Essays

1. What is operations management and how does it contribute to the

betterment of society?
Operations Management is
Management of the conversion process which transforms inputs such as
raw material and labor into outputs in the form of finished goods and
services.
Inputs
(Customers
and/or
Materials)

Transformation
Process
(components)

Outputs
(goods
and
services)

Higher Standard of Living

Ability to increase productivity
Lower cost of goods and services
Better Quality Goods and Services
Competition increases quality
Concern for the Environment
Recycling and concern for air and water quality
Improved Working Conditions
Better job design and employee participation

2. What new trends are considered as the next sources of competitive

advantages?

Two New Trends

The use of environmentally friendly processes and environmentally
friendly products
Competitive advantage can be gained through products and
services that provide enhanced levels of feedback.
The use of information
Large quantities data can now be accurately stored and transmitted
inexpensively.

3. Explain the idea of TQM

Total Quality Management (TQM)

An approach for integrating quality at all levels of an organization

Organization-wide initiative encompassing all functional areas and

levels within the organization.
Focuses on producing high quality goods and services.

4. Describe a firms supply chain

Supply Chain
The steps and the firms that perform these steps in the transformation of
raw inputs into finished products bought by customers.

Inbound Logistics
The delivery of goods and services that are purchased from suppliers
and/or their distributors.
Outbound Logistics
The delivery of goods and services that are sold to a firms customers
and/or distributors.

5. Explain how the JIT and Kanban pull works

JIT (just-in-time)
A coordinated approach that continuously reduces inventory while also
improving quality.
Seeks to achieve high volume production using minimal inventories of
raw material, work in process, and finished goods.
Big JIT (lean production)
Seeks to eliminate all forms of waste in production activities.
Little JIT
Focuses on scheduling goods inventories and providing service
resources.
Kanban Pull System
A manual, self-regulating system for controlling the flow of material.
Workers produce only when the Kanban ahead of them is empty, thereby
creating a pull system through the factory.

6. Describe a good layout.

Key words

Scientific Management (Frederick W. Taylor)

Systematic approach to increasing worker productivity through time study,
standardization of work, and incentives.
Viewed workers as an interchangeable asset.

Operations Research (Management Science)

Outgrowth of WWII needs for logistics control and weapons-systems
design.
Seeks to obtain mathematically optimal (quantitative) solutions to
complex problems.

Hawthorne Studies
Yielded unexpected results in the productivity of Western Electric plant
workers after changes in their production environment.
Led to recognition of the importance of work design and employee
motivation.

Strategic Business Unit (SBU)

A stand-alone business within a conglomerate (parent firm) that operates
like an independent company.

Competitive Priorities
How the operations function provides a firm with a competitive
advantage.
PrioritiesLow cost, high quality, fast delivery, flexibility, and service.

The Marriage of OM and IT

Integrated solutions approaches
Business process reengineering
Supply chain management
Systems integration (SAP)

New Product Development Process

The method by which new products evolve from conceptualization
through engineering to manufacturing and marketing.

Start-up services
New services in established markets already served by existing services.

Customer Contact
The presence of the customer in the system.

Service businesses
Facilities-based services that provide assistance to customers who come to
the service facility.
Field-based services that provide on-site services to customers.
Productivity
The operational efficiency with which inputs are transformed (converted)
into outputs.

A relative measure that becomes meaningful when compared to itself over

time, similar operations internally or externally within its industry.
Partial measures of productivity can be taken using the various inputs
(e.g., labor, energy, and materials) that are combined to create a product.
Productivity

Variable output

Capacity
Utilization

Actual
Total

Outputs
Inputs

Machine
Machine

Hours
Hours

Used
Available

Process Velocity (Manufacturing Velocity)

Ratio of total throughput time for a product to the value-added time.
Throughput timethe time the product spends in the process.
Value-added timethe time it takes to complete the product.
Process
Velocity

Total throughput time

Value-added time

Modularization
Use of standard components and subassemblies to produce customized
products.

Reengineering
The process of rethinking and restructuring an organization

Constraint management (short-term)

Theory of constraints
Identification and management of bottlenecks
Product mix decisions using bottlenecks
Managing constraints in a line process

For one service or product processed at one operation with a one year time period,
the capacity requirement, M, is

Processing hours required for years demand

Capacity
=
Hours available from a single capacity unit
requirement
(such as an employee or machine) per year,
after deducting desired cushion

Setup times may be required if multiple products are produced

Capacity
=
requirement

Processing and setup hours required for

years demand, summed over all services
or products
Hours available from a single capacity unit
per year, after deducting desired cushion

W. Edwards Deming
One of the Quality Gurus
Advocated Statistical Process Control (SPC)
Methods which signal shifts in a process that will likely lead to products
and/or services not meeting customer requirements.
Emphasized an overall organizational approach to managing quality.
Demonstrated that quality products are less costly than poor quality
products.
Identified 14 points critical for improving quality.
The Deming Prize
Highest award for industrial excellence in Japan.

Genichi Taguchi
One of the Quality Gurus
Emphasizes the minimization of variation.
Concerned with the cost of quality to society.
Extended Jurans concept of external failure.

Walter A. Shewhart
One of the Quality Gurus
Statistician at Bell Laboratories
Developed statistical control process methods to distinguish between
random and nonrandom variation in industrial processes to keep processes
under control.
Developed the plan-do-check-act (PDCA) cycle that emphasizes the
need for continuous improvement.
Strongly influenced Deming and Juran.

Joseph M. Juran
One of the Quality Gurus

Emphasized the importance of producing quality products Joseph through

an approach focused on quality planning, control, and improvement.
Defined product quality as fitness for use as viewed by the customer in:
Quality of design
Quality of conformance
Availability Safety
Field use
Categorized the cost of quality as:
Cost of prevention
Cost of detection/appraisal
Cost of failure.

Six sigma
Process Capability
A comparison of control chart limits to design specification limits to
determine if the process itself is (or is not) capable of making products
within design specification (or tolerance) limits.
Process capability ratio

Cp =

Upper tolerance
limit

tolerance
- Lowerlimit

6s
Capability Index
A calculation to determine how well the process is performing relative to
the target dimensions: is the process closer to the upper specification limit
(USL) or the lower specification limit (LSL).

X LSL USL X
C pk min
,

3s
3s

Goals of Six Sigma

To reduce process variation to the point where only 3.4 defects per million
are produced by a process that involves a high volume of manufactured
units or service transactions on a continuous basis.
Provide a framework and methodologies to analyze and evaluate business
processes and reduce waste.

Continuous Improvement
A concept that recognizes that quality improvement is a journey with no
end and that there is a need for continually looking for new approaches for
improving quality.

Servicescape
Product interval time
Product flow-shop layout
Purchase activities
Perceived customer value