OM6 Collier Evans Ch01

Operation Management: Course Introduction
WELCOME TO BUS330 OPERATIONS AND

PRODUCTION MANAGEMENT
Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part. OM6 | CH1 1
Class Introductions
Name
Year in school
Major
Desired first job after college.
Career goal
Some Logistics
TEXTBOOK:
Collier & Evans, OM6 (Operations Management, Sixth Edition), Cengage

Learning, 2017.
Learning Objectives
Operations and production management concepts are critical to the success

of both manufacturing and service firms. Global competition has forced firms
to improve their operational processes to remain competitive continuously.
After this course, the student should have a thorough understanding of:
• Operational strategies in the context of the firm’s business strategy,
including operations as a source of competitive advantage.
• Current "best practices” concerning the abovementioned vital topical
areas.
• Practical approaches to solving the types of operational problems typically
encountered.
Some Logistics
Grading:
Tests: 400 Points (200 midterm, 200 final)

• 50 questions per test, 4 points each
Attendance: 100 Points
Participation: 100 Points
Term Project: 400 Points
Total: 1000 Points
Expectations
Attendance:
• This is a business class, so students will be expected to behave

in a professional manner, similar to a “real life” business
setting.
• Attendance will be taken at the start of each session.

• Each unexcused absence will result in losing 12.5 points per ½
class and 25 points for a full class.
• Students who are tardy will lose 5 points per tardy. After 10
minutes, a student is marked absent.
• There is no limit to the loss of attendance points.
Expectations
Cell Phones:
• Cell phones must be stored in backpacks, briefcases, etc. during class.
• If a student is looking at their phone during class, the professor will ask
them to put their phone down.
• If the professor asks the student to put their phone down a second time,
the student will lose 10 points from his or her grade.
• Another 10 points will be deducted from the student’s grade every time
the instructor has to ask the student put down their phone.
• There is no limit to point deductions for phone use during class.
• Phones, smart watches, computers, etc. must be completely put

away during all tests. If a student has a phone, smart device, book,
etc. on their desk during a test, the score on that test automatically
becomes a zero.
Expectations
Class Participation:
• In this course, we will actively discuss the course
materials through lectures, case studies and
class activities.
• Students are expected to be prepared for each

class (complete the assigned readings and / or
assignments before class) and actively
participate in all discussions.
• Class participation points will be allocated at the

discretion of the professor.
EXPECTATIONS
English Language Skills:
This course and the Business Management

degree program are focused on increasing
English proficiency as well as business
management skills.
EXPECTATIONS
Here is one method:
1. First, print out the readings so there is a copy of the

reading to work with.
2. Then, using a dictionary, look up and write out (on the
copy) the Vietnamese definitions of key words in the
assignment.
3. Work through the reading (and other) assignments before
class, so there is a general understanding of what the
lecture is about.
4. Ask the instructor about phrases or statements in the
assignment that still are difficult to understand.
5. Write down what the instructor says about the reading
assignment on the sides, bottom, or on the back of the
copy of the reading assignment. This will provide a good
study guide for any exam on this material
Term Project
This project involves re-engineering an operations management
process for ethical decision-making and sustainability. It will also
be a team project.
Project Steps: NOTE: Steps 1 – 4 should be submitted on paper.

The final project submission should be on at least 2, but no more
than 3 pieces of posterboard.
1. Visit a local business (do not use a big company like Amazon,
Meta, Google, etc.) and learn one of its key operations
management business processes.
2. Map this process on a piece of paper. Please include pictures of
the business, customers, etc., a picture of the person you spoke
with, and their contact details.
Term Project
3. Analyze the process using the concepts you learned in this
class. On a piece of paper, list the process's strengths and what
it does well. Also, indicate the areas where the process could
be improved based on what you learned in this class.
4. Then, on a final piece of paper, map out the new, improved
process with notes indicating the changes you propose and
why. Focus on sustainability and ethical decision making in the
revised process map.
5. The “as is” process map, lists of strengths and weaknesses, and
revised process with notes should fill at least two but no more
than three poster boards.
Term Project
Due Dates and Points for each step:
• Step 1: April 15, 50 points
• Step 4: May 6, 50 points
• Step 5 and Final Project Due: May 13, 200 points.
Term Project
By end of day today, please email me your team
members using the following Excel format (4 columns):
Keuka ID, Last Name, Middle Name, First Name
Each team can have up to 8 members, with a minimum
of 6.
The team captain should send the email.
OM
COLLIER/EVANS
6 Operations + Supply Chain Management
1
Operations
Management and
Value Chains
Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned,
copied or duplicated, or posted to a publicly accessible website, in whole or in
part.
LEARNING OUTCOMES
1 Explain the concept and importance of

