total GMS

What is Quality?

"The quality of a product or service is a customer's perception of the degree to which the product or service meets his or her expectations."

a focused work center in a separate facility is called ___

"focused factory" work cell -> focused work center -> focused factory

Supply Chains An integrated group of processes to

"source," "make," and "deliver" products with INFORMATION as the common thread

We RATIONALIZE in order to avoid doing maint explain

"the brakes arent thaaat bad" Who ever cleans the BBQ? No one! Its working perfectly now--yeah its been awhile since we cleaned it but I don't want to spend hours to take it apart Maintence tends to look like something that takes a lot but GIVES A LITTLE

- Many times people come up with ideas from

"useability" - If you are generally interested in a particular area like sports, just being in involved IN THAT, you often will come up with better ideas Like tennis player will under stand tennis issues and things that YOU would want as a product

we use statistical control in order to

"we use statistical control in order to assign blame and take corrective actions"

in canada and US, TQM is also known as

"zero defects"

! product failure rate (FR)

(# of failures)/(# of units tested) * 100 or to find failures during period of time: (FRN) = (# of fails)/(total unit-hours - nonoperating)

productivity Growth =

((Current Productivity - Previous Productivity) / Previous Productivity) x100 no/o

Just-in-time (JIT):

): A highly coordinated processing system in which goods move through the system, and services are performed, just as they are needed usually small batches (IDEAL SIZE = 1) pull (demand) system

Two Ways Quality Improves Profitability

*SALES GAINS* - improved response - flexible pricing - improved reputation *REDUCED COSTS* - increased productivity - lower rework & scrap costs - lower warranty costs]] both from qual improvement

__% theft comes from ____ and they ___

- 66% thef comes from employees, comes in before/after work hours, tends. To work in 2's and takes advantage of inventories that are LARGE and just sitting around ○ Little bits missing wont be noticed If u carry more inv, more likely that your employees will steal from. You.

"Quality of work is not quality of service"

- One note to take is that the service provider is uniquely tied in into the service itself If you get someone to cut your lawn and u don't like it, you often blame the individual and this is an issue, because sometimes you would even go to a different company just because of the experience you received but u might have just gotten a bad employee, it doesnt mean the service company is bad

Most Difficult Issue to Overcome

- People working to meet their own objectives / ends, not those defined in the project specifications

TQM In Services

- Service quality is more difficult to measure than the quality of goods [It takes a lot more motivation to go above and beyond esp since now you are in charge of distribution as well] - Service quality perceptions depend on 1. Intangible differences between products 2. Intangible expectations customers have of those products

WHY IS EOQ FLAWED

- Theory EOQ ○ If I can find this sweet spot--gives me the lowest price--that should be the quanitiy I order ○ But the truth is, this doesn't work as it only works on INDIVIDUAL order - We normally order everything at one time It doesn't work in the real world

Bullwhip effect is due to + THEIR COUNTERS

- This is due to; ○ Price fluctuations § Counter: everyday low price ○ Order batching § C: frequent ordering ○ Shortage gaming § C: forecast on sales history ○ Forecast inaccuracy § C: information sharing So it is ALL ABOUT COMMUNICATION

The Kano Model

- basic quality - expected performance quality - excitement quality This gives the 'buzz' that sells the product "its not the steak that sells the steak, it is the sizzle" Because the excitement is there, you no longer focus about price There are however some base things that we need to fulfill first in order to reach higher levels of excitement.

Major factors in strategy

-Cost-Quality-Time-to-market-Customer satisfaction-Competitive advantage

random stocking

-Typically requires automatic identification systems (AISs) and effective information systems -Allows more efficient use of space -no more need for reserved space--saving costs and time -able to track down the stock anywhere b/c of the AIS tasks include: listing open locations, maintain accurate records, sequencing items to minimize travel time, combine order to min time, assign certain popular items to particular area to min distance

a more productive company benefits..

-enjoys lower costs -pass on savings in reduced prices -competitive edge -better stock prices -can offer employee profit-sharing plans based on productivity improvement -can rely on productivity planning to maintain a long term market advantage

work cells advantages over assembly and process-layouts

-inspection is faster due to grouping -fewer workers -workers can reach more of the work area -area is more efficiently balanced -communication is enhanced

how has rapid product development become a new challenge in OM

-international communication of news, entertainment, and lifestyles dramatically chops away at the lifespan of products -need to create products that are more responsive and effective

how has JIT just-in-time-preformance become a new challenge in OM

-inv costs financial resources, hides quality issues, and constrain response to the ever-shorter life cycles we face today -need to work with their supply chains to cut inventories, only keep what is required immediately, no overstock

why does productivity matters

-linked to higher standards of living -competitive advantage -high relative productivity makes it less likely to be supplanted by foreign industry

how has empowered employees become a new challenge in OM

-lots of knowledge now, most ppl in schools + more technical workplace -this combined to require more competence in the workplace -need to also make the job more enriching by moving the decision making to the individual worker

advantages of process-orientated layout

-lots of variety -breakdown of one machine will not halt an entire process--can be transferred else where -good for handling [job lots]: batches of parts processes together

Useful life

-meantime before the product fails

how has information technology contributed in OM

-most important changes -wireless links, internet, ecommerce is reducing costs and accelerating communications

ohno's seven wastes

-over production -queues -transportation -inventory -motion -overprocessing -defective product

which process strategy is nicknamed the "intermittent process" and why

-process focus -bc they perform a wide variety of activites and handle frequent changes -stops by many departments and many routings

which process strategy is nicknamed the "continuous processes" and why

-product focus -bc they have very long cont. production runs

But an problem is that if you are developing a brand new item for the market, how do we know how much we sell it for?

-recall that pricing heavily influnces the success of a product [whisper2000] -standard NORTH AMERICA formula: labour+overhead is often 1.5x $mats - x2 to wholesaler - x2 again to retailer

describe the growth of services

-until about 1990 many were employed in agriculture (manufacturing) -this increased productivity allowed people to leave the farm and seek employment in the city -services then became the dominant employer in the early 1920s, with manufacturing peaking at about 32% in the 1950s

every time u train a worker to be multifuctional...

..they see themselves as more skilled the expect more wages--it is said that managers usually pay for specialized skills multifunctional workers allow managers to have mobility but this is TOO COSTLY wal says that specialized worker>multi fucntional

Deming's 14 Points [ - Was a famous manufacturing person who focused on how to make products better ]

1 Create consistency of purpose 2 Lead to promote change 3 Build quality into the product; stop depending on inspections 4 Build long-term relationships based on performance instead of awarding business on price 5 Continuously improve product, quality, and service 6 Start training 7 Emphasize leadership 8 Drive out fear 9 Break down barriers between departments 10 Stop haranguing workers 11 Support, help, and improve 12 Remove barriers to pride in work 13 Institute education and self-improvement 14 Put everyone to work on the transformation

a good maint facility should have these 6 features

1- well trained personnel 2- adequte resourses 3- establish repair plan and proiorities 4- authority to do material planning 5- identify the cause of breakdowns 6- ability to design ways to extend MTBF [meantimebetweenfailures]

Phases of Quality Assurance

1. Acceptance sampling [Inspection before/after production] 2. Process control [Corrective action during production] 3. Continuous improvement [Quality built into the process] least -> to most progressive - When things start bad--usually end bad ○ Once we start finding problems we are likely to find even more in the future

Disadvantages of Standardization

1. Designs may be frozen with too many imperfections remaining. 2. High cost of design changes increases resistance to improvements 3. Decreased variety results in less consumer appeal

Layout Design Considerations

1. Higher utilization of space, equipment, and people 2. Improved flow of information, materials, or people 3. Improved employee morale and safer working conditions 4. Improved customer/client interaction 5. Flexibility

The Consequences of Poor Quality

1. Loss of business 2. Liability 3. Productivity 4. Costs

Advantages of Work Cells

1. Reduced work-in-process inventory 2. Less floor space required 3. Reduced raw material and finished goods inventories 4. Reduced direct labor cost 5. Heightened sense of employee participation 6. Increased equipment and machinery utilization 7. Reduced investment in machinery and equipment

Steps in Developing New Products

1. Technical and economic feasibility studies 2. Prototype design 3. Performance testing of prototype 4. Market sensing/evaluation and economic evaluation of the prototype 5. Design of production model 6. Market/performance/process testing and economic evaluation of production model 7. Continuous modification of production mod

Firms achieve missions in three conceptual ways

1. differentiation 2. cost leadership 3. response they then translate these strategic concepts into tangible tasks to be accomplished

Every good is made with one of these process Strategies:

1.Process focus -organized around specific activities -high degree of product flexibility -low volume, high variety "job shops" 2.Repetitive focus -assembly lines -modules with parts -more efficient but less flexible 3.Product focus -organized by product -high volume but low variety -high fix cost but low var costs b/c they are same products 4.Mass customization -rapid, low-cost production -not just about varitey, it is WHAT THE CX WANTS - combines the flexibility of a process focus with the efficiency of a product focus -requires sophisticated operational capabilities

- It costs _______ to get a new cx than to keep your current cx satisfied

19x more

typical learning curve

70%`]

Modular Design

A form of standardization in which component parts are grouped into modules that are easily replaced or interchanged - Many cars use the same compenents in them easier diagnosis and remedy of failures-easier repair and replacement -simplification of manufacturing and assembly

What is a Project?

A project is any sort of planned undertaking. defined as a means of moving from a problem to a solution via a series of planned activities

Processes used to ensure timely completion of a project.

