Term
| Top Portion of Value Chain |
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Definition
-Firm Infrastructure
-Human Resources Management
-Technology Development
-Procurement |
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Term
| Bottom Portion of Value Chain |
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Definition
-Inbound Logistics
-Production
-Outbound Logistics
-Marketing and Sales
-Service |
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Term
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Definition
| -Activities include accounting, legal, finance, planning, public affairs, government relations, quality assurance and general management |
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Term
| Human Resource Management |
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Definition
| -Activities involved in recruiting, training, developing, compensating, laying off personnel |
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Term
| Technological Development |
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Definition
| -Technology purchased/adapted/developed to bear in the firm’s transformation of inputs into outputs |
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Term
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Definition
| Acquisition (actual purchase) of inputs, or resources, for the firm |
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Term
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Definition
| Involve relationships with suppliers and include all activities required to receive, store, and disseminate inputs |
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Term
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Definition
| All activities required to transform inputs into outputs |
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Term
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Definition
| All activities required to collect, store, and distribute output |
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Term
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Definition
Inform buyers about products/services
Induce buyers to purchase products/services and facilitate their purchase
(Stimulate demand for products/services)
Collect and communicate feedback from customer back to various units in firm
Sales forecasting |
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Term
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Definition
| Activities required to keep the product/service working effectively for the buyer after it is sold and delivered |
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Term
Process–Oriented View
(Different View from normal Business) |
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Definition
View business as a complex open system with multiple elements and multiple processes. EX: Formal Structure
Data/Information/Actors
Linkages
Flow of materials/information/resources/services through and across organizations
Stochastic nature (subject to change and randomness)
Model and simulate
Measure: Effectiveness, efficiency, productivity, quality etc.
Minimize Cost/Maximize Value |
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Term
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Definition
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Term
| Information Technology and Business Information Systems |
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Definition
Hardware
Software
Database
Telecommunications/Networks
Organization or Business
People
IT people
Business users |
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Term
| Value Chain and IS/IT (inbound logistics,production operations, outbound logistics) |
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Definition
Inbound Logistics
-Automated Warehousing System: JIT inventory systems
Production/Operations
-Computer-Controlled Machinery
Outbound Logistics
-Automated Shipment Scheduling Systems
Tracking Systems |
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Term
| Value Chain and IS/IT (Sales and Marketing,Service, Procurement) |
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Definition
Sales and Marketing
-On-line Ordering Systems for customer
-Sales forecasting
Service
-Equipment maintenance systems
Procurement
-Computerized Ordering Systems and EDISe |
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Term
| Value Chain and IS/IT (Technology Development, Human Resource Management, Infrastructure) |
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Definition
Technology Development
-Computer-Aided Design
Human Resource Management
-Multi-media database storing employee information
-On-line recruiting
-Intranet for employee benefits (retirement benefits, medical benefits etc.)
-On-line training
Infrastructure
-Electronic scheduling; financial systems, accounting systems, decision support systems etc. |
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Term
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Definition
| Efficiency and/or competitive advantage gains due to links between two or more VC activities of a firm |
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Term
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Definition
| Efficiency, partnership and/or competitive advantage gains due to link between one VC activity of firm and external entity (e.g., customer, supplier etc.) |
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Term
| Pre-industrial (1800s) Society |
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Definition
| Labor Force – Extraction Industries (Agriculture, Fishing, Mining); Service – Sailors; Servants |
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Term
| Industrial (1900 – 1950) Society |
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Definition
| Important activity – Goods production; Industry focus – Maximize productivity; Punctuality |
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Term
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Definition
| service oriented: the # of white collar workers exceeded the # of blue-collar workers and the gap has been widening since then |
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Term
Productivity
EX: 24 pages in 12 hours |
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Definition
= Output/Input
EX: 2 pages per hour (dont say 2 - defined units in production) |
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Term
Efficiency
EX: 16 pages in 8 hours; avg is 2 pgs per hour
EX: 15 pages in 9 hours; avg is 2 pgs per hour |
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Definition
Productivity/Standard Productivity
EX: (16 pages/8hour)/(2 pgs/hr) = 1 or 100% efficient
EX: (15 pgs/9hr)/(2pgs/hr) = .83 or 83% effient |
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Term
| Agriculture:% of work force needed to feed? |
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Definition
1800s – 80% of workforce required to feed 100% population
2004 – 2% of workforce required to feed not only U.S. population but also part of the rest of the world. |
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Term
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Definition
U.S. factory output has doubled in the last 30 years.
