Operations Management Cheat Sheet

The core ideas of Operations Management distilled into a single, scannable reference — perfect for review or quick lookup.

PiqCue — piqcue.com/operations-management/cheatsheet

Quick Reference

Supply Chain Management

The coordination and integration of all activities involved in sourcing, procurement, production, and delivery of products from raw material suppliers through to end customers. It encompasses logistics, inventory management, and supplier relationships.

Lean Manufacturing

A systematic approach to minimizing waste within a manufacturing system without sacrificing productivity. Originating from the Toyota Production System, it identifies seven types of waste: overproduction, waiting, transport, overprocessing, inventory, motion, and defects.

Six Sigma

A disciplined, data-driven methodology for eliminating defects in any process. It uses the DMAIC framework (Define, Measure, Analyze, Improve, Control) and aims to achieve no more than 3.4 defects per million opportunities.

Total Quality Management (TQM)

A management philosophy that focuses on continuous improvement of all organizational processes through the involvement of all employees, from top management to frontline workers. It emphasizes customer satisfaction, process measurement, and a culture of quality.

Just-In-Time (JIT)

An inventory management strategy that aligns raw material orders from suppliers directly with production schedules, reducing inventory carrying costs and waste. Materials arrive precisely when needed in the production process rather than being stockpiled.

Capacity Planning

The process of determining the production capacity needed by an organization to meet changing demands for its products or services. It involves balancing available resources against forecasted demand to avoid both overcapacity (wasted resources) and undercapacity (lost sales).

Theory of Constraints (TOC)

A management paradigm developed by Eliyahu Goldratt that views any manageable system as being limited by a very small number of constraints (bottlenecks). The five focusing steps are: identify the constraint, exploit it, subordinate everything else, elevate the constraint, and repeat.

Statistical Process Control (SPC)

The use of statistical methods such as control charts to monitor and control a process, ensuring it operates at its full potential and produces conforming product. It distinguishes between common cause variation (inherent) and special cause variation (assignable).

Aggregate Planning

A medium-term planning approach that determines the overall production levels, inventory quantities, and workforce sizes needed to meet forecasted demand over a planning horizon of 3 to 18 months. It balances demand fluctuations with production capacity.

Value Stream Mapping

A lean management tool that visually maps the flow of materials and information from supplier to customer through all process steps, distinguishing value-adding activities from non-value-adding ones. It is used to identify waste and design an improved future state.

Key Terms at a Glance

Aggregate Planning:A medium-term approach to matching production capacity with forecasted demand over a 3-to-18-month horizon by adjusting workforce, inventory, and production rates.

Bottleneck:The process step or resource with the lowest capacity that limits the throughput of the entire system.

Capacity Planning:The process of determining the amount of production capacity needed to meet current and future demand for products or services.

Continuous Improvement:An ongoing effort to enhance products, services, or processes through incremental and breakthrough improvements.

Critical Path Method (CPM):A project management technique that identifies the longest sequence of dependent activities to determine the minimum project duration.

Cycle Time:The total time required to complete one unit of a product or one cycle of a process from start to finish.

DMAIC:A structured Six Sigma methodology with five phases: Define, Measure, Analyze, Improve, and Control, used to improve existing processes.

Economic Order Quantity (EOQ):The optimal order quantity that minimizes total inventory costs by balancing ordering costs against holding costs.

Efficiency:The ratio of actual output to standard or expected output, measuring how well resources are utilized in a production process.

Forecasting:The process of estimating future demand for products or services using historical data, statistical methods, and market analysis.

Ishikawa Diagram:A cause-and-effect diagram (also called fishbone diagram) used to identify and organize potential root causes of a quality problem.

Just-In-Time (JIT):A production strategy that produces and delivers goods exactly when needed, minimizing inventory and waste.

Kaizen:A Japanese philosophy of continuous, incremental improvement involving all employees at every level of the organization.

Kanban:A visual workflow management system that uses signals (cards, boards) to control the production and movement of items in a pull-based system.

Lead Time:The total elapsed time from when a customer places an order until the order is delivered, or from the start to the end of any process.

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