Activity definition Activity sequencing Activity duration estimating Schedule development Schedule control

Maintenance definition

All activities that maintain facilities and equipment in good working order so that a system can perform as intended

Down Side of Conversion (jit)

Amount of time and cost requirements for achieving conversion Must be the capability of responding quickly when problems arise Increased transportation costs Traffic congestion due to frequent deliveries

Quality Function Deployment

An approach that integrates the "voice of the customer" and "house of quality" into both product and service development

Predictive maintenance

An attempt to determine when best to perform preventive maintenance activities

Reasons for keeping equipment running

Avoid production disruptions Not add to production costs Maintain high quality Avoid missed delivery dates

Adding Purchasing costdoesn't change EOQ WHY

B/C [PD], PURCHASING COST IS JUST AN ADDITION TO THE [TC, TOTAL COST] FORMULA IT IS LIKE A "B" IN Y=MX+B THE OPTIMAL POINT JUST SHIFTS VERTICALLY NOT HORIZ

Never ever make ur employees count stock why

Because they get lazy and estimate Try to do it fast as possible so they can leave You always should use a 3rd party to count It is important to have accurate info

Choosing the Right Control Chart

CONTINOUS OR DISCRETE? C: N= 1 OR N= 2+ N=1 -> indiv unit moving charts N=+2 -> sample means + range D: 2 TYPES OF OCCURANCES THAT CAN B COUNTED -> p chart ONLY OCCURANCES CAN B COUNTED -> c chart

To determine the probability that the project will be completed within the specified time..

Calculate probability that each path will be completed within the specified time Multiply these probabilities

Factors Affecting Productivity

CapitalQualityTechnologyManagement

Two types of factors introduce variation in production processes

Controllable factors - can be reduced by workers and management Uncontrollable factors - reduced only by redesigning or replacing existing processes

Metrics used to measure supply chain performance

Cost unit cost inventory turnover Variety/ Flexibility speed production speed of changes Delivery lead time on-time Customer service fill rate

The Control Process

Define Measure Compare to a standard Evaluate Take corrective action Evaluate corrective action

who is responsible for quality?

EVERYONE IS--everyone's job add some kind of quality factor

Taguchi Concepts

Engineering and experimental design methods to improve product and process design Taguchi concepts: Quality robustness Quality loss function (identifies all costs connected w poor qual and show how these costs increase as the product moves away from being what the cx wants) L=D^2C Target-oriented quality (philosophy of continuous improvement to bring a product exactly on target)

ISO 14000 Environmental Standard

Environmental management Auditing Performance evaluation Labelling Life cycle assessment

T/F low cost strategy implies a low value or low quality

F

Supply ChainUncertainty and Inventory

Factors that contribute to uncertainty inaccurate demand forecasting long variable lead times late deliveries incomplete shipments product changes batch ordering price fluctuations and discounts inflated orders

Inventory Replenishment models

Fixed Order Quantity/Reorder Point Model An order of a fixed size is placed when the amount on hand drops below a minimum quantity called the reorder point Two-Bin System Two containers of inventory; reorder when the first is empty Bar Code A number assigned to an item or location, made of a group of vertical bars of different thickness that are readable by a scanner Universal Product Code (UPC) Radio Frequency Identification (RFID) technology that uses a RFID tag attached to the item that emits radio waves to identify items.

Employee Empowerment

Getting employees involved in product and process improvements Build communication networks that include employees Build a high-morale organization Develop open, supportive supervisors

Quality Circles

Group of employees who meet regularly to solve problems Trained in planning, problem solving, and statistical methods

Key Elements of JIT System `

High quality levels Production smoothing Low inventories Small lot sizes Quick low -cost setups Layout Preventive maintenance Multifunctional workers Cooperative spirit Few, reliable suppliers Pull System of moving goods Problem solving Continual improvement

Inspection decisions

How Much/How Often Where/When Centralized vs. On-site

example of transformation process at a food processor, label the items

INPUTS: raw veg, metal sheets, water, energy, labour, building, equipment PROCESS: cleaning, cutting, cooking, packing, label OUTPUT: canned veg

Slack is SHARED meaning

If two activities on the same path have the same slack, this is total slack available to both

Continuous Improvement (Kaizen) 6 POINTS`

Improvement should be done gradually and continuously Everyone should be involved Built on a cheap strategy Can be applied anywhere Learn by doing Rely on observation, data & scientific thinking

Independent vs. Dependent Demand

Independent Demand (Demand for the final end-product or demand not related to other items) Dependent Demand (Derived demand items for component parts, subassemblies, raw materials, etc) Independent demand is uncertain. Dependent demand is certain.

internal vs external separate changeover activities

Internal - activities that can only be done while machine is stopped External - activities that do not require stopping the machine make setup activities external where possible

Preventative maintenance vs Housekeeping

Maintaining equipment in good condition and replacing parts that have a tendency to fail before they actually fail. Maintaining a workplace that is clean and free of unnecessary things.

Define O and M in Operations Management

Operations: the activities that are directly related to providing goods/services to cx Management: a PROCESS by which objectives are acheived thru the use of resources involves dealing with conflicting objectives + limited resources

Fixed-Order-Interval Model

Orders are placed at fixed time intervals Order quantity for next interval? Suppliers might encourage fixed intervals May require only periodic checks of inventory levels

PERT and CPM

PERT (program evaluation and review technique) and CPM (critical path method) techniques used to schedule and control large projects

Inventory Counting Systems

Periodic counting Physical count of items made at periodic intervals Perpetual (or continual) tracking keeps track of removals from and additions to inventory continuously, thus providing current levels of each item

PDCA model for performance improvement

Plan, Do, Check, Act - Measure twice, cut once ○ Idea is to check twice because once u cut it up, and u mess up, u cant redo it

The Precedence Network Diagram components

Precedence Network: Diagram of project activities that shows sequential relationships by use of arrows and nodes Activity on arrow (AOA): Network in which arrows designate activities Activity on node (AON): Network in which nodes designate activities Path: A sequence of activities that leads from the starting node to the finishing node

4 TYPES OF Quality Costs

Prevention Appraisal Internal Failure External Failure `

Process variability vs Process capability

Process variability Natural variability in a process Process capability Process variability relative to specification (the ability of a process to meet its design specs)

Level loading

Provide level capacity loading (heijunka) Determine due times for each unit of each model so the units of the model are evenly distributed during the day

Determining Prices

Published price lists Competitive bidding Negotiating

Push will ALWAYS have more productivity than PULL---why?

Pull isnt MORE productivity it is just SMOOTH production at a cost of quick productivitiy no hiccups with pull push is sometimes much more better at time efficiency for group orders

Costs Associated with Goods for Sale

Purchasing Costs Ordering Costs Carrying Costs Stockout Costs Quality Costs

The Inventory Cycle

Quantity [y axis] time [x] usage rate [negative slope] after reaching a certain [y line], that is the reorder pt [here u place order] inbetween the place of order and recieve is lead time after u get it, the quant shoots back up again [because everything is constant with the EOQ assumptions, we have a sawtooth shape]

how to: Production Flexibility

Reduce changeover (= set up) time Cross-train workers Use many small machines rather than few large machines Use safety stocks Keep some idle capacity

Benefits of JIT Systems

Reduced levels of in-process inventories, purchased goods, and finished goods Reduced space requirements Increased product quality and reduced scrap and rework Reduced lead times Greater flexibility Smooth production flow Increased productivity levels Worker participation `

Logistics

Refers to the transport and warehousing of materials/products includes use of information movement within the facility incoming and outgoing shipments

Where to Hold Inventory?

Risk pooling holding safety stocks in one central location rather than in multiple locations. Delayed differentiation (postponement) Production of standard components and products, and adding differentiating features later in the process.

Rules for reliability [1]

Rule 1 [Components in series] -If two or more events are independent and the success is defined as the probability that all of the events occur, than the probability of success is equal to the product of the probabilities of the events 0.90 * 0.90 = 0.81

Prevent defects

SPC to control the process Six sigma to reduce variability Poka-yoke for fool proof

NA managers has added these two Housekeeping S's...

Saftey & support/maint

Three important aspects of low inventories:

Saving of space- warehouse space and space in work areas Inventories are buffers that tend to cover up recurring problems that are never resolved Major problems must have already been resolved, it is necessary to be able to deal quickly with problems when they do occur

Slack can be computed one of two ways:

Slack = LS - ES Slack = LF - EF

Housekeeping 5S

Sort ----keep only what is needed, when in doubt, throw it out Set in order ----improve work flow and reduce wasted movements Shine ----clean daily Standardize ----remove variations and this can make abnormals obvious Sustain

Safety Stock -

Stock that is held in excess of expected demand due to variable demand rate and/or lead time.

what is "Normal operating conditions"

The set of conditions under which an item's reliability is specified A man cutting grass is not a dancer What the manufacturer says

hallmark of quality

This is what is the expected function

"mere exposure theory" & "over exposure theory"

Timing is everything for product sales If you are not first, you must be better. Because you get your item out FIRST the "mere exposure theory" will lure more customers to you There is a "over exposure theory" too when people will actively avoid your product if they see it too much

Total Maintenance Cost graph

U shape again similar to production costs

Upper and Lower Control Limits for Sample Mean Chart

UCLM= X+(Z)(O/√N) LCLM= X-(Z)(O/√N) OR LCLM= X+(A2)(R) LCLM= X-(A2)(R)

Upper and Lower Control Limits for Sample Range Control Chart

UCLR = (D4)(R) LCLR= (D3)(R)

What is a Good Service Guarantee?

Unconditional Meaningful-The payout covers--fully--customer dissatisfaction Easy to understand and communicate-For customers-For employees Painless to invoke-Given proactively

Work Balance Charts

Used for evaluating operation times in work cells Can help identify bottleneck operations Flexible, cross-trained employees can help address labor bottlenecks Machine bottlenecks may require other approaches

WBS

WBS= work breakdown structure 'so here is the tasks that this group of ppl will do' Its like a report that comes out of ur work management software hierarchical description

why is Small Lot Sizes required for JIT

When problems with quality occur, inspection and rework costs are less because there are fewer items in al lot to inspect and rework permit greater flexibility enable JIT systems to respond more quickly to demand for output

Balanced System in process design

Workload distributed evenly among workstations must be less than or equal to the cycle time Cycle time is set equal to the takt time Takt time the cycle time that matches the pace of production to the demand rate.

