OPS Prelims Flashcards
Part of a business organization that is responsible for producing goods or services
Operations
Management of Systems or Processes that create goods and/or provide services
Operation Management
Physical Items that include raw materials, parts, subassemblies and final products
Goods
Activities that provide some combination of time, location, form, or psychological value
Services
Sequence of activities and organization involved in producing and delivering a good or service
Supply Chain
Measurement taken at various points in the transformation process
Feedback
Comparison of Feedback against previously established standards to determine if corrective action is needed
Control
Products are typically neither purely service or purely good-based
Goods - Service Continuum
Service Jobs that are closely related to operations
- Financial Services
- Marketing Services
- Accounting Services
- Information Services
What are the basic function of the business organization
- Marketing
- Operations
- Finance
Function of Finance & Operation
- Budgeting
- Economic Analysis of Investment proposals
- Provision of Funds
4 Function of Marketing & Operation
- Demand Data
- Product and Service Design
- Competitor Analysis
- Lead Time Data
APICS stands for?
The Association for Operational Management
ASQ Stands for?
American Society for Quality
ISM Stands For?
Institute for Supply Management
INFORMS Stands for?
Institute for Operations Research and Management Science
POMS Stands For?
The production of Operations Management Society
PMI stands for?
The Project Management Institute
CSCMP stands For?
Council of Supply Chain Management of Professionals
One or more actions that transforms input into output
Process
Three Categories of Business Processes?
- Upper Management Processes
- Operational Processes
- Supporting Processes
These Govern the Operation of the entire organization
Upper Management processes
These core processes that make up the value stream
Operational Processes
These support the core Processes
Supporting Processes
Supply > Demand
Wasteful Costly
Supply < Demand
Opportunity Lost customer dissatisfaction
Supply = Demand
Ideal
The greater the variety of goods and Services offered, the greater the variation in production or service requirements
Variety of goods or service 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
- Can be disruptive to operations and supply chain processes
- may result in additional costs, delays and shortage, poor and inefficient work systems
Variation
Range across the organization
Scope of Operations Management
What are the Role of the Operations Management
- the operations function consists of all activities directly related to producing goods or providing services
- Primary function of the operations management is to guide the system by decision making
These are typically strategic designs that require long term commitment of resources and determine parameters of system operation
System Design
These are generally tactical and operational decisions
- management of personnel
- Inventory management and control
- Scheduling
- Project Management
- Quality Assurance
System Operation
Most Operations Decision involve many alternatives that can have quite different impact on cost or profit
OM Decision Making
An abstraction of reality; a simplification of something
Model
What are the common features of Models?
They are simplification of real life phenomena
Quantitative information may be emphasized at the expense of qualitative information
Model Limitations
A decision-making approach that frequently seeks to obtain a mathematical optimal solution
Quantitative Approach
giving up one thing in return for something else
Analysis of Trade - Offs
A set of interrelated parts that must work together
Systems
Emphasizes interrelationship among subsystems
Main theme is that the whole is greater than the sum of its part
The system approach
Recognizing this allows managers to focus their attention to those efforts that will do the most good
Establishing Priorities
A few factors accounts for high percentage of occurance of some events
Pareto Phenomenon
Craft production - system in which highly skilled workers use simple, flexible tools to produce small quantities of Costumized goods
Pre- Industrial Revolution
Movement was led by efficiency engineer, Frederick Winslow Taylor
Scientific Management
Movement that emphasized the importance of the human element in job design
Human Relation Movement
Who applied psychology
Lillian Gilbreth
Hawthorne studies on worker motivation, 1930
Elton Mayo
Motivation Theory, 1940’s; Hierarchy of needs 1954
Abraham Maslow
Two Factor theory, 1959
Frederick Hertzberg
Theory of X and Y, 1960s
Douglas McGregor
Theory Z, 1981
William Ouchi
Refined and developed management practices that increase productivity
Influence of Japanese Manufacturer
Using resources in ways that do not harm ecological systems that support human existence
Sustainability
Ethical issues that may arise in many aspect of operations management
Ethical Issues in Operations
In the past, organizations did little to manage the supply chain beyond their own operations and immediate suppliers which led to numerous problems
The need for supply chain management
How effective an organization meets the wants and needs of customers relative to others that offer similar goods and services
Competitiveness
Identifying consumer wants and/or needs
Marketing’s Influence
A person or an organization that can affect, be affected by, or perceive itself to be affected by a decision or activities
Stakeholders
- Mission
- Goals
- Organizational Strategies
- Functional Strategies
- Tactics
Hierarchical Planning
The reason for an organization’s existence
Mission
Provide detail and the scope of missions
Goals
A plan for achieving organizational goal
Strategy
States the purpose of the organization
Mission statement
Overall strategies that relate to the entire organization
Organizational Strategies
Strategies that relate to each of the functional areas and that support achievement of the organizational strategy
Functional Level Strategies
The method and action taken to accomplish strategies
Tactics
The actual “doing” Part of the process
Operations
The special attributes or abilities that give an organization a competitive edge
Core Competencies
how can Strategy Formulation be effective?
