Class PPT - LO 3 Operations & Value Chains (Final) PDF

COLLIER/EVANS OM 6 Operations + Supply Chain Management LO3 Operations Management and Value Chains Copyright ©2017 Cengage Learning. All Rights Reserved. M...

COLLIER/EVANS OM 6 Operations + Supply Chain Management LO3 Operations Management and Value Chains Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.  LEARNING OUTCOMES Upon successful completion of this learning outcome, students will be able to:  Examine the importance of operations, value chain and supply chain management  Illustrate how single organizations can follow competitive strategies.  Compare and contrast operations and value chains  Understand Supply chain strategy Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH7 2 Operations Management What is Production / Manufacturing ? 4 Eg: Sandwich Production 5 Eg: Health Care Professional Service 6  Type of Outputs  Good: Physical product that a person sees, touches, or consumes  Durable good: Product that does not quickly wear out and lasts at least three years  Non-durable good: Product that perishes and lasts for less than three years  Service: Primary or complementary activity that does not directly produce a physical product  Both outputs driven by customers and provide value and satisfaction to customers who purchase and use them  Standardized or customized to individual wants and needs Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 7  Goods Vs Services Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 8 Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 9 Goods & Services Examples Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 10  Operations Management (OM) The planning, scheduling and control of the activities that transform inputs into finished goods and services. Includes:  Design of goods, services, and the processes that create them  Day-to-day management of processes  Continual improvement of goods, services, and processes “ Production/ Manufacturing Changed to Operations Why???” Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 11  Service Management: Integrates marketing, human resources, and operations functions to plan, create and deliver goods (peripheral mostly), services and associated service encounters  Moments of Truth: Episodes, transactions, or experiences in which customer encounters the delivery system of the product and forms an an impression of your brand or product itself Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 12 Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 13  Focus of Operations Management Quality of Cost of Efficiency Goods & Operations Services Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 14  Importance of Operations Management Quality Management/ Quality Control of Products and Services Increased Productivity & Efficiency Improved Customer Satisfaction Reduction in Operating Costs Flexibility & Scalability Safety & Risk Control Competitive Advantage Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 15  Key Activities in Operations Management Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 16  Emirates Flight Catering Operations Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 17  Operations Elements - Emirates Flight Catering  Location – Corner of Worlds 2nd Busiest airport  Infrastructure - 88,000 square meters facility 18000, storage, 70000 for Kitchen  Equipment – Bulk Industrial size Kitchen Equipments, burners, cutting stations, cleaning stations, accessories, dishwashers  Layout - specialized units, hot kitchen, cold kitchen, bakery, and pastry sections, each for high-volume processing  Product Design – Inhouse chefs 1800  Automation – Monorails & Railcars, Conveyor system  Scheduling & Capacity - High-Tech Vehicle Fleet  Quality –Testing Labs, Infrared ink, Real-Time Monitoring, Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 18 Concept of Value Chain, Value Chain Analysis & Frameworks  The Concept of Value Perception of the benefits associated with a good, service, or bundle of goods and services in relation to what a buyer pays  Goods or services are perceived favorably by customers if the ratio of perceived benefits to price to the customer is high Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 20  Customer Benefit Packages (CBP) Clearly defined set of tangible and intangible features that a customer recognizes, pays for, uses, or experiences Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 21  CBP Purchasing Vehicle “Each good or service in the CBP needs a process to create and deliver to end customer” Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 22 CBP Fast Food Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 23  Processes Sequence of activities that is intended to create a certain result, such as a physical good, service or information  It is how Organizations create value to customers Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 24  The Supply Chain Covers majority of core business processes in any Organization (source, make, deliver, return) But few of the business processes are not covered by Supply Chain !!! 25 Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 25  Demand Chain Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 26  Supply Chain & Demand Chain Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 27  Value Chain A value chain is the series of business activities a company performs to create a product or service from start to finish. The value chain identifies each activity where value is added — such as sourcing, manufacturing, and sales — and examines how these activities interact. - Source: Salesforce  The idea of a value chain was introduced by Michael Porter in his 1985 book, Competitive Advantage: Creating and Sustaining Superior Performance.  