Real MGMT 4000 Test

Operations and supply chain management (OSCM)

A functional field of business concerned with the management of the entire production and delivery system.

Process Activities

Main activities include planning, sourcing, making, delivering, and returning products or services.

Planning

Processes needed to operate an existing supply chain.

Sourcing

Selection of suppliers to provide the necessary goods and services for production.

Making

The process of producing the major product or service.

Delivering

Logistics processes including selecting carriers and coordinating the movement of goods.

Returning

Receiving worn-out, excess, or defective products back from customers.

Supply chain

Processes that move information and material to, through, and from the firm.

Intangible vs Tangible

A service is intangible and cannot be measured, while a good is a tangible output.

Service heterogeneity

Services are inherently heterogeneous, meaning they can vary in delivery and experience.

Perishable services

Services are perishable and time-dependent; they cannot be stored.

Customer interaction in services

A service requires some degree of interaction with the customer.

Competitive advantage

Creating value for shareholders without compromising future generations' needs.

Efficiency vs Effectiveness

Efficiency is doing things at the lowest cost; effectiveness is doing the right things for maximum value.

Order qualifiers

Dimensions necessary for product consideration by customers.

Order winners

Criteria used by customers to differentiate products and services.

Productivity

Measure of effective resource use, expressed as the ratio of output to input.

Product/service definition

Need-satisfying offering from an organization.

House of quality

Quality function deployment translating customer needs into specifications.

Product life cycle

Stages a product goes through from introduction to decline.

Concurrent engineering

Simultaneous development of project design functions with interactive communication.

Strategic sourcing

Development and management of supplier relationships to meet business needs.

Insourcing vs Outsourcing

Insourcing produces goods/services internally; outsourcing acquires from external providers.

Supplier evaluation and certification

Process to ensure reliable suppliers and effective quality systems.

Logistics

Art and science of obtaining, producing, and distributing materials and products.

Transportation modes

Includes truck, ship, plane, rail, pipeline, and hand delivery for goods.

Warehouse vs Distribution center

Warehouse stores goods; distribution center processes orders for shipment.

Capacity management

Ability to hold, receive, store, and accommodate in operations.

Capacity planning

Process to determine the appropriate level of capacity to meet demand.

Lead strategy

Increasing capacity ahead of anticipated demand.

Lag strategy

Increasing capacity after demand exceeds current levels.

Economies of scale

Cost advantages achieved by increasing production volume.

Decision tree

Schematic model that outlines the steps and consequences in solving a problem.

Lean supply chain

Supply chain focusing on eliminating waste and minimizing costs.

Vertical integration

Owning multiple assets in a supply chain, either backward or forward.

Raw materials

Parts and materials obtained from suppliers for production use.

Work-in-process inventory

Partly finished components or modules in the production process.

Finished goods inventory

Items ready to ship to customers, requiring no further work.

Vendor-managed inventory

Supplier manages an item/group of items for the customer.

Green sourcing

Environmentally responsible sourcing to reduce waste and impact.

Inventory turnover

Measure of how often inventory is replaced during the year.

Third-party logistics (3PL)

Outside company managing part/all logistic functions for another company.

Distribution facility processes

Include inventory tracking, receiving, stowing, picking, packing, and shipping.

Fixed costs

Costs that remain constant regardless of production volume.

Variable costs

Costs that fluctuate based on production volume.

Capacity utilization

Measure of how fully a system is being utilized, expressed as a percentage.

Cushion

Level of capacity in excess of average utilization rate, addressing demand uncertainty.

Service industries

Industries characterized by high uncertainty in demand.

Effective capacity

Maximum service capacity/person per time considering situational factors.

Planning horizon

Time period over which production or operational plans are made.

Capacity cushion formula

Cushion = (1/Average Utilization Rate) - 1.

Trade-offs in operations

Management decides which performance parameters to prioritize in resource allocation.

Order qualifiers and winners

Qualifiers are necessary for consideration; winners determine purchase decisions.

Product life cycle phases

Introduction, growth, maturity, and decline stages of a product.

Supplier development

Improvement of supplier capabilities to meet business needs.

Fulfillment center

Distribution center designed to handle small, individual customer orders.

Tariffs

Taxes on imports/exports, used by governments to generate revenue.

Clustering effects in location

Location of facilities impacts the choice of distribution or service centers.

Backwards vertical integration

Owning suppliers within the supply chain.

Forward vertical integration

Owning distribution channels in the supply chain.

Supplier feedback importance

Frequent feedback ensures positive supplier-customer relationships.

Cost efficiency in procurement

Balancing quality and cost for successful procurement practices.

Economic changes affecting products

Changes in the economy that influence product/service opportunities.

Human behavior’s role in innovation

Customer behavior identifies needs and indicates areas for product improvement.

Service business categorization

Businesses impacting human bodies, physical products, minds, or financial risks.

Good vs service feature

Goods are tangible; services are intangible and cannot be stored.

Decision nodes in decision trees

Represented by squares, indicating decision points in a process.

Chance nodes in decision trees

Represented by circles, indicating uncertainty in outcomes.

Paths in decision trees

Links between decision and chance nodes outlining the sequence of events.

Quality and cost balance

Essential for procurement to ensuring overall supply chain performance.

Cross-functional teams

Teams from various departments working together on projects.

Capabilities of a supply chain

Capacity to adapt to changing market demands while maintaining efficiency.

Market research importance

Critical to understanding customer expectations for product development.

Maintenance of supplier relationships

Frequent communication and feedback essential in sustaining supplier partnerships.

Organizing for product development

Shift from distinct departments to a team-based approach with concurrent engineering.

Capacity measurement in business

Output measured through throughput or inputs based on industry needs.

Service process evaluation

Services often evaluated on customer satisfaction and delivery quality.

Pure Goods

Food products, chemicals, mining

Core Goods

Appliances, automobiles

Core Services

Hotels, airlines, internet service providers

Pure services

University, medical, investment

Triple bottom line

Economic prosperity, social responsibility, environmental stewardship

Strategy Process

Customer needs, corporate strategy, operations strategy, decisions on process and infrastructure

Straddling

Seeking to match a successful competitor by adding features, services, or technology to existing activities

Value Analysis

Objective is to achieve better performance at a lower cost while maintaining all functional requirements designed by the customer

Agile Supply chain

a supple chain designed to operate efficiently while optimizing speed and adaptability

Request for proposal

used for purchasing items that are more complex or expensive and where there may be a number of potential vendors

Request for Quotation

Buyer identifies suppliers and issues a request for routine items

Purchase Order

Is the buyers offer and becomes a binding contract when accepted by the supplier

Weeks of supply

How many weeks worth of inventory is in the system at a particular point in time

warehouse

a facility where goods are stored for future use

proximity to customers

makes rapid delivery easier

Business climate

can include Prescence of similar sized businesses

infrastructure

adequate road, rail, air and sea transportation

political risk

risks in both the country of location and the host country influence the decision

Centroid method

Used for locating single facilities

Long range capacity planning

5-10 years

Intermediate capacity planning

6-18 months

Short range capacity planning

less than one month

Match strategy

Aims to incrementally Match capacity with demand