Final Exam Review Flashcards
Operations Management
The science and art of ensuring that goods and services are created and delivered successfully to customers
Goods
A physical product that you can see, touch, or possibly consume
Service
Any primary or complementary activity that does not directly produce a physical product
Durable goods
Good that does not wear out quickly and typically lasts at least 3 years
Non-durable goods
One that is no longer useful once it’s used, or lasts for less than 3 years.
Customer Benefit Package
A clearly defined set of tangible (goods-content) and intangible (service-content) features that the customer recognizes, pays for, uses, or experiences.
Primary good/service
The ‘core’ offering that attracts customers and responds to their basic needs
Peripheral goods/services
Nonessential to the primary good, but enhance it.
Variant
A CBP feature that departs from the standard CBP and is normally location or firm specific.
Core Process
Focused on producing or delivering an organization’s primary goods or services that create value for customers.
Support processes
Purchasing materials and supplies used in manufacturing inventory, installation, etc.
General management processes
Accounting and information systems, human resources management, and marketing.
Value chain
Network of facilities and processes that describes the flow of goods and services.
Value
The perception of benefits associated with a good, service, or bundler of goods and services in relation to what buyers are willing to pay for them
Supply chain
Portion of the value chain that focuses on the physical movement of goods and materials, and supporting flows of information and financial transactions through the supply, production, and distribution processes
Vertical integration
Refers to the process of acquiring and consolidating elements of a value chain to achieve more control.
Outsourcing
The process of having suppliers provide goods and services that were previously provided internally
Offshoring
Moving process capabilities from a domestic location to another country location while maintaining ownership and control
Reshoring
The process of moving operations back to a company’s domestic location
Three Waves of Outsourcing
- Goods producing jobs
- Simple service work
- Skilled knowledge work
Flexibility
The ability to adapt quickly and effectively to changing requirements
Design flexibility
Ability to develop a wide range of customized goods to meet different of changing customer needs
Volume Flexibility
The ability to respond quickly to changes in the volume and type of demand
Malcom Baldridge Performance Excellence Framework
Organization performance model that focuses on leadership driving the system that creates leaders
The Balanced Scorecard
Organizational performance model that focuses on four perspectives to an organization’s strategy (financial, customer, innovation and learning, and internal perspectives)
Value Chain Model
Organizational performance model that is centered around the value chain, stopping along points in the process to evaluate effectiveness.
The Service-Profit Chain
Organizational performance model based on set of cause-effect linkages between internal and external performance, with a special focus on customer interaction.
Interlinking
The quantitative modeling of cause-and-effect relationships between external and internal performance criteria
Strategy
A pattern or plan that integrates an organization’s major goals, policies, and action sequences into a cohesive whole.
Operations strategy
How an organization will execute its chosen business strategies
Competitive advantage
A firm’s ability to achieve market and financial superiority over its competitors
Core competencies
The strengths that are unique to an organization
Order qualifiers
Basic customer expectations; the minimum performance level required to stay in business
Order winners
Good and service features and performance characteristics that differentiate one customer benefit package from another and win the customer’s business.
Search attributes
Attributes that a customer can determine prior to purchasing the good
Experience attributes
Can be discerned only after purchase or during consumption or use
Credence attributes
Any aspects of a good that the customer must believe in but cannot personally evaluate even after purchase and consumption
Five competitive priorities
- Cost
- Quality
- Time
- Flexibility
- Innovation
Hard technology
Refers to equipment and devices that perform a variety of tasks in the creation and delivery of goods/services
Soft technology
Refers to application of the internet, software, and information systems to provide data, info, and analysis and to facilitate the accomplishment of creating and delivering goods and services
Robots
A programmable machine designed to handle materials or tools in the performance of various tasks
RFID Tags
Tiny computer chips that transmit radio signals to identify locations and track movements throughout the supply chain
E-Service
Using the internet and technology to provide services that create and deliver time, place, info, entertainment, and exchange value to customers
Scalability
A measure of the contribution margin required to deliver a good as the business grows and volumes increase
Reliability
The probability that a manufactures good performs its intended function for a stated period of time under specified operating conditions
How to improve reliability
Use better components or add redundant components
Voice of the customer
Customer requirements, as expressed in the customer’s own words
Quality function deployment
An approach to guide the design, creation, and marketing of goods by integrating the voice of the customer into all decisions
House of quality
Relationship matrix used to analyze relationships to aid in quality function deployment
Servicescapes
All the physical evidence a customer might use to form an impression.