JIT Goals"In Search of the The Seven Zeros"

Zero Defects parts are needed when the are needed - defects won't do can't wait for inspection Zero (excess) Lot Size try for a lot size of one Zero Setup Time Zero Breakdowns Zero handling no extra moves in and out of storage Zero Lead Time Zero Surging level production scheduling

Failure rate as a function of time

[Bath Tub Curve] 3 phases as time pass 1: products fail shortly put into service, not because they wear out but they are defective to begin wit 2: failure decreases rapidly once the truly defective items are WEEDED OUT -This phase is free of worn out items and as seen is the LONGEST PERIOD 3: failure occurs because the products have completed the normal life of their service life and thus worn out

Designing for Ease of Production

[Manufacturability] Specifications - Precise information about the characteristics of the product Tolerances - Minimum & maximum limits on a dimension that allows the item to function as designed Standardization - Reduce variety among a group of products or parts Simplification - Reduce or eliminate the complexity of a part or product

SCOR Model

a framework that focuses on a basic supply chain of plan, source, make, deliver, and return processes, repeated again and again along the supply chain

Projects are "born" when

a need is identified by the customer.

why is PERT and CPM better than gantt chart

able to show interrelations between the activities can consider precedence and interdependency

Rate of learning is greatest..

at first when "ignorance" is greatest; rate of learning decreases as ignorance decreases

negociation strats for suppliers

based on one of these models cost-based model [reqs the supplier to opem its books to the purchaser, price will be discussed] market-based price model [based on published, auction, or index price] competitive bidding [when suppliers are not willing to discuss costs or where near perfect markets do not exist]

why is Setup Time Reduction required in jit?

bc jit uses small LOTS and a variout product mixes this means frequent MACHINE SETUPS so it requires quick and inexpensive

TQM Stresses a

commitment by management to have a continuing, companywide drive toward excellence in all aspects of products and services that are important to the customer

learning curves are defined in the terms of the

complements of their imporvement rates "a 70% learning curve implies a 30% decrease in time when the . task is doubled"

Managing quality supports

differentiation, low cost, and response strategies

Mass Customization

imaginative and fast product design Rapid process design Tightly controlled inventory management Tight schedules Responsive supply chain partners (cant be stuck w unpopular components, needs fast track orders) reliance on modular desgins -using BTO--built to order and not forcasting -postponement, customization until the order comes in

reliability happens by . .

improving individual components Providing redundancy [ - 2 ways on making things more reliable ○ Use better parts that are more reliable ○ Build in redundancy Definition of a loser is someone who has 2 flat tires, only usually have 1 spare tires, b/c the manufacturer plans you with a redundancy--back ups]

autonomous maintenane

include emphasis on . employees to . accept the responsbility to regularly do maint employee empowerment

As the number of components in a system connected in a series_________, the reliability of the system usually

increases; reliability decreases ex: a system w n=50, interacting parts, each which have 99.5% reliability--it has an overall reliabilty of 78%

data today indicate that our service economy has increased in size but we have had slower growth in productivity why is this?

it is difficult to improve productivity in the service b/c -usually labour intensive (counselling) -frequently focused on unique individual attributes or desires (investment advice) -often an intellectual task performed by professional (medical diagonsis) -often difficult to mechanize and automate (haircut) -often difficult to evaluate for quality (preformance of a law firm)

blockslap

it is just a word, he talks about this and the japanese names just the concepts u should take note of--not jist the name

Elements of TQM

leadership, employee involvement, product/ process excellence, continuous improvement, customer focus Develop supplier partnerships Building teams of empowered employees Benchmarking and continuous improvement

explain Preventive Maintenance: Frequency

like a seesaw Balance these costs: as time between periodic maint increases, risk (and cost) of breakdowns increases cost of preventive maintenance per unit time, decreases

Issues in an Integrated Supply Chain

local optimization (no one wants to be caught short/excess, tends to overcompensate) incentives (pushes merch, generates fluctuations) large lots (bias towards this b/c large lots reduce unit costs, but they fail to reflect actual sales and increase holding costs(

3 ways to achieve cost leadership

low overhead effective capacity use inv management

Service Variability & Customer Influence Service Design

low var + low cx contact = internet purchase med var + med cx contact = dept. store purchase high + high = custom clothing purchase

Just-in-Time . traditionally they have

lower processing costs, fewer defects, greater flexibility, and are able to bring new or improved products to the markets more quickly

Learning curves do not apply to

mass production situations (with short cycle times and imperceptible time decreases)

a benefit of the EOQ model is that it is robust--meaning

means it give satisfactory answers even with substainaial variation in its parameters .

midterm

midterm

Single Period Model`

model for ordering of perishables and other items with limited useful lives

why does JIT begins with an external instead of internal focus

need to first understand waht the cx wants and their input + feedback are starting pts for lean production

blanket order

one way to create effective supply chain a long term purchase commitment to a supplier for items that are to be delivered agaisnt short term unfilled orders

how to calc value added

outputs - inputs

Key Dimensions of Quality

performance, features, reliability, conformance, durability, serviceability, aesthetics, perceived quality, value

define an organization's mission

purpse--what it will contribute to society

Product/service design directly affects:

quality delivery cost •Customer satisfaction

types of inv

raw mats and purchased pts wip finished goods spare parts [MRO] ---inv devoted to Maint, Repair, and Operating materials necessary to keep machinery and processes productive

assumptions of repetitve and product-orientated layouts

recall: these are layouts that center around products/families w/ high-vol and low variety assumptions: -vol is adequate for high EQ utilization -product demand is stable enough -product is standardized or is justified -raw mats are uniform quality

reducing cycle time reduces ____

reduces inv, a lot of time the inv is just sitting idle in cycle

shrinkage vs pilferage

s: retail inv that is accounted for between recipt and sale p: inv theft

quantity discount model

simply a reduced price for customers that purchase in larger quants buyer: need to consider between reduced product cost and INCREASED holding cost seller: the purchase cost . doesnt chnge the optimal pt.

3 techniques that are proven to be effective for maint

simulation [able to evaluate the impact of various policies] expert systems [able to monitor and repair] automated . sensors [able to warn when machinery is about to fail or is damaged]

issue in retail layout is:

slotting fees -controversial -fees manufactures pay to get shelf space for their products -small firms are stifled, limited to expand, barrier

Projects can be of any size and duration. t or f

t

Mean Time Between Failures (MTBF)

the average length of time between failures of a product or component =1/FRN

The Service Triangle

the customer is the center of the service strategy, the systems, and the employees who serve him/her.

managerial's perspective, when they call people ignorant,

they are referring to the fact how they are not trying to learn things "devoid of knowledge"

Lead time

time interval between ordering and receiving the order

retail layout's objective & their tactics

to max profits per square foot of floor space -locate the high-draw items around the edge of store -put high impluse/margin items @ prominent locations -place "power items" (main purchased items) to both sides of aisles to increase viewing of other items -use end-aisle since high exposure rate

The objective of inv management is to

to strike balance between inv investment and cx service

Optimal Amount of Inspection

we don't need to OVER inspect. It will get to the point where it will be more and more expensive

internal benchmarking

when an organization is large enough to have many divisions can use this since data is usually more accessible

Single-minute exchange of die (SMED):

): A system for reducing changeover time

2 types of reliability

-The probability that the product or system will function when activated (instantaneous reliability) -The probability that the product or system will function for a given length of time (continuous reliability)

bottleneck effect

-affect productivity. -many managers focuses on bottle neck operations which are the most critical and will apply the most significant changes

disadvantages of process-orientated layout

-bc of its general-purpose use of equipment, it takes more time b/c of difficult schduling -reqs high labour skills = more training -more wip inventory since inbalances in production departments

warehouse customization

-even tho we expect warehouses should store little & for a short time -now they made it so that it can also be a place to add value to the items -generate more competitive advant. -dual purpose

2 types of product-orientated layouts are

-fabrication line [builds components like tires] [tends to be machine-pased, fixed] -assembly line [puts fabricated parts together at a series of workstations] [tends to be pased by individuals or by workstations, can be changed by moving ppl around] both are 'balanced'--time spent in one line is the same to the next workstation

things to focus on when Designing and Developing services/products

-focus on Innovation/New -Getting Them to Market Faster -Improving Current Products/Services -Designing for Ease of Production -Designing for Quality

how should firms pursue a steeper cost than the industry price? [4]

-follow aggressive pricing policy -focus on continued cost reduction and productivity imporvement -building shared experience -keeping capacity growing ahead of demand

cycle time

-for assembly/fabrication lines -the maximum time that a product is allow at each workstation -much like work cells' takt-time =prd time avail/units req -can be also calculated later on as minimum number of workstations like t-t's workers = time for action /cycle

Takt Time

-for work cells -is the pace (freq) of production units need to meet cx orders t-t = (ttl work time avail)/(units req) [[ex: cx needs 600 mirrors and the cell is schd to work 8 hours -> 8*60mins / 600= 0.8 mins or 48 secs for the production of ONE mirror]] can be then later used in the [workers requrired formula] = (ttl operation time req)/(t-t) [[ex: given--total operation time of 140s for ONE mirror, from the work balance chart -> 140/48= 2.92 people per workcell

disadvantages to product orientated layouts

-high vol required -work stoppage at any point ties up whole operation -lack of flex in product

advantages to product orientated layouts

-low variable cost bc of high vol + standardization -low mat handling costs -reduced wip inv -easier training/supervison -rapid output

key strategies for operations to be competitive:

-quality based -time based -vertical integration & outsourcing (make vs. buy, strategic alliances) -supply chain management (sync the suppy chain to get high performance, cooperation between links, share info, focus on trade-offs)

key faetures of an effective inv managemnt

-reealiable forecast of demand -knowledge of lead times -reasonable estimates of holding, orderng, and shortage costs -a classification system -ssytem to keep track of inv

goals of JIT partnership

-removal of unneccessary activities like receiving, inspection, bidding -removal of in-plant inv -removal of in-transit inv, by getting nearby or small frequent shipments

key differences btwn goods and services

-services are often PRODUCED AND CONSUMED simultaneously (salon produces a haircut that is 'consumed' instantly) -services are often unique (ur medical procedure) -services have high cx interaction as they are often difficult to standardize, automate due to the demand for uniqueness, the cx is paying for the customization -services have inconsistent product definition as it may be rigorous and also inconsistent due to policy changes -services are frequently dispersed b/c it can take place sometimes at a office, home, or phone call etc

explain what OMs have to do with [supply chain managment]

-should we make or buy this component -who should be our suppliers and how can we integrate them into our strat

when should you consider a focused work center

-step up from WORK CELLS -when a firm finds a family of similar products that have a large and stable demand -perm/semi-perm

how has mass customization become a new challenge in OM

-with the WHOLE WORLD as the marketplace now, cultural and individual differences can make or break a sale -needs to rapidly respond with product designs that are also flexible and caters to the individual consumers -goal to create customized products when and where-ever needed

policies that may be based on ABC analysis include the following

1 purchasing respiruces expended on supplier developement should be much higher for A 2 tighter phys inv control for A 3 forcasting A items require more care

When and Where to Inspect

1. At the supplier's plant while the supplier is producing 2. At your facility upon receipt of goods from your supplier 3. Before costly or irreversible processes 4. During the step-by-step production process 5. When production or service is complete 6. Before delivery to your customer 7. At the point of customer contact

Seven Concepts of TQM

1. Continuous improvement 2. Six Sigma 3. Employee empowerment 4. Benchmarking 5. Just-in-time (JIT) 6. Taguchi concepts 7. Knowledge of TQM tools

Characteristics of a Well-Designed Service System

1. Each element of the service system is consistent with the operating focus of the firm. 2. It is user-friendly. 3. It is robust. 4. It is structured so that consistent performance by its people and systems is easily maintained. 5. It provides effective links between the back office and the front office so that nothing falls between the cracks. 6. It manages the evidence of service quality in such a way that customers see the value of the service provided. 7. It is cost-effective.

