1. Chapter 8 Operations and Value Chain Management1

2. Operations Management
The design, operation, and control of the transformation process that converts such resources as labor and raw materials into goods and services that are sold to customers
Every organization has an operations system that creates value by transforming inputs into outputs

3. The Transformation Process
Inputs
Outputs
People
Technology
Capital
Equipment
Materials
Information
Goods
Services
Transformation
Process
Source: Management, Seventh Canadian Edition, by Stephen P. Robbins, Mary Coulter, and Robin Stuart-Kotze, page 444. Copyright © Reprinted by permission of Pearson Education Canada Inc. 4 4

4. Outputs (Labour+Capital+Materials)
Productivity =
Outputs
(Labour+Capital+Materials) 6

5. Value
Performance characteristics, features, and attributes, and any other aspects of goods and services for which customers are willing to give up resources
Organizations must provide value to attract and keep customers
Value provided through the transformation of raw materials into some product or service that end-users need where, when, and how they want it

6. Value Chain Management
Process of managing an entire sequence of activities along the entire value chain
Is externally oriented
Focuses on both incoming materials and outgoing products and services
Is effectiveness oriented and aims to create the highest value for customers

7. The Requirements For Successful Value Chain Management
Organizational
Culture and
Attitudes
Coordination and
Collaboration
Technology
Investment
Employees
Value
Chain
Strategy
Organizational
Processes
Leadership
Source: Management, Seventh Canadian Edition, by Stephen P. Robbins, Mary Coulter, and Robin Stuart-Kotze, page 449. Copyright © Reprinted by permission of Pearson Education Canada Inc.
Robbins et al., Fundamentals of Management, 4th Canadian Edition
©2005 Pearson Education Canada, Inc. 7

8. Value Chain Management Requirements
Coordination and collaboration
Technology
Organizational processes
(continued)

9. Value Chain Management Requirements (continued)
Leadership
Employees/human resources
Organization culture and attitudes

10. Benefits of Value Chain Management
Improved customer service - the major benefit
Cost savings
Accelerated delivery times
Improved quality

11. Obstacles to Value Chain Management
Organizational barriers
Cultural attitudes
Intellectual property
Required capabilities
People

12. Technology’s Role in E-Manufacturing
Improve operations management
Link plant-floor automation with enterprise-wide business network systems
Technology is helping to reduce manufacturing costs

13. Quality Control Ensures what is produced meets established standards
Monitors weight, strength, consistency, colour, etc.
Needed at one or more points, beginning with the receipt of inputs 21

14. Managing Projects
Project
Project management
Project manager 22

15. Gantt Chart
Planning tool that shows in bar graph form when tasks are supposed to be done and compares that with the actual progress on each 23

16. PERT
Flowchart-like diagram that depicts the sequence of activities needed to complete a project and the time or costs associated with each activity 25