MIDTERM EXAM Flashcards
-The part of a business organization that is responsible for
producing goods òr services.
Operations
-The management of operating systems. Operating systems are
manufacturing and service companies. It relates to the management of systems or processes that create goods and/or provide services.
Operations Management
What is the role of Operations Management?
to transform organizational inputs into
company’s products or services.
-are physical items that include raw materials, parts,
subassemblies, and final products.
Examples: Computer, cars, oven, shampoo
Goods
are activities that provide some combination of time,
location, form or psychological value.
Examples: Air travel, education, haircut, legal counsel,
surgery, songwriting, software development
Services
50% or more jobs are in these OM-related areas
- Customer Service
- Quality Assurance
- Production Planning and control
- Scheduling
- Job Design
- Inventory Management
What are the similarities of service and manufacturing?
- Both use technology
- Both have quality, productivity, and response issues
- Both must forecast demand
- Both can have capacity, layout, and location issues
- Both have customers,
suppliers, scheduling and
staffing issues
It supplies a large proportion of exports. Many service jobs are dependent on this as support.
Manufacturing
It accounts for almost
70% of the jobs in
Singapore and Japan
and these figures
continue to grow yearly.
Service
Characteristic of Customer contact in goods?
Low (high in service)
Uniformity of input in goods?
High (low in service)
Labor content of goods?
Low (high in service)
Uniformity of output in goods?
High (low in service)
Characteristic of output in goods?
Tangible (intangible in service)
Measurement of productivity in Goods?
Easy (difficult in service)
Opportunity to correct problem in Goods?
High (low in service)
Inventory in goods?
Much (little in service)
Evaluation in goods?
Easier (difficult in service)
Patentable in goods?
Usually (not usually in services)
What are the challenges in managing services?
• Service jobs are often less structured than
manufacturing jobs
• Customer contact is higher
• Worker skill levels are lower
• Services hire many low-skill, entry-level workers
• Employee turnover is higher
• Input variability is higher
• Service performance can be affected by worker’s personal factors
Why study Operations Management?
Every aspect of business affects or is affected by operations
Many service jobs are closely related to operations
- Financial services
- Marketing services Accounting services - - - -Information services
• Through learning about operations and supply chains
you will have a better understanding of:
- The world you live in
- The global dependencies of companies and nations
- Reasons that companies succeed or fail
- The importance of working with others
What is the scope of operations management?
Forecasting
Capacity planning
Facilities and layout
Scheduling
Managing inventories
Assuring quality
Motivating employees
Deciding where to locate facilities
What is included in inputs?
Raw Materials
Labor
Equipment
It is a step-by-step procedure
Transformation
What is included in outputs?
Goods and services
What are the factors that will affect the outcome from input to output?
Control
Value added
Transformation can be?
- Physical
- Location
- Exchange
- Storage
- Physiological
- Informational
What are the responsibilities of operations management?
Planning
Controlling
Staffing
Directing
How effectively an organization
meets the wants and needs of customers relative to others that offer similar goods or services
Competitiveness
Businesses compete using operations. These are.
- Product and service design
- Cost
- Location
- Quality
- Quick Response
- Flexibility
- Inventory Management
- Supply chain management
- Service
- Managers and workers
• A plan for achieving organizational goals
• Serves as roadmap for reaching the organizational destinations
Strategy
• This guides the organization
by providing direction for, and alignment of, the
goals and strategies of the functional units.
• This is a major success/failure
factor.
Organizational strategy
The approach, consistent
with organization
strategy, that is used to
guide the operations
function.
Operations strategy
A measure of the effective use of resources, usually expressed as the ratio of output to input
Productivity
Productivity measures are useful for?
- Tracking an operating unit’s
performance over time
• Judging the performance of an
entire industry or country
Why productivity matters?
√ High productivity is linked to higher
standards of living
As an economy replaces manufacturing jobs with lower productivity service jobs, it is more difficult to maintain high standards ofliving
√ Higher productivity relative to the
competition leads to competitive
advantage in the marketplace
• Pricing and profit effects
For an industry, high relative productivity makes it less likely it will be supplanted by foreign industry
It is difficult to measure and manage
because
• It involves intellectual activities
• It has a high degree of variability
Service Sector Productivity
· A useful measure related to productivity is this
• Where products are involved
• Ratio of output of good product to the quantity of raw
material input
Process Yield
What are the factors affecting productivity?
- Methods
- Quality
- Management
- Technology
- Capital
focusses on the development of the process necessary to produce the designed product.
refers to the way a certain product will be produced. In
Module one, process entails the conversion of inputs to outputs.
