Session 1-5 Flashcards
What is the “1.0 definition” of operations management?
The study of how organisations produce and deliver goods and services
What is the “2.0 definition” of operations management?
The activity of directing/designing/delivering/developing the resources and processes that produce and deliver products and services
Which are the three levels of operations analysis?
- Supply network
- Operation
- Individual processes
(these are nested, with supply network being the top level)
Which are the four Ds?
Design (the operation’s products/services)
Direct (the overall operation strategy)
Delivery (planning/controlling it)
Develop (process performance)
What is the course definition of operations strategy?
The pattern of decisions and actions that shapes the long term capabilities of the operation and its contribution to overall business strategy, through the on-going reconciliation of market requirements and operations resources.
What is the definition of a bottleneck?
Part of a process that constrains the capacity of the whole system
Which are the four rules of bottlenecks
Devote proportionately more management attention to it
Take away all non essential activities from the bottleneck
Ensure that no substandard work passes through the bottleneck
Ensure that only essential work passes through the bottleneck
What is Little’s Law?
Throughput time = Work in progress * Cycle time
Name four advantages of long-thin
More controlled flow
Simple materials handling
Lower capital requirements
More efficient operation
Name four advantages of short-fat
Higher mix flexibility
Higher volume flexibility
Higher robustness
Less monotonous work
What is a pull system?
A system where material is moved only when the next stage wants it
What is a push system?
A system where material is moved on to the next stage as soon as it has been processed
Describe drum, buffer and rope control
The bottleneck is the drum, setting the beat for the rest of the process to follow
Place a buffer of inventory in front of it - makes sure it will always work
Have a communication rope between the bottleneck and the input process
Which are the three laws explaining how processes behave?
- Little’s law
- The law of bottlenecks
- The relationship between variability, utilization and waiting time
What is the course definition of design?
To conceive the looks, arrangement and workings of something before it is created
Which are the four Vs, in which processes differ?
Volume
Variety
Variation in demand
Visibility
Which conditions facilitate low cost processes?
Generally high volume together with low variety, variation and visibility facilitate low cost processes
Name the characteristics of supply networks
Complex, large (wide boundaries), constantly changing
How should processes be defined?
In any way we want
What is the difference between “operations” and “operational”?
Operational is the opposite of strategic; it means detailed, localized, short-term, day-to-day. Operations are the resources that produce products and services.
What should an operations strategy do?
- Provide a vision for how the operation’s resources can contribute to the business as a whole.
- Define the exact meaning of the operation’s performance objectives.
- Identify the broad deci- sions that will help the operation achieve its objectives.
- Reconcile strategic decision with performance objectives.
How does the business model differ from the operating model?
A ‘business model’ is the plan that is implemented by a company to gener- ate revenue and make a profit.
An ‘operating model’ is a ‘high-level design of the organization that defines the structure and style which enables it to meet its business objectives’. It focuses more on how an overall business strategy is to be achieved.
What is the long-term objective of operation strategy?
The long-term objective of operation strategy is to build operations-based capabilities.
What is the resource-based view’s counterpart to “barriers to entry”?
Barriers to imitation
What characterizes a strategic resource, according to the resource-based view?
Scarce
Imperfectly mobile (difficult to move out of the firm)
Imperfectly imitable or substitutible
The “value net” sees any business as being surrounded by four types of players – which are they?
Suppliers
Customers
Competitors
Complementors
What is the difference between outsourcing and offshoring?
Outsourcing means deciding to buy-in products or services rather than perform the activities in-house.
Offshoring means obtaining products and services from operations that are based outside one’s own country.
Name five typical categories that are used when evaluating potential locations
Capital requirements
Market factors
Cost factors
Future flexibility
Risk factors
Name the five manufacturing process types, starting at high volume & low variety
Project processes
Jobbing processes
Batch processes
Mass processes
Continuous processes
Name the three service process types, starting at high volume & low variety
Mass services
Service shops
Professional services
Define “throughput rate” (or “flow rate”)
The rate at which units emerge from the process, i.e. the number of units passing through the process per unit of time
Define “throughput time”
The average elapsed time taken for inputs to move through the process and become outputs
Define “work in progress”
The number of units in the process
Define “utilization”
The proportion of available time for which the re- sources within the process are performing useful work
How can visibility be included as a factor in process mapping?
By drawing “levels of visibility” in the map, and placing process stages accordingly
Define “task precedence”
Defining which activities must occur before others, because of the nature of the task itself
Define “process balancing”
Attempting to allocate activities to each stage as equally as possible
How can process balancing be visualized?
