Operations and Supply Chain Management (OSCM) Terminology

Vocabulary practice flashcards generated from lecture transcript notes covering essential concepts, historical developments, strategies, sustainability metrics, and forecasting models in Operations and Supply Chain Management (OSCM).

Operations and Supply Chain Management (OSCM)

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

Planning (OSCM Process Category)

The process category where a firm determines how anticipated demand will be met with available resources at a high enough quality and value.

Sourcing (OSCM Process Category)

The selection of suppliers that will deliver the goods and services needed to create the firm's product, including receiving, verifying, and transferring shipments, and authorizing supplier payments.

Making (OSCM Process Category)

The process category where the major product is produced or service is provided, requiring scheduling of workers and materials, and using metrics for speed, quality, and productivity.

Delivering (OSCM Process Category)

A logistics process where carriers are picked to move products to warehouses and customers, coordinate movement of goods and information, operate warehouses, manage customer orders, and collect payments.

Returning (OSCM Process Category)

Processes for receiving worn-out, defective, and excess products back from customers, and providing support for customers who have problems with delivered products.

Pure Goods

Products that have no added service tied to them, such as food products and chemicals.

Core Goods

Tangible products where the good is primary, but there is an expectation of accompanying service, such as automobiles and appliances.

Core Services

Offerings focused primarily on a service with a tangible good tied to it, such as cell phone service, airlines, and Starbucks.

Pure Services

Services provided without an added tangible good, such as education, medical, and investment services.

Product-Service Bundling

Building service activities, such as maintenance, training, or system design, into a product offering for customers.

Manufacturing Strategy Paradigm

A concept from the 1970s–1980s that emphasized how manufacturing executives could use factory capabilities as strategic competitive weapons.

Just-In-Time (JIT)

An 1980s operational concept focused on high-volume production using minimal inventories of parts that arrive exactly when they are needed.

Total Quality Control (TQC)

An 1980s operational concept that seeks to eliminate the root causes of production defects.

Lean Manufacturing

An operational philosophy combining Just-In-Time (JIT) production and Total Quality Control (TQC) concepts.

Total Quality Management (TQM)

A 1980s–1990s management approach aimed at managing the organization so that it excels on all dimensions of products and services.

Six Sigma Quality

A statistical quality goal and improvement methodology established in the 1990s targeting no more than $3.4$ defects out of every $1\text{ million}$ units.

Business Process Reengineering (BPR)

A 1990s concept aimed at making revolutionary changes by eliminating non-value-added steps and computerizing remaining operational processes.

Supply Chain Management (SCM)

A late 1990s total system approach to managing the flow of information, materials, and services from raw material suppliers to the final customer.

Electronic Commerce

The use of the internet as an essential element of business activity, originating in the late 1990s.

Sustainability

The ability to maintain balance in a system through ongoing economic, employee, and environmental viability of the firm.

Business Analytics

A mid-2010s practice involving the analysis of data to better solve complex business problems.

Environmental, Social, and Governance (ESG)

Specific measures introduced in the early 2020s to evaluate a company's impact in areas like carbon emissions, diversity and inclusion, and executive pay.

Efficiency

Doing something at the lowest possible cost by using the smallest input of resources.

Effectiveness

Doing the right things to create the most value for customers.

Value

A ratio metric defined as quality divided by price ($\text{Value} = \frac{\text{Quality}}{\text{Price}}$).

Benchmarking

The process of comparing a company's processes to those of others to identify best practices.

Shareholders

Individuals or companies that legally own one or more shares of stock in a firm.

Stakeholders

Individuals or entities that are directly or indirectly influenced by the actions of a firm, including workers, families, communities, stockholders, and the environment.

Triple Bottom Line (TBL)

A framework evaluating organizational success across three criteria: economic prosperity, social responsibility, and environmental stewardship.

Circular Economy

An economic framework focusing on manufacturing products to be reused, recycled, repaired, and remanufactured to balance people, planet, and profit.

Operations and Supply Chain Strategy

Setting broad policies and plans for using the resources of a firm in a way that is integrated with corporate strategy.

Operations Effectiveness

The core business processes needed to run the business across all functional areas.

Strategic Analysis

Looking out and forecasting how business conditions that impact the firm are going to change in the future.

Design Quality

The specific set of features contained within a product or service.

Process Quality

The technical reliability of a product or service.

Straddling

When a firm attempts to match the benefits of a successful competitive position while maintaining its existing position by adding new features, services, or technologies.

Order Qualifiers

Screening criteria that permit a firm's products or services to be considered as candidates for purchase.

Order Winners

Criteria that differentiate the products or services of one firm from those of another to secure customer purchases.

Strategic Forecasts

Medium- and long-term forecasts used to make strategic decisions and estimate aggregate demand.

Tactical Forecasts

Short-term forecasts used as input for making day-to-day decisions related to meeting immediate demand.

Qualitative Forecasting

Forecasting methods based on subjective or judgmental estimates, expert knowledge, and opinions.

Time Series Analysis

Quantitative forecasting based on the premise that historical demand data can be used to predict future demand.

Causal Relationships Forecasting

Quantitative forecasting technique that assumes demand is related to underlying factors in the environment.

Simulation Forecasting

Quantitative model allowing forecasters to evaluate a range of assumptions about forecast conditions.

Simple Moving Average

A forecasting technique that removes random fluctuations by averaging demand over a set period, discarding the oldest data point as a new period arrives.

Weighted Moving Average

A forecasting method where specific weights are assigned to data points, ensuring the sum of all weights equals $1$.

Exponential Smoothing

A time series forecasting technique requiring only the most recent forecast, actual demand, and a smoothing constant alpha.

Linear Regression

A functional relationship model between two or more correlated variables forming a straight line represented by $Y_t = a + bt$.

Forecast Error

The mathematical difference between actual demand occurrence and the forecasted value.

Bias Errors

Consistent forecast errors resulting from systemic mistakes, such as omitting key variables or using incorrect trend lines.

Random Errors

Errors in forecasting that cannot be explained or accounted for by the forecasting model being utilized.

Mean Absolute Deviation (MAD)

The average forecast error calculated using the absolute values of each past forecast error.

Mean Absolute Percent Error (MAPE)

A measure of forecast accuracy that expresses error relative to actual demand as a percentage.

Running Sum of Forecast Errors (RSFE)

The cumulative total sum of all forecast errors over a specified time period.

Tracking Signal (TS)

A metric indicating whether the forecast average is keeping pace with genuine demand changes, calculated as $TS = \frac{RSFE}{MAD}$.

Market Research

A qualitative forecasting method that relies on external companies to conduct surveys and interviews regarding customer preferences and product ideas.

Panel Consensus

A qualitative forecasting method in which a group of participants from various organizational levels exchange ideas in open meetings to develop a forecast.

Historical Analogy

A qualitative forecasting method that models demand for a new product based on the historical performance of similar or generic existing products.

Delphi Method

A qualitative forecasting technique that maintains participant anonymity while iteratively summarizing group responses to questionnaires.