Effective strategy formulation requires taking into account:
- Core Competencies
- Environmental Scanning
- SWOT
Characteristics that consumers perceive as minimum standards of acceptability for a product or service to be considered as a potential for ourchase
Order qualifiers
Characteristics of an organization’s goods or services that cause it to be perceived as better than the competition
Order winners
Strength and weaknesses
Internal Factors
Opportunities and Threats
External Factors
The approach, consistent with organization strategy that is used to guide the operations function
Operation Strategy
Strategy that focuses on quality in all phrases of an organization
Quality based strategies
Strategies that focuses on the reduction of time needed to accomplish tasks
Time based Strategies
A strategic approach for competitive advantage that emphasizes the use of flexibility to adapt and prosper in an environment of change
Agile Operations
A top-down management system that organization can use to clarify their vision and strategy and transform them into action
The Balance Scorecard Approach
Key tool used by all decision-makers
Modeling
It’s purpose is to determine conformity to (consumer and regulatory) requirements, and facilitate the effective deployment and improvement of the quality management system (QMS)
Quality Objectives
- Covered and aligned with Quality Objective
- Qualitative description of success of Quality Objective
Key Result Area (KRA)
Core- Priority of Top Management for monitoring & Decision-Making to attain the KRA’s
Key Performance Indicator (KPI)
Organizations of all types and sizes face internal and external factors and influences that make it uncertain whether and when they will achieve their objective
Risk
A Result of a situation favorable to achieving an intended result (IS09001, 2015)
Opportunity
- Accept to pursue opportunity
- Changing likelihood
- Changing consequences
Treat
Sharing risk with other parties
Transfer
- Avoidance
- Remove risk source
Terminate
- Retain risk by informed Decision
- Provide mitigation action
Take no Action
What are the 4 Risk Management Risk Treatment
- Treat
- Transfer
- Terminate
- Take no Action
A measure of the effective use of resources, usually expressed as the ratio of output to input
Productivity
Productivity measures are useful for?
- Tracking an operating units performance over time
- Judging the performance of an entire industry or country
Why Productivity Matters?
- High productivity is linked to higher standards of living
- Higher Productivity relative to the competition leads to competitive advantage in the marketplace
- For an industry, high relative productivity makes it less likely it will be supplanted by foreign industry
Partial Productivity Measures of Labor Productivity
Labor Productivity
- Units of output per labor hour
- Units of output per shift
- Value-added per labor hour
- Dollar Value of output per labor hour
Partial Productivity Measures of Machine Productivity
- Units of output per machine hour
- Dollar value of output per machine hour
Partial Productivity Measures of Capital Productivity
- Units of output per dollar input
- Dollar value of output per dollar input
Partial Productivity Measures of Energy Productivity
- Units of output per kilowatt-hour
- Dollar value of output per kilowatt-hour
Partial Productivity Measures of Service Sector Productivity
-It is difficult to measure and manage because it involves intellectual activities and it has a high degree of variability
What are the 5 Factors Affecting Productivity?
- Method
- Quality
- Management
- Technology
- Capital
Upper limit or ceiling on the load that an operating unit can handle
Capacity
What are the needs of Capacity?
- Equipment
- Space
- Employee skills
How do you define and measure capacity?
- Measure capacity in units that do not require updating
- Design Capacity
- Effective Capacity
Two definitions of Capacity
- Design Capacity
- Effective Capacity
The Maximum output rate or service capacity an operation, process, or facility is designed for
Design Capacity
Design capacity minus allowances such as personal time and maitenance
Effective Capacity
What are the determinants of Effective Capacity?
- Facilities
- Product and service factors
- Process factors
- Human factors
- Policy factors
- Operational factors
- Supply chain factors
- External factors
Strategies are typically based on assumptions and predictions about?
- Long-term demand patterns
- Technological change
- Competitor behavior
Build capacity in anticipation of future demand increases
Leading
Build capacity when demand exceeds current capacity
Following
Similar to the following strategy, but adds capacity in relatively small increments to keep pace with increasing demand
Tracking
Extra Capacity used to offset demand uncertainty
Capacity Cushion
How does Capacity Cushion strategy work?
Organizations that have greater demand uncertainty typically have greater capacity cushion
A type of planning that can present a number of challenges related to:
- The need to be near customers:
- convenience
- The inability to store services
- cannot store services for consumption later
Service Capacity Planning
What are the requirements for Forecasting Capacity?
- Long-term considerations relate to overall level of capacity
- Short-term considerations relate to probable variations in capacity
Strategy that is used to offset capacity limitations and that are intended to achieve a closer match between supply and demand
Demand Management Strategy
Operation in a sequence of operations whose capacity is lower than that of the other operations
Bottleneck Operations
Something that limits the performance of a process or system in achieving its goals
Constraint
