Operation Management

Chapter 01 Competing with Operations

Chiun-Ming Liu, Professor Department of Industrial Engineering and Systems Management Feng Chia University

Outline

Terminology 1. Operations and Supply Chain Management across the Organization 2. A Process View 3. The Supply Chain View 4. Competitive Priorities and Capabilities 5. Operations Strategy as a Pattern of Decisions 6. Trends in Operations Management 7. Operations Management as a set of Decisions

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Terminology

• Operations Management: The systematic design, direction, and control of processes that transform inputs into services and products for internal, as well as external, customers. • Process: Any activity or group of activities that takes one or more inputs, transforms them, and provides one or more outputs for its customers. • Operation: A group of resources performing all or part of one or more processes. • Supply Chain: An interrelated series of processes within and across firms that produce a service or product to the satisfaction of the customers. • Supply Chain Management: The synchronization of a firm’s processes with those of its suppliers and customers to match the flow of materials, services, and information with customer 3 demand.

1. Operations and Supply Chain Management across the Organization /2

 Operations and supply chain management underlie all departments and functions in a business.  There are three mainline functions of any business: namely, finance, operations, and marketing. 1. Finance generates resources, capital, and funds from investors and sales of its goods and services in the market place. 2. Operations transforms these material and service inputs into product and service outputs. 3. Marketing is responsible for producing sales revenue of the outputs, which become returns to investors and capital for supporting operations.

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Figure 1.1 Integration between different functional areas of a business

Finance

Acquires financial resources and capital for inputs...