“Año del Diálogo y la Reconciliación Nacional””

FACULTAD DE CIENCIAS EMPRESARIALES

ESCUELA DE ADMINISTRACIÓN

THEME:

Managing Operations - The role of operations Management - The nature and

purpose of value chain management

STUDENT:

Paredes Villoslada, Merly Esther

TEACHER:

León Balarezo, Olenka Ytania

Chepén – Perú

2018

27-11-2018
 PRESENTATION

Madam, Leon Balarezo, Olenka Ytania, teacher of the Management by Results course,

presented the report: " Managing Operations - The role of operations Management - The

nature and purpose of value chain management”.

Managing Operations is the set of activities that create value in the form of goods and

services by transforming inputs into finished products. The activities that create goods and

services are carried out in all organizations. In manufacturing companies, the production

activities that create goods are usually quite evident. In them we can see the creation of a

tangible product, such as a Sony TV or a Harley Davidson motorcycle.

In an organization that does not create a tangible good, the production function may be less

obvious. Often these activities are called services. The services can be "hidden" for the

public and even for the client. The product can take forms such as the transfer of funds

from a savings account to a checking account, the transplant of a liver, the occupation of an

empty seat on an airline, or the education of a student. Regardless of whether the final

product is a good or a service, the production activities that occur in the organization are

commonly known as operations, or operations management.

We invite you to read, we hope this report will be of your liking and that it constitutes a

contribution for academic research.

Greetings.

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I. INTRODUCTION

The way to manage productive resources (human, financial, technological resources,

facilities, time, etc.) is crucial for the strategic growth and competitiveness of

companies. The administration or management of operations is the administration

(planning, organization, direction and control) of these productive resources. This way

you can also define operations management as the design, operation and improvement

of the production systems that create the company's primary products or services, it is

the study of the methods, tools, concepts needed to face and solve the problems related

to the production of goods and services. The truth is that nowadays there is a growing

number of experts who agree that, in order to survive in the current global economy, a

world class performance in the area of operations is essential, in order to deliver high

quality products. and competitive in the way of costs.

Unlike the old vision in which companies were imagined as a system of separate

departments (sales, finance, operations and others) today, operations are a subsystem

within the organization, which covers many areas and in which others are also

immersed, just imagine the operational area of a factory, a restaurant, a bank and you

can quickly realize that operations are the heart of these businesses, operations is what

makes the business work. Make an analogy and imagine that a company is a car, then

what makes a car is the engine, it is true that it is very important other aspects such as

lights, seats, color, but ultimately what determines the value of the car is the state of the

engine, even more so this becomes vital if we consider that we must compete in a race

with other automobiles (companies) depending on the type of race, we will look for an

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 engine that gives us speed or strength, so we will look for The operations are adjusted

to our needs.

INDEX

I. INTRODUCTION..........................................................................................................................2
II. SYNTHESIS..............................................................................................................................6
MANAGING OPERATIONS............................................................................................................6
1. DEFINITION.............................................................................................................................7
THE OPERATIONS FUNCTION..........................................................................................................7
BASIC FUNCTIONS..........................................................................................................................7
MAIN AREAS OF ACTIVITY IN THE OPERATIONS FUNCTION:..........................................................8
2. THE ROLE OF OPERATIONS MANAGEMENT..................................................................10
RESOURCE MANAGEMENT...........................................................................................................10
FINANCIAL MANAGEMENT...........................................................................................................10
SETTING OBJECTIVES....................................................................................................................11
COMMUNICATIONS......................................................................................................................11
SALARY.........................................................................................................................................11
EDUCATION AND PERSPECTIVE....................................................................................................12
3. THE NATURE AND PURPOSE OF VALUE CHAIN MANAGEMENT................................12
THE VALUE CHAIN.........................................................................................................................13
ADVANTAGE FOR COST:................................................................................................................15
1. Scale economics.......................................................................................................................15
2. Learning...................................................................................................................................15
3. Capacity for use........................................................................................................................15
4. Connection between activities..................................................................................................15
5. Interrelation between business units (Nuclei of organization, countries, territories)................15
6. Degree of vertical integration...................................................................................................15
7. Time of entry into the market...................................................................................................15
8. Internal policy framework (Derived from the strategic guidelines)..........................................15
9. Geographic location.................................................................................................................15
ADVANTAGE BY DIFFERENTIATION (THE POWER OF BEING UNIQUE)........................16
ANALISIS OF THE VALUE CHAIN:..........................................................................................16
III.CONCLUSIONS.........................................................................................................................18