Advantages of Standardization

1. Fewer parts to deal with in inventory and in manufacturing 2. Reduced training costs and time 3. More routine purchasing, handling, and inspection procedures 4. Orders fillable from inventory 5. Opportunities for long production runs and automation 6. Need for fewer parts justifies expenditures on perfecting designs and improving quality control procedures

new challenges in OM

1. global focus 2. supply-chain partnering 3. sustainability 4. rapid product development 5. mass customization 6. just-in-time performance 7. empowered employees

Types of Layout

1. office layout (Movement of information is main distinction) 2. retail layout (directly with customer exposure) 3. warehouse layout (optimize handling costs and warehouse space) 4. fixed position layout (bulky projects such as ships and building, workers and eq comes to site while product remains at place) 5. process oriented layout (low-volume, high-variety production, intermittent production) 6. work cell layout (arragine ppl and machines into groups to focus on single/related products) 7. product oriented layout (repetitive, continuous)

what is the general ratio of office-to-warehouse/prodction ratio? then from prdoction to inv?

1:9 1:3

why study operations management

1] OM is one of the 3 major functions of any organization and is also INTEGRALLY RELATED to the other 2. So thats why we have to study how people organize themselves for productive enterprise 2] b/c we want to know how goods+services are produced 3] want to understand what operations managers do, helps perform better 4] b/c it is such a costly part of an organization. OM also provides a major opportunity to increase profits and enhance services

new product development requires

1] Understanding the customer 2] Economic change 3] Social and demographic change 4] Technological change 5] Political/legal change 6] Other changes may be brought about through market practice, professional standards, suppliers, and distributors

10 critical decisions for OM

1] design good/service 2] managing quality 3] process and capacity design 4] location strat 5] layout strat 6] hr and job design 7] supply chain management 8] inv, material req planning, JIT 9] intermediate and short term scheduling 10] maintenance

what are the essential functions to the organization of production of goods/services

1] marketing: generate demand, promo, assessing cx wants+needs 2] production/operations: creates the product 3] finance/accounting: tracks how well the organization is doing, pays bill, collect $, provision of funds

rule of 4

25% of price is mats 25% is wages 25% is retailer etc

____of quality problems are due to process and material

85% not employee performance (therefore firms should design good equipment and processes)

___% will fall within -+2o and -+3o

95.45% 99.73%

Control Chart Purpose

: to monitor process output to distinguish between random and assignable variation

Reliability-centered Maintenance (RCM)

An approach that reduces the effect of each major cause of failure for equipment redesign item in order to prevent failures from occurring for each equipment identify major functions determine major possible failure identify major causes of each failure identify ways (including preventive maintenance) to reduce effect of each major cause.

the voice of the consumer

An approach to new product development that solicits feedback from end customers well before the company puts a new product on the market. About 5% of all new-product ideas survive to production, and only about 10% of these are successful Many of products do not survive b/c there is just no market for them

Costs of Quality

Appraisal costs - evaluating products, parts, and services Prevention costs - reducing the potential for defects Internal failure - producing defective parts or service before delivery External costs - defects discovered after delivery [from low cost to high]

2 types of maintenance

Breakdown maintenance Reactive approach; dealing with breakdowns or problems when they occur Preventive maintenance Proactive approach; reducing breakdowns through a program of lubrication, adjustment, cleaning, inspection, and replacement of worn parts

Product Design

Build in Quality Use QFD to create value for customers Concurrent engineering Design for easy manufacturing and assembly (DFM and DFA)

describe Maturity phase

By the time of product is mature, competitors are established. So high volume, innovative production may be appropriate Improved cost control, reduction in options, and a paring down of the product line may be effective or necessary for profitability and market share

Centralized vs. Decentralized Purchasing

Centralized purchasing Purchasing is handled by one special department Decentralized purchasing Individual departments or separate locations handle their own purchasing requirements

ABC Classification System

Classifying inventory according to some measure of importance and allocating control efforts accordingly. A - very important B - mod. important C - least important [20% OF THE ITEMS CARRY 80% OF THE VALUE OF INV] [A] 30% OF THE ITEMS MAKES 15% VALUE [B] 50% OF INV IS THEN [C] WHICH ONLY MAKES 5% OF THE TTL INV VALUE

why is info important in supply chains

Collaboration of supply chain companies and coordination of their activitiesso that market demand is met as efficiently and effectively as possible in order to attain the level of synchronization that will make it more responsive to customer needs while lowering costs

Projects are typically:

Complex and numerous activities Unique - a one-time set of events Finite - with a begin and end date Involve limited resources and budget Involve many people, usually across several functional areas in the organizations Sequenced activities Goal-oriented `End product / service oriented

Replacement Trade-off decisions

Cost of replacement vs cost of continued maintenance New equipment with new features vs maintenance Installation of new equipment may cause disruptions Training costs of employees on new equipment Forecasts for demand on equipment may require new equipment capacity `

Time-Cost Trade-Offs: Crashing

Crashing Shortening activity durations To make decisions concerning crashing requires information about: Regular time and crash time estimates for each activity Regular cost and crash cost estimates for each activity

Critical path vs Critical activities vs Path slack time

Critical path: The longest path from start to end determines expected project duration The critical path is indicated by the activities with zero slack Critical activities: Activities on the critical path Path slack time: Allowable slippage for a path length of a path -- length of critical path

Six Sigma DMAIC Approach

Define critical outputs and identify gaps for improvement Measure the work and collect process data Analyze the data Improve the process Control the new process to make sure new performance is maintained

Bullwhip Effect

Demand/order variability gets progressively larger the further back in a supply chain is the company. front end (starts from cx) and back end

differences between each product designs DFM, DFA, DFR, DFD

Design for manufacturing (DFM) -EASE, CONSIDER CAPABILITIES Design for assembly (DFA) -SMALL PARTS, MODIFY Design for recycling (DFR) -RECOVER FOR SAVINGS + ENVIRN. Design for disassembly (DFD)

There is a correlation of how much an item costs and how much you expect explain

Design/quality also impacts on cost § If you buy an expensive shoes you expect it to last. If you bought flipflops at walmart for 10$, if it breaks you just shrug it off and throw it away Price and quality have a direct relationship

Designing Products for Quality

Designing for Robustness Product will perform as intended even if undesirable conditions occur in production or in field. Designing for Manufacturability (DFM) Products typically have fewer parts and can be assembled quickly, easily, and error-free. Designing for Reliability Manufacturing parts to closer tolerances. Redundant components where necessary.

Deterministic vs Probabilistic for Activity Durations

Deterministic Time estimates that are fairly certain Probabilistic Time estimates that allow for variation

Improving Productivity list..

Develop productivity measures and use them Focus on critical operations (bottleneck operations) Develop methods for productivity improvements Establish reasonable goals for improvement Make it clear that management supports productivity improvement Measure and publicize improvements Don't confuse productivity with efficiency

standard metric of six sigma

Emphasize defects per million opportunities 2,700 defects/million for +- 3o 3.4 defects per  million opportunities for +- 6o

JIT SUPPLIER REQUIREMENTS

Few, Reliable Suppliers `Having to inspect incoming goods is inefficient, does not add value to the product Burden of ensuring quality is shifted to the vendor Suppliers must be willing and able to ship in small lots on a regular basis JIT purchasing is enhanced by long term relationships between buyers and vendors

Four approaches to organizing for product development:

First, a traditional North American approach to product development is an organization with distinct departments -fixed duties or responsibilities exist second and popular approach is to assign a product manager to "champion" the product through the product development system and related organizations third and perhaps best, product development used in North America seems to be the use of teams The Japanese use a fourth approach. They bypass the team issue by not subdividing organizations these activities are all in one organization

Cross-docking

Goods arriving at a warehouse from a supplier are unloaded from the supplier's truck and loaded onto outbound trucks Avoids warehouse storage

Conversion to Cellular Layout

Grouping similar products together Mapping the current process for major products Determining the operations required Determining the capacity requirements Rearranging the layout (usually U-shaped) Determining the capacity of the cell Upgrading the machines if the capacity is inadequate Balancing the cell and determining labour requirements Determining minimum WIP required between the machines in the cell

Give examples of the 3 types of response competitve advantage

HP [flexible] -short life cycles in the tech market -able to change prods and volume to respond to dramatic changes grocerygateway.com [reliable] -schedules are communicated to cx and they are reliable -arraigning delivery time within a 90 min window PizzaHut [quickness] -develop systems that respond quickly

Duties of Purchasing

Identifying sources of supply Negotiating contracts Maintaining a database of suppliers Establishing partnerships Managing supplies Obtaining goods and services

Two essential features are present in every project no matter how simple or complicated they are: `

In the first place, all projects must be planned out in advance if they are to be successfully executed. Secondly, the execution of the project must be controlled to ensure that the desired results are achieved.

