REVIEW AND APPLICATIONS
CHAPTER SUMMARY
15-1 Define operations management and explain its role. Operations management is the
transformation process that converts resources into finished goods and services.
Manufacturing organizations produce physical goods. Service organizations produce
15-2 Define the nature and purpose of value chain management. The value chain is the
sequence of organizational work activities that add value at each step from raw materials
to finished product. Value chain management is the process of managing the sequence of
15-3 Describe how value chain management is done. The six main requirements for
successful value chain management include coordination and collaboration, investment in
technology, organizational processes, leadership, employees or human resources, and
15-4 Discuss contemporary issues in managing operations. Companies are looking at ways
to harness technology to improve their operations management by extensive collaboration
and cost control. ISO 9000 is a series of international quality management standards that
set uniform guidelines for processes to ensure that products conform to customer
DISCUSSION QUESTIONS
15-1 What is operations management and how is it used in both manufacturing and
service organizations?
Answer: Operations management refers to the design, operation, and control of the
15-2 What strategic role does operations management play?
Answer: Today, successful manufacturers recognize the crucial role that operations
management plays as part of the overall organizational strategy to establish and maintain
15-3 How might operations management apply to other managerial functions besides
control?
15-4 Do you think that manufacturing or service organizations have greater need for
operations management? Explain.
Answer: Both manufacturing and service organizations have a great need for operations
management. Productivity is a key concern for both manufacturing and service
15-5 What is a value chain? What is value chain management? What is the goal of value
chain management?
15-6 What types of organizational benefits does value chain management provide? What
obstacles stand in the way of successful value chain management?
Answer: The organizational benefits of value chain management include improved
customer service, cost savings and accelerated delivery times, improved quality, and
15-7 Explain why managing productivity is important in operations management.
Answer: Managing productivity is important in operations management because high
15-8 Who has the power in the value chain? Explain your response.
Answer: In value chain management, ultimately customers are the ones with the power.
15-9 Choose two tasks that you do every week (for example, shop for groceries, host a
poker party, clean your house/apartment, do laundry). For each one, identify how
you could (a) be more productive in doing that task and (b) have higher-quality
output from that task.
15-10 Select a company with which you’re familiar. Describe its value chain. Be as specific
as possible in your description. Evaluate how it “uses” the value chain to create
value.
Answer: Students’ responses to this question will vary depending on the organization and
MyManagementLab
Students can find the following assisted-graded writing questions at
mymanagementlab.com. Answers to these questions are graded against rubrics in the
MyLab.
15-11 How could you use value chain management in your everyday life? Be specific.
15-12 How does technology affect operations management decisions?
Management Skill Builder: Being a Good Conflict Manager
Working in a project-oriented environment requires good negotiation skills. Employees who
work on projects rarely work on just one project. Instead, they work on multiple projects that
require negotiation capabilities on schedules, deadlines, work assignments, and the like with
people possibly both inside and outside the organization. This section addresses the skills
necessary to be a good negotiator.
Personal Inventory Assessment: Strategies for Handling Conflict
Conflict can arise any time you’re working with a group of people on a project. Use this PIA to
assess different strategies for handling conflict.
Skill Basics
Students can be more effective at managing conflict if they understand themselves as well
as the conflicting parties:
What’s you’re underlying conflict-handling style?
Selectively choose the conflicts you want to handle.
Evaluate the conflict parties.
Assess the source of the conflict.
Select the best option.
Practicing the Skill
In this exercise, students are to analyze three different scenarios and for each one,
formulate strategies to handle conflict. The first scenario involves a manager being
assigned to two different projects with competing time frames and asks the student what
the manager should do. The second scenario involves a manager acting as a moderator
for a five-person group where one group member is delaying the team from reaching
decisions. Students are asked how to handle the situation. For the students who play
“problem member,” encourage them to be a little difficult and not give in too easy. Also,
have students refer back to Chapter 10 and the assessment on conflict management styles.
