POM Test 1

Describe how an organization's mission and strategy have different purposes.

The mission is the organization's purpose explaining hw it will contribute to society. Strategy is the organization's action plan to achieve the mission.

Explain what is meant in service design by the "moment of truth."

The moment of truth is when the relationship between the provider and the customer is crucial. At that moment, the customer's satisfaction with the service is defined. It is the moment that exemplifies , enhances, or detracts, from the customer's expectations. For example, that moment could be as simple as a smile from Starbucks barista.

How must an operations strategy integrate with marketing and accounting?

When operations management is well integrated into the strategy of marketing and accounting, competitive advantage is increased. When these activities reinforce each other, they strongly support the company's objectives and missions. Airline scheduling is an operations management activity, but it is tied to marketing because different flight schedules will appeal to people with different destinations in mind at different times of the year. Accounting is tied into operations management because any costs accumulated by the operations manager will ultimately end up dealt with by accounting.

Explain how improving quality can lead to reduced costs.

When quality improves this can lead to greater demand, greater market share, and greater economies of scale. With high quality things such as less scrap, rework, and lower warranty costs are found with it, which leads to less inputs costs for the same amount of output. With improved quality comes improved productivity.

Explain briefly what an x bar - chart and an R - chart do.

X bar chart - a quality control chart for variables, indicates when changes occur in the central tendency of a production process R Chart - A control chart that tracks the range within a sample; it indicates that a gain or loss in uniformity has occurred in dispersion of a production process

What are some of the ethical and social challenges faced by operations managers?

Managers are challenged to 1. develop and produce safe, high-quality green products 2. train, retain, and motivate employees in a safe workplace 3. Honor stakeholder commitments

List and discuss the three basic functions of a firm.

Marketing- generates demand for product/service Operations-creates, produces and delivers product/service finance/accounting- tracks how well organization is doing, pays bills, and collects money

What is the purpose of using a Pareto chart for a given problem?

Pareto charts are a graphic way of classifying problems by their level of importance. 80-20 rule indicates which problems may yield the greatest payoff.

Philip Crosby said that quality is free. Why?

Philip Crosby said that quality is free because he believed that "there is absolutely no reason for having errors or defects in any product or service." He believed that the cost of poor quality was understated in the trade-off between the cost of improving quality and the cost of poor quality. He believed that the cost of poor quality should include all the things that are involved in not doing the job right the first time

In what ways is product strategy linked to product decisions?

Product strategy is critical to achieving competitive advantage and Product decision is the selection, definition, and design of products. The product strategy focuses on improving a product to make it distinct while product decisions aims at establishing which item to produce. So, product decision and product strategy both strive for creating a unique competitive edge. and in meeting clients needs in the best way possible.

Is it possible for a product's life cycle stage to affect its product strategy? In particular, describe how one product in growth and another in maturity might have different product strategies.

Yes, strategies change as products move through their life cycle. In the growth phase, adding capacity or enhancing existing capacity to accommodate the increase in product demand may be necessary. In the maturity phase, improved cost control, reduction in options, and a paring down of the product line may be effective or necessary for profitability and market share

Can a production process be labeled as "out of control" because it is too good? Explain.

Yes. If all other samples are not consistent with the desired results, but only few are, then the few could be considered outliers.

What is a knowledge society?

a society in which much of the labor force has migrated from manual work to work based on knowledge

How does the Theory of Comparative Advantage drive outsourcing?

The Theory of Competitive Advantage states that if an external provider, regardless of its geographic location, can perform activities more productively than the purchasing firm, then the external provider should do the work. This allows the firm to focus on what it does best, the core competencies. With being consistent with the theory of Competitive advantage, outsourcing continues to grow

List and discuss four areas that are significant to improving labor productivity.

continued education diet social overhead morale

How can global operations improve the supply chain?

it can be improved by locating facilities in countries where unique resources are available. (human resources, low cost labor, or raw material)

Discuss the advisability of using modular assemblies in manufacturing. (What are the advantages and disadvantages?) To what extent can these arguments be applied to service products?

modular designs offer flexibility to both production and marketing. Makes changes easier because parts and components are subdivided into modules that are easily interchanged. modular services allow you to mix and match the kinds of services you desire. Disadvantages of modular assemblies are that modules are more expensive than product-specific Verizon since it must function for multiple products.