Need for Supply Chain Management

Increasing competition (using lean or JIT) Increasing levels of outsourcing Increasing globalization Increasing e-commerce Manage orders & inventories (bullwhip effect)

Information Technology:A Supply Chain Enabler

Information links all aspects of supply chain E-business replacement of physical business Electronic data interchange (EDI) a computer-to-computer exchange of business documents Bar code and point-of-sale data creates an instantaneous computer record of a sale Radio frequency identification (RFID) technology can send product data from an item to a reader via radio waves Internet allows companies to communicate with suppliers, customers, shippers and other businesses around the world instantaneously Build-to-order (BTO) direct-sell-to-customers model via the Internet; extensive communication with suppliers and customer

Uses of Learning Curves (THEIR PURPOSE)

Internal: labour forecasting, scheduling, establishing costs and budgets External: supply chain negotiations Strategic: evaluation of company and industry performance, including costs and pricing To pursue a strategy of a steeper curve than the rest of the industry, a firm can: Follow an aggressive pricing policy Focus on continuing cost reduction and productivity improvement Build on shared experience Keep capacity ahead of demand

Activity Sequencing

Involves reviewing activities and determining dependencies You must determine dependencies in order to use critical path analysis

Beta function

It is a weighted avg function I take my worst case guesss plus my best case guess, add them togetrhter plus 4x the avg time then divided by 6

Total productive maintenance

JIT approach where workers perform preventive maintenance on the machines they operate

How muat layout be done for JIT

JIT systems use layouts based on product requirements to handle streams of similar products with similar processing or assembly requirements minimize waiting for movement

Kaizen

Japanese term for continuous improvement

Jidoka

Japanese term for quality at the source: avoid passing defective products to following work station and stop & fix the problem. -a phiolsophy that focuses on pulling the item and fixing it immediately

Kanban Production Control System

Kanban: Card or other device that communicates demand for work or materials from the preceding station Japanese word for "signal" or "visible record" Paperless production control system Authority to pull, or produce comes from a downstream process.

Limitations of Learning Curves

Learning curves differ from company to company as well as industry to industry so estimates should be developed for each organization Learning curves are often based on time estimates which must be accurate and should be reevaluated when appropriate Any changes in personnel, design, or procedure can be expected to alter the learning curve Learning curves do not always apply to indirect labour or material The culture of the workplace, resource availability, and changes in the process may alter the learning curve

production technology

Machine technology -x5 more productive -computer numerical control (CNC), able to control machs with pc chips Automatic identification systems (AISs) and RFID -move data to electric form -tracking Process control -using IT to control a process -ex; determine + control temps Vision systems -vid + pcs as inspection Robots -effectively preform tasks Automated storage and retrieval systems (ASRSs) Automated guided vehicles (AGVs) Flexible manufacturing systems (FMSs) -using automated work cells Computer-integrated manufacturing (CIM) -computers aid \ \in the inv control, warehousing, shipping

Obstacles to Conversion JIT system

Management may not be totally committed Workers and management may not display a cooperative spirit Suppliers may resist to cooperate

3 . types of dependencies

Mandatory dependencies: inherent in the nature of the work; hard logic Discretionary dependencies: defined by the project team; soft logic External dependencies: involve relationships between project and non-project activities

flaws of Inspection and what is better

Many problems Worker fatigue Measurement error Process variability Cannot inspect quality into a product Robust design, empowered employees, and sound processes are better solutions

Project Management Software

Microsoft Project Deltek (Welcom) Integrated toolset with modules supporting Portfolio analysis Risk management Planning and scheduling Project collaboration Complete earned value management `

Supply Chain Strategies

Negotiating with many suppliers Long-term partnering with few suppliers Vertical integration (buying the supplier so they can develop the ability to produce) Joint Venture Keiretsu (few suppliers + vertical aka company coalition) Virtual companies that use suppliers on an as needed basis

Implementing JIT System

Obtain employees cooperation and hire consultant/ facilitator Train on JIT/lean tools, techniques, principles Decide which parts need most effort Expand JIT/lean production to other products and processes

not only be prepared to develop strategies for new but also existing products why?

Periodic examination of products is appropriate because strategies change as products move through their life cycle determining the best strategy for each product based on its position in its life cycle

The benefits of CAD and CAM scan include:

Product quality: CAD permits the designer to investigate more alternatives, potential problems, and dangers Shorter design time: A shorter design phase lowest cost and allows more rapid response to the market Production cost reductions: Reduced inventory, more efficient use of personnel to improve scheduling, and faster implementation of design changes lower costs Database availability: Provides information for other manufacturing software and accurate product data so everyone is operating in the same information, resulting in dramatic cost reductions New range of capabilities: For instance, the ability to rotate and depict objects in three-dimensional form, to check clearances, to relate parts and attachments, and to improve the use of numerically controlled machine tools all provide new capability for manufacturing

Breakdown Consequences

Production capacity is reduced Orders are delayed No production Overhead continues Cost per unit increases Quality issues Product may be damaged Safety issues Injury to employees Injury to customers

components to . Project Planning

Project planning analyzing the project into work packages & activities, estimating resources, durations, scheduling, etc. Quality planning How project and product quality is to be assured and controlled Communications planning Determining the nature of information needed by stakeholders and how to satisfy these needs Purchase planning What to purchase, specifications, supplier evaluation and selection, awarding contracts

Purchasing Costs VS Ordering Costs

Purchasing Costs - the cost of goods acquired from suppliers, including freight Ordering Costs - the costs of preparing and issuing purchase orders; receiving and inspecting the items included in the orders; and matching invoices received, purchase orders, and delivery records to make payments

Pull versus Push

Push System: when work is finished at a workstation, the output is pushed to the next station, or in the case of the final operation, it is pushed on to final inventory Pull System: system for moving work where a workstation pulls output from the preceding station as it is needed work is moved in response to demand from the next stage in the process each workstation produces just enough to meet demand of the next station, this done through KANBAN cards `

what does the Q* formula tell u

Q*= sqrt((2DS)/H)) D= ANNUAL DEMMAND S= ANN. SETUP COST H= ANN. HOLDING COST where the minimum carrying and ordering costs equal (optimal order quant)

Order Qualifiers and Order Winners

Qualifiers: Minimum requirement necessary to be given consideration by the customer. (A/C in a car) Winners: Lead customer to choose your product over the competitor (Stand out). Withina given industry or market, certain competitive priorities can be classified as either order winners or qual

Human Relations Movement

Recognition that factors other than money contribute to worker productivity Understanding of theHawthorn effect Job enlargement

Just-In-Time (JIT)

Relationship to quality: JIT cuts the cost of quality (less inv = hides less bad quality = saves $) JIT improves quality (errors fresh, limiting potential errors) Better quality means less inventory and better, easier-to-employ JIT system

Fixed-Interval Disadvantages

Requires a larger safety stock Increases carrying cost Costs of periodic reviews

what does the Introductory phase include

Research Product development Process modification enhancement Supplier development -still being fine-tuned for the market, may warrant unusual expenditures

examples of periodic Preventive maintenance

Result of planned inspections According to calendar After predetermined number of hours

Rules for reliability [2]

Rule 2: [Components in parallel] -If two events are independent and success is defined as the probability that at least one of the events will occur, the probability of success is equal to the probability of either one plus (1- that probability) multiplied by the other probability 0.95 + 0.90(1-0.95) = 0.995

Rules for reliability [3]

Rule 3: -If three events are involved and success is defined as the probability that at least one of the events will occur, the probability of success is equal to the probability of the first one (any of the events), plus the product of (1- that probability) and the probability of the second event (any of the remaining events), plus the product of (1-the first probability) and (1-the second probability) and the probability of the third event 0.95+(1-0.95)*0.90+(1-0.95)*(1-0.90)*0.98=0.9999

Value Analysis

Select an item that has a high annual dollar value. Identify the function of the item. Ask: Examination of the function of purchased parts/components/products in an effort to reduce their cost Evaluate the answers obtained, and make recommendations.

Benchmarking

Selecting best practices to use as a standard for performance steps: Determine what to benchmark Form a benchmark team Identify benchmarking partners Collect and analyze benchmarking information Take action to match or exceed the benchmark

HOW TO CALC SHORTAGE AND EXCESS COST

Shortage cost: generally the unrealized profits per unit Excess cost: difference between purchase cost and salvage value of items left over at the end of a period

product Process Matrix

Shows the relationships between different production units and how they are used depending on product volume and the degree of product standardization. ex: low vol + low degree of standardization = unit production vs high+high = continuous production

Improving Process Capability

Simplify Standardize Mistake-proof Upgrade equipment Automate

why is Quick, Low-Cost Setup required for JIT

Small lots and changing product mixes require frequent setups Workers are trained to do their own setups Setup tools and equipment and setup procedures must be simple and standardized

goods-service continuum

Spectrum along which goods and services fall according to their attributes, from pure good to pure service generally when you increase service content, it would = high service content and low goods con

Breakdown Programs

Standby or backup equipment that can be quickly pressed into service Inventories of spare parts that can be installed as needed Operators who are able to perform minor repairs Repair people who are well trained and readily available to diagnose and correct problems with equipment

The Project Overview

State the Problem [What is to be done? Who is responsible for the project?] Identify Project Goals [Define project end product or service] Develop Project Objectives (Critical success factors or Milestones) [Objective statement should be (SMART)]

Six Sigma 2 meanings

Statistical definition of a process that is highly 99.9997% capable A program designed to reduce  defects, lower costs, and improve  customer satisfaction

Keys to effective SCM

Supply Chain Management (SCM) information communication cooperation trust supply chain visibility

On a quality control chart if one of the values plotted falls outside a limit it should signal to the manager to do which of the following?

System is only out of control if the number of observations falling outside the boundary exceeds statistical expectations Answer: C. System is only out of control if the number of observations falling outside the limit exceeds statistical expectations (With limits of 2 standard deviations, expect about 4.5% of observations will be outside the limits. With Six Sigma expect that only 3 out of 1 million observations will fall outside the limits. Managers should not conclude the system is out of control from only one observation.)

