Mngt 352 Flashcards
Parkinson’s law
Work expands to fill the time available.
Theory X
The average human has an inherent dislike of work, and will avoid it if they can. They have relatively little ambition, and want security above all. As a result, most people must be coerced, controlled, directed and threatened to put forth adequate effort towards the achievement of organisational objectives.
Theory Y
The expenditure of physical and mental effort in work is as natural as play or rest. The average human does not inherently dislike work. Depending upon controllable conditions, work may be a source of satisfaction or a source of punishment.
Three traits of an adaptor
- Excel in finding ways to complete everyday tasks and overcome predictable challenges, improving on the methods that’ve been used in the past.
- Agents of stability and progress, often found in managerial or defined leadership roles.
- Favour precision and methodical approaches to problem solving.
Three traits of an innovator
- Creative in high pressure, uncertain or unexpected situations.
- Agents of change and reactiveness, often found in visionary leadership roles.
- Prefer to break the rules and are generally inefficient in their problem solving methods, but show great originality.
Why should organisations value both adaptors and innovators?
Both are usually required to solve complex problems.
How could theory X and Y assumptions be redefined?
Theory X could be seen as adaptive, and theory Y assumptions could be seen as innovative.
Why might an adaptive manager be more appropriate for a team of innovators?
Because the adapter would be able to keep the team on track.
What may innovative managers be better suited to?
An industry undergoing rapid change in technology or procedures.
Four Vs definition
Four dimensions that fundamentally determine the nature of any business’s operations and allows us to categorise, compare and understand their nature, structure, challenges and approaches.
What are the four Vs?
Volume, variety, variation in demand and visibility.
Volume definition
The quantity of products or services produced by an organisation.
Three traits of low volume production
- Rarely have specialised or expensive equipment.
- Each staff member performs more than one job.
- High unit costs.
Four traits of high volume production
- High product and process repeatability.
- Capital intensive
- High degree of specialisation
- Low unit costs
Variety definition
The number of different types of products or services produced, and how different they are from each other.
Three traits of high variety production
- Complex processing routines and supply chain.
- More flexible to match customer needs.
- Higher unit cost (usually low volume).
Three traits of low variety production
- Well defined supply chain
- Standardised processing routines
- Lower unit costs.
Variation in demand definition
The level of change and predictability in demand that a business’s operations experience.
Three traits of high variation
- Flexibility to change capacity
- Good at anticipating demand changes
- Higher unit costs
Two traits of low variation
- Stable and predictable
- Lower unit costs
Visibility definition
The visibility of the business and its processes to the customer, and of the customer to the business.
Four traits of high visibility
- Short waiting tolerance
- Satisfaction determined by customer perception.
- Good contact skills needed.
- Higher unit costs.
Three traits of low visibility
- Time lag
- Low contact skills
- Lower unit costs
Product mix
The complete set of products and/or services offered by a firm.
Process mapping
The activities involved in defining what a business does, who is responsible, to what standard a process should be completed and how the success of the process can be determined.
Operation definition and mapping symbol
A process that directly adds value, represented by a circle.
Storage mapping symbol
Upside down triangle
Decision mapping symbol
Sideways diamond
Direction of flow mapping symbol
Arrow
Activity mapping symbol
Sideways rectangle
Transport mapping symbol
Chunky arrow
Buffer
A storage area between stages where the output of a stage is placed prior to it being used in a downstream stage.
Blocking
Occurs when the activities in a stage must stop because there is no place to deposit the item just completed.
Starving
Occurs when the activities in a stage must stop because there is no work.
Bottleneck
Limits the capacity of the entire process
Little’s law
Throughput time = work-in-process x cycle time.
Four basic layout types
- Fixed position
- Process layout
- Cell layout
- Product layout
Three advantages of a fixed position layout
- Very high mix and product flexibility
- Product or customer not moved or disturbed.
- High variety of tasks for staff.
Two disadvantages of a fixed position layout
- Very high unit costs
- Scheduling of space/activities is difficult.
Three advantages of a process layout
- High mix and product flexibility
- Relatively robust against disruptions
- Relatively easy supervision of equipment or staff.