As bar charts corresponding to the utilization or capacity of each stage
How can the five performance objectives be classified into two categories?
By classifying them as qualifiers and order-winners
What is the gist of the process perspective?
The process perspective analyzes businesses as a collection of interrelated processes
What is the “need to know” when it comes to the three levels of operations analysis?
The role of each unit (operation/process/resource) in the network/operation/process, and the relationship between them
Which alternative to “grouping processes by function” is proposed in the book?
End-to-end, which processes being grouped as chains that satisfy particular customer needs
All operations should be expected to contribute to their business by…
…controlling costs
…increasing revenue
…making investment more effective
…growing long-term capabilities
Which of the four D:s is most relevant to strategy?
Direct
What is the most important short-term objective of operations strategy?
Satisfying market requirements
What is the purpose of operations strategy?
To improve the business’s performance relative to that of its competitors in the long term
What is the gist of the resource-based view?
Businesses with an ‘above average’ strategic performance are likely to have gained their sustainable competitive advantage because of their core competencies (or capabilities).
So:
The way an organization inherits, or acquires, or develops its operations resources will, over the long term, have a significant impact on its strategic success
What are the potential upsides of reducing the number of suppliers?
Reduced transaction costs
Enriched supplier relationships
Name four advantages of being small
Allow businesses to locate near to ‘hot spots’ that can tap into local knowledge networks
Responding rapidly to regional customer needs and trends by basing more and smaller units of capacity close to local markets
Taking advantage of the potential for human resource development by allowing staff a greater degree of local autonomy
Exploring radically new technologies by acting in the same way as a smaller, more entrepreneurial rival
All supply chain management shares one common, and central, objective - which one?
To satisfy the end customer
How is the success of capacity management generally measured?
The success of capacity management is generally measured by some combination of costs, revenue, working capital and customer satisfaction
State the exact definitions of the 4 D:s
Directing the overall strategy of the operation
Designing the operation’s products, services and processes
Planning and controlling process delivery
Developing process performance
Name the two central design tasks
- Conceiving the overall shape or nature of the process
2. Conceiving the detailed workings of the process
State examples for each of the layout types
Fixed: open-heart surgery
Functional: maternity ward
Cell (serial functional layouts): hospital (wards grouped by function)
Product: car factory
State examples for each of the process types
Project: most construction companies
Jobbing: furniture restorers
Batch: parts for assembly line production
Mass: coca-cola
Continuous: energy company
State examples for each of the service types
Professional services: consultants
Service shops: banks
Mass services: airlines
Which are the two types of variability?
Input variability & process variability
State the questions for each of the balanced scorecard measures
To achieve strategic impact, what aspects of performance should business process excel at?
To achieve strategic impact, how should we be viewed by shareholders?
To achieve strategic impact, how should we be viewed by customers?
To achieve strategic impact, how will we build capabilities over time?
State the four-step procedure of improvement
- Measure current performance
- Compare it with others
- Set performance targets
- Prioritize improvement
What does DPMO stand for?
Defects per million opportunities
What is the basic idea behind BPR?
Underlying the BPR approach is the belief that operations should be organized around the total process that adds value for customers, rather than the functions or activities that perform the various stages of the value-adding activity.
Supplier relations can be plotted across which continuum?
The transactional - partnership continuum
Which are the three broad techniques used in SCOR?
Business process modeling
Benchmarking performance
Best-practice analysis
Which are the five basic components of the SCOR model?
Plan (manage supply links)
Source (procurement/delivery)
Make (adding value)
Deliver (customer-facing fulfillment)
Return (reverse logistics)
State the four factors determining capacity level
Product/service mix
Duration over which output is required
Specification of output
Capacity “leakage”
Which are the factors in the 2x2 table of capacity variation?
- Predictability - unpredictable
* Demand - capacity
When is yield management useful?
When…
…capacity is relatively fixed
…the market can be fairly clearly segmented
…the service cannot be stored in any way
…the services are sold in advance
…the marginal cost of making a sale is relatively low.
Which are the four types of inventory?
Pipeline, safety, anticipation, cycle
What is the gist of EOQ?
Order inventory such that total costs (comprised of ordering and holding costs) are as low as possible with acceptable customer satisfaction
What is the gist of EBQ?
Like EOQ, but with gradual replenishment
Name two ways of matching supply more precisely with demand
Pull control
Kanbans
Name three ways of reducing variability
Level scheduling
Level delivery schedules
Adopt mixed modeling where possible
Describe the difference between short-term utilization and long term utilization in Lean synchronization
Resource utilization in sacrificed first, then regained through variability reduction
