Business operating management

Yuzhi Zhao

chapter1.pptx

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Operations Management and Value Chains

COLLIER/EVANS

Operations + Supply Chain Management

LEARNING OUTCOMES, Part 1

Explain the concept and importance of operations management

Describe what operations managers do

Explain the differences between goods and services

Define the concept of value and explain how the value of goods and services can be enhanced

Describe a customer benefit package

OM6 | CH7

LEARNING OUTCOMES, Part 2

Explain the difference between value chains and supply chains, and identify three general types of processes in a business

Contrast the three different frameworks for describing value chains

Summarize the historical development of OM

Describe key challenges facing OM

OM6 | CH7

Operations Management (OM), Part 1

LO 1-1

Science and art of ensuring that goods and services are created and delivered successfully to customers

Includes:

Design of goods, services, and the processes that create them

Day-to-day management of processes

Continual improvement of goods, services, and processes

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Operations Management (OM), Part 2

LO 1-1

Depends on:

Efficiency

Cost of operations

Quality of goods

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Key Activities of an Operations Manager

LO 1-2

OM6 | CH1

Transactions between Buyers and Sellers, Part 1

LO 1-3

Types

Good: Physical product that a person sees, touches, or consumes

Durable good: Product that does not quickly wear out and lasts at least three years

Non-durable good: Product that perishes and lasts for less than three years

Service: Primary or complementary activity that does not directly produce a physical product

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Transactions between Buyers and Sellers, Part 2

LO 1-3

Driven by customers and provide value and satisfaction to customers who purchase and use them

Standardized or customized to individual wants and needs

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Goods versus Services, Part 1

LO 1-3

OM6 | CH1

Goods versus Services, Part 2

LO 1-3

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Service Management

LO 1-3

Integrates marketing, human resources, and operations functions to:

Plan

Create

Deliver goods and services

Deal with service encounters

Moments of truth: Episodes, transactions, or experiences in which customer encounters the delivery system and forms an impressions

OM6 | CH1

Value

LO 1-4

Perception of the benefits associated with a good, service, or bundle of goods and services in relation to what a buyer pays

Goods or services are perceived favorably by customers if the ratio of perceived benefits to price to the customer is high

OM6 | CH1

Customer Benefit Packages (CBP), Part 1

LO 1-5

Clearly defined set of tangible and intangible features that a customer recognizes, pays for, uses, or experiences

OM6 | CH1

Customer Benefit Packages (CBP), Part 2

LO 1-5

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Value Chain

LO 1-6

Network of facilities and processes

Describes the flow of materials, finished goods, services, information, and financial transactions from suppliers

Through the facilities and processes that create goods and services, and those that deliver them to the customer

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Supply Chain

LO 1-6

Portion of value chain that focuses on:

Physical movement of goods and materials

Supporting flow of information and financial transactions through the supply, production, and distribution processes

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Types of Business Processes

LO 1-6

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Exhibit 1.4

Input-Output Framework of a Value Chain

LO 1-7

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Exhibit 1.7

Pre- and Postservice View of the Value Chain

LO 1-7

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Exhibit 1.9

Typical Goods-Producing Supply Chain Structure

LO 1-7

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Goods-Producing Supply Chain

LO 1-7

Activities include shipping finished goods to distribution centers (DCs)

Distribution centers

Warehouses that act as intermediaries between factories and customers and ship directly to customers or to retail stores

Inventory: Raw materials, work-in-process, or finished goods that are maintained to support production or satisfy customer demand

OM6 | CH1

Exhibit 1.10

Seven Eras of Operations Management

LO 1-8

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Sustainability

LO 1-8

Organization’s ability to strategically address current business needs and develop a long-term strategy to:

Embrace opportunities and manage risks for products, systems, supply chains, and processes

Preserve resources for future generations

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Perspectives of Sustainability, Part 1

LO 1-8

Environmental sustainability

Organization’s commitment to the long-term quality of the environment

Social sustainability

Organization’s commitment to maintain healthy communities and a society that improves the quality of life

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Perspectives of Sustainability, Part 2

LO 1-8

Economic sustainability: Organization’s commitment to:

Address current business needs and economic vitality

Have the agility and strategic management to prepare successfully for future business, markets, and operating environments

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Data in OM

LO 1-8

Used to evaluate:

Operations performance, quality, order accuracy, customer satisfaction, delivery, cost, environmental compliance, etc.

Helps make decisions using business analytics

Business analytics: Process of transforming data into actions through analysis and insights in the context of decision making and problem solving

OM6 | CH1

Current Challenges in OM

LO 1-8

OM6 | CH1

KEY TERMS, Part 1

Operations management

Goods

Durable good

Nondurable good

Service

Service encounter

Moments of truth

Service management

Value

Customer benefit packages (CBP)

Primary good or service

Peripheral goods or services

Variant

Value chain

Supply chain

Process

OM6 | CH7

KEY TERMS, Part 2

Distribution centers (DCs)

Inventory

Sustainability

Environmental sustainability

Social sustainability

Economic sustainability

Business analytics

OM6 | CH7

Summary

Principles of OM are used in goods manufacturing and production activities

Goods and services are two major transactions between buyers and sellers

Evaluating the value of products and customer benefit packages are a part of OM activities

OM should focus on developing sustainable business operations

OM6 | CH7

4LTR Press

OM6 | CH7