UNIT 1 Flashcards
critical function within any organization, encompassing a wide range of interrelated activities that are essential for producing goods and services efficiently and effectively.
Operations Management
involves predicting future demand for products or services. Accurate forecasting is crucial for effective planning and resource allocation.
Forecasting
helps organizations anticipate market trends, manage inventory levels, and align production schedules with customer needs.
Forecasting
techniques such as quantitative analysis, historical data review, and market research are commonly used
Forecasting
determines the production capacity needed to meet changing demands for products or services.
Capacity Planning
involves assessing current capacity, forecasting future needs, and making decisions about expanding or reducing capacity.
Capacity Planning
ensures that an organization can meet customer demand without overextending resources or incurring unnecessary costs.
Capacity Planning
strategic decision that impacts operational efficiency, cost, and customer service.
Locating Facilitites
Factors to consider include proximity to suppliers and customers, transportation costs, labor availability, and local regulations.
Locating Facilities
includes the arrangement of equipment, workstations, and storage areas to optimize workflow and minimize waste.
Facilities and Layout
involves overseeing the flow of goods from manufacturers to warehouses and from these facilities to point of sale.
Managing Inventories
maintaining optimal inventory levels to meet customer demand while minimizing holding costs
Managing Inventories
Techniques such as Just-In-Time (JIT) inventory, Economic Order Quantity (EOQ), and ABC analysis are commonly used
Managing Inventories
implementing processes and standards to ensure that products and services meet specified requirements.
Assuring Quality
Techniques such as Total Quality Management (TQM), Six Sigma, and regular quality audits help organizations maintain high-quality standards and reduce defects.
Assuring Quality
include providing training and development opportunities, recognizing and rewarding performance, and fostering a positive work environment.
Motivating Employees
models describe how a system operates
Descriptive Models
These models provide recommendations on the best course of action.
Prescriptive Models
These models forecast future outcomes based on historical data.
Predictive Models
simplified representations of reality that help managers understand complex systems and make decisions.
Models in Decision Making
involve the use of mathematical and statistical techniques to analyze data and inform decision-making.
Quantitative Approach
Techniques such as regression analysis and hypothesis testing help managers understand relationships between variables and make data-driven decisions.
Statistical Analysis
This optimization technique helps in resource allocation problems, ensuring that the best possible outcome is achieved given constraints.
Linear Programming
allow managers to test different scenarios and assess the impact of various decisions on operations.
Simulation Models
provide a solid foundation for decision-making by relying on objective data rather than intuition alone.
Quantitative Approaches
essential for evaluating the effectiveness of operations and guiding decision-making.
Performance Metrics
measure how well resources are utilized, such as labor productivity and machine utilization rates.
Efficiency Metrics
Metrics like defect rates and customer satisfaction scores
Quality Metrics
Profit margins, return on investment (ROI), and cost per unit
Financial Metrics
Lowering costs may lead to reduced quality, which can impact customer satisfaction.
Cost vs. Quality
focus on rapid production may limit the ability to customize products for individual customer needs.
Speed vs. Flexibility
Decisions that benefit short-term performance may not align with long-term strategic objectives.
Short Term vs. Long Term Goals
refers to how tailored products or services are to individual customer needs.
Degree of Customization
Managers must decide whether to offer standardized products for efficiency or customized solutions for customer satisfaction.
Standardization vs. Customization
Understanding customer preferences and market trends is crucial in determining the appropriate level of customization.
Market Demand
Organizations must assess their ability to deliver customized products without compromising efficiency.
Operational Capacity
views an organization as a collection of interrelated parts working together to achieve common goals.
Systems Approach
Managers must consider how decisions in one area (e.g., production) affect other areas (e.g., marketing, finance).
Holistic Perspective
Understanding the relationships between different functions helps in making informed decisions that optimize overall performance.
Interdependencies
Continuous feedback from various parts of the system allows for adjustments and improvements in decision-making processes.
Feedback Loops
crucial for effective decision-making, especially in resource-constrained environments.
Establishing Priorities
Clearly define organizational goals and objectives to guide decision-making.
Identifying Objectives
Assess potential decisions based on their alignment with established objectives and their impact on performance metrics.
