Learning Objectives
LO 1-1: Define and discuss operations management.
Operations management can be defined as the effective planning, organizing, and controlling of the many value-creating activities of the firm. Although operations management may differ somewhat from company to company, there are still many similar operational responsibilities.
LO 1-2: Define processes and supply chains.
Processes are methods for getting the work done. They consist of a series of steps that turn inputs into outputs. Supply chains are the network of companies involved in making goods and services, including functions such as purchasing, production, delivery, etc.
LO 1-3: Explain the value of viewing operations management from a process and a supply chain perspective.
Managing and coordinating business processes within a network of supply chain trading partners enable all participants to deliver the best products (goods or services) to the end user. This perspective moves an organization from an internal focus to more of an external focus; thus, enhancing planning and performance through more effective coordination.
LO 1-4: Describe the eight key processes linking organizations along the supply chain.
Customer relationship management involves creating and maintaining customer relationships. Customer service management is the actual interaction with customers to maintain customer satisfaction. Demand management involves balancing customer requirements with supply chain capabilities. Order fulfillment’s purpose is to satisfy customer orders. Manufacturing flow management enables a company to make goods to satisfy target markets. Supplier relationship management involves creating and maintaining supplier relationships. Product development and commercialization enables a company to develop new products frequently and get them to market effectively. Return management involves managing product returns and disposal effectively.
LO 1-5: Discuss the importance of operations management in services.
Operations management in services has different characteristics than in manufacturing; therefore, affects how one addresses specific operational needs. In services, you have intangible products, sold in a decentralized location that is based on customer traffic. Unlike goods, services cannot be inventoried; thus, an unused service is lost. Finally, services often vary widely between competitors.
LO 1-6: Summarize a number of the important developments in operations management.
There are a number of important developments in operations management. Lean thinking is an operating philosophy encompassing the objectives of high quality, fast response, and low waste. Just-in-time (JIT), often viewed as synonymous with lean thinking, involves supplies and assemblies being pulled through the system when and where they are needed. Quality management concepts have continued to evolve from total quality management to six sigma. Other key developments are material requirements planning designed to balance plant capabilities with production requirements, manufacturing resource planning designed to enable firms to perform “what if” analysis, and enterprise resource planning designed to enhance the management of a firm’s functional activities, suppliers, and customers.
Chapter Outline
Download a chapter outline in Word to help you study and take notes.
