Ops Exam 1 Final Study Guide

Product design considerations

1. Design for manufacturing and assembly DFMA 2. Design for recycling DFR 3. Design for disassembly DFD 4. Design for remanufacturing 5. Design for logistics 6. Design for robustness 7. Design for reliability

Seven characteristics of a well-designed service system

1. Each element of the service system is consistent with the operating focus of the firm 2. User friendly 3. Robust: Business should be able to deal with variations in demand and resource availability 4. Structured so that consistent performance by its people and systems is easily maintained. 5. Effective links between back/front office so that nothing falls between the cracks. 6. Customers see the value of the service provided. Make customers aware of improvements. Integration of operations and marketing. 7. Cost-effective.

Strategic uses of the Service-system design matrix

1. Enabling systematic integration of operations and marketing strategy: For example it makes little sense for a service firm to invest in high-skilled workers if it plans to operate using tight specs. 2. Clarifying the service delivery style (Buffering, permeable, reactive) helps diversify the production process. 3. Permitting comparison of how other firms deliver specific services. 4. Helps indicate changes that need to be made as the lifecycle grows. Unlike the product-process matrix for manufacturing where growth moves in one direction (from workcenter to assembly line as volume increases), evolution of service delivery can move in either direction along the diagonal as a function of a sale-efficiency trade off.

How to reduce process flow time?

1. Perform activities in parallel 2. change the sequence of activities 3. reduce interruptions

Designing for the customers: QFD

1. Quality function deployment: QFD a. Inter-functional teams from marketing, design, engineering, and manufacturing. b. Translates customer requirements into product/service design. c. Guides corresponding process design. d. Begins with listening to the customers: use market research, customer preferences are defined and broken down into customer requirements. 2. QFD tool: House of quality

Three general factors for determining fit of service products

1. Service experience fit: The new/modified service should fit into the current service experience for the customer. 2. Operational fit: Existing processes should be able to support the operation of the new/modified service. 3. Financial impact: Introducing a new service/modifying an existing service should be financially justified.

Poka-rokes three T's: Identify

1. Task to be done 2. Treatment accorded to the customer 3. Tangible features of the service. Fail-safe actions of the customer AND service workers.

Variants of product development process in other than market-pull situations

1. Technology-push products: Firm begins with new tech and looks for a market. Plan: Match tech and market. Concept development assumes a given tech. Examples: Specialized rainwear, Tyvek Envelopes. 2. Platform products: Built around a preexisting technological subsystem. Concept development assumes a proven technology platform. Examples: Consumer electronics, computers, printers. 3. Process-intensive products: Production process has an impact on the properties of product. Product design cannot be separated from process design. Either an existing production process must be specified from the start or both product and process must be developed together from the start. Example: Snack foods, breakfast cereals, chemicals, semiconductors. 4. Customized products: New products are slight variations of existing configurations. Similarity of projects allows for a streamlined and highly structured development process. Example: Motors, switches, batteries, containers. 5. High-risk products: Technical or market uncertainties create high risks of failure. risks are identified early and tracked throughout the process. Analysis and testing activities take place as early as possible. Example: Pharmaceuticals, space systems. 5. Quick-build products: Rapid modeling and prototyping enables many design-build-test cycles. Detail design and testing phases are repeated a number of times until the product is completed or time/budget runs out. Example: software, cellular phones. 6. Complex systems: systems must be decomposed into several subsystems and many components. Subsystems and components are developed by many teams working in parallel, followed by system integration and validation. Examples: Airplanes, jet engines, automobiles.

Measuring product development performance: Time to market, productivity, quality

1. Time to Market: Frequency of new product introductions time from initial concept to market introduction. Number started and number completed. Actual versus plan. Percentage of sales coming from new products. Impact on competitiveness: Responsiveness to customer/competitors, quality of design- close to market. Frequency of projects- model life. 2. Productivity: engineering hours per project. Cost of materials and tooling per project. Actual versus plan. Impact on competitiveness: Number of projects- freshness and breadth of line. Frequency of projects- economics of development. 3. Quality: conformance- reliability in use. Design- performance and customer satisfaction. Yield- factory and field. Impact on competitiveness: Reputation- Customer loyalty. Relative attractiveness to customers- market share. Profitability- cost of ongoing service.

Improving productivity

1. develop productivity measures for all operations 2. determine critical (bottleneck) operations 3. develop methods for productivity improvements 4. make reasonable goals 5. make it clear management supports and encourages productivity improvements 6. measure and publicize improvements.

Cost of quality

1. prevention costs- proactive. Reducing potential for defects, proactive designing. 2. Appraisal costs: evaluating products Inspection and auditing, and testing. Destructive and non-destructive. 3. Internal failure costs: producing defective parts or service. 4. External failure costs: Occur after delivery. Cost of quality goes down through prevention. External failures are most costly, then internal failure, then appraisal, then prevention.

