Operations Management - Ch. 1

The business organization is a system composed of what subsystems?

- Marketing subsystem - Operations subsystem - Finance subsystem

What are the Four Sources of Variation?

- Variety of goods/services being offered - Structural variation in demand - Random variation - Assignable variation

What are some key elements of the industrial revolution?

-Began in England 1770s -Division of Labor - Adam Smith -Application of the "rotative" steam engine -Interchangeable parts

What are System Design Decisions?

-Capacity -Facility location -Facility layout -Product and service planning -Acquisition and placement of equipment

What are System Operation Decisions?

-Management of personnel -Inventory management and control -Scheduling -Project management -Quality assurance

What are common features of models?

-Simplifications of real-life phenomena -Omit unimportant details of the real-life systems they mimic so that attention can be focused on the most important aspects of the real-life system

Quantitative Methods

A decision making approach that frequently seeks to obtain a mathematically optimal solution

Supply Chain

A sequence of activities and organizations involved in producing and delivering a good/service

System

A set of interrelated parts that must work together.

Define Mass production

A system in which low-skilled workers use specialized machinery to produce high volumes of standardized goods

Services

Activities that provide some combination of time, location, form or psychological value. Act-oriented.

Model

An abstraction of reality; a simplification of something.

Processing

Controlling quantity, scheduling work

What form of production existed before the Industrial Revolution?

Craft Production

Logistics

Deciding how to best move information and materials

Location

Determining the location of facilities

Schematic Model

Easy to construct and change. Retain some degree of visual correspondence. Ex: blueprint

Purchasing

Evaluating potential suppliers, supporting the needs of operations on purchased goods and services

What is a primary function of the operations manager?

Guide the system by decision making. 1) System Design Decision 2) System Operation Decisions

How did Henry Ford contribute to Scientific Management?

He employed scientific management techniques to his factories, such as moving assembly line, mass production, interchangeable parts, division of labor

Design

Incorporating customer wants, manufacturability, and time to market

What happens during the Transformation Process?

Inputs (land, labor, capital, information) and transformed into outputs (goods, services). All is monitored by "control" and "feedback"

Why is managing services challenging?

Jobs in services are less structured and customer contact is much higher. In many services, worker skill level is lower than manufacturing. Employee turnover is high in services. Input variability is high. Service performance can be adversely affected by many factors outside the manager's control (employee and customer attitudes)

Physical Models

Look like their real-life counterparts. Allow for visual correspondence. Difficult to manipulate. Ex: model of a house

Mathematical Model

Looks nothing like its real-life counterpart. Easiest to manipulate and are important forms of inputs for computers and calculators. Ex: algorithm

What form of production was created post-industrial revolution?

Mass production

Capacity Planning

Matching supply and demand

What does scientific management put an emphasis on?

Maximizing output

Feedback

Measurements taken at various points in the transformation process

Inventory

Meeting demand requirements while managing costs

What is a general approach to decision making?

Modeling is a key tool used by all decision makers

Suppliers

Monitoring supplier quality, on time delivery, and flexibility; maintaining supplier relaitons

How to manufacturing and service organizations differ?

Mostly because manufacturing is goods-oriented and service is act-oritented

Scientific Management

Movement was led by efficiency engineer, Frederick Winslow Taylor. "Science of management" is based on observation, measurement, analysis, and improvement of work methods and economic incentives.

Random Variation

Natural variation that is present in all processes. Generally, it cannot be influenced by managers.

Process

One or more actions that transform inputs into outputs

Goods

Physical items that include raw materials, parts, subassemblies, and the final product. Tangible.

Forecasting

Predicting timing and volume of customer demand

Concerning Supply and Demand, what is an ideal situation?

Supply = Demand

Define craft production

System in which highly skilled workers use simple, flexible tools to produce small quantities of customized goods

Control

The comparison of feedback against previously established standards to determine if corrective action is needed

Transformation

The conversion process between inputs and outputs. Value is added to inputs.

Variety of Goods/Services Being Offered

The greater the variety of goods/services being offered, the greater the variation in production or service requirements

Operations Management

The management of systems or processes that create goods and/or provide services

What is the role of the Operations Manager?

The operations Function consists of all activities directly related to producing goods or providing services

In the Systems Approach, the output and objectives of the organization must do what?

The output and objectives must take precedence over those of any one subsystem

Operations

The part of a business organization that is responsible for producing goods or services

In Systems Theory terminology, Operations Management is most focused on what?

The transformation process

Operational Processes

These are core processes that make up the value stream

What kind of decisions are System Operation Decisions?

These are generally more tactical and operational decisions. Operations managers spend more time on these decisions than any other decision area.

Structural Variation in Demand

These are generally predictable. They are important for capacity planning.

What kind of decisions are System Design Decisions?

These are typically strategic decisions that usually require long-term commitment of resources and determine parameters of system operation

Upper-Management Processes

These govern the operation of the entire organization

Supporting Processes

These support the core processes

Human Relations Movement

This emphasized the importance of the human element in job design

The Systems Approach

This emphasizes interrelationships among subsystems. Its main theme is that the whole is greater than the sum of its parts.

What are the three categories of business processes?

Upper-management processes, Operational processes, Supporting processes

Sustainability

Using resources in ways that don't harm ecological systems that support human existence.

Assignable Variation

Variation that has identifiable sources. This type of variation can be reduced or eliminated by analysis and corrective action

Process Variation

Variations can be disruptive to operations and supply chain processes. They may result in additional costs, delays and shortages, poor quality, and inefficient work systems