TentaP Flashcards
What are the key decisions for operations management?
- Design of goods and services
- Managing Quality
- Process and capacity strategy
- Location strategy
- Layout strategy
- Human resources and job design
- Supply-chain management
- Inventory management
- Scheduling
- Maintenance
At which levels can operations be analyzed?
Level of the supply chain
Level of operation
Level of processes
What are services characterized by?
Perishability (It is consumed the same time as it is produced)
Intangibility (Cannot touch)
Variability (All services are different depending on who provides them)
Inseparability (The inability to separate the provider from the actual service)
How do processes differ in their characteristics? (Four V’s)
Volume of their output
Variety of their output
Variation in the demand
Visibility of the production
Give examples of strategies for shifting demand to match capacity (strategies on the demand side)
- Use reservation systems (Ex. Restaurants)
- Vary the service offering to appeal a new market segment
- Communicate with customers (Ex. Gyms with busy days and times)
- Differentiate on price (offer discounts)
What are strategies for adjusting capacity to match demand? (Strategies on the supply side)
- Adjust capacity to match fluctuations in demand
Stretch time (Extend/reduce hours of operation,
Stretch labor (Ex. Temporary workers)
Stretch facilities (Rent additional space, share facilites)
Give examples of how the business environment is changing
More choice and variety
Demands for better service
Rapidly developing technologies
Increased ethical sensitivity
Environmental impacts (new chain in operations)
Legal regulations
Security awareness
Why is it more and more risky to keep no inventory? What should you do?
The world is getting more dynamic.
All of a sudden demands and supply change.
Build a safety stock
Supply chains is what determines success
Work closely with struggling suppliers
Reduce dependency (increase number of suppliers)
Name the three levels of operations performance
Societal level - operations sustainability
Strategic level - operations strategic impact
Operational level - operations performance objectives
Name the key factors in the societal level (for operations sustainability)
Social (People):
Employee satisfaction
Health and safety
Community programmes
Gender Balance
Economic (Profit)
Return on invested capital
Share price
Profitable growth
Planet:
Environmental obligations
CO2 emissions
Water usage
Ex: The CP oil disaster
- Cust cutting decisions and an inadequate safety system
- Lead to -> deaths of animals
Name the five operations performance objectives at the operations level
Quality – People pay more for higher quality products
Speed – People want things they ordered as fast as possible
Dependability – delivered when things are needed or promised
Flexibility – Being able to adapt to different changes. Has several disting meaning but is always associated with an operation’s ability to change.
- Product/ service flexibility. Ex. Introducing new treatments, models, routes and goods
- Mix flexibility. Ex. Wide range of treatments, options and goods stocked.
- Volume flexibility. Ex. The ability to adjust number of patients treated, cars manufactured, the frequency of services and customers served.
- Delivery flexibility. Ex. The ability to reschedule appointments, trips, to get out-of-stock items.
Cost – Being productive. Ex:
- Bought-in materials and services
- Technology and facilities costs
- Staff costs
What is single-factor productivity?
Output from the operation / One input to the operation = Single-factor productivity
What is multi-factor productivity?
Output from the operation / All inputs to the operation = Multi-factor productivity
Example: EasyJet
1. What do they base their competitive advantage on?
2. What are their operations strategy to support this competitive advantage?
3. To what extent has Easyjet limited its ability to perform well against the other operations performance objective?
- Price
Availability - Reduce costs by being very good at controlling costs
Limited service
Not focusing on the experience - Qualitive is sacrificed to be able to give the customers a better price.
What are polar diagrams?
Used as a profile to see which dimensions that are the most important for a company. Can be used to compare different companies, especially when looking into competitors.
Give examples of operations decisions
Facilities (location, size, specialization)
Capacity (Quantities, times, types)
Technology (equipment, automation)
Labor (Wage policies, level of specialization)
Organization
What are the four perspectives on operations strategy?
- Top down
Operations strategy should interpret higher-level strategy - Market requirements
Operations strategy should satisfy the organization’s market - Bottom-up
Operations strategy should learn from day-to-day experience - Operations resources
Operations strategy should build on operations capabilities.
What is the difference between the outside-in VS inside-out strategy
With the outside-in strategy, you first observe what the customer wants, then find and offer the solution.
In the inside-out strategy, however, you first develop the product or service, then you create desire for it in customers.
