Operations and Supply Chain Management (BUS 370) test 1 review
A retailer cooperates with a manufacturer by coordinating promotional activities (items they plan to put on sale and advertise heavily) with the manufacturer to assist the manufacturer plan production and inventory. This is an example of which of the following important trends in operations and supply chain management?
Relationship Management
managerical
are company's resources adequate to meet current r future customer demands?
capacity
the capability of a worker, machine, work center, plant or organization to produce output per time period
quality
the characteristics of a product or service that bear on its ability to satisfy stated or implied needs- fitness for use (value perspective) - a product or service free from deficiencies (conformance perspective)
Prevention Costs
the costs an organization incurs actually prevent defect from occurring to begin with (six sigma projects, black belts)
Operations Management
the planning, scheduling, and control of the activities that transform inputs into finished goods and services - decisions can range from long-term fundamental decisions, the transformation process looks at immediate issues
6 sigma methodology
a business improvement methodology that focuses an organization on aligning key processes to achieve requirements by making rapid and sustainable improvements to business processes DMAIC:Define, Measure, Analyze, Improve, Control
lead
a capacity strategy in which capacity is added in anticipation of (BEFORE) demand
fixed cost
a cost that does not change, no matter how much of a good is produced
Business Strategy
a mechanism for coordinating and guiding decisions regarding the elements of a business - decide on core comp - decide on required structural and infrastructural elements
A detailed map that identifies the specific activities that make up theinformational, physical and/or monetary flows of a process is
a process map.
Supply Chain Management (SCM)
active management of supply chain activities and relationships in order to maximize customer value and achieve sustainable competitive advantage
trends that will cont. to attach attention of operations and supply chain management
agility, IT, people
The florist checked over the arrangement just prior to loading the vase in the delivery van. It was fortunate, because he noticed that lilacs had been included in the arrangement. The customer specifically requested"no lilacs," so the florist was able to remove them and make the order right before it left the office for the customer.
an internal failure cost.
Regardless of whether the traditional view of the total cost of quality or the zero defects view of the total cost of quality is taken,
as the defect level increases, the failure costs increase
The firm's targeted customers and the operations and supply chain functions needed to provide value to them are identified in the
business strategy
lag
capacity added AFTER demand has marginalized (good for mature, cost sensitive products and services)
The supply chain function works with finance and accounting on determining capital investments in manufacturing plants and resource levels, such as workforce. This supply chain activity is
capacity planning.
strategic alignment btwn business strategy, SCM strategy, and other functional strategies
manager pick a specific strategic action. at functional level, trace to business strategy, and create mission statement ( should be in kine with marketing, finance, and HR)
cross-functional linkages
manufacturers and service providers are linked together through physical, information, and monetary flows
"The planning, scheduling, and control of the activities that transform inputs into finished goods and services" is the definition of
operations management.
"Performance dimensions for which customers expect a minimum level of performan
order qualifier.
core competency
organizational strength abilities that: - develop over long time periods - customers find valuable - competitors find difficult or impossible to copy
"Managing the entire organization so that it excels in all dimensions important to the customer, including product development, marketing and supply chain" is the definition of
otal quality management.
Which of the following is an infrastructural element of a businessstrategy?
policies
Which of these is NOT a flow that moves up and down the supply chain?
procedural - information, monetary, and physical ARE
evaluating process performance
productivity - outputs/inputs efficiency - customer class/hour - item produced/machine hour - actual outputs/standard outputs cycle time - total elapsed time needed to complete a bsuinessprocess -% value-added time
"A measure of process performance; the ratio of outputs to inputs" is the definition of
productivity.
The supply chain function works with marketing and engineering to identify and qualify suppliers of goods and services as well as manageon-going supplier relationships. This supply chain activity is
purchasing
Companies must prioritize and determine the performance dimensions on which they will focus and excel. Each performance dimension has several sub-dimensions. Performance, conformance, and reliability aresub-dimensions of
quality
Which of these is NOT a key element of the operations function?
regulations - systems, tech, and ppl ARE
"A process by which organizations brainstorm about possible causes of problems and narrows the list to focus on the most common causes" is the definition of
root cause analysis.
process map shapes
rounded rectangle: start or finish rectangle: step or activity diamond: decision point rhombus: input or output (data materials) folder looking: document created D shape: delay circle: inspection arrow: move activity, transportation
John Deere
support their slogan: 1. sourcing and purchasing (suppliers choice) 2. quality choices 3. organization: personnel choices (start w contractors, keep employees) wrong part alarm
supply chain diagram
upstream (suppliers) downstream (costumers)
delayed flight example
what are possible causes? root cause, see frequency of reasons
The use of information technology to automate business transactions is known as
e-commerce.
