Operations Management: Producing Value in a Changing Environment

These flashcards cover key vocabulary and concepts in Operations Management related to producing value.

Operations Management

Creating value by managing the activities that produce goods and services and distributing them to customers.

Efficiency

Producing output or achieving a goal at the lowest cost.

Effectiveness

Using resources to create value by producing goods and services that offer a better relationship between price and perceived benefits.

Goods

Tangible products that can be touched or stored.

Durable goods

Products expected to last three years or longer (e.g., furniture, cars, appliances).

Nondurable goods

Products that are used quickly and are often perishable (e.g., toothpaste, apples, paper towels).

Services

Intangible products that include things like legal advice, entertainment, and medical care.

Value Chain

The network of relationships that channels the flow of inputs, information, and financial resources through all processes involved in producing goods and services.

Vertical Integration

Performing processes internally that were previously performed by other organizations in a supply chain.

Outsourcing

Arranging other organizations to perform supply chain functions that were previously performed internally.

Offshoring

Moving production/support processes to foreign countries.

Enterprise Resource Planning (ERP)

Software-based approach to integrate an organization’s information flows.

Total Quality Management (TQM)

An approach that calls for everyone within an organization to take responsibility for improving quality.

Lean Production

An approach emphasizing the elimination of waste in all aspects of production processes.

Just-in-Time (JIT) Production

A production system that meets current demand, minimizing the need for inventory.

Six Sigma

An approach characterized by ambitious quality goals and a commitment to quality improvement.

ISO 9000

A family of generic standards for quality management systems set by the International Organization for Standardization.

ISO 14000

A family of generic standards for environmental management established by the International Organization for Standardization.