Operations Management Framework Quiz

Introduction to Operations and Operations Management

• Operations is the execution of a function within an organization.
• Operations are one of three core organizational functions.
• Marketing is the outward-facing aspect, often driving growth but not always profitability.
• Operations are the "rubber meets the road" aspect, ensuring promises are kept.

Modeling Considerations

• Modeling is a powerful tool for understanding operations.
• The input-transformation process-output (ITPO) model is a common framework used in operations.
• Simple models like a paper airplane showcase the principle of modeling: trial, adjustment, and optimization.

Defining Operations Management

• Operations management is the activity of managing resources for producing and delivering products and services.
• Core functions include production and delivery of a product or service.
• Support functions assist with finance, accounting, etc. 

Products vs. Services

• Products are tangible; services are intangible.
• Customer contact is a key differentiator
• Both products and services can be a blend.

Supply Networks

• Operations processes form a network, interconnected for analysis at the business, organizational, and individual process levels.
• The concept of these levels interacting can allow for opportunity in operational management.

Characteristics of Operations Processes

• The Four Vs - volume, variety, variation in demand, and visibility of the process to the customer are important considerations
• Volume and variety directly affect output
• Variation in demand refers to fluctuations in consumer needs
• Visibility of the process is viewed from the customer’s perspective, and it can be a key indicator of business quality and efficiency.

Responsibilities of Operations Management and Managers

• Aligning with strategic objectives
• Defining operational strategies
• Designing and controlling processes
• Establishing performance criteria for improvement
• Adapting to the evolving global context

Employment, Ethics, Sustainability, and IT

• Employment now has more emphasis on actively integrating and developing human resources.
• Ethical considerations play a more significant role in corporate social responsibility today
• Sustainability and environmental awareness are critical considerations for businesses
• Information technology, and particularly artificial intelligence (AI), is transforming operational processes.

Design of the Operation Process-Layout and Flow

• Operational processes have specific types, e.g., fixed position, functional, product, and cell layouts.
• Layout impacts customer experience, especially noticeable in front-room operations.
• Process design objectives include quality, speed, dependability, flexibility, and cost.
• Balancing these objectives is critical to efficient outcomes.
• Long-thin and short-fat configurations are two common approaches for layout.

Process Types

• Project processes are characterized by high variety and low volume.
• Jobbing processes involve slightly lower variety and some repetitiveness than project processes.
• Batch processes involve moderate volume with some variability in outputs.
• Mass (or line) processes are high-volume and low-variety, with standardized outputs.
• Continuous processes are for situations requiring a seamless, non-stop flow of outputs, e.g., chemical manufacturing.
• Professional services have high variety and low volume, requiring high-skill employees interacting with customers.
• Service shops involve moderate volume and high variety.
• Service factories are high-volume and low-variety, standardizing service.
• Understanding process types assists managers in designing efficient layouts with minimal waste.

Capacity Management

• Capacity is the maximum level of value-added activity an operation, process, or facility can execute.
• Capacity planning is the process of matching productive capacity to expected demand.
• Demand forecasts, technology changes and fluctuations can create challenges needing strategic responses.
• Capacity must be in alignment with demand, using strategic management to create a balance between the two

Measuring Capacity

• Capacity is measured using theoretical, design, and actual capacity.
• Effective capacity management involves balancing capacity and costs.
• Evaluating capacity metrics is crucial for operations managers to ensure that processes and resources are being utilized effectively.
• Capacity management should consider internal constraints, and external market conditions

Capacity Planning

• Forecasting is vital for capacity planning; accurate predictions help make efficient adjustments to resource allocation, and supply.
• Capacity planning and capacity control are critical to an operation’s success in many contexts.
• Understanding appropriate strategies for balancing capacity and demand is crucial

Capacity Management Strategies

• Level capacity involves keeping operations consistent, disregarding demand fluctuations. This strategy is well-suited for non-perishable goods or predictable environments.
• Chase capacity optimizes capacity in real-time. The capacity changes based on current demand and customer needs.
• Demand management focuses on influencing customer behavior to match capacity availability. This strategy is better suited for high variability in demand and fluctuating trends.
• These strategies have various benefits and drawdowns, based on their context implementation, making them adaptable to many contexts.

Just-in-Time (JIT)

• JIT is a waste minimizing philosophy in operations, focusing on minimizing unnecessary inventory levels.
• JIT systems require exceptional coordination within a supply chain, including suppliers for seamless operations.
• Implementing JIT in service contexts may not always be a simple task, involving complex factors that need consideration to prevent disruptions.

Waste Types

• Overproduction is producing more than is needed.
• Waiting time is idle time for people or equipment.
• Transportation is unnecessary movement of materials or information.
• Over-processing is performing extra tasks without adding value.
• Excess inventory is holding more stock than necessary.
• Motion is unnecessary movement of people or equipment.
• Defects are mistakes that necessitate rework or discarded outputs
• recognizing these types of waste is crucial in adapting operations with fewer inefficiencies.

Theory of Constraints (TOC)

• TOC focuses on identifying and addressing bottlenecks that limit overall throughput.
• The Drum-Buffer-Rope (DBR) approach synchronizes production flow by focusing on the constraint which will dictate output rate.
• TOC emphasizes managing bottlenecks rather than removing all sources of waste.

Quality and Quality Management

• Quality encompasses the degree to which a product or service meets expectations for design or performance.
• The manufacturing-based view focuses on conformance to specifications.
• The user-based view focuses on perceived fitness for use.
• The value-based view focuses on balancing cost and value.
• The transcendent approach views quality as inherent excellence.
• Understanding the concept of Quality within service operations demands consideration of customer expectations.
• Measuring quality is not as simple in service and requires a holistic approach using techniques like the QCI model.

Total Quality Management (TQM)

• TQM is an umbrella term that emphasizes the importance of every member of an organization to influence and improve quality, aligning with a customer-centric philosophy.
• TQM tools and techniques are widely used in both manufacturing and service industries.
• TQM emphasizes continuous improvement (Kaizen) to improve operational efficiency repeatedly.

Operations Performance Evaluation and Improvement

• Performance evaluation encompasses operational objectives such as quality, speed, and dependability.
• The balanced scorecard provides a comprehensive framework that combines individual metrics for evaluating performance.
• Activity-based costing (ABC) systems allocate costs more accurately to achieve optimization results
• Historical models for evaluating performance have been overtaken by modern techniques such as the balanced scorecard and ABC accounting approach to assess profitability.