CH 1 - Operations and Supply Chain Management Flashcards
The design, operation, and improvement of the systems that create and deliver the firm’s primary products and services
Operations and Supply Chain Management
Manufacturing and service processes that are used to transform the resources employed by a firm into products desired by customers.
Operations
Processes that move information and material to and from the manufacturing and service processes of the firm
Supply Chain
All managers should understand these basic principles of ________
Operations and Supply Chain Management
One or more activities that transform inputs into outputs
Process
What are the five processes involved in Operations and Supply Chain Management
- Planning
- Sourcing
- Making
- Delivering
- Returning
Consists of the processes needed to operate an existing supply chain strategically
Planning
Involves the selection of suppliers that will deliver the goods and services needed to create the firm’s product
Sourcing
Where the major product is produced or the service is provided
Making
Referred to as a logistics process
Delivering
Involves processes for receiving worn-out, defective, and excess products back from customers and support for customers who have problems with delivered products
Returning
What are the five essential differences between services and goods?
- Service is intangible while a good is tangible
- Service requires interaction with the customer while goods are generally produced separate from the customer
- Services are heterogeneous (they vary day to day) while goods have essentially zero variability
- Services are perishable and time dependent and can’t be stored like goods
- Services are a package of features that affect the five senses
Industries that have become low margin commodity businesses and often add some services
Pure Goods (Food Products, Chemicals, Mining)
Industries that already provide a significant service component as part of their business.
Core Goods (Applications, Cars, Data Storage Systems)
Industries that must integrate tangible goods
Core Services (Hotels, Airlines, Internet Service)
Industries that may need little in the way of facilitating goods but what they do use is critical to their performance.
Pure Services (University, Medical, Investment)
Refers to a company building service activities into its product offerings for its customers
Product Service Bundling
Means doing something at the lowest possible cost
Efficiency
The goal of an ____ process is to produce a good/service by using the smallest ___ of resources
Efficient, Input
Means doing the right things to create the most value for the customer
Effectiveness
Often maximizing ____ and ____ at the same time creates conflict between the two goals
Effectiveness, Efficiency
The attractiveness of a product relative to its price
Value
A process in which one company studies the processes of another company (or industry) to identify best practices
Benchmarking
The time it takes a company to convert the money that it spends for raw materials into the profit that it receives for products that are rold and use those materials. The quicker the cycle, the better for the company.
Cash Conversion Cycle
OR
Cash-to-Cash cycle time
Number of days that it takes for a company to collect cash from customers
Days Sales Outstanding
Number of days worth of inventory the company holds in operation and supply chain processes
Days Inventory
Indicates how quickly suppliers are paid by a company
Payables Period
The number of times receivables are collected, on average, during a fiscal year.
Receivables Turnover
The ____ ____ ratio measures a company’s efficiency in collecting its sales on credit. Higher is better.
Receivables Turnover
Measures the average number of times inventory is sold and replaced during the fiscal year
Inventory Turnover
Measures the efficiency in turning its inventory into sales. The higher the better.
Inventory Turnover
The amount of sales generated for every dollar’s worth of assets
Asset Turnover
___ ____ measures a firm’s efficiency at using its assets in generating sales revenue. The higher the better.
Asset Turnover
Emphasized how manufacturing executives could use their factories capabilities as strategic competitive weapons
Manufacturing Strategy
Integrated set of activities designed to achieve high volume production using minimal inventories of parts that arrive exactly when they are needed.
Just in Time (JIT) Production
Aggressively seeks to eliminate causes of production defects
Total Quality Control (TQC)
Term used to refer to the set of concepts relating to Just In Time and Total Quality Control
Lean Manufacturing
Managing the entire organization so that it excels on all dimensions of products and services that are important to the customer
Total Quality Management
Approach that seeks to make revolutionary changes as opposed to evolutionary changes
Business Process Reengineering (BPR)
A statistical term to describe the quality goal of no more than 3.4 defects out of every million units. Also refers to a quality improvement philosophy and program
Six Sigma
The ability to product a unique product exactly to a particular customer’s requirement
Mass Customization
The use of the Internet as an essential element of business activity
Electronic Commerce
Ability to maintain balance in a system
Sustainability
Involves the analysis of data to better solve business problems
Business Analytics
What are some current issues in Operations and Supply Chain Management? (name 4)
- Coordinating the relationships between mutually supportive but separate organizations
- Optimizing global supplier, production, and distribution networks
- Managing customer touch points
- Raising senior management awareness of OSCM as a significant competitive weapon
