Chapter 8 Operations and Value Chain Management Robbins

Operations Management n n The design, operation, and control of the transformation process that converts such resources as labor and raw materials into goods and services that are sold to customers Every organization has an operations system that creates value by transforming inputs into outputs Robbins et al. , Fundamentals of Management, 4 th Canadian Edition © 2005 Pearson Education Canada, Inc. 2

The Transformation Process Inputs • People • Technology • Capital • Equipment • Materials • Information Outputs Transformation Process • Goods • Services Source: Management, Seventh Canadian Edition, by Stephen P. Robbins, Mary Coulter, and Robin Stuart-Kotze, page 444. Copyright © 2003. Reprinted by permission of Pearson Education Canada Inc. Robbins et al. , Fundamentals of Management, 4 th Canadian Edition © 2005 Pearson Education Canada, Inc. 3

Productivity = Outputs (Labour+Capital+Materials) Robbins et al. , Fundamentals of Management, 4 th Canadian

Value n n n Performance characteristics, features, and attributes, and any other aspects of goods and services for which customers are willing to give up resources Organizations must provide value to attract and keep customers Value provided through the transformation of raw materials into some product or service that endusers need where, when, and how they want it Robbins et al. , Fundamentals of Management, 4 th Canadian Edition © 2005 Pearson Education Canada, Inc. 5

Value Chain Management n n Process of managing an entire sequence of activities along the entire value chain Is externally oriented Focuses on both incoming materials and outgoing products and services Is effectiveness oriented and aims to create the highest value for customers Robbins et al. , Fundamentals of Management, 4 th Canadian Edition © 2005 Pearson Education Canada, Inc. 6

The Requirements For Successful Value Chain Management Organizational Culture and Attitudes Employees Coordination and Collaboration Value Chain Strategy Leadership Technology Investment Organizational Processes Source: Management, Seventh Canadian Edition, by Stephen P. Robbins, Mary Coulter, and Robin Stuart-Kotze, page 449. Copyright © 2003. Reprinted by permission of Pearson Education Canada Inc. Robbins et al. , Fundamentals of Management, 4 th Canadian Edition © 2005 Pearson Education Canada, Inc. 77

Value Chain Management Requirements Coordination and collaboration n Technology n Organizational processes n (continued) Robbins et al. , Fundamentals of Management, 4 th Canadian Edition © 2005 Pearson Education Canada, Inc. 8

Value Chain Management Requirements (continued) Leadership n Employees/human resources n Organization culture and attitudes n Robbins et al. , Fundamentals of Management, 4 th Canadian Edition © 2005 Pearson Education Canada, Inc. 9

Benefits of Value Chain Management n n Improved customer service - the major benefit Cost savings Accelerated delivery times Improved quality Robbins et al. , Fundamentals of Management, 4 th Canadian Edition © 2005 Pearson Education Canada, Inc. 10

Obstacles to Value Chain Management n n Organizational barriers Cultural attitudes n n n Intellectual property Required capabilities People Robbins et al. , Fundamentals of Management, 4 th Canadian Edition © 2005 Pearson Education Canada, Inc. 11

Technology’s Role in EManufacturing n n n Improve operations management Link plant-floor automation with enterprisewide business network systems Technology is helping to reduce manufacturing costs Robbins et al. , Fundamentals of Management, 4 th Canadian Edition © 2005 Pearson Education Canada, Inc. 12

Quality Control n n n Ensures what is produced meets established standards Monitors weight, strength, consistency, colour, etc. Needed at one or more points, beginning with the receipt of inputs Robbins et al. , Fundamentals of Management, 4 th Canadian Edition © 2005 Pearson Education Canada, Inc. 13

Managing Projects n n n Project management Project manager Robbins et al. , Fundamentals

Gantt Chart Planning tool that shows in bar graph form when tasks are supposed to be done and compares that with the actual progress on each Robbins et al. , Fundamentals of Management, 4 th Canadian Edition © 2005 Pearson Education Canada, Inc. 15

PERT Flowchart-like diagram that depicts the sequence of activities needed to complete a project and the time or costs associated with each activity Robbins et al. , Fundamentals of Management, 4 th Canadian Edition © 2005 Pearson Education Canada, Inc. 16