Business Management Unit 3- The Operations Management Function, Chapter 1: Using Operations to create value, Chapter 2 - Process Strategy And Analysis - Textbook, Quality Management, Chapter S5 - Strategic Capacity Planning, ch. 7 Lean Thinking and L...

1 of the 5 Tenets of Lean Thinking:

*Specify precisely what about a product or service creates value from the customers perspective*` -value is not what the firm says but what the CUSTOMER says -firms should stop doing activities that dont add value to customers

3 of the 5 tenets in lean thinking:

*ensure that flow within a process is simple, smooth, and error free, thereby avoiding waste* -idea that you should: hold inventory (water level) high enough to "cover up" the rocks (problems with suppliers, qaulity, delivery, and machine breakdowns) and keep the stream flowing. -lean thinking wants you to: lower the water (inventory) level to expose the rocks (problems)...when the rocks have been broken down (problems solved) the water is then lowered again to expose more rocks...the sequence repeats until all the rocks are broken down small enough in order for the stream (production system) to flow smoothly

2 of the 5 tenets of lean thinking:

*identify, study, and improve the value stream of the process for each product or service*

7 forms of waste:

*page 137...table 7.1* DOUUTEW (waste dooo too) 1.) Defects 2.) Overproduction 3.) Unnecessary transportation 4.) Unnecessary motion: ppl walking to get materials 5.) Too much inventory 6.) Exceess processing: poor design requiring more labor or machine time 7.) Waiting time

4 of the 5 tenets in lean thinking:

*produce only what is pulled by the customer* -the *PUSH* system should be replaced with the *PULL* system of lean production push: aims to produce goods or services in advance of demand...leads to innacurate forecasts. pull: waits for the customer to signal a need for a good before producing it...this minimizes inventory

5 of the 5 tenets in lean thinking:

*strive for perfection* this requires continuous improvement of all processes as well as radical redesign when neccessary.

Technology in Service Industries

- E-Commerce e.g. online shopping, banking and marketing - Computerisation offers potential productivity gains, greater workplace flexibility and employee work-life balanc - Mobile Phones - Communication via Internet has enabled cost savings

Strategies Adopted to Optimise Operations

- Facilities Design and Layout - Materials Management - Management of Quality - Extent of the Use of Technology

Types of Layout

- Fixed Position/Project Layout - Process/Functional Layout - Product Layout

Productivity Measures

- Units of production produced per employee/unit of wage cost - Number of clients attended per hour - Number of units produced per unit of money

Demand forecasting rules

- short term more accurate - aggregated demand easy to forecast/less variable - forecasts developed using multiple info sources are more accurate

value stream mapping

- supports tenet 2 -creates a visual representation of the value stream of a process, much like process flowcharting. it requires direct observation of work and the flow of work within a process so that opportunities for improvement can be found. -improvements to the map come from asking questions like "is this step necessary for creating value?"

What is quality assurance or QA?

-a management program to ensure standard of quality -provides adequate confidence that a radiology service will provide consistent high quality images and services

What is quality control of QC?

-part of a QA program monitoring technical system -monitors technical equipment to maintain quality standards

effect of lean systems on layout and equipment

-there is a more streamlined flow -lot sizes are reduced, inventory is held close to where it is used, and problems are resolved with solutions so that the problems do not arise again in the future. -work spaces can be smaller b/c inventory is low

Forecasts have to be :

-usable -timely -accurate

5s

-well known technique that supports lean thinking. -used for organizing a workspace to improve employee morale, environmental safety, and process efficiency. -when a workspace is well organized, time is not wasted by having to look for things helps: employees have a sense of ownership, helps standardize work, assure a safe work enviro, and keeps processes from becoming too complex

Steps in the Capacity Planning Process

1 - Estimate future capacity requirements 2 - Evaluate existing capacity and facilities and identify gaps 3 - Identify alternatives for meeting requirements 4 - Conduct financial analyses of each alternative 5 - Assess key qualitative issues for each alternative 6 - Select the alternative to pursue that will be best in the long term 7 - Implement the selected alternative 8 - Monitor results

4 Product and Inventory Strategies

1) Design-to-order 2) Make-to-order 3) Assemble-to-order 4) Make-to-stock

3 Process Structure in Service

1) Front office 2) Hybrid office 3) Back office

4 Manufacturing Process Structure

1) Job process 2) Batch process 3) Line process 4) Continuous-flow process

2 Basic Change Strategies for Analyzing and Modifying Processes

1) Process reengineering 2) Process improvement Both need process analysis to identify and implement changes

4 Basics Process Decisions

1) Process structure 2) Customer involvement 3) Resource flexibility 4) Capital intensity

Difference Between Manufacturing and Service Organisations

1. A manufacturing organisation produces products which are tangible while a service organisation performs services which are intangible. 2. A manufacturing organisation have minimal customer contact whereas a service organisation have a high degree of customer/client contact. 3. A manufacturing organisation produces goods that can be standardised or have consistent quality, e.g. Mars bars, cars, clothing. On the other hand, service organisations often perform services tailored to meet individual client/ customer requirements and may not be consistent, e.g. tax advice

Core TQM Concepts

1. Continuous Process Improvement 2. Customer Focus 3. Defect Prevention 4. Universal Responsibility

Key Elements of an Operations System

1. Inputs 2. Transformation 3. Outputs

"integrated supplier program"

1.) Early supplier selection 2.) Family of Parts sourcing 3.) long term strategic relationship 4.) paperwork reduction in receiving and inspection

Implementation of lean thinking (not easy):

1.) establish a team of employees that will study the process that needs improvement 2.) have the team determine what the customer values 3.) construct a value stream map of all the process steps and the times or value that is added 4.) Use customer demand to pull the flow of work through the process 5.) Implement the changes identified by the team

control the movement of containers by using 2 types of kanban cards:

1.) production cards 2.) withdrawal (move) cards -these cards are used to authorize production and identify the parts in any container. -cards can be made of paper, metal or plastic *kanban cards take the place of shop paperwork*

