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March 2014

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What is operations? A companys system of value-creation activities used to transform inputs into finished goods and services

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What is materials management? The set of activities that control the flow of recources into and out of a firms operating system.

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Raw materials Components Labor Cutomer Skills Knowledge Machines Experts Goods Services

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InputsProcessOutput MATERIALS MANAGEMENT MATERIALS MANAGEMENT OPERATIONS

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A superior Operation & Materials Management Could Give Company COMPETITIVE ADVANTAGE PRODUCTIVITY HIGHER VALUE LOWER COST

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Operations & Materials Management Method INCREASE PRODUCTIVITY: Better ways to use resources Lower inventory holding cost Reduce time to process customer orders INCREASE RESPONSIVENESS TO CUSTOMER High-quality customer service Satisfying shopping experience Good after sales services INCREASE INNOVATION: Find ways to inprove product quality Find ways to reduce production cost Find ways to sell products at a lower cost INCREASE QUALITY: Number of customer orders corectly processed Consistent, reliable product Ensure supply of high- quality inputs

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OMM COST Raw Materials & Components Cost Plant Cost Labor Cost Inventory Cost Distribution Cost

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Flexible Production Small-Batch Production Mass Production

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An operating system designed to make one-of-a- kind or small quantities of cuztomized products Small-Batch Production

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An operating system based on the use of automated machines and standard operating procedures to make work routine and create a large number of standardized products Mass Production

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An advanced operating system that combines the benefits of mass production with benefits of small- batch production Flexible Production

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Computer-Integrated Manufacturing A manufacturing technique that controls the changeover of machines from one operation to another via computer software. Flexible Employees & Work Groups A team of self-managed employees who assume responsibility for performing the operating task necessary to make part, or all, of a peoduct.

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A technique that relies on computers to manage the flow of raw materials and component parts into and out of a companys operating system

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The coordination of the flow of raw materials, semifinished goods, and finished products around the world

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An inventory management system whereby inputs are delivered to the firm just when they are needed rather than being purchased and warehoused prior to their use

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