1. Operations as a Competitive Weapon
KR: Chapter 1
Operations as a Competitive Weapon

2. Chapter Outline What is a process? Nested process
Customer-supplier relationships
Service and manufacturing processes
Differences and similarities
Degree of customer contacts

3. Traditional Organizational Chart (How traditional organizations are managed)
CEO
Sales
Marketing
Engineering
Manufacturing
Distribution
Customer
service
Policy and decisions are deployed downward
Information flows upward

4. Process view (How process-focused organizations work)
Product
Delivered
Order
placed
Chain of events is horizontal

5. Core Process Map Customer Sales Marketing Finance Distribution Field
engineering
&
service
Customer
Order
Delivery
acceptance
1.1 Order
placement
1.2 Order
entry
1.9 Invoice
1.3 Credit
check
1.4 Pick and
Pack
1.5 Schedule
1.7 Ship
1.6 Site prep
1.8 Install

6. Process Hierarchy Core process (1) Order fulfillment
Functional process (8 to 12)
Order
processing
Production
Staging and
installation
Subprocesses (20 to 50))
Order
entry
Credit
check
Verify
Customer
address
Assign
Customer
Identification
Number
Enter
Product
code
Work steps (hundreds to thousands)

7. Five Process Groups with 12 Subprocesses
group B,
contracting
Process group A,
Order processing 4
Process group C, delivery 1 2 5 6 7 3 8
External
customers
External
suppliers
Process group D, billing 9 10
Process group E,
Customer service 11 12

8. Chapter Outline What is a process? Nested process
Customer-supplier relationships
Service and manufacturing processes
Differences and similarities
Degree of customer contacts

9. Nature of Services Intangible No inventory
Simultaneous production and consumption
Variety of services
Labor intensive

10. Continuum of Characteristics
More like a manufacturing organization
More like
a service organization
Physical, durable product
Output can be inventoried
Low customer contact
Long response time
Regional, national or International markets
Large facilities
Capital intensive
Quality easily measured
Intangible, perishable product
Output cannot be inventoried
High customer contact
Short response time
Local markets
Small facilities
Labor intensive
Quality not easily measured

11. Chapter Outline What is a process? Value Chain Core process
Support process

12. Internal Value-Chain Linkages Showing Work and Information Flows
External suppliers
External customers
Support processes
Supplier relationship process
Order fulfillment process
New service/ product development process
Customer relationship process
The first slide establishes the continuum.
Figure 1.3

13. Support Processes Table 1.1 Examples of Support Processes
Capital Acquisition
The provision of financial resources for the organization to do its work and to execute its strategy
Budgeting
The process of deciding how funds will be allocated over a period of time
Recruitment and Hiring
The acquisition of people to do the work of the organization
Evaluation and Compensation
The assessment and payment of the people for the work and value they provide to the company
Human Resource Support and Development
The preparation of the people for their current jobs and future skill and knowledge needs
Regulatory Compliance
The process that insure the company if meeting all laws and legal obligations
Information Systems
The movement and processing of data and information to expedite business operations and decisions
Enterprise and Functional Management
The systems and activities that provide strategic direction and ensure effective execution of the work of the business

14. International Benchmarking Clearinghouse’s Standard Process Classification
Understand markets and customers
Develop vision and strategy
Design products and services
Produce and deliver
Manage improvement and change
Develop and manage human resources
Manage information
Market and sell
Invoice and service customers
Execute environmental management program
Manage financial and physical resources
Manage external relationships
Manage improvement and change

15. Chapter Outline What is a process? Value Chain
What is operations management?
Broad and narrow interpretations
OM as a set of decisions
OM as a function

16. The Operations Management System
Outputs
Goods
Services
External environment
Customer or client participation
Operations and processes
Information on performance 5 1 2 3 4
Inputs
Workers
Managers
Equipment
Facilities
Materials
Land
Energy

17. Manufacturing Management Activities
NOTES:

18. Operations As A Basic Function
MARKETING
FINANCE
OPERATIONS

19. Operations As The Technical Core
Finance
Capital Markets, Stockholders
Marketing
Customers
Workers
Suppliers
Purchasing
Personnel

20. Chapter Outline What is a process? Value Chain
What is operations management?
Productivity

21. Productivity Output Input Productivity =
This series of slides illustrates the productivity calculations shown in Example 1.1. The series builds in steps to the conclusion of the Example showing the development of key equations along the way.
This slide advances automatically..

22. Chapter Outline What is a process? Value Chain
What is operations management?
Productivity
Road map for competitive operations
Operations management as a competitive weapon

23. Operations Roadmap Figure 1.6 Competing with Operations
Operations As a
Competitive Weapon 1
Operations Strategy 2
Process Design Strategy 3
Designing Value Chains
Supply Chain
Design 9
Lean Systems 11
Location 10
Designing and
Improving Processes
Process Analysis 4
Process
Performance and
Quality 5
Capability 6
Layout 7
Planning and
Managing Projects 8
Operating Value Chains
Information Technology
and Value Chains 12
Forecasting 13
Inventory
Management 15
Resource
Planning 16
Scheduling 17
Aggregate Planning 14
Outcomes
Figure 1.6

24. Operations Management Activities