Professional Documents
Culture Documents
OM Chapter 1 Competing With Operations
OM Chapter 1 Competing With Operations
OPERATIONS
Support Functions
• Accounting
• Information Systems
• Human Resources
Operations • Engineering Marketing
Translates Generates sales
materials and of outputs
service into
outputs
Product &
Figure 1.1 Service Outputs
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
1–3
A Process View
External environment
Inputs Outputs
Processes and
• Workers operations • Goods
• Managers • Services
• Equipment 1 3
• Facilities
5
• Materials
• Land 2 4
• Energy
Information on
performance
Figure 1.2
Figure 1.3
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
1–5
The Supply Chain View
Support Processes
New
service/ Customer
External customers
External suppliers
product relationship
development management
Supplier Order
relationship fulfillment
process process
Figure 1.4
New Service/
Product Development
• Design
• Analysis No
• Development
• Full launch
Performance
Yes Gap?
Operations Strategy
Competitive Capabilities
Decisions
• Current
• Managing processes
• Needed
• Managing supply chains
• Planned
Figure 1.5
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
1 – 10
Corporate Strategy
Environmental scanning
Developing core competencies
1. Workforce
2. Facilities
3. Market and financial know-how
4. Systems and technologies
Developing core processes
Global strategies
Market segmentation
Needs assessment
Service or product needs
Delivery system needs
Volume needs
Other needs
Order Winner
Sales ($)
Order Qualifier
Sales ($)
Low High
Achievement of competitive priority
Figure 1.6
At an airline
Customer relationship
Top quality
Consistent quality
Delivery speed
Variety
Top quality
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
1 – 16
Using Competitive Priorities
At an airline
Order fulfillment
Low-cost operations
Top quality
Consistent quality
On-time delivery
Variety
At an airline
Supplier relationship
Low-cost operations
Consistent quality
On-time delivery
Variety
Volume flexibility
Productivity improvement
Global competition
Ethical, workforce, and environmental
issues
SOLUTION
Policies processed
a. Labor productivity =
Employee hours
600 policies
= = 5 policies/hour
(3 employees)(40 hours/employee)
SOLUTION
Value of output
a. Multifactor productivity =
Labor cost + Materials cost
+ Overhead cost
Figure 1.7
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall.
1 – 24
Challenges in OM
= $37,500/class
Output $37,500/class
Multifactor productivity = = = 1.25
Input $30,000/class
14 hours 16 weeks
of input =
week class
= 224 hours/class
Output $45,000/class
ductivity = =
Input 224 hours/class
= $200.89/hour
SOLUTION
= $20,680
Output $20,680
or productivity = =
Input 360 hours