Chapter 18B: Managing operations Flashcards
Operation Management
the management of the transformation process that converts resources into finished goods And services
Manufacturing organizations
organizations that produce physical goods
service organizations
organizations that produce non physical goods in the form of service ( 80% of all economic activity in the USA)
Value chain
entire series of work activities that (only) add value at each step; from acquiring raw materials to delivering the finished product (or service) to the customer
Value
the performance characteristics, features, attributes and any other aspects of goods or services for which customers (highest level of power) are willing to give up resources
Productivity
Outputs/Inputs
The overall output of goods or services produced divided by the inputs needed to generate that output
a composite of people and operations variables
Managers (not workers) are the primary source of increased productivity
Benefits of increased productivity
Organizational
Increased competitive capability due to lower costs
Benefits of increased productivity Nationally
economic growth, higher profits and higher wages without inflation - maintain global leadership
Value Chain Management
managing the sequence of activities and information along the entire value chain
Externally oriented on outgoing products and services
Externally oriented to created the highest value for customers
Goals; Transform organizations into finely tuned models of efficiency and effectiveness that meets and exceeds the customers needs
Value chain strategy
a business model incorporating:
- hiring/ training
- communication
- investment in information tech
Questioning organizational processes (how work is done) (aka intellectual stimulation)
- Setting expectations
- Trust, respect
Organizational Barriers
Refusal, reluctance, or inability to effectively share information
Reluctance to shake up the status quo
Security issues
Cultural attitudes
Lack of trust or too much trust (balanced control)
Fear of loss of control, leading to stagnation/inertia
Required Capabilities
Lacking or failing to develop the requisite value chain management skills (communication, conceptual, analytical, technical, stakeholder relationships)
People
- lacking commitment
- refusing to be flexibly
- nonmotivated
- lack of trained managers
Tech’s roles in manufacturing (productivity)
Increased automation to control costs
The production function (people) must be a pull partner in the entire business system in order to avoid bottle necks/slowdowns
Quality
the ability of a products or service to reliably do what its suppose to do and to satisfy customer expectations
Benchmarking
the search for the best practices among competitors or non-competitors that lead to superior performance
A TQM tool for measuring organizational performance
must not be based on past performance only, but instead on the best performance possible
Suggestions for internal benchamarking
- Identify best practices throughout organization
- Develop best practices reward and recognition system
- Communicate best practices throughout the organization
- Create a best practices knowledge sharing system
- nurture best practices in an ongoing basis
Benchmark
a standard of excellence to measure and compare against
Six sigma
a quality program designed to reduce effects to help lower cost, save time and improve customer satisfaction
Internal organization for standardization
ISO 9001 certification: a series of internal quality management standards that set uniform guidelines for processes to ensure that products conform to customer requirements
Certification as a Quality Organization, Matters!!!
Lean organization
understands what customers want, identifies customer value by analyzing all activities required to produce products, and then optimizes the entire process from the customer’s perspective.
Continuous learning to drive out all activities that do not add value to the customer.*
