Total Quality Management Quiz
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Questions and Answers

Which of the following is NOT a core principle of TQM?

  • Continuous process improvement
  • Meeting customer needs and expectations
  • Maximizing profit regardless of customer satisfaction (correct)
  • Eliminating waste and creating value

What type of improvement focuses on small, ongoing adjustments?

  • Continuous Improvement (correct)
  • Six Sigma
  • Business Process Reengineering
  • Radical improvement

According to the Sandcone theory, which of the following should be prioritized in improvement efforts?

  • Efficiency
  • Quality (correct)
  • Cost reduction
  • Delivery speed

Which of the following is a technique used for visualizing relationships between variables?

<p>Scatter diagrams (C)</p> Signup and view all the answers

What is the name for the phenomenon where companies must continuously improve to maintain their market position?

<p>The Red Queen Effect (C)</p> Signup and view all the answers

What type of learning involves challenging fundamental beliefs to drive deeper improvement?

<p>Double-loop learning (D)</p> Signup and view all the answers

Which of the following is NOT a key feature of effective operations improvement?

<p>Minimizing resource utilization (A)</p> Signup and view all the answers

Which of the following improvement approaches emphasizes continuous improvement and customer satisfaction?

<p>Total Quality Management (D)</p> Signup and view all the answers

What type of error occurs when corrections are made when none are needed?

<p>Type I error (D)</p> Signup and view all the answers

Which of the following is a consideration for technologies that directly involve customers?

<p>Customer acceptability (D)</p> Signup and view all the answers

What type of improvement involves major, transformative changes?

<p>Radical improvement (D)</p> Signup and view all the answers

Which of the following is an example of a technique used for identifying root causes?

<p>Cause-and-effect diagrams (D)</p> Signup and view all the answers

Which of the following is NOT a benefit of effective improvement strategies?

<p>Decreased innovation (B)</p> Signup and view all the answers

What is the name for the gap between a customer's specification and the operation's specification?

<p>Gap 1 (A)</p> Signup and view all the answers

What is the core purpose of a Technology Roadmap?

<p>To ensure technology investments align with market needs and operational capabilities (A)</p> Signup and view all the answers

Which of the following improvement techniques uses statistical methods to reduce defects?

<p>Six Sigma (A)</p> Signup and view all the answers

What primarily distinguishes operations from processes?

<p>The volume and variety of outputs produced (C)</p> Signup and view all the answers

Which of the following best describes the role of operations management in an organization?

<p>Coordinating the creation and delivery of services and products (D)</p> Signup and view all the answers

What is a key characteristic of operations in today’s business environment?

<p>They need to adapt to new technology and sustainability practices. (C)</p> Signup and view all the answers

Which components are considered in the input–transformation–output process?

<p>Transforming resources and transformed resources (C)</p> Signup and view all the answers

How is environmental performance increasingly viewed in operations management?

<p>As a vital component of operations management responsibilities (A)</p> Signup and view all the answers

What is the significance of the process hierarchy in operations management?

<p>It shows the connections and relationships within the supply network. (C)</p> Signup and view all the answers

In terms of visibility, which statement is correct regarding operations?

<p>High volume operations usually have low customer visibility. (B)</p> Signup and view all the answers

What defines the input–transformation–output model in operations?

<p>It summarizes the journey of inputs into finished goods or services. (D)</p> Signup and view all the answers

Which of the following is NOT a key activity in risk management?

<p>Maximizing profitability (B)</p> Signup and view all the answers

What type of failure occurs when a supplier provides defective materials?

<p>Supplier failures (D)</p> Signup and view all the answers

What is the primary purpose of 'Fail-safe mechanisms' in preventing failures?

<p>To allow the system to shut down safely in the event of a failure (D)</p> Signup and view all the answers

What is the main difference between preventive and predictive maintenance?

<p>Preventive maintenance is scheduled, while predictive maintenance is based on monitoring and prediction (B)</p> Signup and view all the answers

What does the top-down approach in operations strategy emphasize?

<p>Creating a coherent strategy across various business levels (D)</p> Signup and view all the answers

Which of the following is NOT a typical strategy for mitigating the effects of failure?

