Operations Management Final Exam |
Questions and answers
The Strategic Importance of Location - -Once committed to a location, many
resource and cost issues are difficult to change
- The objective of location strategy - -is to maximize the benefit of location
to the firm
- Location and Costs - -Location decisions require careful consideration
Once in place, location-related costs are fixed in place and difficult to reduce
Effort spent determining optimal facility location is a good investment
- Factors That Affect Location Decisions - -Globalization adds to complexity
Drivers of globalization
Market economics
Communication
Rapid, reliable transportation
Ease of capital flow
Differing labor costs
- Key Success Factors for location decisions - -1. Political risks, government
rules, attitudes, incentives
2. Cultural and economic issues
3. Location of markets
4. Labor talent, attitudes, productivity, costs
5. Availability of supplies, communications, energy
6. Exchange rates and currency risks
- Factors That Affect
Location Decisions - -Proximity to markets
Proximity to suppliers
Proximity to competitors
- The objective of supply chain management - -is to structure the supply
chain to maximize its competitive advantage and benefits to the ultimate
consumer
- The Supply Chain's
Strategic Importance - -Large portion of sales dollars spent on purchases
Supplier relationships increasingly integrated and long term
Improve innovation, speed design, reduce costs
Managing supplier relationships has added emphasis
, - Supply Chain Risk - -More reliance on supply chains means more risk
Fewer suppliers increase dependence
Compounded by globalization and logistical complexity
Vendor reliability and
quality risks
Political and
currency risks
- Risk and Mitigation Tactics - -Research and assess possible risks
Innovative planning
Reduce potential disruptions
Prepare responses for negative events
Flexible, secure supply chains
Diversified supplier base
- SCOR Model - -Supply Chain Operations Reference
Plan: Demand/Supply planning and Management
Source: Identify, Select, Manage, and Assess Sources
Make: Manage production execution, testing, and packaging
Deliver: Invoice, warehouse, transport and install
Return: Raw Material
Return: Finished Goods
- The objective of inventory management - -is to strike a balance between
inventory investment and customer service
- Importance of Inventory - -One of the most expensive assets of many
companies representing as much as 50% of total invested capital
Less inventory lowers costs but increases chances of running out
More inventory raises costs but always keeps customers happy
- Functions of Inventory - -To provide a selection of goods for anticipated
demand and to separate the firm from fluctuations in demand
To decouple or separate various parts of the production process
To take advantage of quantity discounts
To hedge against inflation
- Types of Inventory - -Raw material
Purchased but not processed
Work-in-process (WIP)
Undergone some change but not completed
A function of cycle time for a product
Maintenance/repair/operating (MRO)
Necessary to keep machinery and processes productive
Finished goods
Questions and answers
The Strategic Importance of Location - -Once committed to a location, many
resource and cost issues are difficult to change
- The objective of location strategy - -is to maximize the benefit of location
to the firm
- Location and Costs - -Location decisions require careful consideration
Once in place, location-related costs are fixed in place and difficult to reduce
Effort spent determining optimal facility location is a good investment
- Factors That Affect Location Decisions - -Globalization adds to complexity
Drivers of globalization
Market economics
Communication
Rapid, reliable transportation
Ease of capital flow
Differing labor costs
- Key Success Factors for location decisions - -1. Political risks, government
rules, attitudes, incentives
2. Cultural and economic issues
3. Location of markets
4. Labor talent, attitudes, productivity, costs
5. Availability of supplies, communications, energy
6. Exchange rates and currency risks
- Factors That Affect
Location Decisions - -Proximity to markets
Proximity to suppliers
Proximity to competitors
- The objective of supply chain management - -is to structure the supply
chain to maximize its competitive advantage and benefits to the ultimate
consumer
- The Supply Chain's
Strategic Importance - -Large portion of sales dollars spent on purchases
Supplier relationships increasingly integrated and long term
Improve innovation, speed design, reduce costs
Managing supplier relationships has added emphasis
, - Supply Chain Risk - -More reliance on supply chains means more risk
Fewer suppliers increase dependence
Compounded by globalization and logistical complexity
Vendor reliability and
quality risks
Political and
currency risks
- Risk and Mitigation Tactics - -Research and assess possible risks
Innovative planning
Reduce potential disruptions
Prepare responses for negative events
Flexible, secure supply chains
Diversified supplier base
- SCOR Model - -Supply Chain Operations Reference
Plan: Demand/Supply planning and Management
Source: Identify, Select, Manage, and Assess Sources
Make: Manage production execution, testing, and packaging
Deliver: Invoice, warehouse, transport and install
Return: Raw Material
Return: Finished Goods
- The objective of inventory management - -is to strike a balance between
inventory investment and customer service
- Importance of Inventory - -One of the most expensive assets of many
companies representing as much as 50% of total invested capital
Less inventory lowers costs but increases chances of running out
More inventory raises costs but always keeps customers happy
- Functions of Inventory - -To provide a selection of goods for anticipated
demand and to separate the firm from fluctuations in demand
To decouple or separate various parts of the production process
To take advantage of quantity discounts
To hedge against inflation
- Types of Inventory - -Raw material
Purchased but not processed
Work-in-process (WIP)
Undergone some change but not completed
A function of cycle time for a product
Maintenance/repair/operating (MRO)
Necessary to keep machinery and processes productive
Finished goods
