Operational management Assignment

Part one T/F:

1. True
2. True
3. True
4. False
5. False
6. True
7. True
8. False
Part two Choose:
A
C
E
D
B
C
D
Part 3
1. The field of production management in the past focused almost exclusively on manufacturing
management, with a heavy emphasis on the methods and techniques used in operating a
factory. In recent years, the scope of production management has broadened considerably.
Production concepts and techniques are applied to a wide range of activities and situations
outside manufacturing; that is, in services such as health care, food service, recreation,
banking, hotel management, retail sales, education, transportation, and government. This
broadened scope has given the field the name production/operations management, or more
simply, operations management, a term that more closely reflects the diverse nature of
activities to which its concepts and techniques are applied. Operations management is the set
of activities that creates goods and services through the transformation of inputs into outputs.
2. There are four major decision responsibilities in operations management. These are:
 Process
 Quality
 Capacity
 Inventory
3. The operations function is responsible for the quality of goods and services produced. Quality
decisions must insure that quality is designed and built into the product in all stages of
operations: standards must be set, people trained, and the product or service inspected for
quality to result. Operations has a particular responsibility for producing products and services
that meet the defined specifications and standards.
4. To manufacture and service a growing and profitable worldwide microwave communications
business that exceeds our customers’ expectations.
5. To produce products consistent with the company’s mission as the worldwide low-cost
manufacturer.
6. Strategies are plans for achieving goals. If you think of goals as destinations, then strategies
are the road maps for reaching the destinations. Strategies provide focus for decision-making.
Generally speaking, organizations have overall strategies called organization strategies, which
relate to the entire organization, and they also have functional strategies, which relate to each
of the functional areas of the organization. The functional strategies should support the overall
strategies of the organization, just as the organizational strategies should support the goals and
mission of the organization.
Tactics are the methods and actions used to accomplish strategies. They are more specific in
nature than strategies, and they provide guidance and direction for carrying out actual
operations, which need the most specific and detailed plans and decision-making in an
organization. You might think of tactics as the “how to” part of the process (e.g., how to reach
the destination, following the strategy road map) and operations as the actual “doing” part of
the process.
7. The organization strategy provides the overall direction for the organization. It is broad in
scope, covering the entire organization. Operation strategy is narrower in scope, deals
primarily with the operations aspect of the organization. Operations strategy relates to
products, processes, methods, operating resources, quality, cost, lead times, and scheduling.
8. Let us briefly look at how managers achieve competitive advantage via differentiation, low
cost, and response.
Competing on Differentiation
Differentiation is concerned with providing uniqueness. A firm’s opportunities for creating
uniqueness are not located within a particular function or activity, but can arise in virtually
everything that the firm does. Moreover, because most products include some service and most
services include some product, the opportunities for creating this uniqueness are limited only by
imagination.
Competing on Cost
One driver of a low-cost strategy is an optimal facility that is effectively utilized. Low-cost
leadership entails achieving maximum value as defined by your customer. It requires examining
each of the different operation management decisions in a relentless effort to drive down costs
while meeting customer expectations of value. A low-cost strategy does not imply low value or
low quality.
Competing on Response
Response is often thought of as flexible response, but it also refers to reliable and quick response.
Indeed, we define response as including the entire range of values related to timely product
development and delivery, as well as reliable scheduling and flexible performance.
Flexible response may be thought of as the ability to match changes in a market place in which
design innovations and volumes fluctuate substantially.
In practice, these three concepts- differentiation, low cost, and response-are often translated into
six specific strategies:
(1) Flexibility in design and volume
(2) Low price
(3) Delivery
(4) Quality
(5) After-sale service, and
(6) A broad product line
Through these six specific strategies, operation management can increase productivity and
generate a sustainable competitive advantage. Proper implementation of the operations decisions
by operations managers will allow these strategies to be achieved.
9. Distinctive competencies are those special attributes or abilities possessed by an organization
that give it a competitive edge. In effect, distinctive competencies relate to the ways that
organizations compete. These can include price (based on some combination of low costs of
resources such as labor and materials, low operating costs, and low production costs); quality
(high performance or consistent quality); time (rapid delivery or on-time delivery); flexibility
(variety of volume); customer service; and location.
10. Lack of focus in manufacturing plants and service operations results from excessive attention
to economies of scale. Sometimes incompatible products might be mixed together in the same
facility. In the name of efficiency due to economies of scale, different missions are being
served by the same operation. The solution is to arrange each product as a plant-within-a-plant
(PWP), which may sacrifice some economies of scale while doing a better job of meeting
market requirements and improving profitability. If two or more different missions are being
served by the same facility, this is a signal for the need to have separate focused facilities or a
plant-within-a-plant. A single facility can only support one operations mission.
11. Organizations become involved in product or service design for a variety of reasons. An
obvious one is to be competitive by offering new products or services. Another one is to make
the business grow and increase profits. Furthermore, the best organizations try to develop new
products or services as an alternative to downsizing. Sometimes product or service design is
actually redesign. This, too, occurs for a number of reasons such as customer complaints,
accidents or injuries, excessive warranty claims, or low demand. This desire to achieve cost
reductions in labor or materials can also be a motivating factor.
12. Strategies for New-Product Introduction
There are three fundamentally different ways to introduce new products.
1. Market pull- According to this view, the market is the primary basis for determining the
products a firm should make, with little regard to existing technology.
- A firm should make what it can sell.
- The customer needs are determined, and processes needed to supply the customer. The
market will “pull” through the products that are made.
2. Technology push- In this view, technology is the primary determinant of the products that
the firm should make, with little regard for the market.
 - This approach suggests that “you should sell what you can make”. The firm should pursue
a technology based advantage by developing superior technologies and products.
- The products are then pushed into the market, and the marketing’s job is to create demand
for these superior products.
- Since the products have superior technology, they will have a natural advantage in the
market and the customers will want to buy them.
3. Inter-functional View- This view holds that the product should not only fit the market
needs but have a technical advantage as well.
- To accomplish this, all functions (e.g., marketing, engineering, operations, and finance)
should cooperate to design the new products needed by the firm.
- Often this is done by forming cross functional teams that are responsible for development
of the new product.
- This is the most appealing of the three views but also the most difficult to implement.
- Cross-functional rivalry and friction must be overcome to achieve the degree of
cooperation required for inter functional product development to succeed.
13. New-Product Development Process
The new product development process consists of the following steps.
1. Idea Generation- Ideas for new products can arise from a variety of sources within and
external to the firm. There are two principal sources for generating ideas:
User needs, and

