Supply Chain & OM Mid-Term Flashcards
(93 cards)
Operations Management (OM)
Is activities that relate to the creation of goods & services through transformation of inputs to outputs
Production
Creation of goods
3 Main Functions
- Marketing - generates demand
- Production/operations - creates/produces product
- Finance/accounting - tracks how well organization is doing (pays bills, collects $)
Supply Chain
Global network of organizations & activities that supplies a firm with goods & services
Why Study OM? (2)
- Want to know how goods and services are produced
2. Because it is such a costly part of an organization
Management Process
Application of planning, organizing, staffing, leading, and controlling to the achievement of objectives
10 Critical Decisions of Operations Management
- Design of goods & services
- Managing quality
- Location strategy
- Process & capacity design
- Layout strategy
- Human resource job design
- Supply chain management
- Inventory, material requirements planning and JIT (just-in-time)
- Intermediate & short term scheduling
- Maintenance
Management Should (4)
- Matching employees to right jobs
- Provide proper training
- Provide proper work methods & tools
- Establish legitimate incentives for work to be accomplished
Information Technology
Systematic processing of data to yield information
Services
Economic activities that produce an intangible product (eg. education, entertainment, repair, law & trade)
Services (6)
- Produced & consumer simultaneously
- Unique
- High customer interaction
- Inconsistent product definition
- Knowledge based
- Dispersed
Service Sector
Segment of the economy that includes trade, financial, lodging, education, legal, & medical
Challenges in OM (7)
- Global focus
- Supply-chain partnering
- Sustainability
- Rapid product development
- Mass customization
- Just-in-time performance
- Empowered employees
Productivity
Ratio of outputs (goods & services) divided by one or more inputs (labour, capital, or management)
Efficiency
Improving productivity with minimum of resources & waste
Improvement (2)
- Reducing inputs while keeping outputs constant
2. Increasing output while keeping input constant
Productivity Formula
Units/Input Used
Single Factor Productivity
Indicates ratio of one resource (input) to the goods & services produced (outputs)
Multifactor Productivity
Indicates the ratio of many or all resources (inputs) to the goods & services produced (outputs)
Quality
May change while the quantity of inputs and outputs remains constant
External Elements
May increase or decrease in productivity for the system under study may not be directly responsible
Precise Units of Measure
May be lacking (eg. not all cars require same inputs)
3 Factors Critical to Productivity Improvement
- Labour (10% annual increase)
- Capital (38% annual increase)
- Management (52% of annual increase)
3 Variables for Improved Labour
- Basic education appropriate for an effective labour force
- Diet of labour force
- Social overhead that makes labour available, such as transportation & sanitation