Operations - part of a business organization that is responsible for producing goods and/or services

Goods - physical items that include raw materials, parts, subassemblies

Services - activities that provide some combination of time, location, form, or psychological value

Finance - responsible for securing financial resources at favorable prices and allocating those resources
throughout the organization

Marketing - responsible for assessing consumer wants and needs, and selling and promoting the
organization’s goods or services

Operations management - management of systems or processes that create goods and/or provide services

Supply Chain - sequence of organizations—their facilities, functions, and activities—that are involved in
producing and delivering a product or service

Value-added - term used to describe the difference between the cost of inputs and the value or price of
outputs

Process - consists of one or more actions that transform inputs into outputs

Business process management (BPM) - major process can consist of many sub processes, each having its
own goals that contribute to the goals of the overall process

Operations management - where people are involved in product and service design, process selection,
selection and management of technology, design of work systems, location planning, facilities planning,
and quality improvement of the organization’s products or services

Frank Gilbreth - industrial engineer who is often referred to as the father of motion study

Henry Gantt - recognized the value of nonmonetary rewards to motivate workers, and developed a widely
used system for scheduling, called Gantt charts

Harrington Emerson - testified in a congressional hearing that railroads could save a million dollars a day
by applying principles of scientific management

Henry Ford - great industrialist, employed scientific management techniques in his factories

Electronic business, or e-business - the use of the Internet to transact business

Technology - application of scientific discoveries to the development and improvement of goods and
services

High Technology - most advanced and developed machines and methods

Product and service technology - discovery and development of new products and services

Process technology - methods, procedures, and equipment used to produce goods and provide services

Information technology (IT) - science and use of computers and other electronic equipment to store,
process, and send information

Management of technology is high on the list of major trends, and it promises to be high well into the
future

Globalization - process by which businesses or other organizations develop international influence or start
operating on an international scale
Six sigma - process for reducing costs, improving quality, and increasing customer satisfaction

Total quality management (TQM) - quality focus emphasizes customer satisfaction and often involves
teamwork

Agility - ability of an organization to respond quickly to demands or opportunities

Sustainability - service and production processes that use resources in ways that do not harm ecological
systems that support both current and future human existence

Ethics - standard of behavior that guides how one should act in various situations

Competitiveness - how effectively an organization meets the wants and needs of customers relative to
others that offer similar goods or services

Goals - foundation for the development of organizational strategies

Strategies - plans for achieving organizational goals, provide focus for decision making

Responsiveness - ability to respond to changing demands

Differentiation - relate to product or service features, quality, reputation, or customer service

Tactics - methods and actions used to accomplish strategies

SWOT Analysis - tool to analyze the performance of the business organization

Order qualifiers - characteristics that potential customers perceive as minimum standards of acceptability
for a product to be considered for purchase

Order winners - characteristics of an organization’s goods or services that cause them to be perceived as
better than the competition

Environmental scanning - monitoring of events and trends that present either threats or opportunities for
the organization

Operations strategy - approach, consistent with the organization strategy, that is used to guide the
operations function

Agile operations - strategic approach for competitive advantage that emphasizes the use of flexibility to
adapt and prosper in an environment of change

Productivity - index that measures output (goods and services) relative to the input (labor, materials,
energy, and other resources) used to produce it

Forecast - basic input in the decision processes of operations management because they provide
information on future demand

Budgeting - predict its finances for the organization

Planning capacity - predicts its amount or content that an organization can produce or sell

Sales - predicts its total number of products to be sold.

Production and inventory - predicts its total number of goods to produce and total number of materials
stored.

Personnel - predicts the number of individuals that will work for the organization.

Purchasing - predicts the total number of raw materials to be purchased.

Qualitative - consist mainly of subjective inputs, which often defy precise numerical description.
Qualitative techniques permit inclusion of soft information (e.g., human factors, personal opinions,
hunches) in the forecasting process

Quantitative - involve either the projection of historical data or the development of associative models
that attempt to utilize causal (explanatory) variables to make a forecast

Judgmental forecasts - analysis of subjective inputs obtained from various sources, such as consumer
surveys, the sales staff, managers and executives, and panels of experts

Time-series forecasts - simply attempt to project past experience into the future. These techniques use
historical data with the assumption that the future will be like the past

Associative models - equations that consist of one or more explanatory variables that can be used to
predict demand

DELPHI METHOD - iterative process intended to achieve a consensus forecast. This method involves
circulating a series of questionnaires among individuals who possess the knowledge and ability to
contribute meaningfully

Naive forecast uses a single previous value of a time series as the basis of a forecast

Moving average - uses a number of the most recent actual data values in generating a forecast

Exponential smoothing - sophisticated weighted averaging method that is still relatively easy to use and
understand

Manufacturability - capability of an organization to produce an item at an acceptable profit.

Serviceability - capability of an organization to provide a service at an acceptable cost or profit

Reverse engineering - dismantling and inspecting a competitor’s product to discover product

improvements

Suppliers - another source of ideas, and with increased emphasis on supply chains and supplier
partnerships, suppliers are becoming an important source of ideas

Research -another source of ideas for new or improved products or services

Research and development (R&D) - organized efforts that are directed toward increasing scientific
knowledge and product or process innovation

Basic research - advancing the state of knowledge about a subject, without any near-term expectation of
commercial applications

Applied research - achieving commercial applications

Development converts the results of applied research into useful commercial applications

Cradle-to-grave assessment - known as life cycle analysis, is the assessment of the environmental impact
of a product or service throughout its useful life

Value analysis - refers to an examination of the function of parts and materials in an effort to reduce the
cost and/or improve the performance of a product

Remanufacturing - refers to refurbishing used products by replacing worn-out or defective components,

and reselling the products

Recycling means recovering materials for future use

Design for recycling (DFR) - referring to product design that takes into accounts the ability to disassemble a
used product to recover the recyclable parts. Design that facilitates the recovery of materials and
components in used products for reuse.