Three contrasting service designs

1. production line approach: McDonald's, service delivery is treated much like manufacturing. 2. Self-service approach: ATM Machines Customer takes a greater role in the production of the service. 3. Personal attention approach: Ritz-Carlton hotel company

Business strategy: Michael porter's ideas

3 of them: cost leadership, differentiation, and focus 1. Cost leadership: Price lower than competitors, provide the maximum value as perceived by customer, does not imply low value or low quality 2. Differentiation: Distinguish offerings of the organization that customers perceive as value add 3. Focus: Target specific segment of the market 4. competing on quick responses: flexibility, reliability, quickness flexibility: ability to match changes in marketplace, responding to changes. Reliability: on time delivery Quickness: quick delivery

Single-factor productivity

=output/labor =Output/machine =output.capital =output/energy

Histogram

Another way of showing pareto chart. general purpose quality tool. Shows highest frequency. general purpose quality tool

Assembly chart vs. process flowchart vs. operations and route sheet

Assembly chart: uses the information presented in the assembly drawing and defines how parts go together, their order of assembly, and often the overall material flow pattern. Specifies specific parts and where they come into play in the production process, unlike the process flowchart where it shows the overall product design. Process flowchart: shows what happens to the product as it progresses through the productive facility. The fewer the moves, the better the flow. shows material received from supplier all the way through finished good. Operations and route sheet: specifies operations and process routing for a particular part. Conveys type of equipment, tooling and operations required to complete the part. Specifically for just a part, shows the flow to complete the part, not the whole product.

Buffering vs. Blocking vs. Starving vs. Bottleneck

Buffering: a storage area between stages where the output of a stage is placed prior to being used in a downstream stage. Blocking: Occurs when the activities in a stage must stop because there is no place to deposit the item. Starving: Occurs when the activities in a stage must stop because there is no work. Bottleneck: Stage that limits the capacity of the process.

Designing service organizations

Cannot store services, must meet demand as it arises Service capacity is a dominant issue. Marketing can adjust demand, seasonal sales. Cannot separate the operations management function from marketing in services. Waiting lines can also help with capacity.

REeingeering/Business process design BPD

Clean slate approach to process improvement as opposed to incremental approach in BPA Radical redesign, dramatic improvement. Often needed to create a new order winner IBM Credit corporation: Early on average response time was 60 days with a processing time of 90 minutes. After reengineering: Deal structurer, turnaround time 4 hours number of deals increase 100 times with small reduction in head count

consumer customers vs. business customers

Consumer customers: cost, quality, convenience, timeliness, personalization, ethical issues, style/fashion, and technology Business customers: cost, quality, dependability, flexibility, response time

Phase 4: Testing and refinement

Contribution and evaluation of multiple preproduction versions of product Same geometry and material as production version, not necessarily fabricated with the actual production processes. Prototypes tested to determine if the product will work as designed. Marketing: Develop promotion and launch materials. Facilitate field testing. Design: Test, performance, life, and reliability. Obtain regulatory approvals. Implement design changes. Manufacturing: Facilitate supplier ramp-up, refine fabrication and assembly processes, train workforce, refine quality assurance processes. Other: Sales: Develop a sales plan.

briefly describe the historical evolution of operations management

Craft production industrial revolution: economy of scale Scientific management: Gantt Chart, time and motion study, process analysis, PERT/CPM, Linear pograming, quality Human relations movement: industrial phycology, ergonomics Decision models and management science Influence of japanese manufacturers Mass production, early 1900: moving assembly line, interchangeable parts, division of labor Lean production 1980;s: Just-in-time, CAD, TQM Mass customization: Delll, came up with interchangeable parts for their computers.

Strategy formulation. What does successful strategy formulation take into account? What are some key external factors? Key internal factors?

Critical to success. Effective strategy formulation takes into account: 1. core competencies of the organization 2. scan the environment: SWOT approach Success also depends on: order qualifiers, order winners

Virtual service

Customers no longer Just interact with the business. Two categories of contact: 1. Pure virtual customer contact, customers interact with one another in an open environment: Ebay 2. Mixed virtual and actual customer contact: Customer interacts with one another in a server-moderated environment: such as a discussion group. Youtube, wikepedia

Cycle time vs. Utilization

Cycle time: The average time between completions of SUCCESSIVE Units Utilization: The ratio of the time that a resource is ACTUALLY used/activated relative to the time that it is available for us

Design for manufacturing and assembly

DFMA Simplification of the product by primarily reducing the number of separate parts: During the manufacturing operation, does the part move relative to all other parts already assembled? must the part be of a different material or be isolated from other parts already assembled? Must the part be separated from all other parts to allow the disassembly of the product for adjustments or maintenance?

Comparison of Product and Service

Differences: 1. Products: Tangible, can be stored, Quality: later actions (corrections) are possible, low contact with customers, process does not affect customers, higher uniformity in outputs. 2. Services: Intangible, can NOT be stored, Quality: Later actions may not be possible, higher customer contact, process may affect customers, less uniformity in outputs. Similarities: Many outputs are a "Bundle" of goods/products and services. 1. Forecasting and capacity planning to match 2. supply and demand 3. Process Management 4. Managing Variations 5. Monitoring and controlling costs and productivity 6. Supply chain management 7. Location planning, inventory management, quality control, and scheduling.

characterize current trends in business that impact operations management

Economic Conditions, Innovating, Quality Problems, Risk Management, Environmental Concerns and Competing in a Global Economy

Flow shop/Product oriented

Equipments/operations are located according to the progressive steps required to make the product. Repetitive focus. Example: Cafeteria line.