How do services differ from goods?

-services are intangible while goods are tangible -services are produced and consumed at the same time while goods can be stored in inventory -services are unique while goods are produced all the the same - quality is hard to determine in services but easy for goods. -services are hard to resell while goods often have residual value

Explain the difference between value analysis and value engineering.

-value engineering are activities that help improve a product's design, production, maintainability, and use. -Value analysis reviews successful products during the production process and improves them so they will have a benefit economically and environmentally.

Identify up to four phenomena that foster specialization and worldwide supply chains.

1) a more technologically oriented society 2) specialized expert knowledge 3) instant communication 4) cheaper transportation

What are some measurement problems when measuring productivity?

1. Quality: may change while the quantity of inputs and outputs remain constant. . 2. External elements: may cause an increase or a decrease in productivity for which the system under study may not be directly responsible. 3. Precise units of measure: may be lacking.

Identify the benefits associated with manufacturability and value engineering.

1. Reduced complexity of the product 2. Reduction of environmental impact 3. Additional standardization of components 4. Improvement of functional aspects of the product 5. Improved job design and job safety 6. Improved maintainability (serviceability) of the product 7. Robust design.

List and discuss six reasons to internationalize operations.

1. improve the supply chain - locating facilities in countries where unique resources are available 2. reduce costs and exchange rate risk- reduce risk associated with currency value as well as opportunities to reduce direct costs 3. improve operations - better understanding of management innovations in different countries 4. understand markets- learn new products and services through interaction with foreign customers, suppliers and other competitive businesses 5. improve products - remain open to new ideas 6. attract retain global talent- offering more employment opportunities

Identify and explain the four basic global operations strategies.

1. international strategy - low R, low C 2. multi-domestic strategy - high R. low C 3. global strategy - Low R, High C 4. Transnational strategy - High R, High C

How does an OM strategy change during a product's life cycle?

1. introduction - increase market share, R&D 2. growth - change price or quality image, strengthen niche 3. maturity - dont change, competitive costs are critical, defend market position 4. decline - cost control is critical

What are some of the possible consequences of poor outsourcing?

1.Increased logistics and inventory costs 2. loss of control (quality, deliver...) 3. potential creation of future competition 4. negative impact on employees 5. risks may not manifest themselves for years

What is a poka-yoke? Give an example.

A poka-yoke is a foolproof device or technique that ensures production of good units every time. These special devices avoid errors and provide quick feedback of problems. A simple example of a poka-yoke device is the diesel gas pump nozzle that will not fit into the "unleaded" gas tank opening on your car.

Define "in statistical control."

A process can be considered in statistical control when there are no remaining special causes of variation, only natural or common causes of variation are present.

What is a process chain?

A process chain is a sequence of steps that accomplishes an identifiable purpose (of providing value to process participants).

What might cause a process to be out of control?

A process that is out of control will have assignable causes of variation. Assignable variations present in a process can be traced to a specific reason and can include things like untrained workers, wrongly adjusted equipment, new batches of raw materials, or machine wear and tear. Finding these variations help managers to ensure that a process is capable of operating under control with only natural variations and to identify and remove assignable variations

What is a product-by-value analysis, and what type of decisions does it help managers make?

A product-by-value analysis is a list of products, in descending order of their individual dollar contribution to the firm, as well as the total annual dollar contribution of the product This report allows management to evaluate possible strategies for each product; -- i.e. increasing cash flows, increasing market penetration, or reducing costs. It also tells management which product offerings should be eliminated and which fail to justify further investment in research and development or capital equipment while focusing on the strategic direction of each product

What does a run of 5 points above or below the centerline in a control chart imply?

A run of 5 points above or below the target or centerline may suggest that an assignable, or nonrandom, variation is present. When this occurs, even though all the points may fall inside the control limits, a flag has been raised. This means the process may not be statistically in control. A variety of run tests are described in books on the subject of quality methods. Run of 5 points above (or below) central line. Investigate for cause.

