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73 Cards in this Set
- Front
- Back
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what is operations mgt?
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business strategy: selecting mkts. to compete, level of investment, allocation of resources, functional area strategy (marketing, finance, production and operations)
designing, operating, improving systems that deliver firm's primary products and resources |
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strategy execution
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supply chain mgt.
process and design mgt. product and service development |
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R & D: new product development
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phase 0: planning
phase 1: concept development phase 2: system-level design phase 3: detail design phase 4: testing and refinement phase 5: production ramp-up |
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types of questions in operations
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strategic (long-term)
tactical (mid-term) operational (short-term) |
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strategic decision
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long-term
1. how much do we need? -- manufacturing 2. how should our staff be trained? -- services 3. what products should we invest in? -- prod. development |
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tactical decisions
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mid-term
should we have finished good inventory or make-to-order? -- manufacturing what types of queues should we employ? -- services do we need to exchange prelim. info with manufacturing? -- prod. development |
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operational decisions
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which product gets priority in front of machine A? -- manufacturing
should the services be FCFS or something else? -- services what is the critical path of the project? -- prod. development |
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goals of operations
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improve efficiency -- doing something at lowest possible cost
improve effectiveness -- creating value for organization improve value -- value = quality/price |
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value added of operations mgt.
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- adverse fin. impact of supply chain
- study of 800 traded firms over 10 yrs.; before changes lower operating income, return on sales and assets, sales growth; greater costs and inventories; lower stock price - after changes: stock prices are 13.5% higher |
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1st industrial revolution
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small scale production
- textile manufacturing: flying shuttle, spinning jenny - steam engine (J. Watt): substituting labor for machines - A. smith: free mkts. and division of labor |
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american manufacturing
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vertical integration: consolidating operations under one roof
interchangeable parts unskilled workers |
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second ind. revolution (1910)
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large-scale production
-36 enterprises in 10 states with > 50 workers: reliance on power and local distribution - transportation innovations: RRs - communication innovations: telegraph - big retailers - mass production in vehicles |
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scientific mgt./ Taylorism (1910-1920) and spread of Taylorism (1920-1930)
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efficiency
- scientific mgt. principles - time and motion studies - incentive systems - how systems can be efficient: planning vs. doing - application of Taylor's methods: DuPont - more importance in human element: Hawthorne studies - growth in mgt. education |
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golden era in US (1940-1960)
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- research tools are born: simplex
-studying complex systems: teamwork - mathematical analysis - math solidifies scientific method |
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Japanese challenge (1980)
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total quality control (TQC)
just-in-time -- higher quality, less cost outperformed US during this time |
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US rises to the challenge
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- US firms improve productivity and quality
- focus on emerging technologies - growth of the service industry |
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operations strategy
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setting broad policies and plans for using firm resources to best support long-term competitive strategy
- must support overall corporate strategy |
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competitive dimensions
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cost, quality, delivery speed and reliability, demand mgt., variety, information
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trade-offs
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decisions that arise because of inability to excel simultaneously across all dimensions
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order winners
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critereon that differentiates one firm from another
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order qualifiers
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critereon that even permits firm's product to be considered for purchase
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southwest airlines
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serves price and convenience sensitive customers
low cost, high turnaround; no meals, assigned seats, baggage checking, or classes; electronic ticketing; standard aircraft |
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developing operations strategy
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1. segment market according to product group - ex: high end vs. low end
2. identify product reqs., demand patterns, profit margins 3. determine elements that are order winners and order qualifiers 4. convert order winners into performance requirements then analyze process levels 1. define complexity and volume of product 2. define whether you offer few specific products or many customizable products 3. Determine product design, process design, supply chain design, supplier relations, capacity management plan & technology choice |
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productivity
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how well company is utilizing it's resources
shows how well company performs for given level of inputs more specific measures tell more output/input |
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productivity index
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relative measure, must be compared with something else
1. benchmarking 2. changes over time |
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wal-mart
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low cost
high investment in IT to manage inventory, data, etc. management by data scale high negotiating power with suppliers |
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product development
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begins with perception of mkt. opportunity, ends with production, sale, distribution of product
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characteristics of successful product development
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product quality and cost
development time, cost, and capability |
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challenges of product development
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trade-offs
dynamics (changes in environment) details time pressure organizational realities |
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product development process
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0: planning
1: concept development 2: system-level design 3: detail design 4: testing and refinement 5: production ramp-up |
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market-pull products
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mkt. opportunity to technology
use generic process |
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technology push products
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technology to mkt. opp. (ex: teflon or gor-tex)
concept development takes technology as a given |
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platform products
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built on existing platform (ex: printer)
development assumes technology platform |
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process intensive products
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constrained by production process (ex: chemicals)
product and process developed from the start |
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quick-build products
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rapid modeling and prototyping (ex: cellphones, software)
many design-build test cycles |
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complex systems
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many subsystems (ex: airplanes)
developed by many teams working in parallel |
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what drives development costs
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complexity, # of parts
team size and duration changing design well-before launch vs. close to the time |
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quality function deployment
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method to translate consumer reqs. into engineering specs.
