Chapter 2 OSCM

What is sustainability?

Meeting current needs without compromising future generations

Who are shareholders?

Individuals or companies that own stock in a company

Who are stakeholders?

Individuals or groups affected by a company's actions

What are the three components of the triple bottom line?

Social responsibility, environmental stewardship, economic prosperity

What is social responsibility?

Fair business practices toward labor, community, and region

What is environmental stewardship?

Protecting the environment and reducing waste

What is economic prosperity?

Providing competitive returns to investors and long-term value

What is OSC strategy?

Plans for using resources aligned with corporate strategy

What does OSC strategy link?

Long-term and short-term decisions with corporate strategy

What is corporate strategy?

Overall direction of the organization

What is operations effectiveness?

Performing activities efficiently to meet strategic goals

What are key OSC strategy decisions?

Facility size, processes, supply chain design, workforce, quality

What is competing on cost?

Producing goods/services cheaply

What is competing on quality?

Producing high-quality goods/services

What is delivery speed?

Providing products/services quickly

What is delivery reliability?

Delivering on time as promised

What is flexibility in operations?

Ability to change volume or product offerings

What is new-product introduction speed?

How quickly a firm can introduce new products

What is competing on price typically associated with?

High volume, low customization, automation, lower-skilled labor

What are trade-offs in strategy?

Not being able to excel in all competitive dimensions simultaneously

What is straddling?

Trying to match competitors by adding features without clear strategy

What are order winners?

Features that differentiate products and win customer purchases

What are order qualifiers?

Minimum features required to be considered by customers

What is strategic fit?

Aligning operations activities with overall strategy

What is an activity-system map?

Diagram showing how strategy is supported by activities

What is supply chain risk?

Likelihood of disruption affecting product/service delivery

What are supply chain coordination risks?

Risks from day-to-day management issues

What are disruption risks?

Risks from disasters or major events like pandemics

Steps in risk management framework?

Identify risks, assess impact, develop mitigation plans

How can firms mitigate supplier failure risk?

Use multiple suppliers

How can firms mitigate logistics risk?

Safety stock and alternate suppliers

How can firms mitigate natural disaster risk?

Contingency planning and insurance

What is productivity?

A measure of how well resources are used

Why is productivity a relative measure?

It must be compared to something else to be meaningful

What is partial productivity?

Output divided by a single input

What is multifactor productivity?

Output divided by multiple inputs

What is total productivity?

Output divided by all inputs

What is labor productivity formula?

Output / labor cost

What is multifactor productivity formula?

Output / (labor + materials)

What is total productivity formula?

Output / (labor + materials + overhead)

What is the productivity improvement cycle?

Measure, evaluate, plan, implement

Example of restaurant productivity measure

Meals per labor hour

Example of retail productivity measure

Sales per square foot

Example of utility productivity measure

Kilowatt-hours per ton of coal

Operations effectiveness

Performing activities in a manner that best implements strategic priorities at minimum cost.

Which of the following is not a strategy associated with operational effectiveness?

Hiring more employees

Place these steps in the implementation projects phase of formulating an operations and supply chain strategy in the correct order.

Definition of specific implementation projects

Identification of resources needed

Project funding procurement

The competitive dimension that deals with getting the product to the customer when promised is

delivery reliability

Products and services sold strictly on the basis of cost are typically __________-like.

commodity

______ quality relates to the set of features the product or service contains.

Design

Operations effectiveness is related directly to the costs of doing business.

True

An important competitive dimension may be the ability of a firm to support its product after the sale.

Supplier after-sale support

Correct steps in the strategic analysis phase of formulating an operations and supply chain strategy in the correct order.

Define vision, mission, and objectives

Conduct strategic analysis

Define strategic competitive priorities

All of the following are competitive dimensions that form a firm's competitive position except

Retail store

True or false: According to the notion of trade-offs, an operation can excel simultaneously on all competitive dimensions.

False

Within every industry, there is usually a segment of the market that buys solely on the basis of low ____________ . (Enter only one word per blank.)

cost or price

Straddling occurs when a company seeks to match the benefits of a successful position while maintaining its existing position. Which of the following is not something a firm may try when using the straddling approach?

Lowering price

There are two characteristics of a product or service that define quality: ________________quality and _______________ quality.

design and process

A criterion, or possibly a set of criteria, that differentiates the products or services of one firm from those of another.

Order winner

Order qualifer

A screening criterion that permits a firm's products to even be considered as possible candidates for purchase.

In the context of other product-specific criteria of competitive dimensions, a firm may be required to coordinate with other firms on a complex project for

meeting a launch date.

Supply chain coordination risks that are associated with the day-to-day management of the supply chain, are normally dealt using which of the following? Check all that apply.

Safety stock

Safety lead time

Overtime

Supply chain risk

the likelihood of a disruption that would impact the ability of a company to continuously supply products or services

unplanned and unanticipated events that disrupt the normal flow of goods and materials within a supply chain. Expose firms within the supply chain to operational and financial risks

Risks by viewing the inherent uncertainties related to operations and supply chain management along two dimensions

Supply chain coordination risks that are associated with the day-to-day management of supply chain normally dealt using: safety stock, safety lead time, overtime, etc.

Disruption risks, caused by natural or manmade disasters

Which of the following is/are outputs of the strategic analysis phase of formulating an operations and supply chain strategy?

Competition analysis

Customer preferences

New technologies

Population demographics

Plan approval by top management

The term that defines when some activities are incompatible and that necessitates less of another activity is:

trade-off

The nature of these types of risks lends them to a three-step risk management process that can be applied to situations where disruptions are possible. Place these steps in the correct sequence.

Identify the sources of potential disruptions.

Assess the potential impact of the risk.

Develop plans to mitigate the risk.

When a company seeks to match the benefits of a successful position and maintain their current position in the marketplace it is attempting a(n) ________________ approach.

straddling

When you want to express the ratio of all outputs to all inputs, you should use a ________ productivity measure.

total

Order winners and qualifiers represent a link between Operations and what other business function?

Marketing

The ______ are individuals or organizations that legally own one or more shares of stock in the company.

shareholders

stakeholder

individuals or organizations that are influenced, directly or indirectly, by the actions of the firm.

Supply chain disruption risks are

random and difficult to predict

Which of the following is the first step in a typical strategic planning process?

Define vision, mission, and objectives

Which of the following is not a step in the risk management process?

Create an activity-system map

Productivity is defined as the ratio of

outputs to inputs

True or false: Stakeholders are individuals or companies that legally own a portion of the company and are not influenced by the actions of that company.

False

When calculating productivity, if you compare the output to a group of inputs (but not all inputs), you are conducting which type of productivity measure?

Multiple choice question.

Multifactor

Logistics Failure

Detailed tracking, alternative suppliers

Major Quality Failure

Carefully select and monitor suppliers

Natural Disaster

Contingency planning, insurance

Regulatory Risk

Good legal advice, compliance

Country Risks

Currency hedging, local sourcing