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Chapters 1, 2, 4, 6, 7.docx

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Global Management Studies
GMS 401
Amir Gandomi

Chapter One: Introduction to Operations Management Introduction Operations Management: the management of processes or systems that create goods and/or provide services Process: a series of linked actions, changes, or functions bringing about a result Efficiency: operating at a minimum cost and time; doing things right Effectiveness: achieving quality and responsiveness; doing the right things Goods vs Services: Goods refer to the tangible outputs of the production process. Services are intangible offerings, which generally imply an act Functions Within an Organization Operations: activities directly related to producing goods and providing services Value added: the difference between the cost of inputs and the value of outputs Finance: to provide funds and the economic analysis of investment proposals Marketing: to assess customer wants and needs and communicate them to others Lead time: the time between ordering a good or service and receiving it Other functions include: accounting, MIS, purchasing, personnel/human resources, manufacturing engineering, maintenance, product design, logistics Differentiating Production of Goods vs Performance of Services Intangibility: services cannot be touched, gripped, handled, looked at, smelled, tasted or heard Perishability: they cannot be stored, saved, returned or resold once they have been used Inseparability: services are produced and consumed at the same time Variability (Inconsistency): Humans provide services, so variability is inevitable The Operations Managers Job - has to coordinate the use of resources through the management activities of planning, organizing, directing, and controlling Operations Managers and Decision Making Model: an abstraction of reality, a simplified representation of something Quantitative approaches: an attempt to obtain optimistic solutions to the mathematical models of managerial problems Trade-offs: adding more to one department and taking away from another to alter production results System: a set of interrelated parts that must work together Pareto phenomenon: a few factors account for a high percentage of results achieved Ethics: worker safety, product safety, the environment Craft Production: highly skilled workers use simple, flexible tools to produce small quantities of customized goods Division of Labor: breaking up a production process into small tasks so that each worker performs a small portion of the overall job Interchangeable parts: parts of a product made to such precision that they do not have to be custom fitted Mass production: System in which lower skilled workers use specialized machinery to produce high volumes of standardized goods Total Quality Management: involving every employee in a continual effort to improve quality and satisfy the customers Lean Production: system that uses minimal amounts of resources to produce a high volume of high-quality goods with some variety Major Trends - The Internet and e-commerce - Technology - Globalization - Supply chains Chapter Two: Competitiveness, Strategic Planning, and Productivity Competitiveness: the ability and performance of an organization in the marketplace compared to other organizations that offer similar goods and services Strategy: long-term plans that determine the direction of an organization takes to become (or remain) competitive Strategic Planning: the managerial process that determines a strategy for the organization Productivity: a measure of how efficiently the resources are being used Competitiveness Key Purchasing Criteria: the major elements influencing a purchase: price, quality, timeliness Price: the amount a customer must pay for the good or service Quality: characteristics of a good or service determined by its design, material, workmanship, performance, and consistency Variety: the choices of models and options available to customers Timeliness: the availability of goods or services when they are needed to the customer Value = quality, timeliness, etc / price Order Qualifiers: purchasing criteria that customers perceive as minimum standards of acceptability to be considered for purchase Order Winners: purchasing criteria that cause the organization to be perceived as better than the competition Competitive Priorities: importance given to operations characteristics: cost, quality, flexibility, delivery Strategic Planning Vision: where the organization desires to be in the long-term future Mission: the fundamental purpose of an organization, concisely describing why it exists and what it does to achieve its vision Values: shared beliefs of the organization’s stakeholders Goals and Objectives: goals provide substance to the overall mission/vision; an objective is a specific goal with numerical values Strategies: plans that determine direction for achieving organizational goals Tactics: medium-term plans sometimes used as components of a strategy Action Plans: A medium- or short-term project to accomplish a specific plan Two commonly used techniques are the SWOT analysis (strengths, weaknesses, opportunities, and threats) and PEST analysis (political, economic, social, and technological analysis) Operations Strategy: approach that is used to guide the operations function Cost: the ability to produce at a low cost Quality: the ability to produce in accordance with specifications defined based on customers’ quality requirements Flexibility: the ability to produce a variety of goods or services in the same facility Delivery: the ability to consistently meet promised due dates by delivering products and services on time or quickly Time-based competition: focuses on reduction of time needed to accomplish tasks Outsourcing: buying a part of a good/service or a segment of production/service process from another company, a supplier Productivity Productivity: a measure of productive use of resources, usually expressed as the ratio of output to input Productivity = output/input Productivity Growth: increase in productivity from previous period to the current period Productivity Growth: current period productivity – previous period productivity / previous period productivity - Productivity measures can be based on a single input, on more than one input, or on all inputs Example: quantity of production / labour cost + materials cost + machine overhead - Productivity measurement is more challenging for service compared to manufacturing - Methods, management, equipment, technology, and labour are the main factors affecting productivity Chapter 4: Product Design Product Design: determining the form and function of the product Product Design Process 1. Idea generation and preliminary assessment 2. Building a Business case: market and competitor allowance (establish product goals: performance, price, quality, launch etc) 3. Development of product and process 4. Testing and validation 5. Launch - Product design involves cross-functional collaborations Product Approval Committee: consists of top management; authorize, review, allocate resources Core Teams: cross functional, plan and lead project, expands as needed Phase Reviews: milestones to review the progress; approve, cancel, revise the project Structured Development Process: the use of project management technique; schedule, execute & control Sources of Ideas for New or Redesigned Products Front line-employees, research and development, competitors’ products, suppliers, marketing employees, customer input Reverse-Engineering: take apart a product, analyzes it, and recreate an improved product that does not infringe on competitors’ patents Research and Development (R&D): lab scientists and engineers involved in creative work on a systematic basis to increase knowledge directed toward product and process innovation Key Issues in Product Design Life Cycle: incubation, growth, maturity, saturation, decline (rate of technological change) Standardization: extent to which there is absence or variety in a part or product Mass-Customization: producing basically standardized goods or services but incorporating some degree of customization Delayed Differentiation: producing, but not quite completing a product until customer preferences are known Modular Design: parts are grouped into modules that are easily replaces or interchanged. The product is composed of a number of modules or components instead of a collection of individual parts Reliability: the ability of a product, part, or system to perform its intended function under normal conditions Failure: situation in which a product, part, or system does not perform as intended Robust Design: design that can function over a broad range of conditions Product Liability: a manufacturer is liable for any injuries or damages caused by a faulty product Design for Environment (DFE): describing techniques used to incorporate environmental concerns Remanufacturing: refurbishing used products by replacing worn-out or defective components Design for Disassembly: design so that used products can easily be taken apart Recycling: recovering materials for future use Concurrent Engineering: bringing engineering design, manufacturing engineers, and staff from marketing, manufacturing, and purchasing together in the early design phase Computer-aided Design (CAD): product design using computer graphics Design for Manufacturing (DFM): takes into account the organization’s manufacturing capabilities when designing a product Design for Assembly (DFA): focuses on reducing the number of parts in a product and on assembly methods and sequence Componen
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