Delayed Differentiation

The process of producing, but not quite completing, a product or service until customer preferences are known is a postponement tactic

Service Quality The operations manager must recognize:

The tangible component of services is important The service process is important The service is judged against the customer's expectations Exceptions will occur

Basic EOQ Assumptions`

There are only ordering and carrying costs The same quantity is ordered at each reorder point Demand, purchase-order lead time, ordering costs, and carrying costs are known with certainty Purchasing costs per unit are unaffected by the quantity ordered No stockouts occur EOQ ignores purchasing costs, stockout costs, and quality costs Only one product is involved Annual demand requirements known Demand is even throughout the year Lead time does not vary Each order is received in a single delivery There are no quantity discounts

"people never learn anything"

There is a philosopher that claimed "people never learn anything" And instead they recall as they learn , not learn called the theory of recollection

Responsibilities of the Project Manager

To plan thoroughly all aspects To control "technical" versus "cost" trade-offs determine the specific areas where optimisation is necessary. lead the people, Strong positive leadership must be exercised in order to keep the many disparate elements moving in the same direction in a co-operative. To monitor performance, costs and efficiency To complete the project on schedule and within costs

Tools of TQM

Tools for Generating Ideas Check sheets Scatter diagrams Cause-and-effect diagrams (fish) Tools to Organize the Data Pareto charts (plot problems or defects in descending order of frequency) Flowcharts ((Process Diagram): A chart that describes the steps in a process) Tools for Identifying Problems Histogram Statistical process control chart (A chart with time on the horizontal axis to plot values of a statistic)

Total Cost inv equation

Total cost = Annual carrying cost + Annual ordering cost tc= h(q/2)+s(d/q)

Selecting a Transportation Mode

Total delivery cost = transportation (freight) cost + in-transit holding cost in transit holding cost= H*D/365 --------- where H = annual holding cost of items being transported d = duration of transport (in days)

Design Activities

Translate customer wants and needs into product Refine existing products Develop new products Formulate quality goals Formulate cost targets Construct and test prototypes Document specifications

nonrandom patterns in control charts

Trend Cycles Bias Mean shift Too much dispersion

Radio Frequency Identification (RFID)

Use radio waves to transfer data from chip to a reader Provides complete visibility of product location Continuous inventory monitoring Reduce labor to manage inventory Reduce inventory costs RFID is not standardized yet Difficult to track between systems

Different Views in tqm

User-based: better performance, more features "eyes of the beholder" Manufacturing-based: conformance to standards, making it right the first time Product-based: specific and measurable attributes of the product, views quality as a precise and measurable variable

explain dependencies and precedencies meaning in projects

Usually it is possible to perform several activities at the same time, however there will be activities which cannot begin until a preceding activity has been completed. These relationships are referred to as dependencies or precedencies, and when planning a project it is important to establish the order of precedence of dependent activities, and to establish those activities which can be performed in parallel with other activities.

JIT workers

Workers are trained to operate machinery, handle setups, and perform maintenance and minor repairs Workers are responsible for checking the quality of their own work and monitoring the quality of work they receive as input to their stations Workers expected to participate in problem solving Training costs and time increase

make-to-order make-to-stock: engineer-to-order

[Order Fulfillment] make-to-order: schedule production make-to-stock: assign distribution centre engineer-to-order design to specs

Economic Order Quantity Models

[addresses the questions of when to order + how much] Economic order quantity model Economic production model Quantity discount model

ways to evaluate Process Analysis and Design

[we want to find out if the process we have is designed for competitive ad (D-LC-R), any useless steps that dont add value?, does it max value?, will the process win orders?] Flow Charts - Shows the movement of materials -quick way to see the big picture Time-Function Mapping - Shows flows and time frame Value-Stream Mapping - Shows flows and time and value added beyond the immediate organization Process Charts - Uses symbols to show key activities -can focus on value adding activites when properly mapped Service Blueprinting -for products w/ high service content - focuses on customer/provider interaction

Characteristics of Projects --Generally projects are made up of :

a defined beginning point multiple activities which are performed to a plan / schedule (and have) a defined ending point.

Learning curves typically follow

a negative exponential distribution Cost/time per repetition Y AXIS Number of repetitions (volume) X AXIS

Arithmetic Approach vs Logarithmic Approach vs Coefficient Approach in learning

a: Simplest approach Labour cost declines at a constant rate, the learning rate, as production doubles l: (can tell us how many hrs will be needed to product other units) TN = T1(N^b) TN = time for the Nth unit T1 = hours to produce the first unit b = (log of the learning rate)/(log 2) = slope of the learning curve c: (the simple vers of log appr) TN = T1C TN = number of labour-hours required to produce the Nth unit T1 = number of labour-hours required to produce the first unit C = learning-curve coefficient found in Table in text also can do the CUMULATIVE as the C-TABLE gives the unit time and also total time

when inspections take place, the quality characteristics measured are either __ or ___

attribute (classifies items, like pass/fail) or variable (falling on a scale, like how strong--if it falls in the acceptable range)

cross-docking

avoiding the placement of materials or supplies in storage by processing them as they are received for shipment -why? -> these activites add no value to the product -rather to process them directly to the assembly line than storage -> cost savings but requires: -tight schd -accurate inbound product identification

why is JIT flawed

because it is just a theory--something to strive for but cannot obtain they also dont account for SLACK. They assume that everything will workout just right & don't need backups thinks everything in general everything will operate smoothly which is uNREALISTIC

Service productivity is notoriously low why

because of customer involvement in the design or delivery of the services -makes it complicated -they will want to make it unique and modifications -takes time

why does MRO inv exist

because the need and timing for maint and repair for some equpements are unknown

Learning Curves

become better at their tasks as the tasks are repeated Time to produce a unit decreases as more units are produced - The rate of improvement, however, decreases over the time Gets smaller and smaller we do something because we eventually don't get anymore epiphany moment

x chart vs r chart

both are quality control charts x chart indicates when changes occur in the central tendency r chart tracks the "Range" within a sample, indicating a gain/loss in uniformity of dispersion .

An operations manager's objective is to

build a total quality management system that identifies and satisfies customer needs

"Learning" effect first noted by

by T.P. Wright "learning curve" math model Used to estimate aircraft production labor in WW II, and since then to estimate many kinds of repeated activities

Group replacement

components may be economical when there are labour cost savings for replacing all units together.

total productive maintenance (TPM)

concept of reducing variability thru autonomous and a=excellent MAINT . practice -design machines that are reliable and . easy to operate invest in total cost of ownership, so that services and maint are included in the cost

time it takes to make a product is called

cycle time

Managers often cite ___as one of their biggest challenges

delivering projects on time Time has the least amount of flexibility; it passes no matter what

why must JIT invest in Preventative Maintenance

dependent to each other focused on no hinderance

single-period model

describes a system for ordering items that have little or no value at the end of a sales period ONE order is placed for that product because it is PERISHABLE think of NEWSPAPER. the stocking then is DISCRETE instead of continous. using SD and normal dist, we try to reduce SHORTAGE and EXCESS cost

the learning is based on _____ of production

doubling when prod UNIT doubles so if learning curve is at an 80% rate, the 2nd unit will take 80% of first unit time. 4th unit will take 80% of 2nd units time N1*(%)^(how much was doubled) [ARTHIC APPROACH]

"when nonconformance occurs, the worker is seldom wrong"

either the product was designed wrong, the system that makes the product was designed wrong, or the employee was . improperly trained the employee rarely causes the problem

lean operations

eliminate waste thu a focus on what exactly what the cx wants

Project managers should use

empowerment incentives discipline negotiation Strong leadership helps projects succeed more than good PERT charts

what is the competitive advantage that JIT techniques offer

faster response to the customer at lower cost AND higher quality

Close Supplier Relationship

frequent small deliveries certified suppliers often local (shorter lead time) tiered approach with a few suppliers integrated EDI a must

one popular schduling apprach is

gantt chart they are low cost and allows to document and estimate horizontal bars for each activity on a timeline

what makes the differences between a good and bad decision

good -> uses analytic decision making aka based on logic and consider data/alternatives 6 steps: 1- define problem + factors 2- develop specific + measurable objectives 3- develop a model (relationship btwn objectives and variables) 4- evaluate alternatives 5- select best 6- implement + set timetable

why is record accuracy inmportant

good inv policies are meaningless if managmenet does not know what inv is on hand needs to have precision about ordering, schduling, and shippin

where is the ''bandwagon effect" in the product life cycle

growth here your competitiors copy--increasing supply and thru demand goes down so you need to modify price

A successful project is one which:

has been finished on time is within its cost budget performs to a technical/performance standard which satisfies the end user.

why are inv holding costs often understated?

holding costs are costs that are . associated with "carrying" the inv over time BUT it also includes obsolecnece and costs like insurance, staff and interest payments

decision of inv management

how many to order when to order

Autonomation

intelligent automation: if an abnormal situation arises, the machine automatically stops, preventing production of defective products,

product's life-cycle

introduction, growth, maturity, and decline -A typical firm has a negative cash flow while it develops a product -Eventually the successful product may yield a profit prior to its decline however, the profit is fleeting- hence the constant demand for new products

cycle counting +the advantages

inv records must be verified w a continuing audit the inaccuracies can be found then traced and then fixed advtges: -no shutdown and interuption unlike physical inv -eliminates annual inv adjestments -trained annual personnel -maintains accurate records

Value stream mapping

is a LEAN [jit] tool A visual tool to systematically examine the flows of materials and information study product flow Purpose: identify waste & opportunities for improvement data collected: Times Distance traveled Inefficient work methods Waiting times Info flows

Economic Order Quality (EOQ)

is a decision model that calculates the optimal quantity of inventory to order under a given set of assumptions

throughput

is a measure [in units or time] of what it takes to move an order from receipt to delivery the longer this is, the more costs accumulate

most of the . time in WIP is _______

is not productive time makes up 95% of WIP cycle

Reverse Engineering

is thedismantling and inspecting of a competitor's product to discover product improvements. >>why many apps look the same

uncertain demand rasies the probability of stockout what is one method to reduce stock out

is to hold extra units in inv reffered to safety stock add units as a buffer to the reorder point [ROP]

objective of the product orientated layout

is to minimize inbalance in the fabrication or assembly line. inbalance -> production delay

