Key Terms Management

CH. 1

Operations and supply chain management (OSCM): Design, operation and improvement of the systems that create and deliver the firm’s primary products and services. Pg. 40

Servitization: Building service activities to support a firm’s product offerings. Pg. 46

Efficiency: Doing something at the lowest possible cost. Pg. 47

Effectiveness: Doing the right things to create the most value for the company. Pg. 47

Value: Ratio of quality to price paid. Competitive happiness is being able to increase quality and reduce price while maintaining or improving profit margins. Pg. 47

Mass customization: Producing products to order in lot sizes of one. Pg. 52

Sustainability: The ability to maintain balance in a system. Pg. 53

Triple bottom line: Relates to the economic, employee, and environmental impact of the firm’s strategy. Pg. 53

CH. 2

Triple bottom line: A business strategy that includes social, economic and environmental criteria. Pg. 58

Operations and supply chain strategy: Setting broad policies and plans for using the resources of a firm to best support the firm’s long term competitive strategy. Pg. 59

Straddling: Occurs when a firm seeks to match what a competitor is doing by adding new features, services, or technologies to existing activities. Often creates problems if certain trade-offs need to be made. Pg. 63

Order winner: A dimension that differentiates the products or services of one firm from those of another. Pg. 63

Order qualifier: A dimension used to screen a product or service as a candidate for purchase. Pg. 63

Activity-system maps: A diagram that shows how a company’s strategy is delivered through a set of supporting activities. Pg. 64

Core capabilities: Skills that differentiate a manufacturing or service firm from its competitors. Pg. 65

Productivity: A measure of how well resources are used. Pg. 66

CH. 3

Contract manufacturer: An organization capable of manufacturing and or purchasing all the components needed to produce a finished product or device. Pg. 76

Core competency: The one thing that a firm can do better than its competitors. The goal is to have a core competency that yields a long-term competitive advantage to the company. Pg. 76

Concurrent engineering: Emphasizes cross-functional integration and concurrent development of a product and its associated processes. Pg. 82

Quality function deployment (QFD): Process that helps a company determine the product characteristics important to the consumer and to evaluate its own product in relation to others. Pg. 86

House of quality: Matrix that helps a product design team translate customer requirements into operating and engineering goals. Pg. 87

Value analysis/value engineering (VA/VE): Analysis with the purpose of simplifying product and processes by achieving equivalent or better performance at a lower cost. Pg. 87

Ecodesign: The incorporation of environmental considerations into the design and development of products or services. These concerns relate to the entire life cycle including materials, manufacturing, distribution and the eventual disposal of waste. Pg. 93

CH. 4

Strategic capacity planning: Determining the overall capacity level of capital-intensive resources that best support the company’s long range competitive strategy. Pg. 109

Capacity: The amount of output that a system is capable of achieving over a specific period of time. Pg. 109

Best operating level: Level of capacity for which the process was designed and the volume of output at which average unit cost is minimized. Pg. 109

Capacity utilization rate: Measures how close a firm is to its best operating level. Pg. 109

Economies of scale: The notion is that as a plant gets larger and volume increases,

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