing.

used when products have different processing requirements

Cellular layout

• When used:

  • Best when families of parts or products share similar processing requirements.

• Key trait: Self-contained cells of machines arranged (often in a U-shape) so that the start and end points of the process are close together.

Fixed-position layout

Used when the product is too large, heavy, or bulky to move, such as in shipbuilding or aircraft assembly.

Work measurement

A systematic procedure to analyze work and determine standard times required to perform key tasks in a process.

Work measurement uses

To determine standard times, for planning and scheduling work, to evaluate worker performance, and to provide a basis for labor cost control/job design

Contract manufacturer

A firm that specializes in certain goods-producing activities for other companies, offering lower costs, access to expertise, and flexibility.

Third-party logistics (3PL) provider

A business that provides integrated services to manage logistics and supply chain activities. (think UPS, Fed Ex, Amazon services)

Third-party logistics (3PL) services

Examples include transportation, warehousing, distribution, inventory management, and packaging.

Main reasons for outsourcing in supply chain management

To gain efficiency, reduce costs, and leverage specialized expertise.

Reshoring

Moving operations back to a company’s domestic location.

Offshoring

Building, acquiring, or moving process capabilities to another country’s location while maintaining ownership and control.

Modes of transportation for global shipments

Air, water, rail, and truck.

Requirements for efficiency in a global supply chain

Low-cost transportation, good logistics planning, need good sourcing strategies, need to have a good facility and good performance metrics

Operational structure of a supply chain

The configuration of resources, such as facilities, suppliers, technology, and logistics, arranged to support strategy and customer value.

Break-even point formula for outsourcing decisions

Fixed Cost ÷ (Outsource cost – Variable cost).

Key considerations when designing a Global Supply Chain

your location, how you are going to minimize costs, and how you are going to manage your inventory.

Criteria for locating facilities in supply chains

• Economic factors include operating costs, distribution costs, transportation costs, labor costs, and facility costs.

• Noneconomic factors is this place going to be stable for the long term, how close you are to the supplier

Efficient supply chains

Supply chains that focus on low cost, predictable demand, and long life cycles.

Responsive supply chains

Supply chains that focus on flexibility, quick response, and adaptability to unpredictable demand.

Conditions for facility-layout studies

When new facilities are planned, major changes in demand occur, or new technology is introduced.

Job design

Determining specific job tasks, responsibilities, work environment, and methods to align with operations and competitive priorities.

Job enlargement

Increasing the variety of tasks in a job to make work more interesting and reduce monotony.

Job enrichment

Increasing responsibility, authority, and decision-making in a job to make it more satisfying and motivating.