INTRODUCTION TO OPERATIONS MANAGEMENT

Any of you reading this book may think that you don't know what operations
management (OM) is or that it is not something that interests you. However, after
reading this chapter, you will realize that you already know quite a bit about chief
operating officer. You may even be working in an operations management capacity
and have used certain operations management techniques. You will also realize
that operations management is probably the most important business function
today. If you want to be on the frontier of business competition, you want to be in
operations management. Today companies compete in a very different
environment than a few years ago. To survive, they must focus on quality, time-
based competition, efficiency, international perspectives and customer
relationships. Global competition, e-commerce, the Internet and advances in
technology require fl exibility and responsiveness. This new approach has placed
operations management at the center of attention for companies, because it is the
function through which companies can achieve this type of competitiveness.
Consider some of today's most successful companies, such as Wal-Mart,
Southwest Airlines, General Electric, Starbucks, Toyota, FedEx, and Procter &
Gamble. These companies have achieved world-class status largely due to a
strong focus on operations management. In this book, you will learn the specific
operations management tools and techniques that have helped these and other
companies achieve their success. The purpose of this book is to help you prepare
to succeed in this new business environment. Operations management will give
you insight into how to help your organization gain a competitive advantage in the
market. Whether your area of expertise is marketing, finance, MIS, or operations,
the techniques and concepts in this book will help you in your business career. The
material in this book will teach you how your company can offer products and
services cheaper, better, and faster. You will also learn that operations
management concepts are far-reaching, affecting all aspects of the organization
and even everyday life.

WHAT IS OPERATIONS MANAGEMENT?

Each business is managed through three main functions: finance, marketing and
operations management. Figure 1-1 illustrates this by showing that the vice
presidents of each of these functions report directly to the president or CEO of the
company. Other business functions, such as accounting, purchasing, human
resources, and engineering, support these three core functions.

1. Finance is the marketing function responsible for managing cash flows,

current assets, and capital investments. Marketing is responsible for sales,
generating customer demand, and understanding customer wants and
 needs. Most of us have some idea what finance and marketing are all about,
but what does operations management do?

2. 3. WHAT IS OPERATIONS MANAGEMENT? • 3 FIGURE 1-1 President or

CEO Organization chart showing the three main business functions
Marketing Operations Finance Vice President of Marketing VP of Operations
Vice President of Finance Manages: customers Manages: people,
Manages: cash flow, requires equipment, current assets Generates: sales
for technology, and capital goods and materials, and investment services
information Produce: goods and/or services Operations management (OM)
is the business function that plans, organizes, ᭤ Operations management
coordinations and controls the resources necessary to produce a company's
goods. ice functionand serv. Operations management is a management
function. It involves the responsible management of planning, coordinating
and controlling people, equipment, technology, information and many other
resources.Operations The necessary resources Decision making is the
central function of every company. This is true whether a company's
goodscompany product is large or small, offers good physical or service, is
for fi favor or in T and services.not for fi nes. Every company has an
operations management function. In reality, all other organizational functions
are there primarily to support the operations function. Without operations,
there would be no goods or services to sell. Consider a retailer like Gap that
sells casual clothing. The promotional function provides the marketing of the
merchandise, and the financing function provides the needed capital.
However, it is the operations function that plans and coordinates all the
resources necessary to design, produce and deliver the merchandise to the
different retalocations. Without operations, there would be no goods or
services to sell to customers. The role of operations management is to
transform a company's inputs into the operational role of finished goods or
services. Inputs include human resources (such as workers and man-to-
man agementagers), facilities and processes (such as buildings and
equipment), as well as materials, to transform organizational inputs into
outputs.technology and information. Products are the goods and services
that a company produces. Figure 1-2 shows this transformation process. In
a factory, transformation is FIGURE 1-2 Customer feedback The
transformation process Inputs • Human resources Outputs • Facility
transformation • Processing of goods and processes • Services •
Technologies • Material performance information

3. 4. 4 • CHAPTER 1 INTRODUCTION TO OPERATIONS MANAGEMENT

physical change of raw materials into products, such as the transformation
of leather and rubber into sneakers, denim into jeans, or plastic into toys. In
an airline it is the efficient movement of passengers and their luggage from
one place to another. In a hospital you are organizing resources such as
doctors, medical procedures and medications to transform sick people to
healthy ones. Operations management is responsible for orchestrating all
the resources necessary to produce the final product. This includes
designing the product; decide what resources are needed; organize
schedules, equipment and facilities; ges - ing inventory; QA; designing the
work to make the product; and designing work methods. Basically,
operations management is responsible for all aspects of the process of
transforming inputs into outputs. Customer feedback and performance
information is used to continually adjust the inputs, transformation process,
and output characteristics. As shown in Figure 1-2, this transformation
process is dynamic to adapt to changes in the environment. Proper
management of the operations function has led to success for many compa
- NEI. For example, in 1994, Dell Inc. was a second-tier computer
manufacturer that managed its operations similar to others in the industry.
Dell then implemented a new business model that completely changed the
role of its operations function. Dell has developed new and innovative ways
of managing the operations function that have become one of the best
practices of the day. These changes allowed Dell to provide rapid delivery of
customized products to customers at a lower cost, thus becoming an
industry leader. Just as operations management can lead to business
success, poor operations management can lead to failure. This is illustrated
by Kozmo.com, a web-based home delivery company founded in 1997.
Kozmo's mission is to deliver products to customers, from the latest video to
ice cream, in less than an hour. Kozmo was technology enabled and quickly
became a huge success. However, initial success led to too rapid
expansion. The company found it difficult to manage the operations
necessary in order to deliver the promises made on its website. The
consequences were excess inventory, poor deliveries and lost profits. The
company quickly tried to change its operations, but it was too late. Its
operations had to cease in April 2001. LINKS TO PRACTICE The Web-
based age has created a highly competitive world of online retailers that
poses special challenges for www.Amazon.com-man www.Barnesandnoble
operations. agement . The Web can be used to purchase online everything
from CDs, books and groceries to prescription drugs and automobiles. While
the Internet has given consumers flexibility, it has also created one of the
biggest challenges for businesses: delivering exactly what the customer
ordered in the promised time. As we saw with the Kozmo.com example,
making a promise on a website is one thing; fulfilling those promises is
 another one. Ensuring that orders are shipped from "mouse to home" is the
job of operations and is much more complicated than it seems. In the 1990s
many dot-com companies discovered just how difficult this is. They were not
able to generate a profit and left Business. To ensure that promises are
kept, companies must forecast what customers want and maintain adequate
product inventories, manage distribution centers and warehouses,

