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Lecture Operations now: Supply chain profitability and performance (3/e): Chapter 1 - Byron J. Finch

Chapter 1 - Introduction: Why operations management? After you have mastered the material in this chapter, you will be able to: Describe the relationships among value, profitability, cost, processes, and capabilities; describe the components of value; differentiate between the resources that create value; describe the changes in the business environment and the impact they have;. | Chapter 1 Introduction:Why Operations Management? Learning Objectives Describe the relationships among value, profitability, cost, processes, and capabilities Describe the components of value Differentiate between the resources that create value Describe the changes in the business environment and the impact they have Describe the external forces that affect the business Explain the differences between service and product outputs Explain why B2B and B2C customers may define value differently Describe how operations concepts will affect you in your field 1- Why Operations Management Is Critical to a Career in Business What is operations management? “The management of resources used to create salable products and services.” Why is it important to all business majors? Businesses have broadened employee responsibilities This creates a need for an “enterprise view” College graduates face unpredictable future opportunities 1- Technological progress is moving at a tremendous rate . | Chapter 1 Introduction:Why Operations Management? Learning Objectives Describe the relationships among value, profitability, cost, processes, and capabilities Describe the components of value Differentiate between the resources that create value Describe the changes in the business environment and the impact they have Describe the external forces that affect the business Explain the differences between service and product outputs Explain why B2B and B2C customers may define value differently Describe how operations concepts will affect you in your field 1- Why Operations Management Is Critical to a Career in Business What is operations management? “The management of resources used to create salable products and services.” Why is it important to all business majors? Businesses have broadened employee responsibilities This creates a need for an “enterprise view” College graduates face unpredictable future opportunities 1- Technological progress is moving at a tremendous rate There are many new products and services in addition to old ones Rapid change is the norm A New Business Environment 1- A New Business Environment Businesses try to break down the “silos” that used to define business functions. 1- The Resource/Profit Model serves as an organizational model to put operations in a business context Exhibit 1.3 The Resource/Profit Model Overview of the Resource/Profit Model 1- Chapter 2 is devoted to Profitability It is the primary business objective It measures the long-run productivity of the business It is the outcome of effective strategy and value creation Chapter 3 focuses on Strategy and Value Strategy consists of decisions about the way the firm will try to add value. How will the firm’s resources be aligned? Who are the customers? What do they want? How will value be delivered? Value is determined by the customer Value created must exceed the cost of creating it, or there will be no profitability. Value is the basis upon which customers .