Ch 1 book: Introduction to Operations Management Flashcards
World class manufacturing (WCM)
an advanced version of JIT lean manufacturing
operations management
the management of processes that create goods and/or provide services
A process
a sequence of activities which uses resources and achieves a desired result
usually performed by more than one person
a good
a tangible item
a service
an act or work for someone (a customer or client)
how can processes be classified?
core
support
managerial
Core processes
business processes that have significant commercial impact for an organization
the ongoing end-to-end practices that deliver the organization’s goals
support processes
do not directly create products or services
are necessary to facilitate or assist the execution of operating or management processes
managerial processes
organisational routines that underpin the dynamic capabilities of an organisation
controlling and reconfiguring the organisation’s resource base
impacting the organisation’s ability to attain, sustain or enhance performance in the long‐term
Efficiency
operating at minimum cost and time
Effectiveness
achieving the intended goals (quality and timeliness)
An organization’s three basic functions
operations
finance
marketing
what must an organization’s main functions do in order to achieve goals?
must interact
work together
operations function
represents manufacturing and service processes
manages all the activities directly related to producing goods or providing services
to αdd value during the transformation process
do operations functions exists in both manufacturing industries and service industries?
ye boooy
what do we mean when we say that the production process must be an adaptive system?
To ensure that the desired outputs are obtained, measurements should be taken at various points (feedback),
then, we must compare with previously established standards to determine whether corrective action is needed (control)
Value added
the difference between the cost of inputs and the value or price of outputs
value of outputs in nonprofit organizations
their value to society
how to increase value added? benefits?
eliminate useless or wasteful inputs
the greater the amount of funds available
finance function
secures funds at favourable terms
allocates those funds throughout the organization
how do finance and operations management personnel cooperate?
by exchanging information and expertise in Provision of funds
by exchanging information and expertise in Economicαl analysis of cαpital investment proposαls
Provision of funds
attribute necessary funding of operations and the timing of funding
Most businesses obtain the majority of their funds through what?
the revenues generated by sales of their goods and services
Economicαl analysis of cαpital investment proposαls
Evaluation of alternative investments in plant and equipment by operations and finance people
marketing function
responsible for receiving customer wants/needs and feedback
responsible for communicating these to operations and to product design
manfacturing lead time
The time between the placement of an order and the shipment of the completed order to the customer
realistic estimate of how long it will take to fill customer orders
how does management αccounting help?
supplies management with information on costs of labour, materials, and overhead
provides reports on items such as scrap, downtime, and inventories
how does financial αccounting help?
deals with accounts payable and receivable
gathers the information needed for financial statements
how does purchasing department help?
responsibility for procurement of materials, supplies, equipment, and services
identifies appropriate suppliers and facilitates close supplier relationships
how does HR help?
recruitment and training of personnel
labour relations
contract negotiations
wage and salary administration
ensuring the health and safety of employees
how does manufacturing engineering help?
responsible for the machines and equipment needed in the production process
how does maintenance help?
responsible for the upkeep and repairs of:
equipment
buildings and grounds
heating and air conditioning
removing wastes
parking, and security.
how does product design help?
creation goods and services from information given by marketing people
provision of product specifications to operations to make the products
how do logistics help?
transporting raw material to the plant
storage and warehousing
transporting goods to warehouses, retail outlets, or final customers
which type of decisions are tactical and medium term (1 - 12 months ahead)
planning decisions
which type of decisions are usually strategic and long-term (1 - 5 years ahead)
design decisions
which type of decisions are tactical and short-term (1 - 12 weeks ahead)
control decisions
why do operations have a vital stake in design?
because design determines limitαtions of operations
affects price, timeliness, and quality of products
tαngible output
Production of goods
anything that we can see or touch
what differs between production of goods and performance of services?
Customer contact, use of inventories, and demand variability
Uniformity of inputs
Labour content of jobs
Uniformity of outputs.