Capacity Utilization

= [(actual output)/(design capacity)] x 100%

Efficiency

= [(actual output)/(effective capacity)] x 100%

forecast error

=actual demand- forecasted demand (for a given time period) if positive: overly pessimistic forecast if negative: overly optimistic forecast

Reasons for Diseconomies of Scale

>Distribution costs increase due to traffic congestion and shipping from one large centralized facility instead of several smaller, decentralized facilities >Complexity increases costs; control and communication become more problematic >Inflexibility can be an issue >Additional levels of bureaucracy exist, slowing decision making and approvals for changes

Reasons for Economies of Scale

>Fixed costs are spread over more unit, reducing the fixed cost per unit >Construction costs increase at a decreasing rate with respect to the size of the facility to be built >Processing costs decrease as output rates increase because operations become more standardized, which reduces unit costs

Factors in Planning Service Capacity

>There may be a need to be near customers >The inability to store services >The degree of volatility of demand

Waiting-Line Analysis

>Useful for designing or modifying service systems >Waiting-lines occur across a wide variety of service systems >Waiting-lines are caused by bottlenecks in the process >Helps managers plan capacity level that will be cost-effective by balancing the cost of having customers wait in line with the cost of additional capacity

Computer Aided Design (CAD)

A computer program that facilitates the creation and modification of product designs that has become the standard in most organisations. CAD speeds up the process of product design and increases accuracy. It is costly to introduce, but saves time and money in the long term.

Influence of Recycling on Ethics

A cost-cutting measure that also means less waste is left to be disposed of. This can have a positive impact on the environment, especially if non-renewable components are used.

Payback

A crude but widely used method that focuses on the length of time it will take for an investment to return its original cost. Ignores the time value of money

Influence of Facility Layout and Design on Ethics

A focus on ensuring that the production process operates smoothly and without bottlenecks may also mean less resources and energy used in the production process, thus reducing the impact on some resources such as water and electricity.

Operation

A group of human and capital resources performing all or part of one or more processes

Quality Circle

A group of workers who meet regularly to discuss quality and production issues; any proposed changes to production methods are then put forward to management

Total Quality Management (TQM)

A holistic approach to quality where all members of an organisation aim to participate in ongoing improvement of organisational culture and production processes. Employees are placed into a quality circle and are required to work together to achieve quality improvements on an ongoing basis.

Competitive Advantage

A point of difference or superiority held over one's competitors

Quality Assurance

A proactive approach which aims to build quality into work processes, thereby avoiding errors before they occur. May involve the use of an International Organisation for Standardisation (IOS) certification.

Batch Process

A process that differs from the job process with respect to volume, variety, and quantity _ most common process choice _ volume are higher _ same/similar products _ process flow is flexible with some segments have line flows

Line Process

A process that lies between the batch and continuous processes on the continuum _ volumes are high _ products are standardized --> allows resources to be organized around particular products

Front Office

A process with high customer contact where the service provider interacts directly with the internal or external customer _ considerable divergence _ work flows are flexible

Back Office

A process with low customer contact and little service customization _ work is standardized and routine _ line flows

Hybrid Office

A process with moderate levels of customer contact and standard services with some options available

Job Process

A process with the flexibility needed to produce a wide variety of products in significant quantities, with considerable divergence in the steps performed _ customization is high _ volume is low _ workforce and equipment are flexible _ make products to order _ each new order = a single unit = job

Operations

A series of procedures and processes undertaken in order to create outputs

Assemble-to-Order Strategy

A strategy for producing a wide variety of products from relatively few subassemblies and components after the customer orders are received _ involves a line process for assembly and a batch process _ high volume of standardized components

Design-to-Order

A strategy that involves designing new products that do not currently exist, and then manufacturing them to meet unique customer specifications _ highly customized product

Make-to-Stock Strategy

A strategy that involves holding items in stock for immediate delivery, thereby minimizing customer delivery times _ standardized products with high volume _ need good forecast _ line or continuous-flow processes

Make-to-Order

A strategy used by manufacturers that make products to customer specification in low volumes _ high customization _ process have high divergence -job or small batch processes

Process Choice

A way of structuring the process by organizing resources around the process or organizing them around the products

Flexible Workforce

A workforce whose members are capable of doing many tasks, either at their own workstations or as they move from one workstation to another cons: need more skills and training pro: reliable customer service, alleviate capacity bottlenecks -want general purpose equipment for low volumes and special purpose equipment for high volumes/low customization

Computer Aided Manufacturing (CAM)

Also referred to as Computer Numerical Control (CNC), involves the control of machinery, tools and equipment through a computer. Machines are fed programmed instructions from a central computer, allowing for greater precision and less margin for error.

Just In Time

An inventory management system that aims to avoid holding any stocks (either as inputs or finished goods); supplies arrive just as needed for production, and finished products are immediately dispatched or sold to customers. Pro: 1. Involves the reduction/minimisation of inventory levels in the supply chain, thereby reducing inventory costs. 2. Reduced insurance costs as there would be less inventory in the warehouse that would be insured against theft or fire etc. 3. Reduction in overall inventory management costs associated with keeping track and control of inventory Con: 1. Increase in delivery costs as materials will need to be delivered on a more frequent basis 2. If relationship with supplier is not good, then there is potential for stock to run out if supplies do not deliver the next stock on time, which could mean that the organisation will need to shut down its production until stock is restored and therefore will not meet the stated production time.

Bottleneck Operation

An operation in a sequence of operations whose capacity is lower than that of the other operations

Describe troubleshooting

Begin with symptoms, the radiographer can work step-by-step through problem-solving procedure to eliminate possible problems.

Q(BEP)

Break-Even Quantity = FC/(R - v)

Customer-Contact Matrix

Considering 3 elements of customer contact 1) Degree of customer contact 2) Customization 3) Process characteristics

Quality Management

Consumers look for products that have the best possible quality at the lowest price. Organisations that develop a reputation for quality products and service have a competitive advantage as they are able to minimise waste and defect rates in production, thereby reducing operating costs and maximising operational efficiency and productivity

Fixed Costs

Costs that tend to remain constant regardless of volume of output

Variable Costs

Costs that vary directly with volume of output

Effective Capacity

Design capacity minus allowances such as personal time, and maintenance; always less than design capacity

Process Structure

Determine the process type relative to the kinds of resources needed, how resources are partitioned between them, and their key characteristics

Process Decision

Directly affect the process itself and indirectly affect the services/products that it provides _ guided by process strategy

Process Analysis

Documentation and detailed understanding of how work is performed and how it can be redesign

Product Layout

Equipment is used for a single purpose along a production flow line; the product progresses along the line in a continuous flow; suitable for mass production; creates large amounts of consistent quality products.

