Post on 30-Dec-2015
MANAGEMENT
RICHARD L. DAFT
Managing the Value Chain, Information Technology,
and E-Business
CHAPTER 14
Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.
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Learning Outcomes
• Define operations management and describe its application within manufacturing and service organizations.
• Explain today’s partnership approach to supply chain management.
• Summarize considerations in designing facilities layout.
• Discuss new technologies used for manufacturing and service operations, and explain what is meant by lean manufacturing.
• Explain why small inventories are preferred by most organizations and describe just-in-time inventory management.
• Identify ways in which information technology has transformed the manager’s job.
• Describe different types of IT systems used in today’s organizations and how they support daily operations and decision making.
• Summarize the key components of e-business and explain the common e-business strategies.
Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.
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Which Side of Your Brain Do You Use?
• Managers are inundated with data and information
• Computers and the Internet have expanded the options of information
• Managers choose from written reports, explicit data or visuals
Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.
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The Organization As a Value Chain
• At the center of the transformation process is the technical core
– The management of inputs to produce products and services (output)
– Drive value to customers
• Operations Management pertains to the day-to-day management of the technical core
– Managing the physical production of goods or services
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The Value Chain
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Manufacturing vs. Service Organizations
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Supply Chain Management
• Efficient and reliable system for distributing finished products
• Managing the sequence of suppliers and purchasers
• From obtaining raw materials to distributing finished goods
• Use of Internet technologies
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Integrated Supply Chain
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Facilities Layout
• Process Layout – similar functions are grouped together
• Product Layout – assembly line, tasks are arranged according to progress
• Cellular Layout – sequenced tasks are grouped into cells
• Fixed-Position Layout – product remains at one location and resources are brought to it
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Basic Production Layouts
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Technology Automation
• Radio-Frequency Identification (RFID) – electronic tagging to track items
• Flexible Manufacturing Systems – production lines that can be adapted to produce different products
• Lean Manufacturing – using highly trained employees, technology and innovative methods to cut waste and improve quality
Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.
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Inventory Management
• Inventory is expensive to carry
• Unproductive asset
• Dollars not tied up in inventory can be used in other areas
• High levels of inventory hide business problems
Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.
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Just-in-Time Inventory
• Designed to reduce the level of inventory and associated costs– Stockless systems, zero inventory systems, kanban
systems
• Suppliers deliver inventory at the exact moment needed
• Reduces raw materials inventory to zero• Matching finished-goods inventory to sales
demand• Reduced inventory frees capital for other uses
Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.
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Information Technology Has Transformed
Management• Collaboration
– Information technology connects people around the world
– Sharing and exchanging information and ideas
• Knowledge Management
– Systematically gathering and organizing knowledge
– Foster a culture of continuous learning and knowledge sharing
– Knowledge is different than data and information, knowledge has a human factor; drawn conclusions
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Management Information Systems
(MIS)• Computer-based system
• Provides information and support for effective decision making
– Decision Support Systems
– Executive Information Systems
– Groupware/Collaborative Work Systems
• Enterprise Resource Planning (ERP) integrates business processes across the firm
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Basic Elements of MIS
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Enterprise Resource Planning Systems
• Backbone of an organization’s operation
• Optimizes business processes
• Collects, processes, and provides information about the entire firm
• Managers can analyze decisions across the organization
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Example of ERP Applications
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New Generation of Information Technology
• Innovative technology on the Internet is being fueled by individuals– Blogs– Wikis– Social Networking– Peer-to-Peer File Sharing
• Companies are using these tools and starting their own
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The Internet and E-Business
• Organizations have been incorporating the Internet to expand their operations
– Improve business processes
– Reaching new customers
– Leveraging resources
• Managers must align e-Business strategies with corporate strategy
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Key Components of E-Business
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Strategies for Engaging Clicks with Bricks