Business operating management

Yuzhi Zhao

chapter4.pptx

Home >Business & Finance homework help >Management homework help >Business operating management

Technology and Operations Management

COLLIER/EVANS

Operations + Supply Chain Management

LEARNING OUTCOMES

Describe different types of technology and their role in manufacturing and service operations

Explain how manufacturing and service technology and analytics strengthen the value chain

Explain the benefits and challenges of using technology

Describe key technology decisions

OM6 | CH7

Technology

LO 4-1

Helps service and manufacturing systems operate productively and meet customers’ needs

Technological innovation in goods, services, manufacturing, and service delivery is a competitive necessity

OM6 | CH4

Categories of Technology

LO 4-1

Hard technology: Equipment and devices that perform a variety of tasks in the creation and delivery of goods and services

Soft technology: Application of the Internet, computer software, and information systems that:

Helps provide data, information, and analysis

Facilitates the creation and delivery of goods and services

OM6 | CH4

Manufacturing Technology Issues, Part 1

LO 4-1

Appropriate technology must be selected for producing goods

Process resources must be set up and configured in a logical fashion to support production efficiency

Labor must be trained to operate the equipment

OM6 | CH4

Manufacturing Technology Issues, Part 2

LO 4-1

Process performance must be continually improved

Work must be scheduled to meet shipping commitments/customer promise dates

Quality must be ensured

OM6 | CH4

Computer-Integrated Manufacturing Systems (CIMSs), Part 1

LO 4-1

Union of hardware, software, database management, and communications to automate and control production activities

Evolution of manufacturing automation:

Numerical control (NC) machine tools help duplicate a machinist’s skills by a programmable device that:

Controls the movements of a tool used to make complex shapes

OM6 | CH4

Computer-Integrated Manufacturing Systems (CIMSs), Part 2

LO 4-1

Computer numerical control (CNC) machines

NC machines whose operations are driven by a computer

Robot: Programmable machine designed to handle materials or tools in the performance of a variety of tasks

Emerged with:

CAD/CAE

Computer-aided design/computer-aided engineering

OM6 | CH4

Computer-Integrated Manufacturing Systems (CIMSs), Part 3

LO 4-1

Enables engineers to design, analyze, test, simulate, and manufacture products before they physically exist

CAM

Computer-aided manufacturing

Computer control of the manufacturing process

OM6 | CH4

Computer-Integrated Manufacturing Systems (CIMSs), Part 4

LO 4-1

Make use of flexible manufacturing systems (FMSs)

Flexible manufacturing systems (FMSs): Two or more computer-controlled machines linked by automated handling devices where computers:

Direct the overall sequence of operations and route work to an appropriate machine

Select and load proper tools

Control operations performed by a machine

OM6 | CH4

Advances in Manufacturing Technology

LO 4-1

Help expand the customer benefit package by allowing consumers to create custom products

Three-dimensional printing

Industrial robots

Nanotechnology

OM6 | CH4

Service Technology

LO 4-1

Enhances the perception of service quality

E-service: Uses the Internet and technology to provide services to customers and support the sale of goods

Helps deliver time, place and information, entertainment, and exchange value are some of the services that are provided to customers

OM6 | CH4

Technology in Value Chains

LO 4-2

Helps enhance the efficiency of operations

Provides the capability to eliminate parts of the traditional value chain structure and streamline operations

Internet and e-communications help in the integration of several components of the value chain

OM6 | CH4

Business Analytics in Value Chains

LO 4-2

Helps integrate and analyze data throughout the value chain within an information systems framework

Customer relationship management (CRM) is a key information system

OM6 | CH4

Customer Relationship Management (CRM), Part 1

LO 4-2

Business strategy designed to learn more about customers’ wants, needs, and behaviors to:

Build customer relationships and loyalty

Enhance revenues and profits

Helps firms gain and maintain competitive advantage by:

Segmenting markets

Tracking sales trends and advertising effectiveness

OM6 | CH4

Customer Relationship Management (CRM), Part 2

LO 4-2

Identifying a target market

Forecasting customer retention (and defection) rates

Identifying fraudulent transactions

OM6 | CH4

Customer Relationship Management (CRM), Part 3

LO 4-2

Studying customer benefit packages

Studying and predicting attractive Web characteristics

Linking the information listed above to competitive priorities by market segment and process and value chain performance

OM6 | CH4

Exhibit 4.1

Example Benefits and Challenges of Adopting Technology

LO 4-3

EXHIBIT 4.1 Example Benefits and Challenges of Adopting Technology

Benefits	Challenges
Creates new industries and job opportunities	Higher employee skill levels required, such as information technology and service management skills
Restructure old and less productive industries	Integration of old (legacy) and new technology and systems
Integrates supply and value chain players	Job shift and displacement
Increases marketplace competitiveness and maintains the survival of the firm	Less opportunity for employee creativity and empowerment
Provides the capability to focus on smaller target market segments through mass customization	Protecting the employee’s and customer’s privacy and security
Improves/increases productivity, quality, customer satisfaction, speed, safety, and flexibility/customization; does more with less	Fewer human service providers, resulting in customer ownership not being assigned, nonhuman service encounter, and inability of the customer to change decisions and return goods easily
Lower cost	Information overload
Raises world’s standard of living	Global outsourcing and impact on domestic job opportunities
Monitors the environment and health of the planet	Global outsourcing and impact on domestic job opportunities

OM6 | CH1

Technology Decisions, Part 1

LO 4-4

Made by operations managers who strive to provide the best synthesis of technology, people, and processes

Interaction is called a sociotechnical system

Depend on:

Scalability: Measure of the contribution margin required to deliver a good or service as the business grows and volumes increase

Contribution margin is revenue minus variable costs

OM6 | CH4

Technology Decisions, Part 2

LO 4-4

High scalability: Capability to serve additional customers at extremely low incremental costs

Infinite scalability - Capability to serve additional customers at zero incremental costs

Low scalability: High incremental variable costs involved with serving additional customers

OM6 | CH4

KEY TERMS

Hard technology

Soft technology

Computer-integrated manufacturing systems (CIMSs)

Numerical control (NC)

Computer numerical control (CNC)

Robot

CAD/CAE

CAM

Flexible manufacturing systems (FMSs)

E-service

Customer relationship management (CRM)

Scalability

High scalability

Low scalability

OM6 | CH7

SUMMARY

Technology can be categorized into hard and soft technologies

Customer relationship management (CRM) is a key information system that drives value chain management

Service technology enhances the perception of service quality

Technology decisions depend on factors of scalability that can be infinite, high, or low

OM6 | CH7

4LTR Press

OM6 | CH7