A producer of windshields decides to monitor the material handling system used in the plant. The producer is concerned about if there are scratches that are appearing on their finished product. The best kind of control chart to use in this case is
. a p chart
structural elements
Includes tangible resources such as buildings, equipment, and computer systems.
total cost of quality and quality cost improvements
1. improve processes to the point where products and services are defect free 2. the need for appraisal and prevention costs fall as defect levels decrease 3. managers and employees get better and resolving problems
root cause analysis
A process by which organizations brainstorm about possible causes of problems and narrows the list to focus on the most common causes 1. manpower 2. methods 3. materials 4. machines measurements
cont. improvement tools
- process maps - cause and effect diagrams - check sheets - Pareto analysis - run charts and scatter plots - bar graphs - histograms
professional organizations
1. APICS: Association for Operations Management 2. ISM: Institute for Supply Chain Management 3. CSCMP: The Council of Supply Chain Management Professionals 4. ASQ: The American Society for Quality
dimensions quality
1. Performance 2. Features 3. Reliability 4. Conformance 5. Durability 6. Serviceability 7. Aesthetics 8. Perceived Quality
Sources of Distinct Competence
1. Quality: characteristics of a product that bear o its ability to satisfy stated or implied needs - performance equality (uniquely quality) - conformance quality: does what is claims to do - reliability quality: last long time 2. Time: precut or service delivery - delivery speed - delivery reliability: delivery window, accuracy of quantity shipped 3. Flexibility: how quickly supply chains can respond to the unique needs of diff costumers - mix - changeover - volume 4. Cost: expense associated with material or service - labor - matierals - engineering equipment - quality
career paths
1. analyst 2. production manager 3. service manager 4. sourcing manager 5. commodity manager 6. supplier development manager 7. international logistics manager 8. transportation manager
bluebird cafe case
1. define goals and improvement activity 2. measure existing process 3. analyze process 4. improve process 5. control new process
Tesla Motors Example
1. first entirely electric car company, knew that they needed excellent quality and costumer service to succeed 2. upstream: shares brakes with most vehicles (cutting cost down), state of the art lithium-ion battery plant in Nevada (CORE COMP) didn't outsource 3. downstream: super-charging stations to reduce costumer hesitation of mile range
evaluating capacity alternative
1. fixed and variable costs 2. expected value analysis 3. decision tree 4. break-even point 5. learning curve 6. theory of constraints
Leap Frog Case Study
1. forecasting indicated a demand much higher than originally predicted (for holiday season) 2. constraints: production (mold wouldn't produce enough), material (limited supply of key elements: costumed designed electronics, tyveck paper), logistical (how to get products from overseas) 3. solutions: - engineers designed extra mold sets that allowed for faster production - suppliers found more sources for materials (Tyrek paper through US printing) - flew products over instead of boat (much more $) - get supplies ASAP for holidays even tho far away 4. even increased cost, kept relations good w retailers and costumers which payed off for years to come
Three reasons to study SCM
1. pervasiveness - every org. must make a product or service that someone values 2. Interdependence - most orgs function as part of a larger supply chain - product, ship, port, boat travel, truck, store 3. profitability and survival - orgs must carefully manage their operations and supply chain in order to survive - how many/much do we make? of each kind/size/color? what resources? location?, - key performance criteria: cost?, quality?, speed?
according to SCOR, the five supply chain areas/activities are
1. planning 2. sourcing 3. production 4.delivery 5. return
Operations and SCM activities
1. process selection, design, and improvement (how are we going to set up a restaurant?) 2. forecasting demand and supply (when are ppl coming, time/season?) 3. capacity planning for capital investment and resource levels 4. inventory management (how to manage inventory, enough cups? right amt of ingredients? getting hard to find ingredient like fish?) 5. planning and control for work scheduling and producing enough goods or services to meet demand (need more ppl during busy times) 6. purchasing, managing, supplier relationships (where to buy food from? specialty items?) 7. logistics, distribution of goods (how many times are items delivered? what time of day?)
Netflix example
1. virtual storefront 2. started as dvd distribution with same day delivery (lot of handing steps) 3. virtual supply chain-streaming content advantages - receive immediately - no distribution centers - quick expansion 4. risks:fighting over content, charging fees for what other cable companies release, competing with growing industry
process maps
A detailed map (graphical representation) that identifies the specific activities that make up the informational, physical and/or monetary flows of a process
Value Index
A measure that uses the performance and importance scores for various dimensions of performance for an item or a service to calculate a score that indicates the overall "best" value of an item or a service to a customer. sum of importance and performace
Supply chain
A network of manufacturers and service providers that work together to create products or services needed by end users. These manufacturers and service providers are linked together through physical flows, information flows, and monetary flows.