aims to get design, production, and engineering involved early-on |
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who is involved in product development
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marketing: mediates interaction with firm and consumers, identifies product opps., defines mkt. segments, identifies customer needs, oversees launch and promotion
design: finding physical form of product that best meets customer needs; engineering design and industrial design manufacturing supply chain: designs and operates supply chain in order to produce product from procurement to distribution |
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project-based company
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project managers have more power; "heavy weight"
good resource allocation, fast trade-off resolution issue: maintaining functional expertise |
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functional based company
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functional managers have more power;
ex: marketing, engineering, operations fosters specialization in different areas group coordination can be slow issue: integrating the functions to acheive common goal |
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matrix organization
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project managers and functional managers work together
integration and speed benefits but requires more mgt. and administrators issue: balance the two types of mgrs. and figuring out how measure performance |
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process
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tasks that transform input into output to create greater value for a firm
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how to analyze processes
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identify inefficient tasks
spot areas to improve effectiveness understand where value can be added |
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made to stock
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satisfied by FGI inventory
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capacity
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how many units go through each task or the process as a whole
capacity = thruput time min. thruput rate of any of the stages |
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bottleneck
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production step that limits capacity
smallest thruput rate longest cycle time |
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thruput time
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how long it takes to go through the system
includes waiting time thruput time = WIP/thruput rate -- little's law |
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cycle time
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ave. time for completion of a unit for a production or process; does not include waiting; measured as time/unit
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thruput rate
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ave # units processed over a time interval; measured in units/time
= 1/cycle time = (set-up time + batch size*time/unit)/batch size |
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buffering
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keeping some inventory between stages
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starving
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stopping activity due to lack of material
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blocking
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stopping flow bc there is no storage space
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WIP
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thruput rate * thruput time
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M/M/1
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single queue, 1 server
exponential time between arrivals and services expected time b/t arrivals = 1/lamda lamda = poisson est. service time = 1/mu utilization = arrival rate/service rate |
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M/M/s
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single queue, multiple servers
s = # of servers |
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costs of appraisal
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prevention costs
appraisal costs internal failure external failure oppurtunity costs |
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quality management
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managing aspects of company to excel in dimensions that are important to customers
high quality = less defects, features that meet customer needs |
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edward deming
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uniformity and dependability
statistical tools "14 points" PDCA method book: out of the crisis |
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joeseph juran
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wrote the quality control handbook
quality = "fitness for use" cost of quality gen. mgt. approach as well as statistics |
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malcolm baldrige quality award (1987)
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see handout
given by president |
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TQM:
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continuous improvement
leadership development partnership development |
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six sigma quality
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method companies use to eliminate defects in products
reduces variation in products that lead to defects variation that exists w/in + or - 6 std. devs. of process output |
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six sigma roadmap
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DMAIC:
define measure analyze improve control |
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continuous improvement philosophy
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PDCA - plan do check act; defined by deming
benchmarking kaizen: step by step improvement process |
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tools for continuous improvement
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process flow chart
run diagram control charts fishbone check sheet histogram pareto analysis |
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assignable variation
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being able to assess the cause
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common variation
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may not be possible to correct
random variation, random noise |
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statistical process control
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every output measure has a target value and an acceptable level of variation (upper and lower tolerance limits)
uses samples from output to measure mean and std. dev. |
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accuracy
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sample mean is close to target
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consistency
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low variation
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x/r chart
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plot of averages and ranges over time
used for performance measures that are variables when it is not possible to label good or bad samples sizes of less than 20 |
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p chart
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plot of proportions over time; used for performance measure with "yes" or "no" answers
sample size must be greater than 50 |
