WGU C720 Operations and Supply Chain Management Study Guide

Teamwork - Teamwork in operations benefit the customer when coordinated decisions within an organization produce high quality products that customers value. Product design - consideration of the characteristics, features, and performance of the product. Product technology - application of knowledge to improve the product. Process design - describes how a product will be made. Process technology - application of knowledge to improve a process C720: OPERATIONS & SUPPLY CHANGE MANAGEMENT - NOTES / STUDY GUIDE - Teamwork - Teamwork in operations benefit the customer when coordinated decisions within an organization produce high quality products that customers value. Product and process design - are crucial and relate to both the design of goods and services. Product design - consideration of the characteristics, features, and performance of the product. Product technology - application of knowledge to improve the product. Process design - describes how a product will be made. Process technology - application of knowledge to improve a process. Teamwork can help make improvements to products - . To remain competitive in the global marketplace, teamwork should be utilized to help solve quality and productivity problems. Most organizations develop common goals during the budgeting and planning process, which are done annually. - Many businesses are shifting to organization by process due to - today's fast paced environment. Organizational structures - designed by process cross-functional lines. Cross-functionality - a unique feature important to any organization. Eliminating functional silos - allows teams to share knowledge and understanding of decision-making across the organization. Decentralizing decision-making leads to more cross-functional teams. Relative advantage - the difference between the lowest cost producer and the nextlowest cost producer Ethics - a sense of what is right and wrong that guide behavior. Sustainability - reflects the efforts organizations are expected to make to balance their interconnected obligations to economic viability, the societies in which they operate, and the natural environment - the "triple bottom line." Organizations need to focus on how a decision affects - profitability, employees, the community, and the environment, in the long and short term. Competitive advantage - a capability that customers value that gives an organization an edge against its competition. VIRAL - Value to consumers, it should be Inimitable (not easily imitated), Rare, and an organization should have the Aptitude and Lifespan to earn appropriate returns on the advantage. SWOT Analysis - assists in planning to achieve objectives. Key processes - organizations must have: strategy development, product development, development of systems to produce services and goods, and order fulfillment to leverage impact. Systems development key to meeting strategic goals. - Resources include: people, facilities, equipment, materials, and energy. Process redesign facilitates working toward a common goal in organizations. - Productivity - a mathematical calculation. It is the ratio of the outputs achieved divided by the inputs consumed to achieve those outputs. Productivity Output / Input. Change in productivity = (new productivity - old productivity) / old productivity. Labor productivity - Quantity or value of units produced divided labor hours or labor cost. Labor Productivity = Quantity or Value of Units Produced / Labor Hours or Labor Costs. Quality - is determined by the customer and how the customer will use a product. to judge service quality: - Reliability- ability to perform the promised service dependably and accurately.Responsiveness- willingness to help customers and provide prompt service. Reliability - ability to perform the promised service dependably and accurately. Responsiveness - willingness to help customers and provide prompt service. Assurance - knowledge and courtesy of employees and their ability to convey trust and confidence. Empathy - provision of caring, individualized attention to customers. Tangibles - appearance of physical facilities, equipment, personnel, and communication materials. Factors that determine quality for goods: - Performance - primary operating characteristic of a product Features - secondary characteristics that supplement the product's basic functioning. Reliability - length of time a product will function before it fails or the probability it will function for a stated period of time. Conformance - degree to which a product's design and operating characteristics match pre-established standards. Durability - ability of a product to function when subjected to hard and frequent use. Serviceability - speed, courtesy and competence of repair. Aesthetics - how a product looks, feels, sounds, tastes, or smells. Perceived quality - image, advertising, or brand name of a product. Failure costs - can be internal to the organization (defects found before product reaches consumer) or external after reaching the customer (cost of warranty repair work, handling complaints, or replacing products). Failure costs can lead to: lost goodwill, legal liability if someone is injured/killed, and even loss of customers. Appraisal costs - investment in measuring the quality and assessing customer satisfaction. Appraisal costs include: costs involved with customer satisfaction surveys, hiring individuals to inspect property at a hotel chain, or testing computers to ensure they will operate as intended. Prevention costs - put a stop to the quality problem. Prevention costs include: activities such as employee training, quality control procedures or other activities designed to prevent product defects. Statistical process control (SPC) - the use of statistical methods to determine when a process that produces a good or service is getting close to producing an unacceptable level of defects. Walter Shewhart - father of statistical quality control. Founding father of statistical process control. Developed the P-D-C-A (Plan Do Check Act) which came to be known as Shewhart Cycle, and also the Deming Wheel. However, Deming preferred to call it the Shewhart Cycle. Deming later revised it to P-D-S-A (Plan Do Study Analyze) because