Measurement of productivity
Quality assurance
between production and performance of services, which has more customer contact?
performance of services
between production and performance of services, which is more sensible to demand variability? why?
performance of services
manufacturers can build up inventories of finished goods, enabling them to absorb some of the shocks caused by variability of demand
between production and performance of services, which is subject to greater variability of inputs? why?
performance of services
Manufacturers often have the ability to carefully control the amount of variability of their inputs
between production and performance of services, which often requires a higher labour content? why?
performance of services
goods production typically can be more capital intensive
between production and performance of services, which is subject to greater variability of outputs? why?
performance of services
high mechanization when producing goods generates products with low variability
between production and performance of services, which has a more straightforward measurement of productivity? why?
in goods production due to the high degree of uniformity of items produced
services requirements from job to job make productivity measurement considerably more difficult
between production and performance of services, which has a more challenging quality assurance? why?
performance of services
because performance and consumption occur at the same time
In goods production, errors can be corrected before the customer receives the product
The operations manager
has the ultimate responsibility for the creation of goods or performance of services
The chief role of an operations manager
that of decision maker
A model
an abstraction of reality
a simplified representation of something
ignore the unimportant details so that attention can be concentrated on the most important aspects of a problem
types of models
physical (iconic)
Mαthematical (symbolic)
Schematic models
Common statistical models
Schematic models
graphs, charts, and drawings
Common statistical models
ex: Normal distribution and regresslon equations
Quantitative techniques
focus on objective measurements and analysis of numbers in order to draw conclusions
include deterministic and statistical techniques
types of quantitative techniques
Optimization
Queuing techniques
Inventory techniques to control inventory
Project scheduling technique PERT
Forecαsting techniques to forecast demand
Stlαtistical techniques for quality control
Project scheduling technique PERT (program evaluation and review technique)
used for planning, coordinating, and controlling large-scale projects
a heuristic
a quick way to find a good solution
A trade-off
opportunity cost
A system
a set of interrelated parts that must work together
interrelationships among these parts are crucial
it stresses the fact that the output and objectives of the organization as a whole take precedence over those of any one department
Pareto phenomenon
some things (a few) will be very important for achieving an objective or solving a problem, and other things (many) will not
also known as the 80- 20
Ethics
moral principles that govern a person’s behaviour
craft production
highly skilled workers using simple, flexible tools produced goods according to customer specification
economies of scale
The economic conditions that favour larger plants and machines/ equipment by causing minimum average unit cost to decrease as slze Increases
major problems with craft production?
no economies of scale
slow production
costly production
slow and costly replacement
Two concepts assisting in large-scale production during the industrial revolution
Division of labour
interchangeable parts
Division of labour
the production process is divided up into a series of small tasks and individual workers are assigned to each one of these tasks
the tasks were so narrow that virtually no skill was required
interchangeable parts concept
to standardize parts and make them so precisely that any part in a batch of parts would fit product without alteration
parts did not have to be custom fitted
The result was a tremendous decrease in assembly time and cost.
Scientific management
applying science to observe, measure, analyze, and improve work methods
includes the use of economic incentives
moving assembly line
assembly line in which the product is pulled along the line at a fixed speed while the workers assemble its parts
mass production system
in which large volumes of standardized goods are produced by low-skilled or semiskilled workers using highly specialized, and often costly, equipment
Business analytics
comprises software used to build analysis models and simulations to:
create scenarios
understand realities
predict future states
what do business analytics include?
data mining
predictive analytics (forecasting)
applied analytics
statistics
data mining
looks for unusual patterns and relationships in data
total quality management (TQM)
emphasizes quality and continuous improvement, worker empowerment and teams, and achieving customer satisfaction
similar to JIT (lean manufacturing)
JIT (lean manufacturing)
uses significantly fewer resources than mass production systems to produce around the same input
less space, less inventory, and fewer workers
uses high skilled workforce
combination of mass production and craft production
higher quality than mass production
World class manufacturing (WCM)
a combination of TQM and JIT
includes worker initiated maintenance (called autonomous maintenance) and industrial engineering
other major trends affecting operations
The Internet and ecommerce
Technology
Globalization
Supply chains
Sustainαbility
