What is a concept that takes a total system approach to creating efficient operations?

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Key Terminology

Operations management requires making many strategic and tactical decisions. Here we look at some key operations management decisions and associated key terminology:

• Capacity planning—The process of determining the production capacity needed by an organization to meet changing demands for its products. Different types of capacity exist. For example, design capacity is the maximum amount of work that an organization is capable of completing in a given period; effective capacity is the maximum amount of work that an organization is capable of completing in a given period due to constraints such as quality problems, delays, and material management.
• Efficiency—Performing activities at the lowest possible cost.
• Enterprise resource planning (ERP)—Large, sophisticated software systems used for identifying and planning the enterprise-wide resources needed to coordinate all activities involved in producing and delivering products.
• Forecasting—The process of predicting future events, including product demand.
• Just-in-time—A philosophy designed to achieve high-volume production through elimination of waste and continuous improvement.
• Lean systems—Sometimes synonymous with just-in-time, it is a philosophy that takes a total system approach to creating efficient operations through the elimination of waste.
• Location analysis—Identifying the best location for facilities.
• Mass customization—The ability of a firm to highly customize its goods and services at high volumes through its operations management function.
• Operations management (OM)—The business function that refers to the transformation process of converting raw materials into finished goods and services; OM used to be called production and operations management (P&OM) or just production. As the field evolved from being primarily tactical (e.g., making inventory and scheduling decisions on the manufacturing floor) to being strategic (today there are many CEOs from the OM field), the term moved to focus on the broad notion of operations rather than mere production.
• Product design—The process of deciding on the unique and specific features of a product.
• Process selection—The process of identifying the unique features of the production process that will give the product its unique characteristics. Process selection typically goes hand in hand with product design, as we need to create a process that gives rise to the particular product design desired. An excellent product design is worthless if a process for its creation cannot be developed.
• Productivity—A measure of how efficiently an organization converts inputs into outputs. It is usually measured by a ratio of output divided by input. Productivity is essentially a scorecard of how efficiently resources are used and a measure of competitiveness. Productivity is measured on many organizational levels—from measuring labor and machine productivity to measuring the productivity of an entire organization or even a nation. As a result it is of interest to a wide range of people.
• Quality management—The process used to ensure the quality of a product, including measuring quality and identifying quality problems.
• Reengineering—The process of redesigning a company’s processes to increase efficiency, improve quality, and reduce costs. In many companies things are done in a certain way that has been passed down over the years. Operations management is a key player in a company’s reengineering efforts.
• Scheduling—The process of deciding on the timing and use of resources within an operation; it addresses questions such as who will work on what work schedule and in what sequence jobs will be processed.
• Total quality management (TQM)—A philosophy that seeks to improve quality by eliminating causes of product defects and by making quality the responsibility of everyone in the organization. With TQM everyone in the company is responsible for quality. Practiced by some companies in the 1980s, TQM became pervasive in the 1990s and is an area of operations management that no competitive company has been able to ignore.
• Value added—A term used to describe the net increase created during the transformation of inputs into outputs. The OM function seeks to create value added in the transformation process.

Every business is managed through what three major functions?

1.Marketing
2. Finance
3. Operations Management

Ch-1

Which business function is responsible for managing cash flow, current assets, and Cap. investments

Finance Function is responsible for:

managing cash flows CA and Cap investments

Which Business function is responsible for sales/generating customer demand and understanding customer wants/needs?

Which business function is responsible for planning, coordinating and controlling the resources needed to produce a company's products and services

What is not true for business process re-engineering? a)can increase efficiency . b) cannot be used to improve quality. c) can reduce costs . d) involves asking why things are done in a certain way. e) involves redesigning processes.

. b) It cannot be used to improve quality.

