15 Chapter

Operations
Management

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Learning Outcomes
Define operations management and explain its
role.
Define the nature and purpose of value chain
management.
Describe how value chain management is done.
Discuss contemporary issues in managing
operations.

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15.1
Define operations
management and
explain its role.

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Improving Productivity

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Service Firms vs. Manufacturing
Firms
Manufacturing firms
produce physical goods,
such as cars or food
products

Service firms produce

nonphysical outputs in the
form of services, such as
medical and transportation
services

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Improving Productivity

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Deming: Improving Mangers
Productivity

The truly effective organization will increase

productivity by successfully integrating people
into the overall operations system.

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Operations Management and
Company Strategy

Successful organizations recognize the crucial

role that operations management plays as
part of the overall organizational strategy to
achieve and maintain global leadership.

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15.2
Define the nature
and purpose of
value chain
management.

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Value Chain Management

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Value Chain

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Goals of Value Chain Management

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Benefits of Value Chain Analysis

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15.3
Describe how value
chain management
is done.

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The Value Chain Management
Process

The dynamic, competitive environment facing

contemporary global organizations demands
new solutions.

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Successful Value Chain
Management

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Organizational Processes and
Leadership

1. Better demand forecasting

2. Select functions done collaboratively with other
partners in the chain
3. New measures needed for evaluating the
performance of various activities along the chain

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Employees and Human Resources

Flexible job design

Effective hiring process
Ongoing training

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Obstacles to Value Chain
Management

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Impact of Cultural Attitudes

Trust
Control

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Capabilities and People
Capabilities:
Coordination and collaboration
Configuration that satisfies customers and suppliers
Education of internal and external partners

People:
Commitment
Time
Energy
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15.4
Discuss
contemporary
issues in managing
operations.

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Contemporary Issues

1. Technology
2. Quality initiatives
3. Project management

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Quality Control

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Quality Goals

1. ISO 9000
2. Six Sigma

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Project Management

The task of getting project activities done on

time, within budget, and according to
specifications.

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Gantt Charts

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Load Charts

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PERT Network Analysis

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PERT in Action

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PERT in Action (cont.)

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15-32