Operations Management: Process Management Flashcards
Business Process Management
management approach that seeks to coordinate the function of an organization to customer satisfaction
The process seeks effectiveness and efficiency through promotion of innovation flexibility and integration with technology
BPM can be categorized in 5 categories
- Design
- Modeling-what-if analysis
- Execution-changes are implemented. key indicators of success are developed
- Monitoring
- Optimization
Techniques for BPM
- Define- WHere are we now?
- Measure-Objectively are we getting better?
- Analyze-Best options available?
- Improve-is selected and implemented
- Control-Does it work?
Measures for BPM
1) Gross Revenue-Financial Non-Financial 2) Customer Contracts-Leads 3) Customer Satisfaction-Complaints 4) Operational Statistics-Time
Benefits of BPM
- Efficiency
- Effectiveness
- Agility- Responses to change are faster and more reliable
Process management (PDCA)
Plan-Design the planned process environment
Do-Implement the process improvement
Check -Monitor the process improvement
Act-Continuously commit to the process and reassess the degree of improvement
Benefits
1) Efficiency- Fewer resources are used to accomplish organizational objectives
2) Effectiveness-Obj. are accomplished with greater predictability
3) Agility- Responses to change are faster and more reliable
Shared Services
Seeking out redundant services, combining them and then sharing those services within a group or organization.
Ex. HR, payroll, and legal dept. services will be consolidated into one centralized functions.
Shared Services Implications for Business Risks and Controls -gaining efficiency
a) Service flow disruptions
b) Failure demand
Outsourcing
Contracting services to an external provider.
Outsourcing: Implications for Business Risks and Controls -gaining efficiency
a) Quality Risk -Product or service may be defective
b) Quality of Service-Poorly designed service agreements may impede the quality of service.
Outsourcing Issues Continued
a) Quality Risk -Product or service may be defective
b) Quality of Service-Poorly designed service agreements may impede the quality of service.
c) Productivity
d) Staff turnover
e) Language Skills
f) Security
g) Qualifications of Outsourcers
h) Labor Insecurity
Offshore Operations
relate to an outsourcing of services or business functions to an external party in a different country.
Common types of Offshore Outsourcing
a) IT
b) Business Process( Call centers)
c) Software research and development
d) Knowledge Process
Selecting Improving Initiatives
A) Irrational- Intuitive & Emotional
B) Rational- Structured & Systematic
Implementing Improvement Initiatives
1) Internal Leadership
2) Inspections
3) Executive Support
4) Internal Process Ownership-Accountability
Business Process Engineering
Refers to techniques to help organizations rethink how work is done to dramatically improve customer satisfaction and service, cut costs of operations and enhance competitiveness.
Performance Improvement
Provide the highest quality goods and services in the most efficient and effective manner possible.
Just in Time (JIT)
JIT mgmnt aticipates achievement of efficiency by scheduling the deployment of resources of JIT to meet customer or production requirements
JIT & Inventory
The underlying concept is that inventory does not add value. The maintenance of inventory on hand produces wasteful costs.
Benefits of JIT
1) Synch of production scheduling with dept.
2) Arrival of supplies at regular intervals throughout the production day.
3) Improved coordination and team approach with suppliers
4) More efficient flow of goods between warehouses and production
5) Reduces set-up time
6) Greater efficiency in the use of employees with multiple skills
Costs of Quality
Conformance with quality standards & correcting nonconformance with quality standards.
Prevention + Cure
Conformance Costs
Prevention and appraisal costs
Prevention costs - Prevent the production of defective units
1) Employee Training
2) Inspection expenses
3) Preventive maintenance
4) Redesign of product
5) Redesign of processes
6) Search for higher quality suppliers
Appraisal Costs- Discover and remove defective parts before they are shipped to the customer or the next department
1) Statistical Quality Checks
2) Testing
3) Inspection
4) Maintenance of the laboratory
Nonconformance Costs
Often difficult to compute because most of these costs are in the form of opportunity costs. Basically the customer telling us to fix it.
Internal Failure-Cure a defect discovered before the product is sent to the customer
1) Rework Costs
2) Scrap
3) Tooling Changes
4) Costs to discpose
5) Cost of the lost unit
6) Downtime
External Failure-Cure a defect discovered after the product is sent to the customer
1) Warranty Costs
2) Cost of returning the good
3) Liability Claims
4) Lost Customers
5) Reengineering an external failure
Total Quality Management
Organizational Commitment to customer focused performance that emphasizes both quality and continuous improvement
Quality circles
Gather people together that can best solve the problem
Objectives of TQM- Total Quality Management
a) Customer Focus
b) Continuous Improvement
c) Workforce Involvement-Quality Circles
d) Top Management Support
e) Objective Measures
f) Timely Recognition
g) Ongoing Training
Lean Manufacturing
requires the use of only those resources required to meet the requirements of customers
Focus of lean -Waste Reduction
Not quality focus
Continuous Improvement
Kaizen refers to continuous improvement efforts that improve the efficiency and effectiveness or organizations through greater operational control
ABC
Activity Based Management
ABC- Cost Identification
Highlight the costs of activities, Makes the id of costs of quality and value added activities more obvious
Theory of Constraints
States that org. are impeded from achieving objectives by the existence of one or more constraints.
Constraints
a) Internal Constraints =When the market demands more than we can produce.
Internal Constraints
1) Equipment may be inefficient or used inefficiently
2) People may lack the necessary skills or mind set necessary to produce required efficiencies.
3) Policies may prevent the efficient use of resources.
External Constraints
Exist when our system produces more than the market requires.
Six Sigma
Anticipates the use of rigorous metrics in the evaluation of goal achievement.
Just In Time Characteristics
Insignificant setup times and costs.
.
Lot sizes equal to one.
Balanced and level workloads.
