Test One
operations manager
primary concern is the activities of the conversion process
type of finished-goods inventory policy
produce to stock and produce to order
Type of production processing system
product focused and process focused
What are the two forecasting methods?
qualitative and quantitative
corporate mission
set of long-range goals and including statements about the kind of business the company wants to be in, who its costumers are, its basic beliefs
time series analysis
set of numbers where the order or sequence of the numbers is important ex: historical demand
Behavioralists
social group who changed the way managers thought about and treated workers
Type of product design
standard and custom
Demand Estimates
starting point for all the other planning in operations management
Types of decision making in operational management
strategic, operating, control
production system
takes inputs and converts them into outputs
Operational Effectiveness
the ability to perform similar operations activities better than competitors
global village
the global economy that interconnects the economies of all nations
keiretsu
the linking of companies into industrial groups
How much is the US GDP?
$10 trillion
Outputs of an Operations System
- Direct: products and services - Indirect: waste, pollution, technological advances
Inputs of an Operations System
- External: legal, economic, social, technological - Market: competition, customer desires, product info - Primary resources: materials, personnel, capital, utilities
Competitive Priorities
- low production costs - delivery performance - high quality products/services - customer service and flexibility
Quantitative Forecasting Approaches
-Linear Regression - Simple Moving Average - Weighted Moving Average - Exponential Smoothing - Exponential Smoothing w/ trend
Components of Time Series
-Trends -Cycle -Seasonality -Random fluctuations (noise)
Stages of the products life cycle
-introduction -growth -maturity -decline
Strategic Decisions
Decisions are of strategic importance and have long-term significance for the organization Ex: the design for a new product's production process, where to locate a new factory, whether to launch a new-product development plan
Industrial Revolution
Developed in England in the 1700s. A series of improvements in industrial technology that transformed the process of manufacturing goods. Started with the steam engine and continued with Adam's Smith's book called The Wealth of nations. In the 1800, Eli Whitney developed the concept of interchangeable parts, and the old cottage system of production was replaced by the factory system.
Operations Research
During WW2, enormous quantities of resources had to be deployed, so these teams were formed to deal with the complexity of the development. This helps make decisions when problems are complex and wrong decisions are costly
Who is the father of scientific management?
Frederick Taylor
Outsourcing
Hiring workers in other countries to do a set of jobs
conversion system
The operations function involves the conversion of inputs into outputs; predominant activity of a production system
competitive advantage
an advantage over competitors gained by offering greater customer value, either by having lower prices or providing more benefits that justify higher prices
Competitive Strategy
an organizational strategy for how an organization will compete in its business(es)
Qualitative Approach
based on judgments about casual factors that underlie the demand of particular products or services
Quantitative Approach
based on the assumption that the "forces" that generated the past demand will generate future demand; history will repeat itself
Social-responsibility issue
corporate attitudes are evolving from doing what companies have a legal right to do, to doing what is right Ex: environmental, product-safety, employee impacts
Operating Decisions
decisions are necessary if the ongoing production of goods and services is to satisfy market demands and provide profits Ex: how much finished-goods inventory to carry, the amount of overtime to use next week, the details for purchasing raw material next month
Control decisions
decisions concern day-to-day activities of workers, quality of products and services, productions and overhead costs, and machine maintenance Ex: labor cost standards for a new product, frequency of preventive maintenance, new quality control acceptance criteria
Strategic alliances
joint ventures among international companies to exploit global business opportunities Ex: General Motors and Kia Motor Corp. Kia might help sell and market GM cars in South Korea
Financial Keiretsu
links companies together with cross-holding of shares, sales and purchases within the group, and consultation
Operational Strategy
long-range game plan for the production of a company's products/services and provides a road map for the production function in helping to achieve the business strategy
Business Strategy
long-range game plan of an organization and provides a road map of how to achieve the corporate mission. Inputs include assessment of global business conditions and distinctive competencies
Operations Management
management of an organizations productive resources or its production systems
Organizational model
operational management is in the center of everything
Two ways of studying Operational Management:
operations as a system & decision making in operational management
production sharing
the process of spreading manufacturing and assembly operations across international borders; materials and assembly happen in different countries
international companies
those whose scope of operations spans the globe as they buy, produce, and sell
Production Keiretsu
web of interlocking relationships between a big manufacturer and its suppliers