P300 Final Study Cards

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  1. Process
    A process is a system of activities that transforms inputs into outputs
  2. Inputs
    Inputs are what is taken in by the operation management system
  3. Outputs
    Outputs are what comes out after the operation is done
  4. Transformations
    How inputs are transformed into outputs and products
  5. Operations
    design, supply, produce, and deliver valuable goods and services to customers
  6. Lower Costs
    Lowering costs allows you to create more for the same money
  7. Higher Quality
    Gives better quality to a product and allows for more future sales
  8. Innovation
    creative thinking that allows for products or services to be produce in stronger ways
  9. Supply Chain
    the global network of organizations and activities involved in designing, transforming, consuming and disposing of goods and services.
  10. Supply Chain Management
    management of the processes and relationships in a supply chain
  11. Strategic Planning
    • long-term decisions defining the objectives and capabilities of organization
    • Take a long time to implement
    • Put limits on the capabilities governing operational processes
  12. Tactical Planning
    • intermediate-term decisions defining how capacity is used to meet demand
    • More frequent than strategic planning, usually spanning months
    • Identify customer demands for aggregate product families
    • Establish the inventory and capacity plans
  13. Operational Planning
    • short-term priorities and schedules for resource allocation
    • Address demands, materials, and capacities at the individual product level
    • Usually addresses weeks or days
  14. Goods
    • Tangible
    • Can be inventoried
    • Little customer contact
    • Long lead time
    • Often capital-intensive
    • Quality easily assured
    • Material is transformed
  15. Services
    • Intangible
    • Cannot be inventoried
    • Extensive customer contact
    • Short lead time
    • Often labor-intensive
    • Quality harder to assess
    • Information or customer is transformed
    • Simultaneous production and consumption
  16. Tangible
    Something that you can feel and touch and use
  17. Lead Time
    how long it takes for something to be completed
  18. Critical Customers
    The person who has the greatest impact on design, sales and growth opportunities for the product
  19. Suppliers
    provides inputs
  20. Tier 1
    Upstream supplier, supplier before the main manufacturer
  21. Tier 2
    Upstream supplier, 2nd supplier before the main manufacturer
  22. Echelon 1
    Downstream Supplier, Usually a distributor, who the manufacturer sells to
  23. Echelon 2
    Downstream supplier, the next distributor after the Echelon 2
  24. Distributor
    Echelon 1. They distribute what you manufactor
  25. Stakeholder
    those who have some interest in the firm
  26. Capabilities
    what a firm does well, defines types of problems a firm can proficiently address
  27. Value Proposition
    tangible and intangible benefits that customers obtain from a firm
  28. Critical Customers
    critical to firm’s success and receives firm’s focus
  29. Strategic Planning
    Corporate, Business Unit, and Functional
  30. Corporate Strategic Planning
    • overall mission and types of businesses
    • Long time horizon
    • Overall values, direction, and goals
    • Acquisitions and divestitures
    • Performance metrics
    • Risk management
  31. Business Unit Strategic Planning
    • semi-independent organization for different products or markets
    • Identification of customer or market segments
    • Appropriate product offering and competitive priorities
    • Constrained by corporate strategy
    • More detailed, shorter time horizon
  32. Functional Strategic Planning
    • determines how functions (operations, marketing, finance, etc.) support business unit strategies
    • Most detailed
    • Most constrained
    • Determines specific focus
    • Management of critical resources to achieve corporate and SBU metrics
    • Identification of capabilities
  33. Strength
    • Advantages? “What do we do better”?
    • Unique resources or value propositions?
    • What do customers see as strengths?
  34. Weakness
    • What could we improve? Avoid?
    • What limits our ability to grow/develop?
    • What do customers see as weaknesses
  35. Opportunity
    • What trends can we take advantage of?
    • New technologies or markets?
    • Weaknesses in competitors?
  36. Threat
    • What obstacles do we face?
    • Could regulatory changes disturb us?
    • Could competitors or technology changes impact us?
