MANAGEMENT RICHARD L. DAFT

Managing the Value Chain, Information Technology, and E-Business Managing the Value Chain, Information Technology, and E-Business CHAPTER 14

Learning Outcomes Define operations management and describe its application within manufacturing and service organizations. Explain today’s partnership approach to supply chain management. Summarize considerations in designing facilities layout. Discuss new technologies used for manufacturing and service operations, and explain what is meant by lean manufacturing. Explain why small inventories are preferred by most organizations and describe just-in-time inventory management. Identify ways in which information technology has transformed the manager’s job. Describe different types of IT systems used in today’s organizations and how they support daily operations and decision making. Summarize the key components of e-business and explain the common e-business strategies. Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Which Side of Your Brain Do You Use? Managers are inundated with data and information Computers and the Internet have expanded the options of information Managers choose from written reports, explicit data or visuals Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

The Organization As a Value Chain At the center of the transformation process is the technical core The management of inputs to produce products and services (output) Drive value to customers Operations Management pertains to the day-to-day management of the technical core Managing the physical production of goods or services Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

The Value Chain Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Manufacturing vs. Service Organizations Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Supply Chain Management Efficient and reliable system for distributing finished products Managing the sequence of suppliers and purchasers From obtaining raw materials to distributing finished goods Use of Internet technologies Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Integrated Supply Chain Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Facilities Layout Process Layout – similar functions are grouped together Product Layout – assembly line, tasks are arranged according to progress Cellular Layout – sequenced tasks are grouped into cells Fixed-Position Layout – product remains at one location and resources are brought to it Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Basic Production Layouts Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Technology Automation Radio-Frequency Identification (RFID) – electronic tagging to track items Flexible Manufacturing Systems – production lines that can be adapted to produce different products Lean Manufacturing – using highly trained employees, technology and innovative methods to cut waste and improve quality Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Inventory Management Inventory is expensive to carry Inventory is expensive to carry Unproductive asset Dollars not tied up in inventory can be used in other areas High levels of inventory hide business problems Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Just-in-Time Inventory Designed to reduce the level of inventory and associated costs Stockless systems, zero inventory systems, kanban systems Suppliers deliver inventory at the exact moment needed Reduces raw materials inventory to zero Matching finished-goods inventory to sales demand Reduced inventory frees capital for other uses Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Information Technology Has Transformed Management Collaboration Information technology connects people around the world Sharing and exchanging information and ideas Knowledge Management Systematically gathering and organizing knowledge Foster a culture of continuous learning and knowledge sharing Knowledge is different than data and information, knowledge has a human factor; drawn conclusions Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Management Information Systems (MIS) Computer-based system Provides information and support for effective decision making Decision Support Systems Executive Information Systems Groupware/Collaborative Work Systems Enterprise Resource Planning (ERP) integrates business processes across the firm Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Basic Elements of MIS Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Enterprise Resource Planning Systems Backbone of an organization’s operation Optimizes business processes Collects, processes, and provides information about the entire firm Managers can analyze decisions across the organization Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Example of ERP Applications Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

New Generation of Information Technology Innovative technology on the Internet is being fueled by individuals Blogs Wikis Social Networking Peer-to-Peer File Sharing Companies are using these tools and starting their own Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

The Internet and E-Business Organizations have been incorporating the Internet to expand their operations Improve business processes Reaching new customers Leveraging resources Managers must align e-Business strategies with corporate strategy Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Key Components of E-Business Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.

Strategies for Engaging Clicks with Bricks Copyright ©2010 by South-Western, a division of Cengage Learning.  All rights reserved.