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SEM142 > Operations & Supply Chain Management > Flashcards

Operations & Supply Chain Management Flashcards

1
Q

What is operations management?

A

The systematic design, direction, and control of processes that transform inputs into services and products for internal, as well as external customers.

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2
Q

What is supply chain management?

A

The synchronization of a firm’s processes with those of its suppliers and customers to match the flow, services, and information with customer demand.

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3
Q

What is the role of operations in an organization?

A
  • Operations translates materials & services into outputs, which produces products & services
  • These products & services are marketed to produce sales revenue
  • Sales revenue provides financial resources and capital for more inputs
  • These material & service inputs then go through operations again to become products & services.
  • This continues*
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4
Q

Define process.

A

A process is any activity or group of activities that takes one or more inputs, transforms them & provides one or more outputs for it’s customers.

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5
Q

Explain the external environment.

A

Inputs such as workers, managers, materials etc are put through processes & operations to produce outputs. These outputs give information on the performance of the business. These outputs are then sold to internal and external customers.

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6
Q

What is the difference between a service process and a manufacturing process in terms of the nature of the output and degree of customer contact?

A

Manufacturing Process

  • Physical, durable output
  • Output can be inventoried
  • Low customer contact
  • Long response time
  • Capital intensive
  • Quality easily measured

Service Process

  • Intangible, perishable output
  • Output cannot be inventoried
  • High customer contact
  • Short response time
  • Labor intensive
  • Quality not easily measurable
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7
Q

Explain the Supply Chain View, and all it’s elements.

A

Each activity in a process should add value to the preceding activities; waste and unnecessary cost should be eliminated.

  1. Supplier Relations Process- A process to select the suppliers of services, materials, and info and facilitate the flow of these into the firm.
  2. New Service/Product Development- A process to design & develop new services or products from customer or market inputs.
  3. Order Fulfillment Process- A process to produce and deliver services or products to the external customer.
  4. Customer Relationship Process- A process that identifies, attracts & builds relationships with xternal customers & facilitates the placement of orders.
  5. Support Process- Processes like Accounting, Human Resources, Engineering & Info Systems that provides vital resources & inputs to the core processes.
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8
Q

What is an Operations Strategy?

A
  • Specifies how operations implements corporate strategy and helps build a customer-driven firm.
  • Corporate strategy provides an overall direction that services as the framework for carrying out all the organization’s functions.
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9
Q

Define Competitive Priorities & Competitive Capabilities.

A

Competitive Priorities are the critical dimensions that a process or supply chain MUST possess to satisfy its internal or external customers, both now and in the future.

Competitive Capabilities are the cost, quality, time & flexibility dimensions that a process or supply chain ACTUALLY possess and is able to deliver.

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10
Q

Define Order Winner & Order Qualifiers.

A

Order Winners are the criterion customers use to differentiate the services or products of one firm from another.

Order Qualifiers are the minimum level required from a set of criteria for a firm to do business in a particular market segment.

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11
Q

What is the formula for Productivity.

A

Productivity is the value of outputs (services & products) produced divided by the value of inputs (wages, equipment etc).

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12
Q

What are the advantages & disadvantages of Global Competition?

A

Advantages

  • Increased market penetration
  • Comparative cost advantages

Disadvantages

  • Political risks
  • Lower skilled workers
  • Vulnerability to supply chain disruptions (e.g. Japanese Earthquake in March 2011)
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13
Q

Define a project and explain it’s 3 main goals.

A
  • Projects are an interrelated set of activities with a definite starting & ending point, which results in a unique outcome from a specific allocation of resources.
  • Each Project is unique & temporary.

The 3 main goals are to:

  1. Complete on time
  2. Not exceed budget
  3. Meet specifications
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14
Q

Define project management & give examples.

A
  • Project management is a systemized, phased approach to defining, organizing, planning, monitoring & controlling projects.
  • Project often require resources from many different parts of the organization.
  • Different to routine production of products & services.

EXAMPLES.

  • Engineering: highways, bridges.
  • Political campaigns
  • Military operations
  • Advertising campaigns
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15
Q

Define a program.

A

A program is a collection of projects.

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16
Q

What are the steps in defining & organizing projects?

A

DEFINING & ORGANIZING PROJECTS.

