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Chapter
1 Using Operations To Create Value
Course Introduction
1. What is Operations Management (OM) and why do we study it?
2. What is the primary goal of this textbook?
3. Define Process
1. Role of Operations in an Organization
1. Operations serve as an excellent career path to upper management positions in many
organizations because operations managers are responsible for key decisions that affect the
success of the organization.
2. Operations is one of several functions within an organization
a.
b.
3. Historical Evolution and Perspectives
2. A Process View
1. Describe how processes work
3. What are the two major processes?
a. How do they differ?
b. How are they similar?
3. A Supply Chain View
1. Define a value chain in terms of the types of processes:
4. Operations Strategy
1. Define Operations strategy
2. Define Corporate strategy
a. Environmental scanning
b. Developing core competencies
c. Developing core processes
d. Developing global strategies
3. Market analysis
a. Market segmentation
b. Needs assessment
•
•
•
•
5. Competitive Priorities and Capabilities
1. Competitive priorities
2. Competitive capabilities
Dimension
Definition
Example
Low-cost
operations
Top
quality
Consistent
quality
Delivery
speed
On-time
delivery
Development
speed
Customization
Variety
Volume
flexibility
3. Using competitive priorities
a.
b.
c.
d.
4. Order winners
5. Order qualifiers
6. Using competitive priorities: an airline example (two market segments: first-class passengers
and coach passengers)
7. Identifying Gaps Between Competitive Priorities and Capabilities
6. Addressing the Trends and Challenges in Operations Management
1. Productivity improvement
a. Productivity formula
Productivity= Output
Input
b. Two approaches for productivity measures
Labor Productivity
Multifactor Productivity
Application problem
This Yr.
Last Yr.
Year Before Last
Factory unit sales ($)
2,762,103
2,475,738
2,175,447
Employment (hrs)
112,000
113,000
115,000
Sales of manufactured
products ($)
$49,363
$40,831
—
Total manufacturing cost of
sales ($)
$39,000
$33,000
—
• Calculate the year-to-year labor productivity.
This Yr.
Last Yr.
Year Before Last
employment
salesunitfactory
• Calculate the multifactor productivity.
This Yr.
Last Yr.
tmfgtotal
productsmfgofsales
cos
2. Global competition
a. Firms can increase their market penetration by locating in foreign countries.
b. Five developments have stimulated the need for sound global strategies.
(1)
(2)
(3)
(4)
(5)
c. Comparative cost advantages
What role does China play in globalization today?
What role does India play?
d. Disadvantages of globalization
(1)
(2)
(3)
3. Ethical, and workforce diversity and environmental issues
4. The Internet of Things
a. Operations Management Applications
b. Concerns and Barriers
7. Developing Skills for Your Career
1. Designing and Operating Processes and Supply Chains
Copyright © 2019 Pearson Education, Inc.
a. Part 1: “Managing Processes”
b. Part 2: “Managing Customer Demand”
c. Part 3: “Managing Supply Chains”
2. Adding Value with Process Innovation
