MGMT 333 Roberts Exam 1

The part of a business organization that is responsible for producing goods or services

Operations

The management of systems or processes that create goods and/or provide services

Operations Management

3 functions of the business organization

Marketing, Operations, Finance

What is included in finance & operations

Budgeting

Economic analysis of investment proposals

Provision of funds

What is included in marketing & operations

Demand data

Product and service design

Competitor analysis

Lead time data

You have to take a _____________ instead of focusing on a particular subsystem or functional silo

Systems approach

a sequence of activities and organizations involved in producing and delivering a good or service

Supply Chain

Every aspect of business affects or is affected by

operations

The difference between the cost of inputs and the value or price of outputs

Value Added

Measurements taken at various points in the transformation process

Feedback

The comparison of feedback against previously established standards to determine if corrective action is needed

Control

Goods

physical items that include raw materials, parts, subassemblies, and final products

•Automobile

•Computer

•Oven

•Shampoo

Services

activities that provide some combination of time, location, form or psychological value

•Air travel

•Education

•Haircut

•Legal counsel

have a higher degree of customer contact

Services

Have a higher degree of labor content of jobs

Services

Have more uniformity of inputs. because of the higher degree of variability of inputs, manufacturing jobs can better control the variability

Goods

measurement of productivity is more difficult for

Services

measurement of productivity is easier for

Goods

have more opportunity for quality assurance or to correct problems before delivery

Goods

have more inventory

Goods

have a wide range of wages

Services

have a narrow range of wages

Goods

are usually patentable

Goods

What is PMI

The Project Management Institute

What is APICS

The Association for Operations Management

one or more actions that transform inputs into outputs

Process

These govern the operation of the entire organization.

Upper management processes

These are core processes that make up the value stream

Operational processes

These support the core processes.

Supporting processes

when supply is less than demand

Opportunity Loss and Customer Dissatisfaction

When supply is greater than demand

it is wasteful or costly

Why is it difficult to match supply and demand?

There is variability

Management decision, The greater the variety of goods and services offered, the greater the variation in production or service requirements.

Variety of goods or services being offered

These are generally predictable. They are important for capacity planning (seasonality

Structural variation in demand

Natural variation that is present in all processes. Generally, it cannot be influenced by managers.

random variation

Variation that has identifiable sources. This type of variation can be reduced, or eliminated, by analysis and corrective action.

Assignable variation

CAN BE disruptive to operations and supply chain processes

variations

The Operations function consists of all activities _________related to producing goods or providing services.

Directly

A function of operations managers guide the system with what decisions

system design decisions (strategic) and system operation decisions (tactical/operational)

These decisions usually require long-term commitment of resources and determine parameters of system operation

system design decisions

Operations managers spend more time on these decision than any other decision area. They still have a vital stake in system design

system operation decisions

A key tool used by all decision makers

Modeling Approach

an abstraction of reality; a simplification of something. Does not guarantee good decisions

Model

what, when, where, how, who

typical operations decisions that have different impacts on cost or profits

A decision-making approach that frequently seeks to obtain a mathematically optimal solution

Supported by computer calculations

Often work together with qualitative approaches (ask others for opinions)

Quantitative approaches

giving up one thing in return for something else

Trade off

All managers use ______ to to manage and control operations

Metrics

a few factors account for a high percentage of occurrence of some event(s). 80/20 rule, which issue or item is more important to deal with

Pareto Phenonenon

Using resources in ways that do not harm ecological systems that support human existence

Sustainability

How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services

Organizations compete through some combination of their marketing and operations functions

Competitiveness

key variable that affects price and profits

Costs

Examples of why some organizations fail

1.Neglecting operations strategy can cause poor competitiveness

2.Failing to take advantage of strengths and opportunities and/or failing to recognize competitive threats

3.Too much emphasis on short-term financial performance at the expense of R&D

4.Too much emphasis on product and service design and not enough on process design and improvement