Optimising the Use of Equipments

Equipment must be easily accessible, reliable and operational to maximise its throughput, in order to extract maximum productivity.

regression analysis

Estimates relationships between leading indicators and demand. Correlation bet. two data sets R(squared)= close to 1=tight correlation close to 0= no correlation

Executive Judgment

Executives better equipped to make judgments regarding long term sales of business patterns. They have experience and access to sources of information

Capacity Cushion

Extra capacity used to offset demand uncertainty

What are risks to other patients?

Falls to visitors

FC

Fixed Cost

What is the development of equipment specification?

From the interview information, detailed statements of what the equipment should be capable of doing. Must include a change from the highest to lowest setting. When this is complete it is sent to vendors.

Decision Theory

Helpful tool for financial comparison of alternatives under conditions of risk or uncertainty. Suited to capacity decisions

Importance of Productivity

Higher productivity allows the organisation to be competitive by minimising the inputs needed to generate a given outputs. High levels of productivity will result in more output per unit of inputs, thereby leading to greater profitability. If an organisation maximises the use of its inputs, minimises wastage and achieves its daily production benchmarks, productivity levels will reach an optimal level, helping the company to maximise profits.

How to Read the Customer-Contact Matrix

Horizontal = service provided to the customer in terms of customer contact and competitive priorities Left = high customer contact and highly customized services --> customer likely to present and active --> receives more personal attention Right = low customer contact, passive involvement, less personalized attention Vertical = process divergence + flow **Key competitive priority is how much customization is needed

Flow

How the customer, object, or information being processed flows through the service facility _ flexible flow vs. line flow

Economies of Scale

If the output rate is less than the optimal level, increasing the output rate results in decreasing average unit costs

Diseconomies of Scale

If the output rate is more than the optimal level, increasing the output rate results increasing average unit costs

Exponential Smoothing

In exponential smoothing an exponentially smaller weight is applied to each demand that occurred further back in time. -continually changes -includes all data points -more weight on recent data

Optimising the Use of Physical Space

Insufficient workspace will often result in bottlenecks and subsequent blockages in workflows. The workspace, however, must not be too large, as it may hinder productivity if workers have to move around or walk long distances during completion of tasks.

Process

Involve the use of organization's resources to provide something of value _ talented management need a sound process to be successful _ need cooperation of all parts of the organization

Assembly Line

Involves inputs moving along different stages on a conveyor belt. Capable of producing larger quantities of standardised outputs in a relatively short time. It therefore suits industries where the demand for their product is both high and consistent. It also suits the production of a standardised product requiring only minimal alterations. Pro: 1. It is an efficient 2. Involves low unit costs 3. Provides a constant rate of output with consistent quality standards Con: 1. Initial high set-up costs with the purchase of capital-intensive high-technology production lines 2. Unmotivated employees through repetitive, low-skilled work 3. No allowance for any customisation.

Process/Functional Layout

Involves pieces of equipment with like functions being grouped together. It is used with products that require a large degree of variety, but that are generally only produced in small amounts. E.g. A hospital would use a process layout. Each patient will have different requirements and needs, therefore they will utilise different machinery and locations with no set pattern

Quality Control

Involves the use of a series of physical checks at different stages of the production process to ensure that products and services meet designated standards and errors are eliminated post-production.

Productivity

It is the total value of output produced by the transformation process divided by the total cost or amount of inputs. A measure of the functioning and efficiency of a production system and relates to whether the operating system is able to increase its level of outputs while still using the set level of inputs.

JIT (just in time)

JIT manufacturing came to the US in 1981 at the Kawasaki plant in Nebraska, which used some of the TPS ideas. -JIT manufacturing focused primarly on inventory reduction but ignored other aspects of Toyotas complete system.

Mass Production

Large-scale production of similar or identical items; usually involves automation and generally the products move to the equipment along a conveyor belt.

Mass Production

Line process + make-to-stock strategy

Operations Management

Management of resources to achieve efficient output of goods or services

7 Categories of Constraints

Market - insufficient demand Resource - Too little of one or more resources Material - too little of one or more materials Financial - insufficient funds Supplier - unreliable, long lead time, substandard quality Knowledge or competency - needed knowledge or skills missing or incomplete Policy - laws or regulations interfere

Line Process vs. Continuous-Flow Process

Materials flow through the process without stopping until the whole batch is finished

Process vs. Service/Product

No service or product without a process but no process can exist without at least one service or product

Flow of Strategy

Operation Strategy --> Process Strategy --> Process Decision

What are major areas in a radiology QA programs?

Patient, radiographer, processing systems, equipment, or eternal beam evaluation

What are benefits of QM?

Patient, reduction in radiation exposure, efficiency of pt. care, departmental efficiency, consistency in production of quality images, cost effectiveness

workforce, facilities, marketing and financial know how, systems and technology

Pg 10 Developing core competencies: What are the 4 main core competencies? 1) Well trained and flexible 2) well-located (offices, stores, and plants) and flexible 3) Ability to differentiate or attract capital from stock sales 4) Expertise in information systems, expertise in internet technology and patents

Core Competencies

Pg 10 The unique resources and strengths that an organization's management considers when formulating a strategy (reflect the collective learning of the organization)

Lead time

Pg 10 the elapsed time between the receipt of a customer order and filling it

Strategic alliance, locating abroad

Pg 10-11 Developing Global Processes What are 2 effective global strategies? 1) An agreement with another firm that may take one of 3 forms Collaborative efforts: one firm has core competencies that another firm needs but is unwilling or unable to duplicate (usually btw a buyer-supplier) Joint venture: two firms agree to ptoduce a service or pproduct jointly technology licensing: one company licenses its services or production methods to another (may be used to gain access to foreign markets) 2) locate operations in a foreign country

Needs assessment

Pg 11 Identifies the needs of each segment and assesses how well competitors are addressing those needs

Market segmentation

Pg 11 Is the process of identifying groups of customers with enough in common to warrant the design and provision of services or products that the group wants and needs - starts with differentiating customers - starting point in customer driven operations strategy

Market segmentation, needs assessment

Pg 11 Market Analysis consists of?

