MANA3335 MindTap Learn It: Chapter 15: Managing Operations, Quality, and Productivity

Complying with internationally accepted sets of quality standards Conducting audits that evaluate an organization with respect to recognized quality standards

*ISO 9000 and ISO 14000 {ISO 9000 is a set of quality standards created by the International Organization for Standardization. ISO 14000 extends the concept of quality standards to environmental performance. Organizations often find that preparing for an ISO 9000 audit is helpful in identifying opportunities to improve quality}

Developing, making, and distributing products/services faster Designing a more efficient schedule and eliminating steps to increase the speed at which products/services move from idea to market

*Reducing cycle time {Reducing cycle time means developing, making, and distributing products/services faster. Paradoxically, an intelligent reduction of the time it takes to bring products/services to market often means they are of higher quality}

In the U.S. service sector, overall productivity is ________ than it was in the 1980s.

*higher {Productivity has risen significantly in the U.S. service sector over the last few decades}

Subcontracting a part of the organization's operations to a company that specializes in that work Improving the organization's focus on its core competencies by hiring other organizations to do certain work

*Outsourcing {Outsourcing is the subcontracting of services and operations to other organizations that can perform them cheaper or better. For example, organizations often outsource payroll to a firm that specializes in processing payroll. Ideally, the outsourcing organization gains efficiency because it is no longer doing an activity that is not core to its strategy, and the activity gets done better}

Using a certain set of data analysis methods to monitor quality Conducting in-process sampling and acceptance sampling of products/services to control quality

*Statistical quality control (SQC) {Statistical quality control (SQC) is a set of specific statistical techniques that can be used to monitor quality. It includes in-process sampling of products during the production process and acceptance sampling of finished goods}

An organization that transforms resources into an intangible output that is available when and where customers want it is a __________ organization.

*service {Service organizations transform resources into an experience or accessibility to a product. A few examples are personal services such as haircuts, retail establishments such as restaurants and stores, and health care facilities}

Identifying other organizations that produce high-quality products/services in order to emulate them Learning how other organizations accomplish high-quality work

*Benchmarking {Benchmarking is the process of learning from other organizations that product high-quality products/services. There is no need to figure out a process or technology from scratch if another organization has already figured it out}

Which of the following are commonly recognized dimensions of quality? Check all that apply.

*Serviceability *Features *Conformance *Customer perception {The commonly recognized dimensions of quality include: •Features, or supplemental characteristics •Conformance, or how well a product/service meets established standards •Serviceability, or how fast and easy it is to solve problems with the product/service. •Customer perception of quality A product or service may have high sales due to its quality, or due to some other feature, but sales are not a component of quality}

Managing the materials and other resources once the organization acquires them until they reach the customer as a finished product/service is known as __________ .

*inventory control {Inventory control is concerned with managing the supply and uninterrupted flow of resources throughout the production process, from the time the resources enter the organization to the time they are delivered to the customer. This function is also called materials control}

A manager who decides how equipment will be arranged within a facility is determining its ___________ .

*layout {Layout is an important aspect of facilities management, as it can have a significant impact on efficiency}

The ratio of the value of all an organization's outputs to the value of all its inputs is __________ .

*total factor productivity {Total factor productivity is the ratio of all outputs to all inputs. It can be a difficult measure to calculate since different outputs and different inputs are initially expressed in different units (e.g., hours, quantities, dollars) and need to be converted accurately into the same units}

A strategic commitment by top management to build quality into every business decision is a defining characteristic of _______ .

*total quality management (TQM) {TQM is a commitment at the strategic level to make quality a guiding principle for every decision. When implemented, TQM impacts organizational culture and resource allocation. Corporate-level strategy focuses on which businesses to invest in, and the BCG matrix is a tool to help make those decisions. A SWOT analysis—a survey of the organization's strengths, weaknesses, opportunities, and threats—is a tool to help formulate business-level strategy}

To control this inventory, the manager uses transportation and distribution control systems.

*In Transit {Making products/services isn't enough; they need to reach the customer. Inventory in transit, or in the "pipeline," is the finished goods/services that are being made accessible to customers. The manager is concerned with distributing this inventory efficiently and reliably}

What term would be used to mean the total productivity of all the petrochemical companies in a country?

*Industry productivity {Industry productivity is the productivity achieved by all the firms in an industry}

When is a process layout the best choice for a facility?

*When a variety of products are made {In a process layout, different types of work are done at different stations. Products may start their process of transformation at different workstations, progress through different series of steps, and end at different workstations}

What is the risk if a purchasing manager buys too little material?

*The organization cannot meet customer demand for its product, or it must resort to inefficient means of meeting demand {Control is critical to purchasing management, since the manager needs to know whether the quantity of inputs aligns with demand for the product. The purchasing manager also uses control to monitor the quality and reliability of inputs and their cost}

The quantity of products and/or services that the organization can produce if it wants is its ___________ .

*capacity {Capacity includes labor, equipment, space, and technology. An important aspect of managing capacity is trying to have just enough to produce the quantities that customers want from the organization while not producing so much that money is tied up in unused resources}

The ratio of the outputs generated by a certain resource to the costs of that resource is ___________ .

