7/31/2019 16414 Chapter 2om

1/13

7/31/2019 16414 Chapter 2om

2/13

Operations Management deals with thedesign and management of products,processes, services and supply chains. Itconsiders the acquisition, development, andutilization of resources that firms need todeliver the goods and services their clientswant.

7/31/2019 16414 Chapter 2om

3/13

- What has been happening that affects theway products and services are produced?

- How has the food you eat changed from thefood you ate five years ago?- What about your clothes?- Financial/insurance services?

- The things you buy and the way you buythem?

7/31/2019 16414 Chapter 2om

4/13

Awareness that market controls production- Old viewa market exists to get rid of products

producedproducts are commodities- New viewproducts are produced to meet market needsproducts should be differentiated andtargeted at distinct niches to capturemaximum value from products

7/31/2019 16414 Chapter 2om

5/13

Reduction in trade barriersGlobalization of major companiesGlobal sourcing

Improved transportation capabilitiesIncreased interest in products from aroundthe world - new opportunities for variety

7/31/2019 16414 Chapter 2om

6/13

For Many the Scope is IncreasingCompanies are expanding in both directionsVertically to control supply chains and also

horizontally to extend business capabilitiesor the ability to meet customer needsBlurring of traditional lines distinguishingbusinesses

Retail in particular is branching outMay mean that competition will come fromunexpected sources

7/31/2019 16414 Chapter 2om

7/13

Many aspects introduced by the U.S. after thewar- Three Principles:1. Quality comes first.2. Continual Improvement of product andprocess.3. Elimination of waste.

- Just-In-Time

7/31/2019 16414 Chapter 2om

8/13

Importance of quality management hasfinally been recognizedInternal versus external quality systems

Total Quality ManagementISO 9000/QS 9000HACCPISO 14000

Government regulations

7/31/2019 16414 Chapter 2om

9/13

Business processes can be optimized byignoring the way things were done in the pastFocus on what has to be done

Often used to disguise downsizing

7/31/2019 16414 Chapter 2om

10/13

The importance of considering entire supplychains rather than single firmsCloser relationships with suppliers

Coordination and decision making spreadthrough the chainElectronic Data Exchange EDIEfficient Consumer Response - ECR

7/31/2019 16414 Chapter 2om

11/13

rise in service employment since 1960's.service jobs outnumber manufacturing jobs.measuring performance is much moredifficultproductivity increases much more difficult toachieve.By 2005 only 20% of the population will be

involved in industrial production

7/31/2019 16414 Chapter 2om

12/13

Consumer awareness social issuesimpact on global organizationsCultural differences

Environmental concernGovernment regulationISO 14000

7/31/2019 16414 Chapter 2om

13/13

RoboticsComputer controlled manufacturingBiotechnology

Global positioning systems