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Glossary 659
Breakthrough improvement: an approach to improving
operations performance that implies major and dramatic
change in the way an operation works, for example, business
process re-engineering (BPR) is often associated with
this type of improvement, also known as innovationbased
improvement, contrasted with continuous
improvement.
Broad definition of operations: all the activities necessary
for the fulfilment of customer requests.
Broad responsibilities of operations management: the
wider, long-term, ethical and strategic activities involved
in producing products and services.
Buffer inventory: an inventory that compensates for unexpected
fluctuations in supply and demand, can also be
called safety inventory.
Bullwhip effect: the tendency of supply chains to amplify
relatively small changes at the demand side of a supply
chain such that the disruption at the supply end of the
chain is much greater.
Business process outsourcing (BPO): the term that is
applied to the outsourcing of whole business processes;
this need not mean a change in location of the process,
sometimes it involves an outside company taking over
the management of processes that remain in the same
location.
Business process re-engineering (BPR): the philosophy
that recommends the redesign of processes to fulfil defined
external customer needs.
Business strategy: the strategic positioning of a business
in relation to its customers, markets and competitors, a
subset of corporate strategy.
Capacity: the maximum level of value-added activity that
an operation, or process, or facility is capable of over a
period of time.
Capacity lagging: the strategy of planning capacity levels
such that they are always less than or equal to forecast
demand.
Capacity leading: the strategy of planning capacity levels
such that they are always greater or equal to forecast
demand.
Cause–effect diagrams: a technique for searching out the
root cause of problems, it is a systematic questioning
technique, also known as Ishikawa diagrams.
Cell layout: locating transforming resources with a common
purpose such as processing the same types of product,
serving similar types of customer, etc., together in close
proximity (a cell).
Centre-of-gravity method of location: a technique that
uses the physical analogy of balance to determine the
geographical location that balances the weighted importance
of the other operations with which the one being
located has a direct relationship.
Chase demand: an approach to medium-term capacity
management that attempts to adjust output and/or
capacity to reflect fluctuations in demand.
Cluster analysis: a technique used in the design of cell layouts
to find which process groups fit naturally together.
Combinatorial complexity: the idea that many different
ways of processing products and services at many different
locations or points in time combine to result in
an exceptionally large number of feasible options; the
term is often used in facilities layout and scheduling
to justify non-optimal solutions (because there are too
many options to explore).
Commonality: the degree to which a range of products or
services incorporate identical components (also called
‘parts commonality’).
Community factors: those factors that are influential in the
location decision that relate to the social, political and
economic environment of the geographical position.
Competitive factors: the factors such as delivery time,
product or service specification, price, etc. that define
customers’ requirements.
Component structure: see ‘Product structure’.
Computer-aided design (CAD): a system that provides the
computer ability to create and modify product, service
or process drawings.
Computer-integrated manufacturing (CIM): a term used to
describe the integration of computer-based monitoring
and control of all aspects of a manufacturing process,
often using a common database and communicating via
some form of computer network.
Computer numerically controlled (CNC): machines that
use a computer to control their activities, as opposed to
those controlled directly through human intervention.
Concept generation: a stage in the product and service
design process that formalizes the underlying idea behind
a product or service.
Concurrent engineering: see ‘Simultaneous development’.
Condition-based maintenance: an approach to maintenance
management that monitors the condition of
process equipment and performs work on equipment
only when it is required.
Content of strategy: the set of specific decisions and actions
that shape the strategy.
Continuous improvement: an approach to operations
improvement that assumes many, relatively small,
incremental, improvements in performance, stress the
momentum of improvement rather than the rate of
improvement; also known as ‘kaizen’, often contrasted
with breakthrough improvement.
Continuous processes: processes that are high-volume
and low-variety; usually products made on a continuous
process are produced in an endless flow, such as petrochemicals
or electricity.