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McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved 1-1


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Chapter 1

Introduction to the Field

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OBJECTIVES
• What is Operations and Supply Management?
• Why Study Operations Management?
• Transformation Processes Defined
• Differences between Services and Goods
• The Importance of Operations Management
• Historical Development of OM
• Current Issues in OM

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What is Operations and Supply Management?

Operations and Supply


Management (OM) is defined
as the design, operation, and
improvement of the systems
that create and deliver the
firm’s primary products and
services

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Why Study Operations Management?

Systematic Approach
to Org. Processes

Business Education Operations Career Opportunities


Management

Cross-Functional
Applications

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What is a Transformation Process?


Defined

A transformation process is defined


as a user of resources to transform
inputs into some desired outputs

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Transformations

• Physical--manufacturing

• Locational--transportation

• Exchange--retailing

• Storage--warehousing

• Physiological--health care

• Informational--telecommunications

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Operations and Supply Management


Supply Chain Processes

Manufacturing
Processes
Sourcing Distribution
Processes Processes
Logistics Logistics
Processes Processes

Service
Processes

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What is a Service and What is a Good?

• “If you drop it on your foot, it won’t hurt


you.” (Good or service?)

• “Services never include goods and goods


never include services.” (True or false?)

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The Goods-Services Continuum

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Historical Development of OM

• JIT and TQC

• Manufacturing Strategy Paradigm

• Service Quality and Productivity

• Total Quality Management and Quality


Certification

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Historical Development of OM (cont’d)

• Business Process Reengineering

• Six-Sigma Quality

• Supply Chain Management

• Electronic Commerce

• Service Science

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Current Issues in OM

• Coordinate the relationships between


mutually supportive but separate
organizations.

• Optimizing global supplier, production,


and distribution networks.

• Increased co-production of goods and


services

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Current Issues in OM (cont’d)

• Managing the customers


experience during the service
encounter

• Raising the awareness of


operations as a significant
competitive weapon

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End of Chapter 1

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