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38 Cards in this Set

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Efficiency
Doing something at the lowest possible cost
Effectiveness
Doing the right things to create the most value for the company
Value
The ratio of quality to price paid. Competitive "happiness" is being able to increase quality and reduce price while maintaining or improving profit margin
Operations Management (OM)
Design, operation, and improvement of the systems that create and deliver the firm's primary products and services
Transformation process
System by shich resources are used to convert inputs into desired output
Core services
Basic things that customers want from the products they purchase - for example, to be made correctly, customized to their needs, delivered on time, and price competitively
Value-added services
Services that differentiate the organization from competitors and build relationships that bind customers to the firm in a positive way
Mass customization
Producing products to order in lot sizes of one
Operations strategy
Setting broad policies and plans for using the resources of a firm to best support the firm's long-term competitive strategy
Plant-within-a-plant (PWP)
A concept in which different locations within a facility are dedicated to different priduct lines. Each location is operated according to its own strategy to minimize confusion associated with shifting from one type of strategy to another
Straddling
Occurs when a company seeks to match what a competitor is doing by adding new features, services, or technologies to existing activities. This often creates problems if certain trade-offs need to be made.
Order winner
A dimension that differentiates the products or services of one firm from those of another.
Order qualifier
A dimension used to screen a product or service as a candidate for purchase.
Activity-system map
A diagram that shows how a company's strategy is delivered through a set of supporting activities
Core capabilities
Skills that differentiate a manufacturing or service firm from its competitors; aka core competencies
Key performance indicators (KPI)
A set of measures that help managers evaluate a company's economic performance and spor the need for changes in operations. KPIs include financial measures such as days' cash on hand and operating income by unit or division, as well as nonfinancial metrics such as average time to respond to service calls, lead time, or percentage of sales from new products.
Productivity
A measure of how well resources are used.
Process
Any set of activities performed by an organization that takes inputs and transforms them into outputs ideally of greater value to the organization than the original inputs
Cycle time
The average time between completion of successive units is a process.
Utilization
The ratio of time that a resource is actually activated relative to the time that it is available for use
Buffering
A storage area between stages where the output of a stage is placed prior to being used in a downstream stage. Buffering allows the stages to operate independently.
Blocking
The activities in the stage must stop because there is no place to deposit the item just completed.
Starving
The activities in a stage must stop because there is no work
Bottleneck
A resource that limits the capacity or maximum output of the process
Make-to-order
A process that is activated only in response to an actual order
Make-to-stock
A process that produces standard products that are stored in finished goods inventory. The product is delivered quickly to the customer from the finished goods inventory
Hybrid
Combines the features of both make-to-order and make-to-stock. Typically, a generic product is made and stocked at some point in the process. These generic units are customized in a final process to meet actual orders
Pacing
Movement of items through a process in coordinated through a timing mechanism. Most processes are not paced, but assembly lines usually are paced
Productivity
The ratio of output to input. Taking a dollar value of the output and dividing by the dollar value of the inputs usually measures total factor productivity. Alternatively, partial factor productivity is measured based on an individual input and often is not calculated using dollar values (an example would be units/person)
Efficiency
A ratio of the actual output of a process relative to some standard
Run time
The time required to produce a batch of parts
Setup time
The time required to prepare a machine to make a particular item
Operation time
The sum of the setup time and run time for a batch of parts that are run on a machine
Throughput time
The average time that it takes a unit to move through an entire process. Usually the term kead time is used to refer to the total time that it takes a customer to receive an order (includes time to process the order, throughput time, and delivery time)
Throughput rate
The output rate that the process is expected to produce over a period of time
Process velocity (or throughput ratio)
The ratio of the total throughput time to the value-added time
Value-added time
The time in which useful work is actually being done on the unit
Little's Law
State a mathematical relationship between the throughput rate, throughput time, and the amount of work-in-process inventory. Throughput time is equal to work-in-process divided by the throughput rate.