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12 Chapter Operations Management Copyright ©2015 Pearson Education, Inc. 15-1 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. Copyright ©2015 Pearson Education, Inc. 15-2 15.1 Define operations management and explain its role. Copyright ©2015 Pearson Education, Inc. 15-3 Improving Productivity Copyright ©2015 Pearson Education, Inc. 15-4 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 Copyright ©2015 Pearson Education, Inc. 15-5 Improving Productivity Copyright ©2015 Pearson Education, Inc. 15-6 Deming: Improving Mangers’ Productivity The truly effective organization will increase productivity by successfully integrating people into the overall operations system. Copyright ©2015 Pearson Education, Inc. 15-7 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. Copyright ©2015 Pearson Education, Inc. 15-8 15.2 Define the nature and purpose of value chain management. Copyright ©2015 Pearson Education, Inc. 15-9 Value Chain Management Copyright ©2015 Pearson Education, Inc. 15-10 Value Chain Copyright ©2015 Pearson Education, Inc. 15-11 Goals of Value Chain Management Copyright ©2015 Pearson Education, Inc. 15-12 Benefits of Value Chain Analysis Copyright ©2015 Pearson Education, Inc. 15-13 15.3 Describe how value chain management is done. Copyright ©2015 Pearson Education, Inc. 15-14 The Value Chain Management Process The dynamic, competitive environment facing contemporary global organizations demands new solutions. Copyright ©2015 Pearson Education, Inc. 15-15 Successful Value Chain Management Copyright ©2015 Pearson Education, Inc. 15-16 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 Copyright ©2015 Pearson Education, Inc. 15-17 Employees and Human Resources • Flexible job design • Effective hiring process • Ongoing training Copyright ©2015 Pearson Education, Inc. 15-18 Obstacles to Value Chain Management Copyright ©2015 Pearson Education, Inc. 15-19 Impact of Cultural Attitudes • Trust • Control Copyright ©2015 Pearson Education, Inc. 15-20 Capabilities and People Capabilities: • Coordination and collaboration • Configuration that satisfies customers and suppliers • Education of internal and external partners People: • Commitment • Time • Energy Copyright ©2015 Pearson Education, Inc. 15-21 15.4 Discuss contemporary issues in managing operations. Copyright ©2015 Pearson Education, Inc. 15-22 Contemporary Issues 1. 2. 3. Technology Quality initiatives Project management Copyright ©2015 Pearson Education, Inc. 15-23 Quality Control Copyright ©2015 Pearson Education, Inc. 15-24 Quality Goals 1. 2. ISO 9000 Six Sigma Copyright ©2015 Pearson Education, Inc. 15-25 Project Management The task of getting project activities done on time, within budget, and according to specifications. Copyright ©2015 Pearson Education, Inc. 15-26 Gantt Charts Copyright ©2015 Pearson Education, Inc. 15-27 Load Charts Copyright ©2015 Pearson Education, Inc. 15-28 PERT Network Analysis Copyright ©2015 Pearson Education, Inc. 15-29 PERT in Action Copyright ©2015 Pearson Education, Inc. 15-30 PERT in Action (cont.) Copyright ©2015 Pearson Education, Inc. 15-31 15-32