Operation Management

Operations Management
is the science of ensuring that goods and services are created and delivered successfully to customers
is a physical product that you can see touch or possibly consume
Durable good
is one that does not quickly wear out and typically lasts at least 3 years.
Non durable good
is one that is no longer useful once its used or lasts for less than 3 years
is a ny primary or complementary activity that does not directly produce a physical product
Service encounter
is an interaction between the customer and the service provider
moment of truth
episodes, transactions or experiences in which a customer come into contact with any aspect of the delivery system
service management
integrates marketing, human resources and operations functions to plan, create and deliver goods and services and their associated services encounter
Customer benefit package
a clearly defined set of tangible and intangible features that the customer recognizes, pays for, uses or experiences
Primary good or service
is the core offering that affects customer and responds to their basic needs
Peripheral Goods and services
are those that are not essential to the primary good or services, but enhance it. Gym at CSULB
is a CBP feature that departs from the standard CBP and is normally location or firm specific. kids fishing while parents buying a car
is a sequence of activities that intended to create a certain result
high goods content
what are tangible pure goods? HIgh or Low
low goods content
What are intangible pure goods? High or Low
Core process
Process – focus on producing or delivering an organizations primary goods, or services that create value for customers
Support processes
Process – purchasing materials and suppliers used in manufacturing, managing inventory, installation, technology, acquisition, day care onsite
General Management Process
Process including accounting and information systems, human resources management and marketing.
Strategically address current business needs and successfully develop a long term strategy that embraces opportunity and manages risks for all products, systems, supply chains
Environment Sustainability
organizations commitment to long term quality for our environment
Social sustainability
is an organizations commitment to maintain healthy communities and societies that improves the quality of life
Economic Sustainability
organization commitment to address current business needs and be prepared for future business, markets and operating management.
Business Analyst
process of transforming data into actions through analysis and insights in the context of organizational decision making and problem solving
Value Chain
how does things come together to deliver to the customer. customer puts the value
Supply chain
only looks at physical movements of goods and materials
is the customer perception of the benefits associated with a good
value proposition
a competitively dominant customer experience
Perceived benefits / Cost to the customer
Value =
Operation structure
is the configuration of resources, such as suppliers, factories, warehouse, distributors, technical support centers, engineering design and state offices
vertical integration
acquisition and consolidation of elements of a value chain to achieve more control
Backward integration
refers to acquiring capabilities towards suppliers
Forward integration
refers to acquiring capabilities toward distribution or even customers
process of having suppliers provide goods and services that were previously provided internally (do not have control)
Value chain integration
process of managing information physical goods and services to ensure their availability at the right place, at the right time, at the right cost, at the right quantity
going to another country, factories, while maintaining ownership and control
is the process of moving operations back to a company’s domestic location
Multinational enterprice
organizations that sources markets and procedures its goods and services in several contries
the act of quantifying the performance of organizational units, goods, and services, processes people and other business activities
Financial, customer and market, quality, time
types of measurements
Customer satisfaction
measurement system – provides customer rating of specific goods or services and indicates the relationship between those rating in the customers likely future buying behavior
measures the degree to which the output of process meets customers requirements
Good quality
relates to the physical performance and characteristics of a good
Services quality
is consistently meeting or exceeding customer expectations and service delivery system performance for all service encounter
service upset
error in service or creation and delivery
processing time
the time it takes to perform a task
Queue time
the waiting time
ability to adapt quickly and effectively to changing requirements
Goods and service design flexibility
ability to develop a wide range of customized goods or services to meet different or changing customers
Volume flexibility
ability to respond quickly to changes in the volume and type of demand
create new and unique goods and services that delight customer and create competitive advantage
creating acquiring and transferring knowledge and modifying the behavior of employees in response to internal and external exchange
the ratio of the output of a process to the input
Operational efficiency
is the ability to provide goods and services to customers with minimum waste and maximum utilization resources
Triple Bottom Line (TML)
refers to the measurement of environmental, social and economic sustainability
the quantitative modeling of cause and effect relationship between external and internal performance criteria
Value of a Loyal Customer
VLC quantifies the total revenue or profit each target market customer generate over the buyers life cycle
Actionable measure
provide the basis for decisions at the level which they are applied
Baldrige Performance
Provide a framework for performances excellence, the winners get to see the president
competitive advantage
denotes a firm’s ability to achieve market and financial superiority over its competitors
Order qualifiers
Basic customer expectations are generally considered the minimum performance level required to stay in business
Order winners
(satisfiers, delighter, exciters) are goods and services features and performance characteristics that differentiate one customer benefit package form other.
Search Attributes
Are attributes a customer can determine prior to purchasing the goods and or services, it includes color, price, freshness
Experience attributes
attributes that can be discerned only after purchase or during consumption (a cruise)
Credence attributes
any aspects of goods and services that the customer must believe in but cannot personally evaluate even after purchase
Competitive priorities
represent the strategic emphasis that a firm places on certain performance measures and capabilities with in value chain.
Key competitive priorities
cost, quality, time, flexibility, innovation
Quality competitive priority
once big on markets they focus on the price high goods quality can charge premium prices. differentiation
Cost competitive priority
low cost results high productivity and high capacity utilization
Time competitive priority
customers demand quick response, short waiting time, and consistency
non value added steps
Time reduction can be streamlining and simplifying processes to eliminate
Flexibility competitive priority
manifests in mass customization, competitive priority
Mass customization
being able to make whatever goods and services the customer wants at any volume at any time
discovery and practical application or commercialization of a device, method or idea that differs from existing norms
pattern or plan that integrates an organization major goals policies and action sequences into cohesive whole
core competencies
are the strength that are unique to an organization
Operation Strategy
delivers how an organization will execute
operation design choices
are the decisions management must make as to what type of process structure is best suited to produce goods
focus on non-processes factores and capabilities of the organization. culture