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BUSINESS MODELS FINAL EXAM
Operations Management the planning, scheduling, and control of the activities that transform inputs into finished goods and services Supply Chain Management the active management of supply chain activities and relationships in order to maximize customer value and achieve a sustainable competitive advantage Supply chain A network of manufacturers and service providers that work together to create products or services needed by end users. These manufacturers and service providers are linked together through physical flows, information flows, and monetary flows. Upstream activities or firms positioned earlier in the supply chain Downstream activities or firms positioned later in the supply chain First tier supplier a supplier that provides products or services directly to a firm Second tier supplier A supplier that provides products or services to a firm's first-tier supplier. Agility the ability to recalculate plans in the face of market, demand and supply volatility and deliver the same or comparable cost, quality and customer service Supply chain operations reference model A set of processes, metrics, and best practices developed by the Supply Chain Structural element Includes tangible resources such as buildings, equipment, and computer systems Infrastructural element Includes the policies, people, decision rules, and organizational structure choices made by a firm Strategy
a mechanism by which a business coordinates its decisions regarding structural and infrastructural elements Mission statement A statement that explains why an organization exists. It describes what is important to the organization, called its core values, and identifies the organization's domain Business strategy The strategy that identifies a firm's targeted customers and sets time frames and performance objectives for the business Core competency An organizational strength or ability, developed over a long period, that customers find valuable and competitors find difficult or even impossible to copy Functional Strategy A strategy that translates a business strategy into specific actions for functional areas such as marketing, human resources, and finance. Operations and supply chain strategy the setting of broad policies and plans that will guide the use of the resources needed by the firm to implement its corporate strategy Customer Value Index A measure that uses performance and importance scores for the various performance dimensions for a product or a service to calculate a score that indicates the overall value of an item or service to a customer Customer value index calculation (Importance) Performance Four Performance Dimensions Quality, Time, Flexibility, Cost Performance Quality the product's ability to perform its functions Order winners A performance dimension that differentiates a company's products and services from its competitors Order qualifiers A performance dimension on which customers expect a minimum level of performance Product-based layout
A package that includes all the value-added physical and intangible activities that a service organization provides to the customer Customer contact The degree of customer contact determines the relative importance of front room and back room operations in a service process Product based layout Arranges resources sequentially, according to the steps required to make a product or provide a service Takt Time the maximum allowable cycle time at each workstation based on customer demand Take Time Formula Total available production time/Average customer demand Line balancing the process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements Primary process A process that addresses the main value-added activities of an organization Support process A process that performs necessary, albeit not value-added activities Development processes A process that seeks to improve the performance of primary and support processes Process A set of logically related tasks performed to achieve a defined business outcome Mapping The process of developing graphic representations of the organizational relationships and/or activities that make up a business process Process map A detailed map that identifies the specific activities that make up the informational, physical and/or monetary flows of a process Productivity a measure of process performance
Single-factor productivity a productivity score that measures output levels relative to single input multifactor productivity a productivity score that measures output levels relative to more than one input Cycle time The total elapsed time needed to complete a business process Benchmarking The process of identifying, understanding, and adapting outstanding practices from within the same organization or from other businesses to help improve performance competitive benchmarking The comparison of an organization's processes with those of competing organizations Process Benchmarking The comparison of an organization's processes with those of noncompetitors that have been identified as having superior processes Six sigma A business process for improving quality, reducing costs, and increasing customer satisfaction DMAIC (Six Sigma) Define goals, Measure existing process, Analyze process, Improve process, Control new process DMADV (six sigma) Define, Measure, Analyze, Design, Verify SCOR (Supply Chain Operations Reference) Model A measurement tool that enables supply chain partners to track performance, communicate progress, and develop opportunities for improvement American society for quality the characteristics of a product or service that bear on its ability to satisfy stated or implied needs Value perspective A quality perspective that holds that quality must be judged, in part, by how well the characteristics of a particular product or service align with the needs of a specific user conformance perspective
the maximum defect level at which a consumer would always accept a lot Lot tolerance percent defective the highest defect level a consumer is willing to tolerate continuous variable a variable that can be measured along a continuous scale, such as weight, length, height, and temperature Supply Management The broad set of activities carried out by organizations to analyze sourcing opportunities, develop sourcing strategies, select suppliers, and carry out all the activities required to procure goods and services Global sourcing Firms do not compete only against global competitors, but against their competitors' supply chain Financial impact -Cost of goods sold - The purchased cost of goods from outside suppliers. -Merchandise inventory - A balance sheet item that shows the amount a company paid for the inventory it has on hand at a particular point in time. -Profit margin - The ratio of earnings to sales for a given time period. -Return on assets - A measure of financial performance generally defined as Earnings/Total Assets. Profit Leverage Effect a term used to describe the effect of $1 in cost savings increasing pretax profits by $1 and a $1 increase in sales increasing pretax profits only by $1 multiplied by the pretax profit margin Performance impact -cost is not the only consideration, purchased goods and services can have a major effect on other performance dimensions including quality and delivery performance Spend Analysis The application of quantitative techniques to purchasing data in an effort to better understand spending patterns and identify opportunities for improvement Portfolio analysis the process by which management evaluates the products and businesses that make up the company Multiple-Sourcing Strategy A plan to contract with several suppliers to ensure that backup supplies are available logistics management
The part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements Logistics Management Activities Transportation Warehousing Material handling Packaging Inventory management Logistics information systems Five Transportation Modes Highway Water Air Rail Pipeline major transportation modes Highway Water Air Rail consolidation warehousing A form of warehousing that pulls together shipments from a number of sources in the same geographic area and combines them into larger and more economical loads Cross docking A form of warehousing in which large incoming shipments are received and then broken down into smaller outgoing shipments to demand points in a geographic area Hub and spoke system A form of warehousing in which strategically placed hubs are used as sorting or transfer facilities Reverse logistics system A complete supply chain dedicated to the reverse flow of products and materials for the purpose of returns, repair, remanufacture or recycling weighted center of gravity method A logistics decision modeling technique that attempts to identify the "best" location for a single warehouse, store, or plant given multiple demand points that differ in location and importance
