Chapter 1 Introduction to the Field

What is Operations and Supply Management? Why Study Operations Management? Transformation Processes Defined Differences between Services and Goods The Importance of Operations Management Current Issues in OM OBJECTIVES 1-2

What is Operations and Supply Management? Operations and Supply Management (OM) is defined as the design, operation, and improvement of the systems that create and deliver the firm’s primary products and services 1-3

Why Study Operations Management? Business Education Systematic Approach to Org. Processes Career Opportunities Cross-Functional Applications Operations Management 1-4

What is a Transformation Process? Defined A transformation process is defined as a user of resources to transform inputs into some desired outputs 1-5

Transformations Physical--manufacturing Locational--transportation Exchange--retailing Storage--warehousing Physiological--health care Informational--telecommunications 1-6

Operations and Supply Management Supply Chain Processes Sourcing Processes Manufacturing Processes Service Processes Distribution Processes Logistics Processes Logistics Processes 1-7

Automobile Factory Primary Inputs –Sheet steel, engine parts Resources –Tools, equipment, workers Primary Transformation Function –Fabrication and assembly of cars Desired Output –High quality cars 1-8

Hospital Primary Inputs –Patients Resources –MDs, nurses, drugs, equipment Primary Transformation Function –Health care (diagnosis and treatment) Primary Output –Healthy individuals 1-9

University Primary Inputs –High school graduates Resources –Professors, staff, drugs, classrooms 1-10

University Primary Inputs –High school graduates Resources –Professors, staff, drugs, classrooms 1-11

University Primary Inputs –High school graduates Resources –Professors, staff, computers, classrooms Primary Transformation Function –Imparting knowledge and skills Desired Output –Educated individuals 1-12

What is a Service and What is a Good? “If you drop it on your foot, it won’t hurt you.” (Good or service?) “Services never include goods and goods never include services.” (True or false?) 1-13

The Goods-Services Continuum 1-14

Current Issues in OM Coordinate the relationships between mutually supportive but separate organizations. Optimizing global supplier, production, and distribution networks. Increased co-production of goods and services 1-15

Current Issues in OM (cont’d) Managing the customers experience during the service encounter Raising the awareness of operations as a significant competitive weapon 1-16

Question Bowl A major objective of this book is to show how smart managers can do which of the following? a.Improve efficiency by lowering costs b.Improve effectiveness by creating value c.Increasing value by reducing prices d.Serving customers well e.All of the above Answer: e. All of the above 1-17

Question Bowl In the Input-Transformation-Output Relationship, a typical “input” for a Department Store is which of the following? a.Displays b.Stocks of goods c.Sales clerks d.All of the above e.None of the above Answer: e. None of the above (The above are considered “Resources” of a department store. The correct answer is “Shoppers”.) 1-18

End of Chapter