Service or product needs, delivery system needs, volume needs, other needs

Pg 11 Needs assessment groupings: 1) Attributes of the service or product such as price, quality , and degree of customization 2)

Competitive Capabilities

Pg 11 The cost, quality, time and flexibility dimensions that a process or supply chain actually possesses and is able to deliver - cost - quality - time - flexibility

Competitive Priorities

Pg 11 The critical dimensions that a process or supply chain must possess to satisfy its internal or external customer both now and in the future

low-cost operations, top quality, consistent quality, delivery speed, on-time delivery, development speed, customization, variety, volume flexibility

Pg 12 List of the 9 Competitive Priorities: Cost Process 1) Delivering a service or product at the lowest possible cost to the satisfaction of external or internal customers of the process supply chain Quality Process 2) Delivering an outstanding service or product 3) Producing services or products that meet design specifications on a consistent basis Time Process 4) Quickly filling a customers order 5) Meeting delivery time promises 6) Quickly introducing a new service or product Flexibility 7) Satisfying the unique needs of each customer by changing service or product designs 8) Handling a wide assortment of services or products efficiently 9( Accelerating or decelerating the rate of production of services or products quickly to handle large fluctuations in demand

Order winner

Pg 13 A criterion customer use to differentiate the services or products of one firm from those of another - help achieve competitive priorities of the firm

Time based competition

Pg 13 A strategy that focuses on the competitive priorities of delivery speed and development speed (time capability)

Order qualifier

Pg 13 Minimal level required from a set of criteria from a firm to do business in a particular market - it will not ensure competitive success - must meet threshold to be considered

output(units or value)/inputs

Pg 16 Productivity =

Productivity Improvement

Pg 16 The value of outputs (services and products produced divided by the values of input resources (wages, costs of equipment etc) - majority of the workforce is in service, but productivity gains are much lower (stagnates overall standard of living) - can be increased by international investment and in info tech

Machine productivty

Pg 17 Denominator is the number of machines

Multifactor productivty

Pg 17 IS an index of the output provided by more than one of the resources used in production; it may be the value of the output divided by the sum of labor, material and overhead costs

labor productivity

Pg 17 The index of the output per person or per hour worked

Operation

Pg 3 A group of resources performing all or part of one or more process

Supply Chain

Pg 3 An interrelated series of processes within and across firms that produces a service or product to the satisfaction of customers

Process

Pg 3 Any activity or group of activities that takes one or more inputs, transforms them, and provides one or more outputs for its customers

Operations

Pg 3 Following finance transforms these material and service inputs into product and service outputs

Finance

Pg 3 Generates resources, capital and funds from investors and sales of its goods and services in the marketplace

Marketing

Pg 3 Is responsible for producing sales revenue of the outputs, which became returns on investors and capital for supporting operations

Supply Chain management

Pg 3 The synchronization of a firm's processes with those of its suppliers and customer to match the flow of materials, services, and information with customer demand

Operations management

Pg 3 The systematic design, direction, and control of processes that transform that transform inputs into services and products for internal, as well as external, customers

finance, marketing, operations

Pg 3 What are the 3 mainline functions of any business?

Support Functions

Pg 3 accounting, information systems, human resources, engineering provide essential information, services, and other managerial suport

External customer

Pg 5 A customer who is either an end user or an intermediary (manufacturers, financial institutions, or retailers) buying the firms finished services or products

inputs, outputs, operations, customers, information on performance, participation

Pg 5 All processes have 1) ___, which can include a combination of human resources (workers and managers), capital (equipment and facilities) materials and services , land and energy and provide 2) ___ to customers, (may be tangible or intangible, service or good) 3) ___ through which services, products or customer pass 4) External environment contains, internal and external ___ who provide both 5) ___ ___ ___ and ____ as do the processes themselves - can be a whole firm, a department, a small group or even an individual

Internal Customers

Pg 5 One or more employees or processes that rely on inputs from other employees or processes to perform their work

External suppliers

Pg 5 The business or individuals who provide the resources services, products, and materials for the firm's short term and long term needs

Nested process

Pg 5 The concept of a process within a process

Internal Suppliers

Pg 5 The employees or processes that supply information or materials within a process

services, manufacturing

Pg 5 What are two major types of processes?

output, customer contact, manufacturing

Pg 5-6 What are the 2 key differences between a service and manufacturing process? 1) The nature of the ____ 2) The degree of ___ ___ In general, ____ processes also have longer response times, are more capital intensive, and their quality can be measured more easily

physical (tangible), inventoried, customer contact, response time, capital, quality

Pg 6 Manufacturing process: 1) ____, durable output 2) Output can be ____ 3) Low ___ ___ 4) Long ____ ___ 5) ___ intensive 6) ___ easily measured

intangible, physical (tangible), inventoried, customer contact, response time, capital, quality

Pg 6 Service process: 1) ____, perishable output 2) Output cannot be ____ 3) High ___ ___ 4) Short ___ ___ 5) ___ intensive 6) ___ not easily measured

inputs

Pg 6 Similarities btw manufacturing and service process 1)At the firm level, Service providers do not just offer services and manufacturers do not just offer products 2) Even though services do not inventory finished goods, they do inventory ___ 3) Even some manufacturing firms dont inventory their outputs

core, support

Pg 6-7 What are the 2 main processes in the supply chain?

supplier relationship process, new service/product development process, order fulfillment process, customer relationship process

