Operations Management Final Exam Prep

Front 1

What is designed in a product or service?

Back 1

A concept: The understanding of the nature, use and value of the service or product;

A package: The group of ‘component’ products and services that provide those benefits defined in the concept;

A process: The way in which the component products and services will be created and delivered.

Front 2

Transformed resources

Back 2

Coca-Cola

The transformed resources are the materials (the cans, bottles, liquids, etc.) and the information which are processed to create the finished product.

Front 3

Transforming resources

Back 3

Coca-Cola

The transforming resources are the managers, employees, machinery and equipment, design and technical staff used by The Coca-Cola Company and its franchisees.

Front 4

The product / service design process performance is measured by what?

Back 4

* Quality

* Speed

* Dependability

* Flexibility and

* Cost

Front 5

The Stages of product / service design

Back 5

Concept generation > Concept screening > Preliminary design > Evaluation and Improvement > Prototyping and final design

Front 6

Concept Generation

Back 6

- Ideas from customers formally through Marketing activities

- Listening to customers - on a day-to-day basis. -- Ideas from competitor activity

-- For example reverse engineering

- Ideas from staff

-- Especially those who meet customers every day.

- Ideas from research and development

Front 7

Concept Screening

Back 7

Broad categories of evaluation criteria for assessing concepts

Front 8

Preliminary Design

Back 8

Design involves progressively reducing the number of possibilities until the final design is reached

Front 9

Relationship with delays of "Time to Market" to financial breakeven point

Back 9

A delays in the ‘Time to Market’ disproportionally delays the financial breakeven point

Front 10

Location

Back 10

- The aim of the location decision is to achieve an appropriate balance between three related objectives:

• The spatially variable costs of the operations(spatially variable = something changes with geographical location)

• The service the operation is able to provide toits customers

• The revenue potential of the operations

Front 11

Supply-side factors in location decisions

Back 11

- Labour costs

- Land costs Energy costs

- Transportation costs

- Community factors

--- Local tax rates

--- Governance assistance

--- Politicalstability

--- Language

--- Availability of support services

Front 12

Demand-side factors in location decisions

Back 12

- Labour skills

- The suitability of the site itself

- Image of the location

- Convenience for customers

Front 13

What makes a good layout?

Back 13

• Inherent safety

• Length of flow

• Clarity of flow

• Staff conditions

• Management coordination

• Accessibility

• Use of space

• Long-term flexibility

Front 14

The basic layout types

Back 14

• Fixed-position layout

• Functional layout

• Cell layout

• Line layout

Front 15

Fixed-position layout

Back 15

• The transformed resources do not move between the transforming resources.

• Instead of materials, informations or customers flowing through an operation, the recipient of the processing is stationary and the transforming resources move as necessary.

Front 16

Advantages and disadvantages of Fixed position layout

Back 16

Pros:

- Very high product and mix flexibility

- Product/customer not moved

- High variety of tasks for staff

Cons:

- Very high unit costs

- Scheduling space and activities can be difficult

Front 17

Functional layout

Back 17

• It conforms to the needs and convenience of the functions performed by the transforming resources within the process.

• Similar resources or processes are located together.

• The combinatorial complexity of functional layouts makes optimal solutions difficult to achieve in practice.

Front 18

Advantages and disadvantages of Functional layout

Back 18

Pros:

- High product and mix flexibility

- Relatively robust in the case of disruptions

- Easy to supervise

Cons:

- Low utilisation

- Can have very high WIP

- Complex flow

Front 19

Cell layout

Back 19

• Transformed resources entering the operation are pre-selected (or pre-select themselves) to move to one part of the operation (cell) in which they meet their immediate processing needs.

• After being processed in the cell, transformed resources may go on to another cell.

• An attempt to bring some order to the complexity of flow which characterized functional layout.

Front 20

Advantages and disadvantages of Cell layout

Back 20

Pros:

- Can an give good compromise

- Fast throughput

- Group work can result in good motivation

Cons:

- Can be costly to rearrange existing layout

- Can need more plant

Front 21

Line layout (product layout)

Back 21

- Locating the transforming resources entirely for the convenience of the transformed resources.

- Customers, products or pieces of information follow a prearranged route in which the sequence of activities that are required matches the sequence in which processes have been located.

- The transformed resources “flow” as in a “line”through the process.

- Flow is predictable and therefore relatively easy to control.

Front 22

Advantages and disadvantages of Product layout

Back 22

- Low unit costs for high volume

- Opportunities for specializationof equipment

- Can have low mix flexibility

- Not very robust in the case ofdisruptions

- Work can be very repetitive

Front 23

Mixed Layout

Back 23

• Hybrid layouts which combine elements of some or all of the basic layout types.

• Use the “pure” basic layout types indifferent parts of the operation.

Front 24

A restaurant layout with all four basic layout types

Back 24

Basic layout types have different fixed and variable costs that seem to determine which one to use

Front 25

Per Unit Cost and volume relationship

Back 25

uncertainty about exact fixed and variable costs means the decision can rarely be made on cost alone

Front 26

What is strategy?

Back 26

 Setting broad objectives that direct an enterprise towards itsoverall goal

 Planning the path (in general rather than specific terms) thatwill achieve these goals

 Stressing long-term rather than short-term objectives

 Dealing with the total picture rather than stressing individual activities

Front 27

Strategic decisions

Back 27

Strategic decisions are those decisions which: are widespread in their effect on the organization to which the strategy refers, define the position of the organization relative to its environment, and move the organization closer to its long-term goals.