Six Sigma

Evolution of TWM Movement. Reduce variation to a good extent so you are able to meet the standard within the tolerance. Goals of Six Sigma: Reduce process variation to the point where only 3.4 defects per million are produced by a process provide a framework and methodologies to analyze and evaluate business processes and reduce waste Successful implementation: Training and selection of the workforce impressive cost savings of program

An order-qualifier product always remains to be order-qualifier. True or false?

False

Concurrent engineering delays launching a product in the market. True or false?

False

Lower inventory turn indicates well managed operations. True or false?

False

Productivity and efficiency are the same thing. T/F?

False

The product design processes are more or less same across industry. True or false?

False

an operations manager sole focus is to improve efficiency of his/her department

False

higher quality means higher overall cost. T/F?

False

the first level is the highest level of quality in the kano model. T/F?

False

Process flow chart

General purpose quality tool

Service guarantees in service processes

Guidelines: 1. Any guarantee is better then no guarantee, it doesn't have to be large. 2. Involve customers in the guarantee design. 3. Avoid complex language 4. Do not get angry when a customer invokes the guarantee 5. Be happy when the customer invokes the guarantee

Managing customer introduced variability

How should services accommodate the variation introduced by the customer? Standard approach: Tradeoff between cost and quality. More accommodation, more cost. Less? Less satisfaction. Standard approach may overlook ways to accommodate customers, so we need to look at types of variability for a more detailed answer 5 types of variability: 1. Arrival variability: Random surges of customers arriving, overloaded or underutilized. 2. Request variability: Customer requesting something hard to get. 3. Capability variability: a patient being unable to explain his or her symptoms to a doctor. 4. Effort variability: Shoppers not bothering to put their shopping carts away. 5. Subjective preference variability: Some customers prefer things in different ways then others: First name is friendly, first name is unprofessional. Strategies to accommodate these variabilities: 1. Classic: Extra employees to compensate for variations 2. Low-cost: Cut the cost of accommodations 3. Classic Reduction: More self-service, reservation systems to adjust expectations from customers. 4. Uncompromised reduction: uses knowledge of the customer to enable good service. Effective management of variability requires a company to influence customer behavior.

Ecodesign

Incorporation of environmental considerations in the design and development of products or services 1. The whole life cycle is considered 2. The product is considered as a system 3. A multi-criteria approach is used application of ecodesign can benefit business

The customer order decoupling point determines the position of what in the supply chain?

Inventory

Process mapping and Little's Law

Little's Law= Inventory = throughput rate * flow time There is a long-term relationship between inventory, througput rate, and flow time.

Which process is most likely to be adopted for making a product with large and stable demand?

MTS

IDEO'sDesign Process

Made up of brainstorming and rapid prototyping Brainstorming: Rules: 1. Defer Judgement 2. Build on the ideas of others 3. Stay focused on the topic 4. One person at a time 4. Go for quantity 5. Encourage wild ideas 6. Be visual Rapid prototyping: Easier to discuss a model Three R's: 1. Rough: It does not have to be perfect 2. Rapid: Build models as fast as you can 3. Right: Build lots of models that focus on specific problems

Operations management OM

Management of operations activities to generate value efficiently. Management of resources used to products and services. Operations manager should not work in a "silo", enterprise view is critical to be successful.

Which concept is earlier: Mass production or mass customization?

Mass production

Mission, goals, strategy

Mission: States rational of organization's existance Goals: Provide detail and the scope of the mission, where you are going Strategy: how you are going to get there, an action plan, how an organization expects to achieve its mission and goals.

Interrelated activities in operations management

OM includes many interrelated activities: Forecasting Capacity planning Scheduling Managing inventories Assuring Quality Motivating Employees Deciding location and layout of facilities

Designing for the customer: Value Analysis/Value Engineering

Objective is to achieve better performance at a lower cost while maintaining all functions. Does the item have any design features that are not necessary? Can two or more parts be combined into one? Simplify products and processes.

describe the operations function and the nature of the operations manager's job

Operations function: set of activities in business that generate value by transforming inputs into outputs using efficient processes. Outputs: Products, Services

identify three major functional areas of organizations and describe how they interrelate

Organization business functions: 1. Marketing 2. Operations 3. Finance They all overlap. Marketing and operations Management and operations Finance and operations Operations talks to finance about budgeting, economic analysis of investment proposals, and provision of funds. Operations talks to marketing about demand so it can plan (purchase materials, schedule work) Marketing needs the amount of time products will take to ship from operations, aka lead time. Operations can supply information about capacities and judge the manufacturability of designs. They will have advanced warning if new equipment or skills will be needed for new products or services.