<p>Process optimization (B)</p> Signup and view all the answers

Which of the following perspectives focuses on market demands and competitor actions?

<p>Market requirements perspective (A)</p> Signup and view all the answers

What is the primary objective of 'Follow-up actions' in recovering from a failure?

<p>To implement corrective measures to prevent future occurrences (D)</p> Signup and view all the answers

Which of the following statements accurately describes the relationship between risk management and operational resilience?

<p>Risk management is a necessary component of achieving operational resilience (D)</p> Signup and view all the answers

What is a disadvantage of vertical integration?

<p>Greater isolation from market innovation (B)</p> Signup and view all the answers

Which approach to planning emphasizes formalizing future intentions?

<p>Planning (C)</p> Signup and view all the answers

Why is engaging all employees crucial for successful Total Productive Maintenance (TPM)?

<p>To promote a culture of continuous improvement (C)</p> Signup and view all the answers

What does finite loading ensure when assigning tasks?

<p>Work is allocated up to established capacity constraints (A)</p> Signup and view all the answers

What is indicated by a high P:D ratio in operations planning?

<p>Greater complexity in operational processes (A)</p> Signup and view all the answers

Which scheduling method begins tasks as soon as resources are available?

<p>Forward scheduling (A)</p> Signup and view all the answers

What is the main focus of the inside-out perspective in operations strategy?

<p>Analyzing current capabilities and leveraging core competencies (C)</p> Signup and view all the answers

Which type of control system is characterized by responding to internal demand signals?

<p>Pull control (B)</p> Signup and view all the answers

What is a key consideration when deciding to outsource operations?

<p>Performance implications and risk management (C)</p> Signup and view all the answers

Which aspect of capacity management is concerned with service and product demand?

<p>Capacity planning (C)</p> Signup and view all the answers

What distinguishes independent demand from dependent demand?

<p>Independent demand varies due to market or customer behavior (C)</p> Signup and view all the answers

What benefit does reshoring provide to firms?

<p>Enhanced control over quality and supply chains (D)</p> Signup and view all the answers

Which of the following statements about monitoring and control is incorrect?

<p>Push systems rely on internal demand signals for task initiation (A)</p> Signup and view all the answers

What is the primary objective of managing the demand side in logistics?

<p>Understanding customer needs (A)</p> Signup and view all the answers

Which of the following logistics strategies involves external providers?

<p>3PL (Third-Party Logistics) (B), 5PL (Fifth-Party Logistics) (C)</p> Signup and view all the answers

What is the bullwhip effect in supply chains?

<p>A phenomenon where demand changes amplify upstream (D)</p> Signup and view all the answers

Which type of inventory is kept to manage expected fluctuations in supply or demand?

<p>Anticipation inventory (A)</p> Signup and view all the answers

What does the Economic Order Quantity (EOQ) formula help determine?

<p>The optimal order quantity (D)</p> Signup and view all the answers

What is a significant challenge of holding inventory?

<p>It utilizes working capital (A)</p> Signup and view all the answers

Which replenishment approach triggers orders based on continual inventory review?

<p>Reorder level strategy (B)</p> Signup and view all the answers

What does the ABC classification system categorize?

<p>Stock items based on value or significance (D)</p> Signup and view all the answers

Which of the following factors does NOT influence safety stock?

<p>Rate of return on investment (A)</p> Signup and view all the answers

What is one of the objectives of effective process design?

<p>Ensure flexible workflows (C)</p> Signup and view all the answers

What is a key benefit of blockchain technology in supply chains?

<p>Enhances traceability and security of transactions (B)</p> Signup and view all the answers

What type of process is characterized by highly customized outputs?

<p>Project process (A)</p> Signup and view all the answers

What is the main reason for maintaining cycle inventory?

<p>To manage operational capacity (C)</p> Signup and view all the answers

What primary factor influences the volume and variety that affect process design?

<p>Product or service characteristics (D)</p> Signup and view all the answers

Which aspect is primarily focused on by short-term capacity decisions?

<p>Resource management and allocation (A)</p> Signup and view all the answers

What is a key difference between lean and agile supply chains?

<p>Lean supply chains focus on cost, while agile supply chains prioritize speed. (B)</p> Signup and view all the answers

Which method is NOT commonly used in demand management?