5.Neglecting investments in capital and human resources

6.Failing to establish good internal communications and cooperation

7. Failing to consider customer wants and needs

The reason for an organization's existence

Mission

The fundamental purpose for the existence of any organization should be described by this, answer the question of "What business are we in?" Serves as the basis for organizational goals

Mission Statement

Provide detail and the scope of the mission. Serve as the basis for organizational strategies

Goals

A plan for achieving organizational goals

Serves as a roadmap for reaching the organizational destinations

Strategy

Overall strategies that relate to the entire organization

Support the achievement of organizational goals and mission

Organizational Strategies

Strategies that relate to each of the functional areas and that support achievement of the organizational strategy

Functional level strategies

The methods and actions taken to accomplish strategies

The "how to" part of the process

Tactics

The actual "doing" part of the process

Operations

The special attributes or abilities that give an

organization a competitive edge

Core Competencies

To be effective, _______&_______ need to be aligned, or they will fail

Core competencies and strategies

Strengths and weaknesses are

internal factors

Opportunities and threats are

external factors

Characteristics that customers perceive as minimum standards of acceptability for a product or service to be considered as a potential for purchase

Order qualifiers

Characteristics of an organization's goods or services that cause it to be perceived as better than the competition

Order winners

How the organization should work with suppliers and policies relating to customer relationships and sustainability

Supply chain strategy

Work with governmental regulations and interest groups to achieve sustainability goals

Sustainability strategy

Work with international suppliers/producers and also with countries where the products and services are sold

Global strategy

The approach, consistent with organization strategy, that is used to guide the operations function

Operations strategy

Strategy that focuses on quality in all phases of an organization

Quality based strategy

Strategies that focus on the reduction of time needed to accomplish tasks

Time based strategy

A strategic approach for competitive advantage that emphasizes the use of flexibility to adapt and prosper in an environment of change

Agile operations

A measure of the effective use of resources, usually expressed as the ratio of output to input

Productivity

As an economy replaces manufacturing jobs with lower productivity service jobs, it is more difficult to

maintain high standards of living

Higher productivity leads to

lower costs and higher profits and helps determine how competitive an industry is

Service sector productivity is difficult to measure and manage because

It involves intellectual activities

It has a high degree of variability

The ratio of output of good product to the quantity of raw material input

process yield where products are involved

measurement is often dependent on the particular process:

Ratio of cars rented to cars available for a given day

Ratio of student acceptances to the total number of students approved for admission

process yield where services are involved

Refers to deciding on the way production of goods or services will be organized

Process selection

how many aspects are there of process strategy

2

The mix of equipment and labor that will be used by the organization

Capital intensity

The degree to which the system can be adjusted to changes in processing requirements due to such factors as

Product and service design changes

Volume changes

Changes in technology

Process flexibility

the key aspects of process strategy

capital intensity and process flexibility

variety and flexibility are

directly related

This process is Small scale and flexible; used with low volume/high-variety

More difficult to estimate costs

most likely in the introductory phase of PLC

Job Shop

This process has Moderate volume/moderate variety

less variety in jobs

Batch

This process has higher volumes of more standardized goods/services

Efficient

only flexible if equipment is needed

in maturity phase of PLC

skill of workers is low

Repetitive/ Assembly

This process is large scale, High-volume/non-discrete output

Almost no variety

skill of workers can be low to high

inflexible, used for highly standardized products

Continuous

This process is Non-routine/limited duration

Project

Sustainable Production

the creation of goods and services using processes and systems that are: non-polluting; conserving of energy and natural resources; economically efficient; safe and healthful for workers, communities, and consumers; and, socially and creatively rewarding for all working people."

Three Categories of Business Processes:

Upper-management processes

Operational processes

Supporting processes

In addition to operations, what other function in the organization is a line function ?

Sales

the cobra effect and the rat effect are also known as _____________.

perverse incentives

Southwest competes on this type of operational strategy

low-cost strategy

This type of process has higher volumes of more standardized goods/services and is efficient, which makes it appropriate for products in the maturity phase of their life.

Repetitive