Module 1: Intro to OM Flashcards
is the creation of goods and services
Production
is the set of activities that create value in the form of goods and services by transforming inputs into outputs
Operations Management
generates demand
Marketing
creates the product
Production/operations
tracks how well the organization is doing, pays bills, collects the money
Finance/accounting
A global network of organizations and activities that supply a firm with goods and services
Supply Chain
3 major functions of an organization
OM
Marketing
Finance
What Operations Managers Do
Planning
Organizing
Staffing
Leading
Controlling
10 Strategic Decisions
- Design of goods and services
- Managing quality
- Process and capacity design
- Location strategy
- Layout strategy
- Human resources and job design
- Supply-chain management
- Inventory management
- Scheduling
- Maintenance
Defines what is required of operations
Product design determines quality, sustainability and human resources
Design of goods and services
Determine the customer’s quality expectations
Establish policies and procedures to identify and achieve that quality
Managing quality
How is a good or service produced?
Commits management to specific technology, quality, resources, and investment.
Process and capacity design
Nearness to customers, suppliers, and talent.
Considering costs, infrastructure, logistics, and government.
Location strategy
Integrate capacity needs, personnel levels, technology, and inventory
Determine the efficient flow of materials, people, and information.
Layout strategy
Recruit, motivate, and retain personnel with the required talent and skills.
Integral and expensive part of the total system design.
Human resources and job design
Integrate supply chain into the firm’s strategy.
Determine what is to be purchased, from whom, and under what conditions.
Supply-chain management
Inventory ordering and holding decisions.
Optimize considering customer satisfaction, supplier capability, and production schedules
Inventory management
Determine and implement intermediate- and short-term schedules.
Utilize personnel and facilities while meeting customer demands.
Scheduling
Consider facility capacity, production demands, and personnel.
Maintain a reliable and stable process.
Maintenance
Where are the OM Jobs?
Technology/methods
Facilities/space utilization
Strategic issues
Response time
People/team development
Customer service
Quality
Cost reduction
Inventory reduction
Productivity improvement
Certifications
APICS, the Association for Operations Management
American Society for Quality (ASQ)
Institute for Supply Management (ISM)
Project Management Institute (PMI)
Council of Supply Chain Management Professionals
Charter Institute of Purchasing and Supply (CIPS)
Division of labor
(Adam Smith 1776; Charles Babbage 1852)
Standardized parts
(Whitney 1800)
Scientific Management
(Taylor 1881)
Coordinated assembly line
(Ford/ Sorenson 1913)
Gantt charts
(Gantt 1916)
Motion study
(Frank and Lillian Gilbreth 1922)
Quality control
(Shewhart 1924; Deming 1950)
Globalization year
1992
Internet year
1995
Characteristics of Services
Intangible
Produced and Consumed simultaneously
Unique
High customer interaction
knowledge based
services dispersed
quality hard to evaluate
reselling is unusal
Characteristics of Goods
tangible
can be kept in inventory
similar products
limited customer involvement
product standardized
makes automation feasible
typically produced at a fixed facility
has residual value
is the ratio of outputs (goods and services) divided by the inputs (resources such as labor and capital)
Productivity
Production is a measure of output only and not a measure of efficiency (T or F)
True
US economic system transforms inputs to outputs at an annual __% increase in productivity
2.5%
The productivity increase is the result of a mix of capital (__ of 2.5%), labor (__ of 2.5%), and management (__ of 2.5%).
38%
10%
52%
Quality may not change while the quantity of inputs and outputs remains constant (T or F)
F, it may change
External elements may cause an increase or decrease in productivity? (T or F)
T
Productivity Variables
Labor (10%)
Capital (38%)
Management (52%)
tells an organization where it is going
What do we contribute to society?
Provides boundaries and focus
Mission
If an external provider can perform activities more productively than the purchasing firm, then the external provider should do the work
Theory of Comparative Advantage
tells the organization how to get there
Action plan to achieve mission
Strategy
Strategies for Competitive Advantage
Differentiation – better, or at least different
Cost leadership – cheaper
Response – more responsive
