Operations Management Concept Questions Chapters 1-2

WHAT IS OSCM

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

SYSTEM FUNCTIONS entire product production or service delivery system

1. Create value/product/service

2. Deliver it to customers.

OPERATIONS transform

resources into products.

input → transformation → output

processes that move information and material to and from the firm.

SUPPLY CHAIN

Logistics…

move products

Warehousing…

stores products

information makes process more…

efficient

What is SIPOC

Supplier, Input, Process, Output, Customer

What is the goods and services continuum

Pure goods, core goods, core services, pure services

doing something at the lowest possible cost

Efficiency

doing the right things to create most value

Effectiveness

attractiveness of product relative to its price

Value

Sales are increasing but assets are unchanged means what for asset turnover and ROA

Both increase

Sales are unchanged and COGS decrease does what to net income, profit margin, and ROA

all increase

What are the components in triple bottom line?

1. Economic Prosperity

2. Environmental Stewardship

3. Social Responsibility

What are the competitive dimensions?

Cost, Quality, Delivery / Responsiveness

What are included in COORDINATION RISKS

day-to-day management problems

What are included in DISRUPTION RISKS

natural or manmade disasters

What is a risk mitigation for supplier failure?

multiple suppliers

What is a risk mitigation for logistics failure?

safety stock / detailed tracking / alternate suppliers

What is a risk mitigation for inventory failure?

pool inventory / safety stock

What is a risk mitigation for quality failure?

careful supplier selection and monitoring

What is a risk mitigation for theft/vandalism failure?

insurance/security

The pipelinelike movement of the materials and information needed to produce a good or service.

Supply (chain) network

A strategy that meets the needs of shareholders, and employees, and that preserves the environment

Triple bottom line strategy

The processes needed to determine the set of future actions required to operate an existing supply chain.

Planning

The selection of suppliers.

Sourcing

A type of process where a major product is produced or a service is provided

Making

A type of process that moves products to warehouses or customers.

Delivery

Processes that involve the receiving of worn-out, defective, and excess products returned by customers and support for customers who have product problems

Returning

A business where the major product is intangible, meaning it cannot be weighed or measured.

Service

When a company builds service activities into its product offerings

Product-Service Bundling

A philosophy that aggressively seeks to eliminate the causes of production defects.

Total Quality Control

An approach that seeks to make revolutionary changes, as opposed to evolutionary changes (which is advocated by total quality management)

Business Process Reengineering

An approach that combines TQM and JIT.

Lean Manufacturing

A strategy that is designed to meet current needs without compromising the ability of future generations to meet their needs.

Sustainable

Cost or price, quality, delivery speed, delivery reliability, coping with changes in demand, flexibility and speed of new-product introduction, other product-specific criteria

The seven operations and supply chain competitive dimensions.

It is probably most difficult to compete on this major competitive dimension

Cost

A criterion that differentiates the products or services of one firm from those of another.

Order Winner

A screening criterion that permits a firm’s products to be considered as possible candidates for purchase

Order Qualifier

where inventory is placed to let parts of the supply chain

operate independently, the stage in a supply chain where inventory is held to

separate forecast-driven production from customer order-driven processes, balancing efficiency and responsiveness

Decoupling Points

three forecasting time horizons

Short term (<3 months), Medium term (3

months-2 years), Long term (>2 years)

Simple moving average longer vs shorter….

longer = smoother, shorter = reacts faster to trend

For weighted moving average, weights must sum to…

1 and more recent periods typically get higher weights

surveys/interviews, can be overly optimistic

Market Research

based on similar existing products

Historical Analogy

risk of groupthink

Panel of Consensus/Executive Judgment

iterative, anonymous expert rounds, avoids undue influence, usually 3 rounds

Delphi Method

local reps forecast their own area, rolled up, often overly optimistic

Salesforce Composite

Strategic Forecasts include

aggregate demand

strategic decisions

medium to long term

Tactical Forecasts include

near-term demand

day-to-day decisions

short term

aggregated / product family forecasts are generally _____ than individual product forecasts.

more accurate