Pg 7 4 What are the 4 core processes 1) A process that selects the suppliers of services, materials and information and facilitates the timely and efficient flow of these items into the firm 2) A process that designs and develops new services or products from inputs received from external customer specifications or from the market in general through the customer relationship process 3) A process that includes the activities required to produce and deliver the service or product to the external customer 4) A process that identifies, attracts, and builds relationships with external customers and facilitates the placement of orders by customers

Support processes

Pg 7 A process that provides the resources and input s to the core processes and therefore is essential to the management of the business

Core processes

Pg 7 A set of activities that delivers value to external customers

Supply Chain processes

Pg 8 Business processes that have external customer or suppliers

outsourcing, warehousing, sourcing, customer service, logistics, cross-docking

Pg 8 Common supply chain processes 1) exploring available suppliers for the best options to perform processes in terms of price, quality, delivery, time, environmental issues 2) Receiving shipments from suppliers, verifying quality, placing in inventory and reporting receipt for inventory records 3) Selecting, certifying and evaluating suppliers and managing supplier contracts 4) providing information to answer questions or resolve problems using automated information services as well as voice to voice contact with customers 5) Selecting transportations mode (train, ship, truck, airplane, or pipeline) scheduling both inbound and outbound shipments, and providing intermediate inventory storage 6) Packing of products of incoming shipments, so they can be easily stored more economically at intermediate warehouses for outgoing shipments to their final destination - only as good as the processes within the org that have only internal suppliers and customers

environmental scanning, core competencies, core processes, global strategies

Pg 8 Developing a corporate strategy involves 4 considerations? 1) ___ ___: monitoring and adjusting to changes in the business environment 2) Identifying and developing the firm's __ ___ 3) Developing the firms __ ___ 4) Developing the firms ___ ___

Operations Strategy

Pg 8 The means by which operations implement the firm's corporate strategy and helps to build a customer driven firm - it links long term and short term operations decisions to corporate strategy and develops the capabilities the firm needs to compete

corporate strategy, market analysis, competitive priorities

Pg 8-9 Operations strategy is a process 1) that begins with ___ ____ which coordinates the firm's overall goals with its core processes (framework for carrying out all the orgs functions) - determines the markets the firm will serve and responses the firm will make to changes in the environment 2) and uses a __ ___ which is based on corporate strategy and categorizes a firm's customers, identifies their needs and assesses competitor's strengths 3 This information is used to develop __ ___ - continuous process

Layout

Physical arrangement of operations (or departments) created from the various processes and puts them in tangible form

P

Profit = TR - TC =Q(R - v) - FC

Corporate Strategy

Provides an overall direction that serves as the framework for carrying out all the organization's functions

Influence of Quality Control and Assurance on Ethics

Quality focus during the manufacturing process will mean inefficiencies will be picked up and a better quality product will leave the organisation, which may mean that consumers are protected from faulty products.

Q

Quantity or volume of output = (P + FC)/(R - v)

Influence of Waste Minimisation on Ethics

Reduces operating costs, while also minimising the impact of waste on landfill and the environment.

Customer Involvement

Reflects the ways in which customers become part of the process and the extent of their participation

Quality Certification

Registration of quality standards for design, development and production of manufacturing or service industries. it provides confidence to an organisation's stakeholders, adds great potential for selling into export markets and demonstrates a huge competitive advantage in globalised markets over its non-certified competitors.

Regular Maintenance Program

Regular maintenance of equipments and facilities allows them to be operational. Any piece of equipment lying idle results in lost output and thus, lost revenue.

R

Revenue per unit

Environmental Management Systems (EMS)

Series of policies and practices that focuses on an organisation's approach to environmental issues. The environmental performance of an organisation is important because of growing consumer awareness of and concern for environmental issues, which is affecting purchase choices. An organisation with a sound EMS built into its operations will therefore have a considerable competitive advantage over its competitors.

Ethical and Socially Responsible Management of Operations

Social responsibility requires an organisation to reduce economic, social and environmental impacts on the wider community and ecosystem, and looking out for the interests of all stakeholders. A socially responsible organisation builds goodwill and therefore a positive reputation, is easily able to both attract and retain good employees, and is often able to gain cost advantages. Includes: • waste minimisation schemes, such as recycling • reduction of carbon emissions • provision of enhanced quality of life for employees through provision of safe working environments that respect employee rights • taking responsibility for the environmental, social and economic impact of the organisation's activities.

Constraint

Something that limits the performance of a process or system in achieving its goals

Process Strategy

Specifies the pattern of decisions made in managing processes so that the processes will achieve their competitive priorities = a map of decision steps _ to guide process decision

Present Value Method

Summarizes the initial cost of an investment, its estimated annual cash flows, and any expected salvage value in a single value called the equivalent current value, taking into account the time value of money

Internal Rate of Return

Summarizes the initial cost, expected annual cash flows, and estimated future salvage value of an investment proposal in an equivalent interest rate

Supply Chain Management

Supply chain management is the process of integrating and planning, implementing and controlling the system of organisations, people, technology, activities, information and resources that transforms inputs into finished outputs.

Inventory Control

System of overseeing the contents of an inventory; usually involves maintaining correct levels of stock as well as averting stock loss and theft

Influence of Technology on Ethics

Technology may mean that dangerous and competitive tasks are not completed by employees, thus reducing workplace accidents.

Operation Management's Relationship to Business Objectives

The Operations function is imperative to achieving an organisation's objectives because it is within this function that cost of production and the quality of the finished products are determined therefore directly impacting upon revenue, costs, productivity and, ultimately, profits.

Computer Integrated Manufacturing (CIM)

The combination of CAD and CAM. CIM is a computer program that controls and directs production from start to finish. Computers can direct planning cost estimations, inventory planning, control and quality-control systems.

