chapter 7

OPERATIONS MANAGEMENT & QUALITY CONTROL STUDY GUIDE

(With Definitions, Examples, and Key Terms)

I. What is Operations Management?

- Operations (Production) (p. 199): All activities involved in producing goods and services.

- Operations Management (p. 202): Managing how resources are turned into value for customers.

- Utility (p. 201): A product’s ability to satisfy a want or need (form, time, place).

Example: A theater provides time utility by offering flexible showtimes.

- Operations Capability (p. 205): What a company does better than competitors.

Example: FedEx = delivery speed; 3M = flexibility.

- Operations Process (p. 203): The method a company uses to turn inputs into outputs.

Example: Custom tailoring = make-to-order process.

II. Goods vs. Service Operations

- Goods Operations (p. 199): Produces tangible items (e.g., car factory).

- Service Operations (p. 199): Delivers intangible experiences (e.g., dental clinic).

- High-Contact System (p. 201): Customer is part of the service (e.g., haircut).

- Low-Contact System (p. 208): Service delivered without customer present (e.g., utility).

- Performance (p. 211): How well a service meets expectations.

- Consistency (p. 211): Repeating the same level of performance.

III. Production Methods & Layouts

A. Production Types:

- Make-to-Order Operations (p. 204): Custom items made per request.

Example: Tailored suits.

- Make-to-Stock Operations (p. 209): Mass production of standardized items.

Example: Coca-Cola bottles.

B. Facility Layouts:

- Process Layout (p. 209): Organized by task or function.

Example: Hospital departments.

- Product Layout / Assembly Line Layout (p. 209): Organized by production steps.

Example: Car factory.

- Fixed-Position Layout (p. 210): Product stays in one place, workers/equipment move.

Example: Home construction.

IV. Strategy & Competitive Alignment

- Operations must support company strategy.

- Operations Capability (p. 205): Unique strength in production.

- Competitive Product Analysis (p. 220): Comparison to competitors.

- Just-in-Time (JIT) Production (p. 216): Minimizing inventory by receiving materials only as needed.

- Example Alignments:

- Toyota: Quality & consistency.

- 3M: Flexibility.

- FedEx: Dependability.

V. Operations Planning & Control

A. Planning:

- Capacity (p. 207): How much can be produced.

- Master Operations Schedule (p. 212): Long-term production plan.

- Detailed Schedule (p. 213): Daily tasks and workflows.

- Staff Schedule (p. 214): Employee shifts and assignments.

- Gantt Chart (p. 219): Visual timeline for project steps.

- PERT Chart (p. 215): Sequence of tasks and critical path.

B. Control:

- Operations Control (p. 215): Monitoring output and adjusting.

- Follow-Up (p. 215): Checking if goals were met.

VI. Quality Management & TQM

- Total Quality Management (TQM) (p. 218): All employees involved in improving quality.

- Quality (p. 211): Meeting product/service expectations.

- Quality Control (p. 217): Detecting and fixing issues.

- Quality Ownership (p. 220): Each employee ensures quality in their work.

- Quality Improvement: Constant enhancement of processes.

- Value-Added Analysis (p. 220): Removing non-useful steps.

- Team / Quality Circle (p. 221): Employees meet to solve quality problems.

- Business Process Reengineering (p. 222): Rethinking systems from scratch.

- ISO 9000 (p. 221): Certification for consistent quality systems.

- ISO 14000 (p. 222): Certification for environmental performance.

- Productivity (p. 218): Output vs. input efficiency.

VII. Supply Chain & SCM

- Supply Chain / Value Chain (p. 222): The full system from raw materials to end customer.

- Supply Chain Management (SCM) (p. 223): Coordinating the entire supply chain for efficiency.

- Supplier Selection (p. 216): Choosing partners and vendors.

- Purchasing (p. 216): Buying raw materials and services.

- Inventory Control (p. 216): Managing stock levels.

- Warehousing (p. 216): Storing products before distribution.

- Transportation (p. 216): Moving goods between locations.

- Outsourcing (p. 228): Hiring outside firms for tasks.

- Lean Production System (p. 215): Eliminating waste and inefficiencies.