Operations Management: Blue definitions

  1. Operation
    A group of resources performing all or part of one or more processes
  2. Operations Management
    "The systematic design, direction, and control of processes that transform inputs into services and products for internal and external customers"
  3. Process
    Any activity or group of activities that takes one or more inputs and transforms them into outputs for its customers.
  4. Supply Chain
    An interrelated series of processes within and across firms that produces a service or product to the satisfaction of customers.
  5. Supply Chain Management
    "The synchronization of a firm's processes with those of its suppliers and customers to match the flow of materials, services, and information with customer demand."
  6. External Customers
    "Customers who are either end users or intermediaries (e.g. manufacturers, financial institutions, or retailers) buying the firm's finished services of products."
  7. Internal Customers
    One or more employees or processes that rely on inputs from other employees or processes in order to perform their work.
  8. External Suppliers
    "The businesses or individuals who provide the resources, services, products, and materials for the firm's short-term and long-term needs."
  9. Internal Suppliers
    The employees or processes that supply important information or materials to a firm's processes.
  10. Nested Process
    The concept of a processes within a process.
  11. Core Process
    A set of activities that delivers value to external customers.
  12. Supplier Relationship Process
    "A process that selects the suppliers of services, materials, and information, and facilitates the timely and efficient flow of these items into the firm."
  13. New Service/Product Development Process
    A process that designs and develops new services or products from inputs received from external and internal customer specifications or from the market in general through the customer relationship process.
  14. Order Fulfillment Process
    A process that includes the activities required to produce and deliver the service or product to the external customer.
  15. Customer Relationship Process
    "A process that identifies, attracts, and builds relationships with external customers and facilitates the placement of orders by customers, sometimes referred to as "customer relationship management" "
  16. Support Process
    A process that provides vital resources and inputs to the core processes and therefore is essential to the management of the business.
  17. Operations Strategy
    The means by which operations implements the firm's corporate strategy and helps to build a customer-driven firm.
  18. Core Competencies
    The unique resources and strengths that an organization's management considers when formulating strategy.
  19. Lead Time
    The elapsed time between the receipt of a customer order and filling it.
  20. Competitive Priorities
    "The critical dimensions that a process or supply chain must possess to satisfy internal or external customers, both now and in the future."
  21. Competitive Capabilities
    "The cost, quality, time and flexibility dimensions that a process or supply chain actually possesses and is able to deliver."
  22. Tine-Based Competition
    A strategy that focuses on the competitive priorities of delivery speed and development speed.
  23. Order Winner
    A criterion customers use to differentiate the services or products of one firm from another.
  24. Order Qualifier
    A demonstrated level of performance of an order winner that is required for a firm to do business in a particular market segment.
  25. Productivity
    "The value of outputs (services and products) produced divided by the values of input resources (wages, costs of equipment, etc.)"
  26. Break-Even Quantity
    The volume at which total revenues equal total costs.
  27. Break-Even Analysis
    The use of the break-even quantity; it can be used to compare processes by finding the volume at which two different processes have equal total costs.
  28. Variable Cost
    The portion of the total cost that varies directly with volume of output.
  29. Fixed Cost
    The portion of the total cost that remains constant regardless of changes in levels of output.
  30. Sensitivity Analysis
    A technique for systematically changing parameters in a model to determine the effects of such changes.
  31. Preference Matrix
    A table that allows the manager to rate an alternative according to several performance criteria.
  32. Decision Theory
    A general approach to decision making when the outcomes associated with alternatives are often in doubt.
  33. Payoff Table
    A table that shows the amount for each alternative if each possible event occurs.
  34. Decision Tree
    "A schematic model of alternatives available to the decision maker, along with their possible consequences."
  35. Project
    "An interrelated set of activities with a definite starting and ending point, which results in a unique outcome for a specific allocation of resources."
  36. Project Management
    "A systemized, phased approach to defining, organizing, planning, monitoring, and controlling projects."
  37. Program
    An interdependent set of projects that have a common strategic purpose.
  38. Work Breakdown Structure
    A statement of all work that has to be completed.
  39. Activity
    The smallest unit of work effort consuming both time and resources that the project manager can schedule and control.
