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What is Business Process Management? What are the benefits?
- A studies and systematic approach to incremental change for continuous process improvement in customer satisfaction. The org structure is based on processes rather than function.
- Benefits include improved efficiency, effectiveness, and agility in responding to changes
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What are the 5 activities or techniques involved in BPM with a brief explanation?
- D-MEMO
- Define & Design = ID current processes and conceptualize the processes once improved; establish a baseline
- Model or Analyze = use modeling software to perform what-if variable analysis
- Execute = implement the design changes
- Monitor, Measure, Control = track against expected performance; use dashboards
- Optimize or Improve = refine the process
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What are several measures that can be used with BPM to determine effectiveness?
- Gross Revenue
- Customer Contacts
- Customer Satisfaction
- Operational Statistics
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What are shared services? What are the drawbacks?
- Seeking out and eliminating duplicate functions within the internal organization.
- Drawbacks:
- (1) workflow disruption during the transition,
- (2) failure demand=failure to do something or do it right thus it must be done a 2nd time
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What is outsourcing What are the drawbacks?
- Contracting services with an external provider, whether in the states or offshore.
- Drawbacks:
- (1) quality risk of a product or service
- (2) reduced productivity
- (3) staff turnover, loss or insecurity
- (4) language barrier
- (5) security could be compromised
- (6) the qualifications of the supplier may be lower than for internal personnel
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Irrational methods of selecting an improvement initiative focus on what types of decisions?
Emotional or intuitive based on fashion, fad, or trend
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What key features are needed for successful implementation of an improvement program?
- Internal leadership and visible support from senior mgmt for direction and commitment of resources
- ** it’s impossible to implement without the resources
- Ongoing monitoring and measurement
- Internal process ownership by the individuals involved in the activities
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What is Business Process Reengineering? What are the benefits?
- A clean-slate radical approach to reviewing the business to identify new process methods.
- Criticized for not producing the anticipated benefits
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Give a brief explanation of specific performance improvement programs with a focus on managing resources?
- JIT Management = the belief that inventory does not add value; thus, materials are delivered just prior to manufacture.
- Lean Manufacturing=waste reduction and efficiency
- Demand Flow=resource allocation based on actual customer demand (not sales forecasts) - incorporates parts of the previous two
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What are the JIT Management characteristics, requirements and benefits?
- CHARACTERISTICSlot sizes equal to 1
- insignificant set-up times and costs
- balanced and level workloads
- a "pull" approach (rather than push-thru)
- REQUIREMENTS:
Synchronization of… - production schedule w/customer demand
- supply delivery w/production schedule
- product delivery w/retailer’s market
- BENEFITS
- reduced set-up time
- efficient use of employees w/mult skills
- reduced warehouse space
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What are the 7 critical factors regarding successful implementation of TQM?
- (1) customer focus=internal and external
- (2) continuous improvement
- (3) workforce involvement thru quality circles
- (4) senior management support via modeling
- (5) objective measures=taken & reported
- (6) timely recognition and reward
- (7) ongoing training
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Lean Manufacturing includes which 4 components
- Waste reduction (expend only the min resources necessary w/o sacrificing quality)
- Kaisen seeking out small incremental benefits to improve efficiency
- Activity Based Costing (ABC) to identify which activities cost the most and can be pared
- Activity Based Management (ABM)
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Which productivity system uses Kanban and what is it?
- The demand flow system
- Kanban uses an instruction card to regulate the supply of components through the production system
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What are the 5 steps to the Theory of Constraints process
- (1) identify the constraint through process charts or interviews
- (2) exploit the constraint=get around the issue
- (3) subordinate everything else to the above issue=put all efforts into fixing the constraint
- (4) elevate the constraint=find a way to permanently eliminate the issue
- (5) return to step 1
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What are some constraint examples for the Theory of Constraints
- Internal
- equipment may be poorly maintained and inefficient
- people may lack skills and need addl training
- policies may prevent the efficient use of resources
- External
- supply may outpace demand
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What are the 5 steps to improving an existing product using Six Sigma?
- define the problem
- measure key aspects of the current process
- analyze the data
- improve/optimize the current process
- monitor and control
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What are the 5 steps to using Six Sigma on a new product?
- define design goals
- measure Critical To Quality issues (the value chain)=what the customer deems valuable and how to ensure production makes that happen
- analyze product alternatives
- use modeling to optimize
- verify the design
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Give a brief explanation of specific performance improvement programs with a focus on quality and process improvement?
- TQM=customer-focused continuous improvement
- Six-Sigma=metrics to evaluate goal achievement (PDCA=Plan, Do, Check, Act)
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Give a brief explanation of specific performance improvement programs with a focus on how to eliminate problems?
- Theory of Constraints (TOC)=remove barriers to achieve objectives
- Quality Audits=strengths, weaknesses, improvements
- Gap Analysis=analyzes the difference between industry best practices and current practices in the org
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What is the difference between an internal vs external constraint
- Internal: where the market's demand exceeds our production capability
- External: our production exceeds market demand
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What types of cost changes would JIT benefit?
- If inventory unit carrying costs are increasing JIT reduces the holding cost
- And lower cost per purchase order
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What are the 5 steps in a decision-making process
- (1) identify the problem and uncertainties
- (2) obtain information
- (3) use the info to make predictions about the future
- (4) choose among alternatives
- (5) implement, evaluate, learn, adjust
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