*partial factor productivity {Partial factor productivity is the ratio of the outputs to inputs related to a single resource. This measure is useful in that it allows managers to track the effect of a given decision on productivity}

Which of the following is the productivity of a single firm?

*Company productivity {Company productivity is the level of productivity achieved by an individual firm}

To control this inventory, the manager uses high-level production-scheduling systems.

*Finished Goods {Finished goods are ready for the customer. The manager's concern is with producing a supply of this inventory of sufficient quantity and quality to meet demand. This is more challenging when demand is unpredictable}

Which of the following statements accurately reflect the relationship between quality and profitability? Check all that apply.

*Higher quality means fewer resources go toward placating dissatisfied customers *When customers experience higher quality, they are more likely to purchase again *Better quality production means more output can be sold instead of discarded *Engaging employees in quality assurance reduces the cost of hiring quality inspectors {Although improving quality almost always requires some investment—in equipment, employee training, building a new workflow, etc.—improvements pay off in lower costs over the longer term and higher revenues from sales}

Products or services are delivered to customers.

*In Transit {Making products/services isn't enough; they need to reach the customer. Inventory in transit, or in the "pipeline," is the finished goods/services that are being made accessible to customers. The manager is concerned with distributing this inventory efficiently and reliably}

How does operations affect strategy?

*Operational capability determines which strategies can be carried out effectively {A strategy is only as good as the organization's ability to carry it out. Say a company that makes a snack mix tries to expand the product line to six varieties. However, the production facility cannot efficiently switch from one variety to the next or produce more than one variety at a time, and managers are unable to predict demand for different varieties and so are always making too little or not enough of at least one. Even if six varieties of snack mix are exactly what customers want, this company will have trouble delivering this product to market profitably}

This inventory will be used to make the product.

*Raw Materials {Raw materials are the inputs before any transformation has occurred. The manager's concern is with acquiring them in sufficient quantity and quality and on time}

To control this inventory, the manager uses purchasing models and systems.

*Raw Materials {Raw materials are the inputs before any transformation has occurred. The manager's concern is with acquiring them in sufficient quantity and quality and on time}

What is the risk if a purchasing manager buys too much material?

*Resources are invested in assets that cannot be transformed into a profit-making product {Control is critical to purchasing management, since the manager needs to know whether the quantity of inputs aligns with demand for the product. The purchasing manager also uses control to monitor the quality and reliability of inputs and their cost}

Long, efficient production runs make a sufficient inventory of products or services to meet customer demand.

*Finished Goods {Finished goods are ready for the customer. The manager's concern is with producing a supply of this inventory of sufficient quantity and quality to meet demand. This is more challenging when demand is unpredictable}

What is a key decision operations managers need to make with regard to capacity?

*How much will the organization need to produce? {Sometimes, to ensure they have enough capacity but don't overinvest in excess capacity, an operations manager will build only so much capacity within the organization and arrange to rent capacity (e.g., temporary workers, warehouse space, a piece of equipment) during times of peak demand}

Which of the following is the productivity of a country?

*Aggregate productivity {Aggregate productivity is the level of productivity achieved by a country}

Which of the following technologies is specifically developed to help with the design of products, including the simulation of performance?

*Computer-aided design (CAD) {CAD is used to design any number of products. Using the computer, an engineer can "build" the product and subject it to virtual stressors, allowing many problems to be solved before investing resources in a prototype}

Purchasing management and inventory management are collectively known as ____________ .

*supply chain management {Supply chain management consists of managing the purchase of inputs as well as managing their supply and efficient movement at each stage of the production process. Supply chain management is a part of operations management}

An evaluation of all work activities, materials flows, and paperwork to determine whether they add value for the customer An attempt to discover whether some work activities add no value for the customer

*Value-added analysis {Value-added analysis is a comprehension examination of all work activities to identify those that do not add value to the product/service from the customer's perspective. Organizations should work to eliminate such activities}

To control this inventory, the manager uses shop-floor control systems.

*Work In Process {Work in process is undergoing production. The manager's concern is with dividing production into manageable stages so that the flow of inventory can be regulated}

The process of designing work so that it can be completely or almost completely performed by machines is called ___________ .

*automation {Automation involves designing work so that machines can do all or most of it. Machines are much faster than humans and often make fewer errors}

In the U.S. manufacturing sector, overall productivity is _________ than it was in the 1980s.

*higher {Productivity has risen significantly in the U.S. manufacturing sector over the last few decades}

This inventory is undergoing transformation as it is turned into a product or service.

*Work In Process {Work in process is undergoing production. The manager's concern is with dividing production into manageable stages so that the flow of inventory can be regulated}

Using a method intended to virtually eliminate the ability of a process to produce errors Using a structured process to reduce defects to an almost undetectable level

*Six Sigma {Six Sigma is a method for virtually eliminating errors or defects in either a manufacturing or service process}

When managers think about the complete set of features and characteristics of a product or service that determine whether it satisfies customer needs, they are thinking about __________ .

*quality {Quality is a holistic measure of how well a product/service meets the customer's needs. It includes considerations of reliability and durability, as well as performance, features, and aesthetics. TQM is a means to achieve quality. The organization's strategy will emphasize quality to a greater or lesser extent. Standards for a product/service often include standards related to quality}