Kaban

japanese version of 'pull system' using a card to signify when a certain component is needed

inspection costs curve

like a u based on 2 other relationships: cost of inspection and cost of passing defectives the cost slowly decreases to ((optimal amt of inspection)) as the defective costs decrease total cost but will start going back up again due to the LINEAR cost of inspection

facility layout means planning

location of all machines, utilities, employee workstations, customer service areas, etc flow patterns

A lean production system uses _____________ amounts of resources to produce a high volume of high-quality goods with some variety

minimum

Poka-yoke

mistake-proofing methods aimed at designing fail-safe systems that minimize human error

Old vs new JIT Paradigm

old: JIT is An Inventory Control System Japanese Thing Doesn't Fit Our Business More Volume = Lower Cost More Volume = More Profit Production curtailment is the last option considered Changeovers are costly and should be avoided Reduce the number of products/models To be a Low-Cost Producer Requires Large Capital Investment Problems get fixed with capital Equipment performs better than people Customers buy on price alone Suppliers are a Necessary Evil Multiple Suppliers add Security new: A Focus Within the TQM or Continuous Improvement Effort of Waste Elimination and Reduced Cycle Time Supplier Relationships are based on Mutual Respect and Cooperation Limit the number of suppliers Inventories are costly, regardless of where they are maintained Develop "Win-Win" supplier partnerships Just-In-Case inventory is a waste Good Service is meeting customer expectations Customers demand on-time deliveries

vendor-managed inventory

one way to create effective supply chain a system where supplier maintains material for the buyer, often delivering directly to the buyers department--instead of reciving dock or stockroom

Accurate "pull" data

one way to create effective supply chain generated info from point-of-sale and shares this so each member can schd effectively

Assumptions of EPQ are similar to EOQ except

orders are received incrementally during production so this model can be used when 1--inv continuously flow or builds up overtime 2--when inv contonuosly producd and sold simutaneously

P chart vs C chart

p-Chart - Control chart used to monitor the proportion of defectives in a process [When observations can be placed into two categories like pass or fail] [When the data consists of multiple samples of several observations each] c-Chart - Control chart used to monitor the number of defects per unit [Use only when number of occurrences per unit of measure can be counted;non-occurrences cannot be counted] Scratches, chips, dents, or errors per item

consignment inventory

part of JIT, an arrangment in which the supplier maintains the inv until it is used

types of measures of productivity

partial multifactor total measure

Servicescape & how to get good serivce layout

physical environment in which consumer services are performed and how they effect cx and employees 1] ambient conditions -light, sound, smell, temp--all effect how much they spend time and $ 2] spatial layout and functionality -path planning, directions, angles etc 3] signs + symbols -walmarts door greeter -DL's entrance looking like heaven

management of projects invovle 3 phases

planning scduling controlling

how has JIT changed workers and their relationships w management

ppl are now trained as knowledge workers they are now empowered to make improvements and to stop machines when problems arise

managers for assembly/fabric lines must know the ____________ among the activities

precedence relationship the sequence in which various tasks must be performed in order [to reduce imbalances, you need u need to know how the lines work]

Work Cells Layout

prefers "U" where employees are cross-trained and can assist e/o, better access to everything -identification of family-items so u can group them together in production -high lvl of training avoid: -small closed areas -straight lines--hard to balance and divide properly

Reliability is the

probability that a machine will function properly for a specified time . . the ability of a product, part, or system to perform its intended function under a prescribed set of conditions

variability is a polite word for ____

problems most variability is caused by tolerating waste or by poor management

improve productivity with

process and setup but also with learning

supply chain risk often occurs in

processes [ex: logistics] controls [ex: management] environment [ex: tariffs]

Learning Not Useful when...

production is sporadic Random overhauls Small lot job shops work is fully automated and there is no way to improve the production rate ...rules & regulations limit the production rate ...production quantities are very small ...each item produced is significantly different from the preceding item (custom products)

Quality management programs today are viewed by many companies as

productivity improvement programs

why is Designing products & services that are "user friendly" placed on an emphasis these days for product design?

products today are often made much more intutivately like better ease of use for the users For example when u download an app or software theres a manual that comes with it but nowadays people don't read too much of it and just play around with it until you get it

project vs activity vs schedule vs Project management

project is an interrelated set of activities that has a definite starting and ending point and results in the accomplishment of a unique, often major outcome. An activity or task is the smallest unit of work effort within the project and consumes both time and resources which are under the control of the project manager A schedule allocates resources to accomplish the activities within a timeframe. The schedule sets priorities, start times and finish times. Project management is : the adept use of techniques and skills in planning and controlling tasks and resources needed for the project, to achieve results.

a pull system...

pulls a unit to where it is needed AS it is needed

even with all the assumptions with EOQ, what is the biggest flaw

purchasing cost doesnt effect it it fights with a law of demand because normally the more we order, the better price we get--and we order more BECAUSE of this decrease of $$ it ignores SO many costs! stockouts! quality costs! etc

EXPENDITURE DATA purpose

reducing procurement costs improving efficiency monitoring compliance with policies

Determinants of Service Quality

reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding/knowing the customer, tangibles

Fixed-Interval Benefits

savings in: Ordering Packing Shipping costs

Improvements may create a ___ effect in the learning curve

scallop

factors affecting productivity

standardization: ppl become good at things quality use of internet computer viruses searching for lost or misplaced items scrap rates new workers safety: when someone gets hurt shortage of it workers layoffs labour turnover design of the workspace incentive plans that reward productivity

Andon

system of lights used at each workstation to signal problems or slowdowns. -kinda like a traffic light system, drawing attention where issues are arising

The final phase of a project

terminating the project. Perform close-out activities Evaluate performance Invite customer feedback

Source Inspection

the best inspection can be thought as no inspection at all this "inspection" is always done at the source--it is just doing the job properly is consistent to employee empowerment as they self check themselves treats the next step in the process as the customer, ensuring perfect product

Eprocurement

the business-to-business (B2B) online purchase and sale of supplies and services intergates internet to facilitate purchasing with supply . chains

if u pay ppl with peanuts...

they will act like monkeys, they wont be corporate citizens, they dont care about their jobs

objective of inv control

to acheive satidfactory lvls of cus service while keeping inv costs winthnn reasonable bounds

the idea/purpose behind ABC anaylsis

to establish inv policies that focus on the FEW CRITICAL inv parts and not the MANY TRIVIAL ones dont need to monitor the inexpensive inv as intensive as the expensive ones

Objective of warehouse layout

to find the optimum tradeoff btwn handling costs and costs associated w warehouse space -take to max the utilization of the total "cube" of the warehouse -while maint low costs for all that are related to transaction -also minimize damage and spoilage

how to calculate process capability

to see if there is the ability to meet the design specs (for a process to be capable, it must fall within upper and lower specs) Cp= (UP SPEC - LOW SPEC)/ 6o capable process at least 1.0 which also means that we can expect 2.700/1m errors or 2.0 Cp will give 3.4/1m

functions of inv

to wait while in transit to protect against stockout tos take adv of quantity discounts to smooth production requirements to decouple operations [separate parts of production] [separate from flucutuations in demand (enjoy better margins, productivity) to hedge against price inc (inflation, demand)

service recovery

training and empowering frontline workers to solve a problem immediately

how to safely store inv

using warehose management system (WMS) computer software that controls the movement and storage of materials within a warehouse, and processes the associated transactions Warehouse/storeroom concerns Security Safety Obsolescence

good maintence removes..

variability--it corrupts processes and creates waste

level schdules with small lots

while small lots can help provide JIT system, a operations manager will eventually find it beceom increasingly challenging to keep it up economically it is much more economical to produce in large lots, creating bulk

toyota production system [TPS]

with its emphasis on continous improvment

ISO 9000

world uniting around a single qual standard focus of the standards is to establish qual management procedures thru leadership, detailed documentation, work instructions, and recordkeeping they just deal with the STANDARDS TO BE FOLLOWED, not actually the quality

- A good project manager plans for the === but hopes for the ===

worst ; best

Reliability is a Probability how

•Probability that the product or system will: -Function when activated -Function for a given length of time •Independent events -Events whose occurrence or nonoccurrence do not influence each other.

The Total-Cost Curve is U-Shaped why

○ The marginal cost curve is pulling it up ----but also as we ORDER more, we also have more HOLDING costs orignally downward slope bc ordering+setup costs r natually decreasing ---it is getting divided more as we order more ---per unit basis

Pareto Phenomenon

"80-20" rule This idea can be used to help us establish priorities for management action For example, in quality management, it is often observed that 80% of the defects result from a small number of defects (the "vital few").

explain what OMs have to do with [intermediate and short term scheduling]

-are we better off keeping people on the payroll during slowdowns -which jobs do we perform next

Adding service efficiency

-b/c service efficiency tends to be low, we can fix this by limiting cx interaction which is y its so unproductive Limit the options -by providing a list of options (in the case of the funeral), or a series of photographs (in the case of the hairstyle) ambiguity may be reduced -design specifications may take the form of everything from a menu (in a restaurant), to a list of options Delay customization -Design the product so that customization is delayed as late in the process as possible -Although shampoo and condition are done in a standard way with low-cost labor, the color and styling customizing I've done last Modularization -Modernize the service so that customization takes the form of changing modules. -ex: Insurance on a mix and match (modular) basis. Automation -Divide the service into small parts and to automation -ex: isolating cash checking activity via ATM, banks have been very effective at designing a product that both increases customer service and reduces costs. Separation -structuring serivce so that cx must go to where there service is offered training -clarifying the service options, explain how to avoid problems Moment of Truth -relationship between the provider and the customer is crucial. -The operations managers task is to identify more with the truth and design operations that meet or exceed customer expectations -when they actually interact

3 key variables for improved labour productivity are

-basic education appropriate for the labour force -diet -social overhead that makes the labour avail like transportation and sanitation

how has sustainability become a new challenge in OM

-concerned w designing products and processes that are ecologically sustainable -environmentally friendly