Two disadvantages of a process layout
- Low facilities utilisation
- Can have very high work-in-process or customer queuing.
Three advantages of a cell layout
- Can give a good compromise between cost and flexibility.
- Fast throughput
- Groups can result in good motivation
Two disadvantages of a cell layout
- Can be costly to rearrange existing layout.
- Can need more plant space or equipment.
Three advantages of product layout
- Low unit costs for high volume
- Gives opportunities for specialist equipment
- Materials or customer movement is convenient
Three disadvantages of a product layout
- Can have low mix flexibility
- Not very robust if there is disruption
- Work can be very repetitive
Six factors of a good layout
- Safe
- Clear flow
- Good staff condition
- Good management coordination
- Good use of space
- Long-term flexibility
First-tier
The description applied to suppliers and customers who are in immediate relationships with an operation with no intermediate operations.
Four considerations for location choice
- Corporate desires
- Attractiveness of region
- Labour availability/ cost
- Proximity to raw materials and customers.
Three methods to analyse location choice
- Break-even analysis
- Weighted factor method
- Centre of gravity method
Capacity
The maximum level of value-added activity that an operation, process or facility is capable of over a period of time.
Effective capacity
Design capacity plus or minus ‘real’ factors, such as staff sickness, machine downtime, wastage etc.
Preventative maintenance
Attempts to eliminate or reduce the chances of failure by servicing the facilities at pre-planned intervals. In doing so, process downtime can be planned and accounted for in such a way as to minimise disruption.
Output efficiency
Actual output/ effective capacity
Output utilisation
Actual output/ design capacity
Capacity leading
The strategy of planning capacity levels such that they are always greater than or equal to forecast demand.
Capacity lagging
The strategy of planning capacity levels such that they are always less than or equal to forecast demand.
Two advantages of capacity leading
- Always sufficient capacity to meet demand, so revenue is maximised and customers are satisfied.
- Most of the time there is a capacity cushion which can absorb extra demand if forecasts are pessimistic.
Two disadvantages of capacity leading
- Utilisation of the plants is always relatively low, therefore costs will be high.
- Risks of even greater over capacity if demand doesn’t reach forecast levels.
Two advantages of capacity lagging
- Always sufficient demand to keep the plants working at full capacity, therefore costs are minimised.
- Over-capacity problems are minimised if forecasts are optimistic.
Two disadvantages of capacity lagging
- Insufficient capacity to meet demand fully, so reduced revenue and dissatisfied customers.
- No ability to exploit short-term increases in demand.
Two key types of demand
Independent and dependent
Independent demand
Influenced only by market conditions, e.g. finished goods.
Dependent demand
Related to the demand of another item with independent demand, e.g. raw materials, labour.
Four main types of forecasting
- Qualitative
- Time series analysis (moving/ weighted moving average)
- Casual relationships
- Simulation
Grass roots qualitative forecasting
Derives forecast by compiling input from those at the end of the hierarchy who deal with what is being forecast. Those closest to the customer know best.
Panel consensus qualitative forecasting
Free open exchange at meeting. Discussion by group will provide better forecasts than any one individual.
Historial analogy qualitative forecasting
Ties what is being forecast to a similar item.
Delphi method qualitative forecasting
Group of experts respond to a questionnaire. Moderator compiles results then formulates a new questionnaire that is submitted to the group.
Inventory
The stored accumulation of material resources in a transformation system.
Five functions of an inventory
- To maintain independence of operations.
- To meet variation in demand.
- To allow flexibility in production scheduling.
- To provide a safeguard for variation in raw material delivery time.
- To take advantage of economic purchase order size
Holding costs
The costs of storage facilities, handling, insurance etc.
Setup costs
Making each different product involves obtaining the necessary materials, arranging specific equipment setups etc.
Ordering costs
Managerial and clerical costs to prepare the purchase or production order.
Shortage costs
When the stock for an item is depleted, an order for that item must either wait until the stock is replenished or be cancelled.
Holding cost fromula
Holding cost per unit x average inventory
Ordering cost formula
Ordering cost x number of orders per period
Total cost formula
Holding cost + Ordering cost
How can you find the total cost?
