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KR: Chapter 1

KR: Chapter 1. Operations as a Competitive Weapon. Chapter Outline. What is a process? Nested process Customer-supplier relationships Service and manufacturing processes Differences and similarities Degree of customer contacts.

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KR: Chapter 1

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  1. KR: Chapter 1 Operations as a Competitive Weapon

  2. Chapter Outline • What is a process? • Nested process • Customer-supplier relationships • Service and manufacturing processes • Differences and similarities • Degree of customer contacts

  3. Traditional Organizational Chart(How traditional organizations are managed) CEO Sales Marketing Engineering Manufacturing Distribution Customer service Policy and decisions are deployed downward Information flows upward

  4. Process view(How process-focused organizations work) Product Delivered Order placed Chain of events is horizontal

  5. Core Process Map Customer Sales Marketing Finance Distribution Field engineering & Customer service Customer Order Delivery acceptance 1.1 Order placement 1.2 Order entry 1.9 Invoice 1.3 Credit check 1.4 Pick and Pack 1.5 Schedule 1.7 Ship 1.6 Site prep 1.8 Install

  6. Process Hierarchy Core process (1) Order fulfillment Functional process (8 to 12) Order processing Production Staging and installation Subprocesses (20 to 50)) Order entry Credit check Verify Customer address Assign Customer Identification Number Enter Product code Work steps (hundreds to thousands)

  7. Five Process Groups with 12 Subprocesses Process group B, contracting Process group A, Order processing 4 Process group C, delivery 1 2 5 6 7 3 External customers 8 External suppliers Process group D, billing 9 10 Process group E, Customer service 11 12

  8. Chapter Outline • What is a process? • Nested process • Customer-supplier relationships • Service and manufacturing processes • Differences and similarities • Degree of customer contacts

  9. Nature of Services • Intangible • No inventory • Simultaneous production and consumption • Variety of services • Labor intensive

  10. More like a manufacturing organization More like a service organization Continuum of Characteristics • Physical, durable product • Output can be inventoried • Low customer contact • Long response time • Regional, national or International markets • Large facilities • Capital intensive • Quality easily measured • Intangible, perishable product • Output cannot be inventoried • High customer contact • Short response time • Local markets • Small facilities • Labor intensive • Quality not easily measured

  11. Chapter Outline • What is a process? • Value Chain • Core process • Support process

  12. Support processes New service/ product development process Customer relationship process External suppliers External customers Supplier relationship process Order fulfillment process Internal Value-Chain Linkages Showing Work and Information Flows Figure 1.3

  13. Table 1.1 Examples of Support Processes Support Processes

  14. Understand markets and customers Develop vision and strategy Design products and services Produce and deliver Manage improvement and change Develop and manage human resources Manage information Market and sell Invoice and service customers Execute environmental management program Manage financial and physical resources Manage external relationships Manage improvement and change International Benchmarking Clearinghouse’s Standard Process Classification

  15. Chapter Outline • What is a process? • Value Chain • What is operations management? • Broad and narrow interpretations • OM as a set of decisions • OM as a function

  16. External environment Customer or client participation • Inputs • Workers • Managers • Equipment • Facilities • Materials • Services • Land • Energy • Outputs • Goods • Services Operations and processes 2 3 1 4 5 Information on performance The Operations Management System

  17. Manufacturing Management Activities

  18. OPERATIONS MARKETING FINANCE Operations As A Basic Function

  19. Capital Markets, Stockholders Finance Workers Suppliers Personnel Purchasing Operations Marketing Customers Operations As The Technical Core

  20. Chapter Outline • What is a process? • Value Chain • What is operations management? • Productivity

  21. Output Input Productivity = Productivity

  22. Chapter Outline • What is a process? • Value Chain • What is operations management? • Productivity • Road map for competitive operations • Operations management as a competitive weapon

  23. Outcomes Competing with Operations Operations As a Competitive Weapon 1 Designing and Improving Processes Operating Value Chains Operations Strategy 2 Process Analysis 4 Information Technology and Value Chains 12 Process Design Strategy 3 Process Performance and Quality 5 Forecasting 13 Designing Value Chains Aggregate Planning 14 Process Capability 6 Process Layout 7 Supply Chain Design 9 Inventory Management 15 Resource Planning 16 Planning and Managing Projects 8 Scheduling 17 Location 10 Lean Systems 11 Operations Roadmap Figure 1.6

  24. Operations Management Activities

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