Evaluating Options
Prioritize initiatives based on available resources, potential return on investment, and strategic importance.
Resource Allocation
These are companies that provide raw materials, components, or services to your direct suppliers.
Supplier’s Supplier
one step further back in the supply chain
Supplier’s Supplier
These are companies or individuals that directly supply goods or services to your business.
Direct Suppliers
They provide the materials, components, or products you need to manufacture your products or offer your services.
Direct Suppliers
entities that convert raw materials or components into finished products.
Producers
any entity involved in creating the final product from raw materials
Producers
intermediaries that buy products from producers or suppliers and sell them to retailers or directly to customers.
Distributors
often handle logistics, storage, and transportation of goods.
Distributors
the end-users who purchase the product or service for personal use.
Final Customers
the last link in the supply chain.
Final Customers
Compliance with Laws and Regulations
Product Safety and Quality Standard
Contract Management
Legal Responsibilities
Management must ensure that all operations adhere to the relevant laws, including labor laws, environmental regulations, and industry-specific standards.
Compliance with Laws and Regulations.
involves keeping up-to-date with changes in legislation and implementing policies to ensure compliance.
Compliance with Laws and Regulations
The firm must produce goods or provide services that meet safety and quality standards set by law.
Product Safety and Quality Standards.
Operations management must ensure that the production processes and supply chain meet these standards to avoid legal issues.
Product Safety and Quality Standards.
Ensuring that all contracts with suppliers, distributors, and customers are legally sound and adhered to is a critical management responsibility
Contract Management.
Profitability and Financial Stability
Productivity and Efficiency
Market Competitiveness
Economic Responsibilities
The primary economic responsibility of operations management is to ensure that the firm operates efficiently and profitably.
Profitability and Financial Stability
This involves optimizing production processes, reducing costs, and managing resources effectively.
Profitability and Financial Stability.
Operations managers are responsible for maximizing the productivity of the firm’s resources, including labor, machinery, and materials.
Productivity and Efficiency
This can involve implementing lean manufacturing principles, optimizing supply chains, and reducing waste.
Productivity and Efficiency
Ensuring that the firm remains competitive in the market by delivering products or services that meet customer needs at competitive prices.
Market Competitiveness
This may involve continuous improvement processes, innovation in production methods, and strategic sourcing.
Market Competitiveness
Fair Treatment of Employees
Environmental Stewardship
Fair Business Practices
Corporate Governance
Ethical Responsibilities
Management must ensure that all employees are treated fairly, with respect to wages, working conditions, and opportunities for growth.
Fair Treatment of Employees
This includes implementing fair labor practices and fostering a positive workplace culture.
Fair Treatment of Employees
Operations management has a responsibility to minimize the firm’s environmental impact.
Environmental Stewardship
This might include reducing waste, lowering emissions, and using sustainable materials.
Environmental Stewardship.
Ensuring that the firm engages in honest marketing, transparent pricing, and ethical sourcing.
Fair Business Practices
This can involve choosing suppliers who uphold ethical standards, avoiding exploitative practices, and engaging in fair trade.
Fair Business Practices
Ensuring that the company’s operations are transparent and accountable.
Corporate Governance
This involves implementing ethical decision-making processes, maintaining transparency with stakeholders, and ensuring that the company’s actions align with its stated values and principles.
Corporate Governance
Management can choose suppliers who not only offer the best economic deal but also comply with legal and ethical standards.
Sustainable Supply Chain Management.
By reducing waste, the firm can lower costs (economic responsibility), comply with environmental regulations (legal responsibility), and reduce its environmental footprint (ethical responsibility).
Waste Reduction Programs
involve making decisions that shape the long-term direction and efficiency of a company’s operations.
Strategic Responsibilities
These responsibilities ensure that the company’s operations are not only aligned with its overall business strategy but also optimized to respond to changing market conditions, technological advancements, and competitive pressures.
Strategic Responsibilities
Alignment with Business Objectives
Integration Across the Supply Chain
Supply Chain Strategy Alignment
This involves making decisions on sourcing, procurement, production, and distribution that support these goals.
Alignment with Business Objectives.
Ensuring that all parts of the supply chain—from suppliers to customers—are integrated and coordinated to maximize efficiency, reduce costs, and improve service levels.
