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.