Introduction to Operations Management

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Questions and Answers

Match the following terms with their respective definitions within operations management:

Operations = The part of a business that creates goods and services Supply Chain = Network of organizations involved in providing goods and services Productivity = Ratio of outputs to inputs Process = A set of activities transforming inputs into outputs

Match the following functions with a business context:

Marketing = Promoting and selling products Operations = Producing goods and services Finance = Managing monetary resources Human Resources = Managing employees

Match the key concepts with their descriptions within operations management:

Efficiency = Performing tasks in the best way possible Effectiveness = Doing the right task Value Added = The difference between cost of inputs and value of outputs Capacity = Maximum output rate of a process

Match the key factors with the related aspects in operations:

<p>Quality = Features and characteristics of products Cost = The total expense for production Speed = Timeliness in production Flexibility = Ability to produce different products</p> Signup and view all the answers

Match the operations related process with their description:

<p>Planning = Defining goals, processes, and resources in operations Control = Monitoring performance, comparing actual results and desired results Improvement = Enhancing operations for better outcomes Design = Creating new products and services</p> Signup and view all the answers

Match the following historical events with their approximate time period of origin, according to the provided text:

<p>Globalization = 1990s-2000s Internet Revolution = 1990s E-commerce = 2000s Lean Systems Implementation = Today's Environment</p> Signup and view all the answers

Match the following concepts or systems with their associated originators as mentioned in the text:

<p>WWW = Tim Berners-Lee ERP systems = SAP, Oracle, PeopleSoft E-commerce Platforms = Amazon, Yahoo, eBay ARPANET = Internet Revolution</p> Signup and view all the answers

Match the following OM roles with their typical job titles:

<p>Manager of Manufacturing = Manufacturing manager Overall Operations Management = V.P.operations Supply Chain Oversight = Director of supply chains Plant Supervision = Plant manager</p> Signup and view all the answers

Match the following business drivers with their corresponding needs in today's OM environment:

<p>Customer Demands = Better quality, greater speed, lower costs Operational Efficiency = Implementing lean system concepts Information Management = Need to better manage information using ERP and CRM systems Organizational Structure = Increased cross-functional decision making</p> Signup and view all the answers

Match the following elements to their respective categorization within operations management:

<p>Supply Chain Management = OM has the most diverse organizational function Transformation Process = Manages the transformation process Diverse Titles = OM has many faces and names Specific roles = Manufacturing manager, Plant manager, Quality specialists</p> Signup and view all the answers

Match the following individuals with their contributions to the field of management:

<p>Frederick Taylor = Scientific management Henry Gantt = Management Activity Scheduling chart Frank and Lillian Gilbreth = Time and motion studies Henry Ford = Moving assembly line</p> Signup and view all the answers

Match the following individuals with their contribution to Human Relations in management:

<p>Elton Mayo = Hawthorne studies Abraham Maslow = Motivation theories Frederick Herzberg = Motivation theories Douglas McGregor = Motivation theories</p> Signup and view all the answers

Match the following concepts with their originators/contributors from the Operations Research era:

<p>Linear programming = George Dantzig Simulation, waiting line theory = Operations research groups PERT/CPM = Operations research groups Digital computer = Remington Rand</p> Signup and view all the answers

Match the technological advancements with their associated era for operations management:

<p>MRP, EDI, EFT, CIM = 1970s Digital computer = 1950s Simulation, waiting line theory = 1950s Linear programming = 1940s</p> Signup and view all the answers

Match the following concepts with their associated quality management advocates:

<p>JIT (just-in-time) = Taiichi Ohno TQM (total quality management) = Joseph Juran Strategy and operations = Wickham Skinner</p> Signup and view all the answers

Match the following concepts with their contributors during the Quality Revolution of management:

<p>Strategy and operations = Robert Hayes Business process reengineering = James Champy</p> Signup and view all the answers

Match each originator with their most significant accomplishment related to operations management

<p>Henry Gantt = Management Activity Scheduling chart Abraham Maslow = Motivation theories Taiichi Ohno = JIT (just-in-time) George Dantzig = Linear programming</p> Signup and view all the answers

Match concepts with the era of management in which they came to prominence:

<p>Scientific Time and motion studies = 1910-1920 Human Relations movement = 1930-1960s Operations Research emergence = 1940s to 1960s Quality Revolution focus = 1970s to 1990s</p> Signup and view all the answers

Match the business functions with their need for information from operations management (OM):

<p>Marketing = Understanding production capabilities to meet customer needs Finance = Assessing capital investment needs based on operations concepts Human Resources = Understanding job requirements and worker skills Accounting = Considering inventory management, capacity, and labor standards</p> Signup and view all the answers