Topmost level of among strategies

Organizational strategies

The product design process

Organizations continuously bring new products to market and product design is integral to success. 1. Product design varies significantly across industry. 2. Organizations often outsource major functions: Contract manufacturer: Companies that specialize in designing and/or manufacturing products for other companies. 3. In the context of outsourcing a firm should decide what its core competency should be. 4. Three characteristics of core competency: Provides potential access to a wide variety of markets, increases perceived customer benefits, hard for competitors to imitate.

Assemble to order ATO /Hybrid

Partially manufactured and held in unfinished state Customer order dictates final configuration Quicker response than MTO and more flexible than MTS

strategy hierarchy

Planning and decision making are hierarchal in organizations Top: Mission Organizational goals Organizational strategies Functional strategies Operations strategies Tactics Bottom: Operating Procedures Becomes more detailed near the bottom, broad at the top.

Make-to-order MTO

Process activated in response to an actual order. May be either standard or custom product. WIP and finished goods inventory kept to a minimum. Tends to have longer response time. Suitable for items with low-medium and variable demand.

Make-to-stock MTS

Process activated to meet expected or forecast demand. Customer orders are served from target stocking level. Shorter lead time for stock items: Much longer for out of stock items, risk of obsolescence and shrink. Suitable for items with high and stable demand. Required when customer lead time is less than manufacturing lead time.

What is a process? Summarize the three categories of business processes, and the four sources of variation.

Process management: One or more actions that transform inputs into outputs Three categories of business processes: 1. Upper-management: These govern the operation of the entire business. Governance and strategy. 2. Operational processes: Core processes that make up the value stream. Production, purchasing, services, marketing, sales. 3. Supporting processes: Support the core processes. Accounting HR, IT. Four sources of variation 1. Variety of goods or services being offered: The greater variety, greater variation in production 2. Structural variation in demand: seasonal, trends, etc.. Important for capacity planning, generally predictable 3. Random variation: Natural variation that is present in all processes. Generally, it cannot be influenced by managers. 4. Assignable variation: Variation that has identifiable sources. This type of variation can be reduced, or eliminated by analysis and corrective action.

Phase 5: Production ramp-up

Product is made using the intended production system. Want to train workers and resolve any remaining problems, products may be supplied to preferred customers for evaluation, transition to ongoing production is gradual. Marketing: Place early production with key customers. Design: evaluate early production output. Manufacturing: begin operation of entire production system. Other: N/A

Importance of Quality and Value, Benefits of quality, consequences of poor quality

Quality and value: Quality enhances benefit, value enhances benefit and cost. Quality may increase or decrease overall cost Balance is needed: quality standards may vary across product/service offerings. Benefits of good quality: 1. Enhanced reputation for quality 2. ability to command premium prices 3. increased market share 4. greater customer loyalty 5. lower liability costs 6. fewer production or service problems 7. lower production costs 8. higher profits Consequences of poor quality: 1. loss of business 2. liability 3. lower productivity 4. costs

Quality, types and specifications

Quality: refers to the ability of a product or service to consistently meet or exceed customer requirements or expectations. Customer-dependent. An important focal point in business. 1. ASQ: Product characteristics and features that affect customer satisfaction 2. User-based: What consumer says it is 3. Manufacturing-based: Degree to which a product conforms to design specifications 4. Product-based: level of measurable product characteristics

Assessing service quality

SERVQUAL, audits service to identify strengths and weaknesses. An instrument designed to obtain feedback ability to provide quality service to customers. In particular, look for discrepancies between: 1. customer expectations and management perception of those expectations. 2. Management perceptions of customer expectations and service-quality specifications 4. Service quality and service actually delivered 5. service actually delivered and what is communicated to customers 6. customers' expectations of the service provider and their perceptions of provider delivery. If gaps are found, they can be related to service quality dimensions to address the discrepancies.

Serial flow process, Parallel Process, Logistics Process

Serial flow process: A single path for all stages of production. Parallel process: Some of the operations has alternative paths where two or more resources are used to increase capacity. Logistics process: Movement of things such as materials, people, or finished goods.

Designing Service Products

Service products are very different from regular products direct customer involvement introduces significant variability in the process Questions to be addressed: How will this variability be addressed? What are the implications for operational cost and the customer service experience?

Service design vs. Product design

Services: the process and the product must be developed simultaneously because the process is the product. lacks the legal protection Service constitutes the major output of the development process. Service is defined by training of individuals, and can greatly suffer with lack of training. Can change service offerings virtually overnight.

Define the term operations, what are the outputs?

Set of activities in business that generate value by transforming inputs into outputs using efficient processes. Outputs: Products Services

What is a process? What are the objectives of a good process?

Set of activities that concerts investment in resources to value for which customers pay. Transforms inputs into outputs. objectives of a good process: Add as much as value, keep cost as less as possible.