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IV. PROJECTIONS....................................................................................................................19
V. BIBLIOGRAPHIC REFERENCES.........................................................................................20
VI. ANNEXES.....................................................................................................................................21

II. SYNTHESIS

MANAGING OPERATIONS

1. DEFINITION

Operations manager. It is the area of business administration dedicated both to research and

to the execution of all those actions tending to generate the greatest added value through

planning, organization, direction and control in the production of both goods and services,

all intended to increase quality, productivity, improve customer satisfaction, and lower

costs. At a strategic level, the objective of Operations Management is to participate in the

search for a sustainable competitive advantage for the company.

THE OPERATIONS FUNCTION

 It is related to the production of goods and services.

 It is executed by operations managers.
 Goods and services result from processes of transforming inputs into outputs.
 The manager works on the transformation process, making decisions about efficiency

and effectiveness.

BASIC FUNCTIONS

 Processes: is the design of the material production system. Where a decision is

made about the type of technology to be used, the distribution of the facilities,

analyze the process, balance of the lines, process control and transport analysis.

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  Capacity: is the determination of optimal levels of production of the organization

neither too much nor too few; Specific decisions include forecasts, facility planning,

accumulated planning, programming, [planning] capacity and run analysis.

 Inventory: is the administration of levels of raw materials, work in process and

finished products. Specific activities include ordering, when to order, how much to

order and the handling of materials.

 Work force: is the administration of specialized, semi-specialized, clerical and

administrative employees. The activities to be carried out can be summarized as

designing positions, measuring work, training workers, labor standards and

motivation techniques.
 Quality: is the party in charge of guaranteeing the quality of the products and

services it offers. The activities to be carried out within these functions are to

control quality, samples, tests, quality certificates and cost control.

MAIN AREAS OF ACTIVITY IN THE OPERATIONS FUNCTION:

 Operations strategy: Determine critical operations tasks to support the

organization's overall strategy and develop an appropriate functional strategy.

Example: what should the operations function do to support the strategy of a full

service bank?
 Product planning: Select and design the services and products that the

organization will offer its clients, sponsors or recipients. Example: in which

services do you have a better position to achieve excellence?

 Capacity planning: Determine when and how much of the facilities, equipment

and labor should be available. Example. How many hours of customer service

per year is it possible to offer?

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 Inventory management: Decide the quantities of raw material, work in process

and finished items that should be stored. Example: what inventory of cash will

be necessary? What inventory should be taken of each of the forms?

 Project management: Learn how to plan and control project activities to meet

performance, program and cost requirements. Example: how will the

reorganization of the trust department be handled?

 Programming: Determine when each activity or task must be carried out in the

transformation process and where the inputs should be. Example: how many

ATMs should be planned for each hour of the day? When should an extended

schedule be offered?
 Quality control: Determine how quality standards should be developed and

maintained. Example: what training should be given to tellers to minimize

errors?

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2. THE ROLE OF OPERATIONS MANAGEMENT

An operations manager plays a fundamental role in a business, government or other

organization. The precise tasks of an operations manager depend to a large extent on the

nature and size of the company, but you need a wide range of business and interpersonal

skills to be successful. In general, an operations manager plans, supervises and softens

the communication.

RESOURCE MANAGEMENT

Operations managers play a leading role in the management of both raw materials and

personnel. The supervision of inventory, purchases and supplies is essential for the job.

Human resource tasks include determining needs, hiring employees, overseeing

employee assignments and planning personal development.

FINANCIAL MANAGEMENT

Operations managers play a key role in budgeting, controlling costs and maintaining

organization on a good financial path. Its management of the supply chain and other

resources helps minimize production costs. They study business forecasts, sales reports

and financial statements to find ways to maximize results. They use methods such as

cost-benefit analysis to improve efficiency. Modern operations managers even include

sustainability in the financial equation.

SETTING OBJECTIVES

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Operations managers set goals and objectives and set policies for the different

departments of the organization. For example, the responsibilities of an operations

manager include forecasting sales and planning sales promotions. In collaboration with

other managers, they help to establish procedures and put them into practice.

