OM - Handout 1 (1).pdf

OPERATIONS MANAGEMENT – APM22102 Sisitha Rajapaksha PhD(USJ-Reading), MBA(Texas, USA), MMM(Col.),CLSSBB(USA),CLGB(USA)  Module 01 : Introduction to Operations Management LEARNING OUTCOMES 1. Explain the concept and importance of operations management (OM) 2. Describe what operations managers...

OPERATIONS MANAGEMENT – APM22102 Sisitha Rajapaksha PhD(USJ-Reading), MBA(Texas, USA), MMM(Col.),CLSSBB(USA),CLGB(USA)  Module 01 : Introduction to Operations Management LEARNING OUTCOMES 1. Explain the concept and importance of operations management (OM) 2. Describe what operations managers do 3. Explain the differences between goods and services 4. Define the concept of value and explain how the value of goods and services can be enhanced 5. Describe a customer benefit package LEARNING OUTCOMES 6. Explain the difference between value chains and supply chains, and identify three general types of processes in a business 7. Contrast the three different frameworks for describing value chains 8. Summarize the historical development of OM 9. Describe key challenges facing OM Operations Management Science and art of ensuring that goods and services are created and delivered successfully to customers Includes: Design of goods, services, and the processes that create them Day-to-day management of processes Continual improvement of goods, services, and processes Operations Management The way in which goods and services, and the processes that create and support them, are designed and managed can make the difference between a delightful or an unhappy customer experience. Operations management is the only function by which managers can directly affect the value provided to all stakeholders—customers, employees, investors, and society Depends on: Efficiency Cost of operations Quality of goods What do Operations Managers do? Forecasting: Predict the future demand for raw materials, finished goods, and services. Supply chain management: manage the flow of materials, information, people, and money from suppliers to customers. Facility layout and design: determine the best configuration of machines, storage, offices, and departments to provide the highest levels of efficiency and customer satisfaction. Quality management: ensure that goods, services, and processes will meet customer expectations and requirements. Purchasing: coordinate the acquisition of materials, supplies, and services. Process design: select the right equipment, information, and work methods to produce high-quality goods and services efficiently. Key Activities of an Operations Manager Transactions between Buyers and Sellers Types 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 Transactions between Buyers and Sellers Driven by customers and provide value and satisfaction to customers who purchase and use them Standardized or customized to individual wants and needs Goods versus Services Goods versus Services Service Management Integrates marketing, human resources, and operations functions to: Plan Create Deliver goods and services Deal with service encounters (Interaction between customer and service provider Ex : banking, lodging, education, health care, and government Value Consumers demand innovative products, high quality, quick response, impeccable service, and low prices; in short, they want value in every purchase or experience. Perception of the benefits associated with a good, service, or bundle of goods and services in relation to what a buyer pays Customer Benefit Packages (CBP) “Bundling” goods, services, and digital content in a certain way to provide value to customers not only enhances what customers receive, but can also differentiate the product from competitors. Clearly defined set of tangible and intangible features that a customer recognizes, pays for, uses, or experiences Customer Benefit Packages (CBP) Value Chain Network of facilities and processes Includes all major functions of an organization Describes the flow of materials, finished goods, services, information, and financial transactions from suppliers Through the facilities and processes that create goods and services, and those that deliver them to the customer Supply Chain Portion of value chain that focuses on: Physical movement of goods and materials Supporting flow of information and financial transactions through the supply, production, and distribution processes Types of Business Processes Input-Output Framework of a Value Chain Pre- and Postservice View of the Value Chain Seven Eras of Operations Management Current Challenges in Operations Management Current Challenges in Operations Management Customers - Consumers demand an increasing variety of high-quality goods with new and improved features Technology - Technology continues to evolve at a rapid pace Workforce - Today’s workforce requires new skills, continual learning, more diversity, and better management. Current Challenges in Operations Management Globalization – Labour Costs and operating business in different cultures Sustainability – Need to think about aspects such as using child labor, environmental impact when doing business Optimizing supply chains – Supply chain risks