OPM Exam 1 study set

Sustainability is ?

Managing resource to make sure (not just have tendencies) they are available for future generations

Why do companies do a weekly demand review?

Markets are too competitive and moving too fast to review less frequently.

Low Cost, Low Price?

One is to produce the product at a lower cost than the company's competitors to increase volume

Five core competency end goals?

Price Quality Time Innovation Flexibility

Two main sides to business?

1) Demand (Sales and Marketing) responsible for forecasts, affecting customer behaviors, getting orders for products or services and understanding markets 2) Fulfillment (Operations and Supply Chain Management) responsible for making and delivering products and services.

types of forcasting modules?

1) experienced based - judgement and market knowledge Used in absence of data and when (because) statistics can't account for everything More qualitative in nature Requires market understanding and knowledge 2) naïve - using tools with little qualitative input Only take historical mathematical relationships and extrapolate them into the future Don't explain WHY things happen, only what's likely Quantitative in design 3) causal - understanding relationships between events and demand changes Regression models designed to explain variation in demand (events tend to cause demand characteristics such as rain causes umbrella sales, drought decreases agricultural equipment sales, gun control legislature increases gun sales)

Know that good management systems include?

1) good process design 2) accountability to the process and 3) metrics/results. These are designed to monitor various processes in the business and can be daily (i.e. daily schedule review) or weekly (i.e. Weekly Performance Review), or monthly (S&OP) management system in this course is synonymous with accountability infrastructure. Also know that good process design deteriorates over time unless there are management systems (accountability infrastructures) in place to create process accountability

Industry 4.0 is the next phase in the digitization of the manufacturing sector, driven by four disruptions?

1) the astonishing rise in data volumes, computational power, and connectivity, especially new low-power wide-area networks 2) the emergence of analytics and business-intelligence capabilities. 3) new forms of human-machine interaction such as touch interfaces and augmented-reality systems [AI]; and improvements in transferring digital instructions to the physical world, such as 4) advanced robotics and 3-D printing.

Capacity levels of measuring capacity:

: 1) Theoretical, 2) Effective and 3) Demonstrated.

Theory of Constraints

A specific approach used to identify and manage constraints in order to achieve the company's goals.

Demand Plan Inputs with Marketing?

Affecting customer behaviors Marketing/Demand Development Promotions New Product Introductions Channel Management

High Price High Quality?

Another way a firm can compete on price is to provide higher perceived quality and value and charge a higher price

What is the second most important Operational performance metric in business?

COST!

What is the MOST IMPORTANT Operational performance measurement in business?

CUSTOMER SERVICE!

Why Plan?

Customer demand variation Competition and associated variation Technology and associated variation Manufacturing and service process variation Other variation? The main tools beyond market insight are flexibility and responsiveness (speed) Buffer capacity for agility Buffer inventory for responsiveness

Industry 4.0 and what it means?

Cyber physical systems, systems and human integration

Productivity build?

Economic Power

Quality is influenced by?

Economic Power

What is the balanced scorecard is and how it helps organizations do strategic planning?

Financial: To succeed financially, How should we appear to our shareholders? Customer: To achieve our vision, how should we appear to our customers? Learning and Growth: To achieve our vision, how will we sustain our ability to change and improve? Internal Processes: To satisfy our shareholders and customers, what business processes must we excel at?

Simple Moving Average

Forecast is based on averagedemand over the most recentperiods Useful when demand is not growing or declining rapidly, and no seasonality is present Removes some of the random fluctuation from the data Selecting the period length is important Longer periods provide more smoothing Shorter periods react to trends more quickly

Qualitative versus Quantitative techniques and the importance of both are?

Qualitative inputs are often the key to competitive advantage—Remember that everybody (competition) has the quantitative history but both help Understanding your market, is the best forecast advantage you can have Understanding customer thinking and planning Understanding trends in the market

Business Imperatives?

Tactical objectives that MUST BE DONE in the next 12 months for competitive advantage, advantage - Driving the Corporate Strategy - Often involve multiple functions and almost always involves Operations! It is also a shared idea within Hoshin Planning - delegated actions to support the strategy

Understand IOT (Internet of Things) and what it means?

Term often associated with Industry 4.0 IoT is a key component in this whole equation, mainly from an industrial perspective, which looks a bit more at: Processes Data analysis People interaction

Demand Plan Inputs with Sales?

The sales funnel review (next slide) Know opportunities Know closure rate Know closure cycle time Calculate results

Weighted Moving Average

The simple moving average formula implies all periods are equally important A weighted moving average allows unequal weighting of prior time periods The sum of the weights must be equal to one More recent data (periods) are given more significance (higher weights) than older data Experience and trial and error are the simplest approaches (Educated/experience guessing?? Trial and error) The most recent past is the most important indicator of whatto expect in the future, so weights are generally higher for more recent data If the data are seasonal, weights should be established appropriately The weighted moving average has an advantage over the simple moving average

Porter's 5 Forces

Threat of Entrants: When barriers to entry are low, companies can expect a lot of rivals to enter the market (shampoo versus heat treating) Threat of Substitutes: Similar products or services that satisfy the same need as the existing firm (Cushman trucks versus airplane engines) More substitutes lower profits Existing Rivalry: When intensity is high, strategic goals are difficult to obtain (Silk / Almond Breeze versus milk)

Time series analysis concept (sequential data) and pattern components?

Times series patterns components: "Time series" is simply chronological data." Trend- slope of time series or average rate of change Cyclical- long-term, repetitive pattern (think macroeconomics) Seasonal- repetitive pattern during a fixed time period Irregular- random variation, also called "noise"

Demand Plan inputs Business Plan?

What products What markets What Customers Revenue Profit/Pricing Cost Drivers Economic Assumptions

Over the Internet of Things (IoT), Cyber-physical systems communicate and cooperate with?

With each other and humans in real time, Via the Internet of Services, both internal and cross-organizational services are offered and utilized by participants of the value chain.

Delphi Method

a forecasting technique using a group process that allows experts to make forecasts,

Decision tree

a graph of decisions and their possible consequences; it is used to create a plan to reach a goal

Social responsibility is ?

business practices should be fair to labor, the community, and the region where the firm conducts business

How is Simple Moving Average calculated?

by adding the price of an instrument over a number of time periods and then dividing the sum by the number of time periods

How is weighted moving average calculated?

by multiplying each observation in the data set by a predetermined weighting factor

Seasonality and effect on forecasting?

is a characteristic of a time series in which the data experiences regular and predictable changes that recur every calendar year. Any predictable fluctuation or pattern that recurs or repeats over a one-year period is said to be seasonal.Seasonality can happen any time in the 4 quarters of a year but must demonstrate repeated demand surges and dips in the same quarters

Corporate Strategy (long term direction) defines what the objectives for growth and sustainability in the future are?

long-term direction of the company - Products, Markets, Long Range Financial Plans 3-5 (9-10?) years

bullwhip effect

occurs when distorted product-demand information ripples from one partner to the next throughout the supply chain

Economic prosperity?

shareholders must be compensated via a competitive return

Collaborative Planning?

sharing information and synchronizing production plans across the supply chain

Mean Absolute Percentage of Error?

the MAD adjusted to measure how large errors are relative to the actual demand quantities

Environmental stewardship is ?

the company should protect the environment as much as possible and protect environmental resources for future generations.

The difference between order winners and qualifiers is that order qualifiers are?

the competitive standards that make a firm's products viewed as fit for purchase by consumers, while order winners are the standards that separate the products or services of one firm from another