  40. Network Diagram
    "A network planning method, designed to depict the relationships between activities, that consists of nodes (circles) and arcs (arrows)."
  41. Program Evaluation and Review Technique (PERT)
    "A network planning method created for the U.S. Navy's Polaris missile project in the 1950's, which involved 3,000 separate contractors and suppliers."
  42. Critical Path Method (CPM)
    A network planning method developed in the 1950's as a means of scheduling maintenance shutdowns at chemical-processing plants.
  43. Precedence Relationship
    A relationship that determines a sequence of undertaking activities; it specifies that one activity cannot start until a preceding activity has been completed.
  44. Activity-On-Node (AON) Network
    "An approach used to create a network diagram, in which nodes represent activities and arcs represent the precedence relationships between them."
  45. Path
    The sequence of activities between a project's start and finish.
  46. Critical Path
    The sequence of activities between a project's start and finish that takes the longest time to complete.
  47. Earliest Finish Time (EF)
    "An activity's earliest start time plus its estimated duration, t, or EF = ES + t"
  48. Latest Finish Time (LF)
    The latest start time of the activity that immediately follows.
  49. Earliest Start Time (ES)
    The earliest finish time of the immediately preceding activity.
  50. Latest Start Time (LS
    "The latest finish time minus its estimated duration, t, or LS = LF - t."
  51. Activity Stack (S)
    "The maximum length of time that an activity can be delayed without delaying the entire project, calculated as S = LS - ES, or S = LF - EF"
  52. Gantt Chart
    "A project schedule, usually created by the project manager using computer software, that superimposes project activities, with their precedence relationships and estimated duration times, on a time line."
  53. Normal Time (NT)
    The time necessary to complete an activity under normal conditions.
  54. Normal Cost (NC)
    The activity cost associated with the normal time.
  55. Crash Time (CT)
    The shortest possible time to complete an activity.
  56. Crash Cost (CC)
    The activity cost associated with the crash time.
  57. Minimum-Cost Schedule
    "A schedule determined by starting with the normal time schedule and crashing activities along the critical path, in such a way that the costs of crashing do not exceed the savings in indirect and penalty costs."
  58. Risk-Management Plan
    A plan that identifies the key risks to a project's success and prescribes ways to circumvent them.
  59. Optimistic Time (a)
    "The shortest time in which an activity can be completed, if all goes exceptionally well."
  60. Most Likely Time (m)
    The probable time required to perform an activity.
  61. Pessimistic Time (b)
    The longest estimated time required to perform an activity.
  62. Close Out
    "An activity that includes writing final reports, completing remaining deliverables, and compiling the team's recommendations for improving the project process."
  63. Process Strategy
    The pattern of decisions made in managing processes so that they will achieve their competitive priorities
  64. Process Structure
    "A process decision that determines the process type relative to the kinds of resources needed, how resources are partitioned between them, and their key characteristics"
  65. Layout
    The physical arrangement of operations created by the various processes
  66. Customer Involvement
    The ways in which customers become part of the process and the extent of their participation
  67. Resource Flexibility
    "The ease with which employees and equipment can handle a wide variety of products, output levels, duties, and functions"
  68. Capital Intensity
    The mix of equipment and human skills in a process
  69. Customer Contact
    "The extent to which the customer is present, is actively involved, and receives personal attention during the service process"
  70. Process Divergence
    The extent to which the process is highly customized with considerable latitude as to how its tasks are performed
  71. Flexible Flow
    "The customers, materials, or information move in diverse ways, with the path of one customer or job often crisscrossing the path of another"
  72. Line Flow
    "A flow in which customers, materials, or information move lineraly from one operation to the next, according to a fixed sequence"
  73. Front Office
    A processwith high customer contact where the servive provider interacts directly with the internal or external customer.
