Chapter 1 Right 6 Right level of quality to the right customer at the right time at the right place in the right quantity for the right cost Operations Management the systematic design direction and control of processes that transform inputs into outputs Process an activity or group of activities that takes one or more inputs transforms them and provides one or more outputs for its customers Operation group of resources performing all or part of one or more processes Supply Chain interrelated series of processes within and across firms that produces a service or a product to the satisfaction of the customers Supply Chain Management the synchronization of a firms processes with those of its suppliers to match the flow of materials services and information with customer demand Every process and every person in an organization has customers External Customers end users or intermediaries buying the firms finished product Can be manufacturers financial institutions retailers or consumers Internal Customers one or more employees or processes that rely on inputs from other employees or processes in order to perform their work Inputs examples Workers Managers Equipment Facilities Materials Land Energy Output examples Goods Services External Suppliers other businesses or individuals who provide the resources services products and materials for the firm s short term and long term needs Internal Suppliers employees or processes that supply important information or materials Differences between service and manufacturing processes Manufacturing Have longer response times More capital intensive Quality is easily measured Manufacturing changes physical properties shape size like a block of wood surface Can be stored and transported for future anticipated delivery finish joining parts and materials Service Intangible perishable output Output cannot be inventoried High customer contact Short response time Labor intensive Quality not easily measured High customer contact Core Processes set of activities that delivers value to external customers 1 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 2 New Service product development process a process that designs and develops new services or products from inputs received from external customers specifications or from the market in general through the customer relationship process 3 Order fulfillment process a process that includes the activates required to produce and deliver the service or product to the external customer 4 Customer Relationship process a process that identifies attracts and builds relationships with external customers and facilitates the placement of orders by customers also called customer relationship management Support processes provides vital resources and inputs to the core processes and therefore is essential to the management of the business budgeting recruiting and scheduling Operations Strategy means by which operations implements the firm s corporate strategy and helps build a customer driven firm Core competencies unique resources and strengths that an organization management considers when formulating a strategy Facilities well located facilities flexible facilities Workforce allows for timely responses Market and Financial Know How can identify competitive edges Systems and Technology advantage in data heavy industries Core Processes should be driven by core competencies Customer relationship New services product development Order fulfillment Supplier relationship Competitive Priorities the critical dimensions that a process or supply chain must possess to satisfy its internal or external customers 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 Order Winner criterion that customers use to differentiate the services or products of one frim from those of another Price Quality Time Flexibility After sale support Reputation Technical support Order Qualifier Minimal level required from a set of criterion for a firm to do business in a particular market segment Market Segmentation the process of identifying groups of customers with enough in common to warrant the design and provisions of services or products that the group wants and needs Want multifactor productivity to be as high as possible Chapter 3 Process Strategy specifies the pattern of decisions made in the managing process so that the process will achieve their competitive priorities Supply Chain Processes Business processes that have external customers or suppliers Process Structure determines the process type relative to the kinds of resources needed how resources are partitioned between them and their key characteristics Layout physical arrangement of operations created by the various processes 1 2 Customer involvement The ways in which customers become part of the process and the extent of their participation 3 Recourse flexibility the ease with which employees and equipment can handle a wide variety of products output levels duties and functions 4 Capital Intensity mix of equipment and human skills in a process Customer Contact the extent to which the customer is present is actively involved and receives personal attention during the service process Moment of Truth face to face interaction that brings the customer and the service providers together Process divergence the extent to which the process is highly customized with considerable latitude as to how its tasks are preformed Flexible flow the customers materials or information move in diverse ways with the path of one customer or job often crisscrossing the path that the next one takes Line flow customers materials or information move linearly from one operation to the next according to a fixed sequence Front Office process with high customer contact where the service provider interacts directly with the internal or external customer Hybrid office process with moderate levels of customer contact and standard services with some options available Back office low customer contact and little service customization Product Mix Matrix Volume Product Customization and Process Characteristics Process Choice way of structuring the process by organizing resources around the process or organizing them around the products All milling machines are grouped together and