<p>Increasing production efficiency (C)</p> Signup and view all the answers

What does Overall Equipment Effectiveness (OEE) measure?

<p>Capacity leakage within operations (C)</p> Signup and view all the answers

In capacity management, how is demand typically estimated?

<p>Mixed methods including qualitative and quantitative (D)</p> Signup and view all the answers

Which strategy is part of managing the supply side in capacity planning?

<p>Adjusting capacity to match demand (A)</p> Signup and view all the answers

What is the primary objective of supply chain management?

<p>Satisfying the end customer’s needs (C)</p> Signup and view all the answers

What is a characteristic of effective supply-side management?

<p>Establishing a base capacity level (A)</p> Signup and view all the answers

Which of the following methods is associated with qualitative forecasting?

<p>Delphi technique (C)</p> Signup and view all the answers

What is a limitation of short-term capacity decisions?

<p>They can lead to over- or underutilization of resources. (B)</p> Signup and view all the answers

Which approach involves adjusting capacity to meet demand fluctuations?

<p>Chase demand plans (A)</p> Signup and view all the answers

What is the purpose of yield management in capacity management?

<p>To adjust demand patterns to align with capacity (A)</p> Signup and view all the answers

What does capacity refer to in an operational context?

<p>Maximum level of value-added activity (D)</p> Signup and view all the answers

Which process type is characterized by high volume and low variety, making it efficient and standardized?

<p>Continuous (C)</p> Signup and view all the answers

Which of these is NOT a key performance aspect of a process?

<p>Customer satisfaction (D)</p> Signup and view all the answers

Which layout type is most suitable for producing a high volume of standardized products?

<p>Line (C)</p> Signup and view all the answers

What layout type focuses on grouping similar processes together?

<p>Functional (A)</p> Signup and view all the answers

Which layout type is typically used for complex projects where the work remains stationary?

<p>Fixed-position (D)</p> Signup and view all the answers

In the context of layout design, what does 'resource flow' refer to?

<p>All of the above (D)</p> Signup and view all the answers

What is the primary aim of process technology?

<p>To enable the production or delivery of products and services (D)</p> Signup and view all the answers

What aspect of new process technology is MOST crucial for operations managers to understand?

<p>How it improves operational performance (B)</p> Signup and view all the answers

According to the Gartner Hype Cycle, which stage follows 'inflated expectations'?

<p>Trough of disillusionment (D)</p> Signup and view all the answers

Which of these is NOT a key dimension for evaluating new process technologies?

<p>Potential for automation (B)</p> Signup and view all the answers

What is a key consideration when implementing new process technology?

<p>All of the above (D)</p> Signup and view all the answers

Which of these is a common financial evaluation tool used for process technology?

<p>All of the above (D)</p> Signup and view all the answers

What is the relationship between throughput time, work-in-progress, and cycle time?

<p>Work-in-progress is the product of throughput time and cycle time (C)</p> Signup and view all the answers

What is the primary focus of resource location analysis in fixed-position layout?

<p>Minimizing the distances traveled by resources (C)</p> Signup and view all the answers

Which layout type is most likely to be used in a fast-food restaurant?

<p>Line (C)</p> Signup and view all the answers

Which of these is NOT a type of process technology?

<p>Marketing campaigns for attracting customers (D)</p> Signup and view all the answers

What are the two main categories of effects of a well-run operation?

<p>Positive and Negative Effects (C)</p> Signup and view all the answers

What is the term used to describe the idea that operations should consider their impact on a wide range of stakeholders?

<p>Corporate Social Responsibility (CSR) (B)</p> Signup and view all the answers

Which of the following is NOT a component of the Triple Bottom Line (TBL)?

<p>Technological Bottom Line (C)</p> Signup and view all the answers

Which of the following is NOT a way that operations can affect economic performance at a strategic level?

<p>Improving product quality (A)</p> Signup and view all the answers

What is the main difference between the 'efficient frontier' concept and repositioning performance on the efficient frontier?

<p>The 'efficient frontier' concept involves overcoming trade-offs, while repositioning performance on the efficient frontier focuses on articulating them. (D)</p> Signup and view all the answers

What is the primary concern of operations when it comes to quality?

