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Operations Management Terms (O-R)


Operating Expenses – All the money that the system spends to turn inventory into throughput.

Operation – The action of functioning or the fact of being active or in effect.

Operations Management – The design, operation, and improvement of the systems that create and deliver the firm’s primary products and services.

Operations Strategy – Setting broad policies and plans for using the resources of a firm to best support its long term competitive strategy.

Operation Time – The sum of the setup time and run time for a batch of parts that are run on a machine.

Operation Consulting – Assisting clients in developing operations strategies and improving production processes.

Order Qualifier – The basic criteria that permit the firm’s products to be considered as candidates for purchase by customers.

A brand name can be an “order qualifier.”

Order winner – The criteria that differentiate the products and services of one firm from another.

Repair services can be “order winner.”

Order Scheduling – Final planning of the use of specific machines, production lines, or work centers to produce orders.

Organizational Learning – Improvement that comes both from experience and from change in administration, equipment, and product design.

Outsourcing – Moving some of a firm’s internal activities and decision responsibility to outside providers.


Pacing – Refers to the fixed timing of the movement of items through the process.

PDCA Cycle – Refers to the plan-to-do-check-act cycle of continuous improvement.

Plant-within-a-plant – A concept in which different locations within the facility are allocated to different product lines, each with their own operations strategy.

Poka-yokes – Procedures that prevent mistakes from beginning defects.

Predetermined Motion-Time Data Systems – Systems for deriving a time for a job by summing data from tables of generic movement times developed in the laboratory.

Preventive Maintenance – Periodic inspection and repair designed to keep equipment reliable.

Priority Rules – The logic used to determine the sequence of jobs in a queue.

Process – Any part of an organization that takes inputs and transforms them into outputs that, it is hoped, are of greater value to the organization than the original inputs.

Process Layout – A format in which equipment or functions are grouped together.

Process Postponement – Delay of the process step that differentiates a product to as late in the supply chain as possible.

Process Velocity or Throughput ratio – The ratio of the total throughput time to the value added time.

Product – A good, idea, method, information, object or services created as a result of a process and serves a need or satisfies a want.

Productivity – A measure of how well resources are used.

Product Layout – Equipment or work processes are arranged according to the progressive steps by which the product is made.

Product-Process Matrix – Shows the relationship between process structures and product volume and variety characteristics.

Production Planning Strategies – Plans that involves trade-offs among workforce size, work hours, inventory, and backlogs.

Production Rate – The number of units completed per unit of time.

Project – a series of related jobs usually directed toward some major output and requiring a significant period of time to perform.

Project Management – Planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost and time constraints of a project.

Precedence Relationship – The order in which tasks must be performed in the assembly process.

Pure Project – A structure for organizing a project where a self- contained team works full time on the on the project.

Project Milestone – A specific event in a project.

Pure Strategy – A plan that uses just one of the options available for meeting demand.


Quality at the Source – Philosophy of making factory workers personally responsible for the quality of their output.

Quality Function Deployment – A process that helps a company determine the product characteristics important to the consumer and to evaluate its own product in relation to others.

Queue – A line of waiting persons, jobs, things, or the like.


Reengineering (or Business Process Reengineering) – The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, service and speed.

Rough-cut Capacity Planning – Verification that sufficient capacity exists to meet a master production schedule.

Run Time – The time required to produce a batch of parts

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