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the creation of products and services by transforming inputs, such as natural resources, raw materials, human resources, and capital, into outputs, products, and services

Operations Management

management of the operations process

3 Important factors of Operations Management

Quality, customer satisfaction, financial success

4 types of Operations Planning

Process, Site selection, Facility layout, Resource planning

7 process types

Mass production, Mass customization, Customization, Process manufacturing, Assembly, Continuous, Intermittent

Mass production

manufacturing identical goods to keep costs low

Mass customization

mass produced for individual needs of the customer


production of goods one at a time for individual customers

Process manufacturing

breaking down input into products

Assembly process

combining or transforming inputs into products

Continuous process

long production runs

Intermittent process

short production runs

5 Factors of Site Selection

availability of production inputs, Marketing factors, Local incentives, Manufacturing environment, International location considerations

4 Types of Facility Layout

Product, process, fixed-position, cellular

Product layout

for continuous or repetitive production

Process layout

arranges workflow around the production processes such as welding, finishing

Fixed-position layout

the product remains fixed while the workers and machinery shift


Small work groups manufacture a product

4 Elements of Resource Planning

Purchasing or procurement, internal vs. outsourcing (make or buy decision), inventory management, computerized resource planning

3 types of Computerized resource planning



materials requirement planning; all inputs


manufacturing resource planning; all operations


enterprise resource planning; single program

Supply Chain

the entire sequence of securing inputs, producing goods, and delivering goods to the customer

Supply Chain Management

the process of using information to smooth transitions along the supply chain. Creates stronger bonds with suppliers, improves supplier communications

3 ways that supply chain management creates stronger bonds with suppliers

increases quality standards, reduce production costs, design new products

2 ways that supply chain management can improve supplier communications

increased internet use (E-procurement), electronic data interchange (EDI)

Operations Control

Routing & Scheduling


determining workflow


specifying and controlling timing

3 ways of scheduling

Gantt charts to show scheduled and achieved production; critical path method (CPM), activities to complete a project; program evaluation and review technique (PERT) involves optimistic, pessimistic and most probable estimates

3 ways to improve Operations Management

Total quality management (TQM), Lean manufacturing, Automating operations

Total quality management (TQM)

company wide quality principles & continuous improvement

Lean manufacturing

streamlining production; just-in-time (JIT) principles

Automating operations

manufacturing using Computer-aided design (CAD), computer-aided manufacturing (CAM), flexible manufacturing systems (FMS), and Computer integrated manufacturing (CIM)

International Quality Standards

The International Organization for Standardization (ISO) has developed standards of quality that are used by businesses around the world

Quality Control

the process of creating standards for quality and then measuring finished products and services against them

Flexible Manufacturing Systems (FMS)

a system that combines automated workstations with computer-controlled transportation devices - automatic guided vehicles (AGVs) - that move materials between workstations and into and out of the system

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