By defining these activities, a company can analyze and optimize them in terms of cost and quality to improve its competitive advantage. 28 Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1  Concept of Value Chain Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 29 NESTLE VALUE CHAIN  IKEA Value Chain Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 31  Value Chain of Aqua Culture Industry Primary Activities Support Activities  Human Resources (People)  Management (Planning, Finance, Legal, Sustainablity)  Farms, Equipment Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 32  Value Chain Analysis Value chain analysis is a means of evaluating each of the activities in a company’s value chain to understand where opportunities for improvement lie. Helps realizing competitive advantage, such as  Cost reduction, more efficient and lesser expensive  Product differentiation, by Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 35  Michael Porter’s Value Chain Analysis Model Value Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 36  Apple’s Distributio n Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 37 Apple’s Value Chain Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 38  Apple’s Primary Activities Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 39  Apple’s Key Support Activities Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 40  Value Stream Mapping (Processes) Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 41  CLASS ACTIVITY VALUE CHAIN ANALYSIS Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 42  Tesla Value Chain Analysis Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 44  Value Chain Analysis Importance  Supporting Environmental, Social and Governance (ESG) goals  Increasing efficiencies  Reduction of resource wastage  Introducing Automation  Strategic Outsourcing Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 45  Value Chain Vs Supply Chain Value Chain Concept https://www.youtube.com/watch?v=mu9TWlcjNKk Value Chain Vs Supply Chain https://www.youtube.com/watch?v=Q_Twvihh2_4 Value Chain Development https://www.youtube.com/watch?v=KnAVgP2YjYE Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 46  Common Value Chain Frameworks  Input - Output Framework  Pre & Post-Production Services Framework  Hierarchial Supply Chain Framework Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 47  LO 1-7 Exhibit 1.4 Input-Output Framework of a Value Chain Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 48  Input Output Framework – Examples Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 49  VC – Input/ Output– Buhrke Industries  100+ Support Processes including  Coordination  HR, Medical Assistance  Safety, Accounting Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 50  Value Chain – Input/Output– Cocoa Industry Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 51  LO 1-7 Exhibit 1.7 Pre- and Post service View of the Value Chain Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 52  LO 1-6 VC - Pre & Post Service View – Amazon Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 53  LO 1-6 Hierarchial Supply Chain Framework Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 54  Evolution of Operations Exhibit 1.10 Management ( The Seven Eras ) Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 56  Sustainability in Operations Organization’s ability to strategically address current business needs and develop a long-term strategy to:  Embrace opportunities and manage risks for products, systems, supply chains, and processes  Preserve resources for future generations Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 57  Perspectives of Sustainability  Environmental sustainability Organization’s commitment to the long-term quality of the environment  Social sustainability Organization’s commitment to maintain healthy communities and a society that improves the quality of life  Economic sustainability Organization’s commitment to  Address current business needs and economic vitality  Have the agility and strategic management to prepare successfully for future business, markets, and operating environments Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 58  Sustainability Practices in Operations Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 59  Current Challenges in OM Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 60  Measuring Performance - Operations & Value Chains Act of quantifying the performance of:  Organizational units, goods and services  Processes, people, and other business activities  Provides a scorecard of performance  Helps identify performance gaps  Makes accomplishments visible to workforce, stock market, and other stakeholders Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH2 61 Exhibit 2.1 Scope of Business and Operations Performan ce Measurem ent Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH1 62  Value of a Loyal Customer (VLC) Quantifies total revenues or profits each target market customer generates over a buyer’s life cycle Total market value - Multiplying VLC by the absolute number of customers gained or lost Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH2 63 End of LO 3 Questions & Answers… Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. OM6 | CH2 64