GOODS, SERVICES, AND OPERATIONS MANAGEMENT. CHAPTER 1. DAVID A. COLLIER AND JAMES R. EVANS. LO1 Explain the concept and importance of operations management. LO2 Describe what operations managers do. LO3 Explain the differences between goods and services.
DAVID A. COLLIER AND JAMES R. EVANS
LO2Describe what operations managers do.
LO3Explain the differences between goods and services.
LO4Describe a customer benefit package.
LO5Explain the role of processes in OM and identify three general types of processes.
LO6Summarize the historical development of OM.
LO7Describe current challenges facing OM.
“Walt Disney clearly put us on the path toward things like quality, great guest service, creativity and innovation.” Disney theme parks and resorts are designed to provide exceptional guest experiences and accomplish the mission to “create happiness by providing the finest in entertainment for people of all ages, everywhere.”
How do they accomplish this?
By meticulous attention to the management of operations!
Describe one experience you had at a theme park that illustrates either good or bad customer service or operational design. What can we learn from your experience regarding how a theme park can create a positive customer experience or improve on a bad one through its design and operations?
Operations management (OM) is the science and art of ensuring that goods and services are created and delivered successfully to customers.
Shelly Decker, an accounting and information systems major in college, and her sister created an entrepreneurial venture to manufacture and sell natural soaps and body products.
Brooke Wilson is a Process Manager for J.P. Morgan Chase in the Credit Card Division. He was an accounting major in college. Among his OM-related activities are:
How Goods and Services Affect Operations Management Activities
Examples of Goods and Service Content
Why would someone pay, for example, to crush grapes with their feet? Might it be that the process of doing this is as valuable to the customer as the outcome itself? Entertainment is the act of providing hospitality, escapism, fun, excitement, and/or relaxation to people as they go about their daily work and personal activities. The addition of entertainment to an organization’s customer benefit package provides unique opportunities for companies to increase customer satisfaction and grow revenue.
Biztainmentis the practice of adding entertainment content to a bundle of goods and services in order to gain a competitive advantage.
The old business model of just selling and servicing a physical vehicle is gone. For example, a BMW automobile dealership in Fort Myers, Florida recently opened a new 52,000 square foot facility that offers a putting green, private work areas, a movie theater, wireless Internet access, massage chairs, a golf simulator, and a cafe´, so that customers have multiple entertainment options during their visits.
Build-A-Bear Workshop boasts an average of $600 per square foot in annual revenue, double the U.S. mall average, and Holiday Inns found that hotels with holidomes have a 20% higher occupancy rate and room rates are on average $28 higher.
* Durable goods are items such as instruments, vehicles, aircraft, computer and office equipment, machinery, furniture, glass, metals, and appliances.
** Nondurable goods are items such as textiles, apparel, paper, food, coal, oil, leather, plastics, chemicals, and books.
Source: United States Bureau of Labor Statistics, October 2001, http://www.bls.gov/EMP
U.S. Employment by Major Industry (continued)
Today, more than 90 percent of the jobs in the U.S. economy are in service processes (half of the jobs in goods-producing industries, or about 9%, plus 81% in service industries). Service involves designing and managing service-, information-, or entertainment-intensive processes.
Most people in the United States are working in the service sector or service processes such as health care and education, or in service-related aspects of manufacturing firms such as human resource management and accounting.
Sustainabilityrefers to an organization’s ability to strategically address current business needs and successfully develop a long-term strategy that embraces opportunities and manages risk for all products, systems, supply chains, and processes to preserve resources for future generations.
Examples of Sustainability Practices