18.1 Explain the role of operations management.
18.2 Define the nature and purpose of value chain management.
18.3 Describe how value chain management is done.
4. Discuss contemporary issues in managing operations.
The Role of Operations Management A. *_ Transformation process that converts resources into finished goods and services.
B. Operating System (Exhibit 18) Inputs----Transformation---Outputs
• Services & Manufacturing • Manufacturing Organization- Organizations that produce physical goods ▪ (Raw materials to physical goods)
• *Service Organizations: Organizations that produce non-physical products in the terms of service. *Over 75% of all Economic Activity is service.
1. Managing Productivity- Overall output of goods or services produced divided by inputs needed to generate that output.
2. Plays a Strategic Role in Organizational Success
Value Chain Management, (What & why is it important?)
1) Value: something you’re willing to spend money for
2) Value Chain: Entire series of organizational work activities that add value at each step from raw materials to finished products
3) *Value Chain Management: Process of managing the sequence of activities and information along the entire value chain.
4) **Goal of Value Chain Management (VCM) a) To create value chain strategy that meets and exceeds customers’ needs and desires and allows for full seamless integration among all members of the chain.
5) Benefits of VCM:
6) Requirements for VCM: (6)
1. * Coordination & Collaboration
2. Investment in Information Technology
3. *Organizational Processes: Define: The way that organizational work is done.
4. Strong Leadership 5. Employees (non traditional & flexible) 6. Supportive Organizational Culture & Attitudes
A. Obstacles to Value Chain Management 1. *Organizational Barriers -refusal or reluctant to share information -reluctant to change up status quo -security issues
2. *Cultural Attitudes