Differentiate the total cost formula and set to zero. Rearrange to find the economic order quantity, EOQ.
Lean operations
Moving towards the elimination of all waste in order to develop an operation that’s faster, more dependable and operates at low cost.
Just in time
Aims to meet demand instantaneously, with perfect quality and no waste.
Supply chain management
A total system approach to managing the flow of information, materials and services from raw material suppliers through factories and warehouses to the end customer.
Four duties of purchasing
- Identify sources of supply
- Negotiating contracts
- Maintaining a database of suppliers
- Obtaining goods and services
Three advantages of single sourcing
- Potentially better quality because more supplier quality assurance possibilities.
- Strong relationships which are more durable.
- Greater dependency encourages more commitment and effort.
Three disadvantages of single sourcing
- More vulnerable to disruption if a supply failure occurs.
- Individual supplier more affected by volume fluctuations.
- Supplier might exert upward pressure on prices if no alternative supplier is available.
Three advantages of multi-sourcing
- Purchaser can drive down price by competitive tendering.
- Can switch sources in case of supply failure.
- Wide sources of expertise and knowledge available.
Three disadvantages of multi-souricing
- Difficult to encourage commitment by supplier
- Less easy to develop effective supplier quality assurance.
- Suppliers less likely to invest in new processes.
Bullwhip effect
A supply chain phenomenon where orders to suppliers tend to have a larger variability than sales to buyers, which results in an amplified demand variability upstream.
Three benefits of supply chain management
- Improved inventory management
- Improved operational efficiency
- Improved flexibility
Three issues in supply chain management
- Complexity
- Volatility in the chain
- Information management
Three good characteristics of supply chain management
- Trust among trading partners
- Effective communications
- Supply chain visibility
Quality
The degree to which a set of inherent characteristics fulfil requirements.
Three requirements for a company to be ISO9000 certified
- Develop a written set of procedures for every activity.
- Oblige employees to follow these procedures.
- Pay a company to analyse and verify the above on a regular basis.
Three things poor quality leads to
- Scrap and rework
- Rescheduling, repairing and retesting
- Defective products in the hands of the customer.
Two costs of ensuring quality
- Appraisal costs
- Prevention costs - detecting defects, inspection etc.
Three stages where quality could be checked
- Finished products
- Raw materials/ purchased parts
- Before a costly operation or irreversible process
Total quality management
An emphasis on quality that encompasses the entire company - continuous improvement.
6 sigma
An industry standard.
Three advantages of theory X
- Some employees thrive on an authoritarian style of management.
- Focus on achieving the company goals.
- No room for ambiguity, which makes roles and responsibilities clear.
Three disadvantages of theory X
- Some employees don’t work well under such strict enforcement.
- Not everyone is motivated by financial gain, so they might not make much of an effort to achieve more.
- Can be detrimental to employee learning and development.
Three advantages of theory Y
- Much more appealing style of management.
- Gives employees freedom and responsibility, which encourages creativity and originality.
- Encourages teamwork and development.
Three disadvantages of theory Y
- Not everyone will be comfortable with undefined working boundaries.
- It would be easy to abuse the freedom and trust.
- Can be harder to measure success, as there is less focus on quantifiable metrics.
Self-actualisation (Maslow)
Achieving one’s full potential, seeking personal growth and peak experiences. Ties in with theory Y.
In-house
The act of transforming resources internally.
Outsourcing
The act of moving some of a firm’s internal activities and decision responsibility to outside providers.
Three advantages of outsourcing
- Up-to-date technology
- Superior design
- Increased focus on core tasks
Pareto Law
A general law found to operate in many situations that indicates that 20% of something causes 80% of something else, often used in inventory management (20% of products produce 80% of sales value).
Business-to-business
A situation where one business makes a commercial transaction with another, e.g. a business sourcing raw materials for their production process.
Diseconomies of scale
When a business’s output grows so large that it’s costs per unit start to increase.
Three causes of diseconomies of scale
- Communication breakdown
- Lack of motivation
- Lack of coordination
Vertical Integration
A term that describes the arrangement in which the supply chain of a company is integrated and owned by that company.