Flexible Flow

The customers, materials, or information move in diverse way

Linear Flow

The customers, materials, or information move linearly from one operation to the next, according to a fixed sequence

Virtual Factory

The decentralisation of productive activities so that production does not occur at one worksite; also referred to as decentralisation. Pro: • reduced fixed costs from plant and equipment • loyalty from suppliers through a guarantee of work • a concentration of expertise, with one site performing a small number of tasks in large numbers • quicker supply to some parts of the world • ability to take advantage of cost savings offered by low-wage countries. Con: • language and cultural barriers in dealings with suppliers • high set-up costs • difficult to change suppliers if needed • possibility of political and economic disruption in developing countries • ethical and social responsibility issues

Quality

The degree of excellence in a good or service and its ability to satisfy the customer

Cash Flow

The difference between cash received from sales and other sources, and cash outflow for labor, material, overhead, and taxes

Contribution Margin

The difference between revenue per unit and variable cost per unit = R - v

Resource Flexibility

The ease with which employees and equipment can handle a wide variety of products, output levels, duties, and functions

Customer Contact

The extent to which the customer is present, is actively involved, and receives personal attention during the service process

Process Divergence

The extent to which the process is highly customized and how the tasks are performed

Continuous-Flow Process

The extreme end of high-volume standardized production and and rigid line flows, with production not starting and stopping for long time intervals

Inventory

The holding or storage of raw materials, component parts, work in progress and finished goods

Batch Production

The manufacture of a limited number of identical products; every item in the batch is completed at each stage before they all pass on to the next stage of production.

Design Capacity

The maximum output rate or service capacity an operation, process, or facility is designed for

Capital Intensity

The mix of equipment and human skills in a process _ greater the cost of equipment relative to the cost of labor, the greater is the capital intensity

Facility Layout

The physical layout of a work environment, e.g. factory, shop, office, warehouse

Transformation

The process involved in converting inputs into outputs. This stage is important, as it is the stage where value can be added to the inputs and productivity gains made due to efficiency in the processes and procedures undertaken.

Production Process

The process of transforming resource inputs into finished goods and services

Fixed Position Layout

The product remains in a fixed position with the required resources taken to the product. This layout type is used for the construction of large and bulky products, such as building or aircraft construction. Pro => greater flexibility, enabling manufacture of product to exact specifications. This also allows for high quality to be built into the production process Con => expensive as it is time-consuming and has high input requirements of labour.

Indifference point

The quantity that would make two alternatives equivalent

Actual Output

The rate of output actually achieved; cannot exceed effective capacity

Input

The resources an organisation uses to produce its goods and services. Includes: • Materials • Human resources • Technology e.g. automation, robotics • Capital (cash), plant (building) and equipments • Information and knowledge • Time

Postponement

The strategy of delaying final activities in the provision of a product until the orders are received

Mass Customization

The strategy that uses highly divergent processes to generate a wide variety of customized products at reasonable low costs

Present Value

The sum, in current value, of all future cash flows of an investment proposal

Automation

The techniques and equipment used to achieve automatic, as opposed to human, operation or control of a process, equipment or a system. Includes: - Computer Aided Manufacturing (CAM) - Computer Aided Design (CAD) - Computer Integrated Manufacturing (CIM) - Robotics - Flexible Manufacturing Systems (FMS)

Capacity

The upper limit or ceiling on the load that an operating unit can handle

Robotics

The use of computer-controlled robots to perform manual tasks, especially on an assembly line, replacing functions previously performed by human labour. They offer significant cost savings and increased efficiencies as robots save on labour costs and are not subject to human error. They are able to operate for long periods to a very high standard. In general, robotics offer improved quality and efficiency and have the added advantage of freeing employees from repetitive tasks. Robots are sophisticated and are able to perform complex tasks.

Installment of the equipment involves what and how do we test this new equipment?

The vendor is responsible for testing the equipment. the QC technologist must verify that that the equipment specifications have been met then data is taken so that future QC monitoring.

How do we further train the staff with new equipment?

The vendor shows a demonstration which involves at least two persons apart of the purchasing contract. An in-service program with an orientation procedure would work.

Break-Even Point

The volume of output at which total cost and total revenue are equal

Cost-Volume Analysis

This analysis focuses on the relationships between cost, revenue, and volume of output; The purpose is to estimate the income of an organization under different operating conditions

Flexible Manufacturing Systems (FMS)

This is a complete system involving total computer control of the operations system using CAM-based equipment and automated transport systems that deliver component parts and raw materials in the correct quantities just as they are required. FMS creates total computer control of all aspects of the operations system involving the integration of CAD, engineering and manufacturing. Computers detect things such as machine breakdown and notify operators about the correct replacement parts required. They will also reset equipment when it is required in order to produce different product types according to different specifications.

Describe the objectives and responsibilities of monitoring equipment performance.

This is called the "whole of control" which is when routine checks are done to the equipment. Monitoring can be two difference parts- film processing systems and external beam evaluation. Objectives are 1. monitor the quality of the image processing systems, 2. measure the quality of the external radiation beams, 3. specify faults within these systems to allow corrective measure to be taken.

TC

Total Cost = FC + VC

TR

Total Revenue = R x Q

VC

Total variable cost = Q x v

Outputs

Transformed inputs that are returned to the external environment as products or services

Who chooses the imaging requirements? How does this happen?

Usually a chief radiologist or administrative technologist. Sometimes they don't have the option and end up avoiding the product so it is best to gather a team to decide the equipment that would best suit the department. The radiographers are the most important input because their experiences with the equipment.

v

Variable cost per unit

In the selection of equipment, what happens?

When the bid arrives they can compare for meeting specifications such as cost, and service. Sometime radiologist have a preference and if this happens a non- radiology administrator should be brought in to decide.