<p>Improving customer satisfaction (A)</p> Signup and view all the answers

Which performance objective focuses on the ability to deliver goods and services on time?

<p>Dependability (A)</p> Signup and view all the answers

What is the main benefit of flexibility in operations?

<p>Improved customer satisfaction (A)</p> Signup and view all the answers

What is the core principle behind the balanced scorecard (BSC)?

<p>Using multiple perspectives to assess performance (D)</p> Signup and view all the answers

What is the relationship between operations performance objectives and trade-offs?

<p>Improvements in one performance objective may come at the expense of others. (A)</p> Signup and view all the answers

Which of the following is NOT a perspective included in the balanced scorecard (BSC)?

<p>Competitive perspective (A)</p> Signup and view all the answers

What is the primary goal of operations strategy?

<p>To align operations with organizational goals (A)</p> Signup and view all the answers

Which performance objective is most closely related to internal throughput time?

<p>Speed (C)</p> Signup and view all the answers

How does good performance in other performance objectives contribute to cost performance?

<p>By reducing waste and inefficiency (A)</p> Signup and view all the answers

Which of the following is an example of 'product/service flexibility'?

<p>A company producing a new type of smartphone (A)</p> Signup and view all the answers

Why is operations performance vital in any organization?

<p>It determines the organization's overall success or failure. (A)</p> Signup and view all the answers

Flashcards

Operations Management

Managing resources for creating and delivering services and products.

Importance of Operations Management

Crucial for utilizing resources to meet market demands in all organizations.

Input-Transformation-Output Process

Model depicting operations as transforming inputs into outputs.

Process Hierarchy

Structure of operations forming a network to satisfy customer requirements.

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Operations vs Processes

Distinction based on output volume, variety, demand variation, and visibility.

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Responsibilities of Operations Managers

Tasks categorized as direct, design, deliver, and develop.

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Transforming Resources

Resources that are key to the transformation process, like facilities and staff.

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Transformed Resources

Materials, information, or customers that are being processed.

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Operations Strategy

Decisions and processes to achieve operational goals.

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Top-Down Approach

Strategy development from corporate level down to functions.

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Market Requirements

Demands and needs of customers guiding operations.

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Bottom-Up Approach

Strategy developed from day-to-day operational experiences.

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Inside-Out Perspective

Strategy based on leveraging internal resources and capabilities.

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Vertical Integration

Extent to which supply network activities are done in-house.

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Outsourcing

Shifting activities to external suppliers for efficiency.

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Planning and Control

Aligning supply capacity with customer demand.

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Dependent Demand

Predictable demand based on known factors.

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Independent Demand

Less predictable demand driven by market or customer behavior.

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Loading

Allocation of work to specific work centers.

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Sequencing

Order of task execution in operations.

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Scheduling

Detailed timetable for tasks outlining start and finish.

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Monitoring and Control

Tracking operations and adjusting plans as necessary.

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Capacity Management

Planning and controlling capacity based on demand.

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Operations Performance

The efficiency and effectiveness of an organisation's operations in meeting its goals.

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Corporate Social Responsibility (CSR)

The idea that operations should consider their impact on stakeholders and society.

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Triple Bottom Line (TBL)

A performance framework that includes social, environmental, and economic measures.

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Performance Objectives

Criteria used to assess operations: quality, speed, dependability, flexibility, and cost.

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Quality

The degree to which operations ensure goods/services meet standards and customer satisfaction.

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Speed

The efficiency of delivering goods/services quickly in operations.

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Dependability

The reliability of operations in delivering goods/services on time.

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Flexibility

The ability of operations to adapt to changing demands in production.

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Cost Efficiency

The ability to minimize costs while maintaining quality and output.

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Balanced Scorecard (BSC)

A performance measurement approach incorporating financial and non-financial measures.

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Efficient Frontier

The concept illustrating trade-offs between performance objectives.

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Stakeholders

Anyone with a legitimate interest in an organisation’s operations.

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Operational Failure Risk

The chance of disruptions or failures in operations affecting performance.

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Customer Satisfaction

The degree to which products/services meet or exceed customer expectations.

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Long-term Capacity Strategy

Involves large changes in operations capacity over time, such as significant increases or decreases.

