- A process is any activity or group of activities that takes one or more inputs, transforms them,
and provides one or more outputs for its customers. Operations management refers to the systematic
design, direction, and control of process that transform inputs into services and products
for internal, as well as external customers. Supply chain management is the synchronization
of a firm’s processes with those of its suppliers and customers to match the flow of materials,
services, and information with customer demand.
- Competitive priorities are the critical operational dimensions a process or supply chain must
possess to satisfy internal or external customers, both now and in the future. Competitive capabilities
are the cost (low-cost operations), quality (top quality, consistent quality), time (delivery
speed, on-time delivery, development speed), and flexibility (customization, variety, volume
flexibility) dimensions that a process or supply chain actually possess and is able to deliver.
- One key to successfully formulating a customer-driven operations strategy for both service
and manufacturing firms is to understand what customer wants and how to provide it. Market
analysis first divides the firm’s customers into market segments and then identifies the needs
of each segment. Market segmentation is the process of identifying groups of customers with
enough in common to warrant the design and provision of services or products that the group
wants and needs. The second step in market analysis is to make a “needs assessment”, which
identifies the needs of each segment and assesses how well competitors are addressing those
needs.
- Strategies for manufacturing processes differ from those in services, not only because of low
customer contact and involvement, but also because of the ability to use inventories1 (1Service
firm also hold inventories, but only as purchased material. Manufacturing firms have the additional
flexibility of holding inventories as subassemblies or finished products). Make-to-order,
assemble-to-order, and make-to-stock strategies are three approaches to inventory that should
be coordinated with process choice.

 

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