Operations Management Midterm - Wright

Operations Management

The management of a firm's operating resources

Operations Strategy

The long-term direction of a firm's operating resources

The order of a typical strategy hierarchy is:

1. Corporate Strategy

2. Business Unit Strategy

3. Functional Unit Strategy

What are the four generic performance objectives that managers need to trade off?

Cost, Quality, Delivery, and Flexibility.

The five types of resources to be considered in operations strategy are:

Physical, human, technological, ecosystem, and financial

T or F: By definition, directed strategies determine the organization's realized strategy.

False

T or F: Emergent strategies often determine the organization's realized strategy.

True

Structural decision areas include:

Capacity, facilities, scope, information and process technology

Infrastructure decision areas include:

Workforce, Organization, Quality, Production Planning & Distribution, and Product & Process Development

Was Boeing's new strategy for the 787 effective?

No

Was Microsoft's approach in creating two operational strategies correct?

Yes

LEAN Manufacturing

To achieve high customer service with minimum levels of inventory investment

The two basic models of personal leadership:

Hierarchical, servant

Hierarchical leadership

Autocratic, from top down, poor communication

Servant leadership

Top and bottom decisions, good communication

What is the job of LEAN management?

To remove barriers

Why does LEAN fail?

-Poor management

-Lack of commitment

-Culture does not accept change

-Threatens top jobs

LEAN was derived mostly from ___

Toyota production system

The Theory of Constraints

You are only as strong as your weakest link (bottleneck)

6S

Sort, Set in Order, Shine, Standardize, Sustain, and Safety

The person who knows the job best is ___

The one doing it!

Kaizen Event

Short term approach to enhancing efficiency that focuses on improving an existing process or an activity within a process

To improve operations, you must:

1. Have the right leadership

2. Have or establish a culture of "continuous improvement"

3. Use all the tools available to "change for better"

The basic skills needed to improve a process and eliminate waste are:

Process analytics (!), root cause analysis, statistical process control

Root cause analysis

5 why's, fish bone

What is an expeditor?

An individual who accelerates the progress of an existing order.

What is the name of the company that owns the Bearington plant?

UniCo

How does Jonah define productivity?

Productivity is the act of bringing a company closer to its goal.

When first queried by Jonah in the airport, how does Alex describe the goal of his manufacturing operation?

The goal is market share

What does Jonah give Alex during their first conversation?

A cigar

Which sentence best represents the measurement of inventory as presented by Jonah?

All the money the system invests in purchasing things the system intends to sell.

Which sentence best represents the measurement of operational expense as presented by Jonah?

All the money the system spends to turn inventory into throughput.

Which sentence best represents the measurement of throughput as presented by Jonah?

The rate at which the system generates money through sales.

How many months is Alex Rogo given to turn around the Bearington plant?

3

What does Alex conclude is the goal of a manufacturing organization?

The goal of a manufacturing organization is to make money.

Statistical fluctuations

The reality that most of the factors critical to running you plant cannot be determined precisely ahead of time

How did the Boy Scout troop help Herbie move faster?

The troop divided the content of Herbie's backpack among themselves.

Alex realized on the hike that the distance between himself an Herbie was equivalent to

Inventory

How would Jonah quickly know that throughput increased in a plant?

A plant sold more products

In Jonah's view, the depreciation on a machine is a(n) __________ and whatever portion of the investment in the machine that could be sold is ____________.

operational expense; inventory

Which one of Jonah's measurements represent the money still inside the system?

Inventory

Jonah states that a plant where everyone is working all the time is very ____________.

Inefficient

Jonah teaches that the closer one comes to achieving a balanced plant...

The closer the plant edges toward bankruptcy.

Which machines in the Bearington plant were identified as bottlenecks?

The NCX-10 machine and the heat treat area

According to Jonah, an hour lost at a bottleneck lowers the plants overall __________.

Throughput

At what point in the process does Jonah recommend Quality Control occur?

Quality Control should happen before a bottle-neck.

Which statement best describes the Bearington plant strategy prior to Jonah?

Maintain efficiencies by building inventory

How did the team at the Bearington plant reduce bottlenecks at the NCX-10?

By deploying a Zmegma, a Screwmeister, and one other machine

How did the team at the Bearington plant reduce bottlenecks in the Heat Treat area?

When treating a batch of items, the workers filled the unused space in the furnace with items from other batches.

What two tag colors are used in the process experiment at the Bearington plant?

Green and red

Jonah teaches that time lost on a bottleneck _______________.

Is unrecoverable

Jonah teaches that you should balance the flow of the plant with _____________.

Market demand

Jonah teaches that a bottle neck is a resource who's _______ is __________ than the demand placed upon it.

Capacity; equal to or less

5 Steps of Theory of Constraints

1. Identification of the constraint

2. Exploitation of the constraint

3. Subordinate everything else to the above decisions

4. Elevate the constraint

5. Return to the first step

Jonah teaches that activating a resource and utlizing a resource...

Are not the same

Of the labels describing the time a piece of material spends inside the plant from its entry as a raw material until its exit as a finished product, which ones are major time factors?

Queue time and wait time

Which statement best describes how Jonah teaches Alex to run the Bearington plant?

Balance the flow of the plant with market demand levels rather than capacity levels.

What key production decision did the Bearington team implement to make one thousand Model 12's for Bucky Burnside?

They reduced batch sizes

When you make use of a resource in a way that moves the system toward the goal, Jonah calls this...

Utilization

After the Bearington plant's strong May report, what does Bill Peach require to keep the plant open at the end of the third month?

Fifteen percent more on the bottom line

Performance metrics

That which determines an organization's behavior and performance

What gets measured...

Gets done!

Performance incentives

Something, such as the fear of punishment or the expectation of reward, that induces action or motivates effort

A good performance incentive supports ___, ___, ___. and are ___ with all 3

corporate, business unit, and functional strategies; aligned

Throughput

The maximum time it takes for one unit to go from the beginning to the end of the process

Throughput formula

Add each sequential step

Labor content

Often same as throughput

Labor content formula

Add every step

Bottleneck

The slowest part of any process

Cycle time

The time between completing two consecutive flow units

Cycle time formula

Operating time per day / desired output rate

Capacity

The maximum output in a specified time period

Capacity formula

Time available / cycle time

Labor utilization formula

Step time / cycle time

Average labor utilization formula

(Total time of all steps / number of steps) / cycle time

Total batch time

Set-up time + processing time

Cycle time with cross training formula

Sum of CT task times / # of CT workers

Capacity with cross training formula

Cross-trained steps / # of cross-trained steps, determine cycle time, time period needed / cycle time

Capacity at startup formula

Timeframe - throughput time for first unit = x, x / cycle time + 1

Labor cost

Cycle time (# of people in the process)

OR labor content / average labor utilization

Cycle time with multiple machines/people formula

Time per unit per machine / # of machines, find longest step

Capacity with multiple machines formula

Units per hour (# of machines), find bottleneck, bottleneck (specified time period needed)

Still learning (1)

You've started learning these terms. Keep it up!