  1. Define the scope, time frame & resources
  2. Select project manager & team
    - Good projects managers must be facilitators, communicators & decision makers.
    - Project team members must have technical competence, sensitivity & dedication.
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17
Q

What are the steps in planning a project?

A
  1. Define the Work Breakdown structure
  2. Diagram the network
  3. Develop schedule
  4. Analyze cost-time trade-offs
  5. Assessing risks
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18
Q

Define Work Breakdown Structure and it’s components.

A
  • A statement of all the tasks that must be completed
  • Decomposes tasks into smaller groups, then into activities
  • Activity=Smallest unit of work effort consuming time & resources that the project manager can schedule & control
  • Each activity must have an ‘owner’ who is responsible for doing the work.
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19
Q

What has to be done during the Planning stage?

A

Must determine what must be done and which tasks must precede others.

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20
Q

What has to be done during the Scheduling stage?

A

Determine when the tasks must be completed, when they can & when they must be started, which tasks are critical to the timely completion of the project, & which tasks have slack & how much.

Managers can:

  1. Identify start & finish times for each activity
  2. Estimate the completion time by finding the critical path
  3. Calculate the amount of slack for each activity
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21
Q

In terms of the Schedule, define the Path & Critical Path.

A

Path
-The sequence of activities between a project’s start & finish

Critical Path

  • The sequence of activities between a start & finis that takes the longest time to complete
  • Any delay in the critical path will delay the project
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22
Q

Define Project Crashing.

A

Project Crashing is the shortening of some activities within a project to reduce overall project completion time.

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23
Q

What are some examples of Project Costs?

A

Project Costs

  • Direct costs
  • Indirect costs
  • Penalty costs
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24
Q

In terms of Project Costs, what is:

  • Normal Time (NT)
  • Normal Cost (NC)
  • Crash Time (CT)
  • Crash Cost (CC)
A
  • Normal Time (NT) is the time necessary to complete an activity under normal conditions
  • Normal Cost (NC) is the activity cost associated with the normal time.
  • Crash Time (CT) is the shortest possible time to complete an activity.
  • Crash Cost (CC) is the activity cost associated with the crash time.
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25
Q

How do you determine the Minimum Cost Schedule?

A

Determining the Minimum Cost Schedule:
1. Determine the project’s critical path(s).

  1. Find the activity or activities on the critical path(s) with the lowest cost of crashing per week.
  2. Reduce the time for this activity until…
    a) It cannot be further reduced or
    b) Until another path becomes critical, or
    c) The increase in direct costs exceeds the savings that result from shortening the project (which lowers indirect costs).
  3. Repeat this procedure until the increase in direct costs is larger than the savings generated by shortening the project.
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26
Q

Define Project Risk.

A

Project Risk is the probability & consequence of a project not reaching its goal.

  • Timing
  • Weather
  • Performance
  • Scope
  • Funding
  • Unforeseen events & circumstances

Project Risk requires a Risk Management Plan.

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27
Q

What does a Risk Management Plan identify?

A
  • Risks (what can go wrong)
  • Probabilities (likelihood of something going wrong)
  • Consequences (what will happen if it goes wrong?)
  • Responsibilities (who is responsible for the plan?)

Periodic Updates- Plan MUST be regularly reviewed and updated.

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28
Q

What are the 4 T’s of Risk Responses?

A
  1. Tolerate - Contingency plans
  2. Transfer - Insurance
  3. Treat- Increase/Reduce exposure
  4. Terminate- Don’t proceed
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29
Q

Why do projects fail?

A
  • Poorly defined requirements
  • Underestimated resource requirements
  • Little/no end-user involvement
  • Unrealistic time frames
  • Scope creep
  • Poor control/oversight
  • Inadequate testing
  • Failure to kill the project ( Hope is not a strategy)
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30
Q

What are the 3 elements to the Statistical Analysis of assessing risk?

A
  1. Optimistic time (a)
  2. Most likely time (m)
  3. Pessimistic time (b)
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31
Q

Define Process Strategy.

A

Process Strategy is the pattern of decisions made in the managing processes, so that the processes will achieve their competitive priorities.

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32
Q

What are the elements of the Process Structure in Services?

A
  • Customer contact
  • Customization
  • Process Divergence
  • Flexible Flow
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33
Q

What are the elements of the Process Structure in Manufacturing?