  37. SWOT
    Analyze a firm/organization along factors from the firm’s perspective: Strength, Weakness, Opportunities, Threats
  38. Fit
    alignment of value proposition, capabilities, and critical customers
  39. Order Winner
    why customers choose your firm
  40. Order Qualifier
    minimum standards to be met
  41. Order Loser
    why customers avoid your firm
  42. Quality
    • performance, features, conformance(no defects)
    • Reliability(long time on failure), aesthetics, service/support perceived quality
  43. Timeliness
    reliability (on time), speed, availability
  44. Cost
    purchase price, tranaction (tax, fees), maintenance, operating, salvage/disposal
  45. Innovation
    what do you do that is different
  46. Flexibility
    how easy is it to change your process
  47. Sustainability
    how sustainable is your product
  48. Risk Management
    minimize any risks that you have to take
  49. Triple Bottom Line
    your financial, social and environmental bottom line
  50. Juran’s Law
    • 15% of operational problems are the result of human errors
    • The other 85% are due to systemic process errors
  51. Process Boundary
    The beginning point and the end point of a process.
  52. Process Activities
    • Operations- transforms an input
    • Transportation-moves an input to another place
    • Inspection- verifies the result of another activity
    • Delay- unintentional stops the flow of an input
    • Storage- is the formal inventory of an input
  53. Information Flow
    flow of data and information
  54. Material Flow
    include physical products, including people
  55. Output Capacity
    Limit on amount of output a process can produce given an amount of input and resources (e.g. output per machine hour or labor hour)
  56. Storage Capacity
    Can also refer to size or storage limits.
  57. Maximum Capacity
    • Highest output rate an activity or process can achieve under ideal conditions
    • For equipment also called rated or design capacity
  58. Effective Capacity
    • Sustainable capacity taking into account potential disruptions, fatigue, machine breakdowns
    • Typically around 70-80% of maximum capacity
    • Effective capacity is usually used when making plans to meet demand or determine long run production values
  59. Utilization
    • Utilization = Actual Output/Capacity
    • Percentage of process capacity actually used
    • Low utilization: Equipment or employees may be underused
    • Very high utilization: Possible overuse of resource
  60. Yield Rate
    • Yield Rate =(# 𝐨𝐟 "𝐀𝐜𝐜𝐞𝐩𝐭𝐚𝐛𝐥𝐞" 𝐏𝐫𝐨𝐝𝐮𝐜𝐭𝐬 𝐨𝐫 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬)/(# 𝐨𝐟 𝐒𝐭𝐚𝐫𝐭𝐞𝐝 𝐏𝐫𝐨𝐝𝐮𝐜𝐭𝐬 𝐨𝐫 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬)
    • Percentage of good units produced from total units begun
    • A 80% yield rate means 80% of started products are of acceptable quality while 20% of started products have to be scraped or reworked
  61. Economies of Scale
    The more that you produce the total cost per unit goes down
  62. Diseconomies of Scale
    After the economies of scale, price for unit starts to go up
  63. Expand Effective Process Capacity
    Not sure
  64. Increase Utilization
    Using more of your max capacity
  65. Improve Efficiency
    • Using as much of the workload of the workers as possible
    • efficiency= total of all tasks times/ # of workstations *takt time
  66. Increase Yield
    make more good products so there are less scraped or reworked product
  67. Theory of Constraints
    Identify the constraint, exploit the constraint, subordinate and synchronize to the constraint, Elevate performance of the constraint, repeat the process
  68. Every process has a constraint
    Self explanatory
  69. Variance consumes capacity
    • Variance occurs in a process’s inputs, activities and outputs.
    • Increased complexity and uncertainty makes it difficult to create plans to efficiently and effectively use resources
  70. Processes managed as systems
    • Changing one element of a process may impact other elements, sometimes in unexpected ways.
    • Process elements are interdependent
    • Activities
    • Inputs/Outputs/Flows
    • Process structures
    • Management policies
  71. Performance measures are critical
    • Metrics should address aspects of performance that are important to both customers and the organization.
