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McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved 1-1

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Chapter 1

Introduction to the Field

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OBJECTIVES
• What is Operations and Supply
Management?
• Why Study Operations Management?
• Transformation Processes Defined
• Differences between Services and Goods
• The Importance of Operations Management
• Historical Development of OM
• Current Issues in OM

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What is Operations and Supply Management?

Operations and Supply

Management (OM) is defined
as the design, operation, and
improvement of the systems
that create and deliver the
firm’s primary products and
services

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Why Study Operations Management?

Systematic Approach
to Org. Processes

Business Education Operations Career Opportunities

Management

Cross-Functional
Applications

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What is a Transformation Process?

Defined

A transformation process is
defined as a user of resources
to transform inputs into some
desired outputs

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Transformations

• Physical--manufacturing

• Locational--transportation

• Exchange--retailing

• Storage--warehousing

• Physiological--health care

• Informational--telecommunications

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Operations and Supply Management

Supply Chain Processes

Manufacturing
Processes
Sourcing Distribution
Processes Processes
Logistics Logistics
Processes Processes

Service
Processes

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What is a Service and What is a Good?

• “If you drop it on your foot, it won’t

hurt you.” (Good or service?)

• “Services never include goods and

goods never include services.” (True
or false?)

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The Goods-Services Continuum

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Historical Development of OM

• JIT and TQC

• Manufacturing Strategy Paradigm

• Service Quality and Productivity

• Total Quality Management and Quality

Certification

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Historical Development of OM (cont’d)

• Business Process Reengineering

• Six-Sigma Quality

• Supply Chain Management

• Electronic Commerce

• Service Science

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Current Issues in OM

• Coordinate the relationships between

mutually supportive but separate
organizations.

• Optimizing global supplier, production,

and distribution networks.

• Increased co-production of goods and

services

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Current Issues in OM (cont’d)

• Managing the customers

experience during the service
encounter

• Raising the awareness of

operations as a significant
competitive weapon

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End of Chapter 1

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