Percentage of workforce in manufacturing has diminished from about 37% in 1950 to about 15% in 2004. |
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Term
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Definition
| Modernization or Technology |
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Term
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Definition
| Specialization, optimization (i.e., optimal way or best practice), outsourcing |
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Term
| Better (smarter) processes |
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Definition
BPR – Business Process Re-engineering
Inventory Management with Radio Frequency Identification (RFID)
Dematerialization (e-tickets, self check-in) |
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Term
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Definition
| As productivity increases in one sector, the labor force moves into another. |
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Term
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Definition
| Total Value of all finished goods and services in a country in 1 year |
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Term
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Definition
| 80% of U.S. economy (employment/GDP) is in services |
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Term
|
Definition
| The transformation process that turns inputs into outputs, that is, the act of combining people, raw materials, technology, etc. into useable services and products |
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Term
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Definition
| Food&Shelter, Goods, Services (Quality of life) and Personal Development. |
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Term
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Definition
Services are intangible
Simultaneous production and consumption
Proximity to the customer
Services cannot be inventoried |
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Term
|
Definition
Facilitating goods: playbills, groceries
Computer system upgrades; janitorial services
Internet-based services; catalogs
Retailers hold inventory; hotel rooms, airline seats are inventory |
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Term
| Classification of Services |
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Definition
Pure Services: High % of activities in the presence of the customer
Mixed services
EX: Restaurants, ice cream shop, transportation services
Quasi-Mfg: Low % of activities in the presence of the custome
Manufacturing
EX:(Distribution centers, check-processing center of a bank |
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Term
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Definition
| f (1 – Customer Contact Time/Service Creation Time) |
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Term
| Degree of Labor Intensity |
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Definition
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Term
|
Definition
| If all is flux – is there a way for us to make sense of all these “changes?” |
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Term
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Definition
| A system is a conceptualization of reality |
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Term
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Definition
| An element modeled as if it has no structure |
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Term
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Definition
| elements whose input is under control of a decision maker. |
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Term
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Definition
| an input to an element as a response to a previous output by the same elemen |
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Term
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Definition
| series of subsequent changes in the state of a system's elements (state transitions) – also known as System’s Dynamics – system behavior. |
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Term
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Definition
| Experiences no random influences or fluctuations: Outcomes are certain; i.e., fully determined by the initial state of the system and its dynamics. |
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Term
| Deterministic Processes EX: |
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Definition
Example 2:
Initial state: You have $1000 (present value - PV) in an interest-bearing account.
Dynamic: The value of the account is increased by 5% (interest) at the end of each year.
Question: What is the future value of the account in 25 years? ($3,386.35)
Example 3:
Initial state: 0.
Dynamic: Add the next whole number to the current state.
Question: What's the sum after 1000 additions? (500,500) |
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Term
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Definition
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Term
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Definition
Experience randomness.
Outcomes are not certain as randomness changes the dynamics |
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Term
| Stochastic Process Example |
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Definition
Example 1:
Initial state: 0
Dynamic: Add the result of throwing a die to the current state.
Question: What's the sum after 100 throws?
Question: What's the most likely sum after 100 throws? (350) |
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Term
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Definition
| Stochastic processes have many possible outcomes |
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Term
| Stochastic Processes avg's |
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Definition
We can use the characteristics of these distributions to estimate the likelihood of certain outcomes.
If we know, from experience, that the inter arrival times of barges are exponentially distributed in a certain way, we can estimate the arrival times of the next 100 or 1000 barges |
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Term
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Definition
| Explore the behavior of the system without risking the real-life process. |
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Term
|
Definition
-Internal
Strengths
Weaknesses
-External
Opportunities
Threats |
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Term
| Porter’s five competitive forces |
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Definition
Bargaining Power of Suppliers
Bargaining Power of Customers
Threat of New Entrants
Threat of Substitute Products/Services
Rivalry Among Existing Competitors |
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Term
| Bargaining Power of Suppliers: EX |
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Definition
Example: A retailer in Corvallis sells couches. This retailer purchases couches wholesale from one supplier in Portland.
