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Chapter 1

Operations management is the set of activities that create value in the form of goods and services by transforming inputs into outputs Inputs (3 major categories): Inputs: - materials, personel, capital, utilities, information External (Informational, gives oms knowledge about conditions outside production) -legal/political inputs= constraints, social/economic inputs help sense trends) Market (Informational: competition, product design, consumer desires, etc. Primary resources (Directly support production/delivery of goods/services -examples: materials, supplies, personnel, capital, capital goods, and utilities (gas, water, coal, electricity) (inputs put into a conversion subsystem into:) Outputs: desired products and services Direct Outputs: (2 main forms) Tangible goods- automobiles, hair dryers, calculators, soap, etc. Intangible Outputs- come from production systems, seem inexhaustible: -education, tax counting, hospitals, banking, govt. agencies, etc. Indirect Outputs: (often overlooked) -Examples: Taxes, waste, technological advances, wages, out-reach activities

POM DECISION MAKING: 3 categories Strategic Decisions: long-range decisions about products, processes, and facilities. -ex. Epic burger (long-term rent), govt. agency- where to put new facility? Operating Decisions: Responsibility of operations is to take product/service orders from customers, which the marketing function has generated, and deliver products/services in a way that there are satisfied customers at reasonable costs -Medium to Short-Term decisions about planning product/supply and expected demand -ex. WTC bookstore make sure they have enough textbook supply for each course dmnd -ex. University- tech help, buying advanced tech; University- having a student services -*More common than Strategic Decisions Control Decisions: OMs engage in planning, analyzing, and controlling activities so that poor worker performance, inferior product/service quality, excessive equip breakdowns DONT interfere with the profitab Product Operation System. -Troubleshooting, quick on the spot; fix problem or adapt to sudden changes -ex. What is OMs backup plan if equipment breaks down? -ex. Ship- sudden water aboard; Hot-dog Stand cant run out of condiments!

Chapter 2
There are 6 main Factors Affecting Todays Global Business: p 29-43 Reality of Global Competition Quality, Customer Service, & Cost Challenges Rapid Expansion: Advanced Technologies Continued Growth: Service Sector Scarcity of Operations Resources Social-Responsibility Issues *look up global isues, read thru all sections *Given all these factors a company considers, both internally & externally, it must develop operations strategies that will achieve: Business Strategies and Corporate Mission Corporate mission- set of long-range goals unique to the org. Includes statements about the: type of business (the company wants to be in), who the customers are, basic business beliefs, and *its goals of survival, growth, and profitability. *Mission Statements tend to be a bit philosophical/lofty; generally idealistic Business Strategy: a long-range game plan of an org. and provides a roadmap on how to achieve said corporate mission. *embodied in every part of the business ^p. 44

*Starting point for developing business strategy is to analyze current business conditions 6 main Factors Affecting Todays Global Business: p 29-43 and notes 3-7 Reality of Global Competition- globalization/domestic too. American firms especially manufacturers (extremely competitive since 80s) must compete with international companies. Service sector too. Problems with exchange rates as well -Ex. Auto- Global competition for cheap, moderate, & even luxury markets are really competitive, esp. in last 10 years - Ex. Computer industry is globally extremely competitive; smart phones growing industry Quality, Customer Service, & Cost Challenges since 70s we demand better quality, even in upscale market. U.S. firms especially are vulnerable to global competition bc quality issues, as we consume more of other goods. This leads to the adoption of Total Quality Management (TQM). *Global competition forces many US Compaies to develop new products quickly, to respond quickly to new customers needs & to cut costs* Dominated by asain firms except for UKs firm, SHARP. Downsizing is usually a cost-saving option. Rapid Expansion: Advanced Technologies Automation has its benefits (see 1-5 on p.5). Large Integrated Enterprise Resource Planning (ERP) software systems (such as SAP or Oracle) give managers info in real time to make decisions quicker. BUT REQUIRES A HUGE INITIAL INVESTMENT. Automation helps, but its expensive, not available to small firms, and its really important to have a proper manager. Continued Growth: Service Sector- see notes/book *Steady growth is key Scarcity of Operations Resources see notes/book Social-Responsibility Issues- see notes/book -Capital has become quite liquid and international (no more boarders). Singe 1970s, theres been a HUGE rise in Multinationals (big, global companies) -A noticed Increase in Income Level is Growing in Latin-America

Operations Strategy- an organizations long-range game plan for its products, processes, and facilities. It Provides a road map for what the operations function must do if the Business Strategy is to be achieved. NOTE: Also a Finance Strategy and a Marketing Strategy Distinctive Competencies- represent major competitive advantages an org. CAN capitalize on to capture a market, increase market share, or increase profits. Competitive Weapons: -Low Op. Cost -Speed -Quality -Customer Service -Location 6 Elements of Operations Strategy:

*Pure Positioning Strategies: two positioning strategies that combine type of product, type of production process, and finished-goods inventory poicy the commonly occur together with the following 4 common: [combo with others is called Mixed positioning strategies) Product-Focused, To-Stock Product-Focused, To-Order Process Focused, To-Stock Process Focused, To-Order

Product Life Cycle Introduction- designed and developed product; sales begin, production/marketing are developing, and profits are negative. Growth For successful products, sales grow dramatically; marketing efforts intensify, production concentrates on expanding capacity quick enough to keep up with demnd, and profits begin Maturity Concentrates on high volume production, efficiency, low costs; marketing is competitive sales promotion aimed at increasing/maintaining market share; profits at their peak Decline noticeable decline in profit and sales. Eventually its dropped or replaced by improvements in product. SEE LIFE CYCLE ON NEXT PAGE

NOTE: There is a trend toward shortened product life cycles, especially computers and consumer goods. This results in 3 effects: 1) $ for Product Design and Development is increased 2) Production systems tend to be whipsawed by constantly changing product models. This creates need for flexible production systems that can be easily changed to other products. 3) Operations strategies emphasize ability to bring new product designs on stream quickly. ComputerAided Design (CAD) helps companies respond faster to designing and launching products quickly.