Operations Management Exam #1

Operations management

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

Supply Chain

A sequence of organizations-their facilities, functions, and activities-that are involved in producing & delivering a product or service.

Value-added

Difference between costs of inputs & value of outputs.

Lead Time

Time between ordering a good or service and receiving it.

Process

One or more actions that transform inputs into outputs.

Model

An abstraction of reality, simplified representation of something.

System

A set of interrelated parts that much work together.

Pareto Phenmenon

A few factors account for a high percentage of the occurrence of some event(s).

Craft Production

System in which highly skilled workers use simple, flexible tools to produce small quantities of customized goods.

Mass Production

System in which low skilled workers use specialized machinery to produce high volumes of standardized goods.

Interchangeable parts

Parts of a product made to such precision that they do not have to be custom fitted.

Division of Labor

The breaking up a production process into small tasks, so that each worker performs a small portion of the overall job.

E-Business

The use of electronic technology to facilitate business transactions.

E-commerce

consumer-to-business transactions

Technology

The application of scientifc discoveries to the development and improvement of products and services & operations processes.

Six Sigma

A process for reducing costs, improving quality, and increasing customer satisfaction.

Agility

The ability of an organization to respond quickly to demands or opportunities.

Lean System

System that uses minimal amounts of resources to produce a high volume of high-quality goods with some variety.

Sustainability

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

Ethics

A standard of behavior that guides how one should act in various situations.

Ethical Framework

A sequence of steps intended to guide thinking and subsequent decision or action.

Outsourcing

Buying goods or services instead of producing or providing them in-house.

Competitiveness

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

Mission

The reason for the existence of an organization.

Mission Statement

States the purpose of an organization.

Goals

Provide detail and scope of the mission.

Strategies

Plans for achieving organizational goals.

Tactics

The methods and actions taken to accomplish strategies.

Core competencies

The special attributes or abilities that give an organization a competitive edge.

SWOT

Analysis of strengths, weaknesses, opportunities, and threats.

Order qualifiers

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

Order winners

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

Environmental Scanning

The monitoring of events and trends that present threats or opportunities for a company.

Operations Strategy

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

Quality-based strategies

Strategy that focuses on quality in all phases of an organization.

Time-based strategies

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

Productivity

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

Supply Chain Management

The strategic coordination of the supply chain for the purpose of INTEGRATING supply and demand management.

Logistics

The movement of goods, services, cash, and information in a supply chain.

Resiliency

The ability of a business to recover from an event that negatively impacts the supply chain.

Supply chain visibility

A major trading partner can connect to its supply chain to accesss data in real time.

Event-Response Capability

The ability to detect and respond to unplanned events.

Purchasing Cycle

Series of steps that begin with a request for purchase and end with notifcation of shipment received in satisfactory condition.

Centralized purchasing

Purchasing is handled by one special department.

Decentralized purchasing

Individual departments or separate locations handle their own purchasing requirements.

Vendor analysis

Evaluating the sources or supply in terms of price, quality, reputation, and service.

Strategic Partnering

Two or more business organizations that have complementary products or services join so that each may realize a strategic benefit.

Inventory velocity

The speed at which goods move through a supply chain.

Bullwhip effect

Inventory oscillations become progressively larger looking backward through the supply chain.

Vendor-managed inventory (VMI)

Vendors monitor goods and replenish retail inventories when supplies are low.

Order fulfillment

The processes involved in responding to customer orders.

Logistics

The movement of materials, services, cash, and information in a supply chain.

Traffic Management

Overseeing the shipment of incoming and outgoing goods.

Third-party logistics (3-PL)

The outsourcing of logistics management.

Strategic Sourcing

Analyzing the procurement process to lower costs by reducing waste and non-value-added activities, increase profits, reduce risks, and improve supplier performance.

Fill rate

The percentage of demand filled from stock on hand.

Projects

Unique, one time operations designed to accomplish a specific set of objectives in a limited time frame.

Project champion

a person who promotes & supports a project

Work breakdown structure (WBS)

A hierarichal listing of what must be done during a project.

PERT

Program Evaluation and Review Technique, for planning & coordinating large projects.

CPM

Critical Path Method, for planning & coordinating large projects.

PERT & CRM combined find:

graphical display of project activities, time estimate for project, critical activities, how long activity delays can be before affecting the project

Network (precedence) diagram

Diagram of project activities that shows sequential relationships by use of arrows and nodes.

Activity-on-arrow (AOA)

Network diagram convention in which arrows designate activities.

Activity-on-node (AON)

Network diagram convention in which nodes designate activities.

Activities

Project steps that consume resources and/or time

Events

The starting & finishing of activities, designated by nodes in the AOA convention.

Path

A sequence of activities that leads from the starting node to the finishing node.

Critical Path

The longest path, determines expected project duration. Has no slack.

Critical activites

Activities on critical path.

Slack

Allows slippage for a path: difference between length of path and length of critical path

Deterministic

Time estimates that are fairly certain.

Probabilistic

Estimates of times that allow for variation.

Optimistic time (to)

The length of time required under optimal conditions.

Pessimistic Time (tp)

The length of time required under the worst conditions.

Most likely time ("tm")

The most probable length of time that will be required.

Beta distribution

Used to describe the inherent variability in activity time estimates.

Independence

Assumption that path duration times are independent of each other, requiring that activity times be independent, and that each activity is only on one path (ACE vs. BDF).

Crash

Shortening activity durations.