Factors Affect Process Decisions

_ Competitive priorities _ Customer contact _ Volume

Interpreting More Customer Involvement

_ better quality _ faster delivery _ greater flexibility _ lower cost

flexible or programmable automation

a manufacturing process that can be changed easily to handle various products -useful for both low and high customization processes

fixed automation

a manufacturing process that produces one type of part or product in a fixed sequence of simple operations -demand volumes are high -product designs stable -long product life cycles

What are risks to patients?

a patient could fall, the wrong pt could have been xray'd, contract a nasocomial infection

What is quality management or QM?

a program to minimize variables affecting the image

one touch setups

a setup time of less than one minute -these low setups can be achieved by designing a two-step setup process....one is internal, one is external

2.) Family of Parts Sourcing

a supplier takes responsibility for an entire family of parts

What is risk management?

a system or process to identify, analyze, and evaluate risks along with selecting the methods to minimize them Safety and loss prevention is another term for risk management What is the cause and how can we fix the problem

automation

a system, process, or piece of equipment that is self-acting and self-regulating

What organization developed the standards for acceptance testing and quality control of photostimulable storage phosphor (PSP) imaging systems?

a. American college of radiology ACR

Which of the following is a quality control activity performed in a PACS environment?

a. all of the above (image transfer speed, image processing speed, data integrity measure)

A systematic observation and assessment of different aspects of radiology department would be what kind of activity?

a. quality assurance

internal setup

actions that require the machine to be stopped

seasonal index

adjust forecast values for each seasonal time period. Divides each periods actual demand by an estimate of the average(or base) demand across all periods in a complete seasonal cycle.

perfection

an affordable good or service, delivered rapidly and on time, that meets the needs of the customer. -there is no end to the improvements that can be sought and made b/c customers needs always change.

waste

anything that does not contribute value to the product or service being produced and delivered to the customer. -waste ADDS cost....Japanese term: MUDA means waste -many forms of waste are hidden ex: waiting time for machines or labor to become available.

Naive model

assumes that tomorrows demand will be the same as todays

What organization accredits most hospitals in the United States?

b. The Joint commission (JC)

A comprehensive set of activities designed to monitor and maintain systems that produce a product would be what kind of activity?

b. quality control

Marketing Research

bases forecasting on the purchasing patterns and attitudes of current potential customers -consumer surveys - interviews - focus groups

judgement based forecasting

built upon estimates and opinions of people (experts). It incorporates factors of demand difficult to capture in statistical models. Used when there is a lack of quantitative and historical info (ex new product) or a step change vs. Statistical based forecasting stable product= the more you relay on statistics

What device is used to measure the luminance of a monitor?

c. photometer

What PACS CQI activity documents images that are of poor quality?

c. recognition of nondiagnostic images

external setup

can be done while the machine is operating. ex: on deck batter in baseball; the player is warmed up and ready to bat -as much of internal setup should be converted to external

What does the ACR require?

compliance with standards of practice to assure quality in any imaging system. 3 things are contrast, resolution, noise.

causal modeling

concentrate on external factors that are thought to cause demand.

lean thinking

concepts, principles, and techniques underlying lean production is what makes lean thinking. It is a way of thinking about processes at work. It has 5 tenets that have specific concepts, principles, and techniques. the 5 tenets aim to deliver value to customers ex: 3M, Bendix, Black and Decker, Delta, Honeywell all use lean thinking. benefits: -increased inventory turnover -superior qaulity -cost savings -a lean system does not create qaulity -changing supplier relationships is one of the most important aspects of creating a lean system *PAGE 153 TABLE 7.4*

stable pattern

consistent horizontal streams of demands.

3.) long term strategic relationship

contract for the life of the part can be given to a supplier in exchange for a specific price schedule.

Which of the following are weekly QC duties of a technologist?

d. all of the above (clean imaging plates, clean air intake on reader, perform a reject analysis)

What is done after the installation of new equipment to determine if the equipment is performing to vendor specification?

d. all of the above (error maintenance, acceptance testing, routine maintenance)

Which of the following are daily QC duties of a technologist?

d. all of the above (hinge and latch inspection, erasure of imaging plates, image inspection for artifact)

demand forecasting

decision process in which managers predict demand patterns -integrate info from market, internal op, and larger business environment

lean production

defined as systematically eliminating waste in all production processes by providing exactly what the customer needs and no more. -defects reduced by half -inventory reduced from 2 weeks -this showed US plants could adopt the TPS and compete with Japanese plants

kaizen events

deploying lean thinking starts and is maintained through kaizen events. a kaizen event can take b/w 2 days and one week and is focused on creating improvement in performance (speed, qaulity, cost) in one particular area of operations. ex: the shipping area that has experienced an increase in qaulity problems

Autocorrelation

describes the relationship of current demand with past demand

Delphi method

develops forecasting by asking a panel of experts to individually respond to a series of questions and then the forecaster shares all answers with the group. After, they are given a chance to revise their responses or ask new questions. THis is repeated until a consensus is achieved . -prevents any individual to have compete control of process -reflects input of all

Plants within Plants

different operations within a facility with individualized competitive priorities, processes, and work-forces under the same roof

cross training

each worker must be able to operate several machines or perform a variety of tasks. -must be able to set up machines, do routine maintenance, and inspect the parts benefits of cross trained workers: -they provide flexibility to the lean production system -new pay systems in a lean system will reward workers based on the # of diff jobs they can perform

economies of scope

economies that reflect the ability to produce multiple products more cheaply in combination than separately

What are the goals and purposes of QC testing?

equipment calibration potential problem prior to image quality minimize repeat rate cause of problem before effecting quality of images document to correct the problem

Patient radiation protection

exposure factors, IP speed class, filtration, collimation, processing conditions, repeats, positioning, shielding

Continuous quality improvement tends to focus on the people or the service rather than on the process. T or F

f. focus on process not people

What are reasons for QA

federal laws, accreditation, insurance, malpractice insurance You have to demonstrate that you have a quality control program to JCHOA

moving average

forecast as the average of demands over a number of immediate past periods. increasing # of periods reduces impact of atypical demands in isolated periods but also reduces sensitivity of moving average to actual shifts in demand

benefit of lean system:

have a stable master schedule and uniform load in order to gain the most benefit from your lean system ex: heart attacks occur randomly so demand for this service cant be stabilized or use takt time

The Value Stream

identifies all the processing steps and tasks taken to complete a product or deliver a service from start to end.

trend

identifies general sloping tendency of demand, either upward or downward, in a linear or non linear fashion.

reducing set up time

important factor in lean production systems b.c it increases flexbility to meet schedule changes and reduces inventory. -as setup time reaches zero, the ideal lot size of one unit can be reached -reducing run times has been the main focus for many managers..but they should focus on reducing BOTH run and setup times ex: SWA has quick turnaround (setup) times with its planes

preventative maintenance

important for equipment when using lean systems. -critical to avoid unplanned equipment failures b/c inventories have been cut to minimal levels that workers stick to for the daily plan

collaborative planning, forecasting and replenishment

improves collaboration and information sharing requires buyers and sellers to collaboratively develop their demand plans and collaboratively adjust and execute them with the goal of meeting customer demand with minimal inventories, lead times and transaction costs.