Eli Whitney

-credited for the early popularization of interchangeable -through standardization and quality control

Frederick W. Taylor

-father of scientific management -belief that management should be much more resourceful and aggressive should assume more responsiblity for 1- matching employees to right job 2- providing proper training 3- providing proper work methods + tools 4- establishing legitimate incentives

explain what OMs have to do with [human resources and job design]

-how do we provide a reasonable work environment -how much can we expect our employees to produce

explain what OMs have to do with [inv, material req planning MRP, JIT]

-how much inv of each item should we have -when do we re-order

how has supply chain partnerings become a new challenge in OM

-our market now demands for shorter product life cycles (recall F21 trends) -demanding cx, fast change in tech -so all the tech, materials, and processes needs to be in tune with the needs of end users -need to find PARTNERSHIPS for their unique expertise -outsource and building long term partnerships w critical players in supply chain

valuable aspect of PCN analysis

-positioning and designing processes that can achieve strategic objectives -Firms wanting to achieve high economies of scale or more control in their operations should probably position towards the independent processing region of their process domain -Firms intending to provide a value offering that focuses on customization should be positioned more towards the consumer's process domain

how has global focus become a new challenge in OM

-rapid decline in communication and transportation = made markets global -similarly resources, talents, materials, and labour are also global now -countries thruout the world are all fighting for economic growth -need to rapidly seek creative designs, efficient prod, and high qual materials VIA international collaboration

explain what OMs have to do with [process and capacity design]

-what process and what capacity will these products require? -what equipment and technology is necessary for these processes?

To build the house of quality..

Identify customer wants. What do prospective customers want in this product? Identify how the good/service will satisfy customer wants. Identify specific product characteristics, features, or attributes and show how they will satisfy customer wants Relate customer wants to product hows. Build a matrix that shows this relationship Identify relationships between the firm's hows. How does our hows tie together? Developed importance ratings. Using the customer's importance ratings and weights for the relationships shown in the matrix, compute our importance ratings Evaluate competing products. How well do competing products meet customer wants? Determine the desirable technical attributes, your performance, and the competitive performance against these attributes

techniques that are important to design of a product

Robust design -means that the product is designed so that small variations in production or assembly do not adversely affect the product Modular design -Product designed in easily segmented components -offer flexibility to both production and marketing. -like modularity because it adds flexibility to the way customers can be satisfied. The customization provided by modularity allows customers to mix and match their own taste Computer aided design (CAD) -the use of computers to interactive design products and prepare engineering documentation -save time and money by shortening development cycles -examples are DFMA & 3-D modelling/printing Computer aided Manufacturing (CAM) -refers to the use of specialized computer programs to direct and control manufacturing equipment Virtual reality technology -such as developing 3-D layouts of everything from restaurants to amusement parks Value analysis -seeks improvements that lead to either a better product, or a product made more economically, or a product with less environmental impact -takes place during the production process, when it is clear that a new product is a success

describe Decline phase

Unless dying products make some unique contribution to the firm's reputation or its product line or can be sold with an unusually high contribution, their production should be terminated -open for making v2 and v3

one drive of a low cost strategy is..

a facility that is effectively utilized allow firms to spread overhead costs, shrinkage, and distribution costs

define supply chain

a global network of organizations and activities that supplies a firm w goods/services

explain low productivity improvement in the service sector is also attributable to the growth of low productivity activities in the service . sector

activites that are not previously a part of the measured economy like childcare, food prep, housecare, etc moved out from the home into the service sector due to more women joining the workforce these activites probably resulted in lower measured productivity although in fact, actual productivity has probably increased because these activities are now more efficiently produced than be4

how has industrial engineering and management science contributed to operations management

along with stats, management, and econ contribute to improved models and decision making

why is postindustrial societies known as knowledge societies

b/c labour force has migrated from manual work to technical and infromation processing tasks req ongoing education this is why management is the highest effective productivity variable

why is system design one of the most important parts to designing and operating the production process?

b/c many of the parameters of the system operation are decided by design

why is capital investment often necessary but rarely sufficient in the battle for increased productivity

capital investment provides tools to be used but inflation and taxes increase the cost of captial, making capital inv increasingly expensive

An effective product strategy links product decisions with

cash flow, market dynamics, product life cycle, and the organization's capabilities.

lead users

companies, organizations, or individuals that are well ahead of market trends and have needs that go far beyond those of average users. The operations manager must be "tuned in" to the market and particularly to these innovative lead users

many services are "purely" intangible except

counselling many services have SOME tangible component

productivity paradox

despite massive investment in computers, the rate of productivity is now lower than it was be4 pcs were introduced b/c.. -measures of productivity arent sensitive enough to detect growth in service sectors -perhaps gains are still building and may become apparent in later years

Quality function deployment (QFD) refers to both:

determining what will satisfy the customer and translating those customer desires into the target design.

3 ways to achieve competitive advantage

differentiation low-cost response

Define differentiation

distinguishing the offerings of an organization in a way that the cx perceives as adding value can be going beyond both physical and and service attributes (not just one feature) ex convenience of a production line, training, etc

Documents for services vs. documentation for a service

documents from moving the product to production are different from those used in goods-producing operations because of THE HIGH CX INTERACTION instead, will take the form of explicit job instructions that specifies what is to happen at the moment of truth regardless of how good a pharmacy is products made in terms of variety, access to brand names, if the moment of truth is not done well, the product may be poorly received

efficiency means vs effective

doing the job well with a minimum of resources and waste effective means doing the RIGHT thing

why is the productivity measurement difficult to use in the service sector

econ statistics often ignore the quality of ur haircut, outcome of a courtcase, etc each case can be different, like one lawyer could get rly difficult cases which would impact the "case per labour hour" calculation

Workers need to be both ____ and _____ to create wealth and value for the organization

efficient (don't slack) and effective (build things properly)

define low-cost leadership

entails acheiving max value, as perceived by the cx requires one to examine each of the 10 OM decision in a relentless effort to drive down costs while meeting cx expectations of value [see term 5]

Process-chain-Network (PCN) analysis

focuses on the ways in which processes can be designed to optimize interaction between firms and their customers. The activities are organized into three process regions for each participant: direct interaction -buying and making subway sandwich cx interaction The surrogate (substitute) interaction -in which one participant is acting on another participant's resources -ex: customer has access to buffet ingredients and assemble the sandwich themselves -direct interaction is limited independent -ex: firm that assembles all those pre-packaged sandwiches available in vending machines and convenience stores

partial vs multifactor&total productivity measures

for partial you can do [unitoutput]/measurement which will give you units of outputs per ______ but for multi and total, since the deno are in different units, you measure them all in ($) [unitoutput]*[sales$] / other factors in $ which will give you a small decimal number (index numbeR)

why does high production =/= high productivity?

high production may just imply that more ppl are working ONLY thru the increase of productivity can the standard of living improve Only thru productivity can labour, capital, and management receive additional payments -if prod is increased without increase PRODUCTIVITY, that just means PRICES RISE -productivity = more being produced w/ the same amount of resources (recall leap frog video)

productivity measurement (multi factor)

includes all inputs, aka total factor productivity producitivy= (output)/(labour + mats + energy + captial + misc)

4 ways to get differentiation

innovative design broad product line after sales service experience

Operations management [OM]

is the set of activities that create value in the form of goods and services by transforming inputs into outputs

explain the economic system

it is a cycle starting with.. "inputs" -labour, capital, management "transformation" -trans inputs to outputs "outputs" -goods and services then feedback loop -evaluates preformance against a strat or standard -also evaluates cx satisfaction -sends signals to managers

what is value added

it is the transformative process that ultimately at the end of that action, it creates a higher value of that product

how much does each labour, capital, and management contributes to the annual increase of productivity in canada? aka productivity variables

labour = 10% capital = 38% management = 52% so from this you can tell that OM's have a great effect productivity is heavily based on good SETUP and good PROCESS

why is the definition of 'service' tends to be complicated

manufacturers -> tangible prod while service is intangible but in truth, many products are a combination of a good AND service. like sometimes a service like consulting would require a TANGIBLE report like how the sale of goods includes a service [food] also 'service' activities may also be an integral part of production k there is trouble generating a consistent definition however we define services as including repair, maint, government, food, lodging, transportation, insurance, trade, finance, real estate, education, law, medicine, entertainment..

why must a OM need to have a mission and a strategy?

mission -> knows where its going strat -> how to get there

tools used in Decision Making

models quantitative approaches, trade offs, systems approach (the output and objective of the organization takes priority over everything else), establishing priorities, ethics

how has physical sciences (bio anatomy chem phys) have also contributed in OM

new adhesives, faster circuits, gamma rays to sanitize food products, higher qual glass

house of quality

part of the Quality Function Deployment (QFD) it utilizes a planning matrix to relate what the customer wants to how a firm (that produces the products) is going to meet those wants.

service pay

perception that services are low-paying but that isnt true, some are rly good however food services sectors -> arts -> recreation -> entertainment offer the lowest avg weekly pay in canada

The 5 basic things that operations managers do

planning organizing staffing leading controlling

describe Growth phase

product design has begun to stabilize Adding capacity or enhancing existing capacity to accommodate the increase in product demand may be necessary

productivity measurement (single factor)

productivity=(units produced)/(input used)

problems w the productivity measurement

quality may change while the inputs/outputs remains constant -b&w TV before vs. TVs now -the unit of measure (a tv) is the same but the quality has changed external elements may cause a inc/dec in productivity and the system itself isnt directly responsible -like a more reliable electric provider -> improves -but this was unintentional/planned precise units of measure may be lacking -not all cars req the same inputs

explain the competitive advantage of response

refers to FLEXIBLE, RELIABLE and QUICK response the ability to match changes in the marketplace where design innovations and volumes flutuate

what is experience differientation

when you engage a cx w a product thru imaginative use of the 5 senses so they "experience" the product ex like disney land -> not 'just' going on simple rides 'being immerse, active participant'

Is it true that the activities of operations function often very similar for both goods and services? why?

yes even tho they are different tangible vs. intangible, they both must have quality standards established and mist be designed and processed on a schedule in a facility where human resources are employed