chapter 7

Operations Management

Managing how resources are turned into value for customers.

Utility

A product’s ability to satisfy a want or need (form, time, place).

Operations Capability

What a company does better than competitors.

Goods Operations

Produces tangible items (e.g., car factory).

Service Operations

Delivers intangible experiences (e.g., dental clinic).

High-Contact System

Customer is part of the service (e.g., haircut).

Low-Contact System

Service delivered without customer present (e.g., utility).

Performance

How well a service meets expectations.

Consistency

Repeating the same level of performance.

Make-to-Order Operations

Custom items made per request.

Make-to-Stock Operations

Mass production of standardized items.

Process Layout

Organized by task or function.

Product Layout / Assembly Line Layout

Organized by production steps.

Fixed-Position Layout

Product stays in one place, workers/equipment move.

Just-in-Time (JIT) Production

Minimizing inventory by receiving materials only as needed.

Capacity

How much can be produced.

Master Operations Schedule

Long-term production plan.

Detailed Schedule

Daily tasks and workflows.

Operations Control

Monitoring output and adjusting.

Total Quality Management (TQM)

All employees involved in improving quality.

Quality Control

Detecting and fixing issues.

ISO 9000

Certification for consistent quality systems.

Supply Chain Management (SCM)

Coordinating the entire supply chain for efficiency.