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Chapter15OperationsManagement

Learning Outcomes

• Define operations management and explain its role.

• Define the nature and purpose of value chain management.

• Describe how value chain management is done.• Discuss contemporary issues in managing

operations.

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15.1Define operations management and explain its role.

Improving Productivity

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Service Firms vs. Manufacturing Firms Manufacturing firms produce physical goods, such as cars or food products

Service firms produce nonphysical outputs in the form of services, such as medical and transportation services

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Improving Productivity

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Deming: Improving Mangers’ Productivity

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The truly effective organization will increase productivity by successfully integrating people into the overall operations system.

Operations Management and Company Strategy

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Successful organizations recognize the crucial role that operations management plays as part of the overall organizational strategy to achieve and maintain global leadership.

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15.2Define the nature and purpose of value chain management.

Value Chain Management

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Value Chain

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Goals of Value Chain Management

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Benefits of Value Chain Analysis

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15.3Describe how value chain management is done.

The Value Chain Management Process

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The dynamic, competitive environment facing contemporary global organizations demands new solutions.

Successful Value Chain Management

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Organizational Processes and Leadership

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1. Better demand forecasting2. Select functions done collaboratively with other

partners in the chain3. New measures needed for evaluating the

performance of various activities along the chain

Employees and Human Resources

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• Flexible job design• Effective hiring process• Ongoing training

Obstacles to Value Chain Management

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Impact of Cultural Attitudes

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• Trust • Control

Capabilities and People

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Capabilities:• Coordination and collaboration• Configuration that satisfies customers and suppliers• Education of internal and external partners

People:• Commitment• Time• Energy

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15.4Discuss contemporary issues in managing operations.

Contemporary Issues

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1. Technology2. Quality initiatives3. Project management

Quality Control

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Quality Goals

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1. ISO 90002. Six Sigma

Project Management

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The task of getting project activities done on time, within budget, and according to specifications.

Gantt Charts

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Load Charts

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PERT Network Analysis

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PERT in Action

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PERT in Action (cont.)

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15-32© Pearson Education Limited 2015