What are order-winning factors?
What makes them chose you (What they look at second)
What are Order-qualifying factors:?
relevant factors for the customer (what they look at first)
What do you use the importance-performance matrix for?
As a performance analysis to see:
1. Where resources should be spent
2 Where are we comparing to competitors
What are external customers and how do you satisfy them?
External customers – People and companies outside of the company
The only way to satisfy external customers is to ensure that the internal customers are satisfied
Who are the internal customers?
employees of the company
What can a delay in-time-to-market result in?
Increased development costs, reduced revenues
What are factors that can reduce time-to-market?
- Simultaneous development of the various stages in the process
- An early resolution of deign conflict and uncertainty
- An organizational structure that reflects the development project-
Name the three factors of design
Products and services should be designed so that they can be created effectively.
Products and services design has an impact on the process design and vice versa
Processed should be designed so that they can create all products which the operation is likely to introduce
What is the design funnel?
- The Design Funnel doesn’t introduce any new tools. It’s simply a roadmap of when a designer can use which tools to stimulate better work
- Progressively reducing the number of possibilities until the final design is reached:
Describe Quality function development (house of quality)
- To try to ensure that the eventual innovation actually meets the needs of its customers.
The “Whats” (customer requirements/voice of the customer)
The competitive scores indicate the relative performance of the product (1-5)
The “Hows” (design characteristics) the dimensions of the design that is meeting the customer requirements
The central relationship matrix. Represents a view of the interrelationship between the “Whats” and “Hows”. Indicated the strength of the relationship. (Usually none)
Technical assessment of the product. Contains the importance of each design characteristic.
The roof, captures the information the tram has about the correlations (postive or negative) between the various design characteristics.
Name the different processes in the process design model
- Design processes
- Project processes
- Jobbing processes
- Batch processes
- Mass (line) processes
- Continuous processes
Name the 4 different services in the service process matrix
- Professional service (high customer participation, high service customization) Ex: Doctors, lawyers, accountants
- Service shops (low customer participation, high service customization) Ex: hospitals, auto repair shops, restaurants
- Mass service (high customer participation, low service customization) Ex: retail firms, wholesalers, schools
- Service factory (low customer participation, low service customization) Ex: fast food, hotels, airlines
What is throughput time?
The elapsed time between a unit entering the process and then leaving it (start to finish)
What is cycle time?
Average time between completion of units
Name a few characteristics of what makes a good layout
- Safe place to work and/or to buy
- Length of flow (products moved within the company, cost of the distance)
- Minimize delays (to keep inventories small)
- Reduce WIP
- Clarity of flow (Ikea)
- Staff conditions (good environment for workers)
- Accessibility
- Use of space
- Use of capital
- Long-term flexibility (technology changes etc)
- Image (5-star hotel)
Ex. Ikea (arrows on the floor), Food stores (in which order to they put groceries),
Name the four basic layout types that practical layouts are derived from
o Fixed-position layout
o Functional (process) layout
o Cell layout
o Line (product) layout
Give an example of the fixed position layout and its advantages VS disadvantages
Ex. Full-service restaurant. You sit at your table, you order there, you get served, you eat and you pay at the same place.
Advantages:
Very high mix and product flexibility
Product or customer not moved or disturbed
High variety of tasks for staff
Disadvantages:
Very high unit costs
Hard to schedule space and activities
Movement of equipment and staff
Give an example of the functional (process) postion layout and name its advantages VS disadvantages
Ex. Different sections in a library
Advantages:
High mix and product flexibility
Robust in the case of disruptions
Easy supervision of transforming resources
Disadvantages:
Low facilities utilization
High WIP or customer queuing
Hard to control
Describe and give an example of a cell layout and name the advantages and disadvantages of the layout
Different cells for different products (Ex. All that is needed to produce one product is in one cell)
Advantages:
A compromise between cost and flexibility for a high variety of operations
Fast throughput
Good staff motivation?
