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Chapter 13 Notes

The document discusses key concepts in operations management including responsibilities of operations managers, value chain analysis, the operations cycle, process management, and supply chain management. It notes that operations management involves controlling business processes to achieve strategic goals. Value chain analysis examines how decisions across activities can increase value. The operations cycle aligns tasks to meet strategy. Process management involves designing efficient processes. Supply chain management develops effective supply chain structures and decisions.

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71 views

Chapter 13 Notes

The document discusses key concepts in operations management including responsibilities of operations managers, value chain analysis, the operations cycle, process management, and supply chain management. It notes that operations management involves controlling business processes to achieve strategic goals. Value chain analysis examines how decisions across activities can increase value. The operations cycle aligns tasks to meet strategy. Process management involves designing efficient processes. Supply chain management develops effective supply chain structures and decisions.

Uploaded by

Adam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Arjun Nigam

Chapter 13 Notes – Operations

- Operations Management
o About the ability of a company to control and/or improve its business processes
o Operations, combined with organization’s capital assets, enable strategic outcomes to be
actualized

Responsibilities of Operations Managers


- Operations Management; effective design, development, and management of the processes,
procedures, and practices embedded within organization’s business system for purpose of achieving
its strategic intent
- Process Management; design/development of work flow and connectivity of transformation
requirements needed to ensure that organization’s products and services are efficiently produced
and effectively delivered to marketplace
o Looks at specific tasks that need to be accomplished by organization and orders them to
result in most effective and efficient work flow
- Supply Chain Management; management of interdependencies among suppliers, manufacturers
and distributers.
o Seeks to develop terms and conditions that enable all parties to effectively meet obligations
to one another
- Product/Service Management; refers to variety of activities that take place with design and
development of potential new products in R&D and extend to post-purchase support of
products/services now in hands of customers
o Supporting product modifications, enhancements
o Decisions relating to functionality, durability, and performance

Organization’s Value Chain


- Value Chain Analysis
o Concept proposed by Michael Porter of Harvard (1985)
o Managers should seek to make decisions across chain’s activity areas in manner that
contributes positively to overall value of products/services being produced or offered
o Benefit of decision would out weight cost associated with it; enhancing its value
- Value Max; refers to maximizing benefits (price/quality comparison) that individual or set of
customers will realize as result of using a product/service
- Primary Activities; relate to specific activities through which development and transformation of
product/service occurs as it is produced and delivered to marketplace
o Inbound Logistics; refers to management of supplier relationships relating to those
parts/components or finished products
o Operations; refers to manufacturing and/or product change processes set up to ensure that
the final product the organization is manufacturing or handling is ready for marketplace
o Outbound Logistics; refers to getting finished product to customer via distribution channel
that is accessible, convenient, and able to minimize stock outs and other sales impediment
factors
 Getting the product to the right place at the right time
 Distribution method that is accessible, convenient
 Focus on warehouse needs, inventory management activities, transportation
Arjun Nigam

o Marketing and Sales; refers to those activities that create profile and awareness for
organization’s products, services, or brands, and benefits derived from acquisition and use
of such products or services
o Customer Service; refers to support provided to customers before, during, and following
purchase process

Value Chain Analysis; Support Activities


- Support Activities; areas within organization that are not directly associated with actual processes
the organization uses to produce products and/or deliver services but that are an integral part of
support structure the primary activities rely on to successfully execute strategy
o Examples; IT, HR, R&D, Finance, Legal

Operations Cycle
- Operations Cycle; alignment of operational tasks within organization by its management team in
order to meet strategic outcomes defined in organization’s business strategy
- Process Standardization; design and utilization of common platforms and common task sequencing
to produce/develop a variety of products or services
- Process Simplification; design and utilization of minimum number of tasks when developing
products and/or services

Process Management
- Four decision areas that need to be examined
o Process design, layout, and execution
 Assessment and implementation of tasks necessary to get required work
accomplished
 How such tasks will be grouped and sequenced to ensure that most efficient and
effective processes are utilized in production
 DICE
 Define; tasks required
 Identify; sequencing needed to maximize efficiency and effectiveness
 Create; process-layout and fine tuning
 Execute; process and evaluate
o Materials management
o Facility design and layout
o Capital asset evaluation and acquisition
- PERT chart and GANTT chart used as project management tools
- PERT Chart
o Scheduling methodology that focuses on task sequencing and identification of critical path
of steps that will most greatly impact ability to complete a project, and length of time
needed for completion
- GANTT Chart
o Methodology used to schedule the steps associated with project and time required to
complete each step
Arjun Nigam

- Materials Management; refers to management of inputs required in order to develop the


products/services that organization is intent on delivering to marketplace
- Facility Design and Layout; infrastructure layout and related facility components that will be
required to house and support processes and materials used by organization
- Capacity; maximum amount of product that can be produced
- Capital Asset Evaluation and Acquisition; assessment by operations management teams of the
state of current capital assets and a determination as to their applicability to meeting the needs of
the organization
o Obsolete equipment needs to be replaced
o Determine what to retain, and what to invest in

Supply Chain Management


- SCM; development of supply chain structure and accumulation of necessary info to make effective
supply chain decisions
o Decisions relating to outsourcing of various functions versus keeping activities in-house
o Analyzing sales forecasts to determine appropriate product quantities to purchase
o Designing transportation and warehouse networks to effectively manage flow of products
through organization’s value chain
- Supply Chain Operating Execution; execution of specific tasks necessary to ensure that key
performance results are achieved
o Management of inventory levels, organization of transportation fleet
- Supply Chain Performance Evaluation; critical outcomes that supply chain must achieve in support
of organization’s overall operating performance
- Cash Operating Cycle (COC); amount of time it takes for organization to recover cash it has paid out
for development, production, and distribution of products
o The short the cycle, the more quickly the organization gets its cash back, the less it needs to
rely on cash reserves or short-term debt financing to cover costs

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