COLLIER/EVANS
OM
5
1
Goods,
Services, and
Operations
Management
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accessible website, in whole or in part.
LEARNING OUTCOMES
1 Explain the concept and importance of
operations management
2 Describe what operations managers do
3 Explain the differences between goods and
services
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
OM5 | CH1
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LEARNING OUTCOMES
4 Describe a customer benefit package
5 Explain the role of processes in OM and
identify three general types of processes
6 Summarize the historical development of OM
7 Describe current challenges facing OM
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3
Operations Management
• Science and art of ensuring that goods and
services are created and delivered
successfully to customers
• Design of goods, services, and the processes
that create them
• Day-to-day management of those processes
• Continual improvement of these goods, services,
and processes
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
OM5 | CH1
4
Operations Management
• Issues at the core of operations
management
• Efficiency
• Cost
• Quality
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Key Activities of Operations Manager
Supply chain
management
Facility layout
and design
Technology
section
Quality
management
Purchasing
Resource and
capacity
management
Process design
Job design
Service
encounter
design
Scheduling
Sustainability
Forecasting
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
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Understanding Goods
• Good: Physical product that a person can
see, touch, or consume
• Durable good: Product that does not quickly
wear out and lasts at least three years
• Non-durable good: Perishable and lasts for less
than three years
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Understanding Services
• Service: Primary or complementary activity
that does not directly produce a physical
product
• Similarities between goods and services
• Provides value and satisfaction to customers
who purchase and use them
• Can be standardized or customized to individual
wants and needs
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OM5 | CH1
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Differences between Goods and Services
• Goods are tangible while services are
intangible
• Customers participate in many service
processes, activities, and transactions
• Demand for services is more difficult to
predict than the demand for goods
• Services cannot be stored as physical
inventory
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OM5 | CH1
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Differences between Goods and Services
• Service management skills are paramount
to a successful service encounter
• Service facilities need to be in close
proximity to the customer
• Patents do not protect services
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Service Management
• Integrates marketing, human resources, and
operations functions to:
•
•
•
•
Plan
Create
Deliver goods and services
Deal with service encounters
- Moments of truth: Episodes, transactions, or
experiences in which a customer comes into
contact with any aspect of the delivery system
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
OM5 | CH1
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Customer Benefit Packages (CBP)
• Clearly defined set of tangible and
intangible features that the customer
recognizes, pays for, uses, or experiences
• Combination of goods and services configured in
a certain way to provide value to customers
• Consists of a primary good or service, coupled
with peripheral goods and/or services
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OM5 | CH1
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Customer Benefit Packages (CBP)
Primary good or service
• Core offering that attracts customers and responds to their
basic needs
Peripheral goods or services
• Core offering that are not essential to the primary good or
service, but enhance it
Variant
• CBP attribute that departs from the standard CBP and is
normally location- or firm-specific
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Exhibit 1.3
Examples of Goods and Service Content
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Processes
• Means by which goods and services are
produced and delivered
• Process: Sequence of activities that is intended
to create a certain result
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Key Processes in Business
• Core processes: Focused on producing or
delivering an organization’s primary goods
or services
• Support processes: Purchasing materials
and supplies used in:
•
•
•
•
Manufacturing and installation
Managing inventory
Health benefits and day care on-site services
Technology acquisition and research and
development
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
OM5 | CH1
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Key Processes in Business
• General management processes:
Accounting and information systems,
human resource management, and
marketing
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Exhibit 1.4
Seven Eras of Operations Management
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Sustainability
• Organization’s ability to:
• Strategically address current business needs
• Develop a long-term strategy that embraces
opportunities and manages risk for:
- Products, systems, supply chains, and
processes to preserve resources for future
generations
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
OM5 | CH1
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Perspectives of Sustainability
• Environmental sustainability:
Organization’s commitment to the longterm quality of the environment
• Social sustainability: Organization’s
commitment to maintain healthy
communities and a society that improves
the quality of life
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OM5 | CH1
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Perspectives of Sustainability
• Economic sustainability: Organization’s
commitment to:
• Address current business needs and economic
vitality
• Have agility and strategic management to:
- Prepare successfully for future business,
markets, and operating environments
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OM5 | CH1
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Data and Analytics
• Used to evaluate:
•
•
•
•
•
•
•
Operations performance
Quality
Order accuracy
Customer satisfaction
Delivery
Cost
Environment compliance
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
OM5 | CH1
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Data and Analytics
• Business analytics: Process of transforming
data into actions through analysis and
insights in:
• Context of organizational decision making and
problem solving
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OM5 | CH1
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Current Challenges in OM
Technology
Globalization
Customer
expectations
Engaging the
workforce
Quality
Innovation and
agility
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SUMMARY
• Operations management is constantly
changing
• All operation managers should be aware of
the various challenges that will define the
future workplace
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KEY TERMS
•
•
•
•
•
•
•
•
•
Business analytics
Customer benefit packages
Durable good
Economic sustainability
Environmental sustainability
General management processes
Good
Inventory management
Moments of truth
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
OM5 | CH1
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KEY TERMS
•
•
•
•
•
•
•
•
•
Non-durable good
Operations management
Peripheral goods or services
Planning and budgeting
Primary good or service
Quality
Quality management
Scheduling
Scheduling and capacity
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
OM5 | CH1
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KEY TERMS
•
•
•
•
•
•
Service
Service encounter
Service management
Social sustainability
Sustainability
Variant
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly acce ssible website, in whole or in part.
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