P300 Final Study Cards

A process is a system of activities that transforms inputs into outputs

Inputs are what is taken in by the operation management system

Outputs are what comes out after the operation is done

How inputs are transformed into outputs and products

design, supply, produce, and deliver valuable goods and services to customers

Lowering costs allows you to create more for the same money

Gives better quality to a product and allows for more future sales

creative thinking that allows for products or services to be produce in stronger ways

the global network of organizations and activities involved in designing, transforming, consuming and disposing of goods and services.

management of the processes and relationships in a supply chain

• long-term decisions defining the objectives and capabilities of organization
• Take a long time to implement
• Put limits on the capabilities governing operational processes

• intermediate-term decisions defining how capacity is used to meet demand
• More frequent than strategic planning, usually spanning months
• Identify customer demands for aggregate product families
• Establish the inventory and capacity plans

• short-term priorities and schedules for resource allocation
• Address demands, materials, and capacities at the individual product level
• Usually addresses weeks or days

• Tangible
• Can be inventoried
• Little customer contact
• Long lead time
• Often capital-intensive
• Quality easily assured
• Material is transformed

• Intangible
• Cannot be inventoried
• Extensive customer contact
• Short lead time
• Often labor-intensive
• Quality harder to assess
• Information or customer is transformed
• Simultaneous production and consumption

Something that you can feel and touch and use

how long it takes for something to be completed

The person who has the greatest impact on design, sales and growth opportunities for the product

provides inputs

Upstream supplier, supplier before the main manufacturer

Upstream supplier, 2nd supplier before the main manufacturer

Downstream Supplier, Usually a distributor, who the manufacturer sells to

Downstream supplier, the next distributor after the Echelon 2

Echelon 1. They distribute what you manufactor

those who have some interest in the firm

what a firm does well, defines types of problems a firm can proficiently address

tangible and intangible benefits that customers obtain from a firm

critical to firm’s success and receives firm’s focus

Corporate, Business Unit, and Functional

• overall mission and types of businesses
• Long time horizon
• Overall values, direction, and goals
• Acquisitions and divestitures
• Performance metrics
• Risk management

• semi-independent organization for different products or markets
• Identification of customer or market segments
• Appropriate product offering and competitive priorities
• Constrained by corporate strategy
• More detailed, shorter time horizon

• determines how functions (operations, marketing, finance, etc.) support business unit strategies
• Most detailed
• Most constrained
• Determines specific focus
• Management of critical resources to achieve corporate and SBU metrics
• Identification of capabilities

• Advantages? “What do we do better”?
• Unique resources or value propositions?
• What do customers see as strengths?

• What could we improve? Avoid?
• What limits our ability to grow/develop?
• What do customers see as weaknesses

• What trends can we take advantage of?
• New technologies or markets?
• Weaknesses in competitors?

• What obstacles do we face?
• Could regulatory changes disturb us?
• Could competitors or technology changes impact us?

Analyze a firm/organization along factors from the firm’s perspective: Strength, Weakness, Opportunities, Threats

alignment of value proposition, capabilities, and critical customers

why customers choose your firm

minimum standards to be met

why customers avoid your firm

• performance, features, conformance(no defects)
• Reliability(long time on failure), aesthetics, service/support perceived quality

reliability (on time), speed, availability

purchase price, tranaction (tax, fees), maintenance, operating, salvage/disposal

what do you do that is different

how easy is it to change your process

how sustainable is your product

minimize any risks that you have to take

your financial, social and environmental bottom line

• 15% of operational problems are the result of human errors
• The other 85% are due to systemic process errors

The beginning point and the end point of a process.

• Operations- transforms an input
• Transportation-moves an input to another place
• Inspection- verifies the result of another activity
• Delay- unintentional stops the flow of an input
• Storage- is the formal inventory of an input

flow of data and information

include physical products, including people

Limit on amount of output a process can produce given an amount of input and resources (e.g. output per machine hour or labor hour)

Can also refer to size or storage limits.

