Professional Documents
Culture Documents
INPUT
•Material
TRANSFORMATION OUTPUT
•Machines
•Goods
•Labor PROCESS
•Services
•Management
•Capital
Feedback
Operations
Marketing
Finance and
Accounting
Human
Resources
Outside
Suppliers
Scientific management
systematic analysis of work methods
Mass production
high-volume production of a standardized
product for a mass market
Lean production
adaptation of mass production that prizes
quality and flexibility
B2B B2C
Commerceone.com Amazon.com
Consumer
C2B C2C
Priceline.com eBay.com
Categories of E-Commerce
Flow
Flow of
of information
information (customer
(customer order)
order)
Flow of product (order fulfillment)
Copyright 2006 John Wiley & Sons, Inc. 1-17
Impact of E-Business on
Operations Management
Benefits of E-Business Impact on Operations
Comparison shopping Customer expectations escalate;
quality must be maintained and
by customers costs lowered
No more guessing about demand is
necessary; inventory costs go down;
Direct contact with product and service design
customers improves; build to-order products
and services is made possible
Transaction costs are lower;
Business processes customer support costs decrease; e-
procurement saves big bucks
conducted online
Wholesale /
Manufacturer Retailer Consumer
Distributor
Wholesale /
Manufacturer Retailer Consumer
Distributor
USA:
USA: $21.33
$21.33
Taiwan:
Taiwan: $5.41
$5.41
Mexico:
Mexico: $2.38
$2.38
Cultural differences
Supply chain logistics
Safety, security, and
stability
Quality problems
Loss of capabilities
Measures of Productivity
-- Dot
Dot com
com bust
bust
-- 9/11
9/11 terrorist
terrorist attacks
attacks
Source: “International Comparisons of Manufacturing Productivity and Unit Labor Cost Trends, 2002,” Bureau of Labor
Statistics, U.S. Department of Labor, September 2003. U.S. figures for 2002–2003 from “Major Sector Productivity and
Costs Index,” Bureau of Labor Statistics, U.S. Department of Labor, March 2004
Breakthrough
Breakthrough
Performance
Performance
More
More Efficient
Efficient
Retrench
Retrench
Economies of Scale
Capital Investment
Access to Supply and Distribution
Channels
Learning Curve