The Finance Functions Relationship With Operations Flashcards
What is operations management?
The planning, directing and controlling of the transformation of inputs into outputs that meets the needs of the organisations customers.
What is process design?
The method by which individual specialists seek to understand business activities and ensure that they are as efficient and effective as possible.
What are the 4 Vs of process?
Volume - number of inputs and outputs
Variety - the number of different inputs and outputs
Variation - when outputs are required
Visibility - whether customers view it or not
What are the primary activities of Michael Porters value chain?
Inbound logistics
Operations
Outbound logistics
Marketing and sales
Service
What are the support activities of Michael Porters value chain?
Procurement
Human resources management
Technology development
Firm infrastructure
What is a level capacity strategy?
Maintain activity at a constant level over the planning period, ignoring fluctuations in forecast demand
What is a chase demand strategy?
Attempting to match production capability as closely as possible to the forecast demand.
What is a demand management strategy?
Attempting to manipulate demand levels
What is MRP II?
Manufacturing resource planning - a method for the effective planning of all resources of a manufacturing company.
What is OPT?
Optimised production technology - one of several computer based methods for scheduling production requirements, it uses known capacity constraints to identify and eliminate bottlenecks.
What is ERP?
Enterprise resource planning - software that integrates all departments and functions of an organisation in a computer system able to meet the needs of all organisational users.
What is a periodic inventory system?
Checking stock on a regular basis
What is an ABC system?
A - high value and require close monitoring
B - less important and require less control
C - require little management
What is JIT?
Just in time - an approach to inventory management based on the idea that goods should be produced or services delivered only when they are needed
What is supply chain management?
The flow of goods and services through the organisation with the aim of making the firm more competitive.
What is procurement?
The sourcing and purchasing of goods and services for business use.
What is the model of Reck & Long?
Passive - a clerical function, focuses on efficient transaction processing
Independent - awareness of the financial importance of purchasing, attempts to find the best prices
Supportive - a centralised purchasing department, careful supplier selection is recognised
Integrative - part of the firms strategic planning process
What is Cousins supply wheel?
Organisation structure - how supply interacts with other functions
Portfolio of relationships - how much collaboration there is with suppliers
Cost/benefit analysis - how much time/effort is spent on purchasing
Skills and competencies - whether staff need training on how to build long term relationships with suppliers
Performance measures - not just cost
What are the 3 supply chain performance objectives?
- Speed
- Dependability
- Cost
What are the 4 different sourcing strategies?
- Single sourcing - purchased from one supplier
- Multiple sourcing - purchase from several suppliers
- Delegated sourcing - delegated to an external organisation
- Parallel sourcing - sourced from separate supply systems
What are the 4 types of quality costs?
- Prevention costs - activities undertaken to prevent defects occurring in the design and operation of the product
- Appraisal cost - costs of quality inspection and testing
- Internal failure cost - cost of detection and rectification of defective items arising before transfer to the customer
- External failure cost - arising after transfer to customer
What is TQM?
Total quality management- continue improvement in quality, productivity and effectiveness through a management approach focusing on both process and product
What is kaizen?
Continuous improvement
What is six sigma?
A statistical approach to quality management
What is lean production/lean thinking?
Elimination of waste in all areas of the organisation
What is lean synchronisation?
Customer focus, aim is to produce products and services that meets customer needs and wants
What is benchmarking?
The comparison of a company’s service, practice or process with another party