4. 5. DIFFERENCES between manufacturing and service organizations •

Operate fleets of trucks, and deliver on schedule, keeping costs low and
customers satisfied. Many companies like Amazon.com manage almost
every aspect of their operation. Other companies hire outside firms for
certain functions, such as outsourcing inventory management and deliveries
to UPS. Competition among retailers has intensified as customers demand
increasingly shorter delivery times and highly personalized products. Same-
day service has become common in metropolitan areas. For example,
Barnesandnoble.com offers same-day delivery in Manhattan, Los Angeles,
and San Francisco. Understanding and managing the operations function of
an online business has become essential to remaining competitive. For
operations management to be successful, it must add value during the
transformation process. We use the term value added to describe the net
increase between the value added of a product's final value and the value of
all inputs. The higher the net increase value created, the more productive
the business is. An obvious way to add value is to reduce the cost of
activities in the transformation process during the transformation of inputs
into final results. Activities that do not add value are considered waste;
these include certain jobs, equipment and processes. In addition to added
value, operations must be efficient. E fi science means being able to
perform ᭤ E fi Science activities well, and at the lowest possible cost. An
important role of operations is to carry out activities in all theanalyze
activities, eliminate those that do not add value, and restructure processes
to lowest possible cost.and jobs to achieve greater efficiency. Today's
business environment is more competitive than ever, and the role of
operations management has become the focal point of efforts to increase
competitiveness by improving added value and efficiency. DIFFERENCES
BETWEEN MANUFACTURING AND SERVICE ORGANIZATION
Organizations can be divided into two broad categories: Manufacturing
organization - ᭤ Manufacturing and service organizations, each of which
presents unique challenges to the operations organization function. There
are two main distinctions between these categories. First, manu:
organizations that primarily produce a tangible product. Manufacturing
organizations produce physical, tangible goods that can be stored and
 typically have low inventory before they are needed. In contrast, service
organizations produce intangi – customer contact products that cannot be
produced ahead of time. Secondly, in Orga manufacturing - ᭤ Service
organizationsnizations most customers do not have direct contact with the
operation. The customer organizations that are mainly related are through
distributors and retailers. For example, a customer who purchases an
intangiblecar product from a car dealership never comes into contact with
the car factory. How, product, such as ideas, assistance or information,
ever, in service organizations, customers are usually present during creation
and usually have a large amount of the service. Hospitals, schools, theaters
and hair salons are examples of contact with service customers.
Organizations in which the customer is present during the creation of the
service. The differences between manufacturing and service organizations
are not as clear-cut as they might seem, and there is a lot of overlap
between them. Most manufacturers provide services as part of their offering,
and many service firms manufacture physical products that they deliver to
their customers or consume during the provision of the service. For
example, a furniture manufacturer may also provide product shipping and
furniture assembly. On the other hand, a hair salon can sell its own line of
hair care products. You may not know that General Motors' greatest return
on equity does not come from selling cars, but rather from after-sales parts
and service. The differences between manufacturing and services are
shown in Figure 1-3, which focuses on the dimensions of product tangibility
and the degree of customer contact. Fabri-Turing pure and pure service
extremes are shown, as well as the overlap between them.

5. 6. • 6 CHAPTER 1 INTRODUCTION TO OPERATIONS MANAGEMENT

DEGREE OF CUSTOMER FIGURE CONTACT 1-3 HighCharacteristics low
of manufacturing and tangible serviceProductorganizations GRADE OF
PRODUCTS manufacturing tangibility Organization OFFERING • Physical •
Product of products can be inventoried • Low contact with the customer •
Capital intensive • Long response time • intangible product • product cannot
be inventoried intangible product • high customer contact • short response
time • Labor-intensive service organization Even in service companies
Purely some segments of the operation may have low customer contact,
while others have high customer contact. The former can be considered
"backroom" or "behind the scenes" segments. Consider a fast food
operation like Wendy's, for which customer service and customer contact
are important parts of the business. However, the kitchen segment of
Wendy's operation has no direct customer contact and can be managed as
a manufacturing operation. Similarly, a hospital is a high-touch service
 operation, but the patient is not present in certain segments, such as the
laboratory where sample analysis is performed. In addition to pure
manufacturing and pure service, there are companies that have some
characteristics of each type of organization. For these companies it is
difficult to say whether they are actually manufacturing or service
organizations. Think of an office station, an automated warehouse, or a
mail-order catalog business. These companies have low customer contact
and are capital intensive, yet they provide a service. We call these
companies quasi-manufacturing organizations. LINKS to practice The
United States Postal Service is an example of a manucuasi - manufac- type
of company. Provides a service: fast, reliable delivery of letters, documents
and packages www.usps.com from the US Postal Service. Its output is
intangible and cannot be stored in inventory. However, most operations
management decisions made in the Postal Service are similar to those that
occur in manufacturing. Customer contact is low, and there is a large
amount of inventory at any given time. The Postal Service is capital
intensive, having its own facilities and fleet of trucks and relying on scanners
to sort packages and track customer orders. Scheduling enough workers at
peak processing times is a big concern, as as well as planning delivery
times. Please note that although the departure of the US Postal Service
USA It is a service, inputs include labor, technology and equipment. OM's
responsibility is to manage the

