Operations Management 14 Chapter Copyright ©2011 Pearson Education, Inc. Publishing as Prentice...

OperationsManagement

14Chapter

Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall.

14-2

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 value chain management


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What is Operations Management?

• Operations Management– the study and application

of the transformation process

• Transformation Process– The process that converts

resources into finished goods and services


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How do Service and Manufacturing Firms Differ?• Manufacturing Organizations– Organizations that produce physical goods

• Service Organizations– Organizations that produce nonphysical products

in the form of services


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What is Value?

• Value– The performance

characteristics, features, attributes, and other aspects of goods and services, for which customers are willing to give up resources


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What is Value Chain Management?

• Value Chain– The entire series of work activities that add value at

each step from raw materials to finished product

• Value Chain Management– The process of managing the sequence of activities

and information along the entire value chain


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How Is Value Chain Management Done?• Business Model– A strategic design for

how a company intends to profit from its broad array of strategies, processes, and activities


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Requirements for SuccessfulValue Chain Management• Coordination and Collaboration– All partners in the chain identify things customers

value and integrate their efforts comprehensively and seamlessly

• Technology Investment– key tools include a supporting enterprise resource

planning (ERP) software system that links all of an organization’s activities with trading network partners


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Requirements for SuccessfulValue Chain Management (cont.)• Organizational Processes– Improving forecasting, collaborating with partners,

and evaluating performance of activities in the chain

• Leadership– successful value chain management isn’t possible

without strong and committed leadership


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Requirements for SuccessfulValue Chain Management (cont.)• Employees and Human Resources– flexible approaches to job design, an effective

hiring process, and ongoing training

• Organizational Culture and Attitudes– attitudes include sharing, collaborating, openness,

flexibility, mutual respect, and trust


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What Are Organizational Processes?

• Organizational Processes– The way organizational work is done– Managers must critically evaluate all

organizational processes from beginning to end by looking at core competencies—the organization’s unique skills, capabilities, and resources—to determine where value is being added


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How Do Managers Control Quality?

• ISO 9000– A series of international quality standards that set

uniform guidelines for processes to ensure that products conform to customer requirements

• Six Sigma– A quality standard that establishes a goal of no

more than 3.4 defects per million units or procedures


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How Are Projects Measured?

• Project– A one-time-only set of activities with a definite

beginning and ending point

• Project Management– The task of getting project activities done on time,

within budget, and according to specifications


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What Are Some Popular Project Scheduling Tools?• Gantt chart– A planning tool that shows in bar graph form

when tasks are supposed to be done and compares that with the actual progress on each

• Load Chart– A modified version of a Gantt chart that lists either

whole departments or specific resources


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What is a PERT network analysis?

• PERT Network Analysis– A flowchart-like diagram that depicts the

sequence of activities needed to complete a project and the time or costs associated with each activity


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Elements of PERT Analysis

• Events– End points that represent the completion of major

activities

• Activities– Actions that take place

• Critical Path– The longest or most time-consuming sequence of

events and activities required to complete a project in the shortest amount of time


Operations Management 14 Chapter Copyright ©2011 Pearson Education, Inc. Publishing as Prentice...

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