• Highest output rate an activity or process can achieve under ideal conditions
• For equipment also called rated or design capacity

• Sustainable capacity taking into account potential disruptions, fatigue, machine breakdowns
• Typically around 70-80% of maximum capacity
• Effective capacity is usually used when making plans to meet demand or determine long run production values

• Utilization = Actual Output/Capacity
• Percentage of process capacity actually used
• Low utilization: Equipment or employees may be underused
• Very high utilization: Possible overuse of resource

• Yield Rate =(# ?? "??????????" ???????? ?? ????????)/(# ?? ??????? ???????? ?? ????????)
• Percentage of good units produced from total units begun
• A 80% yield rate means 80% of started products are of acceptable quality while 20% of started products have to be scraped or reworked

The more that you produce the total cost per unit goes down

After the economies of scale, price for unit starts to go up

Not sure

Using more of your max capacity

• Using as much of the workload of the workers as possible
• efficiency= total of all tasks times/ # of workstations *takt time

make more good products so there are less scraped or reworked product

Identify the constraint, exploit the constraint, subordinate and synchronize to the constraint, Elevate performance of the constraint, repeat the process

Self explanatory

• Variance occurs in a process’s inputs, activities and outputs.
• Increased complexity and uncertainty makes it difficult to create plans to efficiently and effectively use resources

• Changing one element of a process may impact other elements, sometimes in unexpected ways.
• Process elements are interdependent
• Activities
• Inputs/Outputs/Flows
• Process structures
• Management policies

• Metrics should address aspects of performance that are important to both customers and the organization.
• Consist of 3 elements: the measure, the standard, and the reward for achieving the standard
• Should be objectively verifiable and quantifiable
• Should support strategy and satisfy critical customers
• Provide the basis for monitoring, controlling and improving

• Kaizen: focused, incremental improvement efforts
• small + small + small + small + … + n = LARGE

groups together similar resources

• Resources arranged according to regularly occurring activities in the process
• Often used by repetitive and continuous processes
• Benefits:
• Minimizes processing time
• Simplifies planning, scheduling, and control
• Drawbacks:
• Lack of flexibility
• Interdependency of activities – problem at one workstation can

• Combining flexibility of small, focused job shop with the efficiency of a repetitive line
• Form a number of small assembly lines called work cells
• Each work cell arranged using product layout principles
• Dedicated workers for each cell are trained in all of the activities within a cell

What type of process the a product is made with project, job shop, batch, repetitive process, or continuous process

how long each step takes and what steps come before it in a process. Can be visually represented in a precedence diagram

Takt-time = Available production time per day/Output needed per day

Efficency = Total of all tasks time/# of workstations *takt time

when total revenue = total cost

Single cost that is a large sum that is occurred no matter how many products are made

• Variable Cost
• Costs that go up as a more products are produced

The number of products it takes for a certain investment to be better then another

In lean manufacturing, the area where a product is stored for the next step. Only is made if the previous step is not overloaded

In lean manufacturing, when you only go on to the next step when a product is finished with the previous step

processes that involving the customer contract

behind the scenes processes

Separating processes into front-office and back-office processes

• Helps to understand interfaces between customers, service providers, technology. Elements include:
• Customer actions: all actions done by customers during service delivery
• Front office: employee actions in the face-to-face encounter with customers
• Back office: behind the scenes activities not seen by the customer
• Support processes: activities necessary for the service, done by employees without direct customer contact
• Physical evidence: tangibles the customers see or collect during their encounter with the organization

match between designed features and customer requirements

meeting design specifications

primary product or service characteristics

added touches, bells and whistles, secondary characteristics

consistency of performance over time

sensory characteristics

ease of use

past performance and reputation

• Total quality management: an integrated business management strategy embedding awareness of quality in all processes
• Quality ultimately determined by customer
• Focus on customers
• Quality management is a total, organization wide activity
• Responsibility for quality belongs to everyone
• Quality improvement requires total commitment
• Decision making in cross-function teams

The idea that employees run the company because they have the most contact with the customers

• Disdain for Variability
• not sure

how much it costs for a firm to improve and maintain the quality of a product

cost of activities aimed at eliminating the potential causes of product defects or failures

• cost of activities aimed at ensuring that defective products are identified and not delivered to customers
• Inspection before/during/after production

• results from defects that are found in products prior to their shipment to customers
• Scrap
• Rework

• result from defects that are found only after products reach customers
• Returned material
• Repair
• Lost of future sales

quality improvement through elimination of defects and variation.Standard deviation: statistical measure of variation

Define, Measure, Analyze, Improve, and Control

how to mange operations

how something is produced and its costs

sending work out to a different firm

not sure

doing work in a firm

not sure

movement of materials and information within, into and out of the firm

the upper part of the supply chain (Tier)

the lower part of the supply chain (echelon)

How a product is experienced by a user

How long it takes for a product to make it to market once it is made

any hours that are over 40 hours and require extra pay

quick, local improvement around up to a year

Any improvments that can take up to 1 year or longer

how production and costs are measured

when product process separate into two different processes based on the products features

Developing and researching a product