Day one reading of course material and associated homework: What is OM370, Operations

Management, and Process Management?

The overarching purpose of a for-profit business is to use money from investors to generate competitive
profits on those investments. The purpose of any other organization (government, not for profit) is to
provide their product to the intended recipient as effectively as possible while keeping a reserve large
enough to continue to operate. http://news.morningstar.com/classroom2/course.asp?
docId=142901&CN=COM&page=1 08/01/2019

To generate a competitive profit or an effectively produced product and adequate reserve, a

company/organization has to produce the Correct Product (good or service). The Correct Product is a
product that has enough value to a customer relative to other organizations in the same industry and/or
substitute industry that the customer is willing to pay a price high enough for that product to satisfy all
other stakeholders. The Correct Product is very dynamic. Targets always move due to competitors' and
customers' learning, thus, the organization has to become a proactive learning organization. YOU have
to become a proactive learner relative to school and then, job-related sets of knowledge. If an
organization produces the Correct Product, that organization will be competitive. For an understanding
of the pattern of human learning read https://hbr.org/2012/09/throw-your-life-a-curve 08/14/2019.
Presented in the article is the concept of learning curves (S curves). The ability of a firm to help people
move up learning/S curves fast has a direct impact on the magnitude of the experience curve that firm
realizes, read https://policonomics.com/experience-curve/ 08/14/2019 to learn about the experience
curve phenomena. Bottom line, the organization that has people that learn faster so that those people
can help develop a lager experience curve will drive out others; be a proactive learner.

Competitiveness: Ability of a firm or a nation to offer products and services that meet the quality
standards of the local and world markets at prices that are competitive and provide adequate returns on
the resources employed or consumed in producing them.

http://www.businessdictionary.com/definition/competitiveness.html 08/09/2019

Product: service and/or good

The product of a restaurant is both a service and a good, people do things for you and you get a
“good” (hamburger))

Service: people do something for you (Amazon, shopping space, delivery/logistic service for
upstream supply chain and downstream to individual buyers, is a convenient one stop shopping
experience)

Good: can touch it (Items that move through Amazon, like a drill, a dress, shoes)

Stakeholders include: customers, investors/owners, suppliers, all levels of employees, community, and
environment. In cost/benefit analysis the hardest part is to determine possible positive and negative
future cash flows. Understanding how a decision (new product, new process, any business rule change)
will impact the six stakeholders will help define those cash flows. With cash flows well defined, the
cost/benefit analysis is more accurate.

Value: what a customer gets for what they give up. Customers give up time, money, energy, and
emotions in exchange for a product.

All an organization has to do to be successful is to be able to answer and act on five questions:

1. Where are we at in the progress of reaching some goal?

2. Why are we at that stage of progress?
3. Where do we want to go from where we currently are in reaching that goal or some new goal?
4. How are we going to move from where we are at to where we want to go?
5. Is it worth doing what we are going to do to reach the old or new goal?

The answers to every one of those questions is provided by a set of processes. How a goal is set and
reached is done with sets of processes. Having a world class set of enterprise wide processes that are
well integrated will enable an organization to have competitive profits.