Key focus of OM is transformation process (uses resources to convert inputs into desired output).

Operations interacts internally with MK, FI/AC

& HR. They interact externally with outside suppliers.
SCM- mgmt. of the flow of info, products & services across a hetwork of customers, enterprises, & SC partners.
Go Global because-favorable costs, access to international mrkts, response to changes in demand, reliable sources of supply, latest trends and
technologies
Business Strat-defines the long-range plan for the company
Inputs to Bus Strat:Environmental scanning-monitoring for market trends, threats & opportunities.Mission-statement that defines what is our
businessCore Competitors-unique strengths that can help us with the mrkt
Operations Strategy-concerned with setting broad policies & plans for using firm resources to best support long-term business/competitive
strategy Needs to support overall corporate strategy.
Order Qualifier-criterion that permits the firms products to even be considered for purchase
Order Winner- criterion that differentiates one firm from another
Productivity-a common measure for how well a company is utilizing its resources
PRODUCTIVITY MEASURESProductivity Measurement-a measure of efficiency with which inputs are transformed to outputs
Single Factor Productivity-a ratio of outputs to only one input (e.g. labor productivitiy)
Multi Factor Productivity- a ratio of outputs to multiple inputs. Converts inputs&outputs to $ value
Total Pro-ratio of outputs to all inputs
Productivity index- a relative measure. It has to be compared with something else. Ex: benchmarking, changes over time and normalized data
Process- a series of independent tasks that transform an input into output of higher value for the organization.
Analyze a process to identify inefficient tasks, spot possible effectiveness improvement tasks and to understand
where value can be added.
Process Performance.In order to understand the efficiency of the process, we need to measure capacity(how many
units per unit time go through each task or process),bottleneck(which production step limits the process capacity),
throughput(how long does it take for a unit to from start to finish in a process)
CycleTime-avg time for completion of a unit at a production step or process. Measured as time/unit. Process RateAvg# of units processed over a time interval. Measured as units/time.
Capacity of a task is the physical limitation in terms of how much can be processed at this task The capacity of
the process is the minimum processing rate at any of the stages, capacity of the stage with the longest cycle time,
min(processing rate)=max(cycle time)=Bottleneck
Littles Law: ThroughputTime=(WIP)x(cycleTime) ThroughputTime=WIP/ProcessingRate
Projects-one of a kind production of a product to customer order. Adv:custom work, latest tech. Disadv: nonRepetitive, small customer base, expensive. Ex:construction/shipbuilding/spacecraft
Batch production-process many diff jobs at the same time in groups or batches. Adv:flexibility, quality. Disadv:
Costly, slow, difficult 2 manage. Ex: machine shops, bakeries, print shops, education.
Mass production-produce large volumes of a standard product for a mass mrkt. Adv:efficiency, speed, low cost
Disadv:capital investment, lack of responsiveness. Ex: automobiles, TVs, computers, fast food.
Continuous production-used for very-high volume commodity products. Adv:highly efficient, large capacity, ease
Of control. Disadv: difficult to change, far-reaching errors, limited variety Ex: paint, chemicals, foodstuffs.
BreakEvenAnalysis-a standard approach to choosing among alternative processes or equipment. Study trade-offs
based on demand volume.
Quality is Fitness for use(how well product/service does what it is supposed to do) and Quality of Design(designing quality characteristics into a
product or service)
Quality of conformance-making sure product or service is produced according to design
Demings14points5.constantly improve system&workers9Eliminate barriers btwn departments13institute vigorous training&education
programs14develop a commitment from top mgmt. to implement above 13 points.
QualityTools:ProcessFlowChart(helps focus on location of problem in a process)Cause&EffectDiagram(chart showing different categories of
problem)Check sheet(tally# of defects from a list of causes)Histogram(frequency diagram of data for quality
problem)ParetoAnalysis,ScatterDiagram,Control Charts.
TotalQualityMngmt(TQM)&Quality Mgnmt system (QMS) serve to achieve customer satisfaction.
QualityCircles-voluntary group of workers and supervisors from same area who address quality problems
ProcessQualityImprovementTeams-focus attention on business processes rather than separate company functions. Includes members from the
interrelated departments which make up a process. Important to understand the process the team is addressing. Process flowcharts are key tools.
Quality in Services. Service defects R not always easy to measure bc service output is not usually a tangible item.Services tend to B labor
intensive.Services&Manufacturing companies have similar inputs and different processes and outputs.
QualityAttributes in Services. Principles of TQM apply equally well to services&manu.Timeliness is an important dimension.Benchmark-best
level of quality achievement in one company that other companies seek to achieve.
SixSigma-a process for developing&delivering virtually perfect products/services. Its a measure of how much a process deviates from
perfection.Goal: 3,4 defects per million opportunities (DPMO). Guilding Methodologies-six sigma-quality improvement through elimination of
defects&variation.StandardDev-statistical measure of variation, DMAIC-Define, Measure, Analyze, Improve, Control
QualityProductivityRatio(QPR)-productivity index tht includes productivity and quality costs
MalcolmBridgeAward-created in 1987 to stimulate growth of quality mgnmt in US
ISO 9000-procedures and policies for international quality certificationISO 9000-2008 defines fundamental terms& definitions used in ISO 9000
familyISO 9001:2008-standard to assess ability to achieve customer satisfaction
Goal of lean production-doing more with less inventory, fewer workers, less space
JustInTimeJIT-smoothing the flow of material to arrive just as it is needed. JIT and Lean Production are used interchangeably.Muda-waste, anything
other than tht which adds value to product/service
8wastes-quality defects, unused creativity, waiting, transportation, process, inventory, motion