operations management
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 (continued)
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
LO 1-1
Operations Management (OM)
• 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
LO 1-1
Operations Management (OM) (Continued)
• Depends on:
• Efficiency
• Cost of operations
• Quality of goods
LO 1-2
Key Activities of an Operations Manager
Facility layout
Forecasting Facility location Technology
and design
Scheduling and
Quality Inventory
capacity Process design
management management
management
Job/service Planning and Supply chain

Design
encounter budgeting management
LO 1-3
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
(hence services are experienced)
LO 1-3
Transactions between Buyers and Sellers
(Continued)
• Driven by customers and provide value and

satisfaction to customers who purchase and
use them
• Standardized or customized to individual
wants and needs
LO 1-3
Goods versus Services
Goods Services
• Tangible • Intangible
• Do not require direct • Require direct involvement
involvement with with customers
customers • Service encounter:
• Demands are easier to Interactions between
predict customers and service
providers
• Demands are difficult to
predict
LO 1-3
Goods versus Services (Continued)
Goods Services
• Stored as physical • Cannot be stored as

inventory physical inventory
• Do not require service • Require efficient service
management skills management skills
• Manufacturing facilities • Facilities typically need
can be located anywhere to be in close proximity
in the world to the customer
• Protected by patents • Not protected by patents
LO 1-3
Service Management
• Integrates marketing, human resources, and

operations functions to:
• Plan
• Create
• Deliver goods and services
• Deal with service encounters
- Moments of truth: Episodes, transactions, or
experiences in which customer encounters the
delivery system and forms an impressions
LO 1-4
Value
• Perception of the benefits associated with a

good, service, or bundle of goods and
services in relation to what a buyer pays
• Goods or services are perceived favorably by
customers if the ratio of perceived benefits to
price to the customer is high
LO 1-5
Customer Benefit Packages (CBP) >>
• Clearly defined set of tangible and

intangible features that a customer
recognizes, pays for, uses, or experiences
LO 1-5
Customer Benefit Packages (CBP) (Continued)
Primary good or service
• Core offering that attracts customers and responds to their

basic needs
Peripheral goods or services
• Offerings that are not essential to the primary good or

service, but enhance it
Variant
• CBP attribute that departs from the standard CBP and is

location- or firm-specific
LO 1-6
Value Chain
• Network of facilities and processes

• 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
LO 1-6
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
Difference between Value Chain and Supply Chain
• Essentially, the value chain comprises all business

activities which increase the value of a product or
service in the eyes of the buyer. It follows then, that the
value chain tends to be traced in the opposite direction
to the supply chain.
• The value chain flows from the customer, back through
the supply chain to the production/creation/extraction
of raw materials, but also includes activities you
wouldn’t typically associate with the supply chain—
activities such as product development and marketing.
LO 1-6
Types of Business Processes
Core
• Focuses on producing or delivering an organization’s primary goods
or services
Support
• Focuses on purchasing, managing inventory, installation, health
benefits, technology acquisition, day care services, and research
General management
• Focuses on accounting and information systems, human resource
management, and marketing
LO 1-7
Exhibit 1.4 Input-Output Framework of a Value

Chain
LO 1-7
Exhibit 1.7 Pre- and Postservice View of the Value

Chain
LO 1-7
Exhibit 1.9 Typical Goods-Producing Supply Chain

Structure
LO 1-7
Goods-Producing Supply Chain
• Activities include shipping finished goods to

distribution centers (DCs)
• Distribution centers
- Warehouses that act as intermediaries
between factories and customers and ship
directly to customers or to retail stores
• Inventory: Raw materials, work-in-process, or
finished goods that are maintained to support
production or satisfy customer demand
LO 1-8
Exhibit 1.10 Seven Eras of Operations Management
LO 1-8
Sustainability
• Organization’s ability to strategically

address current business needs and
develop a long-term strategy to:
• Embrace opportunities and manage risks for
products, systems, supply chains, and processes
• Preserve resources for future generations
LO 1-8
Perspectives of Sustainability
• Environmental sustainability
• Organization’s commitment to the long-term
quality of the environment
• Social sustainability
• Organization’s commitment to maintain healthy
communities and a society that improves the
quality of life
LO 1-8
Perspectives of Sustainability (Continued)
• Economic sustainability: Organization’s

