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Chapter 18- MGMT 3202, Mgmt 3202 - Chapter 16, MGMT 3202 - Chapter 17

Terms in this set (92)

Operations Management
Managing the daily production of goods/services

Productivity- Quality - For service & manufacturing operations
Service Operations:
1) Performed
2) Labor Intensive
3) Intangible
Manufacturing Operations:
1) Made/produced
2) May or may not be labor intensive
3) Tangible
Productivity
Measure of performance that indicates how many inputs it takes to produce or create an output

1) Company
2) Customer
Company
lower costs, higher market share, higher profits
Customer
lower prices, faster service
Partial Productivity
A measure of performance that indicates how much of a particular kind of input it takes to produce an output
Partial productivity = outputs/single kind of input
Multifactor Productivity
An overall measure of performance that indicates how much labor, capital, materials, & energy it takes to produce an output

Multifactor productivity = outputs/(labor+capital+materials+energy)
Quality
A product or service free of deficiencies, or the characteristics of a product/service that satisfy customer needs

1) Product quality
2) Service quality
Product Quality:
1) Reliability
2)Serviceability
3)Durability
Reliability
Average time between breakdowns (when it quits working or doesn't do what it was designed to do)
Serviceability
How easy or difficult it is to fix a product
Durability
Mean time to failure
Less Variation
(deviation in the form, condition, or appearance of a product from the standard) = quality
Service Quality:
1. Reliability
2. Tangibles
3. Responsiveness
4. Assurance
5. Empathy
Reliability
Ability to consistently perform a service well
Tangibles
Appearance of offices, equipment, personnel involved with delivery of service
Responsiveness
Promptness & willingness with which service providers give good service
Assurance
Confidence that providers are knowledgeable, courteous, trustworthy
Empathy
Extent to which service providers give individual attention/care to customer concerns/problems
Self- Profit Chain
Managers + Employees (results in employee satisfaction & service capability) + Customers (leads to customers receiving service with value) + Satisfaction and loyalty (means profitability & growth)
Internal Service Quality
Quality of treatment employees receive from management & other divisions
Service Recovery
Restoring customer satisfaction to strongly dissatisfied customers
Empowering Workers
Permanently passing decision-making authority & responsibility from managers to workers; giving service employees the authority & responsibility to make decisions that immediately solve customer problems
Make-To-Stock
Manufacturing operation that order parts & assembles standardized products before receiving customer orders

Low level of processing or assembly
Assemble- To- Order
Manufacturing operation that divides manufacturing processes into separate parts or modules that are combined to create semicustomized products


Mid level of processing or assembly
Make-To-Order
Manufacturing operation that does not start processing/assembling product until customer order is received

High level of processing or assembly
Continuous- Flow- Production
Manufacturing operation that produces goods at continuous rate

Low level of manufacturing flexibility
Line-Flow- Production
Manufacturing processes that are preestablished, occur in a serial/linear manger, & are dedicated to making one type of product
Batch Production
Manufacturing operation that produces goods in large batches in standard lot sizes
Job Shop
Manufacturing operation that handles custom orders or small batch jobs
Inventory
Amount and number of raw materials, parts, and finished products a company has in its possession
Raw Materials
Basic inputs in a manufacturing process
Component Parts
Basic parts used in manufacturing that are fabricated from raw materials
Work-In-Process
Partially finished goods consisting of assembled component parts
Finished Goods
Final outputs of manufacturing operations

