OM 374 Lecture Notes - Lecture 8: Total Quality Management, Capital Intensity, Process Capability
20 May 2018
School
Department
Course
Professor
Designs and manipulates processes that product services and goods that people use every day
Process
Any activity or group of activities that takes one or more inputs, transforms them, and provides one or
more outputs for its customers. All process must add value
Operation
a group of resources performing all or part of one or more processes
Inputs
Combination of human resources, capital, materials, services, land and energy
Outputs
Services or a tangible product
Customers and Suppliers
Internal and external
Process Types
Core- main purpose of the business
Support- amplifies the core
Nested-exists within another process
Supply Chain Management
The synchronization of a firm's processes with those of its suppliers and customers to match the flow of
materials, services, and information with customer demand
An interrelated series of processes within and across firms the produces a service or product to the
satisfaction of customers
Operations Strategy
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- the means by which operations implements the firm's corporate strategy and helps to build a
customer-driven firm
- links long term and short term operations decisions to corporate strategy and develops the capabilities
the firm needs to be competitive
corporate strategy
provides an overall direction that serves as the framework for carrying out all the organization's
functions
competitive priorities
the critical dimensions that a process or supply chain must posses to satisfy its internal or external
customers, both now and in the future
competitive capabilities
the cost, quality, time, and flexibility dimensions that a process or supply chain actually possesses and is
able to deliver
Order winners
a criterion customers use to differentiate the services or products of one firm from those of another
Order qualifiers
minimum level required from a set of criteria for a firm to do business in a particular market segement
Productivity
Output/input
Role of management
Must examine productivity from the level of the value chain; the collective performance of processes
Process Management
-Designing and operating processes and supply chains
-requires the ability to ensure they achieve their goals (add value)
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-all effective operations decisions follow from a sound operations strategy
Adding Value
Process innovation and continuous improvement
Each part of an organization must design and operate processes that are part of a supply chain and deal
with quality, technology, and staffing issues
Break-even analysis
analysis to compare processes by finding the volume at which two different processes have equal total
costs
Break-even quantity
the volume at which total revenues equal total costs
Maximin
- best of the worst
-Pessimists who tend to believe that the worst case event will certaintly occur
-decision rule chooses the alternative that the best result, given the worst event will occur
Strategic Fit
Successful process decisions require choices that fit the situation and make sense together
-4 factors: Process structure, Customer involvement, Resource flexibility, Capital intensity
Design to order
Designing new products that do not currently exist
Manufacturing to meet unique customer specifications
Make to order
Make products to customer specifications in low volumes with job or small batch processes,
Matches up with flexibility (customization) and top quality
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Document Summary
Designs and manipulates processes that product services and goods that people use every day. Any activity or group of activities that takes one or more inputs, transforms them, and provides one or more outputs for its customers. Operation a group of resources performing all or part of one or more processes. Combination of human resources, capital, materials, services, land and energy. The synchronization of a firm"s processes with those of its suppliers and customers to match the flow of materials, services, and information with customer demand. An interrelated series of processes within and across firms the produces a service or product to the satisfaction of customers. The means by which operations implements the firm"s corporate strategy and helps to build a customer-driven firm. Order winners a criterion customers use to differentiate the services or products of one firm from those of another.