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Short-term Capacity Decisions

Focus on managing resource allocation, scheduling, and daily operational activities.

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Medium-term Capacity Management

Involves managing capacity within established long-term constraints, typically over a medium time frame.

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Demand Forecasting Methods

Organizations use qualitative methods like panels or quantitative methods like time series to predict demand.

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Good Demand Forecasts

Should be accurate, express uncertainty, and be relevant for capacity planning in useful units.

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Capacity Definition

The maximum level of value-added activity an operation can achieve under normal conditions.

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Utilization

The proportion of available capacity that is actually utilized for production or service delivery.

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Efficiency

The effectiveness of using available resources in operations to produce goods or services.

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Overall Equipment Effectiveness (OEE)

A measure assessing the percentage of planned production time that is truly productive.

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Demand Management

Adjusting demand patterns to align with the capacity of operations, like promoting off-peak sales.

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Supply-Side Management

Establishing capacity levels and managing variations in supply amid demand fluctuations.

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Level Capacity Plans

Maintain a consistent capacity level, absorbing mismatches through inventory or workforce adjustments.

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Chase Demand Plans

Adjust capacity according to demand variations, like scheduling more staff when busy.

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Lean vs Agile Supply Chains

Lean focuses on efficiency for predictable products; Agile is responsive to unpredictable demand.

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Sourcing Strategies

Approaches to supplier engagement, including single, multiple, and delegated sourcing techniques.

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Risk Management

The process of identifying, evaluating, and acting on risks to minimize failures and maximize success.

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Types of Failures

Categories of failures including design, facilities, staff, supplier, cyber, customer, and environmental.

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Failure Rates

The frequency of failures occurring in operations over a specific time period.

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Reliability

The probability that a system or process will perform correctly without failure.

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Mitigation Strategies

Plans designed to reduce the adverse effects of failures, like planning and loss reduction.

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Preventive Maintenance

Scheduled maintenance activities to prevent unexpected equipment failures.

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Recovery Steps

Actions taken after a failure to manage, learn, and prevent future occurrences.

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Structured Risk Management

An organized approach to managing risks, enhancing resilience and promoting continuous improvement.

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1PL (First-Party Logistics)

Self-managed logistics where an organization handles its own logistics.

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2PL (Second-Party Logistics)

Asset-based carriers providing logistics services to organizations.

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3PL (Third-Party Logistics)

Outsourced logistics providers managing part of an organization's logistics.

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4PL (Fourth-Party Logistics)

Logistics integrators managing multiple service providers and logistics activities.

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5PL (Fifth-Party Logistics)

Comprehensive e-business logistics solutions that manage logistics entirely online.

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Bullwhip Effect

Phenomenon where small changes in demand amplify through the supply chain.

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Channel Alignment

Standardized planning to coordinate the supply chain network and reduce bullwhip effects.

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Operational Efficiency

Minimizing local errors to prevent disruption in the supply chain.

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Information Sharing

Enhanced communication throughout the supply chain for better coordination.

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Inventory

Stored accumulation of transformed resources within an operation.

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Buffer Inventory

Inventory held to manage unexpected supply or demand interruptions.

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Cycle Inventory

Inventory used to manage production inefficiencies in operations.

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Economic Order Quantity (EOQ)

Formula determining the optimal order quantity for minimizing costs.

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Reorder Level Strategy

A strategy to trigger orders based on continual inventory review.

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ABC Classification

A method categorizing inventory based on value or significance using the Pareto principle.

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Jobbing Processes

Small batch processes with high variety.

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Batch Processes

Processes producing larger batches with some repetition.

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Mass Processes

High volume production with low variety of goods.

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Continuous Processes

Extremely high volume production with low variety, running continuously.

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Professional Services

Services that are highly customized and client-specific.

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Service Shops

Services offering moderate levels of customization.

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Mass Services

Standardized services provided in high volume.

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Throughput Time

Total time taken for a product to pass through the process.

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Work-in-Progress (WIP)

The amount of work being processed at any time.

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Cycle Time

The time between completions of successive units.

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Little’s Law

The formula relating throughput time, WIP, and cycle time: Throughput time = WIP × Cycle time.

