Lecture 1: Introduction to operations management Flashcards Preview

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Flashcards in Lecture 1: Introduction to operations management Deck (21)
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1
Q

Whats the difference between Operations Management (OM) and Supply Chain Management (SCM)?

A
  • OM typically refers to processes within a single firm.
  • SCM refers to processes and exchanges across multiple firms.
2
Q

Why does OM matter?

A
  • OM involves the greatest portion of a company’s employees and capital assets (typically 70-80%)
  • Operational decisions have strong financial, social/ethical and ecological implications and also determine the day-to-day service level at the customer end.
3
Q

Draw the Input-Transformation-Output model and define what is a process.

A
  • A process is the sequence of operations and involved events, taking up time, space, expertise or other resources, which lead/(should lead) to the production of some outcome.
4
Q

What does the “management” in “operations management” entail?

A
  1. The design of the transformation process
  2. The provision of resources (planning)
  3. The allocation of resources to tasks (scheduling)
  4. The control (measurement) and improvement of the transformation process
5
Q

What are the internal and external objectives for operations management?

A
  • Internal objetives:“Shareholder value”
    • 100% effective use of resources
    • Minimal operating expenses: zero defects, zero stock.
  • External objectives:
    • Quality: doing things right, to a standard
    • Speed: time to satisfy order
    • Dependability: reliable delivery when promised
    • Flexibility: ability to change what is delivered
    • Cost: price competitiveness
6
Q

What are the different costs involved in processing?

A
  • Cost of inventory
    • Cost of capital & warehousing
    • Cost of handling, quality implications, obsolescence
  • Cost of production
    • Cost of inventory is a function of production batch sizes
    • Cost of machines, labour
    • Opportunity cost of set-ups
  • Costs of logistics & distribution
    • Cost of transportation, depending on frequency
  • Cost of sales
    • Opportunity cost of lost sales
  • Cost of making a sale (interface to marketing…)
7
Q

Explain the customer value equation.

A

Value = Performance/Cost

  • Performance is a function of:
    • Quality: doing things right, to a standard
    • Speed/Dependability: reliability/speed of delivery
    • Flexibility: ability to change (volume, product mix, design)
  • Firms differentiated by their trade-off across these performance objectives.
8
Q

What features do high quality companies tend to demonstrate?

A
  • Superior product features
  • Excellent customer service
  • Consistent delivery
  • Process quality - error free delivery
9
Q

What are features of a flexible company?

A
  • Company environment changes rapidly -> company must accommodate change by being flexible.
  • Easily customize product/service to meet specific requirements of a customer.
    • Ability to ramp capacity up and down to match market demands.
10
Q

What are parts that a company can change to be flexible?

A
  • Associated with an operations ability to change
    • The product and services it brings to the market
    • The mix of products and services it produces at any one time
    • The volume of products and services it produces
    • The delivery time of its products and services
11
Q

Explain what flexibility means in 1) an automobile plant 2) a hospital.

A
  • Automobile Plant
    • Introducing new models
    • Range of options/model mix
    • The ability to adjust the number of vehicles manufactured
    • The ability to alter manufacturing priorities and reschedule
  • A hospital
    • Introducing new treatments
    • A wide variety/mix of treatments
    • The ability to adjust the number of patients treated
    • The ability to reschedule appointments
12
Q

Explain the difference between order winners from order qualifiers.

A
13
Q

Explain what performance frontiers are.

A
14
Q

What are the two types of key operating decisions? Explain them.

A
  • Structural - long term decisions relating to the delivery process, and the flow of goods and services.
    • Location
    • Capacity
    • Technology
    • Vertical Integration
  • Infrastructural - short term decisions related to planning and control systems of operations
    • Workforce
    • Quality Management
    • Organization Structure
    • Policies/Procedures
15
Q

Explain the 4V’s

A
16
Q

What does the trade-off between production volume and product variety define?

A
  • Defines types of job design required
  • Defines necessary tools and technology
  • Defines cost structure
  • Defines relationship with suppliers
  • Establishes customer expectatios - cheap or customised.
17
Q

Draw a graph (x: Volume, y: Variety) to illustrate the different manufacturing process types.

A
18
Q

Explain/illustrate the four different types of manufacturers ( x: Majority of costs, y: Majority of revenues).

A
  • Service-led producers who provide customers with services based on a significant production capability
  • Product manufacturers who focus on generating value through production
  • Service manufacturers who have little or no production and generate value from services which are based around a product
  • System integrators who control the channel to customers and manage an external production network
19
Q

Explain the difference between pure good and pure service manufacturers.

A
  • Pure Goods
    • Tangible
    • Can be stored
    • Production precedes consumption
    • Low customer contact
    • Can be transported
    • Quality is evident
  • Pure Services
    • Intangible
    • Cannot be stored
    • Production and consumption are simultaneous
    • High customer contact
    • Cannot be transported
    • Quality difficult to judge
20
Q

Draw a graph showing a range of different industrie/businesses that are between pure products and pure services.

A
21
Q

Draw Schmenner’s Service Process Matrix (x: Degree of customisation, y: Labour intensity)

A