Disadvantages:
It can be costly to rearrange
Can require more equipment
Can give lower equipment utilization
Ex. Shop-within-a-shop in a department store
Give an example of a line layout and name the advantages VS disadvantages with it
Ex.. Ikea
Advantages:
Low unit costs for high volume
Give opportunities for specialization of equipment
Materials or customer movement is convenient
Disadvantages:
Low mix of flexibility
Not very robust if there is disruption
Work can be repetitive
Name and describe the three different types of planning in terms of time
Long-range planning
- Planning focusing on horizon greater than one year
- Usually performed annually
-Capacity planning
Intermediate-range (medium) planning
- Planning focusing on a period from 3 to 18 months
- Time increments are weekly, monthly or quarterly
- Tactical Planning (aggregate planning)
Short-range planning
- Planning covering a period from 1 day to 6 months
- Daily or weekly time increments
- Operational level (day-to-day)
Name and describe the three different types of planning
Strategic planning:
- Long-range
- Defines the major goals of the company (>2 years)
Goals:
Cost reduction
Production technology
Quality
Tactical Planning:
- Intermediate range
- Develops from the corporate goals of the company
Analyses:
Workforce capacity
Inventory levels -> Aggregate planning
Production capacity
Operational planning:
-Short range
- Implements the tactical goals at an operational level from < 6 months
- Decomposes the Master Production Schedule in a detailed way
-> Decompose the MPS and MRP to Scheduling and control
Name the external and internal demand predictions for planning for production
External:
- Competitors behavior
- External capacity (subcontracts)
- Raw material availability
- Market demand
- Economic conditions
Internal:
- Current physical capacity
- Current workforce
- Inventory levels
- Activities required for production
What does an aggregate operations plan do?
Translates annual and quarterly business plans into broad labor and output plans for the intermediate term.
Describe sales and operations planning
A process that helps firms provide better customer service, lower inventory, shorten customer lead times, stabilize production rates, and give top management a handle on the business
Name the three production planning strategies to answer new demands
- Chase strategy
Match the order rate by hiring and laying off employees
Must have a pool of easily trained applicants to draw on
Based on demand forecast. - Stable workforce – Variable work hours
Vary the number of hours worked through flexible work schedules or overtime - Level strategy
Demand changes are absorbed by fluctuating inventory levels, order backlogs, and lost sales
Why would you try to avoid inventories?
Costs ( working capital, administrative costs, insurance, time costs (customer), maintenance=
Space (storage, areas for waiting, memory capacity)
Quality (damage, upset customers, data may be lost)
Operational/Organizational (hide problems, pressure on staff, management)
How could you reduce physical inventory?
- Improve demand forecasting
- Increase flexibility
- Persuade suppliers to adopt everyday low prices
What is independent VS dependent demand?
Independent demand – Demand for the final end-product or demand not related to other times.
Dependent demand – Derived demand items for component parts, subassemblies, raw materials etc)
What is the Pareto principle?
The Pareto principle, also known as the 80/20 rule, is a theory maintaining that 80 percent of the output from a given situation or system is determined by 20 percent of the input.
Describe the difference between a Q-model and a P-model
Q-model
- Fixed order quantity model
- Q- constant
- R - when the inventory position drops to the reorder level
- Size of the inventory is less than P-model
- Higher priced items
P-model
- Fixed-time period
- q is variable
- T when the review period arrives
- counted only at the review period
- inventory is more than in q-model
- Efficient because multiple items can be ordered at the sam time
- Usually used with lower-cost items
What is the EOQ?
“The optimal quantity to order taking into consideration both the cost to carry inventory and the cost to order them”
What type of costs does the total annual cost consist of?
Annual purchase cost + Annual ordering cost + Annual holding cost
What is the service level and what is it determined by?
Customer sensitivity regarding stock-outs vary from one product to another
In inventory management, service level is the expected probability of not hitting a stock-out during the next replenishment cycle
The target service level can be defined as a trade-off between the cost of inventory and the cost of stock-outs.
When do we need more units in our safety stock?
When demand is uncertain. Higher demand = higher safety stock
We need to be more protected against the probability of stocking out
Safety stock demands on – protection of stockout and changes in demand
Why build a safety stock if demand is fixed? No reason
What is MRP and what is it used for?
Material Requirements planning – dependent demand
- Approach to calculate how many parts or materials of particular types are required and at what times they are required
- MRP provides time scheduling information specifying when each of the materials, parts and components should be ordered or produced
- For every part or assembly that is required, but not available, identify when work needs to be started for it to be made available by its due date
- Dependent demands drives MRP
What is the main goal of MRP?