A
  • Job Process
  • Batch (small or large)
  • Line
  • Continuous flow
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34
Q

What are 3 different Production & Inventory Strategies?

A
  1. Made to Order
  2. Assemble to Order
    - Postponement
    - Mass customization
  3. Made to Stock
    - Mass Production
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35
Q

What is a Layout and what 2 steps does it involve?

A

Layout is the physical arrangement of human & capital resources.

Involves 3 steps:

  1. Gather info
  2. Develop block plan
  3. Design a detailed layout
36
Q

What are the advantages & disadvantages of Customer Involvement?

A

Advantages

  • Increased net value to customer
  • Can mean better quality, fast delivery, greater flexibility & lower cost
  • May reduce product, shipping, & inventory costs
  • May help coordinate across supply chain
  • Processes ma be revised to accommodate the customers’ role

Disadvantages

  • Can be disruptive
  • Managing timing & volume can be challenging
  • Quality measurement can be difficult
  • Requires interpersonal skills
  • Layouts may have to be revised
  • Multiple locations may be necessary
37
Q

In Service Processes, what is the difference between high and low customer-contact processes?

A

High customer-contact (front office) process:

  • More divergence, more flexible flows
  • More customer involvement
  • More resource flexibility
  • Capital intensity varies with volume

Low customer-contact (back office) process:

  • Less divergence, more line flows
  • Less customer involvement
  • Less resource flexibility
  • Capital intensity varies with volume

Hybrid sits in between high and low customer-contact (or back and front office).

38
Q

In Manufacturing Processes, what is the difference between low-volume made to order and high-volume made to stock processes?

A

Low-Volume, Made-to-Order Process

  • More process divergence & more flexible flows
  • More customer involvement
  • More resource flexibility
  • Less capital intensity

High Volume, Made-to-Stock process

  • Less process divergence & more line flows
  • Less customer involvement
  • Less resource flexibility
  • More capital intensive
39
Q

What are the different aspects of Process Reengineering?

A
  1. Critical processes
  2. Strong leadership
  3. Cross-functional teams
  4. Information technology
  5. Clean-slate philosophy
  6. Process analysis
40
Q

What is the difference between Functions & Processes?

A

Functions:

  • Based on professional discipline (e.g. Finance, marketing, HR, operations)
  • Traditional hierarchical organisations (Stovepipes)
  • Encourages specialization

Processes:

  • An activity that transforms inputs to match customer needs
  • May be decomposed into sub processes
  • Can be cross disciplinary (e.g. product design, order fulfillment)
41
Q

Why should a firm analysis their processes?

A
  • A firm cannot gain a competitive advantage with faulty processes
  • Processes may be the least understood & managed aspect of a business
  • Processes can be analyzed by methodically using well-known tools & techniques
42
Q

What are the steps in a systematic approach to process analysis & improvement?

A
  1. Identify opportunity
  2. Define scope
  3. Document process
  4. Evaluate performance
  5. Redesign process
  6. Implement changes
43
Q

Define scope creep.

A

Scope creep refers to a project that has seen its original goals expand while it’s in progress.

44
Q

How & why should a firm document the process during process analysis?

A

How
1. Flowcharts
2. Service blueprints (used in service industries)
3. Process charts
4. Walk through (follow the paper)
Illustrate how a process operated & how well it is performing (performance measurement)

Why
Can help find performance gaps

45
Q

What is a process chart?

A

An organized way to document all the activities performed by a person/group.

Activities are typically organized into 5 categories

  • Operations
  • Transportation
  • Inspection
  • Delay
  • Storage
46
Q

What are some strategies for change?

A
  • Process reengineering
  • Radical redesign of a process to improve performance
  • Complete evaluation of entire process
  • The people who are involved with the process each day are the best source of ideas on how to improve it
  • Process improvement is the systematic study of activities and flows of a process to find ways to improve it – related to TQM
47
Q

What are the 6 questions that should be asked during the process redesign stage?

A
  1. What is being done?
  2. When is it being done?
  3. Who is doing it?
  4. Where is it being done?
  5. How is it being done?
  6. How well does it do on the various metrics of importance?
48
Q

Define brainstorming.

A

Brainstorming is the free exchange of ideas by knowledgeable people- evaluates ideas & identifies those with the highest payoff.