he felt "check" emphasized inspection over analysis. Deming's 14 points for transformation of management - Deming's basic premise: systems, not employees cause defects. Deming emphasized the importance of training employees to use tools of statistical process control. Joseph Juran - 1950s began his "cost of quality" approach, which stressed the desirability of lowering costs associated with prevention. Juran also suggested the Pareto Principle (he named it after Italian economist Vilfredo Pareto). Pareto Principle is known as 80/20 Rule (80% of effects come from 20% of causes). Pareto Principle has become standard term to describe any situation where a relatively small percentage of factors are responsible for the substantial percentage of effect. Juran - believed that product quality means "fitness for use" which gives the customer the best value. Emphasized management's responsibility for ensuring quality. Emphasized need for continuous improvement through 3 quality elements: planning, control, improvement. Quality planning (Juran) - the development of products and services that appeal to the ever-changing customer wants and needs. Quality Control (Juran) - Inspection and control functions revolve around understanding the customer's perception of fitness of use. Quality improvement (Juran) - The elimination of waste and errors is something that must be led by leadership of a firm. Crosby - stated that all errors must be eliminated. Believed that failure costs were much higher than companies thought and creating a zero-error environment was key. "Do it right the first time" Taguchi - used "Robust design" to ensure the highest quality product or procedure. Quality must be designed into the product. Quality must be designed into a product. Ishikawa - developed a diagram to show cause and effect relationships. (Fishbone diagram). Teamwork is essential - quality circles. Quality with an external orientation feature focuses on customer needs rather than product characteristics. "Quality is the capacity to satisfy customers' needs." Quality with internal orientation focuses on the characteristics of the product/service. - Quality function deployment - transforming customer expectations into specific actions designed to meet those expectations. Total quality management (TQM) - an approach to quality management that originated in Japan and was adopted successfully by many companies throughout the world. Focus on the customer. Quality function development. Responsibility for quality. Team problem-solving. Employee training. Fact-based management. Voice of the customer (VOC) - describes what customers want and that they like and do not like. Quality function deployment (QFD - - one method that can be used to make that transformation by relating customer needs and expectations to specific design characteristics through a series of grid or matrices. House of quality matrix (what vs. how - customer needs vs. design characteristics) helps a company evaluate tradeoffs. Plan-do-check-act cycle - Plan before making any changes. Do, implement the plan and document any changes made. Check, analyze the revised process to determine if goals have been achieved. Act, if goals have been achieved then standardize and document the changes. Continuous improvement - extremely important part of TQM. No matter how good a company is, it must always strive to do better. Benchmarking - a process by which a company compares its performance to the performance of other companies. Benchmark does not define the best possible outcome; it only identifies what a company has achieved. Statistical process control (SPC) - the use of mathematical methods to determine when a process that produces a good or service is getting close to producing an unacceptable level of defects. Use: cause-and-effect diagrams, check sheets, control charts, histograms, Pareto charts, scatter diagrams, and flow or run charts. Statistical process control uses methods and tools to determine the stability of a manufacturing process and reduce the number of product defects. - Fishbone (cause and effect) charts - show the impact of various inputs into the result of a process. Check sheets - the means used to record data points in real-time at the site where the date is generated. Histogram - demonstrates the frequency of data observations within a present range of values. Pareto chart - represents data values in a descending order to visualize the most frequent occurrences. Control charts - graphical depictions of process output where the raw data is plotted in real-time within upper and lower control limits. Run charts - another form of control chart for processes that might have common features, a common scale, or some form of central tendency. Six sigma - relates to the firm's ability to produce error free products. 3.4 defects per 1 million units. Uses quantitative and qualitative techniques and tools. Follows five steps: Define, measure, analyze, improve, and control (DMAIC). Uses a project charter which includes all aspects of a project to ensure optimal success. Employee empowerment - involving employees in every step - from product design, to process design, and system design. As workforce becomes more highly skilled, decision-making and responsibility can be moved to individual contributors in frontline processes or lowest level in the organization. When errors occur, frontline employees often have the best perspective to solve the problem, and identify means to prevent defects and eliminate errors. Kaizen teams - can make rapid changes using ideas from the people who are directly involved in the process. Kaizen - Japanese word for "change better" or continuous improvement. 5S process - sort, straighten, shine, standardize, and sustain Problem statement - a concise verbal statement of the problem under study. Supply chain - the network of organizations that participate in producing goods or providing services. Encompasses all activities associated with the flow and transfer of goods and services from raw material extraction through use by final customer. Focal firm - directs the flow of information. The better the focal firm is at moving information among participants, the better the supply chain will perform. Usually interacts with the final customer.