Keep stock levels as low as possible
What is the bill of materials (BOM) (product tree=
A diagram that describes the existing relationship between the different materials (process and quantities). Which products and which quantities are needed? How to make one unit? When to start making component A, B, etc.
What are the 4 steps in the managing capacity process?
- Measure aggregate demand and capacity and understand changes to demand and capacity
- Determine the operation’s base level of capacity
- Identify and select methods of coping with mismatches between demand and capacity
- Understand the consequences of different capacity decisions
What could typical constraints be?
Physical (machine, labor, material shortages, space, quality)
Market (demand < capacity)
Managerial (policy, metrics)
Describe a bottleneck VS a non-bottleneck
Bottleneck – Any resource whose capacity is less than the demand placed upon it
- maximum speed of the process is the speed of the slowest operation
- Any improvements will be wasted unless the bottleneck is relieved
Non-bottleneck – Any resource whose capacity is greater than the demand placed on it
What is a CCR?
Capacity-constrained resource (CCR) - Any resource whose utilization is close to capacity and could be a bottleneck if it is not scheduled carefully
What is Synchronous manufacturing and which two assumptions is it based on?
All phases of the production system should work synchronously and together to achieve the company’s objectives
Based on two assumptions
- Every organization has a set of processes working together to achieve a common goal
- Every process has a single constraint that limits it from higher performance
What are the five steps of the theory of constraints?
Step 1: Identify the bottlenecks/constraints
Look at your production plan and determine which resource is preventing you from achieving better performance
Step 2: Exploit the bottleneck(s)
Create schedules that maximize the throughput of bottlenecks
Plan production to keep constraint working at 100%
Step 3: Subordinate everything else to the bottleneck(s)
Step 4: Elevate the bottleneck(s)
Decide whether to purchase additional capacity (new machine, better trained employee)
Step 5: Evaluate whether solving the current bottlenecks created other bottlenecks.
Other plants must be monitored carefully as to whether other constraints now exist
Describe the drum, bufffer and rope
Drum – The pace setting resource – constraint
Buffer – The amount of protection in front of the resource
Rope – The scheduled release of material to be in line with the Drum’s schedule
What should be decided when planning?
What activities that should take place
When they should take place
What resources should be allocated to them
Describe loading and the difference between infinite loading and finite loading
- How much to do?
Infinite loading - Scheduling that calculates the capacity needed at work centers in the time period needed without regard to the capacity available to do the work.
Finite loading - Scheduling that loads work centers up to a predetermined amount of capacity.
Describe scheduling and the difference between forward scheduling and backward scheduling
When to do things?
Forward Scheduling – Starts processing when a job is received
Backward Scheduling – Begin scheduling the job’s last activity so that the job is finished on due date
What are the objectives of scheduling?
Meet due dates
Minimize lead times
Minimize setup times
Minimize WIP inventory
Maximize machine and/or labour utilisation
What is sequencing? What are the common rules for it? And what are the objective (whatever the rules?
In what order to do things
Common rules:
FIFO – First in, first out
LIFO – Last in, first out
DD – Due date
SOT – shortest operating (processing) time
STR – slack time remaining
Objectives are (whatever the rule):
- Meeting due dates (dependability)
- Minimizing the time, the jobs spend in the process (flow time) (speed)
- Minimizing WIP inventory (cost)
- Minimizing idle time of resources (cost)
Name the four different parts of planning and control
- Scheduling
- Loading
- Sequencing
- Monitoring and control
What is lean?
“A way of thinking” - all about continuous improvement with a focus on eliminating all forms of waste in a process
What is lean manufacturing?
Making a product in the most effective and efficient manner, while looking for ways to continuously improve and developing an operation that is faster and more dependable
What are the two questions to answer when thinking lean
What to eliminate? Waste = Non value adding activities
How to define value? - Wilingness to pay
What are the 8 Wastes? Describe what the model is and the different types
Eight types of process obstacles that get in the way of providing value for the customer
- Defects
- Overproduction
- Waiting
- Non-utilized talent
- Transportation
- Inventory
- Motion
- Extra- processing
Describe the Just-in-time strategy
Powerful strategy for improving operations
Materials arrive where they are needed only when they are needed
Requires a meaningful buyer-supplier relationship
What are the objectives of JIT?
