ld

e

F

i

e

E

R

1

E

R

1

o

t

h

e

A

P

T

E

A

P

T

E

o

n

t

o

C

H

A

C

H

A

u

c

t

i

o

C C

t

r

o

d

I

n

t

Chapter 1p

Introduction to the FieldIntroduction to the Field

Identify the elements of operationsOBJECTIVES

1-3

Identify the elements of operations and supply chain management

What is Operations and Supply What is Operations and Supply Management?

Why Study Operations Management?Why Study Operations Management? Transformation Processes Defined Differences between Services and Differences between Services and

Goods The Importance of OperationsThe Importance of Operations

Management Historical Development of OMHistorical Development of OM Current Issues in OM

Strategy, Processes, and Analytics

Operations and supply chain management involves Product design Purchasing ManufacturingManufacturing Service operations Logistics Distribution Distribution

Success depends upon Strategy Processes to deliver products and services Analytics to support the decisions needed to

manage the firmg

11--44

What is Operations and Supply Management?

1-5

Operations and SupplyManagement (OM) is defined asg ( )the design, operation, andimprovement of the systemsp ythat create and deliver the firmsprimary products and servicesp y p

Operations and Supply Chain Processes

Operations Supply Ch iOperations Chain

Manufacturing and service processes used to transform

Processes that move information

and material to andresources into products

and material to and from the firm

11--66

Efficiency, Effectiveness, and Value

Efficiency

Doing something at the lowest possible cost

Efficiency

D i th i ht thi t t th t l f

Effectiveness

Doing the right things to create the most value for your customer

The attractiveness of a product relative to its cost

Value

p

1-7

Why Study Operations Management?

1-8

Systematic Approachy ppto Org. Processes

Business Education Career OpportunitiesOperationsManagementManagement

Cross-Functional Applicationspp

What is a Transformation Process?

1-9

Defined

A transformation process isdefined as a user of resourcesdefined as a user of resourcesto transform inputs into somedesired outputsdesired outputs

Transformations

1-10

Physical--manufacturing

Locational--transportation

Exchange--retailing

Storage--warehousingStorage--warehousing

Physiological--health care

Informational--telecommunications

System Primary Inputs

Resources Transformation Function(s)

Desired Output

Hospital Patients MDs, Nurses, Medical

Healthcare (Physiological)

Healthy Individuals

Supplies, equipment

( y g )

Restaurant Hungary Customers

Food, Chef, wiat staff, environment

Well prepared, well served food, agreeable environment

Satisfied customers

environment (Physical & Exchange)

Automobile Sheet, Tools, equip, Fabrication and High quality factory steel,

engineparts

q pworkers assembly of cars

(Physical)

g q ycars

College or Uni

High school graduates

Teachers,books, classroom

Imparting knowledge & skills(Informational)

Educated individuals

Operations and Supply Management

1-12

Operations and Supply ManagementSupply Chain Processes

ManufacturingProcesses

SourcingProcesses

DistributionProcessesLogistics

ProcessesLogisticsProcesses

ServiceProcesses

Processes Processes

What is a Service and What is a Good?

1-13

If you drop it on your foot, it wont hurt you. (Good or service?)

S Services never include goods and goods never include services. (True or false?)(True or false?)

1-14

The Goods-Services Continuum

Goods versus Services

G d S iGoods Services

Pure Goods Core Goods Core Services Pure Services

IntangibleTangible

Less interaction with customersOften homogeneous

Not perishable can be inventoried

Interaction with customer requiredInherently heterogeneousPerishable/time dependent

Defined and evaluated as a package ofNot perishable can be inventoried Defined and evaluated as a package of features

11--1515

Careers in Operations and Supply Chain ManagementManagement

Hospital DepartmentPlant manager Hospital administrator Branch managerDepartment

store manager

Call center manager

Supply chain manager

Purchasing manager

Quality control manager

Business process

improvement analyst

Lean improvement

managerProject manager Production control analyst

Facilities manager

Chief operating officer

11--1616

Historical Development of Operations and Supply Chain ManagementChain Management

Late 1970s

Early 1980s

Manufacturing strategy developed

Just-in-time (JIT) production pioneered by the Japanese

Mid 1980s

Early 1990s

pioneered by the JapaneseService quality and productivity

Total quality management (TQM) and Quality certification Six-sigma quality

Mid 1990s

Late 1990s

( QM) a d Qua y ce ca o programs

Business process reengineering (BPR)

Supply chain management (SCM)

S g q y

Early 2000s

Mid 2010s

Electronic commerceService science

Mid 2010sBusiness analytics

11--1717

Current Issues in OM

1-18

Coordinate the relationships betweenCoordinate the relationships betweenmutually supportive but separateorganizations.

Optimizing global supplier, production,and distribution networksand distribution networks.

Increased co-production of goods andservices

Current Issues in OM (contd)

1-19

( )

Managing the customers Managing the customersexperience during the serviceencounterencounter

Raising the awareness ofRaising the awareness ofoperations as a significantcompetitive weaponcompetitive weapon

Question Bowl

1-20

A major objective of this book is to show j jhow smart managers can do which of the following?

a. Improve efficiency by lowering costsb. Improve effectiveness by creating

lvaluec. Increasing value by reducing pricesd Serving customers welld. Serving customers welle. All of the above

Answer: e All of the aboveAnswer: e. All of the above

Question Bowl

1-21

In the Input-Transformation-Output Relationship a typical input for aRelationship, 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.)

1-22

Thank UThank U