Jones: Introduction To Business: How Companies
III. A Functional Approach to Business
12. Operations and
Materials Management:
© The McGraw-Hill
Companies, 2007
Create Value for People Managing the Production and Flow of Goods and

CHAPTER 12 Operations and Materials
Management:
Managing the Production and Flow of Goods and Services
Learning Objectives

After studying this chapter, you should be able to:

1.
Describe the nature of the operations and materials management process and explain how it can create a competitive advantage for a company.
2.
Identify the five main components of operations and materials management costs and the methods companies use to reduce them.
3.
Differentiate between the three major kinds of operating systems companies use to produce goods and services.
4.
Understand the way total quality management can significantly improve both quality and productivity.
WHY IS THIS IMPORTANT
Flour, eggs, sugar, baking powder, chocolate, and shortening don’t create much excitement when they are in the kitchen cupboard. They create a lot more excitement when someone transforms them into a cake. Whether it’s a cake, a computer, or a legal docu- ment, operations and materials management processes create value in a household or a company.
A company’s operations require inputs such as raw materials or parts and the skilled people and equip- ment to transform them into useful products. After you read this chapter, you will understand why the management of a company’s supply chain and trans- formation processes determine how much value it can create for customers.
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5.
Describe three materials management methods companies use to improve the flow of resources into and out of production and increase operations efficiency. Jones: Introduction To III. A