6. 7. OPERATIONS MANAGEMENT DECISIONS • 7 100% FIGURE 1-4 90%

Employment in the United States by economic sector 80% Percentage of
labor 70% 60% Service Production 50% 40% 30% 20% Production of goods
(Manufacturing construction) 10 % 0% 1958 1973 1988 Year 2003 Source:
US Department of Commerce. Conversion of these inputs into desired
results. Proper management of the OM function is critical to the success of
the US Postal Service. In the US, it is important to understand how to
manage service and manufacturing operations. However, managing service
operations is especially important. The reason is that the service sector
constitutes a dominant segment of our economy. Since the 1950s, the share
of jobs in service-producing industries in the U.S. economy has increased.
In the US, it has increased from 50 to 80 percent of total non-farm jobs. The
remaining 20 percent are in the manufacturing and goods production
industries. Figure 1-4 illustrates this major growth of the service sector.
OPERATIONS MANAGEMENT DECISIONS In this section we look at some
of the specific decisions that operations managers have to make. The best
way to do this is to think about decisions we would have to make if we
started our own company - for example, a company called Gourmet Wafers
 that produces pra-line - nut cookies from an old family recipe. Think about
the decisions you can make to go from the initial idea to the actual
production of the product: that is, operations management. Table 1-1 breaks
these down into the generic decisions that are appropriate for almost any
good or service, the specific decisions required for our examples, and the
formal terms of these decisions that are used in operations management.
Note in the Gourmet Wafers example that the decisions made first were
very broad in scope (for example, the unique features of our product). We
had to do this before we focused so we could make more specific decisions
(for example, worker schedules). Although our example is simple, all
companies follow this decision-making process, including IBM, General
Motors, Land's End, and your local floral store. Also note that in our example
that before we can think about specific day to day decisions, we must make
decisions

7. 8. TABLE 1-1Operations Management decisions for gourmet wafers

General decisions Decisions Specific operations that can be adopted for
Production Management Cookies Term What are the unique characteristics
of the The business offers freshly baked cookies business “homemade”
Operations strategy that will make it more competitive ? style, in a fast food
format. What are the unique characteristics of cookies is that they are a
product of product design? loaded with extra large, crunchy pecans, and are
fresh and moist. What are the unique characteristics of convection? A
special oven is used to make the selection process of the cookies Process
that gives the product its in order to keep them fresh and moist. The mass is
unique characteristics? allowed to rise more than normal so that the cookies
are lighter. What supply sources should we use? The key ingredients, nuts
and syrup, will be purchased. Supply chain to ensure regular and timely
receipt from a single supplier located in South Carolina because they
manage the exact materials we need. How to make offers the best products.
A relationship is resolved, do we manage these sources of supply? in which
the supplier ships the ingredients at the exact time they are needed. How
managers will ensure quality. Quality control is carried out at each stage of
the cookies. Product quality management, quality measurement and
production. The dough is checked for texture; Identify quality problems?
pecans are checked for size and freshness; the syrup is checked for
consistency. What is the expected demand for the expected sales for each
day of the week as a forecast product? certain ; For example, it is expected
that more cookies will be sold during the weekday and most during lunch
time. The expected cookie sales for each month and for the year have also
been determined. Where will the facility be located? After observing
 customer locations and location cost analysis, it is decided that the facility
will be located in a shopping center. How large should the facility be? The
company needs to be able to produce 200 cookies per hour, or up to 2000
cookies per day. How should the installation be designed? Decisions are
made about where the kitchen will be located. Facility layout Where will the
kitchen and ovens be located and how will the work area be organized?
Should there be seating for maximum efficiency. Does the business
compete with customers? speed and quality basis; therefore, the facility
should be organized to promote these features. There will be a small
seating area for customers and a large counter and display case for
shopping. What jobs will be needed in the two people who will be needed in
the kitchen during Job's busy design and work facilities, who should do what
task, and periods and one during slow periods. Your work measures are
determined as to how your performance will be. Will a person be needed to
measure yourself? ordertaking at all times. How will raw materials inventory
be developed? Is a different policy developed for common ingredients? Is
inventory management monitored? When orders will be such as flour and
sugar. These ingredients will be placed and how much will be kept in order
every two weeks for a two week supply. An action? A special purchasing
arrangement is prepared with the supplier of special ingredients. Who will
work what hours? Two people will work the counter in split shifts. One
Scheduling's kitchen employee will work a full shift, with a second employee
working part-time.

8. 9. OPERATIONS MANAGEMENT DECISIONS • 9 FIGURE 1-5

STRATEGIC DECISIONS TACTICAL DECISIONS The relationship
between • Broad scope • Narrow scope of strategic and tactical decisions •
Long-term in nature • Short-term in nature • All-encompassing • About a
small group of, for example, What are the unique features of our product
that make us, for example, Who is going to be competitive in the second
turn? tomorrow? for the entire company that are long term in nature. Long-
term decisions that set strategic decision direction for the entire organization
are strategic decisions. They are broad in the decisions that set the scope
and set the tone for other, more specific fi ca decisions. They direct
questions in that direction to the entire company; They are broad INAS:
What are the unique features of our product? What market do we intend to
compete in scope and ININ in the long term? What do we think the demand
for our product will be? nature . Short-term decisions that focus on specific
departments and tasks are called tactical decisions. Tactical decisions focus
on more specific day-to-day issues, such as Quan-Cities decisions that are
specifications and the timing of specific resources. Strategic decisions are
 made first and determine short-term nature and direction of tactical
decisions, which are made more frequently and routinely. They are bound
by strategic decisions. Therefore, we must start with strategic decisions and
then move to tactical decisions. This relationship is shown in Figure 1-5.
Tactical decisions must be aligned with strategic decisions, because they
are the key to the company's long-term effectiveness. Tacticaldecisions
provide feedback to strategic decisions, which can be modified accordingly.
You can see in the Obleas Gourmet example how important OM decisions
are. OM decisions are critical for all types of companies, large and small. In
large companies, these decisions are more complex due to the size and
scope of the organization . Large companies typically produce a greater
variety of products, have multiple location sites, and often use domestic and
international suppliers. ManagingOM decisions and coordination efforts can
be a complicated task, however, the OM func-tion is critical to the
company's success.We can illustrate this point by examining LINKS to
management decisions PRACTICEtions made by Texas In- ments (IT ) to
position itself for Texas Instruments' global collaboration with customers,
distributors and embedded suppliers. TI realized its business was growing
www.ti.comexponentially, with over 120,000 monthly orders received and
processed electronically. The coordination effort includes 56 factories,
including subcontractors, and the management of over 45, 000 products. To
be successful, the company needed to develop a system to generate better
forecasts, coordinate product manufacturing, manage orders, and track
deliveries. The management and coordination of global operations
management functionswas considered of utmost importance to the success
of the company. IT adopted a comprehensive software package called
enterprise resource planning (ERP) that integrates information across the
organization,

