1. © Copyright McGraw-Hill. All rights reserved.18–1 Operations Management and Competitive Advantage

2. © Copyright McGraw-Hill. All rights reserved.18–2 The Purpose of Operations Management Figure 18.1

3. © Copyright McGraw-Hill. All rights reserved.18–3 Impact of Increased Quality on Organizational Performance Figure 18.4

4. © Copyright McGraw-Hill. All rights reserved.18–4 Operations Management Techniques provide quantitative information for … Total Quality Management (TQM)Total Quality Management (TQM)  A management technique that focuses all activities on improving the quality of a firm’s goods or services. Just in Time InventoryJust in Time Inventory JIT reduces inventory holding costs for warehousing, storage, inventory tracking, and the cost of capital tied up in inventory.JIT reduces inventory holding costs for warehousing, storage, inventory tracking, and the cost of capital tied up in inventory. A drawback to JIT is that a firm does not maintain have a large buffer stock of parts which makes the firm vulnerable to strikes or supply problems that can quickly deplete on-hand inventories.A drawback to JIT is that a firm does not maintain have a large buffer stock of parts which makes the firm vulnerable to strikes or supply problems that can quickly deplete on-hand inventories.

5. © Copyright McGraw-Hill. All rights reserved.18–5 Operations Management Techniques provide quantitative information for … Process ReengineeringProcess Reengineering  Can boost efficiency by directing efforts to activities that add value to the good or service produced. Decisions that will turn a profitDecisions that will turn a profit  (Frito Lay example) etc. etc. etc.etc. etc. etc.

6. © Copyright McGraw-Hill. All rights reserved.18–6 Examples of Operations Management Techniques Product MixProduct Mix TransportationTransportation AssignmentAssignment Minimal spanningMinimal spanning Project planning (PERT/CPM)Project planning (PERT/CPM) etc. etc. etc.etc. etc. etc.