MG215 Lecture Notes Flashcards

Vocabulary flashcards from MG215 lecture notes, focusing on Operations, Supply Chain, Strategy, Processes, Inventory, Demand & Supply Planning, and Quality.

Operations Management (OM)

Design, Plan, Execute, Control, Improve.

Efficiency

Doing things right.

Effectiveness

Doing the right things.

Supply Chain

Interconnected SIPOCs of many companies.

Supply Chain Management (SCM)

Planning, Sourcing, Making, Delivering & Returning Goods vs. Services.

Strategic Planning

Decisions with Long-Term effect (1-5 years).

Tactical Planning

Decisions with Mid-Term effect (6 to 18 months).

Operational Decisions

Decisions with Short-term effect (1-12 weeks).

Corporate Strategy

What businesses should we be in?

Business Unit Strategy

How do we compete in each business?

Functional Strategy

How does each business function (OM, MKT, …) contribute?

Strategy

Establish a fit between market (who), product (what) and company (how).

Value Proposition

Value = benefits/costs

Operations Strategy

Reconciliation process between market demand, technology, and a firm’s inherent operational capabilities.

Structural Decisions

What resources and how to organize them?

Infra-structural Decisions

What the company does?

Process

Specific sequence of steps to follow for achieving a specific goal.

Process Strategy

Deliberate decisions about a process to effectively satisfy its specific goal to support the business’s competitive priorities.

Product Layout

Arrange steps and resources in the order they are used; good for making large volumes of a standardized product.

Functional Layout

Arrange steps and resources according to their functions; good for making a variety of products in small batches.

Cellular Layout

Combines elements of both product and functional layouts; grouping steps and resources into cells to handle a family of products with similar characteristics.

Fixed Position Layout

Keep the product stationary while resources come to it.

Decoupling Point

Where the supply chain transitions from a 'Push' strategy to a 'Pull' strategy.

Design Capacity

Maximum possible output rate based on 'perfect' conditions.

Effective Capacity

Maximum possible output rate based on 'realistic' conditions.

Planned Utilization

Effective capacity/ Design capacity

Utilization of Maximum Capacity

Actual output/ Design capacity

Utilization of Effective Capacity

Actual output/ Effective capacity

Process Capacity

Capacity of the bottleneck step.

Cycle Time

1/Capacity

Throughput Time

From start to end (also called flow time or lead time); sum of process steps’ cycle times and any delay in between the steps.

Takt Time

A target for the process cycle time dictated by customer demand.

L (Little's Law)

Average Inventory or Work-in-Process (WIP).

λ (Little's Law)

Average Throughput Rate.

W (Little's Law)

Average Throughput Time or Lead Time.

Types of Inventories

Raw material, WIP, Finished Goods, MRO.

Roles of Inventory

Cycle Stock, Decoupling Inventory, Pipeline (Transit) Inventory, Seasonal Inventory, Anticipation Inventory, Safety Stock, Speculative Stock.

EOQ

Economic Order Quantity

EPQ

Economic Production Quantity

Bullwhip Effect

What is it, what causes it, and what are some mitigation solutions?

Goal of Demand & Supply Planning

Have the right product delivered to the right customer at the right place at the right time at the right price and right quantity i.e., match demand with supply.

Demand Planning

Demand Forecasting + Demand Management.

Demand Forecasting

Predicts future, usually based on past data and expert opinions.

Demand Management

Helps us manipulate and share the demand to match our supply.

Demand Management Definition

Actively influencing and shaping demand to better align it with supply and operational constraints.

Demand Forecasting Definition

Estimating future customer demand using historical data, trends, market signals, etc.

Bias (MFE)

Also called Mean Forecast Error. Averages the errors over N periods.

Mean Absolute Deviation (MAD)

Averages the absolute errors; error size matters, direction doesn't.

Mean Percent Error (MPE)

Averages the errors relative to actual; highlights consistent over or under predictions.

Mean Absolute Percentage Error (MAPE)

Averages the absolute percentage errors; puts errors in perspective to actual values.

Mean Square Error (MSE)

Squares errors before averaging; large errors weigh more heavily.

Tactical Planning

A product family within a region.

Operational Planning

One product at one location.

Level Plan

Workforce stable (+), output constant (+), extra inventory holding cost (-).

Chase Plan

Workforce unstable (-), output variable (-), inventory and labor expenses (+).

Hybrid Plan

A mix of both chase and level plans.

Performance (Product Quality)

Does what it's supposed to.

Conformance (Product Quality)

Meets design specs.

Features (Product Quality)

Bonus functions or extras.

Aesthetics (Product Quality)

Look, feel, style.

Reliability (Product Quality)

Works every time.

Durability (Product Quality)

Lasts over a long time.

Serviceability (Product Quality)

Easy to fix.

Perceived Quality (Product Quality)

Customer’s impression.

Reliability (Service Quality)

Consistent delivery.

Assurance (Service Quality)

Inspires trust.

Tangibles (Service Quality)

Appearance of space, people, tools.

Empathy (Service Quality)

Personal attention.

Responsiveness (Service Quality RATER)

Quick and helpful.

Knowledge Gap

What the company thinks customers want ≠ Customer expectations.

Design Gap

Product design ≠ What the company thinks customers want.

Delivery Gap

Actual delivery ≠ The way the product was designed to be delivered.

Communication Gap

What the company communicates externally ≠ What is actually delivered.

Perception Gap

What the customer thinks they received ≠ What was actually delivered.

Satisfaction Gap

Customer expectations ≠ Customer perceptions of the experience.

Prevention Costs

Costs to prevent defects and issues before they happen.

Appraisal Costs

Costs to check, inspect, and/or measure quality.

Internal Failure Costs

Costs of fixing mistakes before output reaches customer.

External Failure Costs

Costs of fixing mistakes after output reaches customer.

Quality Control (QC)

Find it and fix it—before the customer does.

Quality Assurance (QA)

Fix the process, not just the product.

Total Quality Management (TQM)

Quality isn’t a department—it’s a culture.

Lean

Cut the clutter—only what adds value stays.

Six Sigma

Consistency through controlling variation.

Common Cause Variation

Natural fluctuation built into a stable system.

Special Cause Variation

Unexpected disruption from a new, unusual, or external factor.

Tampering

Reacting to common cause variation as if something is wrong, making the process worse.

Lean Main Focus

Improve efficiency by eliminating waste and enhancing flow.

Lean Philosophy Origin

Toyota Production System (TPS)

Value (Lean Concept)

Focus only on what the customer truly cares about; eliminate everything else.

Waste Elimination (Muda) (Lean Concept)

Identify and remove all activities that do not create value.

Continuous Improvement (Kaizen) (Lean Concept)

Ongoing, small-step improvements done by everyone, every day.

Flow (Lean Concept)

Work should move smoothly through the process without stops, delays, or pile-ups.

Pull (Lean Concept)

Don’t produce until there’s actual need; let downstream demand trigger upstream work.

Respect for People (Lean Concept)

Engage everyone in solving problems, improving work, and making decisions.

Leveling (Heijunka) (Lean Concept)

Smooth out production and workload to reduce stress, variability, and bottlenecks.

Quality at the Source (Jidoka) (Lean Concept)

Detect and fix problems immediately, before they move downstream.

Go to Gemba (Lean Concept)

Understand problems by directly observing the actual process in the real work environment.

Standardization (Lean Concept)

Create and follow consistent best practices to maintain quality and enable improvement.

Six Sigma Main Focus

Improve effectiveness by reducing variation and defects.