#### Operations Management

Effectiveness

do what is right

Efficiency

do it right

Growth

Innovation

cost

reduction

4 ways to treat a problem

absolution
resolve
solve
dissolve

What is a system?

Two or more parts with the following properties:
each part can affect the whole
all parts are interconnected and interdependent
any groups of parts has the two properties listed above

A system is a whole that cannot be divided into independent parts

t

A system is not a sum of its parts
it is a product of interactions between parts

t

Typical Operations Decisions

What: What resources are needed, and in what amounts?
When: When will each resource be needed? When should the work be scheduled? When should materials and other supplies be ordered?
Where: Where will the work be done?
How: How will he product or service

decision criteria

Output Volume Total Cost (Lifetime Cost) Quality (Reliability) Timely (Availability, Delivery) Flexibility/Customize (Design, Volume, Service) Innovation Value = Quality/Price Sustainability

__________ refers to sourcing from overseas or getting work done in a foreign country.

off shoring

__________ refers to contracting with a third party or an external company to manufacture a good or deliver a service.

Outsourcing

__________ is a sequence of interconnected organizations that help develop, produce, distribute, and sell a product to the final consumer.

Supply Chain

Which of the following refers to the process of managing the system of designing, producing, and delivering goods or services that add value throughout the supply chain and benefit the final consumer?

Operations Management

A phenomenal growth of which sector has expanded the opportunities for operations and supply chain professionals?

Service

The three general types of decisions in operations and supply chain management are __________.

strategic decisions
tactical decisions
operational decisions

The __________ supervises and manages the work environment, vendor selection process, supply chains, real estate, and budgets.

supply chain manager

Which of the following best describes the responsibilities of a logistics manager?

ensures accurate and efficient transportation and storage of goods and materials both for the outbound and inbound areas of the supply chain

Which of the following is true for services?

often labor intensive

__________ is a giant in international trade and global supply chain management.

china

__________ is the world's leading service provider.

India

Which of the following refers to the process of incorporating the interests of the public into a company's core business?

Corporate social responsibility

Which of the following best describes the purpose of an enterprise resource planning system?

to mange to flow of information across all functions not only with an enterprise but also with its external stakeholders including its suppliers and customers

__________ is an extension of lean manufacturing.

Agile manufacturing

__________ is a management philosophy that focuses on continuously improving the quality of a company's products and processes.

Total quality management

Agile Manufacturing

The ability of an organization to respond quickly to market changes with a set of processes, tools, and training available as needed

A management approach that focuses on continuously improving the efficiency of business processes through innovation, flexibility, and the seamless integration of technology

The radical redesign of a firm's existing workflows and resources to reduce operational costs and better meet the needs of customers and support a firm's overall mission

Corporate Social Responsibility (CSR)

The process of incorporating the interests of the public into a company's core business

Customer Management

The process of interfacing with individuals or companies that buy and use finished products

Enterprise Resource Planning (ERP)

An information system that integrates information across all departments of an organization, as well as facilitates and manages the flow of information across all functions within an enterprise and to its external stakeholders

Inbound Portion

Elements of a supply chain that consist of local or foreign suppliers of product ideas, designs, basic raw materials and components, transportation links, and warehouses that end with the internal operations of the company

Lean Manufacturing

A management philosophy that originated in the 1990s based on Toyota's production system that states that any activity or process that does not add value to the product or service is a waste and, therefore, should be eliminated

Lean Production

A management philosophy that originated in the 1990s based on Toyota's production system that states that any activity or process that does not add value to the product or service is a waste and, therefore, should be eliminated

Offshoring

Sourcing from overseas or getting work done in a foreign country

Operations Management (OM)

The process of managing the system of designing, producing, and delivering goods or services that add value throughout the supply chain and benefit the final consumer

Operations Strategies

Strategies that use an organization's resources efficiently to gain a competitive edge in the marketplace by achieving key operations objectives related to product quality, delivery, flexibility, cost, service, and innovation. These strategies should outl

Outbound Portion

Elements of a supply chain that begin when the organization delivers its output to its immediate customers in the supply chain and may consist of globally dispersed wholesalers, retailers, distribution centers, and transportation companies, the consumer,

Outsourcing

Contracting with a third party or an external company to manufacture a good or deliver a service

Service Support

The process of interfacing with suppliers that provide the company with support

Six Sigma

The methodology of improving quality through reducing the number of defects in a given process

Splintering

The practice of breaking traditional supply chains into smaller and more agile supply chains that can better respond to higher levels of business complexity, save money, and improve customer service

Supplier Management

A business process that enables a company to identify and select the best possible suppliers and negotiate the best possible prices for the resources it purchases from them

Supply Chain

A sequence of interconnected organizations that helps develop, produce, distribute, and sell a product to the final consumer

Sustainability

The use of methods, systems, and materials that won't deplete resources or harm natural cycles

Technology Management

...

