Chapter 4: Operations Management Flashcards
What is operations management? (8 Activities)?
The activities required to make and deliver products or services: Procurement, Receipt of Materials, Warehousing, Transport from warehouse to production, manufacturing, warehouse finished good, receiving orders, dispatching goods.
What is a value chain? [Visual]
Are the primary and secondary activities that create profit for an organisation. The value chain arrow is on a sperate visual revision tool.
When does an organisation have a right to profit?
They are flexible, knowledgeable on customer desires, offer economies of scale, absorb risk or provide a niche.
What is the Supplier, Company, Customers supply chain theory? [Visual]
It views procurement as the primary activity which is then facilitated by a sales team, any logistics in the chain are called distribution. Thinks of customers procuring goods that companies have had to procure the raw materials for.
What are upstream and downstream suppliers?
Upstream: Supply chain prior to party in focus. Downstream: Recipients of products or materials after the party in focus has completed their process.
What is a Push supply chain model?
Manufacturers produce based on historical demand, they then use marketing techniques to encourage customers to buy the products. They hold excess inventory to buffer against supply shocks.
What is a Pull supply chain model?
Use a just in time inventory model where customers drive the chain and there is a manufacturing lag. They have lower wastage than push models but also higher lead times.
What is the demand driven variable?
A variable of % production that exists prior to an order receipt. 0% means all production is forecast driven and 100% means all production is driven by customer orders.
How can supply chains be inefficient and how can technology solve this?
Push models can oversupply and pull models can have too much demand. Pricing is important to negate these issues. An extranet could connect retailers, manufacturers and suppliers to better organize procurement and orders based on current customer activities.
What is outsourcing?
Creating contracts with specialized companies so they can fulfil as requirements on the supply chain as they already have reduced costs or economies of scale.
What are the 4 groups in a supply portfolio? [Visual]
Aquisition: Low Profit Impact, Low procurement difficulty.
Leverage: High PI, Low PD
Critical: Low PI, High PD
Strategic: High PI, High PD
How will a buyer deal with a supply portfolio?
They will by acquisition items in a simple and quick way, over order on critical items when supply is high, run supplier contracts against each other on leverage deals, and get a bespoke solution for a strategic item.
What are the key logistical supply decisions and manager may make?
Who transports goods? How to transport? Deal with Customs. Deal with returns. Deal with orders. When to outsource. Where to store goods. How are quality checks done?