9. 10. 10 • CHAPTER 1 INTRODUCTION TO OPERATIONS MANAGEMENT

manages forecasts and coordinates factory operations. Designing and
implementing the ERP system in IT required an understanding of all
strategic and tactical operations decisions; otherwise it would not be
effective. The system has proven to be a success and a major achievement,
allowing IT to consistently manage factory operations around the world.
PLAN OF THIS BOOK The purpose of this book is to provide concepts and
techniques that give the ability to efficiently plan, order and control the
resources necessary to produce a company's goods and services. Themes
progress from strategic to tactical, similar to the order of decisions used in
the Gourmet Wafers example. The plan of this book is shown in Figure 1-6.
We begin with broad, global topics, such as product design and process
 selection. Also at the beginning of the book we cover operations topics that
require a strategic perspective and cultural change within the organization,
such as supply chain management, total quality management, and just-in-
time systems. We progress to more tactical issues, such as work
measurement, inventory management, and scheduling concerns. We have
designed the chapters to provide concepts and techniques that are
important to business professionals regardless of field of study with relevant
operations management. Throughout the chapters, we show how the tools
and concepts discussed relate to other functions in the organization. It is
shown that operations management concepts are far-reaching, affecting all
aspects of the organization. Before continuing you must understand that
operations management (OM) is the business function responsible for the
planning, coordination and control of the resources necessary to produce a
company's goods and services. OM is directly responsible for managing the
transformation of a company's inputs (for example, materials, technology
and information) into finished products and services. OM requires a wide
range of strategic and tactical decisions. Strategic decisions are long-range
and very broad in scope (e.g., unique characteristics of the company's
product and process). They determine the direction of tactical decisions,
which are shorter term and narrower in scope (e.g., policy for ordering raw
materials). All organizations can be separated into manufacturing and
service operations, which differ depending on the tangibility of the product
and the degree of customer contact. Service and Manufacturing
Organizations have very different operational needs. FIGURE 1-6 Types of
Decision Operations Management Topic Chapter Book Plan Strategic
Operations Strategy Ch. 2 Product design and process selection Chap. 3
Supply Chain Management Ch. 4 Total Quality Management Ch. 5 and 6
Just-in-Time and Lean Systems Chap. 7 Forecasting Ch. 8 Capacity
planning and location analysis Ch. 9 Installation design Chap. 10 Design of
the work system Chap. 11 Inventory and resource planning Ch. 12, 13, 14
and 15 Tactical programming problems Ch. 16 and 17

10. eleven. HISTORICAL DEVELOPMENT • 11 HISTORICAL

DEVELOPMENT OM ? The importance of operations management was not
always recognized by companies. In fact, after World War II, American
corporations were dominated by marketing and finance functions. The
United States had just emerged from the war as the world's undisputed
manufacturing leader due in large part to efficient operations. cients. At the
same time, Japan and Europe were in ruins with their businesses and
factories destroyed. American companies were left to fill these markets:
World War II after the 1950s and 1960s represented the golden age for
American business. The main opportunities were in the areas of marketing,
to develop large potential markets for new products, and in finance, to
support growth. Since there were no competitors, the operations function
was of secondary importance, because companies could sell what they
produced. The distinguished economist John Kenneth Galbraith was even
quoted as saying, "the problem of production has been solved." Then, in the
1970s and 1980s, things changed. American companies experienced large
declines in productivity growth, and international competition began to be a
challenge in many markets. In some markets, such as the auto industry,
American corporations were being squeezed out. It seemed that American
firms had become lax with the lack of competition in the 1950s and 1960s.
They had neglected to improve their methods and processes, in part due to
a lack of competitive challenge. At theantime, foreign companies were
rebuilding their facilities and designing new productionmethods. By the time
foreign firms had recovered, many American firms found themselves unable
to compete. To regain their competitiveness, companies turned to
operations management, a function they had overlooked and almost
forgotten. The new focus on operations and competitiveness has been
responsible for the recovery of many companies, and American companies
experienced a resurgence in the eighties and nineties. Operations became
the central function of organizational competitiveness. Although US firms
have recovered, they are fully aware of continued global competition.
Companies have learned that to achieve long-term success they must place
great importance on their operations. Historical Milestones When we think
about what operations management does, that is, managing the
transformation of inputs into goods and services, we can see that, as a
function, it is as old as time. Think of any large organizational effort, such as
organizing the first Olympic games, building the Great Wall of China, or
erecting the pyramids of Egypt, and you will see operations management at
work. Operations management did not emerge as a formal field of study
until the late 1950s and early 1960s, when scholars began to recognize that
all production systems face a common set of problems and stress
thesystems approach to production processes. display operations. Many
events helped shape operations management. Below we will describe some
of the most significant of these historical milestones and explain their
influence on the development of operations management. Later we will look
at some of the current trends in agement-man operations. These historical
milestones and current trends are summarized in Table 1-2. Industry
movement ᭤ Industrial revolutionThe Industrial Revolution One that changed
production byThe industrial revolution had a significant impact on the way
 goods are produced replacing machine powertoday. Before this movement,
products were made by hand by skilled craftsmen for the workforce.