Total Quality Management (TQM)

A sequence of interconnected organizations that helps develop, produce, distribute, and sell a product to the final consumer

Demand Management

The process of anticipating and managing customer demand for a product or service

The four elements focused by operations strategy are __________.

customers, operational critical success factors, product factors and firms core competencies

__________ can identify the critical processes in a supply chain and, therefore, better understand exactly what to measure when assessing their performance.

Supply chain operations reference model

Incorporating sustainability throughout a company's supply chain is difficult because __________.

time consuming and may require changes in firms structure and infrastructure

The three performance targets that measure sustainability are __________.

economic value, social value and environmental value

A(n) __________, which is formulated by an organization's top managers and board of directors, attempts to address the fundamental question of what industries and markets the organization should enter and compete in.

corporate strategy

The four elements of an operations strategy are __________.

logistics, distribution capabilities, information process capability and marketing channels

__________ is the time it takes to conceptualize a new good or service, produce it, and make it available to customers.

Product development cycle time

__________ is not only a performance measurement system but also a strategic planning and management system that is used extensively by profit, nonprofit, and governmental organizations worldwide.

balanced scorecard

Identifying the target market for a service, also known as its __________, is the first step in developing the strategic plan.

strategic postioning

__________ is the ratio of outputs produced to the inputs used.

productivity

__________ is a process that begins by identifying the best practices used by other firms within the industry and their achievements.

benchmarking

__________ is measured by calculating the number tasks performed or number of customers served in a given time period.

service productivity

Which of the following is NOT a process in the supply chain operations reference model?

innovation

The supply chain operations reference model has more than __________ key indicators.

150

A __________ strategy is a firm's plan to provide value to its customers by using the firm's internal and external resources.

go to market

The four stages of the project life cycle are __________.

conceptualization, planning, execution and termination

__________ works best when you can be reasonably certain of how long the project's activities are likely to take.

Critical path method

The __________ method calculates the value generated by the project as well as the budgeted and actual costs at a certain point in time.

earned value management

__________ is the process of speeding up a project's remaining activities in order to move its completion date forward.

crashing

A __________ is a unique venture with a beginning and end, conducted by people to meet established goals within certain cost, schedule, and quality parameters.

project

The three ways of structuring project teams are __________.

matrix, functional and pure project

The triple constraint of projects are __________.

time, cost, quality

In the __________ stage, the team members decide what they expect to achieve with the project.

conceptualization

Two of the best-known methods for tracking projects upon their execution are __________.

s-curves and value management

__________ is the manufacturing or assembling of materials to create the product or service.

fabrication

__________ is the latest possible date that an activity may begin without delaying the project completion.

late start time

_________ is the latest possible date an activity can be completed without delaying the project's completion.

late finish time

The most common type of activity network employs __________ network representation.

activity on node

A __________ chart links project activities to a schedule, which is usually a calendar.

Gantt

__________ is the process of creating a chart that shows a project's activities and indicates how they should logically be coordinated with one another.

Network Diagramming

Activity Network

A diagram that illustrates how activities should best be sequenced

Activity on Arrow (AOA)

A type of activity network that uses arrows to represent the activities and nodes separating the arrows as events that indicate the completion of one task prior to the beginning of the next

Activity on Node (AON)

A type of activity network that uses nodes to represent the individual project activity and the path arrows to represent the sequencing of tasks from node to node through the network

Activity Slack

The amount of time an activity may be delayed from its early start (ES) without delaying the finish of the project. Activity slack is defined as Activity Slack = LS - ES (or LF - EF)

Backward Pass

The process of labeling the activity nodes in a network to determine the project's critical path and the total slack time for each activity

Crashing

The process of speeding up a project's remaining activities to move its completion date forward

Critical Path

The sequence of activities in a network that defines the overall length of the project (the longest individual path)

Deterministic Estimation

A duration estimation that assumes that sufficient information from historical records or the opinion of experts is available to make this determination with a reasonable degree of accuracy