Detailed description of processes will be discussed on the next module.
Process Selection
A key factor in satisfying the customer. Organizations must be continually aware of what customers want, what the competitors are doing, what are new government regulations, and what new technologies are
available.
.
The design process involves motivation, ideas for improvement, organizational capabilities, and forecasting.Product life cycles, legal, environmental, and ethical
considerations influence design choices. Designers should also
consider the degree of standardization in their designs.
Product and service design
What are the product or service design activities
- Translate customer wants and needs
into product and service requirements - Refine existing products and services
- Develop new products and services
- Formulate quality goals
- Formulate cost targets
- Construct and test prototypes
- Document specifications
Objectives of product and service design
- Main Focus
- Customer satisfaction
Understand what the customer wants - Secondary focus
Function of product/service
Cost/profit
-Quality - Appearance
Ease of production/assembly - Ease of maintenance/service
Other issues in product and service design
- Product/service life cycles
- Degree of standardization
- Mass customization
- Product/service reliability
- Robustness of design
• Degree of newness
• Cultural differences
• Global Product Design
It refers to a sequence of stages of demand that products or services go through. The typical sequence consists of Introduction, Growth,Maturity, Saturation, and Decline.
In the early stages, there is a greater potential for returns, than in later stages. Many design changes can be anticipated early during this as familiarity with the product or service increases.
Life cycle
Extent to which there is an absence of variety in a product, service, or
process
Standardization
Advantages of standardization
- Reduced training costs and time
- More routine purchasing, handling, and - - - -inspection procedures
- Quality is more consictont
- Orders fillable from inventory
- Opportunities for long production runs and automation
- Need for fewer parts justifies increased expenditures
- Orders fillable from inventory
- Opportunities for long production runs and automation
- Designs may be frozen with too many
imperfections remaining - High cost of design changes increases
resistance to improvements - Decreased variety results in less
consumer appeal
Disadvantages of standardization
A strategy of producing standardized goods or services, but
incorporating some degree of customization in the final product. Mass
customization can be achieved through
Delayed differentiation and
Modulardesign
Mass Customization
Producing but not completing a product or service until customer preferences or specifications are known.
Once the customer preferences
are established, thev are
incorporated on almost completed
units. This approach reduces
product or service delivery lead times while reducing costs and improving the efficiency due to standardization.
Delayed differentiation or postponement
is a form of
standardization in which
component parts are
subdivided into modules that
are easily replaced,
interchanged, assembled, or
disassembled. Ït allows:
egsier diagnosis and remedy
of failures
easier repair and
replacement
simplification of
manufacturing and assembly
Modular design
The ability of a product, part, or
system to perform its intended function under a prescribed set of conditions
Reliability
Situation in which a product, part, or
system does not perform as intended
Failure
The set of
conditions under which an item’s reliability is
specified
Normal operating conditions
Design that results in products or
services that can function over a
broad range of conditions. The more robust the product is, the less likely it will fail.
Robustness does not only mean
making products heavier and bigger
but customers may also want a
design that is lighter and more
compact.
Robust design
What are the degree of newness
Product or service design change can range from the modification of an existing product or service or to an entirely new product or service:
1. Modification of an existing product/service
2. Expansion of an existing product/service
3. Clone of a competitor’s product/service
4. New product/service
Multinational companies must take into account cultural differences related to the product design. This can result in
different designs for different countries
or regions.
Cultural differences
- Uses combined efforts of a team of designers working
in different countries
Provides a range of comparative advantages over
traditional teams such as:
• Engaging the best human resources around the world
• Possibly operating on a 24-hr basis
• Global customer needs assessment
• Global design can increase marketability
Virtual teams
Designs and manufactures a product based on its own
specifications and sells to another company for branding and
distribution
Original Equipment Manufacturer (OEM)
Designs and manufactures a product according to purchaser’s
specifications
· Original Design Manufacturer (ODM)
Sells an entire product that is manufactured by a second company under its own brand
Original Brand Manufacturer (OBM)
What are the phases in product development process
- Idea generation
- Feasibility analysis
- Product specifications
- Process specifications
- Prototype development
- Design review
- Market test
- Product introduction
- Follow-up evaluation
customers, suppliers, distributors, employees and even maintenance and repair personnel. Ideas canbe generated from interviews, surveys, focus group discussions, complaints and
unsolicited suggestions for improvement.
Supply chain
by studying a competitor’s products or services and how the competitor operates (pricing policies, return policies, warranties, and location strategies, ideas can also be
generated.
