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Ch 1 - Operations and Competitiveness

Definitions (p3 - short for page 3)
1. Product - general term for either a good or service
  (Identify a product you have produced. State if it is a good or service.)
2. Operations - a system that transforms inputs (material, machines, labor, management, capital) into outputs (products) of greater value
3. Operations management (OM) - the management techniques for operations
The Operations Function
1. The four primary functions of a firm are (p4):
  1. Marketing - generates demand for products
  2. Finance/accounting - obtains and tracks capital
  3. Operations - creates the products
  4. Human Resources - recruits and trains employees
    Question: In what function do you currently work?
    Note: If you work in marketing, finance, or human resources, then you can still apply OM techniques to the services produced.
2. Types of transformational processes are (p3):
  1. Physical - manufacturing
  2. Locational - transportation
  3. Exchange - banking, retail
  4. Physiological - health care
  5. Psychological - entertainment
  6. Informational - communications
    Question: What is the primary transformational process where you currently work?
    Note: many operations employ more than one transformational process.
    Importance of psychological process underestimated in many operations.
Operations Mgt in an E-Business Environment (p9)
1. Definitions
  1. E-Commerce or E-Business - trade that occurs over a computer network (Internet)
  2. Business-to-Consumer (B2C) e-commerce - e-commerce that involves businesses and their (retail) customers
    Example - Dell sells PCs directly to consumers (www.dell.com)
  3. Business-to-Business (B2B) e-commerce - e-commerce that involves businesses and their suppliers
         Example - Covisint - a B2B supplier exchange formed by
              DaimlerChrysler, Ford Motor Company and General Motors in Feb., 2000
              "to enable speed in decision making, waste elimination, and cost reduction
              while supporting common business processes between manufacturers and their supply chain."
                      (www.covisint.com)
2. Benefits of E-Business to Operations Mgt (Table 1.2, p10)
  1. Direct contact with customers - mass customization possible - one-to-one marketing
  2. Business processes conducted online - transaction costs lowered - example, ordering Dell PC
  3. Access to customers worldwide - demand increases
  4. Information Technology (IT) synergy - customer orders go directly to production planning
  5. Expanded supply chain - reduced logistics costs
Overview of OM (p21)
1. Designing a Productive System - Ch2 Operations Strategy, Ch3 Quality Mgt, Ch4 Statistical Process Control, Ch5 Products, Ch6 Processes, Ch7 Facilities, Ch8 Human Resources, Ch9 Project Mgt
2. Operating the Productive System - Ch10 Supply Chain Mgt, Ch12 Inventory Mgt, Ch13 Aggregate Planning, Ch14 Resource Planning, Ch15 Lean Production, Ch16 Scheduling, Ch17 Waiting Lines.
Why Study OM? (Not in text)
1. I’m an accountant. Why should I study OM? In 3 years, you’ll be promoted to mgr of accounting operations.
2. I’m a financial analyst. Why should I study OM? In 3 years, you’ll be promoted to mgr of financial operations.
3. I’m a marketing analyst. Why should I study OM? In 3 years, you’ll be promoted to mgr of marketing operations.
4. Why study now? I’ll study when I get promoted. The reason you’ll be promoted is because you’ve made suggestions to demonstrate your managerial potential. (This page was last edited on August 16, 2006 .)