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McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 1

Introduction to the Field

• What is Operations and Supply Management?

• Why Study Operations Management?• Transformation Processes Defined• Differences between Services and Goods• The Importance of Operations Management• Historical Development of OM• Current Issues in OM

OBJECTIVES

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What is Operations and Supply Management?

Operations and Supply Management (OM) is defined as the design, operation, and improvement of the systems that create and deliver the firm’s primary products and services

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Why Study Operations Management?

Business Education

Systematic Approach to Org. Processes

Career Opportunities

Cross-Functional Applications

OperationsManagement

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What is a Transformation Process?

Defined

A transformation process is defined as a user of resources to transform inputs into some desired outputs

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Transformations

• Physical--manufacturing

• Locational--transportation

• Exchange--retailing

• Storage--warehousing

• Physiological--health care

• Informational--telecommunications

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Operations and Supply ManagementSupply Chain Processes

SourcingProcesses

ManufacturingProcesses

ServiceProcesses

DistributionProcessesLogistics

ProcessesLogisticsProcesses

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What is a Service and What is a Good?

• “If you drop it on your foot, it won’t hurt you.” (Good or service?)

• “Services never include goods and goods never include services.” (True or false?)

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The Goods-Services Continuum

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Historical Development of OM

• JIT and TQC

• Manufacturing Strategy Paradigm

• Service Quality and Productivity

• Total Quality Management and Quality Certification

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Historical Development of OM (cont’d)

• Business Process Reengineering

• Six-Sigma Quality

• Supply Chain Management

• Electronic Commerce

• Service Science

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Current Issues in OM

• Coordinate the relationships between mutually supportive but separate organizations.

• Optimizing global supplier, production, and distribution networks.

• Increased co-production of goods and services

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Current Issues in OM (cont’d)

• Managing the customers experience during the service encounter

• Raising the awareness of operations as a significant competitive weapon

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Question Bowl

A major objective of this book is to show

how smart managers can do which of the

following?

a. Improve efficiency by lowering costs

b. Improve effectiveness by creating value

c. Increasing value by reducing prices

d. Serving customers well

e. All of the above

Answer: e. All of the above

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Question Bowl

In the Input-Transformation-Output Relationship, a typical “input” for a Department Store is which of the following?

a. Displaysb. Stocks of goodsc. Sales clerksd. All of the abovee. None of the above

Answer: e. None of the above (The above are considered “Resources” of a department store. The correct answer is “Shoppers”.)

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Question Bowl

In which of the following decades did the concept of quality control originate?

a. 1920’sb. 1930’sc. 1940’sd. 1950’se. 1970’s

Answer: b. 1930’s (Tools such as sampling inspection and statistical tables where first developed by Walter Shewhart, H. F. Dodge, and H. G. Romig.)

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End of Chapter 1

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