Competitor based
Is the dismantling and inspecting
of a competitor’s product to
discover product improvements.
Reverse Engineering
A way of research and development where it advances knowledge about a subject
without near-term expectations of commercial
applications.
Basic Research
A way of research and development where it achieves commercial applications
Applied Research
A way of research and development where converts results of applied research into
commercial applications
Development
This entails market analysis (demand), economic analysis
(development cost and production cost, profit potential), and technical analysis (capacity requirements and availability, and the skills needed).
Feasibility Analysis
This entails detailed description of what is needed to meet or exceed customer wants and requires collaboration among legal, marketing, and operations.
Product Specifications
The focus here is the process needed to produce the
product. Alternatives must be weighed in terms of cost,
availability of resources, profit potential and quality. This
involves collaboration between accounting and operations.
Process Specifications
One or a few units are made following product and process specifications to foresee any problems that may be encountered in the future.
Prototype Development
This stage involves making any necessary changes. This requires collaboration among marketing, finance, engineering,design, and operations.
Design Review
this is used to determine the extent of customer
acceptance. If it will not be successful, there is a need to return
to the design review phase. This is handled by marketing.
Market Test
This focuses on promoting the product and is handled by the Marketing Department.
Product Introduction
This phase is handled by Marketing and is
concerned with determining if changes are needed and
refining forecasts.
Follow up evaluation
The designers’ consideration of the organization’s
manufacturing capabilities when designing a product.
The more general term design for operations
encompasses services as well as manufacturing.
Design for Manufacturing (DFM)
What are the designing for manufacturing
· Concurrent engineering
• Computer-aided design
• Production requirements
• Recycling
• Remanufacturing
• Value analysis
• Component commonality
is the bringing together
of engineering design and manufacturing personnel early in the design phase.
Concurrent Engineering
Why should product design be discussed?
If the design is not deliberated upon by the concerned parties, departments will move individually.
Example:
Let us assume that the Marketing Department wants to know what product will appeal to the market and they found out that the customers need a SWING.
Is a product design using computer graphics.
- Increases productivity of designers 3
To 10 times - creates a database for manufacturing information on product specifications - -provides possibility of engineering
and cost analysis on proposed
designs
Computer Aided Design
• Design for manufacturing (DFM)
• Design for assembly (DFA)
• Design for recycling (DFR)
• Design for disassembly (DFD)
•Manufacturability
Production Requirements
is the ease of fabrication
and/or assembly, which is important for:
• Cost
• Productivity
- Quality
Manufacturability
recovering materials for
future use
Recycling
What are the recycling reasons
- cost savings
- environment concerns
- environment regulations
Refurbishing used products by
replacing worn-out or defective components.
Remanufacturing
: Designing products so
that they can be easily taken apart.
Design for disassembly (DFM)
• Examination of parts/materials to reduce
UStand improve product nerform snA
• Ask questions:
• Cheaper parts/materials
• Function nececcar
• Simplified part
• Specifications relaxed
• Substitution by non-standard parts
Value Analysis
Multiple products or product families that have a high
degree of similarity can share components
Automakers using internal parts
- Engines and transmissions
- Water pumps
• Other benefits
Reduced training for assemble and installation- Reduced repair time and costs
Component Commonality
It is something that is done to or for a customer.
Service is an act
needed to provide the service
- Facilities- Processes- Skills
Service delivery system
Service design involves?
- The physical resources needed
The goods that are purchased or consumed by the customer, or
provided with the service
Service delivery system
The facilities, processes, and skills needed to provide a service
Product bundle
The combination of goods and services provided to a customer
Service package
The physical resources needed to perform the service
What are the differences between product design and service design?
• Products are tangible; services are intangible.
• Services created and delivered at the same time.
• Services cannot be inventoried.
• Services are highly visible to customers.
• Services have low barrier to entry and exit.
• Location is important to service design, with convenience as a major factor.
• Range of service systems
• Demand variability creates waiting lines or idle service resources.
What are the phases in service design
- Conceptualize
- Identify service package components.
- Determine performance specifications.
- Translate performance specifications into design
specifications. - Translate design specifications into delivery
specifications.
- A method used in service design to
describe and analyze a proposed
service
A useful tool for conceptualizing a
service delivery system
Service blueprinting
What are the characteristics of well designed service systems?
- Consistent with the organization missior
- User friendly
3.Robust - Easy to sustain
- Cost-effective
- Value to customers
- Effective linkages between back operations
- Single unifying theme
- Ensure reliability and high quality