Introduction - when a product or service is introduced, it may be treated as a curiosity item

Growth - it is important to obtain accurate projections of the demand growth rate and how long that will
persist, and then to ensure that capacity increases coincide with increasing demand

Maturity - the product or service reaches maturity, and demand levels off

Decline - decisions must be made on whether to discontinue a product or service and replace it with new
ones or abandon the market, or to attempt to find new uses or new users for the existing product or
service

Standardization - refers to the extent to which there is absence of variety in a product, service, or process

Standardized products mean interchangeable parts, which greatly lower the cost of production while
increasing productivity and making replacement or repair relatively easy compared with that of customized
parts

Mass customization - a strategy of producing standardized goods or services, but incorporating some
degree of customization in the final product or service

Delayed differentiation - a postponement tactic: the process of producing, but not quite completing, a
product or service, postponing completion until customer preferences or specifications are known

Modular design - a form of standardization. Modules represent groupings of component parts into
subassemblies, usually to the point where the individual parts lose their separate identity

Reliability - a measure of the ability of a product, a part, a service, or an entire system to perform its
intended function under a prescribed set of conditions

Failure - used to describe a situation in which an item does not perform as intended

Normal operating conditions - the set of conditions under which an item’s reliability is specified

Robust design - the design that results in products or services that can function over a broad range of
conditions

Taguchi’s Approach - Japanese engineer Genichi Taguchi’s approach is based on the concept of robust
design

Quality function deployment (QFD) - an approach that integrates the “voice of the customer” into both
product and service development

Kano model - a theory of product and service design developed by Dr. Noriaki Kano, a Japanese professor,
who offered a perspective on customer perceptions of quality different from the traditional view that
“more is better

Basic quality - refers to customer requirements that have only a limited effect on customer satisfaction if
present, but lead to dissatisfaction if not present

Performance quality - refers to customer requirements that generate satisfaction or dissatisfaction in

proportion to their level of functionality and appeal
Excitement quality - refers to a feature or attribute that was unexpected by the customer and causes
excitement (the “wow” factor), such as a voucher for dinner for two at the hotel restaurant when checking
in

Service - refers to an act, something that is done to or for a customer

Service delivery system - includes the facilities, processes, and skills needed to provide the service.

Product bundle - the combination of goods and services provided to a customer

Service package - the physical resources needed to perform the service, the accompanying goods, and the
explicit and implicit services included

Service blueprint - useful tool for conceptualizing a service delivery system

Process selection refers to deciding on the way production of goods or services will be organized

Capital intensity - the mix of equipment and labor that will be used by the organization

Process flexibility - the degree to which the system can be adjusted to changes in processing requirements
due to such factors as changes in product or service design, changes in volume processed, and changes in
technology

Variety - means either having separate operations for each product or service, with a steady demand for
each, or being willing to live with some idle time, or to get equipment ready every time there is the need to
change the product being produced or the service being provided

Job Shop - a job shop usually operates on a relatively small scale. It is used when a low volume of high-
variety goods or services will be needed

Intermittent - occurring at irregular intervals; not continuous or steady

Batch processing - used when a moderate volume of goods or services is desired, and it can handle a
moderate variety in products or services

Repetitive - processes have been defined as those involving the processing of a material or workpiece by a
sequence of passes of the processing tool

Continuous production is a flow production method used to manufacture, produce, or process materials
without interruption

Project is used for work that is nonroutine, with a unique set of objectives to be accomplished in a limited
time frame

Product or service profiling - is linking key product or service requirements to process capabilities

Technological innovation - refers to the discovery and development of new or improved products,
services, or processes for producing or providing them

Technology -refers to applications of scientific discoveries to the development and improvement of goods
and services and/or the processes that produce or provide them

Process technology - includes methods, procedures, and equipment used to produce goods and provide
services

Information technology (IT) - the science and use of computers and other electronic equipment to store,
process, and send information

Automation - machinery that has sensing and control devices that enable it to operate automatically
Fixed automation - the least flexible, it uses high-cost, specialized equipment for a fixed sequence of
operations

Programmable automation - involves the use of high-cost, general-purpose equipment controlled by a

computer program that provides both the sequence of operations and specific details about each
operation

Computer-aided manufacturing (CAM) - refers to the use of computers in process control, ranging from
robots to automated quality control

Numerically controlled (N/C) machines - are programmed to follow a set of processing instructions based
on mathematical relationships that tell the machine the details of the operations to be performed

Computerized numerical control (CNC) - refers to a computer that reads instructions and drives a machine
tool

Flexible automation - a type of manufacturing automation which exhibits some form of “flexibility”

Flexible manufacturing system (FMS) - a group of machines that include supervisory computer control,
automatic material handling, and robots or other automated processing equipment

Computer-integrated manufacturing (CIM) - a system that uses an integrating computer system to link a
broad range of manufacturing activities, including engineering design, flexible manufacturing systems,
purchasing, order processing, and production planning and control