Operations MGT and TQM. 2021 MODULE 1

 extbook For he Subject

 

 I LLE: E: OP OPER IONS IO NS MA MANA GEME MEN N AN AND D O ERA ALA QUALI Y NAGE MANAGEMEN 2020 ed. AU HORS HORS:: CO COLLLIER ER,, EV EVA ANS, AND LIN INDS DSA AY   AVA ILA B L E A

REX BO O K S O RE

 

CHAPTER I: OP OPER ERA A IO IONS NS MA MANA NAGE GEME MEN N AN AND D VALUE CHAINS

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Learning Objectives:

1. Expl Explain ain the conc concept ept and impo importa rtance nce of operat operations ions mana management gement.. 2. Describ Describe e what operations managers do. 3. Differe Differentiate ntiate goods from services. 4. Defi Define ne co conc ncep eptt of va valu lue e an and d di disc scus usss ho how w th the e va valu lue e of go good odss an and d services can be enhanced. 5. Describ Describe e a customer benefit package. 6. Differe Dif ferent ntiat iate e val value ue ch chai ain n from sup suppl plyy ch chain ain and ide identi ntify fy 3 ty types pes of processes in a business.

 

CHAPTER I: OPERA IONS MANAGEMEN AND VALUE CHAINS

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Learning Objectives:

7. Contrast the three different frameworks for describing value chains. 8. Summarize the historical development of OM. 9. Describe key challenges facing OM.

 

CHAPTER I: OPERA IONS MANAGEMEN AND VALUE CHAINS

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OPERATIONS MANAGEMENT: – Is the science and art of ensuring that goods and services are created and delivered successfully to customers: – It includes the design of goods, services and the process that create them; the day-to-day management of those processes; and the continual improvement of those goods, services and processes54 – OM is important because it makes companies successful – Success Story of Procter & Gamble – William Cooper Procter grandson of the founder. OM in the Workplace and its Usage: 1. Process Design – When introducing a new product 2. Inve Inventor ntoryy mana managemen gementt – controls con trols and track down cost to avoi avoid d ext extra ra cost 3. Scheduling – ensures ensures enough pro production duction •

4. Quality management – to conform standards of products.

 

CHAPTER I: OPERA IONS MANAGEMEN AND VALUE CHAINS

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UNDERSTANDING GOODS AND SERVICES: GOOD – is a physical product that you can see, touch or possibly consume. Ex. Cell phones, appliance, food etc.  Durable

Good – is one that does not quickly wear out and typically last at least lea st three yea years. rs. Ex. Vehicles, Vehicl es, furn furnitures itures,, etc etc..  Nondurable Good – is one that is no longer useful once it is used or last for more that 3 years. Ex shoes, clothing and food. •

SERVICE –tlyyispr any primary activity nott di no direc rectl prod oduc uce e a ph phyyor sicccomplementary si al pr prod oduc uct.t. It re repre prese sent ntthat thedoes nongoods part of a transaction.

 

CHAPTER I: OPERA IONS MANAGEMEN AND VALUE CHAINS

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SIGNIFICANT DIFFERENCES BETWEEN GOODS AND SERVICES:

1. Good Goodss are tan tangibl gible e whil while e ser service vicess are exp experi erienc enced. ed. 2. transactions. Customer Cust omerss par partici ticipate pate in many ser service vice proces processes ses,, acti activit vities ies and - Service encounter – is an interaction between the customer and the service provide prov ider. r. Ex. Making Maki ng hot hotel el rese reservat rvation ion,, pu purcha rchase se a we websi bsite. te.

3. The The de dema mand nd for se serv rvic ice e is mo more re di diff ffic icul ultt to pre predi dict ct th than an th the e de dema mand nd for goods. 4. Ser Service vice can not be store as phys physical ical inv invent entory. ory. 5. Se Serv rvice ice man manage agemen mentt ski skills lls are pa paramo ramount unt to a suc succes cessf sful ul se serv rvice ice encounter.

 

CHAPTER I: OPERA IONS MANAGEMEN AND VALUE CHAINS

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SIGNIFICANT DIFFERENCES BETWEEN GOODS AND SERVICES:

6. Se Serv rvic ice e fa faci cililiti ties es ty typi pica callllyy ne need ed to be in cl clos ose e prox proxim imit ityy to th the e cu cust stom omer er.. 7. Pa Patent tent do not protect servi service. ce. •

HOW GOODS AND SERVICES AFFECT OM ACTIVITIES

OM AC IVI YG YGOODS OODS

SERVICE SERV ICE

Forecast ecast involve long-te long-term rm 1. Forecasting For

Forecast For ecast horizon ar are e short

2. Facility Location pro produ duct ctio ion n sh shou ould ld be ne near ar to raw materials customer

faci fa cilility ty sh shou ould ld be cl clos ose e to

3. Facility Lay-out wa wareho rehous use e de desi sign gned ed for

desi de sign gned ed for go good od cu cust stom omer er

  and Design

efficiency efficie ncy inter interaction action

 

CHAPTER I: OPERA IONS MANAGEMEN OM AC IVI YG YGOOD OODS S 4. echnology 5. Quality

qual qu alit ityy

AND VALUE CHAINS SERVIC SER VICE E

produ pro duct ctio ion n on au auto tomat matio ion n

defifine de ne cl clea earr an and d me meas asura urabl ble e

relyy on in rel info fo ba base sed d hd hdwe we.. acco ac coun untt for cu cust stom omer er

perrce pe cept ptio ion n of qu qual alit ityy use phy physic sical al in inven ventor toryy