Match the historical milestones with their impact on Operations Management (OM):

<p>Industrial Revolution = Introduction of machine power and factory systems Scientific Management = Application of systematic analysis to improve efficiency Human Relations Movement = Focus on the importance of human factors in productivity Computer Age = Advancement in information processing and automation</p> Signup and view all the answers

Match the operations management (OM) concepts with their descriptions:

<p>Inputs = Resources such as materials, labor, capital, and information Transformation Process = Conversion of inputs into products or services Outputs = The finished products or services OM = Managing resources to produce a company's products</p> Signup and view all the answers

Match the trends in operations management (OM) with their descriptions:

<p>Just-in-Time (JIT) = Reducing inventory levels by receiving materials only when needed Total Quality Management (TQM) = A management philosophy focusing on continuous improvement Reengineering = Radical change to business process to improve efficiency Supply Chain Management (SCM) = Managing the flow of goods and services from suppliers</p> Signup and view all the answers

Match the organizational type with its product characteristics:

<p>Manufacturing organizations = Produce tangible products Service organizations = Produce intangible services Both = May use technology to assist in production and delivery Neither = Products are not their focus</p> Signup and view all the answers

Match the operations management (OM) areas with their focus:

<p>Strategic Decisions = Long-term decisions about capacity and product design Tactical Decisions = Medium-term decisions about scheduling and resource allocation Operations = The specific business function that is responsible for transformation Business = Must interact with all functions to achieve goals</p> Signup and view all the answers

Match the business functions with their operational focus:

<p>Marketing = Focuses on customer needs and market demands Finance = Focuses on capital investments and financial reporting Human Resources = Focuses on worker skills and employee needs Operations Management = Focuses on the production and delivery of goods/services</p> Signup and view all the answers

Match the general OM topics with their description:

<p>Flexibility = The ability of OM to adapt to change. Time-based competition = Using speed as a way to capture market shares. Global marketplace = Interacting with the entire world in OM. Environmental issues = Focusing on sustainability in OM.</p> Signup and view all the answers

Match the following concepts with their descriptions in the context of Operations Management:

<p>Value Added = The net increase between output product value and input material value Efficiency = Performing activities well for the least possible cost Strategic Decisions = Set the direction for the entire company, broad in scope and long-term Tactical Decisions = Focus on specific day-to-day issues like resource needs and schedules</p> Signup and view all the answers

Match the following characteristics with either service or manufacturing organizations:

<p>Intangible product = Service organization Tangible product = Manufacturing organization High customer contact = Service organization Low customer contact = Manufacturing organization</p> Signup and view all the answers

Match the historical figures with their contributions in Operations Management:

<p>James Watt = Steam engine Adam Smith = Division of labor Eli Whitney = Interchangeable parts Frederick W. Taylor = Principles of scientific management</p> Signup and view all the answers

Match the following concepts to their primary focus in Operations Management.

<p>Capacity = Maximum output rate Layout = Physical arrangement of resources Scheduling = Timing of resource use Quality = Degree of excellence</p> Signup and view all the answers

Match the following organization types with their service/manufacturing characteristics

<p>Service Organization = Simultaneous production and consumption, high customer contact Manufacturing Organization = Output can be stored and low customer contact Quasi-Manufacturing Organization = Low customer contact and capital intensive Both = Use technology and must forecast demand</p> Signup and view all the answers

Match the production system with the corresponding product characteristic or process description:

<p>Service = Short response time; labor intensive Manufacturing = Longer response time; capital-intensive</p> Signup and view all the answers

Match the operations management functions to their descriptions

<p>Planning = Determining how resources will be used Coordinating = Ensuring resources are correctly aligned Controlling = Monitoring and adjusting operations Transformation = Process of converting inputs to outputs</p> Signup and view all the answers

Match the given descriptions with the corresponding sector that is growing in recent years:

<p>Growing to 50-80% of non-farm jobs = Service sector Demands for higher quality = Service sector Time based competition = Service sector Work force diversity = Service sector</p> Signup and view all the answers

Match the type of decision with its scope in Operations Management:

<p>Strategic decisions = Set the direction for the entire company Tactical decisions = Day-to-day and specific in nature Tactical Decisions = Focus on resource needs, schedules, and quantities</p> Signup and view all the answers

Match the historical eras with the events or concepts that emerged during that time:

<p>Industrial Revolution = Longer response time; capital-intensive</p> Signup and view all the answers

Flashcards

Operations Management

The management of the processes that transform inputs into outputs, focusing on efficiency, effectiveness, and value creation.

