15 Chapter Operations Management Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-1

Learning Outcomes After studying this chapter, you will be able to: Define operations management and explain its role. Define the nature and purpose of value chain management. Describe how value chain management is done. Discuss contemporary issues in managing operations. Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-2

Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-3

Operations Management Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-4

Service Firms vs. Manufacturing Firms Manufacturing organizations produce physical goods, such as cars or food products. Service organizations produce nonphysical outputs in the form of services, such as medical, transportation, and entertainment services. Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-5

Improving Productivity Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-6

Deming’s 14 Points for Improving Productivity Plan for the long-term future. Never be complacent with the quality of your product. Establish statistical control over your production processes and require your suppliers to do so. Deal with the best and fewest number of suppliers. Find out if your problems are confined to particular parts of the production process or stem from the overall process itself. Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-7

Operations Management and Company Strategy Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-8

Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-9

Value Chain Management Value chain – The entire series of organizational work activities that add value at each step from raw materials to finished product Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-10

Goals of Value Chain Management Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-11

Benefits of Value Chain Management Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-12

Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-13

The Value Chain Management Process Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-14

Successful Value Chain Management Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-15

Organizational Processes and Leadership Organizational processes must change to provide: 1.Better demand forecasting 2.Select functions done collaboratively with other partners in the chain 3.New measures needed for evaluating the performance of various activities along the chain Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-16

Employees and Human Resources Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-17

Obstacles to Value Chain Management Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-18

Impact of Cultural Attitudes Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-19

People and Capabilities Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-20

Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-21

1.Technology’s role in operations management 2.Quality initiatives 3.Project management Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall Contemporary Issues

Quality Control Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-23

Quality Goals Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-24

Project Management Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-25

Gantt Charts Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-26

Load Charts Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-27

PERT Network Analyses Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-28

PERT Network Analyses (cont.) Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-29

PERT Network Analyses (cont.) Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-30

Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 15-31