Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice 2012 Hall Pearson Education, Inc. publishing as Prentice Hall 19- 1 Explain the role of operations management Define the nature and purpose of value chain management Describe how value chain management is done Discuss contemporary issues in managing operations
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter 2012 Pearson Education, Inc. publishing as Prentice Hall Publishing as Prentice Hall 19- 2 The Role of Operations Management Operations management - the transformation process that converts resources into finished goods and services.
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice 2012 Hall Pearson Education, Inc. publishing as Prentice Hall 19- 3 Managing Productivity Productivity The overall output of goods or services produced divided by the inputs needed to generate that output A composite of people and operations variables
Benefits of Increased Productivity
Economic growth and development Higher wages and profits without inflation Increased competitive capability due to lower costs
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice 2012 Hall Pearson Education, Inc. publishing as Prentice Hall 19- 4 Services and Manufacturing Manufacturing organizations - organizations that produce physical goods. Service organizations - organizations that produce nonphysical products in the form of services.
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice 2012 Hall Pearson Education, Inc. publishing as Prentice Hall 19- 5 Exhibit 19-1: The Operations System
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice 2012 Hall Pearson Education, Inc. publishing as Prentice Hall 19- 6 Strategic Role of Operations Management The era of modern manufacturing began in the U.S. over 100 years ago. After WWII, U.S. manufacturers focused on functional areas other than manufacturing. By the 1970s, foreign competitors integrated manufacturing technologies and were producing quality goods at lower costs. U.S manufacturers responded by investing in updated technology, restructuring organizations, and including production requirements in their strategic planning.
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice 2012 Hall Pearson Education, Inc. publishing as Prentice Hall 19- 7 Managing Operations Using Value Chain Management Value - the performance characteristics, features, attributes, and any other aspects of goods and services for which customers are willing to give up resources. Value chain - the entire series of organizational work activities that add value at each step from raw materials to finished product.
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice 2012 Hall Pearson Education, Inc. publishing as Prentice Hall 19- 8 Managing Operations Using Value Chain Management Value chain management - the process of managing the sequence of activities and information along the entire value chain.
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice Hall 2012 Pearson Education, Inc. publishing as Prentice Hall 19- 9 Value Chain Management Requirements for Value Chain Management A new business model incorporating: Coordination and collaboration Investment in information technology Changes in organizational processes Committed leadership Flexible jobs and adaptable, capable employees A supportive organizational culture and attitudes
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice 2012 Hall Pearson Education, Inc. publishing as Prentice Hall 19- 10 Value Chain Strategy Organizational processes - the ways that organizational work is done.
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice Hall 2012 Pearson Education, Inc. publishing as Prentice Hall 19- 11 Exhibit 19-2: Value Chain Strategy Requirements
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice 2012 Hall Pearson Education, Inc. publishing as Prentice Hall 19- 12 Obstacles to Value Chain Management Organizational barriers Refusal or reluctance to share information Reluctance to shake up the status quo Security issues Cultural attitudes Lack of trust and too much trust Fear of loss of decision-making power Required capabilities Lacking or failing to develop the requisite value chain management skills
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice 2012 Hall Pearson Education, Inc. publishing as Prentice Hall 19- 13 Obstacles to Value Chain Management (cont.) People Lacking commitment to do whatever it takes Refusing to be flexible in meeting the demands of a changing situation Not being motivated to perform at a high level Lack of trained managers to lead value chain initiatives
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice 2012 Hall Pearson Education, Inc. publishing as Prentice Hall 19- 14 Exhibit 19-3: Obstacles to Value Chain Management
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice 2012 Hall Pearson Education, Inc. publishing as Prentice Hall 19- 15 Current Issues in Managing Operations
Technologys Role in Manufacturing
Increased automation and integration of production facilities with business systems to control costs Predictive maintenance, remote diagnostics, and utility cost savings Quality - the ability of a product or service to reliably do what its supposed to do and to satisfy customer expectations
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice 2012 Hall Pearson Education, Inc. publishing as Prentice Hall 19- 16 Current Issues in Managing Operations Quality Initiatives Planning for quality Organizing and leading for quality Controlling for quality
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice 2012 Hall Pearson Education, Inc. publishing as Prentice Hall 19- 17 Quality Goals ISO 9000 - a series of international quality management standards that set uniform guidelines for processes to ensure that products conform to customer requirements.
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice 2012 Hall Pearson Education, Inc. publishing as Prentice Hall 19- 18 Quality Goals (cont.) Six Sigma - a quality program designed to reduce defects, help lower costs, save time, and improve customer satisfaction.
Copyright 2012 Pearson Education, Inc.
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice Hall 2012 Pearson Education, Inc. publishing as Prentice Hall 19- 19 Mass Customization and Lean Organization Mass customization - providing customers with a product when, where, and how they want it. Lean organization - an organization that understands what customers want, identifies customer value by analyzing all activities required to produce products, and then optimizes the entire process from the customers perspective. Copyright 2012 Pearson Education, Inc. Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Publishing as Prentice 2012 Hall Pearson Education, Inc. publishing as Prentice Hall 19- 20 Terms to Know operations management manufacturing organizations service organizations productivity value value chain value chain management organizational processes RFID intellectual property quality ISO 9000 Six Sigma mass customization Cellular manufacturing Copyright 2012 Pearson Education, Inc. Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter 2012 Pearson Education, Inc. publishing as Prentice Hall Publishing as Prentice Hall 19- 21 Copyright 2012 Pearson Education, Inc. Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter 2012 Pearson Education, Inc. publishing as Prentice Hall Publishing as Prentice Hall 19- 22