6. Inventory/capacity and Design

qualility qua ty mea measu sureme rement nt

efficiency

7. Process Design cont controllabl rollable e (can be auto automated) mated) exte extensiv nsively ely part particip icipated ated 8. Job/Service

product prod uction ion sk skill illss requ required ired

  Encoun Encounter ter Desig Design n  

behav be haviora iorall and ser servic vice e

skills

9. Scheduling

revolv revo lves es arou around nd the loc locati ation on

10. Supply chain Management

focus foc us on ph phys ysic ical al flflow ow of go good odss foc focus us on flflow ow of pe peop ople le

focuss on ass focu assig igned ned emp employ loyee ee

 

CHAPTER I: OPERA IONS MANAGEMEN AND VALUE CHAINS

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  HE CO CONC NCEP EP OF VAL VALUE UE  

Value – is the perception of the benefits associated with a good, service, or bundle of goods and services in relation to what buyers are willing to pay for them. Formula - Va Vallue = Perceived benefits

Price(cost)to Price(cos t)to customer •

CUS OMER BENE BENEFI FI PACK ACKAGES AGES 

Bundling on goods and services, and digital content is a certain way to provide value to customers that differentiates products from competitor.

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Customer Benefit Package – is a clearly defined set of tangible (goods content) and intangible (service content) features that the customer recognizes, pay for, uses, or experience.

Samples:

 

CHAPTER I: OPERA IONS MANAGEMEN •

VALUE CHAINS

AND VALUE CHAINS

- Is a network of facilities and processes that describes the flow of materials, finished goods and services, info rmatio informa tion, n, an and d fi finan nancia ciall tra transa nsacti ction on fro from m sup suppl plie iers, rs, th throug rough h th the e fa facil cilit ities ies an and d proc process esses es th that at cre create ate go good od and services, and those that deliver them to the customer.

Key Processes in business includes: 1. Core Proces Processes ses – focus on produc production tion and del deliver iveryy of produc products ts 2. Suppo Support rt Proces Processes ses – includes incl udes purcha purchasing sing of materi materials als and supp supplier lierss and othe others rs 3. General Management Processes – includes i ncludes account accounting, ing, IT systems, HR and marketing 

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VALUE VALU E CH CHAIN AIN FRA FRAME MEWOR WORKS KS

3 Different Perspective

a. input-output framework – (cradle-to-grave) begins with suppliers of materials to goods and service providing process. b. Pre-an Pre-and d Postpro Postproduc duction tion Ser Servic vice e Frame Framewor workk – Pre P re incl include ude cus custom tomized ized and team oriented oriente d produ product ct des design, ign, consulting consul ting services and others while Post include on-site installations or application services. c. Supply Framework chains are theon foundation of most value chain. Ex HP ships thousands of Hierarchical computers daily andChain spends US$50B –orSupply 64% of its revenue supply chain activity.

 

CHAPTER I: OPERA IONS MANAGEMEN AND VALUE CHAINS

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OM: A HIS ORY OF CHANGE AND CHALLENGE

7 major ERAs of Operations Management 1. Foc Focus us on Cos Costt and Ef Effificie ciency ncy – It was on th the e Ind Indust ustria riall Rev Revol olut utio ion n wh where ere man manyy inv inven entio tions ns came to being.

2. The Qual Quality ity Revo Revolut lution ion – US U S and Japa Japanese nese focus focused ed on this aft after er the 2nd world war. 3. Customizatio Customization n and Design – because be cause of competit competition, ion, companies emphasize emphasized d innovative designs 4. Time Time-Bas -Based ed Comp Competi etitio tion n – Quick Quic k respon response se to comp competi etitio tion n by cont continua inually lly improv improving ing and reengineering processes 5. The Ser Servic vice e revo revolu luti tion on – in i n 1955, abo about ut 50 50% % of US wo workfo rkforce rce we were re em emplo ploye yed d in go good odss producing industries and 50% at service. Today 90% of employees are already in service process 6. Sust Sustaina ainabili bility ty – (refers (ref ers to an organiz organization ationss abil ability ity to strate strategica gically lly add address ress curren currentt busi busines nesss needs and successfully develop a long-term strategy to preserve future generations) 7. Data Analytic Analyticss – very important in evaluating operations performance.

 

CHAPTER I: OPERA IONS MANAGEMEN AND VALUE CHAINS

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O HE HERS RS AN AND D ER ERMS: MS:

3 Perspectives of Sustainability: 1. Envi Environment ronmental al Sust Sustaina ainabili bility ty – is an organi organizatio zation’s n’s commi commitmen tmentt to the long long-te -term rm qual quality ity of our environment. 2. Social Soc ial Sus Sustai nabili ility ty – the is an organizati organ commit mitmen mentt to mai mainta ntain in a hea healthy lthy com commun muniti ities es and a society thattainab improves quality ofizations life.ons com 3. Eco Econom nomic ic Sus Sustai tainab nabili ility ty – is an organ organizati izations ons com commit mitmen mentt to add address ress cur current rent bus busine iness ss nee needs ds and economic vitality – Business Analytics – is a process of transforming data into actions through analysis and insights in the context of organizational decision making and problem solving. EN D O F M O D U L E 1 ASSIGNMEN : 1. Read Rea d the “Za “Zappo pposs Cas Case e Stud Study” y” on page 25 & 26 and ans answer wer all que questi stions ons.. 2. Send answers answer s through the inbox in canva canvass. ss.