Front 28

Porters Generic

Back 28

Low Cost

Focused Low Cost

Differentiation

Focused Differentiation

Front 29

Operations vs Operational

Back 29

Operations’ are the resources that create products and services.

‘Operational’ is the opposite of strategic, meaning day-to-day and very detailed

Front 30

How is operations strategy different to operationsmanagement?

Back 30

Front 31

How is operations strategy different to operationsmanagement?

Back 31

Front 32

How is operations strategy different to operationsmanagement?

Back 32

Front 33

How is operations strategy different to operationsmanagement?

Back 33

Front 34

The 4 stage model of operations contribution

Back 34

Front 35

The four perspectives on operations strategy

Back 35

Front 36

Top-down and bottom-up perspectives of strategy

Back 36

Front 37

The strategy hierarchy

Back 37

Front 38

Order-winning, and qualifying competitive factors

Back 38

Order winners are the competitive advantages such as quality, delivery speed, ect. that cause a firm's customers to select that company's products or services. It is the main reason why customers purchase a company's product.

Order qualifiers are the competitive advantages that a company must demonstrate in order to be a viable competitor in the business arena.

Front 39

The triple bottom line

Back 39

Planet:

•Recyclability of materials, energy consumption, waste materialgeneration•Reducing transport-related energy

•Noise pollution, fume and emissionpollution

People: •Customer safety from products and services•Employment impact of an operation’s location•Employment implications of outsourcing•Repetitive or alienating work •Staff safety and workplace stress•Non-exploitation of developing country suppliers

Profit:

•Cost of producing products and services•Revenue from the effects of quality, speed, dependability, andflexibility•Effectiveness of investment in operations resources•Risk and resilience of supply•Building capabilities for the future

Front 40

The five competitive objectives

Back 40

Front 41

Two common meanings of “Quality”

Back 41

- Quality as the specification ofa product or service

-- e.g. Lower Hurst Farmproduces organic meat raisedexclusively on its own farm

- Quality as the conformancewith which the product orservice is produced

-- e.g. Quick service restaurantslike McDonalds may buy lessexpensive meat, but itsconformance must be high

Front 42

External and internal benefits of conformance quality

Back 42

- Externally: it enhances the product or service in the market, or at least avoids customer complaints

- Internally: it brings other benefits to the operation

- It prevents errors slowing down throughput speed

- It prevents errors causing internal unreliability and low dependability

- It prevents errors causing wasted time and effort, therefore saving cost

Front 43

External and internal benefits of speed

Back 43

- Externally – it means the elapsed time between a customer asking for aproduct or service and getting it (in a satisfactory condition)

- It often enhances the value of the product or service to customers

- Internally - it brings other benefits to the operation

-- It helps to overcome internal problems by maintaining dependability

-- It reduces the need to manage transformed resources as they passthrough the operation, therefore saving cost

Front 44

External and internal benefits of Dependability

Back 44

Externally -- it enhances the product or service in the market, or at leastavoids customer complaints

Internally -- it brings other benefits to the operation

-- It prevents late delivery slowing down throughput speed

-- It prevents lateness causing disruption and wasted time and effort,therefore saving cost

Front 45

Flexibility – What does it mean?

Back 45

Flexibility has several distinct meanings but is always associated with an operation’s ability it change

 The products and services it brings to the market –Product/service flexibility

 The mix of products and services it produces at any onetime – Mix flexibility

 The volume of products and services it produces – Volumeflexibility

The delivery time of its products and services – Deliveryflexibility

Front 46

Definition of Cost

Back 46

The cost of producing products and services is obviously influenced by many factors such as input costs, but two important sets are.....

The 4 V’s

volume variety variation visibility

The internal performance of the operation at quality speed dependability flexibility

Front 47

What are Polar diagrams?

Back 47

Polar diagrams are used to indicate the relative importance of each performance objective to an operation or process

They can also be used to indicate the difference between different products and services produced by an operation or process

Front 48

Polar diagrams for a taxi service versus a bus service

Back 48

Front 49

What Operations ManagersDo

Back 49

Plan - Organize - Staff - Lead -Control

Front 50

Eli Whitney

Back 50

In 1798, received government contract to make 10,000 muskets

 Showed that machine tools could make standardized parts to exact specifications

 Musket parts could be used in any musket

Front 51

Frederick W. Taylor

Back 51

 Born 1856; died 1915

 Known as ‘father of scientific management’

 In 1881, as chief engineer for Midvale Steel, studied how tasks were done

 Began first motion & time studies

 Created efficiency principles

Front 52

Frank and Lillian Gilbreth

Back 52

 Frank (1868-1924); Lillian (1878-1972)

 Husband-and-wife engineering team

 Further developed work measurement methods

Front 53

Henry Ford

Back 53

Born 1863; died 1947

In 1903, created Ford Motor Company

In 1913, first used moving assembly line to make Model T

Unfinished product moved by convey or past work station

Paid workers very well for 1911 ($5/day!)

Front 54

W. Edwards Deming

Back 54

 Born 1900; died 1993

 Engineer & physicist

 Credited with teaching Japan quality control methods in post-WW2

 Used statistics to analyze process

 His methods involve workers in decisions