    • Consist of 3 elements: the measure, the standard, and the reward for achieving the standard
    • Should be objectively verifiable and quantifiable
    • Should support strategy and satisfy critical customers
    • Provide the basis for monitoring, controlling and improving
  72. Continuous process improvement
    • Kaizen: focused, incremental improvement efforts
    • small + small + small + small + … + n = LARGE
  73. Process Layout
    groups together similar resources
  74. Product Layout
    • Resources arranged according to regularly occurring activities in the process
    • Often used by repetitive and continuous processes
    • Benefits:
    • Minimizes processing time
    • Simplifies planning, scheduling, and control
    • Drawbacks:
    • Lack of flexibility
    • Interdependency of activities – problem at one workstation can
  75. Cellular Layout
    • Combining flexibility of small, focused job shop with the efficiency of a repetitive line
    • Form a number of small assembly lines called work cells
    • Each work cell arranged using product layout principles
    • Dedicated workers for each cell are trained in all of the activities within a cell
  76. Product-Process Matrix
    What type of process the a product is made with project, job shop, batch, repetitive process, or continuous process
  77. Precedence Relationships
    how long each step takes and what steps come before it in a process. Can be visually represented in a precedence diagram
  78. Takt-time
    Takt-time = Available production time per day/Output needed per day
  79. Efficiency
    Efficency = Total of all tasks time/# of workstations *takt time
  80. Break-even Point
    when total revenue = total cost
  81. Fixed Cost
    Single cost that is a large sum that is occurred no matter how many products are made

    • Variable Cost
    • Costs that go up as a more products are produced
  82. Indifference Point
    The number of products it takes for a certain investment to be better then another
  83. Kanban
    In lean manufacturing, the area where a product is stored for the next step. Only is made if the previous step is not overloaded
  84. Pull Manufacturing
    In lean manufacturing, when you only go on to the next step when a product is finished with the previous step
  85. Front-office Processes
    processes that involving the customer contract
  86. Back-office Processes
    behind the scenes processes
  87. Decoupling
    Separating processes into front-office and back-office processes
  88. Service Blueprinting
    • Helps to understand interfaces between customers, service providers, technology. Elements include:
    • Customer actions: all actions done by customers during service delivery
    • Front office: employee actions in the face-to-face encounter with customers
    • Back office: behind the scenes activities not seen by the customer
    • Support processes: activities necessary for the service, done by employees without direct customer contact
    • Physical evidence: tangibles the customers see or collect during their encounter with the organization
  89. Design Quality
    match between designed features and customer requirements
  90. Conformance Quality
    meeting design specifications
  91. Performance
    primary product or service characteristics
  92. Features
    added touches, bells and whistles, secondary characteristics
  93. Reliability/Durability
    consistency of performance over time
  94. Aesthetics
    sensory characteristics
  95. Support
    ease of use
  96. Perceived Quality
    past performance and reputation
  97. Total Quality Management
    • Total quality management: an integrated business management strategy embedding awareness of quality in all processes
    • Quality ultimately determined by customer
    • Focus on customers
    • Quality management is a total, organization wide activity
    • Responsibility for quality belongs to everyone
    • Quality improvement requires total commitment
    • Decision making in cross-function teams
  98. Inverted View of Management
    The idea that employees run the company because they have the most contact with the customers

    • Disdain for Variability
    • not sure
  99. Cost of Quality
    how much it costs for a firm to improve and maintain the quality of a product
  100. Prevention Costs
    cost of activities aimed at eliminating the potential causes of product defects or failures
  101. Appraisal Costs
    • cost of activities aimed at ensuring that defective products are identified and not delivered to customers
    • Inspection before/during/after production
  102. Internal Failure Costs
    • results from defects that are found in products prior to their shipment to customers
    • Scrap
    • Rework
  103. External Failure Costs
    • result from defects that are found only after products reach customers
    • Returned material
    • Repair
    • Lost of future sales
  104. Six Sigma
    quality improvement through elimination of defects and variation.Standard deviation: statistical measure of variation
  105. DMIAC
    Define, Measure, Analyze, Improve, and Control
  106. Operations Management
    how to mange operations
  107. Production
    how something is produced and its costs
  108. Outsource
    sending work out to a different firm
  109. Sending eliminates
    not sure
  110. Insource
    doing work in a firm
  111. Interdependent
    not sure
  112. Logistics
    movement of materials and information within, into and out of the firm
  113. Upstream
    the upper part of the supply chain (Tier)
  114. Downstream
    the lower part of the supply chain (echelon)
  115. Total Product Experience
    How a product is experienced by a user
  116. Time to Market
    How long it takes for a product to make it to market once it is made
  117. Overtime
    any hours that are over 40 hours and require extra pay
  118. Short-term
    quick, local improvement around up to a year
  119. Long-term
    Any improvments that can take up to 1 year or longer
  120. Metrics
    how production and costs are measured
  121. Parallel Structure
    when product process separate into two different processes based on the products features
  122. Research and Development
    Developing and researching a product
Author:
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P300 Final Study Cards
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