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Buad 306: Exam 1 Important TopicsChap 1: IntroductionOperations and supply chains are intrinsically linked. Operations management: management of systems/processes that provide goods/servicesSupply chain:sequence of organizations that are involves in producing and delivering a product/service.Operations Process:Inputs Transformation Process OutputsInputs: land, labor, capital, informationTransformation process: transporting, storing, building, repairing.oValue Added – the essence of the operations function is to add value during the transformation process. Value added is used to describe the difference between the costs of inputs and the value/price of outputs.Outputs: goods/services. Goal is to satisfy customer and make a profitEvolution of the operations process:Add value to the transformation processContinually improve, meet or exceed customer needsImprove the process, decrease cost, improve efficienciesExample: Campbell soup – (transformation changed from condensed to not condensed, based off feedback), change to outputs: feedback; change to inputs: demand, technology, cost; change to transformation process: technology, automation, processes.Transformation Process:1.Physical transformation: physical change to how it looks/how it is usedoEx: wood chair; cotton shirt2.Logistical transformation: movement through the supply chain, changes in locationoMoving objects from point A – point B (business to customer; factory to business)oEx: shipping cocoa beans from rain forest to America for Starbucks to use3.Exchange transformation: exchange of objects – paying money for a product/serviceoEx: buy raw materials with cash4.Physiological transformation: change in physical structure. Change in the product.oEx: water bottle – smaller cap, changes in plastic material5.Psychological transformation: change an individual’s thoughts/opinionsoEx: advertising (make them want to buy product)6.Information transformation: research, development, gathering data, learningoEx: conduct search on customer’s preferences*(Starbucks uses all of these transformation processes)Impacts of the transformation process:Demand (is it high or low)MaterialsSuppliersSchedulesPeopleDesignTechnologyCost considerationsRelated Functions in the transformation process: operations management works with alldepartments of an organization.Decision-makingInventory managementCapacity planningLocation selectionForecasting Project management
Buad 306: Exam 1 Important TopicsMaterials/suppliersManaging qualityCapacity planning:process of determining the production companyProcess Management: key aspect of operation managementProcesses enable delivery of product and services to customers on a consistentbasisoEx: all Starbucks drinks are made exactly the same – Why? – because they have a process to makethe same drink at all locations.