PDCSA Cycle

Shewhart's PDC(S)A Cycle, obtaining continuous improvement 1. Plan: identify the improvement and make a plan 2. Do: Test the plan 3. Check, study is the plan working? 4. Act: Implement the plan

Cause and effect diagram

Shows causes and effects of operations and failures. also known as fishbone or ishiwaka diagram customer complaint at a restaurant general purpose quality tool

Job Shop Layouts/Process oriented

Similar operations are performed in a common or functional area, regardless of the product in which the parts are used. Good for construction sites

Single stage vs. Multi-stage process:

Stage: Used to indicate that multiple activities have been pulled together for analysis purposes. Single stage process: One activity Multi-stage process: Multiple: multiple group of activities that are linking through the flow.

Service blueprinting

Standard tool for service process design. Specialized flowchart with failure points, wait points, line of visibility. Blueprinting describes the features of the service design but does not provide any direct guidance how to make the process conform to that design.

SCM stands for

Supply Chain Management

Break-even analysis

The point where we are indifferent between two options. the process of evaluating different production level trade-offs in order to break even. Must consider the cost of the equipment, the setup time, and the time per unit. Choose among alternative processes or equipment. Presents alternative profits and losses due to the number of units produced or sold. Depends on demand, most suited for large initial investments and fixed costs, when variable costs are reasonably proportional to the number of units produced. can approach at cost minimization or profit maximization.

Positioning inventory in the supply chain

The shorter the customer lead time, the higher the inventory investment. Shows the process of source to make to deliver and how much time and investment it takes for each type of order. The inverted triangles represent customer order decoupling points. Make-to-stock orders: customer lead time is short, and inventory investment is high. Decoupling point is at the end of the make cycle. Assemble-to-Order: Customer lead time is medium, inventory investment is medium, and the decoupling process happens halfway through the make time. Make-to-Order: Customer lead time is longer, inventory investment is low, and the decoupling process happens before the make cycle. Engineer-to-order: Customer lead time is long, inventory investment is low, and the decoupling point is at it's source. many firms serve a combination of these environments and a few will have all simultaneously. The arrows going in a circle has to do with lead time. The order comes in and then goes back out, with the lead time determining the length of time. Make-to-stock typically has the shortest lead time, and engineer-to-order has the longest lead time.

Market-Pull Productions AKA Generic

The team begins with a market opportunity and selects appropriate tech to meet customer needs Process barely includes distinct planning. Everyday products. Process generally includes distinct planning, concept development, system-level design, detail design, teasing and refinement and production ramp-up phases Examples: Sporting goods, furniture, tools

The Kano Model

Three levels of quality characteristics for customers 1st level: must-be Example: Accepting credit cards in retail chains for convenience 2nd level: differentiator Example: Quality merchandise at cheaper price 3rd level: Pleasant surprise Example: Free merchandise on a sale day

Total quality Management TQM

Three principles of TQM: Customer focus, continuous process improvement, total involvement Customer focus: The customer determines what quality is, internal and external customer Continuous process improvement: constantly trying to eliminate variability Total involvement: a commitment at all levels of the firm

Inventory

Too little or too much inventory is NOT good. Entered as asset in financial statements. Inventory turnover: Measures how frequently average inventory is sold/how efficiently inventory is used. Desirable number of turns varies across industry. Higher turnover is better typically.

Service-system design matrix

Top: shows the customer/server contact through 3 entry positions 1. Buffered core: physically seperated 2. Permeable system: Penetrable via phone/face-to-face contact 3. Reactive system: Penetrable and reactive Left side: High= more sales opportunity, low = less sales opportunities. Greater the amount of contact, greater the sales opportunity. Right: Production efficiency as the customer exerts more influence. Process efficiency decreases as the customer has more contact. Face-to-face contact provides a high sales opportunity, however low contact is more efficient. Under mail contact and phone contact customers have little interaction with the system. Face-to-face loose specs refer to situations where the service process is generally understood but there are options in how it will be performed. Face-to-face tight specs refer to those situations where there is little variation in the service process; neither customer nor server has much discretion in creating the service.

Blocking is when the activities in the stage must stop because there is no place to deposit the item just completed. True or false?

True

In the term "Six Sigma" a sigma stands for stnadard deviation. T/F?

True

Job shop has more flexibility than assembly line. True or false?

True

Offering more alternatives to customer is likely to increase divergence in service operations. True or false?

True

One of the main considerations in designing services is variability due to higher customer contact. True or false?

True

Operations strategies are adopted based on competitive priorities identified, true or false?

True

Service blueprinting is a type of flowchart. True/False?

True

The product-process matrix shows that as volume increases specialized equipment becomes cost effective. True or false?

True.

In a cellular layout, higher equipment utilization can be achieved with reduced inventory. True or false?

True. Cellular layout has different cells, things go smoother with less inventory.

Managing supply and demand

Variations can be disruptive to operations and supply chain processes. Need to match supply and demand.

