Operations Management and Competitive Advantage Copyright Mc GrawHill

Operations Management and Competitive Advantage © Copyright Mc. Graw-Hill. All rights reserved. 1

The Purpose of Operations Management © Copyright Mc. Graw-Hill. All rights reserved. Figure 18. 1 2

Impact of Increased Quality on Organizational Performance © Copyright Mc. Graw-Hill. All rights reserved. Figure 18. 4 3

Operations Management Techniques provide quantitative information for … • Total Quality Management (TQM) ØA management technique that focuses all activities on improving the quality of a firm’s goods or services. • Just in Time Inventory • JIT reduces inventory holding costs for warehousing, storage, inventory tracking, and the cost of capital tied up in inventory. • A drawback to JIT is that a firm does not maintain have a large buffer stock of parts which makes the firm vulnerable to strikes or supply problems that can quickly deplete on-hand inventories. © Copyright Mc. Graw-Hill. All rights reserved. 4

Operations Management Techniques provide quantitative information for … • Process Reengineering ØCan boost efficiency by directing efforts to activities that add value to the good or service produced. • Decisions that will turn a profit Ø(Frito Lay example) • etc. © Copyright Mc. Graw-Hill. All rights reserved. 5

Examples of Operations Management Techniques • Product Mix • Transportation • Assignment • Minimal spanning • Project planning (PERT/CPM) • etc. © Copyright Mc. Graw-Hill. All rights reserved. 6