OPERATIONS MANAGEMENT for MBAs Fourth Edition Meredith and Shafer John Wiley and Sons, Inc. Topic 1: Operations Strategy Chapter 1: Operations Strategy

Outline Course Coverage Introduction to Operations Management Start Capacity Planning

Coverage Selected topics in Chapters; 1, 8, 8S, 7, 7A, 7B, 3, 4, 5 Other OM Topics Cases - HP DeskJet, Hayworth, FoxMeyer Homework - Excel Tools, Solver, Simulator Simulations Exams

Wal-mart vs. Kmart Revenue / Sales Stores 2002 bankruptcy and merger with Sears Chapter 1: Operations Strategy

Operations Heart of every organization Operations are the tasks that create value Chapter 1: Operations Strategy

Operations Adds Value Pricing, Availability Demand Borrowing Defects Satisfied Call Order errors Utilization Variability Wait time Change suppliers Add capacity Chapter 1: Operations Strategy

Quality Service/product design Process design Continuous improvement Purchasing Service/product design Problem-solving tools Benchmarking Employee involvement Continuous improvement Customer satisfaction Chapter 1: Operations Strategy

Innovation, Operations, & IT Chapter 1: Operations Strategy

Innovation, Operations, & IT Chapter 1: Operations Strategy

Creativity Exercises 5 + 5 + 1 = 5 4 6

Diversity and Importance of Operations Improvements in operations can simultaneously lower costs and improve customer satisfaction. Improving operations often dependent on advances in technology. Can obtain competitive advantage by improving operations. Diversity of Operations Chapter 1: Operations Strategy

Emerging Issues and Trends in OM Productivity improvement Supply chain management New technologies Global competition Ethical, workforce, and environmental issues Lean Chapter 1: Operations Strategy

Country Productivity Chapter 1: Operations Strategy

Chapter 1: Operations Strategy

Chapter 1: Operations Strategy

Our Philosophy PFSweb is an outsourcing solutions design firm with an extensive offering of world-class logistics, fulfillment, customer care and technology infrastructure that can be leveraged to create unique, client-specific business solutions. Our philosophy is not to fit your business model into our pre-existing infrastructure, but rather to develop our infrastructure around your unique needs. We are flexible, scalable, and adaptable so we can keep pace with your ever-changing needs, whether you are adding new sales channels, marketing initiatives, vendor managed inventory (VMI) programs or special projects. We realize that no two clients face the exact same challenges, and for that reason, we are always extending our technology and operations capabilities based directly on client needs. Our philosophy is that there is absolutely no favorable argument for you to consider outsourcing with PFSweb unless we can execute at a greater performance level than what you could achieve in-house or through an alternative partner. Chapter 1: Operations Strategy

Chapter 1: Operations Strategy

The Supply Chain View Core processes are sets of activities that deliver value to external customers Supplier relationship process New service/product development process Order fulfillment process Customer relationship process Support processes provide vital resources and inputs to the core processes Chapter 1: Operations Strategy

Operations Activities Strategy Output Planning Capacity Planning Facility Location Facility Layout Aggregate Planning Inventory Management Materials Requirements Planning Scheduling Quality Control Chapter 1: Operations Strategy

OM Career Opportunities Operations Analyst Inventory Management Forecasting Purchasing Quality Industrial Engineering Logistics Distribution Project Management Chapter 1: Operations Strategy

Defining and Measuring Quality Conformance to specifications Performance Quick response Quick-change expertise Features Reliability Durability Serviceability Aesthetics Perceived quality Humanity Value Chapter 1: Operations Strategy

Core Competencies Collective knowledge and skills an organization has that distinguish it from the competition. Typically center on an organization’s ability to integrate a variety of specific technologies and skills in the development of new products and services. Building blocks of core capabilities. Chapter 1: Operations Strategy

Core Competencies continue Are basis on which new outputs are developed. Better to think of organization in terms of its portfolio of core competencies than as a portfolio of products. Identifying and developing core competencies is one of top management’s most important roles. Organization practices and business processes Chapter 1: Operations Strategy

Examples of Core Competencies Chapter 1: Operations Strategy

FedEx – Value Chain Chapter 1: Operations Strategy

Where should OM initiatives be focused first?

Vision and Mission Statements Vision statements used to express organization’s values and aspirations. Mission statements express organization’s purpose or reason for existence. Chapter 1: Operations Strategy

Order Qualifiers and Winners Order qualifiers are characteristics that are the ante to enter the market Order winners are characteristics that win the customer’s purchase Chapter 1: Operations Strategy

Examples Chapter 1: Operations Strategy