What are disadvantages of poor quality images?

incorrect diagnosis, risk of repeating a hazardous procedure, unproductive pt dose, patient inconvenience, increased cost

gemba

japanese word for: direct observation of work

forecast demand too low=

lost sales lowered productivity available for customers

uniform load

master scheduling for products is done to achieve uniform load: the assignment of apprx. equal amounts of work to each machine or worker.

takt time

matching supply to demand -means the baton that an orchestra director uses to regulate the speed of the music. -in lean productions it is the time between successive units of produciton; this represents the SPEED OF OUTPUT ex: a takt time of 2 mins means one unit is produced every 2 mins, or 30 units are produced every hour. -*takt time should be equal to the average demand rate of the market to match production with demand and minimize inventories* *produce at a constant rate that = average demand*

forecast accuracy

measures how closely the forecast aligns with the observation over time. -every error(too high or too low) reduces accuracy

Costs of forecasting should save...

money lost in holding inventory that is never sold lost capacity making products no one wants to buy lost wages paying workers who are not needed

What are the risks to employees and medical staff?

moving patients, needle sticks, and stress injuries.

Quality in lean systems

must be an INPUT in order to create value for the customer, as needed to fulfill the first tenet -defective goods are clearly waste -lean production aims to expose errors and get them corrected at their source rather than covering them up

What format should be used for risk management?

objective, facts only, accurate representation of events that happen.

postponable product

one that can be configured to its final form quickly and inexpensively once actual customer demand is known. -largely eliminates need for large and complex forecasting

shift of step change

one time change in demand usually due to some external influence on demand such as a major product promotional campaign. this makes previous data no longer reliable so more judgement based forecasting has to be used.

What does a quality assurance or QA deal with?

people involved in various aspects of patient care

5 whys technique

powerful technique for improving a production process...it explores the cause and effect relationship that underlie an observed problem ex: a defect in a product or lateness in delivery. -ask WHY at least 5 times in order to deliver insights into the root cause of an observed problem so that proper correction can be taken to prevent the root cause from re-creating the observed problem -asking WHY moves you towards potential solutions

demand management

proactive approach in which managers attempt to influence patterns of demand -product pricing -promotional activities -incentives(sales comissions) -coupons

repetitive manufacturing

production of standardized discrete products in high volume -materials produced in large batches, machines run faster to reduce costs

What would a QA monitor?

pt scheduling, exam prep, radiology check in procedure and image interpretation

What is the technologist accountable to the patient for? To what degree?

quality care, accurate diagnosis by giving history and facts

reducing lead time

reducing the fill, wait, move, use, or return times

4.) paperwork reduction in receiving and inspection

reducing the work associated with each order and delivery results in a direct savings to the customer and the supplier

seasonality and cycles

regular patterns of repeating highs and lows

stabilizing the master schedule

scheduling a certain number of customers each day or using methods such as advertising or pricing to even out the number of customers who want the service each day. -master scheduling = the avg customer demand on a daily basis.

single setups

setup time that is completed in single digit numbers.

co-location

several deliveries can be made each day provided that the supplier is located in the same vicinity -prefer: local suppliers with short lead times

1.) Early Supplier selection

suppliers are selected before the parts reach final design, and so the design can be worked out completely with the suppliers

An imaging plate should be erased when it has not been used for an extended period of time? T or F

t erase imaging plates that haven't been used

Grassroots forecasting

technique that seeks inputs from people who are close in contacts with customers and products. limitation: "experts" may unconsciously base their forecasts on recent experiences, rather than entire set of experiences better for developing short term forecasts for individual products

forecast errors

the "un-explained" component of demand that seems to be random in nature

forecast bias

the average error. Indicates the tendency of a forecasting technique to continually over-predict or under-predict demand.

demand planning

the combined process of forecasting and managing customers demands to create a planned pattern of demand that meets the firms operational and financial goals. - helps operations managers know what customers they should serve and at what levels of service

What is the cost of quality?

the expense of not doing things the first time

rengineering

the fundamental rethinking and radical redesign of processes to improve performance dramatically in terms of cost, quality, service, and speed

Kanban

the method of production authorization and materials movement in the lean production system that supports the tenet of producing ONLY what is PULLED by the CUSTOMER -means: a marker used to control the timing and sequencing of work through a sequential process. -purpose of kanban system: to signal the need for more parts and ensure that those parts are produced just in time to support work centers. -a complete kanban system can link all work centers in a production facility -it can also link the production facility to its suppliers

setup time

the nonproductive time when machines are being adjusted before beginning work on a new batch of parts.

focused factories

the result of a firm's splitting large plants that produced all the company's products into several specialized, smaller plants

What does the QA process evaluate standards of?

the technical equipment

group technology GT or Cellular manufacturing

the work centers are redesigned so that parts can flow smoothly from one work center to the next.

supplier relationships

these relationships are required to make radical changes. -suppliers are treated the same way internal work centers are treated -suppliers receive kanban cards and special containers, and they are expected to make frequent deliveries JIT for the processes using those supplies -*suppliers viewed as the external factory and as part of the production team*

multifunction workers

they have a broader set of skills

Historical Analogy

this approach uses data and experience from similar products to forecast demand for a new products

weighted moving average

this models assigns a different weight to each periods demand according to its importance. (ex. more importance to recent periods)

Personnel protection

time, distance, shielding

Toyota Production System (TPS)

toyota realized it needed to produce automobiles in much smaller batches, with much lower inventory, using simple but high-qaulity processes and involving workers as much as possible.

What are some examples of equipment consistency necessary for chest or KUB exam?

tube in detent, AEC to work

single unit production

used when setup time cannot be reduced, so small lots should be scheduled while still trying to reduce the lot size

industrial robot

versatile, computer controlled machine programmed to perform various tasks

What type of documentation is an incident report?

written documentation