Behavioral science applied to service encounters

What you should remember: 1. A company looks better ending strong then starting strong. 2. Break pleasant experiences into multiple stages and combine unpleasant ones into a single stage. 3. Let customers control the process. 4. Pay attention to norms and rituals, as customers will blame you more if you are not following them. 5. People are easier to blame than systems. If customers see a friendly face they may be more forgiving, they need to vent out their frustrations. 6. Let the punishment fit the crimeEncounter a service error? Task (outcome) error: Material compensation, treatment (interpersonal process) error: calls for an apology.

Lean-six sigma

a balanced approach to process improvement that integrates principles from lean operation and statistical tools for variation reduction from six sigma to achieve speed and quality An approach that is equally applicable to products and services Early application in service support functions of general electric and caterpillar finance

Product/Process Matrix

a framework depicting when the different production process types are typically used, depending on product volume and how standardized the product is. the horizontal access shows the volume of a particular product. The vertical access shows standardization, variations in the product that is produced. This is measured in terms of differences. Highly Standardized is highly similar. Low standardized are different in their processes of production. it is desirable to design processes along the diagonal. Depending on where your product lands (medium product volume/product standardization would land in the manufacturing cell) determines the environment you should use. Some of the layouts span across large areas of this framework.

House of quality

a matrix that helps a product design team translate customer requirements into operating and engineering goals. QFD uses customer feed back decisions, house of quality helps the team focus on building a product that satisfies customers. Develop a list of customer requirements, ranked of important.

Supply chain

a sequence of activities and organizations involved in producing and delivering a good or service of both.

Agil operations

a strategic approach for competitive advantage that emphasizes the use of flexibility to adapt and prosper in an environment of change Involves the blending of several core competencies/competitive properties: Cost quality reliability flexibility response time

Process improvement

a systematically approach to improving a process

The balanced scorecard

a top-down management system that organizations can use to clarify their vision and strategy and transform them into action 1. Develop objectives 2. Develop metrics and targets for each objective 3. Develop initiatives to achieve objectives 4. Identify links among the various perspectives: a. financial b. customer c. internal business process d. learning and growth 5. Monitor results

Run chart

also known as a trend chart, general purpose quality tool

Methods for generatin ideas

brainstorming: technique for generating a free flow of ideas in a group of people Quality circles: Groups of workers who meet to discuss ways of improving products or processes: less structured and more informal than teams involved in continuous improvement. Quality circle teams have historically had relatively little authority to make any but the most minor changes Benchmarking

Service package and the five features

bundle of goods and services 1. Supporting facility: the physical resources that must be in place before a service can be offered. 2. Facilitating goods: The material purchased by the buyer or the items provided to the customers. 3. Information: Data provided by the customer. 4. Explicit services: Benefits readily observable by the senses. 5. Implicit services: Phsychological benefits the customer may sense only vaguely.

Check list

check list of complaints for a particular brand of ___ Check list of group sizes in a restaurant general purpose quality tool

Phase 3: Design detail

complete specifications of the geometry, materials, and tolerances for all parts. Identification of all the standard parts to be purchased from suppliers. Process plan is established. Tooling is design. Output: Drawings describing the geometry of each part and its tooling, specifications of purchased parts, process plan. Marketing: Develop marketing plan Design: define part geometry, choose materials, tolerances, complete industrial design control documentation. Manufacturing: Define piece-part production processes. Design tooling. Define quality assurance processes. Begin procurement of long-lead tooling. Other:

Types of transformation processes

continuous flow shop/ assembly line Batch Job Shop Project

Quality in services

convenience reliability responsiveness time assurance Courtesy tangibles: The physical appearance of facilities, equipment personnel and communication materials consistency expectations Must be stated in terms of specific, measurable characteristics. Wants in service can sometimes be difficult to pin down, challenges for designing and managing service quality. Customer wants are often industry specific. Customer expectations change over time, different customers have different expectations. Error preventions must be design into the systems. Some quality dimensions of a product or service will be more important than others.

competitive priorities

cost, quality, dependability, flexibility, response time. In forming operations strategy, it is important to consider competitive priorities. 1. Cost 2. Quality 3. Dependability or reliability 4. Flexibility 5. Response time Not independent: quicker response time means more flexibility, better quality means more dependability Interaction among structural infrastructure decisions and competitive priorities are complex Managers should: establish priorities, look beyond departmental boundaries

Six Sigma methodologies

current product/Service cycle: DMAIC (define, measure, analyze, improve, control) New product/service cycle: DMADV (define, measure, analyze, design, verify

High and Low contact systems

customer contact: physical presence of the customer in the system. 1. Extent of contact refers to the amount of time the customer must be in the system relative to service time. 2. Services with a high degree of customer contact are more difficult to control. Creation of the service: The work process involved in providing the service itself.

Three principles of TQM

customer focus, continuous process impvrovement, total involvement

Nature of services

customer is the focal point of all decisions and actions of service strategy, employees, and support system.

