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Business: a Changing World 9th ed, Chap 8

Business: a Changing World 9th ed, Chap 8



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Published by sairabellus
Business: A changing world, 9th ED, chap 8.
More chapters to come soon.
Business: A changing world, 9th ED, chap 8.
More chapters to come soon.

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Categories:Types, Business/Law
Published by: sairabellus on Jan 08, 2014
Copyright:Attribution Non-commercial


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age 238
Chapter Outline
 Introduction The Nature of Operations Management
The Transformation Process
Operations Management in Service Businesses
 Planning and Designing Operations Systems
 Planning the Product 
 Designing the Operations  Processes
 Planning Capacity
 Planning Facilities
Sustainability and Manufacturing 
 Managing the Supply Chain
 Managing Inventory
 Routing and Scheduling 
 Managing Quality
 International Organization for Standardization (ISO)
 Integrating Operations and Supply Chain Management
Learning Objectives
After reading this chapter, you will be able to:
LO 8-1
 Define operations management, and differentiate between operations and manufacturing.
LO 8-2
 Explain how operations management differs in manufacturing and service firms.
LO 8-3
 Describe the elements involved in planning and designing an operations system.
LO 8-4
 Specify some techniques managers may use to manage the logistics of transforming inputs into finished products.
LO 8-5
 Assess the importance of quality in operations management.
LO 8-6
 Evaluate a business's dilemma and propose a solution.
Taco Bell Masters the Drive-thru
When it comes to the drive-thru, Taco Bell is a master. Taco Bell employees average 164 seconds per customer order from the time the customer arrives to departure. With an assembly line of food items to construct, six different types of wrappers, and detailed procedures for every step of the process, Taco Bell is now among the top for speed, accuracy, and efficiency. The company was founded in 1962. It focused on mass-produced food and now serves its south-of-the-border fare in 5,600 stores. In 2011, fast-food sales hit $168 billion. However, Taco Bell was not always so successful with its drive-thru operations. Workers lacked specific directions and the preparedness to efficiently handle the fast-paced drive-thru. Because 70 percent of customers use the drive-thru
designating it as the fast-food industry's make-it-or-break-it element
Taco Bell was at a disadvantage.
Page 239
Taco Bell's solution to this problem was similar to what would be found in a major factory: standardize procedures, eliminate bottlenecks, and work to optimize staff efficiency. Employees at Taco Bell are divided into two categories: Service Champions (drive-thru) and Food Champions (food preparation). Service Champions are trained to follow a specific script as they greet customers and take orders. They enter orders into the point-of-sale system, make drinks when needed, and handle payments. When processing orders for more complex menu items, Service Champions may assist Food Champions in food preparation. The script goes a long way toward eliminating botched orders. Beyond that, it comes down to teamwork, to everyone working together to create a seamless process free from mistakes. In this instance, speed and accuracy of service are as much a part of quality as the finished food. Taco Bell has essentially maximized its service speed, unless, miraculously, it can figure out how to speed up its customers.
All organizations create products
goods, services, or ideas
for customers. Thus, organizations as diverse as Toyota, Campbell Soup, UPS, and a public hospital share a number of similarities relating to how they transform resources into the products we consume. Most hospitals use similar admission procedures, while online social media companies, like Facebook and Twitter, use their technology and operating systems to create social networking opportunities and sell advertising. Such similarities are to be expected. But even organizations in unrelated industries take similar steps in creating goods or services. The check-in procedures of hotels and commercial airlines are comparable, for example. The way Subway assembles a sandwich and the way GMC assembles a truck are similar (both use automation and an assembly line). These similarities are the result of operations management, the focus of this chapter. Here, we discuss the role of production or operations management in acquiring and managing the resources necessary to create goods and services. Production and operations management involves planning and designing the processes that will transform those resources into finished products, managing the movement of those resources through the transformation process, and ensuring that the products are of the quality expected by customers.
The Nature of Operations Management
LO 8-1
Operations management (OM)
 the development and administration of the activities involved in transforming resources into goods and services, is of critical importance. Operations managers oversee the transformation process and the planning and designing of operations systems, managing logistics, quality, and productivity. Quality and productivity have become fundamental aspects of operations management because a company that cannot make products of the quality desired by consumers, using resources efficiently and e
ffectively, will not be able to remain in business. OM is the “core” of most
organizations because it is responsible for the creation of the organization's goods and services. Some organizations like General Motors produce tangible products, but service is an important part of the total product for the customer.
Historically, operations management has been called “production” or “manufacturing” primarily because of
the view that it was limited to the manufacture of physical goods. Its focus was on methods and
techniques required to operate a factory efficiently. The change from “production” to “operations”
recognizes the increasing importance of organizations that provide services and ideas. Additionally, the

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