Chapter 1 Competing with Operations Instructor: David Weltman Website: Office: 502

Processes and Operations Outputs Services Goods Internal and external customers Information on performance Processes and operations Inputs Workers Managers Equipment Facilities Materials Services Land Energy Figure 1.1

OM Decisions Strategic Tactical

Operations Management as a Function Figure 1.3

Distribution Organization

Service Sector Jobs Percentage of workforce 40 – 30 – 20 – 10 – 0 ||||| Manufacturing, mining, and construction Other services Wholesale and retail sales Government Figure 1.4

Competitive Priorities Corporate strategy goals core competencies environmental responses new products/services global strategies Market analysis segmentation needs assessment Competitive priorities OperationsMarketing cost qualityFinance time flexibilityOthers Figure 1.5

Core Competencies Process expertise Workforce Facilities Market and Financial Know-How Systems and Technology Other

Competitive Priorities Corporate strategy goals core competencies environmental responses new products/services global strategies Market analysis segmentation needs assessment Cost1.Low-cost operations Quality2.High-performance design 3.Consistent quality Time4.Fast delivery 5.On-time delivery 6.Development speed Flexibility7.Customization 8.Volume flexibility Figure 1.5

Competitive Priorities Capabilities current needed plans Corporate strategy goals core competencies environmental responses new products/services global strategies Market analysis segmentation needs assessment Competitive priorities OperationsMarketing cost qualityFinance time flexibilityOthers Functional area strategies finance marketing operations others Figure 1.5

Strategy and Decisions Operations strategy Market analysis Competitive priorities Corporate strategy Figure 1.8 ServicesManufacturing Standardized services Assemble-to-order Customized services Make-to-stock Assemble-to-order Make-to-order

Service Strategies Standardized Assemble-to-order Customized

Manufacturing Strategies Make-to-stock Assemble-to-order Make-to-order

Health Clinic Process Physical exam Broken arm Flu D T RP B D:Doctor (examination rooms) R:Radiology (X-ray) T:Triage (assess severity of illness) B:Blood (lab test) P:Pharmacy (fill prescriptions) Broken arm Flu Physical exam Figure 1.6

Automobile Assembly Process A:Front-end body-to- chassis assembly H:Hood attachment F:Fluid filling S:Start-up testing Midsized 6 cylinder Compact 4 cylinder ASHF Midsized 6 cylinder Compact 4 cylinder Figure 1.7

Nested Processes Create End of Year Financial Statements Reconcile GL Determine TaxesDetermine EOY Inventory -- obtain revenues - -- obtain costs

Strategy and Decisions Figure 1.8 Operations strategy Market analysis Competitive priorities Corporate strategy ServicesManufacturing Standardized services Assemble-to-order Customized services Make-to-stock Assemble-to-order Make-to-order Process decisions Quality decisions Capacity, location, and layout decisions Operating decisions

Strategy and Decisions Operations strategy Process decisions Quality decisions Capacity, location, and layout decisions Operating decisions Market analysis Competitive priorities Corporate strategy Figure 1.8 ServicesManufacturing Standardized services Assemble-to-order Customized services Make-to-stock Assemble-to-order Make-to-order Capabilities

Industries and SIC Codes

PFSWeb

Keys to Competing Successfully Inbound logistics Production processes Outbound logistics Sales and marketing Customer service Operations Management (information technology) UpstreamDownstream

Federal Express Service Customers Bill & Collect Human Resources Build and Improve Distribution Centers Support Aircraft and Trucks Order Supplies Collect Packages Sort Packages Ship Packages Customers