MGM101- Chapter 13 – Operation and supply chain management
When we visualize the interconnectivity of these three business system components, we should
conclude the following:
•Strategy is what we want to accomplish. • The business structure should provide the controls
and the formal communication and responsibility framework that will guide the organization as it
seeks to realize its strategy.
•Operations are understood to be the actual processes employed, which, when combined with the
utilization of the organization’s capital assets, enable strategic outcomes to be actualized.
Operations Management is the effective design, development, and management of the processes,
procedures, and practices em- bedded within an organization’s business system for the purpose
of achieving its strategic intent.
Process Management is the design and development of the work flow and connectivity of the
transformation requirements (processes) needed to ensure that an organization’s products and
services are efficiently pro- duced and effectively delivered to the marketplace.
Supply Chain Management is the management of the interde- pendencies among suppliers,
manufacturers, and distributors; it seeks to develop the terms and conditions that will enable all
parties to efficiently and effec- tively meet their obligations to one another due to their business
Product/Service Management: refers to the variety of activities that commence with the design
and development of potential new products in R&D and extend to the post-purchase support of
products/services now in the hands of customers.
Value Maximization refers to maximizing the benefits (price/ quality comparison) that an
individual or set of customers will realize as a result of using a product or service.
Primary Activities relate to the specific activities through which the development and
transforma- tion of a product or service occurs as it is produced and delivered to the marketplace.
Inbound Logistics refers to the management of supplier relation- ships relating to those parts and/
or components, or finished prod- ucts, that are brought into the organization in order to produce
finished products for
delivery to the marketplace.
Operations refers to the manu- facturing and/or product change processes set up to ensure that
the final product the organiza- tion is manufacturing or handling is ready for the marketplace.
Outbound Logistics refers to getting the finished product to the customer via a distribution
channel that is accessible, convenient, and able to minimize stockouts and other sales
impediment factors. Marketing and Sales refers to those activities that create pro- file and awareness for the organi-
zation’s products, services, or brand(s), and the benefits de- rived from the acquisition and use of
such products or services.
Customer Service refers to the support provided to customers before, during, and following the
Support Activities are those ar- eas within the organization that are not directly associated with
the actual processes the organi- zation uses to produce products and/or deliver services but that
are an integral part of the sup- port structure the primary activities rely on to successfully execute
Operations Cycle is the align- ment of the operational tasks within an organization by its
management team in order to meet the strategic outcomes defined in the organization’s business
Process Standardization is the design and utilization of common platforms and common task se-
quencing to produce/develop a variety of products or services.
Process Simplification is the design and utilization of a minimum number of tasks when
developing products and/or services.
Operations managers need to understand the strategic intent of the organization and, using this
information, translate it into the action plans