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Chapter12 OperationsManagementOperationsManagement(p.334)-thestudyandapplicationofthetransformationprocess

Howyouconvertresources(laborandrawmaterials)intooutputs(products)TransformationProcessAllorganizationsproducegoodsorservicesthroughthetransformationprocess(p.334)–theprocessthroughwhichanorganizationcreatesvaluebyturninginputsintooutputsTransformationProcessInputs:PeopleTechnologyCapitalEquipmentMaterialsInformationTransformationProcessOutputsGoodsServicesProductionManufacturingorganizations(p.334)–producephysicaloutputsExamples:CarsCellphonesFoodBooksServiceorganizations(p.335)–producenonphysicaloutputsExamples:EducationMedicalServicesTransportationLet’sbeproductiveProductivity(p.335)–theoveralloutputofgoodsandservicesdividedbytheinputsneededtogeneratethatoutputProductivity=Output/(labor+capital+materials)Whyisproductivityimportant?Productivitydependsonpeopleandoperationsvariables–needtofocusonboth!Increaseyourglobalcompetitiveness!WanttoincreaseefficiencyProducemore,whilesavingtimeandmoneyCustomerswantvalueEveryorganizationneedscustomerswhowillusetheirserviceorbuytheirproducts.Customerswantthegoodsorservicestogivethemvalue.Value(p.337)–theperformancecharacteristics,features,andattributes,oranyotheraspectsofgoodsandservicesforwhichcustomersarewillingtogiveupresources(usuallymoney)ValueChainSowetransformrawmaterialsandotherresourcesintosomeproductsorservicesthatcustomerswant–somewherealongthelineitgainsvalue.Valuechain(p.337)–theseriesoforganizationalworkactivitiesthataddsvalueateachstepbeginningwiththeprocessingofrawmaterialsandendingwithafinishedproductinthehandsofendusers.ValueChainManagementValuechainmanagement(p.338)–theprocessofmanagingtheprocessofactivitiesandinformationabouttheproductasitgoesthroughthevaluechain.Effectivenessoriented–aimstocreatethehighestvalueforcustomersSupplyChainManagementSupplychainmanagement(p.338)–managementofthefunctionsandactivitiesinvolvedinproducinganddeliveringaproductorservicefromsupplierstocustomersEfficiencyoriented-GoalistoreducecostsandmakeorganizationmoreproductiveWhohasthepowerinthevaluechain?Playersinthevaluechain:Suppliers–provideneededresources;determinepriceandqualityProducers–assemblestheresourcesintoavaluableproductorserviceDistributor–makessuretheproductorserviceisavailable**Customers**-definewhatvalueisandhowitshouldbeprovidedSuccessfulValueChainManagementValueChainStrategyCoordinationandcollaborationTechnologyinvestmentOrganizationalprocessesLeadershipEmployeesOrganizationalcultureandattitudesExhibit12-2,page339SuccessfulValueChainManagementCoordinationandcollaborationSharinginformationandbeingflexibleInvestmentintechnologyOrganizationalprocessesp.340-ThewayorganizationalworkisdoneEliminatenon-valueaddingactivitiesStrongleadershipGood,hardworkingemployeesSupportiveorganizationalcultureandattitudesObstaclesintheValueChainObstaclesinvaluechainmanagementOrganizationalbarriersRequiredcapabilitiesPeopleCulturalattitudesExhibit12-4,page344IssuesinOperationsManagementTechnologyande-manufacturingJust-in-timeinventoryContinuousimprovementandqualitycontrolP.345Technologyande-manufacturingCompetitionforcescompaniestodeliverproductsandservicesthatcustomersvalueinatimelymannerCompaniesarelookingatwaystousedtheinternetandtechnologytoimprovethisprocessCanshowcapacity,statusoforders,testproductqualityateachstageofproductionCanrevealproblemareasorbrokenequipmentJust-in-timeinventoryManycompanieshavemuchmoneysittingininventory(productsormaterialswaitingtobeusedorsold)–wanttoreducethesizeofinventoryJut-in-time(p.346)–systemsinwhichinventoryitemsarrivewhenneededintheproductionprocessinsteadofbeingstoredinstockContinuousimprovement

andqualitycontrolWealwayswanttoimprovethequalityoftheorganization’sprocesses,products,andservices.Continuousimprovement–focusesonactionstopreventmistakesQualityControl–focusesonfindingmistakesthatmayhavealreadyoccurredQualityControlQualitycontrol–p.346–monitoringqualitytoensurethatwhatisproducesmeetssomepreestablishedstandardExamplesofwhattomonitor:WeightStrengthConsistencyColorTasteLet’sReview…DiscussthefollowingwithyourneighborWhatisthedifferencebetweenaserviceorganizationandamanufacturingorganization?Whatisthegoalofvalue-chainmanagement?Whoaretheplayersinthevaluechain?Whichgrouphasthepower?1.Whatisthedifferencebetweenaserviceorganizationandamanufacturingorganization?

Serviceorganization–producesnonphysicaloutputsintheformofservicesforexample:education,medical,transportationManufacturingorganization–producesphysicalgoods2.Whatisthegoa

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