MANAGEMENT RICHARD L. DAFT. Managing the Value Chain, Information Technology, and E-Business CHAPTER 14

MANAGEMENT

RICHARD L. DAFT

Managing the Value Chain, Information Technology,

and E-Business

CHAPTER 14

Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved.

3

chapter19

Learning Outcomes

• Define operations management and describe its application within manufacturing and service organizations.

• Explain today’s partnership approach to supply chain management.

• Summarize considerations in designing facilities layout.

• Discuss new technologies used for manufacturing and service operations, and explain what is meant by lean manufacturing.

• Explain why small inventories are preferred by most organizations and describe just-in-time inventory management.

• Identify ways in which information technology has transformed the manager’s job.

• Describe different types of IT systems used in today’s organizations and how they support daily operations and decision making.

• Summarize the key components of e-business and explain the common e-business strategies.


4

chapter19

Which Side of Your Brain Do You Use?

• Managers are inundated with data and information

• Computers and the Internet have expanded the options of information

• Managers choose from written reports, explicit data or visuals


5

chapter19

The Organization As a Value Chain

• At the center of the transformation process is the technical core

– The management of inputs to produce products and services (output)

– Drive value to customers

• Operations Management pertains to the day-to-day management of the technical core

– Managing the physical production of goods or services


6

chapter19

The Value Chain


7

chapter19

Manufacturing vs. Service Organizations


8

chapter19

Supply Chain Management

• Efficient and reliable system for distributing finished products

• Managing the sequence of suppliers and purchasers

• From obtaining raw materials to distributing finished goods

• Use of Internet technologies


9

chapter19

Integrated Supply Chain


10

chapter19

Facilities Layout

• Process Layout – similar functions are grouped together

• Product Layout – assembly line, tasks are arranged according to progress

• Cellular Layout – sequenced tasks are grouped into cells

• Fixed-Position Layout – product remains at one location and resources are brought to it


11

chapter19

Basic Production Layouts


12

chapter19

Technology Automation

• Radio-Frequency Identification (RFID) – electronic tagging to track items

• Flexible Manufacturing Systems – production lines that can be adapted to produce different products

• Lean Manufacturing – using highly trained employees, technology and innovative methods to cut waste and improve quality


13

chapter19

Inventory Management

• Inventory is expensive to carry

• Unproductive asset

• Dollars not tied up in inventory can be used in other areas

• High levels of inventory hide business problems


14

chapter19

Just-in-Time Inventory

• Designed to reduce the level of inventory and associated costs– Stockless systems, zero inventory systems, kanban

systems

• Suppliers deliver inventory at the exact moment needed

• Reduces raw materials inventory to zero• Matching finished-goods inventory to sales

demand• Reduced inventory frees capital for other uses


15

chapter19

Information Technology Has Transformed

Management• Collaboration

– Information technology connects people around the world

– Sharing and exchanging information and ideas

• Knowledge Management

– Systematically gathering and organizing knowledge

– Foster a culture of continuous learning and knowledge sharing

– Knowledge is different than data and information, knowledge has a human factor; drawn conclusions


16

chapter19

Management Information Systems

(MIS)• Computer-based system

• Provides information and support for effective decision making

– Decision Support Systems

– Executive Information Systems

– Groupware/Collaborative Work Systems

• Enterprise Resource Planning (ERP) integrates business processes across the firm


17

chapter19

Basic Elements of MIS


18

chapter19

Enterprise Resource Planning Systems

• Backbone of an organization’s operation

• Optimizes business processes

• Collects, processes, and provides information about the entire firm

• Managers can analyze decisions across the organization


19

chapter19

Example of ERP Applications


20

chapter19

New Generation of Information Technology

• Innovative technology on the Internet is being fueled by individuals– Blogs– Wikis– Social Networking– Peer-to-Peer File Sharing

• Companies are using these tools and starting their own


21

chapter19

The Internet and E-Business

• Organizations have been incorporating the Internet to expand their operations

– Improve business processes

– Reaching new customers

– Leveraging resources

• Managers must align e-Business strategies with corporate strategy


22

chapter19

Key Components of E-Business


23

chapter19

Strategies for Engaging Clicks with Bricks

Documents

MANAGEMENT RICHARD L. DAFT. Managing the Value Chain, Information Technology, and E-Business CHAPTER 14