Module 01 Flashcards
The part of a business organization that is responsible for producing goods and services.
Operations
The management of systems or processes that create goods and/or provide services.
Operations Management
Anything that is tangible and can be bought.
Physical items that include raw materials, parts, subassemblies, and final products.
Goods
Intangible products
Activities that provide some combination of time, location, form, or psychological value.
Services
The ideal situation for a business organization.
Achieve an economic match or supply and demand.
Responsible for securing financial resources at favorable prices and allocating those resources throughout the organization.
Finance
Responsible for assessing consumer wants and needs and selling and promoting the organization’s goods and services.
Marketing
Responsible for producing the goods or providing the services offered by the organization.
Operations
A sequence of activities and organizations involved in producing and delivering a good or service.
Supply Chain
Supply Chains and Operations are _
Intrinsically linked
T/F
Supply chains are both external and internal to the organization.
True
Part of a supply chain that provides raw materials, parts, equipment, supplies, and/or other inputs to the organization, and they deliver outputs that are goods to the organization’s customers.
External Part
The part of a supply chain that us part of the operations function itself, supplying operations with parts and materials, performing work on products, and/or performing services.
Internal Part
The creation of goods or services involves transforming or converting inputs into outputs.
Transformation
Measures taken at various points in the transformation process.
Feedback
The comparison of feedback against previously established standards to determine if corrective action is needed.
Control
The difference between the cost of inputs and the value price of outputs.
Value-added
T/F
In nonprofit organizations, the value of outputs is their value to society; the greater the value added, the greater the effectiveness of their operations.
True
T/F
In for-profit organizations, the value of outputs is measured by the prices the customers are willing to pay for those goods or services.
True
A combination of goods and services that can make a company more competitive.
Product packages
T/F
Manufacturing and service are not different in terms of what is done but are quite similar in how it is done.
False
Answer: Manufacturing and service are often different in terms of what is done but quite similar in how it is done.
Many services involve this. Where there is a high -, the interaction between the server and customer becomes a “moment of truth” that will be judged by the customer every time the service occurs.
Degree of Customer Contact
Services often have a higher degree of - than manufacturing jobs do, although automated services are an exception.
Labor Content of Jobs
This can be difficult for service jobs due largely to the high variations of inputs.
Measurement of Productivity
This is usually more challenging for services due to the higher variation in input, and because delivery and consumption occur at the same time. Unlike manufacturing, which typically occurs away from the customer and allows mistakes that are identified to be corrected, services have less opportunity to avoid exposing the customers to mistakes.
Quality Assurance
Many services tend to involve less use of inventory than manufacturing operations, so the costs of having inventory on hand are lower than they are for manufacturing. However, unlike manufactured goods, services cannot be stored. Instead, they must be provided “on demand.”
Amount of Inventory
It is easier to evaluate a manufacturing business since there is a standard to be followed.
Evaluation of Work
Product designs are often easier to patent than service designs, and some services cannot be patented, making them easier for competitors to copy.
Ability to Patent Design
Procurement of materials, supplies, and equipment.
Purchasing
Scheduling, performance standards, work methods, and material hunting.
Industrial Engineering
Shipment of goods to warehouses, retail outlets, or final customers.
Distribution
General upkeep and repairs of equipment, building; removal of toxic wastes, parking; security.
Maintenance
One or more actions that transforms inputs into outputs.
Process
These govern the operation of the entire organization.
Upper-Management Processes
These are core processes that make up the value stream.
Operational Processes
These support the core processes.
Supporting Processes
Having the right capacity requires accurate forecasts of demand, the ability to translate forecasts into capacity requirements, and a process capable of meeting expected demand.
Process Variation
T/F
Process variation and demand variability can make matching process output and demand difficult. Hence, managers must be able to deal with variation by knowing its different sources.
True
The greater the variety of goods and services offered, the greater the variation in production or service requirements.
Variety of Goods or Services being Offered
These are generally predictable. They are important for capacity planning.
Structural Variation in Demand
Natural variation that is present in all processes. Generally, it cannot be influenced by managers.