takt time-paces production to customer demand. Manufacturing cells-compromised of dissimilar machines brought together to manufacture a
family of parts. Cycle time is adjusted to match takt time by changing worker paths.
JIT uses Pull System. Material is pulled thru the system wen needed. Reveral of traditional push system where material is pushed according to a
schedule. Forces cooperation. Prevent over&underproduction. While push systems rely on a predetermined schedule, pull systems rely on
customer requests. Kanban-card which indicates standard quality of production. Maintain discipline of pull production. Authorize
production&movement of goods.
Inventory hides problems, less inv exposes problems.
Components of Lead Time. Processing time(reduce# of items or improve efficiency)MoveTime(reduce distances, simplify movements,
standardize routings)WaitingTime(better scheduling, sufficient capacity)SetupTime(usually biggest bottleneck).
QuickSetups. internal-can be performed only wen a process is stopped.External can be performed in advance.
SMEDPrinciples-separate internal setup from external.Convert internal to external. Streamline all aspects of setup. Perform setup activities in
parallel or eliminate them entirely.
Poka-yokes-prevent defects from occurring.
Kaizen-system of continuous improvement.
Under-capacity scheduling-leaves time for planning, problem solving&maintenance.
Jidoka-authority to stop the production line
Andons-call lights tht signal quality problems
Total Productive Maintenance(TPM):Breakdown maintenance (repairs to make failed machine operational, Preventative Maintenance(system of
periodic inspection&maintenance to keep machines operating). TPM combines preventative maintenance and total quality concepts.
LeanProductionBenefits:reduced inventory, improved quality, lower costs, better use of HR, greater flexibility, shorter lead time, reduced space
requirement.
Lean&6Sigma are natural partners for process improvement. Lean-eliminates waste&creates flow. More continuous improvement. 6Sigma reduces
variability&enhances process capabilities. Requires breakthrough Improvements.
IntangibleProduct-hard to inventory, designed 4 customer experience. High Customer Contact-customer often
participates, direct customer/employee interface.
Service Operations is special. It is inseparable from delivery, it tends to be decentralized&dispersed, are consumed
more often than products,are perishable, output is variable etc.
3service strats-production line approach(service factory) ex McD, self service approach(mass service)exB&N, personal
attention approach(service shop)ritzcarlton. Queuing-waiting line mngmt. Arrival rate-frequency at which customers
arrive at a waiting line according to a probability distribution ServiceRate-time required to serve a customer, usually
described by negative exponential distribution. Service rate must be higher than arrival rate. Queue discipline-order
in which customers are served.
BALKING-when an arriving customer chooses not to enter a queue bc its already too long
Reneging-wen a customer already in queue gives up&exits w/o being serviced.
JOCKeyiNG-wen a customer switches btwn alternate queues in an effort to reduce waiting time.
PSYCHOLOGYofwaiting-ex BankofAmerica(mirrors)Supermarkets(magazinesimpulsepurchases)