Manufacturers are always trying to develop new products that meet the needs of consumers, e.g.
development of small cars.
Identification of market needs can lead to the development of new technologies and products to
meet those needs. New innovations can replace products based on older technologies. Research
and development (R&D) plays an important role in developing new products and advancing
technology. The purpose of R&D is to generate new ideas and concepts and to develop these ideas
and concepts into useful products.
2. Screening- The purpose of screening is to eliminate ideas that do not appear to have a high
potential for success and thus avoid expensive development costs. Three major criteria are
used in initial screening:
 Product development –technical and operational feasibility
– current market and potential to grow
– contribution to overall profitability and cash flow.
Before a new product idea is put into preliminary design, it should be subjected to analysis
organized around these three tests. The purpose of screening is not to reach a conclusive decision
to produce and market the product. After initial development, more extensive analysis may be
conducted through test markets and pilot operations before a final decision is made to introduce
the product.
To assist in product analysis, several methods have been developed. One is a checklist scoring
method that involves developing a list of factors along with a weight for each.
If the total score is above a certain minimum level the new product idea may be selected for further
development. Alternatively, the method may be used to rank products in priority order for
selection.
A new product idea may also be subjected to standard financial analysis by computing an
approximate return on investment. To do this, cash flows must be estimated for investments,
revenues, and costs for future product sales.
3. Preliminary product design- This process is concerned with developing the best design
for the new product idea. Preliminary product design must specify the product completely.
At the end of the product design phase, the firm has a set of product specifications and
engineering drawings (or computer images) specified in sufficient detail that production
prototypes can be built and tested.
If the preliminary design is approved, a prototype or prototypes may be built for further testing
and analysis. In the preliminary design, trade offs between cost, quality, and product
performances are considered. The result should be a product design, which is competitive in
the market place and produce able by operations.
4. Prototype construction– Several prototypes which closely resemble the final product may
be made.
5. Prototype testing- A model is tested for its physical properties or use under actual
operating conditions. Such testing is important in uncovering any problems and correcting
them prior to full-scale production. Road-testing an automobile or using a consumer panel
to test a new piza are some examples.
 6. Final product design – As a result of prototype testing certain changes may be
incorporated into the final design. Drawings and specifications for the product are
developed. If the changes are made, the product may be tested further to ensure final
product performance. An information package should be developed to ensure that the
product is produceable. A great many ideas originate at the beginning but only a few are
successfully introduced to the market as products.
14. Value analysis (or value engineering)–is a method for improving the usefulness of a product
without increasing its cost or reducing the cost without reducing the usefulness of the product.
It can result is great cost savings or a better product for the customer, or both Value engineering
or value analysis is an attempt to see if any materials or components can be substituted or
redesigned in such a way as to continue to perform the desired function, but at a lower cost
15. The term design for manufacturing (DFM) is also used to indicate the designing of products
that are compatible with an organization’s capabilities. A related concept in manufacturing is
design for assembly (DFA). A good design must take into account not only how a product will
be fabricated, but also how it will be assembled. Design for assembly focuses on reducing the
number of parts in an assembly, as well as the assembly methods and sequence that will be
employed.
16. Robust Design Some products will perform as designed only within a narrow range of
conditions, while other products will perform as designed over a much broader range of
conditions. The latter have robust design. The more robust a product, the less likely it will fail
due to a change in the environment in which it is used or in which it is performed.
17. The service product bundle consists of three elements:
 The physical goods (facilitating goods)
 The sensual service provided (explicit service)
 The psychological service (implicit service)