COMMUNICATIONS

Operations managers need good communication and interpersonal skills to help different

parts of an organization work together. His work includes the creation of a positive

culture where work can be done. They facilitate communication between employees and

departments. Sometimes, they can help resolve disputes or disagreements. Operations

managers cooperate in high-level decision-making along with other senior executives of

the organization, such as the president, chief financial officer and executive director.

SALARY

Operations managers and general managers averaged an annual income of US $ 113,100

in 2010, according to the Bureau of Labor Statistics. Managers in the 10th percentile

received US $ 47,280 per year, while those in the 75th percentile received US $ 142,030

per year. The government does not report a specific figure on the 90th percentile,

indicating only that they were at least US $ 166,400 a year.

EDUCATION AND PERSPECTIVE

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 Most operations managers have at least a bachelor's degree in business administration,

finance or another field related to the organization. Some have a master's degree in

business administration or another advanced degree. The number of positions for

operations managers will remain unchanged from 2008 to 2018, according to the Bureau

of Labor Statistics. As existing operations managers move to similar positions in

different organizations, new applicants will face strong competition. People with good

leadership skills, a proven ability to obtain results and knowledge of foreign languages

have the best chance of getting a job.

3. THE NATURE AND PURPOSE OF VALUE CHAIN MANAGEMENT.

Speaking about the Value Chain and the Management Model of an organization, region,

zone, territory, or any other clearly defined system, is to speak of the particular style

through which that system develops in its environment, with endogenous and exogenous

interactions. It is therefore to speak of the strengths and weaknesses of that system, and

how they are reflected in its delineation of functions, its structure, its hierarchy, its costs,

its functional division, its times, its parameters of quality, degree of innovation , and in

short, its strategic (sustainable) competitive advantage with its competitors and with its

collaborators.

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Considering then the brief introduction that we have just done about the interaction

between the management models, the value chain, and the competitive advantage, it is

convenient to describe the structure that we are going to consider in this article: Initially

we will describe the aspects more important about the value chain, secondly we will

analyze the core of the competitive advantage of the organizational systems (company,

region, area, etc.), then we will describe how to perform an analysis of the value chain,

and finally the relationship between the value chain and the management model.

THE VALUE CHAIN

Businesses, organizations, economic zones, are only systems that contain a multitude of

factors, which must function in a structured manner, pursuing concrete and rational

objectives for the benefit of the greatest possible number of agents with whom they

interact (environment, people, organization, etc.)

In order to understand the operation of that system, and as it generates a competitive

advantage, it becomes useful to consider a division; It is convenient to divide it into a

series of activities that add value consecutively once they connect with each other and

form what in 1985, in his book Competitive Advantage, Michael Porter called the Value

Chain.

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The Generic Model proposed by Porter included a series of activities commonly found

in a wide range of companies and organizations. (Usually I wonder if it is not time to

revise some of their postulates based on the resounding change that the Internet, the

fundamentals of solidarity economy and other factors modified various operating

systems, although in general terms I agree that the structure remains and is sufficiently

flexible)

These activities were classified as primary and support, as shown in the following

diagram:

FUENTE: Procesos & Negocios del Ecuador

The goal of this connection scheme of the activities is to offer the final user of the good

or service produced a perception of economic value that exceeds the aggregate cost of

each of the activities included in the value chain. At this point is when I present in a

general way, in my opinion at least, the great dilemma of systems administration:

Increase the perception of economic value by the user (willingness to pay more money),

or, decrease the aggregate amount of the costs of the chain (An alternative vision, and

that I like more, is the relocation of the costs with an optimization approach.)

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It is precisely at this point that the model of the value chain allows choosing between

two generic strategic alternatives:

1. Advantage by costs: It implies to understand deeply the structure of costs to subtract

them in the greater possible quantity of the chain of value.

2. Differentiation: Focus on competencies and skills (design, sales, service,

experience, etc.) and do better than competitors.

It is not necessary to choose one of the two options in a straightforward way, since in

fact, in order to grow an organization must always focus on reducing costs (always

maintaining an optimal level of quality, infrastructure, organizational climate) and

strengthen their differentiation capabilities (a of them it can be, in fact, to carry out an

exceptional management of the chain of value).

