IB Business Management 5.1 Introduction to Operations Management Key Definitions

The process of planning, monitoring, and optimizing the production capacity of a business to meet demand efficiently.

The process of determining the production capacity needed to meet current and future demand efficiently.

The unique attributes or capabilities that allow a business to outperform its competitors. It enables a company to offer superior value to customers, whether through lower costs, differentiated products, superior quality, brand reputation, or innovation.

An inventory management strategy where materials and products are ordered and received only when needed for production, reducing storage costs and waste.

A Japanese management philosophy that focuses on small, continuous improvements in processes, products, and workplace culture. It encourages employee involvement, problem-solving, and incremental changes to enhance efficiency, quality, and overall business performance.

A manufacturing philosophy focused on minimizing waste (e.g., excess inventory, overproduction, and inefficiencies) while maximizing value for customers. It emphasizes continuous improvement, efficient workflows, and high-quality output using methods like Just-in-Time (JIT), Kaizen, and automation.

A seamless and integrated approach to sales, marketing, and customer service across multiple channels (e.g., physical stores, websites, mobile apps, social media, and call centers). The goal is to provide a consistent and personalized customer experience, allowing customers to switch between channels effortlessly.

Operations management is the process of overseeing the transformation of inputs (resources) into outputs (goods or services) in a way that maximizes efficiency and effectiveness.

The strategic planning and structuring of workflows, resources, and activities to efficiently produce goods or services. It involves determining the most effective way to organize tasks, materials, equipment, and human resources to maximize productivity, minimize costs, and ensure quality.

A visual representation of a workflow that outlines the steps, inputs, and outputs of a process. It helps businesses identify inefficiencies, bottlenecks, and areas for improvement by providing a clear overview of how tasks are performed.

A process used to ensure that products or services meet specified standards by identifying and correcting defects.

A data-driven methodology focused on reducing defects and variability in processes to achieve near-perfect quality. It follows a structured approach called DMAIC (Define, Measure, Analyse, Improve, Control) to improve efficiency and eliminate errors.

The practice of producing goods and services in a way that minimizes environmental impact, ensures social responsibility, and maintains economic viability for future generations.

A holistic approach to long-term success through customer satisfaction. It involves continuous improvement, employee involvement, and process optimization across all departments.

TQM is an organization-wide philosophy of continuous improvement, where every employee, from managers to front-line workers, focuses on improving processes and maximizing customer satisfaction.