Operations Management: Creating Value Along the Supply Chain 2nd Canadian Edition by Roberta S. Russ

CHAPTER 1
 
OPERATIONS MANAGEMENT
 
CHAPTER LEARNING OBJECTIVES
 
 
1. Describe what the operations function is and how it relates to other business functions. Operations can be viewed as a transformation process that converts inputs into outputs of greater value. Operations management is the study of processes directly related to the creation and distribution of goods and services. Increasingly, these operations are taking place outside of the boundaries of a traditional enterprise. Thus, while today’s managers need to understand how to efficiently manage operations within their own firm, they also need to develop skills in coordinating operations across a global supply chain. This text teaches students how to analyze processes, ensure quality, create value, and manage the flow of information, products, and services across a network of customers, enterprises, and supply chain partners. Operations is the technical core or “hub” of the organization, interacting with the other functional areas and suppliers to produce goods and provide services for customers.
 
 
2. Discuss the key factors that have contributed to the evolution of operations and the initiation of supply chain management. Operations management did not really begin until the Industrial Revolution. Before then, products were made by skilled craftpersons and their apprentices, one at a time. With the rise of factories, though, came an increased division of labour, where workers were only responsible for one small part of the total production process. For many years, factories were dominated by the concept of mass production, but this eventually gave way to the realization that production should be tied to customer demands (the quality revolution). The field of supply chain management was born to manage the flow of information, products, and services across a network of customers, enterprises, and supply chain partners.
 
 
3. Discuss how and why businesses operate globally and the rolesand the roles China and India play in the current global market. Two-thirds of today’s businesses operate globally through global markets, global operations, global financing, and global supply chains. Many companies are now outsourcing much of their production and service functions to other countries. China accounts for 20% of the world’s population and is the world’s largest manufacturer. India, on the other hand, is known as the world’s service provider. India has an enormous resource of highly skilled engineers, scientists, and technically trained workers available at less than half the cost of those located in developed countries.
 
 
4. Calculate and interpret productivity measures used for measuring competitiveness. Competitiveness has been defined by the OECD as “the degree to which a nation can produce goods and services that meet the test of international markets while simultaneously maintaining or expanding the real incomes of its citizens.” The most common measure of competitiveness is productivity, which is the ratio of input to output.
 
 
5. Discuss the process of developing, deploying, and monitoring the success of an operations strategy. Firms choose to compete in different ways. A firm’s strategy defines how it will compete in the marketplace—its own best way. Strategy formulation involves defining the primary task, assessing core competencies, determining order winners and order qualifiers, and positioning the firm. An effective strategy meets the order qualifiers and excels on the order winners. A competitive position is not sustainable unless the operating system that supports it is configured and managed effectively.
Policy deployment is a planning system that helps align day-to-day operating decisions with the company’s overall strategy. The balanced scorecard reinforces a firm’s strategy by providing customer-oriented and process-oriented measures of performance, in addition to traditional financial measures.
Decision making for the future can be scary at best. Fortunately, there are quantitative tools available for making decisions under uncertain conditions. The supplement to this chapter reviews several of them.

 
TRUE-FALSE STATEMENTS
 
 
1. Operations management is concerned only with the day-to-day operations of a firm’s productive systems.
 
Answer: False
 
Difficulty: Easy
Learning Objective: Describe what the operations function is and how it relates to other business functions.
Section Reference: 1.1 The Operations Function
Blooms: Knowledge
AACSB: Reflective Thinking
 
 
2. A warehouse operation is an example of a physical transformation process.
 
Answer: False