1 organization chart CEO over marketing operations finance production creation of goods and services OM set of activities that create value in form of g s by turning o into i study om 1 of 3 functions of any orgzn we want and need to know how g s produced understand what OM mgrs due a costly part of organization om decisions strategic broad long term encompassing tactical narrow short term small issues om people plan organize lead control staffing OM JOB implement an OM strategy provide competitive advantage increase productivity critical decisions design of goods and servies managing quality process and capacity design location strategy layout strategy human resources and job design supply chain maintenance inventory material planning JIT intermediate short trm scheduling maintenance services intangible not inventoried high customer contact short response time labor intensive manufacturing tangible inventories low customer contact long response time capital intensive productivity outputs inputs labor r units produced labor hrs used output labor material energy capital mis service productivity labor intensive focused on unique individual attributes intellectual task difficult to mechanize difficult to evaluate for quality 2 reasons to globalize 1 reduce costs lower wage rates lower direct and indirect costs 2 improve supply chain locating facilities closer to unique resoures 3 provide better g s ontime deliveries cultural variables improved cstmr service 4 understand markets new opportunities 5 learn to improve operations remain open to free flow ideas 6 attract and retain global talent offer better employment opportunities mission statement tell orgzn where its going strategy tells the orgzn how to get there foundation design value develop strategies factors affecting mission environment customer benefit to society philosophies values profability growth public image strategy active plan to achieve mission functional areas have strategies exploit opportunities strengths neutralize threats avoid weaknesses competitive advantage strategies 1 differentiation uniqueness hard rock cafe walt disney magic kingdom 2 cost leadership max value perceived by cstmr not always low quality 3 response flexibility reliability and timeliness 10 OM strategic decisions goals and service design quality process and capacity design location selection human resources job design suppy chain mgmt inventory scheduling maintenance operation strategy issues resources view value chain analysis porters 5 forces model operating in a system with many external factors constant change Strategy development identify key success factors build staff the orgzn integrate OM w other activities 5 product decision develop and implement a product strategy that meets the demands of the marketplace with a competitive advantage product life cycle introductory fine tuning may warrant unusual expenses for research product dvlpmt process modification enhancement supplier dvlpmt best period to increase mrkt share growth product design stablizes effective forecasting of capacity adding or enhancing capacity maturity phase competitors high volume cost control decline terminate QFD identify customer wants and how g s will satisfy wants relationships b w the firms hows importance ratings evaluate competing products compare performance to desirable technical attributes issues for product development robust design small variations in production or assembly lower cost higher quality modular design segmented components flexibility to both production and marketing ability to satisfy cstmr requirements CAD shorter dvlpmt cycles lower cost improved accuracy CAM virtual reality tchnlgy value analysis environmentally friendly design acquiring technology purchase firm joint ventures alliances documents for production assembly drawing shows view of product assembly chart point of production where components flow into subassemblies and into final product route sheet operations and times required to produce a component work order instructions to produce a given quantity of item service design direct interaction with customer reduced productivity increased opportunity for customization automated machines reduce time labor interaction spreadsheet modeling process influence chart sketch overall paln develop the base case test model using trial values use model to perform the needed analysis document model so others understand profit revenue total cost revenue unit price x quantity made and sold total cost fixed variable variable cost unit sold x quantity made sold goal seek what if goal seek set cell as output cell profit to value 0 by changing cell input cell quantity made and sold 7 process strategies how to produce a product or provide a service that meets or exceeds customer requirements and cost and managerial goals has long term effects on efficiency and production flexibility cost and quality 1 process focus organized around specific activities or processes general equiptment but skilled personnel high degree of product flexibility high cost low equipment utilization 2 repetitive focus assembly lines modules w parts less flexibility more efficient 3 product focus organized by product high volume but low variety of products efficient processes high fixed by low variable cost 4 mass customization rapid low cost production of g s to satisfy unique customers flexibility of process focus with efficiency of product focus rapid design process analysis and design is the process acheive competitive advantage add value maximize customer value win orders flowcharts shows movement of materials time function map shows flows and time frames value stream mapping flows time value added beyond the immediate organization process charts uses symbols to show key activities service blueprinting focuses on customer provider interaction improving service processes layout and human resources production technology machine technology increases precision productivity flexibility environmental impact AIS improved data acquisition reduced data entry errors increased speed process control real time monitoring and control of processes vision systems particular aid to inspection accurate robots perform monotonous dangerous tasks ASRS automated placement and withdrawal of parts and products AGVS electronically guided and controlled carts FMS computer controls workstation material handling equiptment CIM extension of flexible manufacturing systems sustainability resources