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Layout Types

Different configurations of facilities impacting efficiency: fixed-position, functional, cell, line.

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Fixed-Position Layout

Configuration where transformed resources are stationary, and staff/equipment move around.

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Functional Layout

Similar processes grouped together in a facility.

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Gartner Hype Cycle

Model illustrating the evolution of technologies through stages of expectations.

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Technology Roadmap (TRM)

Aligns technological developments and investments with future market needs and operational capabilities.

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Adjustment Costs

Costs associated with the adaptation period during the implementation of new technology.

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Radical Improvement

Major, transformative changes that significantly alter operations.

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Continuous Improvement

Small, ongoing adjustments that enhance processes gradually.

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Organisational Ambidexterity

Balancing exploitation of existing capabilities with exploration of new ones.

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Total Quality Management (TQM)

An integrated approach to quality development across the organization for customer satisfaction.

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Lean

Focuses on eliminating waste and creating value maximally.

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Six Sigma

Uses statistical methods to reduce defects and improve quality.

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Evidence-based Problem-solving

Using data to guide decisions in processes.

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Customer Centricity

Focusing on customer needs and designing processes around them.

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Quality Gap Model

Conceptualizes quality as the gap between customer expectations and perceptions.

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Total Quality Steps

The six steps leading to conformance with quality specifications.

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Types of Learning

Single-loop learning makes adjustments, while double-loop learning questions underlying assumptions.

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Improvement Cycles

Iterative processes for refining and enhancing operations.

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Process Variation Reduction

Enhancing consistency by reducing discrepancies in processes.

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Study Notes

Operations Management: Key Concepts

  • Operations management is the management of resources used to create and deliver services and products. It's crucial for all businesses, even if not explicitly labeled as "operations management."
  • Operations management focuses on managing processes, which all have internal customers and suppliers. All management functions involve processes, so operations management applies to all managers.
  • Operations use resources to create outputs that meet market demands. This is fundamental to any business.
  • Today's dynamic business environment necessitates new thinking in operations management, especially concerning technology, supply networks, and sustainability.
  • All operations follow an input-transformation-output process. Inputs include facilities, staff, materials, information, and customers. Outputs are often a combination of services and products.
  • Operations differ based on output volume, variety, demand variation, and visibility. Low volume/variety usually means lower costs.

Operations Performance

  • Operations profoundly affect a business's success or failure; they represent a large portion of a company's assets. A well-managed operation focuses on improvement and builds unique capabilities, understanding that processes are the foundation of any operation.
  • Poor operations lead to easily observable customer issues (and costly organizational problems), complacency, and missed improvement opportunities.

Performance Judgment

  • Societal-level performance considers a broad range of stakeholders – people/groups with a legitimate interest in the operation’s activities (corporate social responsibility, CSR).
  • Triple Bottom Line (TBL) measures performance in three areas: social, environmental, and economic.
  • Social: Balancing societal impacts with internal financial impacts.
  • Environmental: Recognizing impact on the natural environment.
  • Economic: Traditional financial metrics of resource use effectiveness.
  • Strategic-level assessments evaluate decision impact on the business. Operations significantly impact business economics by:
    • Cost reduction.
    • Service-based customer satisfaction.
    • Risk reduction.
    • Reduced investment needs.
    • Foundation for future innovation.
  • Operational-level judgements measure quality, speed, dependability, flexibility, and cost.
    • Quality (doing things right): Important for customer satisfaction externally, cost reduction and dependability internally.
    • Speed (doing things fast): Crucial for customer service, reduces inventory by shortening internal throughput time, and reduces risk by delaying resource commitment.
    • Dependability (doing things on time): Fundamental to customer service, crucial for reliability and avoiding cost associated with problems or delays.
    • Flexibility (changing what they do): Offers new products, a range of services, changeable volume & time to produce. Improves speed, lessens changeover time, and maintains dependability.
    • Cost (doing things cheaply): Impacts pricing (higher volume or greater profitability) internally, influenced by performance in other operational objectives.
  • Performance measurement (e.g., balanced scorecard): Needs multiple measures to reflect performance objectives. The balanced scorecard considers financial, internal process, customer, and learning/growth perspectives.