How does a person’s conflict management style relate to how they negotiate in this
scenario? Do students find themselves seeking to avoid conflict, accommodate, compete,
compromise, or collaborate? Finally, in the third scenario, a manager is faced with a
personal conflict when her boss asks for an opinion about a co-worker. The manager
recognizes that the co-worker’s performance is substandard, but also regards the
individual as a close friend.
Experential Exercise
WestWood Travel Services
To: Ebben Crawford, Director of Operations
From: Anne Mendales, President
Subject: ISO 9001 Certification
Anne is thinking of implementing TQM principles at Westwood Travel. Since business has
grown from one office to five offices with nearly 50 employees, Anne wants to ensure that the
company is doing everything it can to meet their clients’ needs, especially since they’ve lost
some clients to competitors.
Ebben’s job is to write a paper on how to apply the concepts of customer focus, continuous
process improvement, benchmarking, training teamwork, and empowerment to a travel business
to make us more competitive.
Teaching Tip: Quality is discussed in Chapter 15. For more material on Total Quality
Management, encourage students to research articles in the library and on the Internet.
Case Application 1: Tragedy in Fashion
Discussion Questions
15-13 Discuss this from a value chain management perspective. What happened? How did it
happen? Why did it happen?
15-14 How do incidents like this affect how managers work with a value chain?
15-15 Do some research on offshoring. What is it? What are the benefits and the drawbacks of
offshoring as far as managing the operations system?
Offshoring is the relocation of, usually, an operational process from one country to
15-16 What can managers learn about managing operations from this situation?
Managers can learn that taking care of the facility and employees is an important part of
15-17 Societal moral issue: Although enforcement of worker safety in Bangladesh is clearly
lax, government officials clearly don’t want global businesses withdrawing from the
country (and moving the problem somewhere else) and driving it deeper into poverty.
Discuss.
15-18 Personal moral issue: Would you pay a higher price for “ethical” clothing? Why or why
not? Discuss.
Case Application 2: Dreamliner Nightmare
Discussion Questions
15-19 What role does innovation play in managing an organization’s operations?
15-20 What role does technology play in managing an organization’s operations? (Take a look
back at Technology and the Manager’s Job).
15-21 Describe the operations management issues that the Dreamliner team faced. Could
these issues have been avoided? Why or why not?
15-22 Is a global network of suppliers the future of operations management? Discuss.
15-23 What other lessons about operations management can you see in this story?
Students will pick up on different things but one example might include a discussion
about time. In this case, time was not estimated properly and shipping delays cost the
Case Application 3: Stirring Things Up
Discussion Questions
15-24 Would you describe production/operations technology in Starbucks retail stores as unit,
mass, or process? Explain your choice. (Hint: You may need to review this material
found in Chapter 6.) How does its production/operations technology approach affect the
way products are produced?
15-25 What uncertainties does Starbucks face in its value chain? Can Starbucks manage those
uncertainties? If so, how? If not, why not?
15-26 Go the company’s Web site [www.starbucks.com] and find the information on the
company’s environmental activities from bean to cup. Select one of the steps in the chain
(or your professor may assign one). Describe what environmental actions it’s taking.
How might these affect the way Starbucks “produces” its products?
On Starbucks’ Web site, students should go to the heading “Responsibility” and click to
see what plans the company has made toward improving the environment. Starbucks
breaks their programs to improve the environment into the following categories:
Recycling and Reducing Waste: Starbucks is committed to significantly reducing the waste their
stores generate.
15-27 Research the concept of lean organizations. What benefits does “lean” offer? How
might a business like Starbucks further utilize the concepts of being lean?
Information on lean organizations can be found on several Web sites. Information can
also be found using your university’s online databases. Put simply, lean organizations
15-28 What lessons could other organizations learn from Starbucks’ actions?
Companies can learn a variety of lessons and students’ answers will differ. They may