11. 12. 12 • CHAPTER 1 INTRODUCTION TO OPERATIONS MANAGEMENT

TABLE 1-2 Historical development of the concept of operations
management Explanation of time Industrial Revolution At the end of the 18th
century Innovations were introduced that changed production using machine
power instead of human power . From 1900 management scientists brought
the concept of analysis and measurement of the technical aspects of work
design, and the development of moving assembly lines and mass
production. The human relations movement from 1930 to 1960 focused on
understanding the human elements of job design, such as worker motivation
and job satisfaction. Management sciences 1940s to 1960s Focused on the
development of quantitative techniques to solve operations problems.
Computer age of the 1960s Allowed the processing of large amounts of data
and allowed the widespread use of quantitative procedures. Just-in-time
systems (JIT) 1980s Designed to achieve a high volume of production with
minimum inventories. Total quality management (TQM) 1980s Sought to
eliminate the causes of production defects. Reengineering of the 1980s
required redesign of a company's processes in order to provide greater
efficiency and cost reduction. Environmental issues 1980s Considered
waste reduction, need for recycling and reuse of products. Flexibility 1990s
Customization offered on a massive scale. Time-based competition 1990s
Time-based, such as speed of delivery. 1990 supply chain management
focused on reducing the overall cost of the system that manages the flow of
materials and information from suppliers to end customers. Global
competition 1990s Design of operations to compete in the global market. E-
commerce Late 90s; early Used the Internet to carry out commercial
activities. twenty-first century in their shops or homes. Each product was
unique, made with care by one person. The Industrial Revolution changed
all that. It began in the 1770s with the development of a series of inventions
that relied on machine power rather than human power. The most important
of these was the steam engine, which was invented by James Watt in 1764.
The steam engine provided a new source of energy that was used to
replace human labor in textile factories, machine manufacturing plants, and
other facilities. The factory concept was emerging. Additionally, the steam
engine led to advances in transportation, such as railroads, which allowed
for wider distribution of goods. Around the same time, the concept of
division of labor was introduced. First described by Adam Smith in 1776 in
The Wealth of Nations, this important concept would become one of the
basic components of the assembly line. Division of labour
12. 13. HISTORICAL DEVELOPMENT • 13 Today's modern work environment
The forging of steamships and railways during the Industrial Revolution
means that the production of a good is divided into a series of small
elementary tasks, each of which is performed by a different worker.
Repetition of the task allows the worker to specialize in that task. The
division of labor allowed higher volumes to be produced. This, along with
advances in transportation, allowed distant markets to be reached by
steamships and railways. A few years later, in 1790, Eli Whitney introduced
the concept of interchangeable parts. Before that time, each part used in a
production process was unique. With inter- changeable parts, parts are
standardized so that each element of a batch of items fits sequally. This
concept meant that we could move from one-time production to volume
production, for example, in the manufacture of clocks, clocks, and similar
items. Scientific Management Scientific management was an approach to
management promoted by Frederick W. ᭤ Scientific managementTaylor at
the beginning of the 20th century. Taylor was an engineer with an eye for ef-
an approach to science management. Through scientific management he
sought to increase worker productivity, which focused on improving
production by redesigning jobs and organizational production. This concept
has two main characteristics. First, the determination of acceptable workers
is assumed to be motivated solely by money and limited only by their
physical ability. levels of worker output.Taylor believed that worker
productivity is governed by scientific laws of C, and that ISUP manages to
discover these laws through measurement, analysis, and observation.
Workers should be paid in direct proportion to how much they produce. The
second feature of this approach is the separation of planning and
implementation functions in a company, which means the separation of
management and work. Management is responsible for designing
production systems and determining acceptable worker output. Workers
have no input into this process, they are only allowed to work. Many people
did not like the scientific management approach c. This was especially true
of workers, who believed that management used these methods to unfairly
increase production without paying them accordingly. However, many
companies adopted thescientifi c management approach. Today many
scientists have worked as majormilestone in the field of operations
management, and have had many influences on operations management.
For example, piece rate incentives, in which workers are paid in direct
proportion to their output, emerged from this movement. Additionally, a
widely usedmethod of work measurement, stopwatch time studies, was
introduced by FrederickTaylor. In timing studies, observations of a worker
are made and recorded
13. 14. 14 • CHAPTER 1 INTRODUCTION TO OPERATIONS MANAGEMENT
perform a task over many cycles. This information is used to establish a
standard time to perform the particular task. This method is still used today
to set a time standard for short, repetitive tasks. The scientific management
approach was popularized by Henry Ford, who used the techniques in his
factories. Combining technology with scientific management, Ford
introduced the moving assembly line to produce Ford automobiles. Ford
also combined scientific management concepts with division of labor and
interchangeable parts to develop the concept of mass production. These
concepts and innovations helped increase production and efficiency in their
factories. The Human Relations Movement of the early 20th century was
dominated by the scientific management movement and its philosophy.
However, this changed with the publication of the results of Hawthorne's ᭤
Hawthorne studies. The Hawthorne studies were carried out on a Wester
Electric. Studios were responsible for the plant in Hawthorne, Illinois, in the
1930s. The purpose was to study the effects of ENVI-creating human
relations ronmental changes, such as changes in lighting and ambient
temperature, on production movement, which focused on taking more into
account the activity of line workers. mounting. The study's findings were
unexpected; the needs of the workers. Worker productivity continued to
increase despite the environmental changes made. Elton Mayo, a Harvard
sociologist, analyzed the results and concluded that the workers were
actually motivated by the attention given to them. The idea that workers
respond to the attention they receive is known as the Hawthorne effect.
Many sociologists and psychologists went to Hawthorne to study these
findings, ᭤ Human Relations which led to the human relations movement, a
completely new philosophy based on movement the recognition that factors
other than money can contribute to worker productivity. A philosophy based
in the The impact of these fi conclusions on the development of operations
management hasrecognition that factors otherthan money can contribute to
be tremendous. The influence of this new philosophy can be seen in the
productivity of the implementing worker. For example, the Hawthorne
studies showed that scientific management had made jobs too repetitive
and boring. Job enlargement is an approach in which workers are given a
larger portion of the total task to do. Another approach used to give jobs
more meaning is job enrichment, in which workers are given a larger role in
planning. Recent studies have shown that environmental factors in the
workplace, such as adequate lighting and ventilation, can have a large
impact on productivity. However, this does not contradict the principle that
management attention is a positive factor in motivation. Management
Science While one movement focused on the technical aspects of work
 design and another ᭤ Administrative science on the human aspects of
operations management, a movement called management. A field of study
was developing that focuses on science that would make its own unique
contribution. Managementon the development of science focused on the
development of quantitative techniques for prob-solving operations -
quantitative techniques tosolve operation problems. lems. The first
mathematical model for inventory management was developed by FW
Harris in 1913. Soon after, procedures were developed for statistical
sampling theory and quality control. World War II created an even greater
need for the ability to quantitatively solve complex problems of logistics
control, weapons system design, and missile deployment. Consequently,
science administration grew during the war and continued to