What is a run test, and when is it used?

A run test is a test used to examine the points in a control chart to see if nonrandom variation is present. Run test help to identify abnormalities in a process. In general, a run of 5 points above or below the target or centerline may suggest that an assignable, or nonrandom, variation is present. Run test are used to see if a process is in control or not

List and discuss the seven concepts that are necessary for an effective TQM program.

-Check Sheet: any kind of a form that is designed for recording data. -Scatter Diagram: Show the relationship between two measurements. -Cause-and-Effect Diagram (fish-bone chart): Used for identifying quality issues and inspection points. -Pareto Chart: A method of organizing errors, problems, or defects to help focus on problem-solving efforts. -Flowchart: Graphically represent a process or system using annotated boxes and interconnected lines. -Histogram: Show the range of values of a measurement and the frequency with which each value occurs. -Statistical Process Control (SPC): Monitors standards, makes measurements, and take corrective action as a product or service being produced.

List and discuss the seven tools of TQM?

-Check Sheet: any kind of a form that is designed for recording data. -Scatter Diagram: Show the relationship between two measurements. -Cause-and-Effect Diagram (fish-bone chart): Used for identifying quality issues and inspection points. -Pareto Chart: A method of organizing errors, problems, or defects to help focus on problem-solving efforts. -Flowchart: Graphically represent a process or system using annotated boxes and interconnected lines. -Histogram: Show the range of values of a measurement and the frequency with which each value occurs. -Statistical Process Control (SPC): Monitors standards, makes measurements, and take corrective action as a product or service being produced.

List and discuss five strategic operations management decisions.

-Design of goods and services: Defines much of what is required of operations in each of the other OM decisions -Managing quality: Determines the customer's quality expectations and establishes policies and procedures to identify and achieve that quality. -Process and capacity strategy: Determines how a good or service is produced and commits management to a specific technology, quality, human resources, and capital investments that determines much of the firms' basic cost structure. -Location strategy: Requires judgments regarding nearness to customers, suppliers, and talent, while considering costs, infrastructure, logistics, and government. -Layout strategy: requires integrating capacity needs, personnel levels, technology, and inventory requirements to determine the efficient flow of materials, people, and information. - Human Resources and job design: determines how to recruit, motivate, and retain personnel with the required talent and skills. People are an integral and expensive part of the total system design -Supply Chain Management: Decides how to integrate the supply chain into the firm's strategy, including decisions that determine what is to be purchased, from whom, and under what conditions -Inventory Management: Considers inventory ordering and holding decisions and how to optimize them as customer satisfaction, supplier capability, and production schedules are considered. -Scheduling: Determines and implements intermediate - and short term - schedules that effectively and efficiently utilize both personnel and facilities while meeting customer demands -Maintenance: Requires decisions that consider facility capacity, production demands, and personnel necessary to maintain a reliable and stable process.

What techniques do we use to define a product?

-Engineering Drawing: shows the dimensions, tolerances, materials, and finishes of a component (manufacturing) -Bill of Material (BOM): lists the product's components, their description, and the quantity of each required to make 1 unit (manufacturing)

List some possible causes of assignable variation.

-Mistakes by an operator, -defective materials, -worn or aged tools, -weather or other environmental changes

Identify the external product development strategies; describe each in a sentence or two.

-Purchasing Technology by Acquiring a Firm - which is best explained through companies such as Microsoft and Cisco systems as they purchase entrepreneurial firms that have already developed a technology to fit their mission in order to speed up their own company's development. -Joint Ventures - are a combined ownership, usually between two firms, to form a new entity. They are often appropriate for exploiting specific product opportunities that may not be central to the firm's mission. -Alliances- allow cooperative agreements to be made while firms still remain independent but pursue strategies consistent with their individual missions. This stems from the point when new products that are central to the mission, but substantial resources are required as sizable risk is present.

What is SWOT analysis? List its four elements and describe its purpose.

