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Operations Management in Starbucks: Adding Value and Satisfying Customers

This chapter provides an introduction to operations management and explores the operations performed by Starbucks. It delves into the transformation process, inputs, outputs, and the goal of satisfying customers. It also emphasizes the importance of adding value, managing processes efficiently, and fulfilling shareholder value.

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Operations Management in Starbucks: Adding Value and Satisfying Customers

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  1. BUAD306 Chapter 1 – Introduction to Operations Management

  2. What kind of OPERATIONS does Starbucks perform?

  3. Operations Process Transformation Process Inputs Outputs GOAL: Satisfying customers GOAL: Profit Value Add – difference of VALUE of inputs and VALUE of outputs Role of Operations is to ADD VALUE.

  4. Evolution of the Process Evolve based on back from where??? Transformation Process Inputs Outputs • Want to add value to transformation process • Continually improve, meet/exceed customer needs • Improve the process: decrease costs, improved efficiencies, etc.

  5. Transformation Process • Physical • Logistical • Exchange • Physiological • Psychological • Informational

  6. Related “Stuff” Materials Suppliers Schedules People Transformation Process Inputs Outputs Demand Cost Considerations Technology Design

  7. Related Functions Inventory Mgt Capacity Planning Decision-making Location Selection Transformation Process Inputs Outputs Forecasting Managing Quality Project Mgt Materials/Supppliers

  8. Process Management • Processes enable delivery of product and services to customers on a consistent basis • Need to manage these process to ensure: • Efficiency • Cost effectiveness • Fulfillment of demand (ongoing) • Fulfillment of shareholder value

  9. Product Design Factors • Time to Market • Availability of Technology • Skills/Coordination of Design Staff • Design for Operations/Manufacturing • Quality • Customer Service/Support • Environmental Impact • Government Compliance • Costs

  10. Product Design - Peeps Original “Puffy” Peep Dude

  11. Operations Systems • Wide variation is possible depending on the business: Standardized Output Customized Output Custom Individual Units Continuous Output Single, Large-Scale Implementation Tangible Output Intangible Output

  12. Comparison of Mfg vs Svc

  13. Why is Ops Important? • No matter the business function, operations impacts…you will need proven models and techniques to identify best solutions!! • Finance – Profit forecasts… • Accounting – Cost forecasts… • Marketing – New product launches, product development… • HR – Staffing, training… • MIS – data-driven analysis, CRM…

  14. Are these skills important for business success? • Efficiency focus • Cost containment • Creative/Effective product development • Supplier relations • Problem solving • Data Analysis • Quality Focus

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