OM REVIEWER

1. OPERATIONS MANAGEMENT is about how organizations produce goods and services.

2. OPERATIONS MANAGEMENT is the activity of managing the resources which are devoted to the production and
delivery of products and services.
3. OPERATIONS MANAGEMENT is the activities, decisions and responsibilities of managing the production and
delivery of products and services.
4. OPERATIONS FUNCTION is the arrangement of resources that are devoted to the production and delivery of
products and services.
5. OPERATIONS MANAGERS are the people who have particular responsibility for managing some, or all of the
RESOURCES WHICH COMPRISE THE OPERATIONS FUNCTION.
6. THREE CORE FUNCTIONS:
a. the marketing (including sales) function – which is responsible for communicating the organization’s
products and services to its markets in order to generate customer requests for service;
b. the product/service development function – which is responsible for creating new and modified products
and services in order to generate future customer requests for service;
c. the operations function – which is responsible for fulfilling customer requests for service throughout the
production and delivery of products and services.
7. SUPPORT FUNCTIONS:
a. the accounting and finance function – which provides the information to help economic decision making
and manages the financial resources of the organization;
b. the human resource function – which recruits and develops the organization’s staff as well as looking after
their welfare.
8. TRANSFORMATION PROCESS MODEL is a model that describes operations in terms of their input resources,
transforming processes and outputs of goods and services.
9. TRANSFORMED RESOURCES The resources that are treated, transformed or converted in a process, usually a
mixture of materials, information and customers.
a. Materials– operations which process materials could do so to transform their physical properties
b. Information– operations which process information could do so to transform their informational properties
c. Customers– operations which process customers might change their physical properties in a similar way to
materials processors
10. TRANSFORMING RESOURCES The resources that act upon the transformed resources, usually classified as
facilities (the buildings, equipment and plant of an operation) and staff (the people who operate, maintain and
manage the operation)
11. BUILDING BLOCKS:
a. facilities– the buildings, equipment, plant and process technology of the operation;
b. staff– the people who operate, maintain, plan and manage the operation. (Note we use the term ‘staff’ to
describe all the people in the operation, at any level.)
12. TANGIBILITY The main characteristic that distinguishes products (usually tangible) from services (usually
intangible).
13. FACILITATING SERVICES are services that are produced by an operation to support its products.
14. FACILITATING PRODUCTS are products that are produced by an operation to support its services.
15. PROCESSES an arrangement of resources that produces some mixture of goods and services, mechanisms that
transform inputs into outputs.
16. THREE LEVELS OF OPERATIONS ANALYSIS:
a. the supply network it is the network of supplier and customer operations that have relationships with an
operation.
b. the operation
c. the process
17. INTERNAL SUPPLIER Processes or individuals within an operation that supply products or services
18. INTERNAL CUSTOMER Processes or individuals within an operation who are the customers for other internal
processes or individuals’ outputs.
19. HIERARCHY OF OPERATIONS The idea that all operations processes are made up of smaller operations process.
20. OPERATIONS AS A FUNCTION, meaning the part of the organization which produces the products and services
for the organization’s external customers;
21. OPERATIONS AS AN ACTIVITY, meaning the management of the processes within any of the organization’s
functions.
22. ‘END-TO-END’ BUSINESS PROCESSES Processes that totally fulfil a defined external customer need.
23. BUSINESS PROCESS REENGINEERING The philosophy that recommends the redesign of processes to fulfil
defined external customer needs.
24. DIFFERENT CHARACTERISTICS OF OPERATIONS PROCESSES:
a. Volume The level or rate of output from a process
b. Variety The range of different products and services produced by a process
c. Variation The degree to which the rate or level of output varies from a process over time
d. Visibility The amount of value-added activity that takes place in the presence (in reality or virtually) of the
customer, also called customer contact.
25. REPEATABILITY The extent to which an activity does not vary.
26. SYSTEMIZATION The extent to which standard procedures are made explicit.
27. STANDARDIZATION The degree to which processes, products or services are prevented from varying over time
28. CUSTOMER CONTACT SKILLS The skills and knowledge that operations staff need to meet customer
expectations.
29. FRONT-OFFICE The high visibility part of an operation.
30. BACK-OFFICE The low visibility part of an operation.
31. OPERATIONS MANAGEMENT IMPORTANCE:
a. reduce costs
b. can increase revenue
c. reduce the need for investment
d. enhance innovation
32. OPERATIONS MANAGEMENT is a ‘make or break’ activity.
33. ROLE OF OPERATIONS:
a. Implementing Business Strategy The most basic role of operations is to implement strategy.
b. Supporting Business Strategy Support strategy goes beyond simply implementing strategy. It means
developing the capabilities which allow the organization to improve and refine its strategic goals.
c. Driving Business Strategy The third, and most difficult, role of operations is to drive strategy by giving it a
unique and long-term advantage.
34. HAYES AND WHEELWRIGHT’S FOUR STAGES OF OPERATIONS CONTRIBUTION:
a. Stage 1: Internal neutrality This is the very poorest level of contribution by the operations function. It is
holding the company back from competing effectively.
b. Stage 2: External neutrality The first step of breaking out of stage 1 is for the operations function to begin
comparing itself with similar companies or organizations in the outside market (being ‘externally neutral’).
c. Stage 3: Internally supportive Stage 3 operations are among the best in their market. Yet stage 3 operations
still aspire to be clearly and unambiguously the very best in the market.
d. Stage 4: Externally supportive Yet Hayes and Wheelwright capture the growing importance of operations
management by suggesting a further stage – stage 4. A stage 4 company is one which sees the operations
function as providing the foundation for its competitive success.
35. STAKEHOLDERS are the people and groups who may be influenced by, or may influence, the operation’s
activities.
36. THE FIVE PERFORMANCE OBJECTIVES:
a. Quality define it as consistent conformance to customers’ expectations, major influence on customer
satisfaction or dissatisfaction.
- Quality reduces costs
- Quality increases dependability
b. Speed The elapsed time between customers requesting products or services and their receiving them,
increases value for some customers.
- Speed reduces inventories
- Speed reduces risks
c. Dependability Delivering, or making available, products or services when they were promised to the