At the GAP, which function plans and coordinates all the resources needed to design, produce, and deliver merch. to its various retail locations

Operations management is responsible for increasing the organization's efficiency which means the company will be able to 

Eliminate activities that don't add value

What would not be generally considered as a transformation? a) a haircut b) a train ride c) manufacturing a radio d) waiting to see the doctor e) a surgery

Waiting to see the doctor

At a factory, the transformation process is a(n) ____ change of raw materials and components into products:
a) locational b) imperceptible c) hypothetical d) irreversible e) physical

What is not an input? a) services b) managers c) buildings d) technology e) information

Operations management is responsible for orchestrating all the resources needed to produce the final product. this includes all of the following except:
a) obtaining customer feedback b) arranging schedules c) managing inventory d) controlling quality e) designing work methods

A. obtaining customer feedback

Which second-tier computer company utilized a drastic change in its operations function to become an industry leader in the late 1990's a) Apple b) Compaq c) Dell d) IBM e) Kozmo

A company with low customer contact that is capital intensive is called a a) a farm b) manufacturing c) quasi-manufacturing d) service e) Industrial era operations management

Which initially successful web-based home delivery company had to shut down in 2001 due to inadequate management of operations?
a) Contact.com b) Time Saver.com c) Kozmo.com d) Kramer.com e) Neptune.com

Ans: c Section Ref: What is Operations Management? Level: moderate

In oder to be successful with Web-based on-line shopping, companies must do all except which :
a) manage distribution centers and warehouses b) operate fleets of trucks c) maintain adequate inventories of products d) promise same-day delivery e) schedule deliveries

What outsourcing function does UPS provide?

Inventories and Deliveries 

An example of an operation that does not add value is ____________________________.

Moving components to a warehouse for storage until factory needs them 

Which famous economist once suggested that, “The production problem has been solved.”? a) John Nash b) Irving Fisher c) John Kenneth Galbraith d) Adam Smith e) John Maynard Keynes

Ans: c Section Ref: Historical Development Level: hard

what was the primary reason why American firms lost market dominance in many industries in the 70's-80's?

they had become lax with a lack of competition in the 1950's and 60's

what areas does General Motors earn its highest ROC? (return on cap) a) selling cars b) selling logo merchandise c) financing d) selling racing engines e) post-sales parts and service

What is an example of a "back room" operation for an airline company?

loading luggage onto the airplane

What companies have low customer contact and are Capital intensive yet provide a service?

Quasi-manufacturing organizations

How many non-farm jobs in the US come from service producing industries?

Long term decisions that set the direction for the entire organization?

What is not true with respect to strategic and tactical decisions? a) focus on more specific day-to-day decisions b) determine the direction for strategic decisions c) provide feedback to strategic decisions d) are made more frequently and routinely e) must be aligned with strategic decisions ^^^All tactical decisions

b) determine the direction for strategic decisions

Which of the following is not primarily performed by the operations management function?

When did operations management emerge as a formal field of study?

Managing the transformation of inputs into g & s is a) a post industrial era process. b) a direct contributor to the curved earth syndrome. c) as old as time. d) a twenty-first century developed process. e) a design of Frederick Taylor.

Invented the steam engine

What concept involves breaking down the production of a product into a series of small, elementary tasks, each of which is performed by a different worker?

Concept of interchangeable parts 

34. Who created “scientific management?” a) James Watt b) Adam Smith c) Eli Whitney d) Frederick W. Taylor e) Henry Ford

What was Fredrick taylor's background?

A key feature of scientific management is that workers are motivated only by

Key feature of scientific management is that workers are limited only by::

Creator of scientific management beleived

worker productivity is governed by scientific laws

What operations management concept did not evolve from scientific management?

Popularized moving assembly line?

under scientific management, information from what is used to set time standards for task performance?

What movement started with the publication of the results of the Hawthorne Studies?

What is the Hawthorne effect?
a) workers responding to the attention they are given b) stopwatch time studies leading to time standards c) the use of quantitative methods for solving management problems d) the use of interchangeable parts e) more lighting increases productivity

Workers respond to the attention they are given

Increasing the level of responsibility of a job by adding planning and coordination tasks is ___________.
a) job enlargement
b) job rotation
c) job involvement
d) job enrichment
e) job backward integration

Describes the approach of giving workers a larger portion of the total task to do

When were the Hawthorne studies:

What company were the Hawthorne Studies Conducted?

Management Science focused on

Quantitative techniques for solving operations problems

Where was the JIT philosophy developed?

