Operations Management: Lifecycle Concepts

• This is an operations management study guide

Technology Adoption Cycle

• Describes how new technology is adopted by different groups over time.
• The adopter categories are innovators, early adopters, early majority, late majority, laggards.
• Key factors influencing adoption are perceived usefulness, ease of use, and social influence.

Product Life Cycle

• The stages are introduction, growth, maturity, and decline.
• Strategic focus shifts from market penetration (early stages) to cost-cutting (maturity and decline).
• Operations implications include capacity planning, inventory management, and process efficiency.

Boston Consulting Group (BCG) Matrix

• Classifies products into stars (high growth, high market share), cash cows (low growth, high market share), question marks (high growth, low market share), and dogs (low growth, low market share).
• Aids in resource allocation and strategic decision-making.

Cycle of Satisfaction

• Ensures customer satisfaction through consistent quality, performance, and service.
• Uses customer feedback loops and continuous improvement.

Market Research Techniques

• Primary research includes surveys, interviews, focus groups, and observations.
• Secondary research includes industry reports, market trends, and competitor analysis.
• Data-driven decision-making enhances product development and positioning.

New Product Development (NPD) Process Including Stage Gates

• Stages include idea generation, concept development, business analysis, product development, market testing, and commercialization.
• Stage Gates evaluate feasibility before proceeding.

Break-even Analysis

• Determines the point at which total revenue equals total costs.
• Break-even Point = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)
• Helpful in pricing strategies and financial planning.

Net Present Value (NPV)

• Measures profitability of investments considering time value of money.
• NPV = ∑Ct(1+r)t\sum \frac{C_t}{(1 + r)^t} where CtC_t is cash flow in period tt and rr is discount rate.

Target Costing

• A pricing strategy where market price determines the cost structure.
• Target Cost = Market Price - Desired Profit.
• Encourages cost-efficient production and competitive pricing.

Process and Process Management

• A process is a sequence of activities transforming inputs into outputs.
• Process management involves optimizing workflows to enhance efficiency and quality.
• Types include manufacturing, service, and hybrid.

Product-Process Matrix

• Classifies processes based on volume and variety.
• Includes project (high customization, low volume), job shop (small batches, high variety), batch (moderate volume and variety), repetitive (standardized production), and continuous (high volume, low variety).

Capacity Planning

• Determines the production capability needed to meet demand.
• Strategies include lead (ahead of demand), lag (reactive), and match (gradual adjustment).

Theory of Constraints (TOC)

• Identifies and mitigates bottlenecks to improve efficiency.
• The five steps are identify constraint, exploit constraint, subordinate other processes, elevate constraint, and repeat cycle.

Process Mapping

• A visual representation of workflow to identify inefficiencies.
• Common types include flowcharts, swimlane diagrams, and value stream maps.

Bottleneck Analysis

• Identifies process constraints to optimize production flow.
• Involves cycle time calculation and throughput analysis.

Lean & Lean Management

• Philosophy focused on eliminating waste and maximizing value.
• Core principles include value, value stream, flow, pull, and perfection.

Competitive Advantages of Lean

• Reduces costs, improves quality, enhances customer satisfaction.
• Leads to faster production cycles and operational flexibility.

Push vs. Pull System

• Push systems base production on forecasted demand.
• Pull systems drive production by actual customer demand.
• Lean favors pull systems to minimize waste.

Key Japanese Terms

• Kaizen refers to continuous improvement.
• Kanban is visual inventory management.
• Muda means waste elimination.
• Heijunka is production leveling.
• Jidoka is automation with human intelligence.

Building Blocks of Lean

• Inventory Management: Reducing excess stock.
• Continuous Improvement: Incremental process optimization.
• SMED (Single Minute Exchange of Dies): Reducing setup times.
• TQM (Total Quality Management): Focused on quality at all levels.
• Cycle Time Reduction: Enhancing speed of production.
• Parallel Processing: Performing tasks simultaneously.
• Multi-function Workers: Employees trained in multiple skills.
• Work Environment Optimization: 5S implementation.
• Root Cause Analysis: Identifying and addressing fundamental issues.

Value Stream Mapping

• Analyzes material and information flow to enhance efficiency.
• Identifies non-value-added activities for elimination.

5S & 8 Wastes

• 5S: Sort, Set in Order, Shine, Standardize, Sustain.
• 8 Wastes: Defects, Overproduction, Waiting, Non-utilized Talent, Transportation, Inventory, Motion, Extra Processing.