The Operations Management System by VdJ5J0E7

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									  KR: Chapter 1


 Operations as a
Competitive Weapon
         Chapter Outline
What is a process?
  Nested process
  Customer-supplier relationships
  Service and manufacturing processes
    Differences and similarities
    Degree of customer contacts
     Traditional Organizational Chart
     (How traditional organizations are managed)
                                    CEO


 Sales    Marketing   Engineering     Manufacturing   Distribution   Customer
                                                                      service




                                                                Policy and
                                                                decisions are
Information                                                     deployed
flows upward                                                    downward
                    Process view
         (How process-focused organizations work)



                                                         Product
                                                        Delivered


Order
placed




                        Chain of events is horizontal
                  Core Process Map
               Customer
Customer        Order                                                   Delivery
                                                                       acceptance

Sales           1.1 Order
                     placement

                    1.2 Order
Marketing                 entry                                  1.9 Invoice
                            1.3 Credit
Finance                           check

                                  1.4 Pick and   1.5 Schedule     1.7 Ship
Distribution                          Pack


Field
engineering                                      1.6 Site prep    1.8 Install
&
Customer
service
                         Process Hierarchy
                       Core process            Order fulfillment
                       (1)

          Functional
          process (8          Order                                Staging and
                            processing           Production
          to 12)                                                   installation

    Subprocesses          Order                  Credit
    (20 to 50))           entry                  check

                 Verify          Assign             Enter
Work steps
                                Customer
(hundreds to   Customer       Identification
                                                   Product
thousands)      address                             code
                                 Number
                 Five Process Groups with
                     12 Subprocesses

                               Process
                               group B,
            Process group A,   contracting
            Order processing
                                    4        Process group C, delivery
             1           2                     5       6       7
                    3
                                                               8         External
External                                                                 customers
                                    Process group D, billing
suppliers
                                      9                10

                                   Process group E,
                                   Customer service
                                                       11      12
         Chapter Outline
What is a process?
  Nested process
  Customer-supplier relationships
  Service and manufacturing processes
    Differences and similarities
    Degree of customer contacts
Nature of Services
Intangible
No inventory
Simultaneous production and
consumption
Variety of services
Labor intensive
Continuum of Characteristics
           More like a                    More like
           manufacturing                  a service
           organization                organization



• Physical, durable product   •   Intangible, perishable product
• Output can be inventoried   •   Output cannot be inventoried
• Low customer contact        •   High customer contact
• Long response time          •   Short response time
• Regional, national or       •   Local markets
  International markets       •   Small facilities
• Large facilities            •   Labor intensive
• Capital intensive           •   Quality not easily measured
• Quality easily measured
        Chapter Outline
What is a process?
Value Chain
  Core process
  Support process
Internal Value-Chain Linkages Showing
     Work and Information Flows
                                        Support processes




                                                                                   External customers
   External suppliers




                                       New service/
                                       product                      Customer
                                       development                  relationship
                                       process                      process




                        Supplier                      Order
                        relationship                  fulfillment
                        process                       process




Figure 1.3
                      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        The acquisition of people to do the work of the organization
Hiring

Evaluation and         The assessment and payment of the people for the work and value they
Compensation           provide to the company

Human Resource         The preparation of the people for their current jobs and future skill and
Support and            knowledge needs
Development

Regulatory             The process that insure the company if meeting all laws and legal
Compliance             obligations

Information Systems    The movement and processing of data and information to expedite
                       business operations and decisions

Enterprise and         The systems and activities that provide strategic direction and ensure
Functional             effective execution of the work of the business
Management
     International Benchmarking Clearinghouse’s
           Standard Process Classification

1.    Understand markets    7.    Manage information
      and customers         8.    Market and sell
2.    Develop vision and    9.    Invoice and service
      strategy                    customers
3.    Design products and   10.   Execute environmental
      services                    management program
                            11.   Manage financial and
4.    Produce and deliver         physical resources
5.    Manage improvement    12.   Manage external
      and change                  relationships
6.    Develop and manage    13.   Manage improvement
      human resources             and change
       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
The Operations
Management System
                  External environment

                   Customer or client
                     participation
     Inputs
 •   Workers        Operations and
 •   Managers         processes
 •   Equipment                              Outputs
 •   Facilities    1         3              • Goods
 •   Materials                          5   • Services
 •   Services
 •   Land          2         4
 •   Energy

                       Information on
                        performance
Manufacturing Management Activities
   Operations As A Basic
         Function
            OPERATIONS




MARKETING                FINANCE
Operations As The Technical
           Core
                Capital Markets, Stockholders

                              Finance




                                          Personnel
                Purchasing
    Suppliers




                                                      Workers
                             Operations

                             Marketing

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




                      Output
       Productivity =
                       Input
        Chapter Outline
What is a process?
Value Chain
What is operations management?
Productivity
Road map for competitive operations
Operations management as a
competitive weapon
                     Operations Roadmap
                                    Competing with Operations             Outcomes




                                        Operations As a
                                       Competitive Weapon
          Designing and                         1
        Improving Processes                                               Operating Value Chains


                                       Operations Strategy
          Process Analysis                      2                         Information Technology
                 4                                                           and Value Chains
                                                                                    12

                                     Process Design Strategy
              Process                          3
          Performance and                                                      Forecasting
               Quality                                                             13
                 5

                                     Designing Value Chains                Aggregate Planning
                                                                                  14
   Process              Process
   Capability            Layout
      6                    7
                                             Supply Chain              Inventory             Resource
                                                Design                Management             Planning
                                                  9                       15                    16
           Planning and
         Managing Projects
                 8
                                  Location             Lean Systems            Scheduling
                                     10                     11                     17

Figure 1.6
Operations Management Activities

								
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