Random Variation
Variation that has identifiable sources. This type of variation can be reduced, or eliminated, by analysis and corrective action.
Assignable Variation
Consists of all activities directly related to producing goods or providing services.
Operations Function
T/F
A primary function of operations management is to guide the system by decision-making.
False.
Answer: A primary function of the operations manager is to guide the system by decision-making.
These are typically strategic decisions that usually require long-term commitment of resources and determine parameters of system operation.
System Design Decisions
These are generally tactical and operational decisions.
System Operation Decisions
A key tool used by all decision-makers.
Modeling
An abstraction of reality; a simplification of something.
Model
Look like their real-life counterparts. The advantage of these models is their visual correspondence with reality.
Physical Models
More abstract than their physical counterparts; that is, they have less resemblance to the physical reality. The advantage of schematic models is that they are often relatively simple to construct and change. Moreover, they have some degree of visual correspondence.
Schematic Models
They are the most abstract. They do not look at all like their real-life counterparts. These models are usually the easiest to manipulate, and they are important forms of inputs for computers and calculators.
Mathematical Models
These are decision-making approaches that frequently seek to obtain a mathematically optimal solution.
Quantitative Approaches
All managers use metrics to manage and control operations.
Performance Metrics
Giving up one thing in return for something else.
Trade-off
Providing highly customized products or services such as home remodeling, plastic surgery, and legal counseling.
Degree of Customization
What are the subsystems of a system?
Marketing, Operations, and Finance
Set of interrelated parts that must work together.
System
In nearly all cases, certain issues or items are more important than others.
Establishing Priorities
A few factors account for a high percentage of occurrence of some event(s).
Pareto Phenomenon
Began in the England in 1770s in which management theory and practice did not advance appreciably during this period.
Industrial Revolution
Division of Labor (1776)
Adam Smith
Cotton gin and interchangeable parts (1792)
Eli Whitney
A machine that quickly and easily separates cotton fibers from their seeds.
Cotton Gin or Cotton Engine
A movement that was led by an efficiency engineer, Frederick Winslow Taylor.
Scientific Management
Father of motion study
Frank Gilbreth
Nonmonetary rewards to workers; scheduling
Henry Gantt
Organization structure; use of experts
Harrington Emerson
Employed scientific management techniques in factories.
Henry Ford
Applications of psychology (focused on human factor - an application of psychology to work)
Lillian Gilbreth
Hawthorne studies on worker motivation, 1930
Elton Mayo
Motivation theory, 1940s; Hierarchy of Needs, 1954
Abraham Maslow
Two factor theory, 1959
Frederick Hertzberg
Theory X and Theory Y, 1960s
Douglas McGregor
Theory Z, 1981
William Ouchi
Mathematical model of inventory management, 1915
F.W. Harris
Statistical procedures for sampling and quality control, 1930s
Dodge, Romig, and Shewart
Statistical Sampling Theory, 1935
Tippett
OR application in warfare
Operations Research (OR) Groups
Linear programming, 1947
Mathematician who worked with the US Military during the World War II.
George Dantzig
Refined and developed management practices that increase productivity.
Credited with fueling the “quality revolution.”
Influence of Japanese Manufacturers
Use of the internet to transact business.
E-Business
Consumer-to-business transactions
E-Commerce
The application of scientific discoveries to the development and improvement of goods and services.
Technology
The discovery and development of new products and services.
Product and Service Technology
Refers to methods, procedures, and equipment used to produce goods.
Process Technology
Refers to the science and use of computers and other electronic equipment to store, process, and send information.
Information Technology (IT)
High on the list of major trends, and it promises to be high well into the future. Advances in materials, methods, and equipment also have had an impact on competition and productivity.
Management of Technology
The need for global supply chains have broadened the scope of supply chain management. However, tightened border security in certain instances has slowed some movement of goods and people. Moreover, in some cases, organizations are reassessing their use of offshore outsourcing.
Globalization
Importance of operations strategy on the overall success of their business.
