Operations and supply chain management: OSCM: Chapter 1: Operations & Supply Chain Management Flashcards
What's the definition of OSCM (Operations & Supply Chain Management)?
The design, operation, and improvement of the systems that create and deliver the firm's primary products and services.
What are the categories of OSCM?
Planning, Sourcing, Making, Delivering and Returning.
Planning: Operate the existing supply chain, use key metrics to drive it and monitor its health.
Sourcing: Supplier selection, pricing, delivery and key metrics.
Making: Where the product is produced or the service provided-- speed and quality measured.
Delivering: Logistics processes. Warehouses, shippers, carriers, etc...
Returning: Receiving defective, worn out, or excess product or providing support.
What are the five essential differences between services and goods?
1. A service is an intangible process that cannot be weighed, whereas a good is a tanglible output of a process that has physical dimensions.
2. A service requires some degree of interaction with the customer for it to be a service. Goods, on the other hand, are generally produced in a facility separate from the customer.
3. Services (with some exceptions) are inherently heterogeneous (they vary from day to day and eve3n hour by hour as a function of the attitudes of the customer and the servers. Goods can be produced to meet very tight specifications day-in and day-out w/ essentially zero variability.
4. Services as a process are perishable and time dependent and cannot be stored.
5. The specifications of a service are defined and evaluated as a package of features that affect the five sense. These featuers are "supporting facility", "facilitating goods", "explicit services" and "implicit services".
Is a product usually either a good or a service or a mix?
Most any product offering is a combination of goods and services. Really, there's a continuum of "pure goods" to "pure services".
What are some examples of pure goods?
Food products, chemicals, book publishing.
What are some examples of pure services?
Teaching, medical advice, financial consulting
What are goods and services called that are in between pure goods and pure services and what are some examples of each?
Core Goods: appliances, data storage systems, automobiles
Core Services: hotels, airlines, internet service providerse.
Are pure goods industries typically low margin or high margin?
Pure goods industries have become low margin commodity businesses. In order to differentiate, they are often adding some services, like providing consulting services.
What is Servitization?
Servitization refers to a company building service activities into its product offerings for its current users, that is, its installed base. Such services include maintenance, spare part provisioning, training, and in some cases, total systems design and R&D. A well known pioneer in this area is IBM.
Is servitization always the best strategy? Does it always lead to better profitability?
A servitization strategy might not be the best approach for all product companies. A recent study found that while servitized firms generate higher revenues, they tend to generate lower profits as a percentage of revenues when compared to focused firms. This is because they are often unable to generate revenues or margins high enough to cover the additional investment required to cover service-related costs.
How is the current US labor force split up among agriculture, manufacturing and services?
3% agriculture, 27% manufacturing and 70%! in services.
What is Efficiency? (roughly)
Efficiency means doing something at the lowest possible cost. The goal of an efficient process is to produce a good or provide a service by using the smallest input of resources.
What is Effectiveness? (roughly)
Effectiveness means doing the right things to create the most value for the company. Often, maximizing effectiveness and efficiency at the same time creates conflict between the two goals. (Example: at a customer service counter at a local bank, being efficient means using the fewest people possible at the counter. Effective, though, means minimizing the amount of time customers need to wait in line.)
What is Value? (roughly)
Related to efficiency and effectiveness is the concept of value, which can be metaphorically defined as quality deviced by price. If you can provide the customer with a better car without changing price, value has gone up. If you can give the customer a better car at a lower price, value goes way up. A major objective of this book is to show how smart management can achieve high levels of value.
What is Business Process Reengineering (BPR)?
Advocates eliminating non-value-added steps and reengineering process. It 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.
What is 'mass customization'?
Producing products to order in lot size of one (think Moto Maker).