P300 – Flashcard
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Operations Management
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The management of processes used to design, supply, produce, and deliver valuable goods and services to customers
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Supply Chain Management
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is the management of the processes and relationships in a supply chain
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Goods vs Services
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-Intangibility of services -Services can not be inventoried -Heterogeneity -Simulatneity
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Levels of planning
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Strategic: High level, Long-Term Tactical: Intermediate-term Operational: Frequently revisited, Short-Term
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Strategic Planning
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Long-Term decisions defining the objectives and capabilities of an organization. -Take a long time to implement -Put limits on the capabilities governing operational processes
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Tactical Planning
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Intermediate-term decisions defining how capacity is used to meet demand. -More frequent than strategic planning, usually spanning months -Identify customer demands for aggregate product families -Establish the inventory and Capacity Plans
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Operational Planning
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Short-term priorities and schedules for resource allocation -address demands, materials, and capacities at the individual product level -usually addresses weeks or days
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Supply Chain
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the global network of organizations and activities involved in designing, transforming, consuming and disposing of goods and services.
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Customer Management
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interfaces with customers and order processing and fulfillment
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Supply Management
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processes to identify, acquire and administer inputs
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Logistics Management
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movement of materials and information within, into and out of the firm
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Customers
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use or consume output
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Suppliers
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provide inputs
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Stakeholders
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have an interest in organizational well being and performance
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Planning
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Determine how anticipated demand will be met with available resources
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Sourcing
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Select suppliers that will deliver the goods and services needed to create the firm's product
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Making
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How the major product is produced or the service provided
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Delivering
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Logistic processes to coordinator and schedule the movement of goods and information
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Returning
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Receiving defective products and providing customer support
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Process
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is a system of activities that transforms inputs into valuable outputs
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Physical Transformation
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Manufacturing
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Locational Transformation
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Transportation
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Exchange Transformation
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Retailing
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Storage Transformation
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Warehousing
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Physiological Transformation
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Health Care
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Informational Transformation
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Telecommunications, Consultants, Education
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Supply Chain Processes
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Planning, Sourcing, Making, Delivery, Returning
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Corporate Strategic Planning
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overall mission and target businesses -Long time horizon -Overall values, direction and goals -Acquisitions and divestitures -Performance metrics -Risk management
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Business Unit Strategic Planning
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semi-independent organization for different products or markets -Identification of customer or market segments -Appropriate product offering and competitive priorities -Constrained by corporate strategy -More detailed, shorter time horizon
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Functional Strategic Planning
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determines how functions support business unit strategies -Most detailed -Most constrained -Determines specific focus
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Order Winners
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why customers choose your firm
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Order Losers
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why customers avoid your firm
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Order Qualifiers
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minimum standards to be met
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Product Related
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outcome of customer experience • Quality • Timeliness • Cost
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Process Related
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supply chain operations' abilities • Innovation • Flexibility • Sustainability • Risk Management
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Process Defined by Activties
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-An operation transforms an input, physically or otherwise. -Transportation moves an input without transforming its other characteristics. -Inspection checks results of another activity. -Delays occur when flow of an input is unintentionally stopped. -Storage is an activity where items are inventoried under formal control.
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Process Defined by Inputs, Outputs, and Flows
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• Inputs: material, energy, information, capital, people (service), facilities, equipment, and labor • Outputs: physical goods, services, and information -Both intended and unintended products of the process are considered outputs. Unintended outputs: often by-products like pollution or waste • Flows: Information flows contain data. Material flows include physical products, including people
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Process Defined by Structure
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Is the organization of inputs, activities, and outputs -Process Capabilities -Sequencing, positioning, and linking of process activities Typical process structures: -Project -Job Shop -Batch Shop -Assembly Line -Continuous Flow
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Process Capacity
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• A process' limit on amount of output given an amount of input and resources (e.g. output per machine hour or labor hour) • Can also refer to size or storage limits.
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Maximum Capacity
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-Highest output rate an activity or process can achieve under ideal conditions
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Effective Capacity
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-Sustainable capacity taking into account potential disruptions, fatigue, machine breakdowns -Typically around 70-80 percent of maximum capacity
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Utilzation
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Percentage of process capacity actually used
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Yield Rate
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Percentage of good units begun that were successfully produced
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Theory of constraints
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-Every process has a constraint -Every Process Contains Variance that Consumes Capacity -Every Process must be Managed as a System -Performance Measures are Crucial to the Process's Success -Every Process must be Continuously Improved
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Every process has a constraint
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Bottleneck: limits the ability of the process to generate output - constraining activity • Constraint or "scarce resource" • Defines the maximum capacity of a system
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Every Process Contains Variance that Consumes Capacity
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-Variance occurs in a process's inputs, activities and outputs. -Increased complexity and uncertainty makes it difficult to create plans to efficiently and effectively use resources.
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Every Process must be Managed as a System
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-Changing one element of a process may impact other elements, sometimes in unexpected ways. - Process elements are interdependent -Activities -Inputs/Outputs/Flows -Process structures -Management policies
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Performance Measures are Crucial to the Process's Success
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Metrics should address aspects of performance that are important to both customers and the organization. -They should be verifiable and quantifiable -They should align internally and with customer value -They should support standards and wards -They provide the basis for: communication and monitoring
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Every Process must be Continuously Improved
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-focused, incremental improvement efforts - Team focus: utilize the knowledge and experience of the people associated with the process - Short term and focused - Action-oriented - Repetitive
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Increase Utilization
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-Increase up-time -Reduce changeovers and set-up times -Improve scheduling
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Improve Efficiency
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-Improve layout -Break bottlenecks -Reduce or buffer variation -Increase labor productivity
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Increase Yield
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-Voice of the customer -Poka-Yoke -Increase process capability and control -Improve incoming materials quality
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Bottleneck
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-limits output -increase lead time -adversely affects cost, quality, and flexibility
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Visible to the Customer
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Affects how the customer views the process and the firm
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Core Capability
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-A process that incorporates a critical strategic skill set that is difficult for the competition to copy -Must be guarded, managed, and improved continuously because it is the major source of our firm's value
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Feeder Process
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-A process that feeds a number of alternative processes coming out of it -A problem in this process (ex: delay) can affect many downstream outcomes
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Greatest Variance
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-Variances are amplified by sequential steps in processes -To reduce variance, managers should identify those steps that are sources of greatest variance
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Most Resources consumed
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We focus on these processes because they offer the "biggest bang for the buck."