Transformation Process

The process of converting resources (inputs) into goods or services (outputs) that meet customer needs.

Operations Management Functions

The activities involved in planning, organizing, directing, and controlling the resources used to produce goods and services.

Operations Efficiency

The goal of maximizing the value created from resources used in the transformation process.

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Operations Effectiveness

The ability to consistently meet customer expectations and requirements.

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Globalization in Operations Management

Refers to the growing interconnectedness of businesses and economies worldwide, driven by factors like trade agreements (WTO, EU), and technological advancements that facilitate global trade and communication.

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Internet Revolution in OM

Marked by the emergence of the internet, World Wide Web (WWW), and enterprise resource planning (ERP) systems, which transformed how businesses manage their operations, information flow, and supply chains.

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Lean Systems

A set of principles and practices aimed at minimizing waste and maximizing efficiency in all aspects of operations. It emphasizes continuous improvement, customer value, and waste reduction.

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Enterprise Resource Planning (ERP)

Software systems designed to integrate and manage various business processes, including financial, human resources, and supply chain management, providing a comprehensive view of operations.

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Operations Management (OM) in Practice

A multi-faceted and crucial field within organizations, encompassing various roles such as V.P. Operations, Director of Supply Chains, Manufacturing Manager, Plant Manager, and Quality Specialists, all focused on managing the transformation process.

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Why is OM important for other departments?

All departments within a company rely on information from Operations Management (OM) to perform their tasks efficiently.

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What is the role of Operations Management (OM)?

Operations Management (OM) is responsible for transforming inputs, such as resources and materials, into outputs, which are the company's products or services.

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How do different business functions work together?

Organizations rely on the interaction between operations, marketing, and finance to achieve their goals. Each department's success depends on the others.

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How does OM affect Marketing?

Marketing needs to understand what operations can produce to effectively meet customer needs.

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How does OM affect Finance?

Finance needs to understand operational concepts and needs to accurately assess the need for capital investments.

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What is the role of information systems in business operations?

Information systems are essential for sharing information between departments, enabling everyone to work together effectively.

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Why is HR important in OM?

Human resources must understand the specific job requirements and skills needed for the workforce in operations.

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How does OM affect Accounting?

Accounting needs to consider inventory management, capacity information, and labor standards to ensure accurate financial reporting.

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Scientific Management

A management approach that focuses on improving efficiency and productivity by analyzing and optimizing individual tasks.

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Management Activity Scheduling Chart

A tool used to plan and track work activities, highlighting the relationship between tasks and deadlines.

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Moving Assembly Line

A production method that involves moving a product through a series of workstations, with each station focused on a specific task.

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Hawthorne Studies

Studies conducted in the 1930s that explored the impact of workplace environment and social factors on employee productivity.

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Motivation Theories

A set of theories focused on understanding and motivating individuals in workplaces, including Maslow's Hierarchy of Needs and Herzberg's Two-Factor Theory.

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Linear Programming

A mathematical technique used to optimize resource allocation and decision-making, often applied to production and logistics.

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Just-in-Time (JIT)

A management approach that emphasizes streamlining processes, reducing waste, and minimizing inventory levels by producing goods only when needed.

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Total Quality Management (TQM)

A comprehensive management approach that aims to achieve high levels of quality in all aspects of a business, focusing on customer satisfaction and continuous improvement.

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What is Operations Management?

The business function responsible for planning, coordinating, and controlling resources to produce products and services. This includes managing the transformation process from inputs to outputs.

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What is value added?

Activities that add value by increasing the product's worth at each stage of production. For example, raw materials become more valuable as they undergo manufacturing processes

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What is operational efficiency?

Performing activities efficiently means doing them well with the least possible cost. It's about maximizing output with minimal resources.

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What is a key characteristic of service operations?

The production and consumption happen concurrently, meaning the service is delivered and experienced simultaneously. For example, a haircut.

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What is a key characteristic of service operations?

Outputs from service operations are often unique and may vary from customer to customer. For example, a custom tailored suit.

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What is a key characteristic of service operations?

Services are intangible, meaning they cannot be physically touched. For example, a financial consultation.

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What is a key characteristic of manufacturing operations?

Manufacturing outputs can be stored and used later, unlike services which are often consumed immediately.

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What is a key characteristic of manufacturing operations?

Outputs in manufacturing are usually similar and standardized, unlike services which can be more varied.

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What is a key characteristic of manufacturing operations?

Manufacturing outputs are typically tangible and can be physically touched and measured. For example, a computer.