14. 15. HISTORICAL DEVELOPMENT • 15grow after the war was over. Many
quantitative tools were developed to solve problems in forecasting, inventory
control, project management, and other areas. Management science is a
mathematically oriented field that provides operations managementwith
tools that can be used to assist in decision making. A well-known example
of such a tool is linear programming.The Computer AgeThe 1970s
witnessed the advent of widespread use of computers in business. With
computers, many of the quantitative models developed by management
science could be used on a larger scale. Data processing became easier,
with significant effects in areas such as forecasting, scheduling, and
inventory management. A particularly important computerized system,
materials requirements planning (MRP), was developed for inventory control
and scheduling. Materials requirements planning was able to process large
amounts of data to calculate inventory requirements and develop schedules
for the production of thousands of items. This type of processing was
impossible before the computer age. Today, the exponential growth of
computing power continues to impact operations management. Only in
TimeJust - in -time (JIT) is a major operations management philosophy,
developed in Japan ᭤ Just-in time in the 1980s, which is designed to achieve
high-volume production using a minimum A philosophy designed for
quantities of inventory. This is achieved by coordinating the flow of materials
to achieve high volume production so that the right parts arrive at the right
place in the right quantity; hence the term, waste disposal and just in time.
However, JIT is much more than the coordinated movement of goods. It is a
continuous improvement. It is an all-inclusive organizational philosophy that
employs teams of workers to achieve continuous improvement in
organizational processes and efficiencies by eliminating all organizational
waste. Although JIT was first used in manufacturing, it has had a use in the
 service sector, for example, in the food service industry. JIT has had a
profound impact on changing the way companies manage their operations.
It is credited with helping many companies turn around and is used by
companies such as Honda, Toyota, and General Motors. JIT promises to
continue transforming businesses in the future. Total Quality Management
As customers demand increasing quality in their products and services,
companies have been forced to focus on improving quality to remain
competitive. Total ᭤ Total quality management (TQM) is a philosophy
promulgated by "quality gurus" as a philosophy that seeks good. Edwards
Deming, which aggressively seeks to improve product quality by elimination,
improve quality by eliminating the productive causes of product defects and
making quality an all-encompassing organizational defect and by making a
philosophy of quality. . With TQM, everyone in the company is responsible
for quality. TQM was practiced by some companies in the 1970s and
became widespread in the 1990s. This is in the organization. An area of
operations management that no competitive company has been able to
ignore. The importance of this movement is demonstrated by the number of
NEI companies joining the ranks of those achieving ISO 9000 certification.
ISO 9000 is a set of quality standards developed for global manufacturers
by the International Organization for Standardization (ISO) to control trade in
the then emerging European economic environment. Community (EEC).
Today, many companies require their suppliers to meet these standards as
a condition of obtaining contracts.

15. sixteen. 16 • CHAPTER 1 INTRODUCTION TO OPERATIONS

MANAGEMENT Business Process Reengineering ᭤ Reengineering
Business process reengineering means redesigning a company's processes
to increase a company's design efficiency, improve quality, and reduce
costs. In many companies, things are done in a process to do them in a
safer way that has been passed down over the years. Often, managers say,
"Good, efficient. We always do it this way." Reengineering requires asking
why things are done a certain way, questioning assumptions, and then
redesigning processes. Operations management is a key player in a
company's reengineering efforts. Flexibility Traditionally, companies
competed by mass producing a standardized product or offering customized
products in small volumes. One of the current competitive challenges for
companies is the need to offer a greater variety of product options to
customers than traditionally standardized product flexibility. This is the
challenge of fl exibility, an organizational strategy in what it means to be
able to offer a wide variety of products to customers. For example, the
company tries to offer 13 different product designs in the Pampers diameter
 line - to offer a greater variety of product options to its customers. Although
diapers are a standardized product, the designs of the products are
common customers. It took into account the different needs of customers,
such as the age, gender and development of the child who wears the
diaper. ᭤ Mass customization An example of fl exibility is mass
customization, which is the ability of a firm to highly customize its goods and
services to different customers. Mass customization personalizes its
products and requires design of flexible operations and the use of delayed
product differentiation, as well as services to different customers. called
postponement. This means keeping the product generic whenever possible
and postponing completion of the product until specific customer
preferences are known. c. Time-based competition competition Time-based
competition One of the most important trends in today's companies is time-
based competition. An organizational strategy includes developing new
products and services faster than the competition, focusing on efforts to get
to market first, and fulfilling customer orders more quickly. For example, new
products and delivery to customers faster than two companies can produce
the same product, but one can deliver it to competitors. to the customer in
two days, while the other delivers it in five days, the first company will make
the sale and win over the customers. Time-based competition specifi- cally
requires designing the operations function for speed. Supply Chain
Management ᭤ Supply chain supply chain management (SCM) involves
managing the flow of materials and information management from suppliers
and buyers of raw materials all the way to the customer's end. The goal is to
have everyone in the chains work together to reduce overall costs from
suppliers to customers to reduce and improve quality and service delivery.
Supply chain management requires an overall team-based cost and
incremental approach, with functions such as marketing, purchasing,
operations, and engineering response. To customers. all working together.
This approach has been shown to result in more satisfied customers,
meaning everyone in the chain benefits. SMC has been made possible with
the development of information technology (IT) tools that enable plan- ning
collaboration and scheduling. Technologies enable synchronized supply
chain execution and design collaboration, allowing companies to respond
better and faster to changing market needs. Numerous companies,
including Dell Computer, Wal-Mart, and Baxter Healthcare, have achieved
world-class status by effectively managing their supply chains.