Phase 2: System-level design

definition of the product architecture decomposition of the product into subsystems and components Final assembly scheme for the production system is usually defined Output: Geometric layout of the product, functional specifications for each subsystem, preliminary process flow diagram. Marketing: Develop plan for product options and extended product family. Set target sales price points. Design: General alternative product architectures. Define major subsystems and interfaces. Refine industrial design. Manufacturing: Identify suppliers for key components. Perform make-buy analysis. Define final assembly scheme. Set target costs. Other: Facilitate make-buy analysis, identify service issues.

system design and system operations, the decision making role of operations manager

design: 1. capacity 2. facility location 3. facility layout 4. product and service planning 5. Acquisition 6. Placement of equipment. These are typically strategic decisions that: require long-term commitment of resources, determine parameters of system operation ___________________________________________________________________ Operations: 1. deals with management of personnel 2. inventory management and control 3. scheduling 4. project management 5. quality assurance. These are generally tactical and operational decisions. Operations managers spend more time on system operation decision than any other decision area, they still have a vital stake in system design.

Product and Process Life Cycles

each product has a life cycle, Any product or service will eventually not be selling, with newer tech on the market. Demand goes up, then back down. Frequency/Design cycle: at the beginning changes are high and slowly decreases. Frequency of changes in process: Starts low, gets high, then low again.

Economic analysis of product development projects

economic analysis is useful under two circumstances: 1. Go/No-go milestones 2. Operational design and development decisions 1. Start by building a base case financial model consisting of major cash flows: a. Development cost b. Ramp-up cost c. Marketing and support cost d. Production cost e. Sales volume 2. Sensitivity analysis to understand project trade-offs: a. Longer/shorter project development times b. Higher/lower volume of sales c. Higher/lower product cost and/or sales prices d. Higher/lower development cost

Key issues for today's business operations

economic conditions, innovation, quality problems, risk management, global competition Environmental concerns: Sustainability: Using resources in ways that do not harm ecological systems that support human existance, may include social criteria in decision making Areas affected: Product and service design, outsourcing decisions, supply chain waste management, consumer education programs, disaster preparation and response. Ethical issues as well

Why study OM?

every aspect of business affects or is affected by operations. Many service jobs are closely related to operations: financial, marketing, accounting, and information services. there is a significant amount of interaction and collaboration amongst the functional areas: Need operations plan, even oif production is outsourced enterprise view is important to be successful in a business career Job opportunities in OM area

Six Sigma hierarchy

executive leader: Not necessarily someone who is very familiar or certified with six sigma, mostly somebody who will be actually sponsoring the six sigma initiative champion: Next level up master black belt: Deal with quite a few projects black belt: more experienced green belt: Minimum level of certification

pareto chart

factors for improving an operation, if you see lots of problems in different categories and you do not have the resources to address each and everything, look for the highest frequency. Helps solve which areas are hurting the most. general purpose quality tool If you can identify top 20 problems gets rid of 80% of the problems!

outputs of a firm is stricly either product or service. True or false?

false

Cellular Layouts Hybrid Apprach

grouping parts into families that follow a common sequence of steps because of similar design or manufacturing characteristics (Group Technology) Identifying the dominant flow patterns of parts families as a basis for location or relocation of processes. Physically grouping machines and processes into cells: higher utilization of machines, relatively less inventory. Use of cellular layout: chip manufacturing and metal fabrication. Flexible manufacturing system FMS: Fully automated version of cellular manufacturing. Layout is according to part family processing requirement.

competitiveness

how effectively an organization meets customers requirements relative to others that offer similar goods or services. Organizations compete through some combination of their marketing and operations functions What do customers want? What is the best way to make that? How can these needs be satisfied? Marketing: identifying wants/need of customers, pricing, advertising Operations: design, cost, location, quality, quick response, flexibility, inventory management, supply chain management, service, managers and workers

Supporting approaches to adhere to TQM Principles

management commitment Employee empowerment training reward and recognition measurement quality tools

factors affecting productivity

methods, quality, capital, tech, management

Phase 1: Concept development

needs of the target market are identified Alternative product concepts are generated and evaluated One or more concepts are selected for further development and testing concept: A description of the form, function, and features of a product. Marketing: Collect customer needs, identify lead users, identify competitive products Design: Investigate feasibility of product concepts, develop industrial design concepts, build and test experimental prototypes Manufacturing: Estimate manufacturing cost, assess production feasibility Other: facilitate economic analysis, investigate patent

Why do some organizations fail?

neglect operations strategy Fail to take advantage of strengths, oppoertunities, and/or failing to recognize competitive threats Too much emphasis on short-term financial performance at the epxense of R&D Too much emphasis in product and service design and not enough on process design and improvement Neglecting investments in capital and human resources Failing to establish good internal communications and cooperation Failing to consider customer wants and needs

productivity

operations manager's responsibility is to increase productivity. Productivity: a measure of the effective use of resources, usually expressed as the ratio of output to input Productivity is not efficiency Productivity ratios are used for: 1. Planning workforce requirements 2. scheduling equipment 3. financial analysis 4. measuring improvements.

Order losers, qualifiers, winners

order loser: product/service characteristics that repel customers, below par Qualifiers: Basic characteristics of products/ services to be considered as candidates for purchase by customers. At par. Order winners: Characteristics of products/services that cause it to be perceived as better than competition. Above par. 1. Competition drives intrinsic value of product/service 2. Intrinsic value may vary across customer 3. Order qualifiers are necessary but may not be enough to win customers 4. Service may be added to product to make it order winners. 5. Order winners may become order qualifiers over time.

