Chapter 1
Triple bottom line
A strategy that meets the needs of shareholders, and employees, and that preserves the environment
Lean Manufacturing
An approach that combines TQM and JIT
Which of the following is an example of benchmarking? Determining if a competitor's advertising includes false claims. Hiring a consultant to study customer satisfaction metrics with those of key competitors. Evaluating a competitor's product for weaknesses.
B
Product service bundling
Building service activities into a firm's product offering
Efficiency
Doing something at the lowest possible cost
Effectiveness
Doing the things that will create the most value for the customer is known as
From an operations perspective, what is the difference between efficiency and effectiveness?
Efficiency concerns costs and effectiveness reflects requirements
Which characteristics are more likely associated with services vs. products?
High customer involvement and inability to inventory
Asset turnover
Revenue (or Sales)/Total Assets
Supply chain network
The pipeline movement of the materials and information needed to produce a good/service
Value
attractiveness of a product relative to its cost.
Core service
integrates tangible goods (cable TV provides cable hookup)
Returning
processes for receiving worn-out, defective, and excess products back from customers
Making
producing the major product or providing the service
Value equation
quality/price
How much impact (or leverage) might operations managers have on return on investment (ROI) by reducing material costs?
6x
Benchmarking
A process in which one company studies the processes of another company for best practices. Relative cost of providing a good/service is closely related to earnings growth
Successful operations and supply chain management depends on:
An operations-related strategy Processes to deliver products and services Analytics to support decisions and provide feedback
Receivables turnover calc
Annual net credit sales / avg acc receivable
Cash conversion cycle calc
Days sales outstanding + Days inventory - Payable period
A company has recently implemented an automated online billing and payment processing system for orders it ships to customers. As a result, it has reduced the average number of days between billing a customer and receiving payment by 10 days. How will this affect the receivables turnover ratio?
Increases
Pure service
Perishable, heterogeneous, perishable/time dependent, intangible, interaction with customer, can't patent service innovation
Operations and supply chain management is concerned with the design and management of the entire system that has what function?
Produces a product or delivers a service
Which processes are most likely under the direction of operations managers?
Sourcing, planning, and making
What are the three elements that require integration to be successful in operations and supply chain management?
Strategy, processes, and analytics
A manufacturing company has entered into a new contract with a major supplier of raw materials used in the manufacturing process. Under the new arrangement, called vendor managed inventory, the supplier manages their raw material inventory inside the manufacturer's plant, and only bills the manufacturer when the manufacturer consumes the raw material. How is this likely to affect the manufacturer's inventory turnover ratio?
The plant operates more efficiently, the inventory turnover ratio goes up.
Inventory turnover
cost of goods sold/average inventory value
Focus of operations/supply chain
design, operation, and improvement of the systems that create and deliver an organization's products and services.
Just in time production
integrated set of activities designed to achieve high-volume production using minimal inventories of parts that arrive at workstations exactly when they are needed
Delivering
logistics processes such as selecting carriers, coordinating the movement of goods and information, and collecting payments from customers
operations
manufacturing and service processes that are used to transform the resources employed by a firm into products desired by customers
Processes
one+ activities that transform inputs into outputs
Planning
processes needed to operate an existing supply chain. Forecasting
Supply chain
processes that move information and material to/from the manufacturing and service processes of the firm. Outside of the firm
Pure goods
products that don't include any services. Tangible: food products, mining, chemicals
Core goods
provide large level of service with their good. Appliances, automobiles, data storage system
Sustainability
relates to the ability of a firm to maintain balance in a system, considering the ongoing economic, employee, and environmental viability of the firm?
Sourcing
selection of suppliers that will deliver the goods and services needed to create the firm's product. A set of pricing, delivery, payments, and partner relationship metrics needed. Where we get things. Selection of suppliers
Operations and supply chain management is primarily concerned with systems that create and deliver
the firm's primary products and services.