Exam 2 - from notes

Operations Management (OM)

The science and art of ensuring that goods and services are created and delivered successfully to customers.

flow time definition

the average time it takes to complete one cycle of a process

whats an example of interlinking?

adding resources or changing the operating system to reduce waiting time, and therey increase customer statisfaction

Ogranizational Performal Measures- sustainability

environmental & regulatory compliance, product related litigation, fiancial audits

organizational performance measures- productivity and operational efficiency

labor production and equipment utilization

Whats the general process for identifying a bottleneck activity?

identify the work activity that has the smallest throughout

operational performance measures- financial

labor and material costs

cost of quality

budget variance

operational performance measures- customer and market

customer claims and and complaints

type of warrant failure/upseats

sales forecast accuracy

operational performance measures- quality

defects/unit or error/opportunity

service representative courtesy

operational performance measures- time

slow processing or cycle time

present of time meeting promised due date

operational performance measures- flexibility

number of engineering changes

assembly-line changeover time

operational performance measures- innovation and learning

number of patent applications

number of improvement suggestion implemented

percent of workers trained on statistical process control

operational performance measures- productivity and operational efficiency

manufacturing yeild

order fulfillment time

operational performance measures- sustainability

toxic waste discharge rate

workplace safety violations

percent of employees with emergency prepardness training

the difference between job shop and flow shop

unlike flow shops, job shops require frequent machine changeovers and delays

The time required to ramp up to an increased production output level in response to a surge in the sales of a product is a measure of?

volume flexibility

Dextron, a privately owned computer technology company, provides a wide range of customized laptops to suit the needs of students, corporate professionals, and small business owners. In this case, Dextron's ability to provide a wide range of customized laptops to suit its customers' needs best describes _____.

1. volume flexibility

2. design flexibility

3. manufacturing yield

4. budget variance

design flexibility

Actionable performance measures should be meaningful to a company's management and should provide the basis for decisions at the strategic level in an organization

True or false

false

Which of the following statements is true of goods-producing processes?

1. They use employees as a substitute for physical inventory.

2. They require more flexibility and adaptation to special circumstances than service processes.

3. They require extensive customer participation in service creation and delivery.

4. They are mechanistic and controllable because of the lack of customer participation.

They are mechanistic and controllable because of the lack of customer participation.

The higher the customer participation in service processes, the more certainty a firm has with respect to service time and capacity

True or false

false

Which of the following is an example of a bottleneck management principle?

A. Work-in-process buffer inventory should be place behind bottlenecks to maximize resource utilization.

B. At bottleneck workstations, idle time is acceptable.

C. Use large order sizes at bottleneck workstations.

D. An hour lost at a bottleneck resource has no effect on total process or factory output.

Use large order sizes at bottleneck workstations.

Which of the following is a quality performance measure at an operational level?

1. customer retention

2. product recalls

3. Customer ratings of goods and services

4. service representative courtesy

service representative courtesy

Banks and airline ticket counters have what kind of configuration?

one or more parallel servers fed by a single queue

key measures of innovation and learning include?

Percentage of new products developed

which of the following performance perspectives in the balanced scoreboard model includes measures such as productivity, flow time, and asset utilization?

a. financial perspective

b. customer perspective

c. innovation and learning perspective

d. interal perspective

internal perspective

The following process involves five activities and the output rate foreach activity is also shown below? What is the throughput of the entire process?

Activity 1: 40/hr

Activity 2: 30/hr

Activity 3: 105/hour

Activity 4: 70/hr

Activity 5: 15/hr

Activity 5: 15

Supermarkets and discount retailers have what kind of configuration?

Several parallel servers fed by their own queues

voting facilities and manufacturing facilities have what kind of configuration?

A combination of several queues in a series

what are the 3 types of queueing configurations?

1. one or more parallel servers fed by a single queue

2. several parallel servers fed by their own queues

3. a combination of several queues in a series

the 3 components of business analytics?

Descriptive

Prescriptive

Predictive

A candy factory is an example of what type of firm?

Good-producing firm

A happy meal and the toy that comes with it is an example of what type of good? (primary, primary& peripheral, variant)

Primary and peripheral good

The kid’s room you have your kids play in when you’re car shopping is an example of what type of good? (primary, primary& peripheral, variant)

variant

Efficiency

How well resources are used in creating output.

Cost

The cost of operations.

Quality

The quality of goods and services that create customer satisfaction.

Good

A physical product that a person can see, touch, or consume.

Durable good

A product that does not typically wear out and typically lasts at least three years.

Non-durable good

A product that is no longer useful once it is used and lasts for less than three years.

goods producing firms

found in businesses such as manufacturing, farming, forestry, mining, construction, fishing

Service

Any primary or complimentary activity that does not directly produce a physical product.

service-providing firms

found in services such as banking, lodging, health care, goverment

the differences between goods and services

Goods are tangible while services are intangible.

Customers participate in many service processes, activities, and transactions.

Demand for services is more difficult to predict than demand for goods.

Services cannot be stored as physical inventory.

