w5 - Operations Strategy Flashcards
What is operations management?
Operations management is the process of effectively and efficiently using resources to deliver goods and services that meet customer needs.
What are the main stages in a product’s life cycle?
- Design
- Manufacturing
- Sales and distribution
- After-sale service
- Upgrades
- Disposal
What is the input-process-output (IPO) model?
The IPO model represents how operations transform inputs into outputs. It involves:
- Inputs (e.g., raw materials, labor, technology)
- Process (e.g., manufacturing, service delivery)
- Outputs (e.g., finished products, services)
What is the role of transformation in the IPO model?
The transformation process converts inputs into outputs by adding value. This can involve physical changes (manufacturing), informational processing, or service delivery.
What are examples of transformation processes?
- Manufacturing: Turning raw materials into finished goods
- Service: Providing healthcare, education, or customer support
- Information processing: Banking transactions, software development
What are core and support processes in operations?
- Core processes directly produce goods or services (e.g., furniture manufacturing, fast-food preparation).
- Support processes enable core processes (e.g., HR, IT, finance).
How does operations management relate to services?
Operations management applies to both goods and services, though services are intangible, involve customer interaction, and require real-time execution.
What is a business strategy?
A business strategy defines objectives and actions to achieve competitive advantage by integrating different functions like marketing, operations, and finance.
What is operations strategy?
Operations strategy aligns operational capabilities with business objectives, ensuring efficient production, quality control, and market competitiveness.
What are order qualifiers and order winners?
- Order qualifiers: Basic requirements customers expect (e.g., safety in airlines).
- Order winners: Features that differentiate a product (e.g., free checked bags in airlines).
How do order qualifiers and order winners change over time?
Customer expectations evolve; for example, cameras on phones were once an order winner but are now an order qualifier.
What is capacity planning in operations?
Capacity planning determines the production level needed to meet demand efficiently while avoiding underutilization or overloading of resources.
What are the two categories of operational decision areas?
- Long-term investments (e.g., facility location, technology adoption, vertical integration)
- Medium-term organizational decisions (e.g., employee incentives, quality management, scheduling)
What is the tradeoff concept in operations management?
Businesses must balance cost, quality, delivery, and flexibility. Increasing flexibility can raise costs, while improving quality may slow production.
What is cumulative capability development?
Rather than accepting tradeoffs, businesses like Toyota develop capabilities that enhance quality and flexibility while maintaining cost efficiency.
What is mass customization?
Mass customization combines mass production efficiency with personalized customer options, as seen in custom Nike shoes or Subway sandwiches.
What is the service-profit chain model?
The model states that satisfied employees lead to better customer service, which increases customer loyalty, leading to higher profitability.
What are the key challenges in service operations?
- High customer interaction
- Intangibility of service quality
- Managing demand variability
- Limited ability to store inventory
What are front-office and back-office operations?
- Front-office: Customer-facing activities (e.g., waitstaff, bank tellers)
- Back-office: Internal operations (e.g., kitchen staff, data processing)
How can businesses manage demand variability in services?
- Smoothing demand (e.g., happy hour discounts)
- Managing capacity (e.g., hiring temporary staff, automation)
- Encouraging customer compliance (e.g., appointment reminders)
