MGMT 333 exam 1 Flashcards
What is operations
The part of a business organization that is responsible for producing goods or services
The part of a business organization that is responsible for producing goods or services
operations
How can we define operations management?
The management of systems or processes that create goods and/or provide services
The management of systems or processes that create goods and/or provide services
define operations management
function overlap in finance & operations
Budgeting, Economic analysis of investment proposals, Provision of funds
Function overlap in marketing & operations
Demand data, Product and service design, Competitor analysis, Lead time data
**You have to take a ___ ___ instead of focusing on a particular sub-system or functional silo
systems approach
**You have to take a systems approach instead of focusing on a ___ ___ or ___ ___
particular sub-system, functional silo
Supply chain
a sequence of activities and organizations involved in producing and delivering a good or service
a sequence of activities and organizations involved in producing and delivering a good or service
Supply chain
Why Study Operations Management?
Every aspect of business affects or is affected by operations
The Transformation Process
**Value-Added describes the difference between the cost of inputs and the value or price of outputs.
goods are…
Goods are physical items that include raw materials, parts, subassemblies, and final products
services are…
Services are activities that provide some combination of time, location, form or psychological value
Goods-service Continuum
Products are typically neither purely service- or purely goods-based
Manufacturing vs. Service
- Degree of customer contact
- Labor content of jobs
- Uniformity of input
- Uniformity of output
- Measurement of productivity
- Production and delivery
- Quality assurance
- Amount of inventory
- Evaluation of work
- Ability to patent design
***Know the key differences between goods and services characteristics
characteristic. goods. services
output tangible intangible
customer contact. low high
labor content low high
uniformity of input. high low
measurement of productivity
easy difficult
opportunity to correct problems before delivery
high low
inventory much little
wages narrow range wide range
patentable usually not usually
OM-Related Professional Societies
**APICS - The Association for Operations Management
**The Project Management Institute (PMI)
if supply>demand, then…
wasteful and costly
if supply<demand, then…
opportunity loss and customer dissatisfaction
if supply=demand, then…
ideal
Why is it so difficult to match supply and demand?
**it changes constantly, it’s called variability
** four sources of variation
- Variety of goods or services being offered
- Structural variation in demand
- Random variation
- Assignable variation
explain Variety of goods or services being offered
The greater the variety of goods and services offered, the greater the variation in production or service requirements.
explain Structural variation in demand
These are generally predictable. They are important for capacity planning (seasonality)
explain Random variation
Natural variation that is present in all processes. Generally, it cannot be influenced by managers.
explain Assignable variation
Variation that has identifiable sources. This type of variation can be reduced, or eliminated, by analysis and corrective action.
How can variations be disruptive to operations and supply chain processes?
They may result in additional costs, delays and shortages, poor quality, and inefficient work systems
The operations function includes many interrelated activities such as:
Forecasting, Capacity planning, Locating facilities, Facilities and layout, Scheduling, Managing inventories, Assuring quality, Motivating employees
Role of the Operations Manager
The Operations function consists of all activities directly related to producing goods or providing services.
A primary function of the operations manager is to guide the system by decision making.
System design decisions - strategic
System operation decisions – tactical/operational
General Approach to Decision Making
Modeling is a key tool used by all decision makers
Model -
an abstraction of reality; a simplification of something
examples of models
Physical Model –
Schematic Model –
Mathematical Model –
Physical Model – miniature airplane
Schematic Model – drawing of a city
Mathematical Model – Inventory optimization
5 Hierarchical Planning
- Mission
- Goals
- Organizational strategies
- Functional strategies
- Tactics
Mission statement
**The fundamental purpose for the existence of any organization should be described by its mission statement
Goals
The mission statement serves as the basis for organizational goals
Strategies
A plan for achieving organizational goals
Tactics
The methods and actions taken to accomplish strategies; the “how to” part of the process
Operations
The actual “doing” part of the process
Core Competencies
The special attributes or abilities that give an organization a competitive edge
Environmental scanning is necessary to identify…
Internal factors - strengths and weaknesses
External factors - Opportunities and threats
**Strategic OM Decision Areas
Decision Area What the decisions affect
Product and service design
Costs, quality, liability, and environmental issues
Capacity
Cost, structure, flexibility
Process selection and layout
Costs, flexibility, skill level needed, capacity
Work design
Quality of work life, employee safety, productivity
Location
Costs, visibility
Quality
Ability to meet or exceed customer expectations
Inventory
Costs, shortages
Maintenance
Costs, equipment reliability, productivity
Scheduling
Flexibility, efficiency
Supply chains
Costs, quality, agility, shortages, vendor relations
Projects
Costs, new products, services, or operating systems
Quality-based strategy
Strategy that focuses on quality in all phases of an organization
Time-based strategies
Strategies that focus on the reduction of time needed to accomplish tasks
Agile operations
A strategic approach for competitive advantage that emphasizes the use of flexibility to adapt and prosper in an environment of change
formula for productivity
productivity = output/input
formula for partial measures
output/single input
or
output/labor
or
output/capital
formula for multifactor measures
output/multiple inputs
or
output/(labor+macine)
or
output/ (labor+capital+energy)
formula for total measure
goods or services produced/all inputs used to produce them
formula for productivity growth
[(current productivity-previous productivity)/previous productivity] x 100%
**TWO Key aspects of process strategy:
Capital intensity and Process flexibility
Capital intensity
The mix of equipment and labor that will be used by the organization
Process flexibility
The degree to which the system can be adjusted to changes in processing requirements due to such factors as:
Product and service design changes, Volume changes, Changes in technology
It is demand driven. Two key questions in process selection:
- How much variety will the process need to be able to handle?
- How much volume will the process need to be able to handle?
5 types of processes
- job shop
- batch
- repetitive
- continuous
- project
describe Job shop
-Small scale and flexible; used with low volume/high-variety
-More difficult to estimate costs - going into it unknowingly doing it
describe batch
-Moderate volume/moderate variety
-Processing still intermittent
-Less variety in jobs being processed
describe repetitive
-Higher volumes of more standardized goods/services
-Efficient and only slight flexibility of equipment is needed
describe continuous
-High-volume/non-discrete output
-Almost no variety
-Skill of workers can be low or high (depends on what it is)
describe project
-Non-routine/limited duration
a job shop is ___ variety and ___ volume. and example of job shop would be ___ or ___
high, low, repair shop, emergency room
a batch process is ___ variety and ___ volume. and example of batch process would be ___ or ___
moderate, moderate, commercial bakery, classroom lecture
a repetitive process is ___ variety and ___ volume. and example of repetitive process would be ___ or ___
low, high, assembly line, automatic car wash
a continuous flow process is ___ variety and ___ volume. and example of continuous flow process would be ___ or ___
very low, very high, petroleum refining, water treatment