  74. Hybrid Office
    A process with moderate levels of customer contact and standard services with some options available
  75. Back Office
    A process with low customer contact and little service customization
  76. Process Choice
    A way of structuring the process by organizing resources around the process or organizing them around the products
  77. Job Process
    "A process with the flexibility needed to produce a wide variety of products in significant quantities, with considerable complexity and divergence in the steps performed"
  78. Batch Process
    "A process that differs from the job process with respect to volume, variety, and quantity"
  79. Line Process
    "A process that lies between the batch and continuous processes on the continuum; voumes are high and products are standardized, which allows resources to be organized around particular products"
  80. Continuous Flow Process
    "The extreme end of high-volume standardized production and rigid line flows, with production not starting and stopping for long time intervals"
  81. Make-To-Order Strategy
    A strategy used by manufacturers that make produdcts to customer specifications in low volumes
  82. Assemble-To-Order Strategy
    A strategy for producing a wide variety of products from relatively few subassemblies and components after the customer orders are received
  83. Postponement
    The strategy of delaying final activities in the provision of a product until the orders are received
  84. Mass Customization
    The strategy that uses highly divergent processes to generate a wide variety of customized products at resonably low costs
  85. Make-To-Stock Strategy
    "A strategy that involves holding items in stock for immediate delivery, thereby minimizing customer delivery times"
  86. Mass Production
    A term sometimes used in the popular press for a line process that uses the make-to-stock strategy
  87. Block Plan
    A plan that allocates space and indicates placement of each operation
  88. Closeness Matrix
    A table that gives a measure of the relative importance of each pair of operations being located close together
  89. Weighted-Distance Method (WD)
    A mathematical model used to evaluate flexible flow layouts (of facility locations) based on proximity factors (or time)
  90. Euclidean Distance
    "The straight-line distance, or shortest possible path, between two points"
  91. Rectilinear Distance
    "The distance between two points with a series of 90-degree turns, such as long city blocks"
  92. Flexible Workforce
    "A workforce whose members are capable of doing many tasks, either at their own workstations or as they move from one workstation to another"
  93. Automation
    "A system, process, or piece of equipment that is self-acting and self-regulating"
  94. Fixed Automation
    A manufacturing process that produces one type of part or product in a fixed sequence of simple operations
  95. Flexible (or Programmable) Automation
    A manufacturing process that can be changed easily to handle various products
  96. Industrial Robot
    "Versatile, computer-controlled machine programmed to perform various tasks"
  97. Economies of Scope
    Economies that reflect the ability to produce multiple products more cheaply in combination than separately
  98. Plants Within Plants (PWPs)
    "Different operations within a faciity with individualized competitive priorities, processes, and workforces under the same roof"
  99. Focused Factories
    The result of a firm's splitting large plants that produced all the company's products into several specalized smaller plants
  100. Reengineering
    "The fundamental rethinking and radical redesign of processes to improve performance dramatically in terms of cost, quality, service, and speed"
  101. Process Improvement
    The systematic study of the activities and flows of each process to improve it
  102. Facility Location
    The process of determinin geographic sites for a firm's operations
  103. Quality of Life
    "A factor that considers the availability of good schools, recreational facilities, cultural events, an an attractive lifestyle"
  104. Critical Mass
    A situation whereby several competing firms clustered in one location attract more customers than the total number who would shop at the same stores at scattered locations
  105. Geographic Information System (GIS)
    "A system of computer software, hardware, and data that the firm's personnel can use to manipulate, analyze, and present information relevant to a location decision"
  106. Load-Distance Method (LD)
    A mathematical model used to evaluate locations based on proximity factors
  107. Center of Gravity
    A good starting point to evaluate locations in the target area using the load-distance method
  108. Transportation Method
    A quantitative approach that can help solve muliple-facility location problems
  109. Heuristics
    "Solution guidelines, or rules of thumb, that find feasible solutions to problems (but not necessarily the best)"
  110. Optimization
    A procedure used to determine the "best" solution; generally utilizes simplified and less reaistic views of a problem
  111. Low-Cost Operations
    (Competitive Priority)
    Delivering a service or product at the lowest possible cost to the satisfaction of external or internal customers of the process or supply chain.
  112. Low-Cost Operations Example
    (Competitive Priority)
    "Costco achieves low cost by designing all processes for efficiency, stacking products on pallets in warehouse-type stores, and negotiating aggressively with their suppliers. Costco can provide low prices to its customers because they have designed operations for low cost."
