Baylor MGT 3325 Exam No. 2

Operations Management

The management of the entire system that transforms inputs into outputs

Cycle Time

The time from the start to finish of a specific task

Throughput Time

Start to finish of the whole system - the rate at which a system generates sales

Process Analysis

Series of steps which transforms materials into finished goods

POOGI

Process of Ongoing Improvement

5 Steps: Theory of Constraints

Identify, Exploit, Subordinate, Elevate, Inertia

Identify

find the constraint(s) in a system

Exploit

improve the constraint(s) in a system

Subordinate

subject all other processes to the bottleneck

Elevate

make the system constraint(s) better

Inertia

make sure the system does not stop due to internal or external constraint(s)

Lean Thinking

The elimination of waste in order to create the maximum amount of value

Kaizen

Change for the better - elimination of muda

PDCA

Plan, Do, Check, Act

Muda

Production activities that are wasteful and do not add value

Pull

Production is scheduled based on customer demand

Push

Production is scheduled to create excess inventory or force extra goods onto stores/consumers

7 Examples of Waste

Inventory, Waiting, Defects, Over-Production, Motion, Transportation, Over-Processing

5S's

Sort, Straighten, Shine, Standardize, Sustain

Sort

Only keep necessary items in the work area

Straighten

Keep items organized within each workspace

Shine

Clean the work area to eliminate any filth

Standardize

Create standards so that anything unusual can be easily spotted

Sustain

Continually practice the steps in order to retain an efficient space

Quality Management

Activities performed to improve and maintain the quality of a product

Process Control

Monitoring individual steps to ensure the process runs as intended

Types of Quality

Conformance & Performance

Supply Chain

A network of organizations connected by the flow of goods, information and money

Supply Chain Management

Managing relationships in a network to create value through sourcing, procurement, conversion and all logistics management

Bullwhip Causes

Demand variability & Lag of receiving information

Bullwhip Solutions

Improve information sharing, improve channel alignment & improve operational efficiency

Lean Management

As production systems are developed, managed, and improved, chaos turns to order

TPS (Toyota Production System)

Produce the kind of units needed, at the time they are needed, and in the qualities they are needed

5 Lean Principles

Value, Value Stream, Flow, Pull, Perfection

Value

Make the process make a difference to the customer

Value Stream

Organize value adding steps in the best possible way

Flow

Conduct all value steps without interruption

Pull (5 Lean Principles)

Ensure all processes are driven by customer demand

Perfection

Continuously improve the process

Mura

Waste associated with the unevenness of demand

Muri

Waste resulting from complex or difficult processes

Process Focus

Systemic & holistic view of process & results

Team Focus

Examination of assumptions

Continuous Improvement

Focused, local, and repetitive incremental changes

Plan

Create an idea for improving the process

Do

Execute the improvement plan

Check

Examine feedback & adjust the plan

Act

Implement the plan into the whole system

Bullwhip

A distortion of information about the demand as the information flows through the supply chain

Operational Performance Objectives

Cost, Delivery, Flexibility, Quality

Product Control

Inspecting a product at the end of the process

Variability

The enemy of quality control & it inherently occurs via inputs, parameters and execution

Objectives of Process Control

Detect & reduce variability

Detect Variability

Measure processes to find variability before it results in flawed products

Reduce Variability

Improve the process to reduce variability

Statistical Process Control

Statistical tools that allow you to monitor a process & distinguish randomness from variation

Common Variation

Random variation that inherently exist in any system

Assignable Variation

Variation as a result of some change in the system

In Control

Processes with only common variation

Out of Control

When a process exhibits assignable variation

Capable

Consistently meeting specifications or customer specifications - capable is not in control if common variation is too large

Control Costs

Costs incurred to prevent, manage, and maintain quality

Prevention Costs

Costs associated with tasks intended to prevent defects

Appraisal Costs

Costs to monitor, inspect, and test quality problems throughout the process

Failure Costs

Costs experienced due to poor quality

Internal Failure Costs

Costs of recovering from defects within the process

External Failure Costs

Costs incurred when a defect reaches the customer

Types of Supply Chain Relationships

Vendor, Partners, Strategic

Partnership

A tailored business relationship based on mutual trust, openness, shared risk & shared rewards that achieves performance better than one firm could do on its own

Oscillation

Inventory or backlog going down then upq

Amplification

Height of oscillations increases as it moves down the supply chain

Lag

Swings that generally happen later and increase as you get further down the supply chain and further away from the customer