16. 17. TODAY'S ENVIRONMENT • OM 17Global MarketplaceToday

companies must think in terms of a global marketplace in order to compete
EF - ᭤ Global marketplaceeffectively. This includes the way they view their
customers, competitors and suppliers. A trend in business focusingKey
issues are meeting customer needs and getting the right product to markets
such as di - in customers, suppliers and competitors from a globalverse
such as the Far East, Europe or Africa. Operations management is
responsible for outlook. Most of these decisions. OM decides whether to
tailor products to different customer needs, where to locate facilities, how to
manage suppliers, and how to comply with local government standards.
Furthermore, global competition has forced companies to achieve higher
levels of excellence in the products and services they offer. Regional trade
agreements, such as the Free Trade Agreement (FTA), the European Union
(EU), and the General Agreement on Tariffs and Trade (GATT), Guarana-
Tee continued competition at the international level.Environmental
IssuesThere is an emphasis growing need to reduce waste, recycle and
reuse products and parts. Society has put great pressure on businesses to
focus on air and water quality, waste disposal, global warming, and other
environmental issues. Operations ᭤ Environmental issues management
plays a key role in redesigning processes and products in order to meet a
trend in business toand exceed environmental quality standards. The
importance of this problem lies in the deliberate reduction of waste,
recycling and reuse of products through a set of standards called ISO
14000. Developed by the International Organization for Standardization
(ISO), these standards provide guidelines and documentation for the
certification program. the environmentally responsible actions of a
company.Electronic CommerceElectronic commerce (e-commerce) is the
use of the Internet to carry out business activities, such as communication,
commercial transactions and data transfer. The Internet developed from a
government network called ARPANET, which was created in 1969 by the
US Department of Defense. USA Since the late 1990s the Internet has
become an essential medium-sized business, enabling efficient
communication between manufacturers, business-to-business (B2B) ers,
suppliers, distributors and customers. It has enabled businesses to reach
more e-commerce among customers at a speed that is definitely faster than
ever before. It also has significantly cutting costs for businesses.as it
provides direct links between entities. ᭤ Business to Customers Electronic
commerce can occur between companies, known as B2B (business to
business (B2C)) commerce and constitutes the highest percentage of
transactions. Most e-commerce between businesses and their common B2B
exchanges occurs between businesses and their suppliers, such as
customers. General Electric Business Process Network. A more well-known
type of ᭤ Customer to customere-commerce occurs between businesses
and their customers, known as B2C exchange, (C2C) as seen at online
 retailers such as Amazon.com. E-commerce can also occur: e-commerce
between customers, known as C2C exchange, such as consumer auction
sites like eBay. customers.E-commerce is the creation of virtual
marketplaces that continue to change the way neg - ᭤ virtual
marketplaceness functions. (DEF to come) TODAY'S OM ENVIRONMENT
Today's OM environment is very different from what it was a few years ago.
Customers demand better quality, faster speed and lower costs. In order to
be successful, companies must master the basics of operations
management. To achieve this

17. 18. 18 • CHAPTER 1 INTRODUCTION TO OPERATIONS MANAGEMENT

systems Lean systems Many companies are implementing a concept called
lean systems. Lean systems take a concept that leads to a total total system
approach for creating an ef fi cient operation and p ULL together bestsystem
approach for creating practical concepts. This includes concepts such as
just-in-time (JIT), total quality-efficient operations. management (TQM),
continuous improvement, resource planning and supply chain management
(SCM). The need to increase efficiency has also led many companies to
implement large information systems called enterprise resource planning
(ERP). Planning (ERP) ERP systems are large and sophisticated software
programs that are used to identify and plan complex programs that require
the necessary resources to coordinate all the activities involved in favor of
the systems used for identifyingand planning the Enterprise-ducing and
Delivering products to customers.Wide resources needed to implement best
practices for operations management are not sufficient to give acoordinate
all company activities a competitive advantage. The reason is that in today's
information age it is better involved in production and practices quickly pass
to competitors. To gain an advantage over your competitors by delivering
products. Insurance companies continually look for ways to better respond
to customers. This forces companies to have a deep knowledge of their
customers and to be able to advertise their demands. The development of
customer management (CRM) has made it possible for companies to have
this detailed knowledge of their software solutions that enable customers.
CRM includes software solutions that allow the firm to collectthe firm to
collect customer-specific data c. customer specific data. This type of
information can help the firm identify profiles of its most loyal customers and
provide customer-specific solutions. Additionally, CRM software can be
integrated with ERP software to connect customer requirements to the
company's entire network of resources. ᭤ cross-functional decision making
Another feature of today's OM environment is the increased use of cross-
functional decision making, which requires coordinated interaction and
 decision making between the different business functions of the
organization. Until recently, decision making that occurred among the
different employees of a company made decisions in isolated departments,
called "functional functions of the organization." silos." Today, many
companies bring together experts from different departments into cross-
functional teams to solve business problems. Employees in each function
must interact and coordinate their decisions. This requires employees to
understand the functions of other business functions and the objectives of
the company as a whole, in addition to their own experience. OPERATIONS
MANAGEMENT IN PRACTICE Of all business functions, operations is the
most diverse in terms of the tasks performed. If you consider all the issues
involved in managing a transformation process, you can see that operations
managers are never bored. Who are operations managers and what do they
do? The head of the operations function in a company typically has the title
of vice president of operations, vice president of manufacturing, vice
president, or director of supply chain operations and generally reports
directly to the president or chief operating officer. . Below the vice president
level are mid-level managers: manufacturing manager, operations manager,
quality control manager, plant manager, and others. Below these managers
are a variety of positions such as quality specialist, production analyst,
inventory analyst, and production supervisor. These people perform a
variety of functions, such as analyzing production problems, developing
forecasts, making plans for new products, measuring quality, tracking
inventory, and developing customer schedules. employees. Therefore, there
are many job opportunities in operations management at all levels of the
company. Additionally, operations jobs tend to offer high salaries, job
interest, and excellent opportunities for advancement. Today many
corporate CEOs

