Operations Exam/Final

Operations and supply chain management (OSCM)

The design, operation, and improvement of the systems that create and deliver the firm’s primary products and services

Operations

Manufacturing and service processes used to transform the resources employed by a firm into products desired by customers

Supply Chain

Processes that move information and material to and from the manufacturing and service processes of the firm

Processes

One or more activities that transform inputs into outputs

Planning

Determining how to meet expected demand with available resources while measuring supply chain efficiency, quality and customer value

Sourcing

Selecting suppliers and managing the purchasing, receiving, verification and payment of needed goods and services.

Making

Producing the product or providing the service by scheduling workers, materials and equipment while monitoring speed, quality and productivity

Delivering (logistics processes)

Managing logistics: moving products to warehouse/customers, coordinating orders and transportation and collecting customer payments

Returning

Handling defective, worn-out or excess products and providing customers with after-sale support

Intangible

Cannot be weighed or measured (haircut, customer service)

Tangible

Something physical that can be seen, touched, measured or weighed (car, phone, shirt)

1. Tangible/Intangible

2. Interaction with customer

3. Services are inherently heterogeneous (they vary from day to day)

4. Perishable and time dependent

5. Package of design features

Five essential differences between services and goods

Pure Goods

• Food Products

• Chemicals

• Mining

Core Goods

• Appliances

• Automobiles

• Data storage systems

Core Services

• Hotels

• Airlines

• Internet Service Providers

Pure Services

• University

• Medical’

• Investment

Product-Service Bundling

When a firm builds service activities into its product offerings to create additional value for the customer

Efficiency

A ratio of the actual output of a process relative to some standard. Also, being “efficient” means doing something at the lowest possible cost.

Effectiveness

Doing the things that will create the most value for the customer.

Value

The attractiveness of a product relative to its price.

Manufacturing strategy

Emphasizes how a factory’s capabilities could be used strategically to gain advantage over a competing company.

Just-in-time (JIT)

An integrated set of activities designed to achieve high-volume production using minimal inventories of parts that arrive exactly when they are needed.

Total quality control (TQC)

Aggressively seeks to eliminate causes of production defects.

Lean manufacturing

To achieve high customer service with minimum levels of inventory investment.

Total quality management (TQM)

Managing the entire organization so it excels in all dimensions of products and services important to the customer.

Business process reengineering (BPR)

An approach to improving business processes that seeks to make revolutionary changes as opposed to evolutionary (small) changes.

Six Sigma

A statistical term to describe the quality goal of no more than 3.4 defects out of every million units. Also refers to a quality improvement philosophy and program.

Mass customization

The ability to produce a unique product exactly to a particular customer’s requirements.

Electronic commerce

The use of the Internet as an essential element of business activity.

Sustainability

The ability to meet current resource needs without compromising the ability of future generations to meet their needs.

Triple bottom line

Evaluating the firm against social, economic, and environmental criteria.

Business analytics

The use of current business data to solve business problems using mathematical analysis.

Internet of Things

The billions of devices that are connected to the internet

Artificial Intelligence (AI)

The intelligence of machines or software and the application to OSCM processes.

Shareholders

Individuals or companies that legally own one or more shares of stock in the company

Stakeholders

individuals or organizations that are influenced, either directly or indirectly, by the actions of the firm

Sustainability

The ability to meet current resource needs without compromising the ability of future generations to meet their needs.

Social responsibility

fair and beneficial business practices toward labor, the community, and the region in which a firm conducts its business

Economic prosperity

the firm is obligated to compensate shareholders who provide capital through stock purchases and other financial instruments via a competitive return on investment

Environmental stewardship

refers to the firm’s impact on the environment

Operations and supply chain strategy

The setting of broad policies and plans that will guide the use of the resources needed by the firm to implement its corporate strategy.

Operations effectiveness

Performing activities in a manner that best implements strategic priorities at minimum cost.

Initiatives

the major steps that need to be taken to drive success in the firm

Straddling

When a firm seeks to match what a competitor is doing by adding new features, services, or technologies to existing activities. This often creates problems if trade-offs need to be made.

Order winners

One or more specific marketing-oriented dimensions that clearly differentiate a product from competing products. (decision maker)

Order qualifiers

Dimensions used to screen a product or service as a candidate for purchase.(gets you to the table)

Activity-system maps

Diagrams that show how a company’s strategy is delivered through a set of supporting activities.

Supply chain risk

The likelihood of a disruption that would impact the ability of a company to continuously supply products or services.

Productivity

A measure of how well resources are used. According to Goldratt’s definition (see Chapter 22S, Theory of Constraints), all the actions that bring a company closer to its goals.

Productivity = Outputs / Inputs

Productivity Formula:

(Output / Labor) or (Output / Capital) or (Output / Materials)

Partial measure:

(Output / Labor + Capital + Energy) or (Output / Labor + Capital + Materials)

Multifactor measure:

(Output / Inputs) or (Goods and Services produced / All resources used)

Total Measure:

Role of Operations

The role of operations is to manage the resources and capabilities of the firm. Operations, along with finance, marketing and other functions use strategy for purposeful alignment to create value, compete, and win

Market Priorities

Order winners and qualifiers signal customer decision criteria. “Qualifiers“ are minimum requirements and “winners” are differentiating features. These are market-based (a.k.a., voice of the customer) considerations that a firm aspires to meet.

(new - old) / (old)

% Change Formula:

Manufacturing Processes

Used to make everything that we buy ranging from a building to an ink pen

Customer order decoupling point

Where inventory is positioned in the supply chain.

Make-to-stock

A production environment where the customer is served “on-demand” from finished goods inventory.

Assemble-to-order

A production environment where preassembled components, subassemblies, and modules are put together in response to a specific customer order.

Make-to-order

A production environment where the product is built directly from raw materials and components in response to a specific customer order.

Engineer-to-order

Here the firm works with the customer to design the product, which is then made from purchased material, parts, and components.

Lean manufacturing

To achieve high customer service with minimum levels of inventory investment.

Process Selection

The strategic decision of selecting which kind of production processes to use to produce or provide a service

Project layout

A setup in which the product remains at one location, and equipment is moved to the product.

Workcenter

An area in a business where productive resources are organized to complete work.

Manufacturing cell

Groups dissimilar machines to work on products that have similar shapes and processing requirements.

Assembly line

A setup in which an item is produced through a fixed sequence of workstations, designed to achieve a specific production rate.

Continuous process

A process that converts raw materials into finished product in one continuous process.

Product–process matrix

A framework depicting when the different production process types are typically used, depending on product volume and how standardized the product is.

The Horizontal Dimension (Product–process matrix)

Relates to the volume of a particular product or group of standardized products

The Vertical Dimension (Product–process matrix)

Standardization is shown and refers to variations in the product that is produced

break-even analysis

A standard approach to choosing among alternative processes or equipment

break-even chart

visually presents alternative profits and losses due to the number of units produced or sold

Assembly drawing

an exploded view of the product showing its component parts

Assembly chart

uses the information presented in the assembly drawing and defines how parts go together, their order of assembly and often the overall material flow pattern

Operation and route sheet

specifies operations and process routing for a particular part. It conveys such information as the type of equipment, tooling and operations required to complete the part

Process flowchart

denotes what happens to the product as it progresses through the productive facility