Exam 1 Study Guide Chapter 1 Using Operations to Compete Why is operations supply chain management important to business survival The role of operations in the organization coordination among different business functions is necessary and key to developing a common strategy organization Responsible for key decisions that affect the success of the Operations management supply chain is about making decisions to deal with problems and issues that affect RIGHT 6 With the right level of quality To the right customer At the right time At the right place In the right quantity For the right cost or price o In your own words what is operations supply chain management about Operations management the systematic design direction and control of processes that transform inputs into services and products for internal as well as external customers Supply chain management the synchronization of a firm s processes with those of its suppliers and What are key inputs into any process that produces a product or a customers to match the flow of materials services and information with customer demand service Process Any activity or group of activities that takes one or more inputs transforms them and provides one or more outputs for its customers Key inputs Human resources workers managers Capital equipment facilities Purchased materials Energy Land o What is a product What is a service Service a system supplying a public need Product results of a process o Can there be services without products No the service package A service is really a service bundle aka service package that includes o Supporting facilities physical resources wherein services are produced and consumed by customers provided during the consumption of services by customers physical products that are o Facilitating goods o Information Messages that customers received during consumption of services Data needed by the service provider to deliver services o Explicit services observable benefits customers expect to receive as part of services consumption Explicit o Implicit services customers sense as part of services consumption stated clearly in detail psychological benefits Implicit implied not plainly expressed Ex car repair product already exits o Understanding the customer needs o Everything is focused on the customer How are manufacturing and service process different What 4 core processes do operations supply chain managers obsess over Four core processes Supplier relationship process A process to select the suppliers of services materials and information and facilitate the flow of these into the firm New service product development process A process to design and develop new services or products from customer or market inputs Order fulfillment process A process to produce and deliver services or products to the external customer Customer relationship process A process that identifies attracts and builds relationships with external customers and facilitates the placement of orders o What decisions do operations supply chain managers typically make Decisions pertain to process capacity inventory quality logistics and workforce safety quality delivery productivity cost people Development of new capabilities Maintenance of existing capabilities Design new processes that have strategic implications Development organization of supply chain Key performance measures cost quality o Strategy o Operations strategy Specifies the means by which operations implements corporate strategy and helps build a customer driven firm Corporate strategy provides an overall direction that serves as the framework for carrying out all the organization s functions Four considerations What is an operations strategy What is a strategy o Monitoring and adjusting to changes in the business environment o Identifying and developing the firm s core competencies o Developing the firm s core processes o Developing the firm s global strategies What are core competencies and what do they include o Core competencies unique resources strengths that an organizations management considers when formulating strategy Reflects the collective learning of the organization especially in how to Coordinate processes Integrated technologies Includes Facilities Workforce Market financial know how Systems technology What are the four competitive priorities and competitive capabilities Competitive priorities what it should emphasize Critical dimensions a process or supply chain must process to satisfy internal or external customers both now in the future Planned for processes Presented to maintain or build market share Competitive capabilities what it should do well Supply chain created from them The cost quality time flexibility dimensions that a process or supply chain actually possesses is able to deliver o How are competitive priorities and competitive capabilities different What is an order winner What is an order qualifier Order winner The criterion customers use to differentiate the services or products of one firm from those of another What a firm must have to win customers sales and beat out competition Includes o Cost o Quality Low cost operations delivering a service or a product at the lowest possible cost ex Costco Top quality delivering an outstanding service or product ex rolex Consistent quality producing services or products that meet design specification on a consistent basis ex McDonalds o Time o Flexibility Delivery speed quickly filling a customer s order ex Dell On time delivery meeting delivery time promises ex United Parcel Service UPS Development speed quickly introducing a new service or a product ex Zara Customization satisfying the unique needs of each customer by changing service or products designs ex Ritz Carlton Variety handling a wide assortment of services or product efficiently ex Amazon com Volume flexibility accelerating or decelerating the rate of production of service or products quickly to handle large fluctuations in demand ex The United States Postal Service USPS However also include criteria not directly related to the firm s operations o After scale support o Technical support o Reputation Order qualifier The minimum level required from a set of criteria for a firm to do business in a particular market segment What a firm must have to be in the business Position the firm to compete in the market o Are competitive capabilities order winners or order qualifiers Chapter 3 Process Strategy What are the four basic process strategy decisions Process