  113. Top Quality
    (Competitive Priority)
    Delivering an outstanding service or product
  114. Top Quality Example
    (Competitive Priority)
    Ferrari's processes deal with providing superior product features and more demanding performance requirements.
  115. Top Quality Considerations
    (Competitive Priority)
    "To deliver top quality, a service process may require a high level of customer contact, and high levels of helpfulness, courtesy, and availability of stores. It may require superior product features, close tolerances, and greater durability from a manufacturing process."
  116. Consistent Quality
    (Competitive Priority)
    Producing services or products that meet design specifications on a consistent basis
  117. Consistent Quality Example
    (Competitive Priority)
    "McDonald's standardizes work methods, staff training processes, and procurement of raw materials to achieve the same consistent product and process quality from one store to another."
  118. Consistent Quality Considerations
    (Competitive Priority)
    "Processes must be designed and monitored to reduce errors, prevent defects, and achieve similar outcomes over time, regardless of the "level" of quality."
  119. Delivery Speed
    (Competitive Priority)
    Quickly filling a customer's order
  120. Delivery Speed Considerations
    (Competitive Priority)
    "Design processes to reduce lead time (elapsed time between the receipt of cust. order and filling it) through keeping backup capacity cushions storing inventory, and using premier transportation option."
  121. Delivery Speed Example
    (Competitive Priority)
    "Dell engineered its customer relationship, order fulfillment, and supplier relationship processes to create an integrated and an agile supply chain that delivers reliable and inexpensive computers to its customer with short lead times."
  122. On-time Delivery
    (Competitive Priority)
    Meeting delivery-time promises
  123. On-time Delivery Considerations
    (Competitive Priority)
    "Along with processes that reduce lead time, planning processes (forecasting, appointments, order promising, scheduling, and capacity planning) are used to increase percent of customer orders shipped when promised (95% is often a typical goal)"
  124. Development Speed
    (Competitive Priority)
    Quickly introducing a new service or a product
  125. Development Speed Considerations
    (Competitive Priority)
    Processes aim to achieve cross-functional integration and involvement of critical external suppliers in the service or product development process.
  126. Development Speed Example
    (Competitive Priority)
    "Li & Fung can get a new product idea for a sweater or other lines of clothing from its customer, design the sweater, transmit the design to Hong Kong and southeast Asia where it is produced, ship the sweater back to the U.S., and put the sweater on the store shelves on the customer within a few weeks."
  127. Customization
    (Competitive Priority)
    Satisfying the unique needs of each customer by changing service or product designs
  128. Customization Considerations
    (Competitive Priority)
    "Processes with a customization strategy typically have low volume, close customer contact, and an ability to reconfigure processes to meet diverse types of customer needs."
  129. Customization Example
    (Competitive Priority)
    Ritz Carlton customizes services to individual guest preferences.
  130. Variety
    (Competitive Priority)
    Handling a wide assortment of services or production of services or products efficiently
  131. Variety Considerations
    (Competitive Priority)
    Processes supporting variety must be capable of larger volumes than processes supporting customization. Services or products are not necessarily unique to specific customers and may have repetitive demands
  132. Variety Example
    (Competitive Priority)
    Amazon.com uses information technology and streamlined customer relationship and order fulfillment processes to reliably deliver a vast variety of items to its customers.
  133. Volume Flexibility
    (Competitive Priority)
    Accelerating or decelerating the rate of production of services or products quickly to handle large fluctuations in demand.
  134. Volume Flexibility Considerations
    (Competitive Priority)
    Processes must be designed for excess capacity and excess inventory to handle demand fluctuations that can vary in cycles from days to months. This priority could also be met with a strategy that adjusts capacity without accumulation of inventory or excess capacity.
  135. Volume Flexibility Example
    (Competitive Priority)
    "The U.S.P.S. (United States Post Office) can have severe demand peak fluctuations at large postal facilities where processes are flexibly designed for receiving, sorting, and dispatching mail to numerous branch locations."
Card Set
Operations Management: Blue definitions
Operations Management: Mid-term review Text by: Krajewski Ritzman Malhotra 9th Edition