-SWOT analysis is a method of determining internal strengths and weaknesses and external opportunities and threats. -strengths -weaknesses, -opportunities -threats. -The purpose/idea is to maximize opportunities and minimize threats in the environment while maximizing the advantages of the organizations strengths and minimizing the weaknesses

List and explain Shewhart's two types of variation. What are they also called?

-common (natural) variation - variability that affects every production process to some degree and is to be expected - special (assignable) variation - variation in a production process that can be traced to specific causes

What potential cost-saving advantages might firms experience by using outsourcing?

-cost savings -Gaining outside expertise that comes with specialization -improving operations and service -maintaining a focus on core competence -accessing outside technology

How should a company select an outsourcing provider?

-factor-rating method which provides an objective way to evaluate outsource providers. It assigns points for each factor to each provider and then importance weights to each of the factors. Then they can apply the process to compare outsourcing providers being considered by the firm.

What are the five reasons productivity is difficult to improve in the service sector?

-labor intensive -focused on individual attributes -task performed by professionals -difficult to mechanize and automate -difficult to evaluate for quality

Why are organizations becoming more global?

-rapid decline in the cost of communication and transportation -Resources in the form of capital, materials, talent, and labor are now becoming more global -Operation managers are rapidly seeking creative designs, efficient production, and high-quality goods via international collaboration

What internal issues must managers address when outsourcing?

-reduced employment levels, -changes in facility requirements, -potential adjustments to quality control systems and manufacturing processes, -expanded logistics issues, including insurances, tariffs, customs, and timing.

List five steps in developing and using x -charts and R -charts.

1. Collect 20 to 25 samples, often of n = 4 or n = 5 observations each, from a stable process, and compute the mean and range of each. 2. Compute the overall means ( x and R ), set appropriate control limits, usually at the 99.73% level, and calculate the preliminary upper and lower control limits. Refer to Table S6.2 for other control limits. If the process is not currently stable and in control, use the desired mean, m, instead of x to calculate limits. 3. Graph the sample means and ranges on their respective control charts and determine whether they fall outside the acceptable limits. 4. Investigate points or patterns that indicate the process is out of control. Try to assign causes for the variation, address the causes, and then resume the process. 5. Collect additional samples and, if necessary, revalidate the control limits using the new data.

Identify the five steps of DMAIC.

1. Defines the project's purpose , scope, and outputs and then identifies the required process information, keeping in mind the customer's definition of quality; 2. Measures the process and collects data; 3. Analyzes the data, ensuring repeatability (the results can be duplicated) and reproducibility (others get the same result); 4. Improves by modifying or redesigning, existing processes and procedures; and 5. Controls the new process to make sure performance levels are maintained.

Discuss the managerial issues regarding the use of control charts.

1. First, managers must select the points in their process that need SPC. They may ask "Which parts of the job are critical to success?" or "Which parts of the job have a tendency to become out of control?" 2. Second, managers need to decide if variable charts (i.e., x and R ) or attribute charts (i.e., p and c) are appropriate. Variable charts monitor weights or dimensions. Attribute charts are more of a "yes-no" or "go-no go" gauge and tend to be less costly to implement. 3. Third, the company must set clear and specific SPC policies for employees to follow. For example, should the data-entry process be halted if a trend is appearing in percent defective records being keyed? Should an assembly line be stopped if the average length of five successive samples is above the centerline?

Why are organizations becoming more global?

1. Improve the supply chain: The supply chain can be improved by locating facilities in countries where unique resources are available. 2. Reduce costs and exchange rate risk: many international operations seek to reduce risks associated with changing currency values (exchange rates) as well as take advantage of the tangible opportunities to reduce their direct cost. 3. Improve operations: operations learn from better understanding of management innovations in different countries. 4. Understand markets: because international operations require interaction with foreign customers, suppliers, and other competitive businesses, international firms inevitably learn about opportunities for new products and services. 5. Improve products: firms serve themselves and their customers well when they remain open to new ideas. 6. Attract and retain global talent: global organizations can attract and retain better employees by offering more employment opportunities.

What are 10 determinants of service quality?

