Operations Management Exam 1

Good

a physical product that you can see,touch,or possibly consume

durable good

does not quickly wear out and typically lasts at least three years.

Service

any primary or complementary activity that does not directly produce a physical product

Nondurable good

is no longer useful once it's used

Service Encounter

an interaction between the customer and the service provider

Moments of Truth

any episodes, transactions, or experiences in which a customer comes into contact with any aspect of the delivery system, however remote, and thereby has an opportunity to form an impression

Service Management

integrates marketing, human resources, and operations functions to plan, create, and deliver goods and services, and their associated service encounters

Customer Benefit Package or CBP

is a clearly defined set of tangible (goods-content) and intangible (service-content) features that the customer recognizes, pays for, uses, or experiences

PRIMARY Good or Service

the "core" offering that attracts customers and responds to their basic needs

PERHIPHERAL Good or Service

are those that are not essential to the primary good or service, but enhance it

Variant

a CBP feature that departs from the standard CBP and is normally location-or firm-specific "fish pond at auto dealer

Process

is a sequence of activities that is intended to create a certain result

Value Creation Process

focused on producing or delivering an organization's primary goods or services, such as filling and shipping a customer's order, assembling a dishwasher, or providing a home mortgage

Support Processes

process such as purchasing materials and supplies used in manufacturing, managing inventory, installation, health benefits, technology acquisition,

Sustainability

efers to an organization's ability to strategically address current business needs and successfully develop a long-term strategy that embraces opportunities and manages risk for all products, systems, supply chains, and processes to preserve resources for

Environmental Sustainability

an organization's commitment to the long-term quality of our environment.

Social Sustainability

an organization's commitment to maintain healthy communities and a society that improves the quality of life

Economic Sustainability

is an organization's commitment to address current business needs and economic vitality, and to have the agility and strategic management to prepare successfully for future business, markets, and operating environments

Value Chain

is a network of facilities and processes that describes the flow of materials, finished goods, services, information, and financial transactions from suppliers, through the facilities and processes that create goods and services, and those that deliver th

Supply Chain

is the portion of the value chain that focuses primarily on the physical movement of goods and materials, and supporting flows of information and financial transactions through the supply, production, and distribution processes

Value

is the perception of the benefits associated with a good, service, or bundle of goods and services (i.e., the customer benefit package) in relation to what buyers are willing to pay for them

Value Proposition

A competitively dominant customer experience

Operational Structure

the configuration of resources such as suppliers, factories, warehouses, distributors, technical support centers, engineering design and sales offices, and communication links

Vertical Integration

the process of acquiring and consolidating elements of a value chain to achieve more control

Backward Integration

acquiring capabilities toward suppliers

Forward Integration

acquiring capabilities toward distribution or even customers

Outsourcing

is the process of having suppliers provide goods and services that were previously provided internally

Value Chain Integration

the process of managing information, physical goods, and services to ensure their availability at the right place, at the right time, at the right cost, at the right quantity, and with the highest attention to quality

Offshoring

is the building, acquiring, or moving of process capabilities from a domestic location to another country location while maintaining ownership and control.

Multinational Enterprise

an organization that sources, markets, and produces its goods and services in several countries to minimize costs, and to maximize profit, customer satisfaction, and social welfare

Competitive Advantage

denotes a firm's ability to achieve market and financial superiority over its competitors

Order Qualifiers

Basic customer expectations are generally considered the minimum performance level required to stay in business

Order Winners

goods and service features and performance characteristics that differentiate one customer benefit package from another, and win the customer's business

Search Attributes

are those that a customer can determine prior to purchasing the goods and/or services.

Experience Attributes

are those that can be discerned only after purchase or during consumption or use

Credence Attributes

are any aspects of a good or service that the customer must believe in, but cannot personally evaluate even after purchase and consumption

Competitive Priorities

represent the strategic emphasis that a firm places on certain performance measures and operational capabilities within a value chain

Mass Customization

being able to make whatever goods and services the customer wants, at any volume, at any time for anybody, and for a global organization, from any place in the world.

Innovation

is the discovery and practical application or commercialization of a device, method, or idea that differs from existing norms

Strategy

a pattern or plan that integrates an organization's major goals, policies, and action sequences into a cohesive whole.

Core Competencies

the strengths that are unique to that organization.

Operations Strategy

how an organization will execute its chosen business strategies

Operations Design Choices

the decisions management must make as to what type of process structure is best suited to produce goods or create services

Infrastructure

the nonprocess features and capabilities of the organization and includes the workforce, operating plans and control systems, quality control, organizational structure, compensation systems, learning and innovation systems, and support services.

Prototype Testing

he process by which a model (real or simulated) is constructed to test the product's performance under actual operating conditions, as well as consumer reactions to the prototypes

Voice of the Customer

Customer requirements, as expressed in the customer's own words

Quality Formation Deployment QFD

an approach to guide the design, creation, and marketing of goods and services by integrating the voice of the customer into all decisions

Reliability

he probability that a manufactured good, piece of equipment, or system performs its intended function for a stated period of time under specified operating conditions

Design Failure Mode and Effects Analysis DFMEA

a technique for identifying how a product may fail; the effect of a failure on the customer; seriousness, likelihood of occurrence, and ability to detect a potential failure; cause of failure

Design for Manufacturability DFM

is the process of designing a product for efficient production at the highest level of quality

Product Simplification

he process of trying to simplify designs to reduce complexity and costs and thus improve productivity, quality, flexibility, and customer satisfaction

Design for Environment DFE

is the explicit consideration of environmental concerns during the design of goods, services, and processes and includes such practices as designing for recycling and disassembly