apple and southwest examples
APPLE: 1. CORE COMP: found what customers love/want/use 2.issues: request new products introductions that caused seasonal spikes 3. supply chain strategy: partnered w/ suppliers , worked with logistics providers and retailers, revolutionary information supply chain downloads eliminated physical dvds/movies SW 1. CORE COMP: low cost, high satisfaction 2. supply chain strategyL: one kind of plane, point to point routes, boarding locations flexible, humorous, out-going employees, low cost airports
protocol & gamble (P&G) example
AT FIRST: - 5 diff billing for each compartment - 5 diff logistic processes, less than a truckload, inflated truckload costs - no common information systems AFTER STREAMLINED INITIATIVE - one integrated billing processes -administrative cost savings to customers - one set of logistic processes - full truck had s shipped 98% of the time. transportation savings
Intermountain Healthcare Example
Although the rising cost of healthcare is concerning, the speed of improvement is slow: It takes 20 years for new medical practices to move from the development stage to widespread adoption by health care providers "The chance of receiving healthcare that meets generally accepted standards is about 55%." Intermountain put in place critical processes: From common medical conditions, they developed standardized processes, called "protocols", on how to treat these conditions - 90% of conditions covered by 70 protocols Computerized the protocols and shared with caregivers Maintained and updated protocols based on latest scientific evidence as well as caregiver's experience
measuring process performance
COSTS: - materials - labor - shipping QUALITY - defects (parts per mil or ppm) - number of returns reliability - number of returns - reliability ( mean time btwn failures) TIME - lead time to customer - percent orders late FLEXIBILITY - changeover time volume to meet changes in demand
Which of the following statements regarding control charts is best?
Control charts are used to distinguish whether the process is operating normally or requires attention.
statistical quality control calcs x and r charts
Cp when = mean Cpk no = mean
__________ is the dimension of quality that addresses the additional characteristics of the product or service beyond the base operating features.
Features
The standard that extends the benefits of quality management to all parties that are interested in or affected by a business's operations is
ISO 9004:2009.
Infrastructural element
Includes the policies, people, decision rules, and organizational structure choices made by a firm.
measures of capacity
Oil changes per hour, billable hours Law firm), student hours per semester (university)
Rated Capacity
The long-term, expected output capability of a resource or system
Theoretical Capacity
The maximum output capability, allowing for no adjustments for preventive maintenance or unplanned downtime,
continuous improvement
The philosophy that small, incremental improvements can add up to significant performance improvements over time.
benchmarking and measures
The process of identifying, understanding and adapting outstanding practices to help improve performance (competitive and process)
Dittenhoefer Case Study
china company - added coating for less breakage and dishwasher use - thickness and tolerance - caused 2 probs: temp to high and not enough thickness of polymer - plates could be recalled, dissatisfied consumers - prevent defectsL process changes, formal procedures, training (red-light during cleaning, machine checks each morning) - catch probs early (control charts identify potential internal failures) - catch probs before customers get them ( final inspection, prevention&control charts)
Operations Function
collection of people, technology, and systems within an organization that has primary responsibility for providing the organizations product/services
Which of the following is a structural element of a business strategy?
computer systems
The American Society for Quality has a two part definition of quality. One perspective on quality is "a product or service free from deficiencies; the product performs as intended." This is the ____________ perspective on quality.
conformance
Which of the following is a principle of TQM that assumes there will always be room for improvement, no matter how well an organization isdoing?
continuous improvement
internal failure cost
cost caused by defects that occur prior to delivery to the customer, including $ spent on repairing or reworking defective products, ass well as time wasted on those activities
appraisal cost
costs a company incurs for assessing its quality levels (inspection)
external failure costs
costs incurred by defects that are not detected until a product or service reaches the costumer (recalls, warranty payments, lawsuits)
variable cost
directly tied to level of business activity
In the Dittenhoefer Fine China case, a worker found that the plates had around 2.4 microns of coating applied. Manufacturing was able to correct the problem and save these plates, but no one knew how many plates had been shipped before the problem was discovered. The plates that were already shipped before the problem was corrected resulted in which of the following type of quality costs?
external failure
The supply chain function works with marketing to develop planningnumbers, such as customer demand and availability of supply, which are needed for effective decision making. This supply chain activity is
forecasting
Which of these is an output to a single organization's transformationprocess?
fulfilled needs
"Translates the business strategy into specific actions and coordinates with other areas" is the definition of
functional strategy.
"Translates the business strategy into specific actions and coordinates with other areas" is the definition of
functional strategy.
McDonald's focuses the employee on a specific task such as cashier or grill cook. Subway employees have broad skills and can run the entire restaurant by themselves. The choice of employee roles is an example of which of the following types of business elements?
infrastructural
In the Dittenhoefer fine china case, a worker set the polymer coating machine to 190 degrees to clean the machine and forgot to reset the temperature for production. Dittenhoefer destroyed the 2,400 defective plates prior to delivery to the customer. The destruction of 2,400 plates resulted in which of the following type of quality costs?
internal failure
Which of these operations and supply chain management career paths works closely with manufacturing, marketing, and purchasing to createtimely, cost-effective import/export supply chains?
international logistics manager
business processes
logically related sets of tasks or activities performed to achieve a defined business outcome - primary: value added, customer will pay - support: necessary, not value added - developmental: improve the perfomace of primary and support processes