49
Q

TQM. In terms of generating ideas, what is benchmarking?

A

Benchmarking measures a firm’s processes, services & products against a standard or another firm.

  • Some corporations and government organizations have agreed to share data
    1. Competitive benchmarking is based on comparisons with a direct competitor
    2. Functional benchmarking compares areas with those of outstanding firms in any industry
    3. Internal benchmarking compares an organizational unit with superior performance with other units

-Collecting data can be a challenge.

50
Q

What is TQM & what are it’s 3 key points?

A

TQM (Total Quality Management) is a Japanese management philosophy designed to achieve high levels of quality & process performance.

Key points:

  1. Customer satisfaction
  2. Employee involvement
  3. Continuous Improvement (Kaizen)
51
Q

TQM. What is quality? (Common quality perspectives)

A

What is Quality?

  • Conformance to specification
  • Value
  • Fitness for use
  • Support
  • Psychological impressions
52
Q

TQM. What are the 4 costs of quality?

A

4 Costs of Quality:

  1. Prevention- Cost of preventing defects before they happen
  2. Appraisal- Cost of assessing process performance
  3. Internal failure- Costs of defects discovered during production
  4. External failure - Costs when customer discovers defect
53
Q

TQM. Explain continuous Improvement (Kaizen).

A

Problem solving process for improving quality must be built into the process (quality at the source)

  • Better to uncover source of quality problem & correct it than inspect & correct later (Jidoka)
  • Continuous incremental improvement
    1. Reduce Waste
    2. Simplify processes
    3. Speed up processes
  • PDSA Cycle
  • Use ‘quality tools’
  • Not unique to TQM
  • TQM extends to quality of product from suppliers.
54
Q

Define PDSA.

A

PDSA (Demming Wheel)

  1. Plan
    - Evaluate current process
    - Collect procedures, data, identify problems
    - Develop an improvement plan, performance objectives
  2. Do
    - Implement the plan - trial basis
  3. Study
    - Collect data & evaluate against objectives
  4. Act
    - Communicate the results from trial
    - If successful, implement new process
55
Q

What is the purpose of and give examples of Quality Tools.

A

Quality tools identify causes & solutions to problems.

  1. Checklists
    - Data check-off sheet designed to identify problems at each work station
  2. Histograms
    - Chart showing frequency distribution of observed values of a variable such as service time at a fast food drive-up window. Displays whether the distribution is symmetrical (normal) or skewed).
  3. Pareto charts
    - Technique that displays the degree of importance for each element. Often called 80-20 Rule. Principle is that quality problems are the result of only a few problems e.g. 80% of the problem caused by 20% of causes.
  4. Scatter diagrams
    - Shows how 2 variables are related. Can be used in a regression analysis to establish equation for the relationship.
  5. Cause-and-effect diagrams
    - aka FIshbone Disagram or Ishikawa Diagram
  6. Flow charts
  7. Control charts
56
Q

Explain the Process Six Stigma.

A
  • System for controlling & minimizing defects & variability in process & products.
  • Relies heavily on TQM principles
  • Measures performance as number of standard deviations away from process mean or target
57
Q

What are the 2 types of variations?

A
  1. Common Cause
    Variation that is random, unidentifiable & unavoidable.
  2. Assignable Cause
    Variation that can be identified & eliminated
58
Q

What are the steps in the Six Stigma DMAIC Model?

A
  1. Define
  2. Measure
  3. Analyze
  4. Improve
  5. Control
59
Q

What are some common mistakes in terms of managing processes?

A
  1. Not connecting with strategic issues
  2. Not involving the right people int he right way
  3. Not giving the design teams & process analysts a clear charter & then holding them accountable
  4. Not being satisfied unless fundamental “reengineering” changes are made
  5. Not considering the impact on people
  6. Not giving attention to implementation
  7. Not creating an infrastructure for continuous process improvement.
60
Q

What are advantages & disadvantages of complying to international quality standards?

A

Advantages

  • External benefits are primarily increased sales opportunities
  • ISO certification is preferred or required by many corporate buyers
  • Internal benefits include improved profitability, improved marketing, reduced costs, & improved documentation & improvement of processes.

Disadvantages

  • Certification can be expensive & time consuming
  • Certification must be maintained.
61
Q

What are the 3 different types of constraints?