Processes and Operations

  • Operations are part of larger supply networks, satisfying end-customer needs through individual operations' contributions. Operations consist of process networks forming internal customer-supplier relationships.
  • Operations and processes differ in volume, variety, demand variability, and visibility. High volume, low variety, low variation, and low customer visibility usually result in lower costs.

Strategy and Operations Strategy

  • Strategy defines how an organization is positioned in the marketplace to achieve long-term goals. Operations strategy details the operational role, objectives, and activities of operations, and how that contributes to organizational success (e.g., Hayes and Wheelwright model progression).
  • Operations strategy includes (1) specific decisions and (2) methods used to create strategy. Four perspectives shape ops strategy:
    • Top-down (alignment with business strategy).
    • Outside-in (market requirements).
    • Bottom-up (operational experience).
    • Inside-out (operations resources). Stakeholder involvement is crucial.
  • Top-down (alignment): Strategic development across corporate, business, and functional levels; coherence and alignment with other functions are crucial. Concepts like business and operating models clarify the top-down perspective.
  • Outside-in (market requirements): Prioritizes satisfying market demands; operations' actions/objectives mirror customer needs. Market conditions shift with product differentiation and life stages.
  • Bottom-up (operational experience): Emphasises strategy arising from day-to-day operational experience; aligns operations with higher-level strategies and leverages experience for informed strategy-building.
  • Inside-out (operations resources): Focuses on leveraging core operational competencies and understanding current capabilities & constraints to bolster strategic resources. Capabilities must be valuable, rare, costly to imitate, and organized to maintain competitive advantage.

Vertical Integration, Outsourcing, & Supply Chains

  • Vertical integration dictates how much of the supply network is performed in-house. Advantages involve securing supply access, reduced costs. Disadvantages are reduced flexibility and potential insulation from innovation.
  • Outsourcing shifts activities to external suppliers. Key considerations involve performance impact, competitive advantage, and risk. Offshoring sources from overseas; reshoring brings back to domestic production.
  • Supply Chain Management: Manages relationships and flows between operations. It's applied internally (departments) & externally (across operations). Performance multiplication happens when problems in one part of the chain impact others drastically.
  • Lean supply chains are efficient, good for stable products. Agile supply chains are responsive, good for unpredictable products.
    • Sourcing strategies include multiple sourcing, single sourcing, delegated sourcing, and parallel sourcing.

Planning and Control

  • Planning & control create a balance between operations' capacity and customer demand. It ensures ongoing operation flow and stability. Planning is formalizing future intention, control is adjusting to changes.
  • Planning tends to dominate long-term decisions (aggregate), control focusses on near-term interventions (unexpected changes). Uncertainty in demand impacts this balance; high uncertainty underscores control.
    • Demand is "independent" (unpredictable) or "dependent" (predictable).
  • Loading: Allocating work to specific work centers (finite loading respects capacity, infinite loading doesn't).
  • Sequencing: Order of tasks. Rules include physical constraints, customer priority, and due dates.
  • Scheduling: Detailed timetable for activities (forward scheduling starts as soon as possible, backward scheduling starts as late as possible to meet deadlines).
  • Monitoring & Control: Tracking operations, adjusting plans as needed. Pull control (demand-driven) is different from push control (centralized decisions).

Capacity Management

  • Capacity management understands demand and plans/controls capacity of operations across different time horizons (long-term strategies, short-term capacity decisions). Feedback informs long-term plans. -Long term capacity strategy involves introducing or removing major capacity additions (see Chapter 5).
    • Short term decisions are about allocation, sequencing, and resource management (see Chapter 10).
    • Medium range decisions come between the two extremes.
  • Effective capacity management includes forecasting, measuring capacity, managing demand, and supply, understanding capacity decision impact.
  • Demand measured using qualitative (panels, Delphi, scenarios) and quantitative (time series, causal) methods.
  • Capacity measurement assesses using input resource availability or output created. Metrics include Utilization, Efficiency, and OEE.
  • Demand management aims to align demand with capacity (e.g., price differentials, scheduling promotions).
  • Supply-side management aims to build base capacity and accommodate fluctuations. Capacity planning includes: Level capacity plans (consistent with inventory/over/under utilization) and Chase demand plans (adjusts capacity to match).
  • Capacity management decisions balance predictable/unpredictable demand, use queuing models, take a longitudinal view (long and short-term forecasting).