Patents do not protect services

similarities between good and services

• they provide value adn satisfaction to customers who purchase and use them

• they can be standardized or customized to individual wants and needs

Service Management

Integrates marketing, human resources, and operations functions to plan, create, and deliver goods and services and their associated service encounters

Service Encounter

An interaction between the customer and the service provider.

making a hotel reservation

Customer-Benefit Package (BCP)

a clearly defined set of tangibles and intangible features that the customer recognizes, pays for, uses, or experiences

ex. primary checking account, with designer check and credit card, and online bill payment

primary

good or service coupled with peripheral goods and services and sometimes a variant

primary good or service

core offerring that attracts customers and responds to their basic needs

peripheral goods or services

core offerring that are not essential to the primary good or service but enhace it

ex. finance and leasing for cars

variant

CBP attribute that departs from the standard CBP and is normally location or firm-specific

Processes

A sequence of activities that are intended to create a certain result, such as a physical good, service, or information.

Core Process

Focused on producing or delivering an organization's primary goods or services.

ex. filling and shipping a customer’s order, assembling a dishwasher, or providing a home mortage

Support Processes

Purchasing materials and supplies used in manufacturing, managing inventory, etc.

ex. installation, health benefits, technology aquisition, day care onsite services, research & development

General Management Processes

Accounting, information systems, human resource management, and marketing.

the order of OM evolution

efficiency, quality, customization, time-based competition, service, sustainability, & analytics/big data

Sustainability

An organization's ability to strategically address current business needs, develop a long-term strategy, and manage risk to preserve resources for future generations.

environmental sustainability

organization’s commitment to lont-term quality of the environement

social sustainability

organization’s commitment to maintain healthy communities and a society that improves the quality of life

economic sustainability

organization’s commitment to address current business needs and economic viability, and to have agility and strategic management to prepare successfully for future business, markets, and operating environments

Business Analytics

The process of transforming data into actions through analysis and insights in the context of organizational decision-making and problem-solving.

Descriptive Analytics

Understand past and current performance.

Predictive Analytics

Predict the future by detecting patterns and relationships in data.

Prescriptive Analytics

Identify the best decisions.

current challenges

globalization, technology, customer expectations, quality, engaging the workforce, innovation, agility

7 categories of performance measurements

Finance

customer and market

quality

service quality

time

flexibility

innovation & learning

Organizational performance measurement - Finance

revenue, profit, ROA, earnings per share

Organizational performance measurement - customer and market

customer satisfaction

market share

Customer retention

Organizational performance measurement - quality

measures the degree to which the output of a process meets customer requirements

includes

• Customer ratings of goods and services

• Product recalls

goods quality

physicial performance and characteristics of a good

service quality

consistently meeting or exceeding customer expectations and service delivery system performance for services

performance measurement - service quality assesed by

tangibles

reliability

responsiveness

assurance

empathy

organizational performance measurement - time

performance measures

• speed of tasks

• variability of processes

includes: speed & reliability

speed of performing a task

measured by processing time and queue

variability of processes

measured using SD or mean absolute deviation

organizational performance measurement - flexibility

ability to adpat quickly and effectively to changing requirements

• design flexibility

• volume flexibility

goods and services flexibility

ability to develop a wide range of customized goods or services to meet different or changing customer needs

volume flexibility

ability to respond quickly to changes in the volume adn type of demand

organizational performance measurement - innovation & learning

innovation: ability to create new and unique goods and services that delight customers and create competitive advantage

leaning: creating, acquiring, and transferring knowledge, modifying the behavior of employees in response to internal and external change

includes

• new product development rates

• employee satisfaction

• employee turnover

Triple Bottom Line (TBL or 3BL)

measurement of sustainability related to

• environmental factors

• social factors

• economic factors

environmental factors

energy consumption, recycling, resource conservation activities, air emissions, solid and hazardous waste rates, etc

social factors

consumer and workplace safety, community relations, and corporate and ethics and governance

economic factors

auditing, regulatory compliance, sanctions, donations, fine, etc

Productivity

The ratio of the output of a process to its input.

Operational Efficiency

The ability to provide goods and services to customers within minimum waste and maximum utilization of resources.

interlinking

quantative modeling of cause-and-effect relationships between external and internal performance criteria

helps quantify performance relationships between all parts of a value chain

Balanced Scorecard

Performance perspectives that focus on

financial, customer, innovation & learning, and internal processes.

Balanced scoreboard- Finance

measures value provided to shareholders

Balanced scoreboard- customer

focuses on customer needs and satisfaction and market share and its growth

Balanced scoreboard- innovation & learning

emphasizes people and infrastructure

Balanced scoreboard- internal

focuses attention on the performance of key internal processes that drive a business

Custom or make-to-order definition

Produced and delivered as one-of-a-kind or in small quantities, designed to meet specific customers' specifications.

Dentist’s office

Option or assemble-to-order definition

Configurations of standard parts, subassemblies, or services that can be selected by customers from a limited set.

ex. Mc Donalds, Subway

Standard or make-to-stock definition

Made according to a fixed design, and the customer has no options from which to choose.

Ikea furniture, clothes

Projects definition

Large-scale, customized initiatives that consist of smaller tasks and activities that must be coordinated and completed to finish on time and within budget.

ex. Skyscrapers, custom jewelry, space shuttle

Job Shop definition

Organized around particular types of general-purpose equipment that are flexible and capable of customizing work for individual customers.

Dentist’s office, eyeglasses

Flow Shop definition

Organized around a fixed sequence of activities and process steps to produce a limited variety of similar goods or services.

Ex. Cars

Continuous Flow definition

Creates highly standardized goods or services, around the clock in very high volumes.

Ex. oil, steel manufacturing

Product Life Cycle

A characterization of product growth, maturity, and decline over time.

the 4 phases of product life cycle are?

1. Introduction

2. Growth

3. Maturity

4. Decline and turnaround