A
  1. Physical (workspace capacity, resource: quality, availability or space)
  2. Managerial (policy, metrics, mindset)
  3. Market (demand)
62
Q

Define a Bottleneck.

A

A bottleneck is a capacity constraint resource whose available capacity limits the organization’s ability to meet the product volume or mix, or demand fluctuations.

63
Q

Define TOC.

A

TOC (Theory of Constraints) is the management approach to maximising profit by the effective use of resources.

64
Q

Define Drum-Buffer-Rope Systems.

A

Drum-Buffer-Rope Systems is a planning & control system that regulated the flow of work-in-process materials at the bottleneck.

  • Drum: Bottleneck schedule (sets the beat or the production rate for the entire plant & is linked to market demand).
  • Buffer: Time buffer that plans early flows into the bottleneck & thus protects it from disruption.
  • Rope: Communication that synchronizes all processes with ‘drum beat’.
65
Q

What are the key TOC Principles?

A
  • The focus should be on balancing flow, not on balancing capacity
  • Maximizing the output and efficiency of every resource may not maximize the throughput of the entire system.
  • An hour lost at a bottleneck is an hour lost for the whole system.An hour saved at a nonbottleneck resource is non productive
  • Inventory is needed only in front of the bottlenecks in order to prevent them from sitting idle, and in front of assembly and shipping points in order to protect customer schedules. Building inventories elsewhere should be avoided
  • Bottleneck flows should be equal to the market demand. Pacing everything to the slowest resource minimizes inventory and operating expenses
66
Q

What are the steps in implementing the TOC?

A

TOC implementation:

  1. Identify the System Bottleneck(s)
  2. Exploit the Bottleneck(s) maximize throughput at bottleneck
  3. Subordinate All Other Decisions to Step 2(Schedule non bottleneck processes to the needs of the bottleneck)
  4. Elevate the Bottleneck(s)(After 2 & 3, consider increasing capacity at bottleneck)
  5. Do Not Let Inertia Set In (repeat 1- 4 for new bottleneck)
67
Q

Define Lean Systems.

A
  • Lean systems maximise the value added by each company activity by removing waste and delays.
  • JIT supports Lean by reducing inventories, organising resources, information flows and decision rules
  • Lean supports firm’s internal linkages between its core and supporting processes and its external linkages with its customers and suppliers.
  • Kaizen relies on understanding that excess capacity or inventory hides process problems.
  • Goal of Lean: eliminate the eight types of waste (MUDA).
68
Q

Define JIT.

A

Just-in-time method.

  • Strategy that supports Lean and helps to minimize inventory and to supply product to consumers in a timely manner
  • Business model that allows raw materials to enter the production process as soon as they arrive at the factory
  • Reduces storage areas for large supplies of raw goods
  • Reduce cost of Work in Progress (WIP)
69
Q

What are the 8 types of MUDA (waste)?

A
  1. Over production - Manufacturing an item before it is needed
  2. Inappropriate processing - Using expensive high precision equipment when simpler machines would suffice
  3. Waiting - Wasteful time incurred when product is not being moved or processed
  4. Transportation - Excessive movement and material handling of product between processes
  5. Motion - Unnecessary effort related to the ergonomics of bending, stretching, reaching, lifting, and walking
  6. Inventory - Excess inventory hides problems on the shop floor, consumes space, increases lead times, and inhibits communication
  7. Defects - Quality defects result in rework and scrap, and add wasteful costs to the system in the form of lost capacity, rescheduling effort, increased inspection, and loss of customer good will
  8. Underutilisation of employees - Failure of the firm to learn from and capitalize on its employees’ knowledge and creativity impedes long term efforts to eliminate waste.
70
Q

Explain the 5 S Method in terms of Process Considerations.

A
  1. Sort- Separate needed from unneeded items and discard the unneeded.
  2. Straighten- Neatly arrange what is left, with a place for everything.
  3. Shine- Clean & wash work area
  4. Standardize- Establish schedules & methods of performing the cleaning & sorting.
  5. Sustain- Disciplined performance of the first 4 S practices, everyone understands, obeys and practices the rules.
71
Q

Explain TPM.

A

TPM (Total Preventative Maintenance.