Operations Strategy
Due to layoffs, corporate downsizing, and general cost-cutting.
Working with Fewer Resources
To maximize the revenue they receive from fixed operating capacity by influencing demand through price manipulation
Revenue Management
Six sigma process
Process Analysis and Improvement, and Quality Improvement
The ability of an organization to respond quickly to demands or opportunities.
Agility
Minimal amounts of resources to produce a high volume of high-quality goods with some variety.
Lean Production
Trade disputes and tariffs have created uncertainties for decision-makers.
Economic Conditions
Finding new or improved products or services are only two of the many possibilities that can provide value to an organization. Innovations can be made in processes, the use of the internet, or the supply chain that reduce costs, increase productivity, expand markets, or improve customer service.
Innovating
The numerous operations failures underscore the need to improve the way operations are managed. That relates to product design and testing, oversight of suppliers, risk assessment, and timely response to potential problems.
Quality Problems
The need for managing risk is underscored by recent events that include financial crises, product recalls, accidents, natural and man-made disasters, and economic ups and downs. Managing risks starts with identifying risks, assessing vulnerability and potential damage (liability costs, reputation, demand), and taking steps to reduce or share risks.
Risk Management
Low labor costs in third-world countries have increased pressure to reduce labor costs. Companies must carefully weigh their options, which include outsourcing some or all of their operations to low-wage areas, reducing costs internally, changing designs, and working to improve productivity.
Competing in a Global Economy
Many organizations have developed code of ethics to guide employees’ or members’ conduct.
Ethical Issues in Operations
A standard of behavior that guides how one should act in various situations.
Ethics
Accurately representing the organization’s financial condition.
Financial Statements
Providing adequate training, maintaining equipment in good working conditions, and maintaining a safe working environment.
Worker Safety
Providing products that minimize the risk of injury to users or damage to property or the environment.
Product Safety
Honoring warranties and avoiding hidden defects.
Quality
Not doing things that will harm the environment.
Environment
Being a good neighbor
Community
Avoiding false pretenses
Hiring and firing workers
Taking into account the impact on a community and honoring commitments that have been made.
Closing Facilities
Respecting workers’ rights and dealing with workers’ problems quickly and fairly.
Workers’ Rights
Efforts on cost and time reduction, and productivity and quality improvement, have expanded in recent years to include the supply chain. Opportunity now lies largely with procurement, distribution, and logistics – the supply chain.
The Need to Improve Operations
Organizations are increasing their levels of outsourcing, buying goods or services instead of producing or providing them themselves. As outsourcing increases, some organizations are spending increasing amounts on supply-related activities. Issues with imported products have led to questions of liability and the need for companies to take responsibility for monitoring the safety of outsourced goods.
Increasing Levels of Outsourcing
Transportation costs are increasing and they need to be more carefully managed.
Increasing Transportation Costs
Competitive pressures have led to an increasing number of new products, shorter product development cycles, and increased demand for customization.
Competitive Pressures
Increasing globalization has expanded the physical length of supply chains. A global supply chain increases the challenges of managing a supply chain.
Increasing Globalization
The increasing importance of e-business has added new dimensions to business buying and selling and has presented new challenges.
Increasing Importance of E-Business
Supply chains are complex; they are dynamic, and they have many inherent uncertainties that can adversely affect them, such as inaccurate forecasts, late deliveries, substandard quality, equipment breakdowns, and canceled or changed orders.
The Complexity of Supply Chains
Inventories play a major role in the success or failure of a supply chain, so it is important to coordinate inventory levels throughout a supply chain. Shortages can severely disrupt the timely flow of work and have far-reaching impacts, while excess inventories add unnecessary costs.
The Need to Manage Inventories
Trade wars can occur if a country objects to its trade imbalance with another country. This can result in tariffs and retaliatory tariffs, causing changes in cost structures. Uncertainty about how long and to what degree tariffs will be in place can greatly increase pressure on companies that have global supply chains.
The Need to Deal with Trade Wars
T/F
Models may be incorrectly applied, and the results misinterpreted.
True
