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

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

Operation’s Interfaces Manufacturing Process Infrastructure MIS What IT solutions to make it all work together? Finance Budgeting. Analysis. Funds. Human Resources Skills? Training? # of Employees? Design Sustainability. Quality. Manufacturability. Operations Table 1.2 on page 13 in the text for more details to support this discussion Marketing What products? What volumes? Costs? Quality? Delivery? Accounting Performance measurement systems. Planning and control. ©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Management — Bozarth & Handfield

Supply Chain Management Active management of supply chain activities and relationships to maximize customer value and achieve a sustainable competitive advantage Example: Buying co-ops for independent hardware dealers ©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Management — Bozarth & Handfield

Material Flows First Tier Supplier Distributor Retailer Alcoa Ball Corp Anheuser-Busch M&M Meijer First Tier Supplier Distributor Retailer Transportation companies Final customers Upstream Downstream Second Tier Supplier Focal Company Page 8 in the text. ©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Management — Bozarth & Handfield

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 Use Boeing, http://www.boeing.com, as an example for reducing supply chain costs and time. ©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Management — Bozarth & Handfield

A Top-Down Model of Strategy Goals Business Strategy Mission Statement Marketing Strategy Financial Manufacturing Operations Decisions ... ©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Management — Bozarth & Handfield

Order Winners and Qualifiers 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 Discussion about how today’s exceptional performance becomes tomorrow’s standard customer exp[ectation. ©2006 Pearson Prentice Hall — Introduction to Operations and Supply Chain Management — Bozarth & Handfield

Manufacturing Strategy The Terry Hill Model Corporate Objectives Marketing Strategy Order Winners Manufacturing Strategy Process Infrastructure 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