As regards economic zones, territories, chains or production circuits, a combination of

the two aspects can always be managed, for example, by lowering costs due to the

purchasing association, or by improving the quality of the users' experience (example in

zonal tourist destinations), which would lead to an undeniable improvement of the

capacities and competences of the individual actors that make up the area, the territory

or the chain.

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ADVANTAGE FOR COST:

1. Scale economics

2. Learning

3. Capacity for use

4. Connection between activities

5. Interrelation between business units (Nuclei of organization, countries, territories)

6. Degree of vertical integration

7. Time of entry into the market

8. Internal policy framework (Derived from the strategic guidelines)

9. Geographic location

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ADVANTAGE BY DIFFERENTIATION (THE POWER OF BEING UNIQUE)

Differentiation could be defined as the extent to which the product or service delivered is

considered unique in the eyes of society. At this point Porter identifies 9 factors that affect

this capacity. By personal opinion I will choose with the three that seem decisive:

1. Internal policies and STRATEGIC DECISIONS

2. Learning

3. Interrelations with the environment

In a general way it could be said that differentiation entails higher costs, but also implies

Higher Economic Value Perceived by the end user. Regarding differentiation, the factor of

innovation is key in terms of what is done and how it is done. In public institutions, it is

common for the sense of service innovation to be lost, not so much in what is being done,

what is subject to policies and norms, but in how it is done.

It is important to consider that the structure considered by Porter is not rigid, on the

contrary, since it considers the interrelationships that exist between primary activities as

well as between primary activities and support activities. This connection, which may be

obvious, is often lost at the time of strategic decision making.

ANALISIS OF THE VALUE CHAIN:

To perform a value chain analysis we must understand that there are hierarchies of the

value chain in which we are involved. Understanding the macro background of the chain

structure, I could summarize the general methodological steps to perform the value chain

analysis: Identify and analyze flows of products or services, additions of value in different

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stages. Identification of key actors and their relationship in the value chain (macro and

micro actors) Identify organizations that contribute to production, services and institutional

support. Identify bottlenecks and restrictions Abstract the framework of the sector that is

being analyzed Identify local group strategies (cost - differentiation) SWOT of the value

chain The conclusions that are drawn from here will serve to design a management model

that works like fish in the water in the value chain.

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III. CONCLUSIONS

The management of operations is the set of attitudes within the organization for decision

making and services with the aim of satisfying customers and also with the aim of seeking

to reduce the maximization of the company's profits by reducing costs and above all so that

the companies every day is more competitive with respect to the competition. The

operations manager plays an extremely important role, in charge of interviews with the

employee, works on logistics, makes budget plans, makes high-level decisions and has to

take charge of creating a positive environment within the work area for the best

performance of the working class in order to achieve the plans and objectives established

by the organization.

We always want to get the best possible use of resources, whether material or human, as

well as the skills of the staff that works to make each one magnify their task. The main goal

is to help understand the operations as a competitive weapon in the global market through a

good management of the design, direction and systematic control of the processes that

transform the inputs into products and services to satisfy the needs of the clients and

generate a competitive advantage against the great competitors of the national and

international market.

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IV. PROJECTIONS

Operations management is based on constant decision making and strategic choices

that tend to focus on the entire organization, in terms of departments, teams and tasks.

Decision making, whether strategic or tactical, is an essential aspect of all

administrative activities, including operations management. What distinguishes

operations managers are the types of decisions they make, either individually or with

other people. These types of decisions can be divided into five categories, each of

which corresponds a distinctive part: Selections of strategies, processes, quality,

capacity, location, physical distribution, and operational decisions in general already

described above in particular.

Although the specific circumstances of each situation vary, decision-making usually

involves the same basic steps: (1) recognizing and clearly defining the problem, (2)

gathering the necessary information to analyze possible alternatives, and (3) choosing

the most attractive alternative and put it into practice. Administrators must carefully

relate their strategic and tactical decisions to achieve maximum efficiency.

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V. BIBLIOGRAPHIC REFERENCES

Krajewski I. A. (2010). Administración de Operaciones. Procesos de Cadenas de

Suministros. Bogota, Colombia: Pearson.

Porter, M. E. (1992). Ventaja Competitiva. México: CECSA

Schroeder, R.G. (1992). Administración de operaciones, 3. ª ed., México (primera versión

en inglés de 1989): McGraw-Hill.

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VI. ANNEXES

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