1. Reliability-- involves consistency of performance and dependability. it means that the firm performs the service right the first time and that the firm honors its promises. 2. Responsiveness-- concerns the willingness or readiness of employees to provide service. It involves timeliness of service. 3. Competence-- means possession of the required skills and knowledge to perform the service. 4. Access-- involves approachability and ease of contact. 5. Courtesy-- involves politeness, respect, consideration, and friendliness of contact personnel. 6. Communication-- means keeping customers informed in language they can understand and listening to them. It may mean that the company has to adjust it language for different consumers--increasing the level of sophistication with a well-educated customer and speaking simply and plainly with a novice. 7. Credibility-- involves trustworthiness, believability, and honesty. It involves having the customer's best interest at heart. 8. Security-- is the freedom from danger, risk, or doubt. 9. Understanding/Knowing the Customer-- involves making the effort to understand the customer's needs. 10. Tangibles-- include the physical evidence of the service.

Identify and briefly describe the three process regions from PCN analysis.

1. The direct interaction- region includes process steps that involve interaction between contributors. When going to Subzero to get ice cream the server works directly with consumer. 2. The surrogate or substitute interaction- region includes process steps in which one member is performing on another member's resources. When someone goes to Sonic to order ice cream the desert is prepared inside then brought outside to the consumer. Another way to look at is when you go to a frozen yogurt shop and you get dispense the desert yourself. 3. The independent processing- region includes steps in which the supplier or the customer is performing on resources where each have all the control. When thinking about this is when you go to a gas station to get a pint of ice cream. This also can be thought about is when ice cream is made at home.

Describe four organizational approaches to product develop-ment. Which of these is generally thought to be best?

1. US approach that divides an organization into different parts. Firms can be divided into departments such as research & development, engineering, manufacturing, and production. The main advantage of this approach is that each department has fixed responsibilities to uphold, while the main disadvantage is lack of forward thinking. 2. assigns a product manager to divide up work between departments and organizations. The manager acts as the central means of communication between each department and accepts the main responsibility of making sure the product gets finished. 3. use of teams. Teams are often comprised of people from different departments who bring certain skills and knowledge from their respective areas. Together, this team will bring the product from market requirements to product success. This is often referred to as the best method of product development. - best approach 4. bypasses the issue of dividing a product management into departments, but instead focuses on the organization as one unit. This reflects traditional Japanese values, as they often emphasize teamwork and shared responsibility more than many Western countries

Explain how just-in-time processes relate to the quality of an organization's outputs.

1. cuts the cost of quality- less inventory means less costs. inventory hides bad quality, whereas JIT exposes bad quality 2. improves quality - shrinks lead time, limits number of potential errors. 3. better quality means less inventory and a better, easier to employ JIT system. allows firms to reduce costs associated with inventory

List and discuss three primary ways to achieve competitive advantage.

1. differentiation - distinguishing the offerings of an organization in a way that the customer perceives as adding value 2. cost leadership - achieving maximum value, as perceived by the customer 3. response - a set of values related to rapid, flexible, and reliable performance

List and discuss some reasons to study operations management.

1. how people organize themselves for productive enterprises 2. how goods and services are produced 3. understand what operations managers do 4. it is such a costly part of an organization

Which 3 of Deming's 14 points do you think are most critical to the success of a TQM program? Why?

I would say identifying problems (3), consistency of purpose (1), then education and improvement (13). Identifying problems is a basic premise of TQM is that quality control is integrated into production processes, therefore, dedicated quality control procedures, which are out of the normal process flow, are unnecessary and work against increasing efficiency. Consistency of purpose is a suggestion to focus on long-term planning rather than a short-term response to changing circumstances and to align periodic planning with the organization's overall mission and vision. Education and Improvement to institute a vigorous program of education and self-improvement for everyone. This point is simply an extension of the ideas in Points 5 and 6; "continuous improvement" must be applied to the people as well as processes.

The focus of ISO 9000 is to enhance success through what eight quality management principles?

ISO 9000 is the quality standard with international recognition. Its focus is to enhance success through eight quality management agreement principles: -Top management leadership -Customer satisfaction -Continual improvement -Involvement of people -Process analysis -Use of data-driven decision making -A systems approach to management -Mutually beneficial supplier relationships