Page 496 - Fundamentals of Management Myths Debunked (2017)_Flat

15 Review

CHAPTER SUMMARY

15-1 Define operations management 15-3 Describe how value chain management
and explain its role. is done.

Operations management is the transformation process The six main requirements for successful value chain manage-
that converts resources into finished goods and services. ment include coordination and collaboration, investment in
Manufacturing organizations produce physical goods. Ser- technology, organizational processes, leadership, employees or
vice organizations produce nonphysical outputs in the form of human resources, and organizational culture and attitudes.
services. Productivity is a composite of people and operations The obstacles to value chain management include orga-
variables. A manager should look for ways to successfully nizational barriers (refusal to share information, reluctance
integrate people into the overall operations systems. Organi- to shake up the status quo, or security issues), unsupportive
zations must recognize the crucial role that operations man- cultural attitudes, lack of required capabilities, and employees
agement plays as part of their overall strategy in achieving unwilling or unable to do it.
successful performance.
15-4 Discuss contemporary issues in managing
15-2 Define the nature and purpose of value operations.
chain management.
Companies are looking at ways to harness technology to
The value chain is the sequence of organizational work activi- improve their operations management by extensive collabora-
ties that add value at each step from raw materials to finished tion and cost control.
product. Value chain management is the process of managing ISO 9000 is a series of international quality management
the sequence of activities and information along the entire prod- standards that set uniform guidelines for processes to ensure
uct chain. that products conform to customer requirements. Six Sigma is
The goal of value chain management is to create a value a quality standard that establishes a goal of no more than 3.4
chain strategy that meets and exceeds customers’ needs and defects per million units or procedures.
desires and allows for full and seamless integration among all Project management involves getting a project’s activities
members of the chain. done on time, within budget, and accomplished to specifications.
Four benefits from value chain management include A project is a one-time-only set of activities that has a definite be-
improved procurement, improved logistics, improved product ginning and ending point in time. Popular project scheduling tools
development, and enhanced customer order management. include Gantt charts, load charts, and PERT network analysis.

DIsCussION QuEstIONs

15­1 What is operations management and how is it used in 15­7 Explain why managing productivity is important in
both manufacturing and service organizations? operations management.
15­2 Why is operations management important to business 15­8 Who has the power in the value chain? Explain your
organizations? response.
15­3 Discuss the importance of effective operations 15­9 Choose two tasks that you do every week (for exam-
management from the manager’s perspective. ple, shop for groceries, host a poker party, clean your
15­4 Do you think that manufacturing or service organizations house/apartment, do laundry). For each one, identify
have greater need of operations management? Explain. how you could (a) be more productive in doing that
15­5 What is a value chain? What is value chain manage- task, and (b) have higher-quality output from that task.
ment? What is the goal of value chain management? 15­10 Select a company with which you’re familiar. Describe
15­6 What types of organizational benefits does value chain its value chain. Be as specific as possible in your
management provide? What obstacles stand in the way description. Evaluate how it “uses” the value chain to
of successful value chain management? create value.

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