commitment to:
• Address current business needs and economic
vitality
• Have the agility and strategic management to
prepare successfully for future business,
markets, and operating environments
LO 1-8
Data in OM
• Used to evaluate:
• Operations performance, quality, order
accuracy, customer satisfaction, delivery, cost,
environmental compliance, etc.
• Helps make decisions using business
analytics
• Business analytics: Process of transforming data
into actions through analysis and insights in the
context of decision making and problem solving
LO 1-8
Current Challenges in OM
Customer Evolving Managing

expectations technology workforce
Optimizing supply
Globalization Sustainability
chains
KEY TERMS
• Operations • Customer benefit

management packages (CBP)
• Goods • Primary good or
• Durable good service
• Nondurable good • Peripheral goods or
services
• Service
• Variant
• Service encounter
• Value chain
• Moments of truth
• Supply chain
• Service management
• Process
• Value
KEY TERMS
• Distribution centers (DCs)

• Inventory
• Sustainability
• Environmental sustainability
• Social sustainability
• Economic sustainability
• Business analytics
Class Exercise:
1. In each team discuss a customer experience you have personally
encountered where the good or service or both were unsatisfactory (e.g.,
defective product, errors, mistakes, poor service, service upsets, etc.).
2. How might the organization have handled it better, and how could
operations management have helped?
3. Use course concepts to detail your answer. For example:
- Forecasting:
- Supply Chain Management
- Facility Layout and Design
- Technology Selection
- Quality Management
- Purchasing
- Resource and Capacity Management:
- Process Design:
- Job Design:.
Class Exercise:
Zappos Case Study:
1. Watch Zappos video.
2. Instructor will assign you to teams.
3. In your teams, please discuss the following:
a. Draw and describe the customer benefit package that Zappos provides.
Goods? Services? Digital Content? Who manufactures the physical
goods? Who is responsible for the quality and delivery of the physical
goods
b. Identify and describe the primary, support, and general management
processes needed to execute a customer order at Zappos.
c. Describe how any three of the OM activities in the box “What do
Operations Managers Do?” impacts the management of both the goods
that Zappos sells and the services that it provides. Explain how this
case illustrates each of the seven major differences between goods
producing and service providing businesses.

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OM6 Collier Evans Ch01

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Operation Management: Course Introduction

WELCOME TO BUS330 OPERATIONS AND

Desired first job after college.

Collier & Evans, OM6 (Operations Management, Sixth Edition), Cengage

Operations and production management concepts are critical to the success

Tests: 400 Points (200 midterm, 200 final)

Attendance: 100 Points

Participation: 100 Points

Term Project: 400 Points

Total: 1000 Points

• This is a business class, so students will be expected to behave

• Attendance will be taken at the start of each session.

• There is no limit to the loss of attendance points.

• There is no limit to point deductions for phone use during class.

• Phones, smart watches, computers, etc. must be completely put

• Students are expected to be prepared for each

• Class participation points will be allocated at the

This course and the Business Management

1. First, print out the readings so there is a copy of the

Project Steps: NOTE: Steps 1 – 4 should be submitted on paper.

6 Operations + Supply Chain Management

1 Explain the concept and importance of

6 Explain the difference between value chains

• Science and art of ensuring that goods and

Job/service Planning and Supply chain

• Driven by customers and provide value and

• Stored as physical • Cannot be stored as

• Integrates marketing, human resources, and

• Perception of the benefits associated with a

• Clearly defined set of tangible and

Primary good or service

• Core offering that attracts customers and responds to their

Peripheral goods or services

• Offerings that are not essential to the primary good or

• CBP attribute that departs from the standard CBP and is

• Network of facilities and processes

• Portion of value chain that focuses on:

• Essentially, the value chain comprises all business

Exhibit 1.4 Input-Output Framework of a Value

Exhibit 1.7 Pre- and Postservice View of the Value

Exhibit 1.9 Typical Goods-Producing Supply Chain

• Activities include shipping finished goods to

Exhibit 1.10 Seven Eras of Operations Management

• Organization’s ability to strategically

• Economic sustainability: Organization’s

Customer Evolving Managing

• Operations • Customer benefit

• Distribution centers (DCs)

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