Early Finish Time (EF)

The earliest possible date on which an activity can be completed. Early finish is defined as es + activity duration = ef

Early Start Time (ES)

The earliest possible date on which an activity can start, based on the beginning and ending times for previous activities in the network

Earned Value Management (EVM)

A method to calculate the value generated by the project as well as the budgeted and actual costs at a certain point in time

Forward Pass

The process of fully labeling the activity nodes in a network to determine the earliest times each activity can begin and the earliest it can be completed

Gantt Chart

A diagram that links project activities to a schedule, usually a calendar

Late Finish Time (LF)

The latest possible date an activity can be completed without delaying the project's completion. Late finish is defined as ls + activity duration = lf

Late Start Time (LS)

The latest possible date that an activity may begin without delaying the project completion

Life Cycle

The stages of a project's development conceptualization, planning, execution, and termination

Precedence Diagramming

Sometimes called network diagramming, the process of creating a chart that shows a project's activities and indicates how they should logically be coordinated with one another

Probabilistic Estimation

A duration estimation that assigns probabilities to a range of time estimates for each activity

Program Evaluation And Review Technique (PERT)

A duration estimation technique that uses probabilities by applying a weighted average of optimistic, pessimistic, and most likely estimates to derive an expected duration for an activity

Project Management

The application of knowledge, skills, tools, and techniques to project activities to meet the project requirements

Project Risk

Any event that can negatively affect the viability of a project based on the formula Project Risk = (Probability of Event) � (Consequences of Event)

Project scheduling

The process of converting a project's goals into a logical method for completing them on time

Project

A unique venture with a beginning and an end, conducted by people to meet established goals within certain cost, schedule, and quality parameters

A modern iteration of triple constraint that considers the goal of satisfying a customer or client. The elements of quadruple constraint are time, cost, quality, and customer satisfaction

Risk Management

The process of anticipating and figuring out how to respond to a project's risks prior to beginning the project

Scope Creep

A situation in which project specifications are continually modified or improved as new ideas emerge or new technical solutions become possible

Scope Management

The process of determining the best way in which the project's goals can be accomplished given its constraints

S-Curve

a curve that depicts logistic growth; shape of an "S." The leveling off of a J-Curve exponential growth.

Triple Constraint

Elements that characterize a project and are used to evaluate its success time (adherence to schedule), cost, and quality

Work Breakdown Structure (WBS)

process of breaking down a project's overall mission into step-by-step tasks

Work Packages

Activities that comprise the deliverables of a project

Which of the following is a primary reason for the accelerated pace of global interaction?

By improving the quality of goods and services produced, the _______ value of products and services is enhanced.

Functional

Which of the following is a strategic supply chain and operations decision?

quality management

______ manufacturing refers to the ability of an organization to respond quickly to market changes.

agile

Which of the following is an external interface with the operations function?

customer

The transformation process of a hospital is ______.

physiological

Which of the following can be on both the inbound and outbound portion of a supply chain?

transportation

Firms that provide components or finished goods and services to the primary firm are called ______.

first tier suppliers

Which of the following is a significant operation interface that distinguishes a service supply chain from a product supply chain?

service performance management

Which of the following is the type of operations interface that interacts with suppliers to provide the company with equipment maintenance and repair services?

vertical interfaces

L. L. Bean contracts with shirt manufacturers to produce a wide assortment of shirts for men and women. These shirt manufacturers represent ______ suppliers for L. L. Bean.

First Tier

______ will be effective for reducing variations in a company's manufacturing processes.

six sigma

There is a clear separation between tactical and operational supply chain and operations decisions.

false

An apparel manufacturer restructures its traditional supply chains by outsourcing its T-shirts manufacturing division to China while keeping its designer clothing division in the United States. Such practice is called splintering.

true

Budget airlines such as JetBlue are leveraging their ability to offer low-cost flights to price-conscious customers as their core competency.

true

Flexibility is one of the core competencies that do not apply to service operations.

False

Which of the following capabilities enables companies to successfully integrate their operations and supply chain globally?

financial- engineering

Steinway's high-quality, high-cost vertical piano failed because it did not meet the order-______ criterion.

qualifying

The receptionist at the information desk of a hospital represents the ______ to the service operation system.

front stage activity

Companies that manufacture products with a very ______ product life cycle have ______ as their core competency.

short, innovation

Which of the following is an example of a socially responsible company as described in Chapter 2 of the textbook?