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What is the difference between strategic and tactical decisions in OM?

Strategic decisions set the overall direction for a company and have long-term impact. Tactical decisions deal with specific day-to-day issues. Both types need to align.

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Study Notes

Introduction to Operations Management

  • Operations Management (OM) is a business function responsible for planning, coordinating, and controlling resources to produce goods and services for a company.
  • OM is a core function within any organization, whether service or manufacturing, profit or not-for-profit.
  • It's a management function.
  • OM involves decisions that span across a wide range, from strategic to tactical.
  • Strategic decisions set the direction for the whole company, and are long-term in nature. Tactical decisions focus on daily issues like resource needs, schedules, and product quantities.
  • OM decisions must align with the company's strategic goals.

Learning Objectives

  • Define and explain OM.
  • Explain the role of OM in business.
  • Describe the decisions that operations managers make.
  • Describe the differences between service and manufacturing operations.
  • Identify major historical developments in OM.
  • Identify current trends in OM.
  • Describe the flow of information between OM and other business functions.

Typical Organizational Chart

  • A typical organizational chart shows the President/CEO at the top, followed by the VPs of Marketing, Operations, and Finance.
  • Marketing manages customer demands and generates sales for goods and services.
  • Operations manages people, equipment, technology, materials, and information to produce goods and/or services.
  • Finance manages the cash flow, current assets, and capital investments.

OM's Transformation Process

  • OM transforms inputs (human resources, facilities, processes, technologies, materials) into outputs (goods and services).
  • Customer feedback plays a key role in this process, guiding the transformation.

OM's Transformation Role

  • OM adds value at each stage of production by increasing product value by the difference between the output value of the product and the input material value.
  • OM provides an efficient transformation process; efficiency is about performing activities with the lowest possible cost.

Manufacturers vs. Service Organizations

  • Services: Simultaneous production and consumption, heterogeneous output, intangible products, perishable, high customer contact, short response time, and labor intensive.
  • Manufacturers: Output is storable, homogeneous output, tangible products, non-perishable, low customer contact, long response time, and capital intensive.

Similarities for Service/Manufacturers

  • Both use technology.
  • Both face issues with quality, productivity, and response time.
  • Both need to forecast demand.
  • Both may have capacity, layout, and location issues.
  • Both require customers, suppliers, scheduling, and staffing considerations.

Service vs. Manufacturing (Continued)

  • Manufacturing can involve services.
  • Some organizations blend service and manufacturing.
  • Quasi-manufacturing (QM) organizations' characteristics often include low customer contact and capital intensity.

Growth of the Service Sector

  • The service sector is growing, employing a larger percentage of non-farm jobs globally.
  • Factors driving this growth are increasing demand for quality, technological shifts, time-based competition, and workforce diversity.

Historical Events in OM

  • Industrial Revolution: Steam engine, division of labor, interchangeable parts.
  • Scientific Management: Time and motion studies, activity scheduling charts, moving assembly line.
  • Human Relations: Hawthorne studies, motivation theories, linear programming and digital computers, operations research.
  • Quality Revolution: Just-in-time (JIT), Total Quality Management (TQM), business process reengineering.
  • Globalization: WTO, EU, other trade agreements
  • Internet Revolution: Internet, WWW, ERP, supply chain management, e-commerce

Today's OM Environment

  • Customers desire higher quality, faster delivery, and lower costs.
  • Companies use lean concepts for efficient operations.
  • ERP and CRM systems are used to manage information.
  • Cross-functional decision-making is increasing.

OM in Practice

  • OM is a diverse organizational function that manages the transformation process.
  • Different titles (e.g., VP of operations, director of supply chains, manufacturing manager, plant manager, quality specialist) exist within the OM function.
  • All business functions depend on information from OM to conduct their tasks effectively.

Business Information Flow

  • A diagram shows the flow of information between marketing, IS, operations (including engineering), finance, accounting, and human resources.
  • Key inputs and outputs are highlighted.

OM Across the Organization

  • Operations, marketing, and finance support most businesses, and their interaction is necessary to meet organizational goals.
  • Marketing needs a solid understanding of operations capabilities to fulfill customer needs.
  • Finance needs understanding of operations concepts before determining capital investment.
  • Information systems enable communication throughout the organization.
  • Human resources need a good understanding of job requirements and employee skills.

Chapter Highlights

  • What is the business function of OM?
  • What is the role of OM?
  • What is the scope of OM decisions (strategic and tactical)?
  • How are organizations categorized (manufacturing vs. service)?
  • Key historical events impacting OM.
  • Current trends and challenges in OM.

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