Measured through Average Aggregate (average overall inventory during a time period,
Weeks of Supply (number of weeks it would take to run out of inventory), or Inventory Turnover (number of times per year that company sells its average inventory)
Ordering Costs
Costs associated with ordering inventory (including data entry, phone calls, obtaining bids, correcting mistakes, determining when/how much to order)
Setup Costs
Costs of downtime & lost efficiency that occur when a machine is changed or adjusted to produce a different kind of inventory
Holding Cost (carrying or storage costs)
Costs of keeping inventory until it's used/sold (including storage, insurance, taxes, obsolescence, opportunity costs)
Stockout Cost
Costs incurred when a company runs out of product (including transaction to replace inventory and loss of customer goodwill)
Economic Order Quantity [EOQ]
System of formulas that minimizes ordering & holding costs and helps determine how much/how often inventory should be ordered
Just-In-Time Inventory [JIT]
Inventory system in which component parts arrive from suppliers just as they are needed at each stage of production
Materials Requirement Planning [MRP]
Production & inventory system that determines the production schedule, production batch sizes, & inventory needed to complete final products
Control
Regulatory process of establishing standards to achieve organizational goals, comparing actual performance against the standards, and taking corrective action when necessary
Control Process
-Establish standards; derived from customer feedback or benchmarking
-Measure performance & compare to standards
-Corrective action in response to performance deviations
Establish Standards
Basis of comparison for measuring the extent to which various kinds of organizational performance area satisfactory/unsatisfactory
Benchmarking
Process of identifying outstanding practices, processes & standards in other companies & adapting them to your company
Cybernetic
(Control Considerations)
Process of steering or keeping on course; ongoing process (Keep course)
Control
(Control Consideration)
Achieved when behavior/procedures don't conform to standards
Regulation Cost
(Control Considerations)
Cost/unintended consequences associated with implementing or maintaining control
Feedforward (Production)
(Control Methods)
Mechanism for monitoring performance inputs rather than outputs to prevent or minimize performance deficiencies before they occur
Concurrent (Active)
(Control Methods)
Mechanism for gathering information about performance deficiencies as they occur, thereby eliminating or shortening the delay between performance & feedback
Feedback (Reactive)
(Control Methods)
Mechanism for gathering information about performance deficiencies after they occur
Bureaucratic Control
(Control Systems)
Use of hierarchical authority to influence employee behavior by rewarding or punishing employees for compliance or noncompliance with organizational policies, rules, procedures
Example: Gift card for task completion; pay-cut for breaking rules
Objective Control
(Control Systems)
Use of observable measures of worker behavior or outputs to assess performance & influence behavior
-Behavior Control
-Output Control
Behavior Control
(Objective Control)
Regulation of the behaviors & actions that workers perform on the job
Objective Control
Output control
Regulation of workers' results or outputs through rewards & incentives
Normative Control
(Control Systems)
Regulation of workers' behavior & decisions through widely shared organizational values and beliefs
-Selective hiring
-Observation learning
Concretive Control
(Control Systems)
Regulation of workers' behavior and decisions through work group values and beliefs
-Groups from & bond
-Formal rules guide behavior
Self-control (Self-management)
(Control Systems)
Control system in which managers and workers control their own behavior by setting their own goals, monitoring their own progress and rewarding themselves for goal achievement
- Clear boundaries set
-Skill developments
Balanced Scorecard
Measurement of organizational performance in four equally important areas: finance, customers, internal operations, innovation & learning
- Forces managers to set goals & measure performance in multiple areas
-Minimizes Changes of suboptimization
-Financial; Customer; Internal (processes, decisions, actions); Innovation & learning
Suboptimization
(Balanced Scorecard)
Performance improvement in one part of an organization but only at the expense of decreased performance in another
Data
- Not useful for decisions
- Lacks context & meaning
Information
Useful data that can influence people's choices & behavior
- Processed, organized structure, etc.
- Has context & meaning
Accurate
(Characteristics of Useful Information)
Reliable, consistent with fact, verifiable
Complete
(Characteristics of Useful Information)
Contains the necessary information needed
Relevant
(Characteristics of Useful Information)
Pertains to the right situation, environment, issues, etc.
Timely
(Characteristics of Useful Information)
Available when needed, in real time if possible
Acquisition Cost
(Cost of Information)
Cost of obtaining data that you don't have
Processing Cost
(Cost of Information)
Cost of turning raw date into usable information
Storage Cost
(Cost of Information)
Cost of physically or electronically archiving information for later retrieval/use
Retrieval Cost
(Cost of Information)
Cost of accessing already stored & processed information
Communication Cost
(Cost of Information)
Cost of transmitting information from one place to another
Then:
- Paper & pencil approach
- More errors
- Lacking in accuracy, completeness, relevance, timeliness
- More expensive
Now:
- Computer hardware & software
- Fewer errors
- More accurate, complete, relevant, timely
- Less expensive thanks to Moore's Law
Moore's Law
Predicted that computing processing power would double and cost would drop by 50% about every two years
Capturing
Manual or Electronic
Manual Capture
Recording and entering data by hand into a data storage device
- Slow; Costly; Labor intensive; Often inaccurate
Electronic Capture
Use of electronic devices to capture and record data
Bar Code
(Electronic Capture)
Visual pattern that represents numerical data by varying the thickness & pattern of vertical bars
Radio Frequency Identification (RFID) Tags
(Electronic Capture)
Tags containing minuscule microchips that transmit information via radio waves & can be used to track the number/location of objects into which tags have been inserted
- Dog's Microchips
Electric Scanner
(Electronic Capture)
Electronic device that converts printed text/pictures into digital images; with Optical Character Recognition they can convert digitized documents into text that can be searched, read, and edited by word processing & other types of software
Processing
Transforming raw data into meaningful information
Data Minding
(Processing)
Process of discovering unknown patterns & relationships in large amounts of data
Supervised
(Data Minding)
Process when the user tells data mining software to look & test for specific patterns & relationships in a data set
Unsupervised
(Data Minding)
Process when the user tells data mining software to uncover whatever patterns & relationships it can find in a data set
Association or Affinity Patterns
(Processing)
When two or more database elements tend to occur together in a significant way
- Shoppers buying diapers more likely to buy beer
Sequence Patterns
(Processing)
When two or more database elements occur together in a significant pattern in which one element precedes the other
- Patients with high blood pressure & precious cardinal event more likely to suffer heart attack
Data Clusters
(Processing)
When three or more data base elements occur together in a significant way
Predictive Patterns
(Processing)
Patterns that help identify database elements that are different
- College students not likely to buy cars over $30,00
Protecting
Process of ensuring that data are reliably and consistently retrievable in a usable format for authorized users but no one else
Authentication
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