Exam 1 Flashcards
System design
Long term, strategic decisions made by higher level operation managers
What operations are part of the systems design
-product design
-capacity planing
-location analysis
-facilities layout
-product and service selections
Systems operations
Short term, day to day decisions made by lower level operations managers
What is part of the systems operations
-plant maintenance
-inventory management
-scheduling
-project management
-quality control
Systems theory
The organization is a system made up of interrelated subsystems that interacts with and is affected by the external environment
Pareto phenomenon
Q few factors account for the vast majority of the products or costs
-80/20 rule, 80% of the problems are caused by 20% of the activities
Current Key issues
-Sustainability
- Supply chain manangement
-Lean Operations
-factory if the future
Supply chain management issues
-last mile delivery
-last 50ft delivery
-trucker shortage
-drones
-e commerce and reverse logistics
-reshoring
-lead time supply shortage and rising costs
Lean operations
Minimizing muda/waste
The supply chain
-a network of organizations and activities that supplies a firm with goods and services
- members of the supply chain can collaborate to achieve high levels of customer satisfaction, efficiency and competitive advantage
Productivity
Single factor measure of output/input
Multi-factor
Why productivity matters
-higher productivity leads to higher standards of living
- higher productivity relative to the competitions leads to a competitive advantage in the market place
Competitive advantage
The creation of a unique advantage over competitors
Core competencies
Things a company does especially well
What are the general strategies
-differentiation
-cost leadership
-responsiveness
Differentiation
Distinguishing the product/service so the customer perceives added value
Cost leadership
Achieving value at a low cost
Responsiveness
Offering rapid, flexible, and reliable performance
Outsourcing
Transfer activities that have traditionally been internal to external suppliers
Reashoring
Bringing manufacturing back to one’s home country or source from suppliers who are in one’s home country after previously having outsourced abroad
Strategy list for operations
Strategic products and service design
-Products and service design or redesign should be closely tied to an organizations strategy
-design should be responsive to changes in the external environment
Main objectives of product design
-customer satisfaction
Secondary objectives of product design
-function of product/service, cost/profit, quality, appearance, ease of production/assembly, ease of maintenance/service, ethics/safety, sustainability
Secondary objectives of product design
-function of product/service, cost/profit, quality, appearance, ease of production/assembly, ease of maintenance/service, ethics/safety, sustainability
Value Analysis
Sustainability in the triple bottom line
The three p’s; people, profit, and planet
Breakdown maintenance
Reactive approach; dealing with breakdowns are problems when they occur
Preventative maintenance
Proactive approach; reducing breakdowns through program of lubrication, adjustment, cleaning, inspection, and replacement of worn parts
Breakdown consequences
-Production capacity is reduced, orders are delayed.
-no production overhead continues, so costs per unit increases quality issues, product may be damaged,
-safety issues, injury to employees or customers.
Goal of strategic capacity planning
Match the long-term supply capabilities of an organization and the predicted level of long-term demand
Goal of strategic capacity planning
Match the long-term supply capabilities of an organization and the predicted level of long-term demand
Over capacity
Handling too much capacity; operating costs are too high because some of the capacity sits unused
Under capacity
Not having enough capacity; resources are strained, and customers may be lost because the company can’t keep up with demand
Solutions to under capacity
-short term; raise prices, increased leadtimes, discourage marginally, profitable business
-long-term; increase capacity
-to adjust to seasonal demand; produce products with complementary demand patterns
Solutions to over capacity
Stimulate markets or change product mix
Design capacity
Theoretical maximum capacity for which an operation/process or facility is designed
Effective capacity
What we plan to make keeping in mind current operating constraints
Actual output
What we actually make,
-affected by things such as machine, breakdowns, materials, shortages, quality, problems, absences
Long-term forecasting
More than three years,
-add facilities and or equipment
Intermediate range forecasting
3 to 30 months,
-add equipment, employees, shifts
-use inventory, subcontracting, back orders
Short term
Less than three months,
adjust use of employees and machines to meet demand
Developing capacity alternatives
-ForeCast demand accurately,
-design flexibility into systems,
-take stage of life cycle into account,
-take a big picture approach to capacity changes/systems approach,
-prepared to deal with capacity chunks,
-attempt to smooth capacity
-requirements, identify the optimal operating level
Service capacity planning
Presents challenges related to;
-the need to be near customers,
-the inability to store services,
-the degree of demand, volatility, volume, and timing of demand, service times for individual customers may vary
What is forecasting?
The art in science of predicting future events,
forecasting can be used for production, inventory personnel, and facilities
Accurate forecast help with what?
-Improve profits,
-reduce inventory levels,
-reduce inventory shortages,
-improve customer service levels
Features of forecasts
-Assumes a casual system,
-cast are rarely perfect because of randomness,
-casts are more accurate for groups of items than individual items,
-forecast accuracy decrease as time horizon increases
How to decide which casting model to use
-Cast accuracy is one of the most important criteria,
-goal is-to minimize forecasting error,
-tries to smooth out randomness while leaving real changes or patterns intact
Types of forecast
Qualitative, time series, associative model
Types of forecast
Qualitative, time series, associative model
Qualitative
Uses subjective inputs, like executive opinions, sales force opinions, and consumer surveys
Type series
Identifies patterns in the historical data (demanded sales) and then projects patterns into the future
Associative models
Use explanatory variables to predict the future
Time series analysis
Naïve approach, moving average, linear trend equation
Naïve forecast
The forecast for an upcoming period is equal to the previous period actual value. -
Can be used with a stable time series, seasonal variations, trend.
Lagging
The moving average will always lag behind the real changes that take place
Good service continuum
Products are typically never partly service or purely good based
Business operations overlap
Operations marketing, and finance departments overlap
Entropy
What happens when a company doesn’t pay attention to the exterior environment and makes changes/adjustments
Went to do preventative maintenance
Usage, passage of time, planed inspection
What has to happen in order for a business to pay employees more without having to make other adjustments?
Increase productivity