Would you expect bargaining power of supplier to be high or low? |
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Term
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Definition
| an auction format in which increasingly lower bids are solicited from organizations willing to supply the desired product or service at an increasingly lower price |
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Term
| Threat of Substitute Products or Services |
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Definition
High when there are many alternatives to a product or service and
Low when there are few alternatives from which to choose |
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Term
| Use of IS/IT to combat force |
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Definition
Improve price/performance
Less expensive
Value-added features
Spawn new businesses
Generate new products
Create derived demand |
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Term
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Definition
Leadership Strategy
Cost Leadership
Differentiation Leadership |
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Term
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Definition
Focus Strategy
Cost focus
Differentiation focus |
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Term
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Definition
Menu (Fixed) Pricing
1-1 Pricing
Auction Pricing
Reverse Auction
Barter |
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Term
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Definition
commissioning: E-Trade, E-Bay
Advertising: Yahoo, Google Generalized Portal, Personalized Portal (my.yahoo.com); Specialized Portal (focus on a narrow audience with much deeper coverage; iBoats); Attention/Incentive Marketing (user paid by company for their viewing of content or entry of information; My Points); Free model (some service or product given for free in exchange for viewing ads - Wunderground); Bargain discounter (Buy.com); Registration model (service is free but the user must register, enabling the company to track usage and viewing patterns – NY Times) etc.
Mark-up (Amazon) – intermediary between manufacturer and end-consumer
Production-Based (Microsoft) – manufacturer sells direct to end-consumer – no intermediary
Referral-flat fee or percentage (Number of hits, page views, click-through, unique visitors, length of stay, registered users, repeat visitors etc.);
Subscription – ISPs – users pay fee whether or not they use service
Fee-for-Service – Customers paying an ASP; customers pay for metered Internet service |
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Term
| Value Configuration Analysis |
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Definition
|
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Term
|
Definition
Value Chain: Dell and Value Network: Old Napster: Music Distribution
Value Shop and Value Network: EBAY, Automobile Manufactures
In between: Amazon |
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Term
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Definition
Block
-Limit access (intellectual property)
-Undercut price
Run
-Continual innovation of products/services
Complementary Assets
Team-up
-Joint ventures
-Strategic Alliances/Acquisitions |
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Term
| Why analyze and manage processes? |
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Definition
Effectively and efficiently implement strategy
Gain competitive advantage
Process analysis is often neglected in services
Broken processes - Examples?
Why do we have broken processes? |
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Term
| Business Process Reengineering |
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Definition
| BPR - Radical redesign of business process(es) to achieve dramatic improvements in measures of performance such as quality, cost, speed, and services that facilitate gaining competitive advantage or enhancing/changing business strategy. |
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Term
| Some Characteristics of a Virtual Organization |
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Definition
Excellence - All star winning team
Resource Utilization - Competitive advantage
Opportunism – Making use of market opportunities
Lack of borders - Redefines traditional boundaries
Adaptability – to change
Trust - Essential between/among business partners
Technology - Basic ingredient
Resources of business partners remain in their original locations but are integrated via information systems. |
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Term
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Definition
Cycle time reduction
Effective communication
Restructuring organization |
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Term
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Definition
Laying off employees
Voluntary retirement
Retraining employees
Retraining costs
Transfer of employees |
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Term
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Definition
| Job is at process step and being worked on |
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Term
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Definition
| Job is at the work station, and the work station is being "setup." |
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Term
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Definition
| Job is where it should be, but is not being processed because other work precedes it. |
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Term
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Definition
| The time a job spends in transit |
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Term
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Definition
| When one process step is finished, but the job is waiting to be moved to the next step |
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Term
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Definition
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Term
|
Definition
Process Flow Diagrams
Project Flow Diagrams
Service Blueprint
Time Function Map
Process Charts
Flow Charts
Activity Diagrams (swim lanes) |
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Term
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Definition
| Directional Arrows from one element to another |
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Term
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Definition
| Alphabetic layout with predecessors |
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Term
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Definition
| Directional arrows from one letter to another |
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Term
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Definition
| Incorporated Back Office (no customers) and Front Office (customer interaction) |
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Term
| Time Function Map (Baseline) |
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Definition
| Direct Layout with variable (x axis) as time - long term (52 weeks EX) |
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Term
| Time Function Map (Target) |
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Definition
| Short - specific to project(6 days) |
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Term
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Definition
| direct layout of minutes and process per element (transport, operate, delay, etc.) |
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Term
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Definition
Diamond = decision
Diagonal Rectangle = Data
Square Squiggle = Document
Multiple Square Squiggle = Multiple Doc
Oval = Terminate/Start
Square = process |
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Term
| Swim Lane characteristics |
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Definition
Two-dimensions
One for time (vertical)
One for actors (horizontal)
Immediately shows where actors have a role in the process
Includes Information Systems as actors |
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Term
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Definition
| Customers set parameters and marketers select quality improvements that lead to the highest return on investment |
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Term
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Definition
Since early 1980s, strong emphasis on quality improvement
If companies succeed in satisfying customers well these companies are often rewarded with repeat business.
