Value Chain

Sequence of activities in a business that transforms resources into goods and services that customers want

Value is added as the product progresses through the company

Primary value chain functions directly create or provide good or service

Secondary value chain functions exist to support primary functions

Primary Functions

Marketing – discover customer needs Product development – design products to

meet customer needs Operations (Production) – make quality

products efficiently Sales – convince customers to buy Distribution – get product to customers Customer relationship management –

make sure customers are satisfied

Secondary Functions

Human resources management – recruitment and selection, training and development, performance appraisal and feedback, pay and benefits, labor relations

Accounting – 6 step accounting cycle Finance – raising capital to invest in assets Information technology (IT) – hardware and

software used to support all other primary and secondary functions in firm

Chapter 9: Operations Management

Build and deliver products/services in response to customer demands at a scheduled delivery time

Provide an acceptable level of quality Produce goods/services at lowest cost

possible

Components of Operations Management Facility Location Facility Layout Materials Requirement Planning Purchasing Inventory Control Quality Control

Changes in Operations Management

Computers Computer-aided design (3D) Computer-aided manufacturing Computer-integrated manufacturing

Flexible manufacturing Ford Plant in Brazil

Lean Manufacturing Mass Customization

Dell Factory Tour

Is Manufacturing Dead in U.S.? Globalization has led to outsourcing of many

manufacturing jobs Political ads currently running feature loss of

U.S. manufacturing jobs Video on Ball Metal Beverage Container

Video link on my homepage Write-up pages 252-253 text