Where is the JIT philosophy applicable? Service organizations
a)Service organizations b) Manufacturing organizations c) Assembly line operations d) A, B, and C e) A and C only

What time period was the JIT philosophy developed? 

What is a philosophy that aggressively seeks to improve product quality by eliminating causes of product defects and making quality an all-encompassing organizational philosophy

TQM=Time Quality Management?

Who is the "quality guru"

Supply chain management involves managing

The flow of materials and info from suppliers and buyers to the final customer.

One of the 2 most important features of time-based competition involves 

Developing new products and services FASTER than the competition.

What do the ISO 14,000 standards provide guidelines for?

Environmentally responsible actions. 

RegionRegional trade agreements 

Internet developed a gov't network ARPANET created in 1969 

Today's business must think in terms of

GE trading process Network primarily handles transactions between 

companies and their Suppliers

Concept that takes a total system approach to creating efficient opperations

1. lean systems
   
2. enterprise resource planning
   
3. customer relationship management
   
4. management science
   
5. management information systems
   

What are software solutions that allow the firm to collect customer-specific data?

67. Entry-level positions for operations management graduates include all of the following except _________.
a) quality specialist
b) inventory analyst
c) plant manager
d) production analyst
e) production supervisor

68. Operations management personnel perform a variety of functions, including all of the following except ___________________. a) analyzing production problems b) analyzing potential mergers c) developing forecasts d) developing employee schedules e) monitoring inventory

ANALYZING POTENTIAL MERGERS

Which of the following concepts is linked the least with Henry Ford.

Today's operations management is characterized by:

Its increased use of cross-function decision making

71. Which of the following historical figures would probably have the most different management style from the others?
a) Elton Mayo
b) Henry Ford
c) Eli Whitney
d) Frederick W. Taylor
e) Adam Smith

What does operations management interact with?

Marketing, Info systems, finance, engineering!
ALL OF THE ABOVE

Om's Transformation role is to add value How is value added?

The net increase between output product value and input material value 

T/F: Operations management is the business function that plans, coordinates, and controls the resources needed to produce a company’s products and services. 

T/F: Marketing is the central core function of every company

T/F:Operations management is the central core function of every company

T/F An example of transformation is waiting to see the doctor

T/F: At a factory, the transformation process is the physical change of raw materials and components into products.

T/F: An Ex. of an operation that DOESN'T add value is making a wedding cake.

T/F: Efficiency means being able to perform most activities;. 

T/F: An example of a "back room operation for an airline company is loading luggage onto the airplane.

T/F:Companies that have low customer contact and are capital intensive, yet provide a service are called service factories.

T/F:The industrial revolution started in the 1770's with the development of a number of inventions that relied on machine power instead of human power. 

T/F: Division of labor involves breaking down the production of a product into a series of a small, elementary tasks, each of which performed by a different worker.

T/F: Key feature of scientific management is that workers are limited only by their tools.

T/F:Operations management is a result of a single event, the industrial revolutions

T/F: Workers participation in decision making is a key feature of scientific management.

T/F: "Job enrichment" is an approach in which workers are given a larger portion of the total task to do

T/F: The first mathematical model for inventory management was developed by Elton Mayo.

T/F: Operations research started with the publication of the results of the Hawthorne studies.

T/F: Sustainability was an early 1950's management function and focus.

T/F increasing the level of responsibility of a job by adding planning and coordination tasks is called job enrichement

Out sourcing is providing g/s to an outside provider

Management science focuses on developing quantitative techniques for solving operations problems.

The objective of the supply chain management is to have every member of the chain compete against each other to enhance competitive abilities.

T/F:The need to offer a greater variety of product choices to customers of a traditionally standardized product is the challenge of flexibility.

One of the most important trends in companies today is competition based on time

The Highest percent of transactions on the internet occur between businesses and their customers. FALSE

Applying the best practices to operations management is not enough to give a competitive advantage because/ 

Best practices are quickly passed to competitors.

What are the top 3 important functions of operations management from your understanding?

Which business function is responsible for sales generating customer demand and understanding customer wants and needs?

What is an operations management environment?

Which business function is responsible for planning coordinating and controlling of the activities that transform resources into finished goods and services?