Patagonia

Companies increasingly strive to achieve the ______ performance when formulating their corporate strategy.

triple bottom line

Which of the following is a supply chain's delivery performance indicator?

the total number of products delivered correctly and on time

Shell is able to compete on ______ by producing gasoline at a ______ than its competitors.

price, lowercost

A firm's strategy should be aligned to form a top-to-bottom hierarchy, linking ______ levels.

The critical path of a project is always the one with the most activities.

false

Estimating the duration of a project's activities involves both subjective and objective analysis.

true

Which of the following are the stages of a project life cycle?

conceptualization, planning, execution, termination

A critical skill for project managers is ______.

team building

A project manager is evaluating local suppliers to be potential back-ups for main suppliers in Japan. The project manager is doing ______ to manage a project supply chain.

an environmental analysis

A project is considered successful if it meets budget and schedule requirements.

false

The earned value is the ______ of the ______.

estimate of budgeted cost; work actually performed to date

The manager of a crew that installs carpeting has tracked the crew's output over the past several weeks, obtaining these figures. What is the week with the highest labor productivity?

yards installed/ workers

A company offers ID theft protection using leads obtained from client banks. Four employees work 40 hour a week on the lead, at a pay rate of $35 per hour per employee. Each employee identifies an average of 3500 potential leads a week from a list of 6000 Do give positive rating if you think this answer helped. MFP = (Potential leads)(No. of workers)(Fee)(Conversion percentage) /Labor cost + Material cost + Overhead cost MFP = 3,500 (4) ($60) (0.03) / ( 4(40)($35) +$1,500 + \$8,000) = 25200 / 15100 = 1.67

Multifactor Productivity Equation

output/ (labor cost+material cost +overhead cost)

project

A temporary endeavor undertaken to create a unique product, service, or result.

Why projects?

Shortened product life cycles
Narrow product-launch windows
Complex products and services
Integrated global markets/suppliers Fast, Complex, Global

Time, Cost, quality and customer client satisfaction

key decisions

Project selection
Project Conceptualization/Definition (Scope)
Selecting Project Manager and Team
Planning and designing project: Conceptualize, Plan, Risk
Managing and controlling project resources: Scheduling, Managing the Supply Chain
Executing, Evalua

project risk

A risk related to management and control of the (test) project, e.g. lack of staffing, strict deadlines, changing requirements, etc.

project risk

probability of event * consequences of event

Risk Management

is the process of anticipating and figuring out how to respond to a project's risks prior to beginning the project.

Risk Management Techniques

The risk management process involves three steps:
Identifying risks: Financial, Technical, Commercial, Legal/Contractual
Analyzing the probability of risks occurring and their consequences.
Formulating risk mitigation strategies: Accept, Minimize, Share,

Key Decisions

Project selection
Project Conceptualization/Definition (Scope)
Selecting Project Manager and Team
Planning and designing project: Conceptualize, Plan, Risk
Managing and controlling project resources: Scheduling, Managing the Supply Chain
Executing, Evalua

History of PM

Modern project management began with the Manhattan Project, which the U.S. military led to develop the atomic bomb In 1917 Henry Gantt developed the Gantt chart as a tool for scheduling work in job shops
In 1958, the Navy developed PERT charts
In the 197

Professional PM

Program Management Professional (PgMPSM) Credential
Professionals who manage multiple related projects that are aligned with an organization's strategy.
Project Management Professional (PMP�) Credential
One of the most valued credentials in project manage

Tools and Methods

WBS: Work Breakdown Structure
Gantt Chart
Network Diagrams
CPM: Critical Path Method
PERT: Program Evaluation and Review Technique
Crashing Schedules
Earned Value Analysis

Crashing (the schedule)

Crash = shorten the activity duration, and thereby reduce the project duration
So which activities do we need to crash to impact the project duration? (heuristic or rule-of-thumb)
You should be able to crash the activity (ie the work involved can be exped

critical path

all activies have zero slack

slack

early start - late start

Early Start/Early Finish

the earliest times that the activity can start and finish without delaying the project

Early Start/Early Finish

Early start is the Early finish of the letter in front
EF = ES + # given
LS = LF - TIME
LF: TAKE THE EF OF LAST ONE AND GO BACK

crashing the schedule

- Reducing the duration of the critical path resulting in overall shorter project duration
- Additional cost and schedule risks
- Accelerates project completion

Crash activities

activities should be on the critical path
select the least cost option
cheapest avaible on critical path