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1 Operations Management The planning, scheduling, and control of the activities that transform inputs into finished goods and services.

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Presentation on theme: "1 Operations Management The planning, scheduling, and control of the activities that transform inputs into finished goods and services."— Presentation transcript:

1 1 Operations Management The planning, scheduling, and control of the activities that transform inputs into finished goods and services

2 2 Viewing Operations as a Transformation Process Transformation Process Manufacturing operations Service operations Inputs Outputs Materials People Equipment Intangible needs Information Tangible goods Fulfilled requests Information Satisfied Customers

3 3 Operation’s Interfaces Operations Finance Budgeting. Analysis. Funds. Marketing What products? What volumes? Costs? Quality? Delivery? Human Resources Skills? Training? # of Employees? Accounting Performance measurement systems. Planning and control. MIS What IT solutions to make it all work together? Design Sustainability. Quality. Manufacturability. Manufacturing Process Infrastructure

4 4 Supply Chain Management Active management of supply chain activities and relationships to maximize customer value and achieve a sustainable competitive advantage

5 5 Alcoa Ball CorpAnheuser-BuschM&M Meijer First Tier Supplier DistributorRetailer Transportation companies Final customers UpstreamDownstream Alcoa Second Tier Supplier Material Flows Focal Company

6 6 Important Trends Electronic commerce –Reduce the costs and time associated with supply chain relationships Increasing competition & globalization –Fewer industries protected by geography Relationship management –Competition between chains, not individual firms –Trust and coordination

7 7 A Top-Down Model of Strategy Business Strategy Marketing Strategy Financial Strategy Manufacturing Strategy Operations Decisions... Goals Mission Statement

8 8 Order Winners and Qualifiers Winners:  Differentiators — performance not yet duplicated by competitors  Competitive advantage — performance better than all or most of the competitors Qualifiers  Minimum acceptable level of performance With time, Winners become Qualifiers

9 9 The Terry Hill Model Corporate Objectives Marketing Strategy Order Winners Manufacturing Strategy ProcessInfrastructure Growth Survival Profit ROI Other financial measures Product markets and segments Range Mix Volumes Standardization vs customization Level of innovation Leader vs follower Price Quality Delivery speed reliability Demand increases Color range Product range Design Brand image Technical support After-sales support Choice of alternative processes Trade-offs in processes Role of inventory Make or buy Capacity size timing location Function support Manufacturing planning & control systems Quality assurance and control Manufacturing systems engineering Clerical procedures Compensation agreements Work structuring Organizational structure


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