Inventory Management

  • Inventory (stock) is the stored transformed resources. Inventory control typically concerns transformed resources. Types include materials, information, and customers. Inventory is needed because supply and demand timing don't always match.
  • Types of inventory: Buffer (unexpected disruptions), Cycle (operations' varied production), Decoupling (different stages), Anticipation (anticipated fluctuations), Pipeline (transport delays).
  • Inventory challenges include capital ties, damage/loss/obsolescence risk, space/insurance/management costs.
  • Key decisions: How much (economic order quantity [EOQ], newsvendor problem), when (reorder levels, fixed interval strategies).
  • Inventory control uses techniques like ABC classification and computer-based systems.

Process Design & Technology

  • Process design (product-service design) shapes the physical form, purpose, and production methods of services and products.
  • Objectives of process designs include quality, speed, dependability, flexibility and cost (with environmental considerations, e.g., material usage, energy, waste).
  • Process types (mfg & service) depend highly on volume/variety tradeoffs. - Manufacturing (Project, Jobbing, Batch, Mass, Continuous). - Services (Professional, Service Shops, Mass).
  • Process mapping visualizes and analyzes processes, comparing options, and enabling improvements based on performance goals. Key performance aspects (Throughput time, WIP, Cycle time) relate via Little's Law – Throughput time = WIP × Cycle time. Variability significantly impacts process performance.
  • Process technology: machines, equipment, and devices enabling operations. Must consider what it does, how, its advantages/constraints, and the Gartner Hype Cycle.

Facilities Layout

  • Facility layout (position/design) affects resource flow, staff efficiency, and customer experience (particularly in visible operations).
  • Basic layout types: Fixed-position, functional, cell, and line. Choice depends on process type, volume—variety, and objectives.
  • Design involves analyzing factors (resource flow, staff/customer interaction) using techniques for each layout style.

Improvement

  • Improvement is a core responsibility for sustainable competitive advantage. Improvement types involve radical (major change) and continuous (incremental change) methodologies. Key features include cyclical improvement processes, process understanding, end-to-end process view, evidence-based solutions, customer focus, systems/procedures, reduced process variation, efficient synchronised flows, employee education, and the pursuit of excellence.
  • Approaches include TQM (continuous improvement and customer satisfaction), Lean (waste elimination), BPR (radical process redesign), and Six Sigma (statistical quality improvement).
  • Improvement techniques include scatter diagrams, flow charts, cause-effect diagrams, Pareto analysis, and why-why analysis.
  • Effective management involves organization, information gathering, allocation, resources, strategic alignment, benchmarking, a receptive organizational culture and learning types (single-loop & double-loop learning).

Quality

  • Quality is consistent conformance to customer expectations, impacting profitability and competitiveness. The quality gap model (customer expectation – perception) depends on specifications, service/product concept, specified vs. delivered quality, and communication to the customer. Quality of service often involves speed, dependability, and flexibility; quality of experience is a user-centric view. Sandcone theory suggests that quality improvement should be prioritized, with other elements following.
  • Steps to achieve quality conformance: defining quality characteristics, measuring, setting standards, monitoring, finding flaws, and improving continuously.

Risk Management

  • Risk management aims to prevent issues & mitigate consequences. Key activities are understanding, evaluating, and acting on risks to enhance success, reduce failure.
    • Failures include design, facilities, staff, supplier, cyber, customer, and environmental disruptions.
    • Failure measurement includes rates, reliability, and availability.
  • Failure prevention strategies include designing out failures, redundancy, fail-safe mechanisms, and proactive maintenance (breakdown, preventive, predictive, TPM).
  • Mitigation aims to isolate failures and reduce their impact (planning, economic actions, containment).
  • Recovery is about understanding causes, managing communication, implementing corrective actions, learning to prevent future issues

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Test your knowledge of Total Quality Management (TQM) principles and techniques. This quiz covers various aspects such as continuous improvement, operations improvement features, and the Sandcone theory. Challenge yourself with questions related to TQM methodologies and their applications in real-world scenarios.

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