Operation Management Ch 1 Creating Value through Operation Managment

Operation Management
A systematic design. direction and control of processes that transform input into services or products for internal as well as external customers.
An activity or group of activities that takes one or more input and transforms into one or more outputs.
A group of resources performing all or part of one or more processes
Supply Chain
The interrelated series of processes within a firm and across different firms that produce a service or product to the satisfaction of customers.
Supply Chain Management
The synchronization of a firm’s processes with those of its suppliers and customers to match the flow of materials, services and information with customer demand.
The three mainline functions of any businesses:
External customers
A customer who is either an end user or an intermediary buying the firm’s finished services or products.
Internal cutomers
One or more employees or processes that rely on inputs from other employees or processes in order to perform their work.
External suppliers
The businesses or individuals who provide the resources, services , products, and materials for the firm’s short-term and long-term needs.
Internal suppliers
The employees or processes that supply important information or materials to a firm’s processes.
Inputs can include a combination of
Human resources (workers and managers)
Capital (equipment and facilities)
Purchases materials and services
Nested Process
The concept of a process within a process
Two major types of processes are
Service and manufacturing
The two key differences between service and manufacturing processes along a continuum are:
1) the nature of their output
2) the degree of customer contact
The output of ……………………. typically cannot be held in a finished goods inventory to insulate the process from erratic customer demands
Service Processes
The two types of processes in the supply chain
Core processes
Support Processes
Core process
A set of activities that delivers value to external customers
The four core processes
1. Supplier relationship Process
2. New Service / Product Development Process
3. Order fulfillment Process
4. Customer Relationship process
Supplier Relationship Process
A process that selects the suppliers of services, materials and information and facilitates the timely and efficient flow of these items into the firm
New Service/product development process
A process that designs and develops new services or products from inputs received from external customer specifications or from the market in general through the customer relationship process.
Order fulfillment Process
A process that includes the activities required to produce and deliver the service or product to the external customer.
Customer relationship Process
A process that identifies, attracts, and builds relationships with external customers, and facilitates the placement of orders by customers, sometimes referred to as customer relationship management
Support Processes
A process that provides vital resources and inputs to the core processes and therefore is essential to the management of the business
Operations Strategy
The means by which operations implements the firm’s corporate strategy and helps to build a customer-driven firm.
Market Analysis
Categorizes the firm’s customers, identifies their needs, and assesses competitor’s strength.
Environmental scanning
The process by which managers monitor trends in the environment for potential opportunities or threats.
Core Competencies
The unique resources and strengths that an organization’s management considers when formulating strategy.
Lead time
The elapsed time between the receipt of a customer order and filing it.
Collaborative Effort
arises when one firm has core competencies that another needs but is unwilling (or unable) to duplicate
Joint venture
when two firms agree to produce a service or product jointly.
Market segmentation
The process of identifying groups of customers with enough in common to warrant the design and provision of services or products that the group wants and needs.
Competitive priorities
The critical dimensions that a process or supply chain must possess to satisfy its internal or external customers , both now and in the future
Competitive capabilities
The cost, quality, time and flexibility dimensions that a process or supply chain actually possesses and is able to deliver
Time based competition
A strategy that focuses on the competitive priorities of delivery speed and development speed
Order winner
A criterion that customers use to differentiate the services or products of one firm from those of another
types of competitive priorities
Cost, quality, time and flexibility
Order qualifier
Minimal level required from a set of criteria for a firm to do business in a particular market segment.
The value of outputs (services and products) produced divided by the values of input resources (wages costs of equipment, and so on)
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