  • Unplanned machine downtime is expensive
  • Lean systems emphases minimum inventory buffers
  • Better to perform preventative maintenance on machine on schedule than encounter unscheduled breakdown
  • Workers responsible for regular routine maintenance
72
Q

Explain Mixed-Model Assembly.

A

Items are produced smoothly in mixed batches throughout the day rather than in large batches of one item, followed by long shutdowns and setups and then by another large batch of another item.

73
Q

Explain Lot size of One (IDEAL)

A
  • Work should flow through the process without interruption one unit at a time based on the customer’s demand rate.
  • Delays associated with setting up equipment, must be eliminated.
74
Q

Explain the three aspects of lean processes “Quality at the source”.

A
  1. Jidoka (Workers are own QA inspectors)
  2. Poka-yoke (Mistake proof, minimise human error)
  3. Anadon (signal malfunction, mistakes stop Production line)
75
Q

Explain the reasons for two supply chain considerations.

A

Close Supplier Ties

  • Low levels of capacity slack or inventory
  • Look for ways to improve efficiency and reduce inventories throughout the supply chain
  • JIT II
  • In-plant representative
  • Benefits to both buyers and suppliers

Small Lot Sizes

  • Reduces the average level of inventory
  • Pass through system faster
  • Uniform workload and prevents overproduction
  • Increases setup frequency
76
Q

What are some considerations when designing a lean system layout?

A
  1. Line flows are recommended (eliminate waste)
  2. One worker, multiple machines (OWMM)
  3. Group technology
    - Group parts or products with similar characteristics into families
77
Q

Explain the Kanban System.

A

The Kanban System is a Japanese manufacturing system in which the supply of components is regulated through the use of an instruction card sent along the production line.

  1. Each container must have a card
  2. Assembly always withdraws from fabrication (pull system)
  3. Containers cannot be moved without a kanban
  4. Containers should contain the same number of parts
  5. Only good parts are passed along
  6. Production should not exceed authorization
78
Q

Explain VSM.

A

Value stream mapping is a qualitative lean tool for eliminating waste

Creates a visual “map” of every process involved in the flow of materials and information in a product’s value chain

79
Q

Compare traditional systems with lean systems for SUPPLIERS.

A 
Suppliers: 
Traditional
-Quantities dictated by cost and volume
-Incoming acceptance checks
-Arms length relationship

Lean

  • Frequent, smooth deliveries of small lots
  • The supplier considered part of the team.
  • No incoming inspection of the materials to check their quality
  • All parts must be of specified quality and guaranteed by the supplier.
80
Q

Compare traditional systems with lean systems for PLANNING & CONTROL.

A

Traditional
-The focus is on planning and forecasting

Lean

  • Focus is to attempts to respond to real time demand with flexible, quick operations.
  • Procedures are kept simple, visual, and made as routine as possible
  • Rather than planning and forecasting for an uncertain future, the firm works with known facts
81
Q

Compare traditional systems with lean systems for MAINTENANCE.

A

Traditional

  • Corrective maintenance and
  • Preventive maintenance

Lean

  • Relies much more heavily on the operator for many of the maintenance tasks, especially simple preventive maintenance
  • The maintenance function assumes greater responsibility and has greater visibility.
82
Q

Compare traditional systems with lean systems for QUALITY.

A

Traditional:
-Quality is to inspect the goods at critical points in the production system to remove defective items and correct the system.

Lean
-The goal is zero defects and perfect quality.

83
Q

Compare traditional systems with lean systems for INVENTORIES.

A

Traditional

  • Based on Cost
  • Inventory is a buffer to ensure continuous supply

Lean

  • Inventory is seen as an evil
  • It is a resource sitting idle, wasting money
  • Reduce the inventories until inventory investment is practically gone.
84
Q

What are the principles of Lean?

A
  • Specify value from the customer’s point of view.
  • Identify the value stream, the complete set of activities required to create the output valued by the customer.
  • Make value flow through the value stream by eliminating non-value added activities and streamlining the remaining value added steps.
  • Have the customer pull value through the value stream.
  • Pursue perfection.
85
Q

What are the benefits of Lean?

A

Lean Benefits:

  • Cost savings
  • Revenue increases
  • Investment savings
  • Workforce improvements
  • Uncovering problems

SEM142 (1 decks)

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