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Product life cycle
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Launch Growth Maturity Decline
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Launch
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introduction into the market and may require SC process innovation
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Growth
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increasing demand, flexible SC, more data from customers, increasing standardization
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Maturity
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demand and product stabilization, increasing importance of cost, process innovation to increase SC efficiency
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Decline
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changing technology or customer needs, declining demand, potential phase in of a replacement product
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Types of innovators
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Fast Innovators High-Quality Innovators Efficient Innovators
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Fast Innovators
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-Get to market quickly -React quickly to competitor's actions -More continuous stream of product introductions
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High-Quality Innovators
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- Fewer issues launching products, and fewer failures - Effectively satisfy customers for higher brand loyalty
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Efficient Innovators
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- Fund more new design and development projects - Sell at lower prices, or have lower break even quantities
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Idea and Opportunity Development
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-Need organizational culture that motivates and affects innovation success -Solicit ideas from external networks -Open Innovation
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Innovation Portfolio Planning
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- The process of selecting & prioritizing innovation projects - Analyzes estimated market share, revenues, profits, investment and development time requirements. - Ensure innovation projects are consistent with the firm's strategy and development capacity
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Innovation Project Management
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-It's the planning and execution of each product/process innovation project. -Discipline: clarify and reduce uncertainty -Flexibility: for situations where uncertainties persist
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New Product/Process Launch and Learning
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-Management of a progression of projects -Capture lessons learned post launch -Learning applied to next project -Continuous chain of projects adds to capabilities
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Codevelopment
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Benefits: - Increased sources of, & access to, ideas & opportunities, leading to higher quality - Leveraging the expertise of others increases the number of successful launches, and reduces lead time - Financial and legal risks are shared Risks: - Less control over intellectual property (IP) - Partner dependency may lead to less control over goals and timing
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Early supplier involvement (ESI)
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- Suppliers participate directly in product design activities - Allows the firm to focus on integration of systems and the overall functionality of a product
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Concept Development
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-Identify core product concept -conduct market, technical, and finacial assesments -identify the target values of the product attributes, volume, and price -determine the primary product architecture, including product variants and components sharing plan -propose and investigate production process concepts
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Product and Process Planning
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-Decide which components will be designed versus off-the-shelf -Identify who will design, produce, and assemble the components -Specify the types of processes to be used to produce the product and the structure of the supply chain -Identify who will develop and supply needed process technologies -Develop early prototypes and system-level simulations
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Detailed Design and Development
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-Determine the values of the key design parameters -Perform detailed design of the components including material and process selection, assembly precedence, and tooling requirements -Build full-scale prototypes and detailed simulations
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Product and Market Testing
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-conduct full-scale product performances tests and simulations -conduct customer tests -design and test critical tools and production procedures -refine details of product design
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Commercialization
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-Evaluate pilot production units -establish market channels and an order fulfilment systems -train sales force and field service personnel
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Market Introdcution
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-ramp-up production volume -fill distribution channels -launch promotion and advertising campaigns -evaluate field experience with product
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Voice of customer (VoC)
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gather input on customer's needs and wants
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Quality Function Deployment (QFD)
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convert customer's needs and wants into specifications
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Failure Modes and Effects Analysis (FMEA)
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identification and correction of potential problems
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Value Engineering/Value Analysis
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improvement of benefits and costs through examination of functionality
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Design for Manufacture
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Improvement of product producibility -Producibility: A measure of the speed, ease, cost efficiency, and reliability with which a product can be produced.
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Design for Assembly
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minimizing number of components and easing assembly processes
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Design for Product Serviceability
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easing disassembly and component reuse
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Design for Six Sigma
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improving process consistency
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Components Standardizartion
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reuse parts for existing designs. - Less Development Cost - Lower Part Cost
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Modular Product Design
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using combinations of standardized parts - A few basic common platforms - Modules are swapped and added for product customization
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Design for Logistics
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minimizing packaging, handling and shipping costs
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Design for Environment
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minimize detrimental environmental impacts, across product life cycle
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Physical goods can be differentiated from services in the operations management process by:
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Longer lead times and they can be inventoried.
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Jones Manufacturing sells a part to Lear Corporation. Lear puts this part into a radio, which Lear then sells to Ford. From Ford's point of view, Jones Manufacturing is a(n) __________ supplier.
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Tier 2
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Your company faces a shortage of skilled workers its West Lafayette location. This is an example of a
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Threat
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What kinds of questions does an operations manager who is responsible for operational level planning address?
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How many units of inventory for product X should I order?
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What kinds of questions does an operations manager who is responsible for tactical level planning address?
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What new customers should the company pursue?
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Customer service management connects what functional groups?
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Marketing, logistics management, and sales and distribution.
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An example of strategic planning is:
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Deciding where to locate a new manufacturing plant.
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Scantron Inc. claims that its competitors have to recall 10 percent of their products to fix defects, while it only has to recall 5 percent. Scantron is emphasizing which dimension of quality?
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Conformance