Service Delivery System Design

includes facility location and layout, the servicescape, service process and job design, technology and information support systems, and organizational structure

Servicescape

all the physical evidence a customer might use to form an impression, also provides the behavioral setting where service encounters take place

Lean Servicescape environments

very simple

Elaborate Servicescape Environments

complicated designs and service systems

Service Process Design

the activity of developing an efficient sequence of activities to satisfy both internal and external customer requirements

Service Encounter Design

focuses on the interaction, directly or indirectly, between the service-provider(s) and the customer

Customer Contact

refers to the physical or virtual presence of the customer in the service delivery system during a service experience

High Contact Systems

Systems in which the contact percentage is high like estate planning and hotel check-in

Low Contact Systems

Systems in which the contact percentage is low like construction planning

Customer Contact Requirements

measurable performance levels or expectations that define the quality of customer contact with representatives of an organization

Empowerment

giving people authority to make decisions based on what they feel is right, to have control over their work, to take risks and learn from mistakes, and to promote change

Service Upset

any problem a customer has�real or perceived�with the service delivery system and includes terms such as service failure, error, defect, mistake, or crisis

Service Guarantee

a promise to reward and compensate a customer if a service upset occurs during the service experience

Service Recovery

is the process of correcting a service upset and satisfying the customer

Custom or Make to order Goods & Services

are generally produced and delivered as one-of-a-kind or in small quantities, and are designed to meet specific customers' specifications

Option or Assemble to Order Goods & Services

are configurations of standard parts, subassemblies, or services that can be selected by customers from a limited set

Standard or Make to Stock Goods and Services

are made according to a fixed design, and the customer has no options from which to choose

Projects

arge-scale, customized initiatives that consist of many smaller tasks and activities that must be coordinated and completed to finish on time and within budget

Job Shop Processes

organized around particular types of general-purpose equipment that are flexible and capable of customizing work for individual customers

Flow Shop Processes

organized around a fixed sequence of activities and process steps, such as an assembly line, to produce a limited variety of similar goods or services

Continuous Flow Processes

create highly standardized goods or services, usually around the clock in very high volumes

Product Life Cycle

a characterization of product growth, maturity, and decline over time

Product Process Matrix

a model that describes the alignment of process choice with the characteristics of the manufactured good

Pathway

a unique route through a service system

Customer Routed Services

are those that offer customers broad freedom to select the pathways that are best suited for their immediate needs and wants from many possible pathways through the service delivery system

Provider Routed Services

onstrain customers to follow a very small number of possible and predefined pathways through the service system

Service Encounter Activity Sequence

consists of all the process steps and associated service encounters necessary to complete a service transaction and fulfill a customer's wants and needs

Activity

a group of tasks needed to create and deliver an intermediate or final output

Task

a specific unit of work required to create an output

4 Levels of Process Design

Task, Activity,Process,Value Chain

Process Map (flowchart)

describes the sequence of all process activities and tasks necessary to create and deliver a desired output or outcome

Process Boundary

The beginning or end of a process

Value Stream

refers to all value-added activities involved in designing, producing, and delivering goods and services to customers

Reengineering

the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed

Utilization

the fraction of time a workstation or individual is busy over the long run

Throughput

The average number of entities completed per unit time, the output rate

Bottleneck

the work activity that effectively limits throughput of the entire process

Flow time or Cycle Time

the average time it takes to complete one cycle of a process

Distribution Centers (DCs)

are warehouses that act as intermediaries between factories and customers, shipping directly to customers or to retail stores where products are made available to customers

Inventory

refers to raw materials, work-in-process, or finished goods that are maintained to support production or satisfy customer demand

Supply Chain Operations Reference (SCOR) model

is a framework for understanding the scope of SCM that is based on five basic functions involved in managing a supply chain: plan, source, make, deliver, and return.

Supply Chain Management (SCM)

the management of all activities that facilitate the fulfillment of a customer order for a manufactured good to achieve satisfied customers at reasonable cost

Contract Manufacturer

firm that specializes in certain types of goods-producing activities, such as customized design, manufacturing, assembly, and packaging, and works under contract for end users

Efficient Supply Chains

designed for efficiency and low cost by minimizing inventory and maximizing efficiencies in process flow

Responsive Supply Chains

focus on flexibility and responsive service and are able to react quickly to changing market demand and requirements

Push System

produces goods in advance of customer demand using a forecast of sales and moves them through the supply chain to points of sale where they are stored as finished goods inventory

Pull System

produces only what is needed at upstream stages in the supply chain in response to customer demand signals from downstream stages

Push-Pull Boundary

The point in the supply chain that separates the push system from the pull system

Postponement

the process of delaying product customization until the product is closer to the customer at the end of the supply chain

Green Sustainable Supply Chain

can be defined as "the process of using environmentally friendly inputs and transforming these inputs through change agents�whose by-products can improve or be recycled within the existing environment

Reverse Logistics

refers to managing the flow of finished goods, materials, or components that may be unusable or discarded through the supply chain from customers toward either suppliers, distributors, or manufacturers for the purpose of reuse, resale, or disposal.

Order Amplification

a phenomenon that occurs when each member of a supply chain "orders up" to buffer its own inventory.

Multisite Management

the process of managing geographically dispersed service-providing facilities.

Center of Gravity Method

determines the X and Y coordinates (location) for a single facility. Although it does not explicitly address customer service objectives, it can be used to assist managers in balancing cost and service objectives

Vendor Managed Inventory

where the vendor (a consumer goods manufacturer, for example) monitors and manages inventory for the customer (a grocery store, for example)