Operations Management

and Total Quality

Management
Vince Manzon
Operations Management and
Value Chain
Operations Management and Total Quality Management
  is the science and art of
Operations ensuring that goods and
Managemen services are created and
t delivered successfully to
customers.
 Operations Management
 It includes:
 the design of goods

 services

 the processes the create them

 the day-to-day management of those processes

 the continual improvement of these goods, services,

and processes
 Whyis OM
important?
 Core of Operations
Management

 Efficiency
 Cost
 Quality
 Understanding Goods and Services
 Good
 is a physical product that you can see, touch, or
possibly consume
 there are 2 classification of goods
 CLASSIFICATION OF GOODS
 DURABLE GOOD – is one that does not
quickly wear out and typically lasts at least 3
years.
 NONURABLE GOOD – is one that is no
longer useful once it’s used, or lasts for less
than 3 years.
 SERVICE
 is any primary or complimentary activity that
does not directly produce a physical product.
DIFFERENCES BEWTWEEN GOODS AND
SERVICES
 Goods are tangible, whereas services are intangible
 Customers participate in many processes, activities,
and transactions.
 The demand for the services is more difficult to
predict than the demand of goods.
DIFFERENCES BEWTWEEN GOODS AND
SERVICES
 Services cannot be physically stored as physical inventory.
 Service management skills are paramount to successful
service encounter.
 Service facilities typically need to be in close proximity to
the customer
 Patents do not protect services.
 Value
 is the perception of the benefits associated with
a good, service, or bundle of goods and services
in relation to what buyers are willing to pay for
them.
Value = perceived benefits / price
 CUSTOMER BENEFIT PACKAGE
 is clearly defined set of tangible (goods
content) and intangible (service content)
features that the customer recognizes, pays for,
uses or experiences.
PRIMARY AND PERIPHERAL GOODS OR
SERVICES
 PRIMARY GOOD OR SERVICE – is the core
offering that attracts customers and responds to
their basic needs.
 PERIPHERAL GOODS OR SERVICES – are
those that are not essential to the primary good
or service, but enhance it.
 VALUE CHAIN
 is a network of facilities and processes that 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.
 Processes
 is a sequence of activities that is intended to
create a certain result.
 is how work creates value for customers
 VALUE CHAIN FRAMEWORK
 3 PERSPECTIVE
 input-output framework

 pre and postproduction services framework

 hierarchical supply chain

 Input-output Framework

Core Postsale
Supplier Input Processes Output Service
 Pre- and Postservice
 Gaining Customer Value Creation Keeping the
Customer

Preproduction Core Postproduction

Service Processes Service
 Hierarchical Supply Chain

Suppliers

Manufactu
ring Plant
Regional
Warehouse
Retail
Stores
Customers
 Distribution Centers
 are warehouses that act as intermediaries
between factories and customers, shipping
directly to customers, or to retail stores where
products are available to customers.
 Inventory
 refers to raw materials, work-in-process, or
finished goods that are maintained to support
production or satisfy customer demand.
 OM: A History of Change and Challenge
 Focus Efficiency
 The Quality Revolution
 Customization and Design
 Time-Based Competition
 The Service Revolution
 Sustainability
 Data Analytics
 3 DIMENSION OF SUSTAINABILITY
 Environmental Sustainability
 Social Sustainability
 Economic Sustainability
 Business Analytics
 is a process of transforming data into actions
through analysis and insights in the context of
organizational decision making and problem solving.
 it is used to understand past and current
performance (descriptive analytics), predict the
future by detecting patterns and relationships in data
(predictive analytics), and identify the best decision
(prescriptive analytics)
 Key Challenges
 Customers
 Technology
 Workforce
 Globalization
 Sustainability
 Optimizing Supply Chain