customer, valued by most customers.
- Dependability saves time
- Dependability saves money
- Dependability gives stability
d. Flexibility The degree to which an operation’s process can change what it does, how it is doing it, or when it
is doing it, being able to change in some way.
- Flexibility speeds up response
- Flexibility saves time
- Flexibility maintains dependability
e. Cost as universally attractive objective, would want to do things cheaply; that is, produce goods and services
at a cost which enables them to be priced appropriately for the market.
37. FOUR TYPES OF REQUIREMENT:
a. product/service flexibility– the operation’s ability to introduce new or modified products and services;
b. mix flexibility– the operation’s ability to produce a wide range or mix of products and services;
c. volume flexibility– the operation’s ability to change its level of output or activity to produce different
quantities or volumes of products and services over time;
d. delivery flexibility – the operation’s ability to change the timing of the delivery of its services or
products.
38. THE FLEXIBILITY OBJECTIVE:
a. Mass customization The ability to produce products or services in high volume, yet vary their specification
to the needs of individual customers or types of customer.
b. Agility The ability of an operation to respond quickly and at low cost as market requirements change.
39. PRODUCTIVITY is the ratio of what is produced by an operation to what is required to produce it.
a. Single factor productivity = Output from the operation divided by One input to the operation
b. Multi-factor productivity = Output from the operation divided by All inputs to the operation
40. POLAR REPRESENTATION A useful way ofrepresenting the relative importance ofperformance objectives for a
product or service.
41. STRATEGIC DECISIONS usually mean those decisions which:
- are widespread in their effect on the organization to which the strategy refers;
- define the position of the organization relative to its environment;
- move the organization closer to its long-term goals.
42. OPERATIONS are the resources that create products and services.
43. OPERATIONAL is the opposite of strategic, meaning day-to-day and detailed.
44. OPERATIONS STRATEGY concerns the pattern of strategic decisions and actions which set the role, objectives
and activities of the operation.
45. THE CONTENT AND PROCESS OF OPERATIONS STRATEGY:
a. Top-down The influence of the corporate or business strategy on operations decisions.
b. Bottom-up The influence of operational experience on operations decisions.
c. Market requirements The performance objectives that reflect the market position of an operation’s
products or services, also a perspective on operations strategy.
d. Operations resource capabilities The inherent ability of operations processes and resources; also a
perspective on operations strategy.
46. CORPORATE STRATEGY The strategic positioning of a corporation and the businesses with it.
47. BUSINESS STRATEGY The strategic positioning of a business in relation to its customers, markets and
competitors, a subset of corporate strategy.
48. FUNCTIONAL STRATEGY The overall direction and role of a function within the business; a subset of business
strategy.
49. EMERGENT STRATEGY A strategy that is gradually shaped over time and based on experience rather than
theoretical positioning.
50. COMPETITIVE FACTORS The factors such as delivery time, product or service specification, price, etc. that define
customers’ requirements.
51. ORDER-WINNING FACTORS The arrangement of resources that are devoted to the production and delivery of
products and services.
52. QUALIFYING FACTORS Aspects of competitiveness where the operation’s performance has to be above a
particular level to be considered by the customer.
53. LESS IMPORTANT FACTORS Competitive factors that are neither order winning nor qualifying, performance in
them does not significantly affect the competitive position of an operation.
54. PRODUCT/SERVICE LIFE CYCLE A generalized model of the behaviour of both customers and competitors during
the life of a product or service; it is generally held to have four stages, introduction, growth, maturity and
decline.
a. Introduction stage When a product or service is introduced, it is likely to be offering something new in terms
of its design or performance.
b. Growth stage As volume grows, competitors may enter the growing market. Keeping up with demand could
prove to be the main operations preoccupation.
c. Maturity stage Demand starts to level off. Some early competitors may have left the market and the
industry will probably be dominated by a few larger companies.
d. Decline stage After time, sales will decline, with more competitors dropping out of the market.
55. RESOURCE-BASED VIEW (RBV) The perspective on strategy that stresses the importance of capabilities
(sometimes known as core competences) in determining sustainable competitive advantage.
56. INTANGIBLE RESOURCES The resources within an operation that are not immediately evident or tangible, such
as relationships with suppliers and customers, process knowledge, new product and service development.
57. FIVE PS:
a. Purpose
b. Point of entry
c. Process
d. Project management
e. Participation
58. OPERATIONS FOCUS means dedicating each operation to a limited, concise, manageable set of objectives,
products, technologies, or markets.
59. OPERATION-WITHIN-AN-OPERATION (or ‘plant-within-a-plant’ or ‘shop-within-a-shop’) concept is a practical
response that allows an organization to accrue the benefits of focus without the considerable expense of setting
up independent operations.
60. DESIGN is to conceive the looks, arrangement and workings of something before it is constructed.
61. THROUGHPUT RATE (or flow rate) is the rate at which units emerge from the process, i.e. the number of units
passing through the process per unit of time;
62. THROUGHPUT TIME is the average elapsed time taken for inputs to move through the process and become
outputs;
63. NUMBER OF UNITS IN THE PROCESS (also called the ‘work in process’ or in-process inventory) is an average over
a period of time;
64. UTILIZATION of process resources is the proportion of available time that the resources within the process are
performing useful work, ratio of the actual output from a process or facility to its design capacity.
65. LIFE CYCLE ANALYSIS A technique that analyses all the production inputs, life cycle use of a product and its final
disposal in terms of total energy used and wastes emitted.
66. PROCESS TYPES Terms that are used to describe a particular general approach to managing processes
67. MANUFACTURING PROCESS TYPES:
a. Project Processes deal with discrete, usually highly customized, products.
b. Jobbing processes deal with high variety and low volumes,
c. Batch processes treat batches of products together, and where each batch has its own process route.
d. Mass processes produce goods in high volume and relatively low variety.
e. Continuous processes high volume and low variety; usually products made on continuous process are
produced in an endless flow, such as petrochemicals or electricity.
68. SERVICE PROCESS TYPES:

a. Professional Services are devoted to producing knowledge-based or advice based services, usually involving high
customer contact and high customization

b. Service Shops are positioned between professional services and mass services, usually with medium levels of
volume and customization, characterized by levels of customer contact, customization, volumes of customers and
staff discretion.

c. Mass Services have a high number of transactions, often involving limited customization.

69. PRODUCT–PROCESS MATRIX A model derived by Hayes and Wheelwright that demonstrates that natural fit
between volume and variety of products and services.

70. PROCESS MAPPING Describing processes in terms of how the activities within the process relate to each other
(may also be called process blueprinting or process analysis).

71. HIGH-LEVEL PROCESS MAPPING An aggregated process map that shows broad activities rather than detailed
activities (sometimes called an outline process map).

72. OUTLINE PROCESS MAP (or chart) identifies the sequence of activities but only in a general way.

73. WORK CONTENT The total amount of work required to produce a unit of output, usually measured in standard
times.

74. CYCLE TIME The average time between units of output emerging from a process.

75. LITTLE’S LAW The mathematical relationship between throughput time, work-in process and cycle time
(throughput time equals work-in-process times cycle time).

76. THROUGHPUT EFFICIENCY the item being processed (the customer) is being worked on.

77. VALUE-ADDED THROUGHPUT EFFICIENCY restricts the concept of work content to only those tasks that are liter
ally adding value to whatever is being processed. This often eliminates activities such as movement, delays and
some inspections.

78. SIMULATION MODELS to explore its characteristics before the process, product or service is created.