Custom (make to order)
Type of good that is generally produces and delivered as one of a kind or in small quantities, and are deisgned to meet specific customer specifications
Option (assemble to order)
Type of good that is generally configurations of standard parts, subassemblies, or services that can be selected by customers from a limited set
Standard (make to stock)
Type of good that is made according to a fixed design, and the customer has no options from which to choose
Projects
Large scale, customized initiatives that consist of many smaller tasks and activities that must be coordinated and completed to finish on time and within budget (custom goods and services)
Job shop processes
Organized around particular types of general-purpose equipment that are flexible and capable of customizing work for individual customers (custom or option type products)
Flow shop processes
Organized around a fixed sequence of activities and process steps, such as assembly line, to produce a limited variety of similar goods (assembly line)
Continuous flow processes
Create highly standardized goods, usually around the clock in high volumes
Task
A specific unit of work required to create an output
Activity
A group of tasks needed to create and deliver an intermediate or final output
Process map
Describes the sequence of all process activities and tasks necessary to create and deliver a desired output or outcome
Value Stream
Refers to all value-added activities involved in designing, producing, and delivering a good to customers
Throughput
The avg. number of entities completed per unit time, the output rate, from a process
Bottleneck
The work activity that effectively limits the throughput of the entire process
Facility Layout
Refers to the specific arrangement of physical facilities
Product layout
An arrangement based on the sequence of operations that is performed during the manufacturing of a good or delivery of a service
Process layout
Consists of a functional grouping of equipment or activities that do similar work
Cellular layout
The design is not according to the functional characteristics of equipment, but rather by self-contained groups of equipments (cells) needed for producing a particular set of goods or services.
Job enrichment
Vertical expansion of job duties to give the worker more responsibility
Job enlargement
Horizontal expansion of the job to give the worker more variety, but not necessarily more responsibility
Work teams
Organizing workers into teams so that they are mutually responsible to each other
Ergonomics
Concerned with improving productivity and safety by designing workplaces, equipment, etc. that take into account the physical capabilities of people
Efficient supply chains
Designed for efficiency and low cost by minimizing inventory and maximizing efficiencies in the process flow.
Responsive supply chains
Focus on flexibility and responsive service and are able to react quickly to changing market demand and requirements
Push system
Produces goods in advance of customer demand using a forecast of sales and moves them through the supply chain to points of sale, where they are stored as finished goods inventory
Pull system
Produces only what is needed at upstream stages in the supply chain in response to customer demand signals from downstream stages
Postponment
The process of delaying product customization until the product is closer to the customer at the end of the supply chain
Vendor Managed Inventory
Where the vendor (e.g. a consumer goods manufacturer) monitors and manages inventory for the customer (e.g. a grocery store)
Capacity
Capability of a manufacturing or service resource to accomplish its purpose over a specified time period
Economies of scale
Achieved when the avg. unit cost of a good decreases as the capacity and/or volume of throughput increases
Diseconomies of scale
Occurs when the avg. unit cost of a good begins to increase as the capacity of throughput increase
Focused factory
Factory focused on:
- Narrow range of goods
- Target market segments
- Dedicated processes to maximize efficiency
Theory of constraints
Focuses on increasing total processes throughput by maximizing the utilization of all bottleneck work activities and workstations
Safety capacity
Amount of capacity reserved for unanticipated events
- Demand surge
- Materials shortages
- Equipment breakdowns
Planning horizon
Length of time on which a forecast is based
Trend
Gradual upward or downward movement in demand
Seasonal pattern
Repeatable up and down pattern. Not necessarily based on seasons of the year
Cyclical pattern
Regular pattern over a long period of time. Similar to seasonal, but longer periods of time
Random variation
Can’t be predicted. Unexplained deviation from a predictable pattern
Irregular variation
One time variation that isn’t predictable, but explainable
Independent Demand
Demand for a SKU that is unrelated to the demand for other SKUs and needs to be forecasted
Dependent demand
Demand directly related to the demand for other SKUs and can be calculated without needing to be forecast
