10 Key Terms

Key Terms

Operations Management: The process of creating value by managing the activities that produce goods and services and deliver them to customers.

Efficiency: Achieving a goal or producing output at the lowest possible cost.

Effectiveness: Using resources in ways that create genuine value for customers.

Goods: Tangible physical products. Durable goods last three or more years; non-durable goods are consumed quickly.

Services: Intangible activities that provide benefits without resulting in a physical product.

Mass Customization: Using technology to produce personalized products or services at a scale and cost comparable to mass production.

Value Chain: The full network of activities, organizations, and resources involved in creating and delivering a product or service.

Vertical Integration: Taking over processes previously handled by other organizations in the supply chain.

Outsourcing: Handing off certain business functions to outside organizations.

Offshoring: Moving business processes or operations to another country, typically to reduce costs.

Inventory: Stocks of goods or materials held by an organization.

Servicescape: The physical environment in which a customer and service provider interact.

Automation: Replacing human operation and control of machinery with programmed systems.

CAD (Computer-Aided Design): Software used to create and edit detailed digital blueprints and 3D models.

CAM (Computer-Aided Manufacturing): Software that translates digital designs into manufacturing instructions for automated equipment.

CIM (Computer-Integrated Manufacturing): A system combining CAD, CAM, and flexible manufacturing to automate the design-to-production process.

Total Quality Management (TQM): An approach in which everyone in an organization takes responsibility for continuous quality improvement.

Six Sigma: A data-driven quality improvement approach targeting fewer than 3.4 defects per million opportunities.

Lean Production: A manufacturing and operations philosophy focused on eliminating waste and doing more with less.

ISO 9000: A family of international standards for quality management systems.

Sustainability: Meeting current organizational objectives while protecting and preserving the environment for future generations.