Oper & Supply Chain Exam 1

Production

The creation of goods and services.

Operations Management (OM)

The set of activities that creates value in the form of goods and services by transforming inputs into outputs.

Inputs

Resources used in a process, such as labor, materials, energy, capital, and other resources.

Outputs

The goods or services produced by a process.

Supply Chain

A global network of organizations and activities that supplies a firm with goods and services.

Marketing

The organizational function that generates demand.

Production/Operations

The organizational function that creates the product or service.

Finance/Accounting

The organizational function that tracks performance, pays bills, and collects money.

Productivity

The ratio of outputs divided by inputs; a measure of process improvement and efficiency.

Single-Factor Productivity

Productivity measured using one resource input, such as labor.

Multifactor Productivity

Productivity measured using multiple resource inputs together; also called total-factor productivity.

Stakeholders

People or groups with a vested interest in an organization, including customers, distributors, suppliers, owners, lenders, employees, and community members.

Design of Goods and Services

Strategic decision that defines what operations must produce; product design affects cost, quality, sustainability, and human resources.

Managing Quality

Determining customer quality expectations and establishing policies and procedures to achieve that quality.

Process and Capacity Strategy

Deciding how a good or service will be produced and what technology, quality, human resources, and investments are needed.

Location Strategy

Choosing locations while considering customers, suppliers, talent, costs, infrastructure, logistics, and government.

Layout Strategy

Arranging capacity, people, technology, inventory, materials, and information for efficient flow.

Human Resources and Job Design

Recruiting, motivating, and retaining people with the required talent and skills.

Supply-Chain Management

Integrating the supply chain into strategy and deciding what to purchase, from whom, and under what conditions.

Inventory Management

Making inventory ordering and holding decisions while balancing customer satisfaction, suppliers, and production schedules.

Scheduling

Determining and implementing intermediate- and short-term schedules while using personnel and facilities to meet demand.

Maintenance

Keeping facilities and processes reliable and stable while considering capacity, production demands, and personnel.

Mission

The purpose or rationale for an organization’s existence; it answers what the organization contributes to society and provides boundaries and focus.

Strategy

An action plan used to achieve the organization’s mission.

Competitive Advantage

An advantage created through an organization’s strategy that helps it compete successfully.

Differentiation

Distinguishing an organization’s offering in a way the customer perceives as adding value.

Experience Differentiation

Engaging a customer with a product through imaginative use of the five senses so the customer experiences the product.

Cost Leadership

Competing by achieving maximum value as perceived by the customer at low cost; it does not automatically mean low quality.

Response

Competing by being more responsive through flexibility, reliability, and quickness.

Flexibility

Matching market changes in design innovation and production volumes.

Reliability

Meeting schedules.

Quickness

Speed in design, production, and delivery.

Globalization

Expanding operations across countries to improve supply chains, reduce costs and exchange-rate risks, improve operations and products, understand markets, and attract talent.

Outsourcing

Transferring activities that were traditionally performed internally to external suppliers.

Core Competencies

Capabilities or strengths an organization focuses on and seeks to maintain while other activities may be outsourced.

Key Success Factors

Important activities or conditions that support successful execution of an organization’s strategy.

SWOT Analysis

A strategic analysis of strengths, weaknesses, opportunities, and threats.

Strengths

Internal capabilities or advantages that help the organization.

Weaknesses

Internal limitations or disadvantages.

Opportunities

External situations the organization may be able to use to its advantage.

Threats

External conditions that may harm the organization or make success more difficult.

Factor Rating

A method used to evaluate alternatives such as countries or outsourcing providers by comparing important factors.

Project

A temporary effort involving many related activities directed toward a specific goal.

Project Planning

Establishing objectives, defining the project, creating the work breakdown structure, determining resources, and forming the organization.

Project Scheduling

Relating people, money, and supplies to specific activities and relating activities to one another.

Project Controlling

Monitoring resources, costs, quality, and budgets, then revising plans and shifting resources when needed.

Project Manager

The person who coordinates project activities and monitors schedules and costs while helping ensure the project is on time, within budget, and meets quality goals.

Matrix Organization

A permanent organizational structure in which specialists from functional areas can be assigned across projects.

Work Breakdown Structure (WBS)

A hierarchy that breaks a project into the project, major tasks, subtasks, and activities or work packages.

Work Package

A specific activity at the lowest level of the work breakdown structure that must be completed.

Gantt Chart

A scheduling chart that shows project activities and their timing; it documents activities, order, time estimates, and overall project time.

Critical Path Method (CPM)

A project scheduling technique that assumes a fixed time estimate for each activity.

Program Evaluation and Review Technique (PERT)

A project scheduling technique that uses probability distributions for activity times to allow for variability.

AON — Activity on Node

A network convention in which activities are represented by nodes.

AOA — Activity on Arrow

A network convention in which activities are represented by arrows.

Immediate Predecessor

An activity that must be completed immediately before another activity can begin.

Earliest Start (ES)

The earliest time an activity can start, assuming all predecessors have been completed.

Earliest Finish (EF)

The earliest time an activity can be finished.

Latest Start (LS)

The latest time an activity can start without delaying completion of the entire project.

Latest Finish (LF)

The latest time an activity can finish without delaying completion of the entire project.

Forward Pass

The process of beginning at the starting event and working forward to calculate earliest start and earliest finish times.

Backward Pass

The process of beginning at the last event and working backward to calculate latest finish and latest start times.

Slack

The length of time an activity can be delayed without delaying the entire project.

Critical Path

The path of critical activities that determines project completion timing.

Optimistic Time (a)

PERT time estimate used if everything goes according to plan.

Most Likely Time (m)

PERT time estimate representing the most realistic activity duration.

Pessimistic Time (b)

PERT time estimate assuming very unfavorable conditions.

Project Variance

The sum of the variances of activities on the critical path.

Project Crashing

Shortening project time by reducing the duration of selected activities, usually at an added cost.

Quick memory cues: Differentiation = different/better; Cost leadership = lower cost; Response = flexibility + reliability + quickness. Project management = Planning → Scheduling → Controlling.