Multi-factor measures

output/Labor+machine output/(labor+capital+energy) Where labor= number of hours * cost

labor productivity vs AVERAGE labor productivity

output/number of working hours (DO NOT ADD COST) take the two answers you got for labor productivity and divide by the number of employees.

Quality in goods

performance aesthetics features conformance reliability durability perceived quality serviceability Notice that price is NOT a dimension of quality! Performance: Everything works Serviceability: Ease of repair

Six phases of generic product development process

phase 0: planning phase 1: concept development phase 2: system-level design phase 3: design detail Phase 4: Testing and refinement Phase 5: Production ramp-up

Phase 0: planning

precedes project approval, begins with corporate strategy, includes assessment of tech developments and market objectives, output is the project mission statement. Marketing: Define market segments, market opportunity Design: Consider product platform, assess new tech Manufacturing: Identify production constraints, set supply chain strategy Other: Research available tech, provide financial goals, allocate project resources

General purpose quality tools

process flow chart run chart cause and effect diagram pareto chart histogram Check sheet scatter digram control chart

4 P's of Marketing: Value Attributes and the marketing interface

product: quality, tech, ethical issues, style Price: cost Place: convenience, response time, delivery dependability Promotion: personalization, flexibility Selecting and commicating these attributes is a marketing issue Delivering on them is about operations Integration of hte functions is key to success

Operations strategy and quality

quality is a strategic imperative for organizations: customers are very concerned with the quality of goods and services they receive Quality is a never-ending journey: it is important that most organizational members understand and buy into this idea Customer satisfaction is not equal to customer loyalty Quality needs to be incorporated throughout the entire supply chain, not just the organization iteself

Determinants of service quality

quality of design: intention of designers to include or exclude features in a product or service. Quality of conformance: the degree to which goods or services conform to the intent of the designers. Ease-of-use and user instructions: Increase the likelihood that a product will be used for its intended purpose and in such a way that it will continue to function properly and safely. After-the-sale service: taking care of issues and problems that arise after the sale.

Scatter diagram

scatter diagram shows the relationship between two dimensions. general purpose quality tool

Benchmarking ***

selecting best practices to use as a standard for performance. How to benchmark: 1. Determine what to benchmark 2. form a team 3. Identify benchmarking partners 4. Collect and analyze benchmarking information 5. take action to match or exceed benchmark Types: Industry-focused: airline, health care, steel Process-focused: Lean manufacturing, return management

Sequential vs. concurrent approaches

sequential: Different functions work separately, one after another. Marketing works on gathering info, engineer design, operations brings to market. concurrent: Greater emphasis on cross-functional integration. emphasizes cross-functional integration and concurrent development of a product and its associated processes

service sector productivity

service sector productivity is difficult to measure and manage because: 1. involvement of intellectual activities 2. high degree of variability. A useful measure related to productivity is process yield: 1. where products are involved: ratio of output of good product to the quantity of raw material input 2. Where services are involved: Process yield measurement is often dependent on the particular process. Ratio of cars rented to cars available.

quality-based strategies

strategies that focus on quality in all phases of an organization pursuit of such a strategy is rooted in a number of factors: Trying to overcome a poor quality reputation, desire to maintain a quality image, a desire to catch up with the competition, a part of a cost reduction strategy

Time-based strategies

strategies that focus on reduction of time needed to accomplish tasks: It is believed that by reducing time, costs are lower, quality is higher, productivity is higher, time-to-market is faster, and customer service is improved Areas where organizations have achieved time reductions: planning time, design time, processing time, changeover time, delivery time, response time for complaints

operations strategies

the approach, consistent with organization strategy, that is used to guide the operations function.

Quality standards

the international organization for standardization: ISO 1. Industrial standard: Specifications for TQM 2. ISO 9000: common quality standards for products sold internationally. 3. ISO 14,000 series: standards for environmental performance 4. ISO 24700 series: standards for office equipment containing reused components

Core competencies

the special attributes or abilities that give an organization a competitive edge. Based on customer needs and what the competition is doing. To be effective core competencies and strategies need to be aligned. Examples of core competencies: Sony: Miniaturization Honda: Engines and power trains

Lead time

time needed to respond to a customer order

Business process analysis BPA

to optimize large processes crossing functional boundaries and better meet customer needs Particular attention paid to transitions between departments with incremental changes.

Process flowcharting

use of a diagram to present the major elements of a process. Basic elements can include: Tasks or operations Flows of materials or customers Decision points Storage areas or queues It is an ideal methodology to be used to being analyzing a process Flowchart symbols: Rectangle: Tasks or operations Diamond: Decision points Inverted triangles: Storages areas or queues (Waiting lines) Arrow: Flows of material or customers

Customer order decoupling point

where inventory is positioned to allow entities in the supply chain to operate independently.