Produce only the products the customer wants
Produce products only at the rate that the customer wants them
Produce with perfect quality
Produce with minimal lead time
Supplies and components are “pulled” through system to arrive where they are needed when they are needed
Describe the Push VS Pull strategy
Push:
Make all we can just in case
Large lots
High inventories
Waste
Production approximation
Pull:
The customer starts the process, pulling an inventory item from Final Assembly
Then sub-assembly work is pulled forward by that demand
The process continues throughout the production process
What are the four goals of supplier partnerships?
Removal of unnecessary activities
Removal of in-plant inventory
Removal of in-transit inventory
Improved quality and reliability
What is the difference between lean synchronization approach and the traditional approach?
lean synchronization - delivers are made on request
traditional approach - buffers separate stages
What are the 5 S for eliminating waste?
Sort – eliminate what is not needed
Straighten – Position thing so they can be reached easily
Shine – Keep things clean and tidy
Standardize – Maintain cleanliness and order
Sustain – Develop a commitment and pride in keeping to standards
What is Kanban?
(japanese for card) – An authorization for the next container of material to be produced. A sequence of kanbans pulls materials through the process
How can you eliminate waste?
- Visual managing
- The 5s
- Kanbans
- Levelled scheduling
- Lean layouts
- Kaizen
- TQM
What is the cost of quality?
The cost of not corresponding to customer’s demands
control costs + failure costs
What are the two control costs?
Prevention: Planning implementation and maintenance of quality system: market research, process design, quality audits, training of personnel
Appraisal: Conformity assessment of products and raw materials: inspection and testing, cost of maintenance of inspection equipment, cost of products destroyed in tests
What are failure costs?
Internal failures: Scrap, reprocessing of products, cost of ascertaining the cause of defects, cost of selling at a lower price due to defective products
External failures: Response to warranties and complaints, returns, cost of receiving and repairing, fines for product not fulfilling promised performance. (When the product has left the company) - Reputation is the worst type of failure costs
What are the key characteristics of TQM?
Customer focus
Teamwork with employee involvement and empowerment
Continuous process improvement
Strategically-based obsession with quality
Scientific approach and long-term commitment
(Involves everyone)
What are the 6 steps of Quality planning and control?
- Define the quality characteristics (is the colour relevant for the quality for batteries for example)
Ex: the quality characteristics is the weight of the cereal in the box - Decide how to measure the quality characteristic
Variables or attributes? - Set quality standards for the quality characteristic
What are the acceptable limits on this measure? USL and LSL - Control quality against those standards
% Conformity or nonconformity (defective rate)
Ex: We have 1000 boxes of cereal and find that they weigh an average of 15,875 g with a standard deviation of 0,529 g
What percentage of boxes is outside the specification limits?
- Find and correct causes of poor quality
- Continue to make improvement
Describe the characteristics of variation
There will always be variation
Variation is necessary to measure before control
Small variation is ok – common causes of variation.
Large variation – assignable causes of variation, beyond expected natural variation. The process is in a state “out of control”. Identify causes and correct. -> we want to fix the process back to control
What is a p-chart?
A single chart that tracks the percentage of nonconforming items in each sample
Sample sizes are large usually 100 pieces or more
What does the Process capability index: CP measure
A measure of how “capable” the process is to meet customer requirements; compares process limits to specification limits
- does not take process centering into account
- is a measure of potential capability not actual capability
What does the process capability index Cpk measure?
If the process is centred between the specification limits
How can we improve the process if it already is centered?
> reduce the sigma -> capability would be greater
What should we do if the process is centered along the normal distribution curve?
reduce variability
What is supply chain?
The interconnected journey that raw materials, components and goods take before their assembly and sale to customers.
A term that describes how organizations are linked together
Name types of supply chain stakeholders
- Producers – which make or grow the raw materials for goods
- Vendors – which buy and sell materials
- Manufacturers – which make materials into goods
- Transporters (logistics) - which move those goods around the world
- Supply chain managers – which ensure that operations run smoothly in everything from planning to sourcing raw materials, -manufacturing, delivery and returns
- Retailers – which sell the goods (online or physical stores)
- Consumers – who buy and use the goods and services
Describe the upstream flow of customer (requirements)
Long-term plans and requirements
Market research information
Individual orders
Payment
Potential new products and services
What are the “Downstream” flow of products and services for the customer (fulfilment)
Downstream supply chain operations involve the movement of finished goods from a business to its customers. These operations include distribution, order fulfillment and delivery.
