INTR SUPPLY CHAIN: Chapter 8

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Operations Management

The design, execution, and control of operations that convert resources into desired goods and services.

Manufacturing vs. Service

Manufacturing produces tangible products (can be stored); Services produce intangible products (cannot be stored).

Product-Process Matrix

A tool linking product volume and variety to the best production process (Job Shop, Batch, Assembly Line, Continuous Flow).

Job Shop

A process with high variety and low volume, typically utilizing highly skilled labor and general-purpose equipment.

Continuous Flow

A process with very high volume and very low variety, such as a refinery or water treatment plant.

Total Cost of Manufacturing (TCM)

The sum of all costs to produce products, including procurement, production, inventory, and warehousing.

Lean Manufacturing

An operating philosophy focused on the absolute elimination of waste and the disciplined use of resources.

The 8 Wastes (DOWNTIME)

Defects, Overproduction, Waiting, Non-utilized Talent, Transportation, Inventory, Motion, and Extra-processing.

Six Sigma

A disciplined, data-driven methodology for eliminating defects in any process (aiming for 3.4 defects per million).

DMAIC

The Six Sigma improvement process: Define, Measure, Analyze, Improve, and Control.

Statistical Process Control (SPC)

The use of statistical techniques to monitor and control a process to ensure it operates at its full potential.

Pure Services

Services offering very little "tangible" product to the customers (e.g., consulting or teaching).

Service-Package Bundle

A mix of explicit services, implicit services, facilitating goods, and supporting facility provided to a customer.

Explicit vs. Implicit Services

Explicit services are observable benefits (e.g., a clean room); Implicit services are psychological benefits (e.g., feeling safe).

Productivity (Formula)

Total Output divided by Total Input (e.g., units produced per hour).

Level Capacity Strategy

Maintaining a steady production rate and workforce level regardless of demand fluctuations.

Chase Capacity Strategy

Adjusting capacity (hiring/firing) to match demand as it fluctuates over time.

Service Quality Dimensions

Reliability, Responsiveness, Assurance, Empathy, and Tangibles.

Total Quality Management (TQM)

A management approach focused on long-term success through customer satisfaction and continuous improvement.