The cost of acquiring a new customer is five times that of retaining one.
The likelihood of future retention increases with the length of retention. |
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Term
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Definition
| Service improvement and product quality is the single most critical challenge facing US business |
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Term
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Definition
| Servicer Per. - customer satisfaction - customer retention - market share - profit |
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Term
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Definition
| Poor quality is expensive - 20-30% of sales |
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Term
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Definition
| costs associated with preventing defects before they happen |
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Term
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Definition
| costs to assess/appraise quality (shortcomings) |
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Term
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Definition
Yield shortage and scrap
Rework, correcting mistakes
Extra parts, material and other resources required
Complicates the production process |
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Term
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Definition
Warranties, returns, product replacements, product recalls.
Technical support.
Dissatisfied customers/lower repeat business.
Poor publicity.
Legal consequences: lawsuits, settlements, damages, etc. |
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Term
|
Definition
ECM - Traditional School
Economic Conformance Model
TQM
Total Quality Management |
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Term
| Economic Conformance Model |
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Definition
ECM – Economic Conformance Model – prevalent until mid 1980s.
Conformance – How well can your business process perform relative to a target.
Note: Minimum total cost is not at 100% conformance level.
Notion – You can’t be perfect and it is not in your best (bottom line) interest to be perfect! Dangerous thought process – license to steal?! |
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Term
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Definition
This model tends to dominate in today’s industry.
Failure costs – predictions same as ECM predictions.
As you get better in getting consistent good quality – the Prevention and Appraisal costs do not go up as much as ECM predicts.
Notion - The total costs of quality fall as defect levels decrease |
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Term
|
Definition
Transcendent: Innate excellence that can be recognized only through experience
Product-based: Measurable quantities are used to define quality
User-based: “Quality is in the eyes of the beholder”
Dimension-based (See next slide)
Manufacturing-based: Conformance to requirements
Value-based: A balance between conformance or performance quality and an acceptable price to the customer |
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Term
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Definition
Fool proofing mechanisms
Prevent inevitable mistakes from turning into defects
Example: Repeating back a customer’s order at Starbucks before giving customer a cup of coffee
Conceived of by Shigeo Shingo, “Mr. Improvement” |
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Term
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Definition
Hire the right people.
Educate and train them.
Allow them to fix things.
Recognize and reward.
Don't hide the bad news. |
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Term
| Service guarantees and refunds |
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Definition
Unconditional
Easy to understand and communicate
Meaningful
Easy to invoke – no red tape
Easy to collect – quick and hassle-free procedure |
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Term
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Definition
| High CMM(I) scores correlate to good quality software/IT. |
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Term
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Definition
Large repository of detailed and summary data used to support the strategic decision making process for the enterprise
Stores current and historical data (internal and external)
Integrates data from organization’s disparate information systems used by functional units
Involve terabytes - exabytes of data
Run on very powerful computers
Expensive |
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Term
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Definition
| A small data warehouse containing only a portion of the organization’s data for a specified function or population of users. It is a subset of a data warehouse (e.g., marketing/sales data mart) |
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Term
| On-line Analytical Processing (OLAP) |
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Definition
| Capability for manipulating and analyzing large volumes of data from multiple perspectives (multidimensional analysis) |
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Term
| On-line Transaction Processing (OLTP) |
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Definition
| Immediate (On-line) processing of multiple concurrent transactions from customers/users |
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Term
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Definition
Provides a means to extract patterns and relationships from large amount of data (e.g., a data warehouse)
Uses sophisticated, automated algorithms to discover hidden patterns, relationship among data |
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Term
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Definition
Used to collect, store, analyze and present
sufficient and accurate information in a timely manner and in a usable form
Includes OLAP, data mining, statistical analysis
Has a positive impact on business strategy, and operations |
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Term
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Definition
| Unpredictability of process variables indicates lack of process control. |
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Term
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Definition
As sample size gets large enough, the
sampling distribution becomes almost normal regardless of the actual population distribution. |
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Term
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Definition
| As a normal distribution, the process can be shown to have the following mean and standard deviation. |
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Term
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Definition
| how wide your quality variation spread (from target) ought to be |
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Term
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Definition
| how wide your quality variation spread (from target) currently is. |
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Term
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Definition
| A process is 'capable' if its control limits are within its specification limits: |
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Term
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Definition
| "Strategic approach to improving business performance by deploying a structured methodology to reduce process variation.” |
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Term
|
Definition
| Define, Measure, Analyze, Improve and Control |
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