Operations and Supply Chain Management: OSCM Chapter 1 Flashcards

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College: Third year
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Definition of Operations and Supply Chain Management (OSCM)

The design, operation and improvement of the systems that create and deliver the firm’s primary products and services.

Concerned with the management of the entire system that produces a product or delivers a service


Operations Management

Refers to manufacturing and service processes used to transform the resources employed by a firm into products desired by customers

Manufacturing process: include produce some type of physical products

Service process: produce intangible product


supply chain management

Refers to processes that move information and material to and from the manufacturing and service process of the firm.


- the logistics processes that physically move product

- warehousing and storage processes that position products for quick delivery to the customer


Categories of OSC processes

Planning, sourcing, making, delivering, returning

1. Planning: consists of the processes needed to operate an existing supply chain strategically.

2. Sourcing: involves the selection of suppliers that will deliver the goods and services needed to create the firm’s product.

3. Making: is where the major product is produced or the service is provided.

4. Delivering: also referred to as logistics processes; coordinate and schedule the movement of goods and information through the supply network.

5. Returning: involves processes for receiving worn-out, defective, and excess products back from customers and support for customers who have problem with delivered products.


Differences between services and goods

1. Tangible vs. intangible:
- Services is an intangible process —> cannot be weighted or measured
- A good is a tangible output of a process that has physical dimensions

2. Degree of customer interaction:
- services require some degree of interaction
- goods are produced in a facility separate from the customer

3. Heterogeneity
- services: are inherently heterogeneous -> they vary from day to day
- goods: can be produced to meet very tight specifications with essentially zero variability

4. Time & Place
- Services as processes are perishable and time dependent , they cannot be stored
- goods - can be stored and consumed any time

5. Services are evaluated as a package of features:
- supporting facility
- facilitating goods
- explicit services
- implicit services


the good-services continuum

Captures the main focus of the business and spans from firms that just produce products to those that only provide services


Product-service boundling ("servitization")

refers to a company building service activities into its product offerings for its customers.


mass customization:

The ability to produce a unique product exactly to a particular customer’s requirements.

A strategy of producing standardized goods or services, but incorporating some degree of customization


manufacturing strategy paradigm

Emphasized how manufacturing executives could use their factories’ capabilities as strategic competitive weapons


service quality and productivity

The unique approach to quality and productivity pioneered by McDonald’s has been successful that it stands as a reference point in thinking about how to deliver high-volume standardized services


Total Quality Management (TQM)

TQM: managing the entire organization so it excels in all dimensions of products and services important to the customer.

ISO 9000: certification standard created by the International Organization for Standardization; now play a major role in setting the quality standards for global manufacturers.


Six Sigma Quality

A statistical term to describe the quality goal of no more than 3.4 defects out of every million units. Also refers to a quality improvement philosophy and program


Just-in-time (JIT):

JIT was the major breakthrough in manufacturing philosophy. Pioneered by the Japanese.
- an integrated set of activities designed to achieve high-volume production using minimal inventories of parts that arrive exactly when they are needed.


Total Quality Control (TQC)

Aggressively seeks to eliminate causes of production defects
- now cornerstone in many manufacturers’ production practices


Lean Manufacturing

Lean manufacturing: to achieve high customer service with minimum levels of inventory investment
-> the term is used to refer to a set of concepts (TQC, JIT)


Business process reengineering (BPR)

An approach that seeks to make revolutionary changes as opposed to evolutionary changes (which are commonly advocated in TQM)

-> does this by taking a fresh look at what the organization is trying to do in all its business processes, and then eliminating non-value added steps and computerizing the remaining ones to achieve the desired outcome.


electronic commerce

Refers to the use of the Internet as an essential element of business activity.


Business Analytics

Involves the analysis of data to better solve business problems


The Internet of Things

A term that refers to the billions of devices that are connected to the internet.


Current issues in operations and supply chain management

1. Uncertainty in global tariffs and regulations

2. Difficulty in hiring and keeping employees

3. Adapting to change in business technology and infrastructure



a ration of the actual output of a process relative to some standard. Means doing something at the lowest possible cost.



Doing the things that will create the most value for the customer



The attractiveness of a product relative to its price.

- if you can provide the customer with a better product without changing the price, value has gone up.