Integration Across the Supply Chain
Designing the Supply Chain Network
Scalability and Flexibility
Network Configuration
involves determining the optimal locations for production facilities, warehouses, and distribution centers to minimize costs and improve service levels.
Designing the Supply Chain Network
The network should be designed to scale up or down based on demand fluctuations and to adapt to changes in the market or environment, such as new regulations or shifts in consumer preferences.
Scalability and Flexibility
Leveraging Technology for Operations
Data Analytics and Automation
Information Technology (IT)
Strategic use of IT systems, such as Enterprise Resource Planning (ERP) and Supply Chain Management (SCM) software, can streamline operations, improve decision-making, and enhance communication across the supply chain
Leveraging Technology for Operations
This reduces errors, improves efficiency, and enables more informed strategic decisions.
Data Analytics and Automation
Strategic Product Design
Innovation and Quality Management
Products and Services
Decisions on product and service offerings, including their design, features, and lifecycle, are critical
Strategic Product Design
Ensuring continuous improvement and innovation in products and services while maintaining high quality standards.
Innovation and Quality Management
Determining the Capacity Needs
Balancing Supply and Demand
Capacity Planning
this includes decisions on expanding facilities, investing in new technologies, or outsourcing
Determining Capacity Needs
Operations managers must ensure that capacity aligns with expected demand to avoid both overproduction and underproduction
Balancing Supply and Demand
Forming Longterm Partnerships
Collaboration and Co-Innovation
Strategic Partnerships
Engaging in joint ventures, research and development collaborations, and shared investments with partners
Collaboration and Co-Innovation
building and maintaining strategic relationships with suppliers, distributors, and other stakeholders
Forming Long term Partnerships
Selecting distribution Channels
Logistics Optimization
Distribution Strategy
the distribution strategy should align with customer expectations, cost considerations, and company objectives
Selecting Distribution Channels
optimizing transportation, warehousing and inventory management
Logistics Optimization
Risk Management
Scenario Planning
Uncertainty and Risk Management
identifying potential risks in the supply chain
Risk Management
this could include diversifying suppliers, holding safety stocks or creating contingency plans
Risk Management
this allows the company to respond more effectively to unforeseen events and maintain operational stability
Scenario Planning
focuses to the movement and handling of physical goods and services
Product and Service Flow
exchange and management of data and information
Information Flow
Management of monetary transactions and financials arrangements
Financial Flow
Flow Management
Product and Service
Information
Financial
the term used to describe the difference between the cost of inputs and the value or price of outputs.
Value-added
These govern the operation of the entire
organization
Upper Management Process
These are the core processes that make up the value stream.
Operational Process
These support the core processes.
Supporting Processes
A few factors account for a high percentage of the occurrence of some event(s).
Pareto phenomenon
this is related to global warming, pollution and other natural disasters that had increasing effect in business operations, in effect – stricter environmental regulations
Environmental Concerns
refers to service ad production processes that uses resources in ways that do not harm ecological systems that support both current and future human existence
Sustainability
finding new ways of improving product quality
Innovation
the sequence of organizations –their facilities, functions and activities that are involved in producing and delivering a product or service.
Supply Chain
provide raw materials, parts, equipment, supplies, and/or other inputs to the organization, and they deliver outputs that are goods to the organization’s customers.
External Parts of Supply Chain
part of the operations function itself, supplying operations with parts and materials, performing work on products, and/or performing services.
Internal Parts of Supply Chain
the strategic coordination of business functions within a business organization and throughout its supply chain for the purpose of integrating supply and demand management.
Supply Chain Management
the part of a supply chain involved with the forward and reverse flow of goods, services, cash, and information.
Logistics
includes management of inbound and outbound transportation, material handling, warehousing, inventory, order fulfillment and distribution, third-party logistics, and reverse logistics
Logistics Management
term that reflects the concept that value is added as goods and services progress through the chain.
Value Chains
starts at the beginning of the chain and ends with the internal operations of the organization.
Supply Component
starts at the point where the organization’s output is delivered to its
immediate customer and ends with the final customer in the chain.
Demand Component
the sales and distribution portion of the value chain.
Demand Chain
the lifeblood of any business organization.
Supply Chain
