Module 1 - Intro to Business Processes Flashcards
What does Operations Management (OM) involve?
It involves the design, control, and improvement of the system used by an organization to create the goods and services it provides to customers.
What is the relationship of internal and external customers to the organization?
customers can be internal (within the organization) or external (served by the organization).
Why is it important to effectively manage processes that serve internal customers?
Because the cost of these processes will affect eventually the product cost’s to end users.
Name as many business process transformations as possible and give an example for each
PPEILTS
Transformation – Examples
Physical – Manufacturing; Assembly; Packaging.
Physiological – Medical Practice; Psychologist; Therapist.
Exchange – Insurance; Bookstore; Supermarket.
Informational – Software; Education; Consultation.
Location – Airline; Taxi; Trucking; Mail Delivery.
Storage – Banking; Hotel; Warehousing.
Name differences between the manufacturing and service processes
Activity Time Duration
Flow Unit (in/tangible)
Role of Information
Process Flow (across/within department)
Quality Definitions (in/formal)
Quality Control (inspections/management reviews)
Contact w/Customers (major/minor)
Priority Setting (formal plans / subjective)
Main Resource (machinery / labor)
Buffering Mechanism (capacity/inventory)
Cost Structure (hidden / visible)
Characteristic – Manufacturing – Service
Activity Time Duration – Fixed – Variable
Flow Unit – Tangible – Intangible
Role of Information – Supports Flow – Is the Flow Unit
Process Flow – Within a Department – Across Departments
Quality Definitions – Formal Specifications – Informal & Subjective
Quality Control – Inspection Plans – Management Reviews
Contact w/Customers – Minor – Major
Priority Setting – Formal Plans/Schedules – No Explicit Priority Setting
Main Resource – Machinery – Labor
Buffering Mechanism – Inventory or Capacity Buffers – Capacity Buffers
Cost Structure – Primarily Visible – Mostly Hidden
How does a manufacturing vs a service system buffer for uncertainty?
Manufacturing - inventory buffers
Services - capacity buffers
Why was traditional OM focused almost exclusively on manufacturing? (3 reasons)
1- Services represented a smaller proportion of Gross National Product (GNP)
2- Services (compared to manufacturing) appeared to be less technologically sophisticated.
3- The activities that make up services vary a great deal more than the activities associated with manufacturing.
What does the acronym SIPOC stand for?
It lists __ of a process
Suppliers – Inputs – Process – Outputs – Customers
* Suppliers - those who provide process inputs (can be either internal or external).
* Inputs - the flow unit as it arrives to the process.
* Process - the flow units, activities, and resources that make up the process.
* Outputs - the flow unit as it leaves the process.
* Customers - those who receive the outputs (can be internal or external).
important characteristics
A “stakeholder” is anyone who __ the operation of a process.
Besides suppliers and customers, name other “stakeholders” of a process.
affects, or is affected by
Other stakeholders include employees, Board members, partners, shareholders (i.e., investors), regulators, and the community at large
Compare job shop vs flow shop
(flexibility, queue time, speed, volume)
Describe each.
A job shop process uses general purpose resources and is highly flexible and slower, and has more queues. Small companies deal with high-mix, low-volume products. The product moves between machines in various ways& quantities, just to get the job done.
A flow shop process uses specialized resources and the work follows a fixed path. It’s faster and has less queues. High volume manufacturers use this model, with a set flow. Each stage happens in exactly the same order every time.
What is the concept of plant-within-a-plant (PWP) and what are the challenges? Give an example.
An existing facility is divided both organizationally and physically into separate PWPs. Each PWP has its own facilities in which it can concentrate on its particular manufacturing task, using its own work-force management approaches, production control, organization structure, etc.
If the demand across product lines changes significantly, the system may become unbalanced. For example, some flow lines may become overloaded and others under-loaded.
Example of PWP: hospital is often organized by departments (based on the needs of individual patients, such as surgery, radiology, emergency, etc)
Name the 6 types of information-based services.
Type – Description
Troubleshooting – Solves a specific customer problem within a specified class.
Gathering – Provides instructions or summarizes information for use by others.
Evaluation – Determines if a specification or a standard is met.
Analysis – Determines if resources should be allocated for a specific purpose.
Planning – Plans, tracks, and controls sets of processes and other activities.
Consultation – Provides considerable expertise to assist customers with various needs.
Why are statistical models very useful in operations management?
Because the complexity of the system requires that models be used and statistical models are designed to consider variation in their logical foundations.
Fisher suggests a two-by-two matrix based on the product (functional or innovative) and the product system (cost efficient or responsive). Which product type uses a responsive production system?
Innovative, because demand will be difficult to forecast precisely and the ability to sell may be fleeting
The duration/level of forecast uncertainty has what relationship with the production lead time?
A shorter lead time system has the advantage of requiring shorter duration forecasts.
For example, if a production lead time is 6 months, then the forecast must cover a duration considerably longer than 6 months.
Within a production system, there are two types of approaches to triggering production of goods. What is the difference between push and pull?
(ie- batch or responsive, long or short lead times
Push systems = the forecast of demand is used to plan and schedule the production of items
–associated with efficient operating systems and batch production
–long production lead times
Pull systems = actual customer demand signals the production of items to replenish what the customer consumes.
–associated with responsive operating systems, Lean production, Kanban
–short production lead times