It includes:
Products and services
New products and services
Delivery information
Payment request/credit
Name the five operations performance objectives
Quality -> being RIGHT
Speed -> Being FAST
Dependability -> Being ON TIME
Flexibility -> Being ABLE TO CHANGE
Cost -> Being PRODUCTIVE
What determines your decision on operation structure?
Risk:
Number of alternative suppliers
Switching costs
Exit barriers
Cost of making product in-house
Criticality:
Volume purchased
% Of total purchase cost
Impact on business growth
What are examples of reverse logistics?
Returns
Returns avoidance
Remanufacturing
Refurbishing
Packaging
Unsold goods
End-of-life
Delivery failure
Rentals & Leasing
Repairs & maintenance
What is the bullwhip effect?
a supply chain phenomenon describing how small fluctuations in demand at the retail level can cause progressively larger fluctuations in demand at the wholesale, distributor, manufacturer and raw material supplier levels. The effect is named after the physics involved in cracking a whip.
The bullwhip effect refers to a scenario in which small changes in demand at the retail end of the supply chain become amplified when moving up the supply chain from the retail end to the manufacturing end
What is the ripple effect?
The ripple effect is the notion that a single action has an effect over several different entities.
“Tossing a small stone into the water”
Which of the following can NOT be identified with Control Charts?
a) A process that is shifting upward or downward
b) The natural variation of a process
c) A special/assignable cause present in the process
d) The cause of process variation
d) The cause of process variation
. A services company accepts all customers that show up, even if they have to wait, which means it practises
______________. The first customer to arrive is the first one to be served, this being the _________ of the
operations. Complete the previous sentences.
a) Finite loading; Sequencing
b) Finite loading; Scheduling
c) Infinite loading; Sequencing
d) Infinite loading; Scheduling
c) Infinite loading; Sequencing
. Three inputs for every MRP system are:
a) Sales forecast, delivery costs, capacity plan
b) Average replenishment time, re-order point, economic order quantity
c) Stock on hand, Master Production Schedule, Bill of Materials
d) Bill of Materials, sales forecast, sales history
c) Stock on hand, Master Production Schedule, Bill of Materials
Disneyland Paris is one of the largest and best known theme parks in Europe. In terms of Volume, Variety,
and Variation, how would you describe it?
a) High volume, high variety, low variation
b) High volume, high variety, high variation
c) High volume, low variety, low variation
d) High volume, low variety, high variation
d) High volume, low variety, high variation
If the system contains a bottleneck, the _______ is the best place for control. If there is no bottleneck, the__________ is the best place for control.
a)Capacity-constrained resource;rope
b)Capacity-constrained resource;drum
c)Bottleneck; capacity-constrained resource
d)Rope; drum
c)Bottleneck; capacity-constrained resource
6.Which of the following is false?
a) To define the priority of objectives, both the importance and the performance level needto be considered
b) A product requires 24 separate tasks, and the sum of those task times is 14 minutes; if the cycle time is 2 minutes, then at least 12 workstations will be needed
c) Compared to dependent demand, independent demand is less predictable because it depends on the chances of the market or customer behaviour
d) Order qualifiers are those competitive priorities that a company needs to meet if it wants to do business in a particular market
b)A product requires 24 separate tasks, and the sum of those task times is 14 minutes; if the cycle time is 2 minutes, then at least 12 workstations will be needed
4.The short-term planning and control activity called loading:
a) Assigns dates to specific jobs
b) Assigns jobs to work centers
c) Assigns workers to jobs
d) Specifies the order in which jobs should be done at each work center
b) Assigns jobs to work centers
3.Which of the following statements best characterizes delivery reliability?
a) A company that always delivers on the same day of the week
b) A company that delivers more frequently than its competitors
c) A company that always delivers at the promised time
d) A company that delivers faster than its competitors
c)A company that always delivers at the promised time
In Statistical Process Control (SPC), what is the difference between controlling and improving the process?
Controlling involves eliminating assignable causes and getting the process back to a state of statistical control, where only common causes of variability are present.
Improving the process means producing increasingly on target for the quality characteristic identified. Narrowing the control limits that decide what are assignable causes(not acceptable) and what are common causes (acceptable) of variability. That is, reducing common cause variation.