18. 19. OPERATIONS MANAGEMENT IN PRACTICE • 19 have gone through

the operations categories. For example, the current president and CEO of
Wal-Mart, H. Lee Scott, comes from a background in operations and
logistics. Also from the back of operations are current Home Depot CEO
Bob Nardelli and Lowe's CEO Robert Tillman. . As you can see, all business
functions need information from management operations in order to perform
their tasks. At the same time, operations managers rely heavily on input
from other areas. This information sharing process is dynamic, requiring
managers to work in teams and understand each other's roles. OM across
the organization Take needs, if marketing managers do not understand what
operations can be produced, what due dates can andNow we know the role
operations can manage- cannot fulfill, and what types of customization
 operation-function and the decisions that operations-man tions can deliver.
The marketing department can de- managers do, let's look at the
relationship between Velop an exciting marketing campaign, but if
operations and other company functions. Since the mentions mentioned
cannot produce the desired product, sales will not be prior; most companies
are supported by three. In turn, operations managers need information - the
main functions: operations, marketing and finance. al- tion about desires
and expectations. It corresponds toalthough these functions involve different
activities, it allows them to design products with characteristics that CUS-
they must interact to achieve the objectives of the organizations fi nd
desirable, and that they cannot do thisnization. They must also follow the
strategy without regular coordination with the marketing management
developed at the top level of the organization - department. Figure 1-7
shows the flow of information for each business function, as well as the flow
of capital investments, make or buy decisions, vegetable ex tween
functions. . Many of the decisions made by operations managers
understand the concepts and needs of operations. Because otherare
dependent on information from the other func- tion, operations managers
cannot make large financialtions. At the same time, other functions cannot
be carried out correctly without information on operations. straints and
financial evaluation methods Invest-Figure 1-8 shows these relationships.
ments. It is essential for these two functions to work a- Marketing is not fully
able to satisfy cus - gether and understand the limitations of each. FIGURE
1-7 president or CEO organization chart with information flow Strategic
Sales and Demand Direction of the company State of financial requirements
Marketing Operations Vice President of Marketing Vice President of
Marketing Vice President of Finance Organizational Operations needs
capacity to meet and financial sales and requirements demands

19. twenty. 20 • CHAPTER 1 INTRODUCTION TO OPERATIONS

MANAGEMENT Marketing IS Finance Asset Current financial Planned
measured capital investments Customer demands capabilities Information
Customer feedback Inventory level needs Capital requirements Budgets
Need for new products Production rates Technological capabilities
Shareholder Capabilities required Operations Management operations
Labor capabilities Available billing information capabilities costs product
specifications Current work requirements Work process Design
technological performance requirements improvements measures trade-offs
Accounting Human Resources Engineering FIGURE 1-8Information flow
between operations and other business functions information systems (IS) is
a function that ES- human resource managers must understand job
 information to flow through the organizational requirements and skills of
workers so that they can hire theand enable OM to operate effectively. OM
are highly correct people for available jobs. To manage employees
effectively on information such as demand forecasts, operations managers
must understand job quality levels, inventory levels, supplier market trends,
hiring and firing costs and training deliveries, and workers' schedules. SI
must understand costs.the needs of OM in order to design an adequate
infor- Accounting must take into account the inventory management system.
Typically, IS and OM work together to design, capability information, and
labor standards in the design of an information network. This close
relationship order to develop accurate cost data. In turn, it must be
continuous. The SI must be able to accommodate. Operations managers
must communicate billing information, meeting OM needs as they change in
response to mation and process improvements in accounting and market
demands. At the same time, it is up to is to rely heavily on accounting data
for the cost of managing-carrying the latest information technology
capabilities decisions.to the organization to improve the functioning of the
OM.

20. twenty-one. KEY TERMS • 21INSIDE OMWhile OM decisions are linked to

those of other business functions, decisions within the OM function must be
linked to each other. We learned that OM is responsible for a wide range of
strategic and tactical decisions. These decisions directly affect the others
and must be carefully linked, following the company's strategic direction. In
the Gourmet Wafers example, we see that product design decisions are
directly related to process selection. The reason is that a company's process
needs to be able to produce the desired product. Likewise, forecasting
directly demands impact functions such as capacity planning, man-agement
inventory, and scheduling. These are just a few examples of bindings within
the OM function. Throughout this book we will study different functions of
OM and learn how each impacts the other. You will realize that OM
decisions are not made in isolation. Rather, each decision is intertwined with
other business functions and other MO decisions. Chapter 1 Highlights
Operations management is the business function 5 A series of historical
milestones have shaped the operation, which is responsible for managing
and coordinating operations, into what it is today. Some of the most
significant resources needed to produce a business are Industrial Revo-
ducts and services. Without operations management, scientific
management, human relations there would be no products or services to
sell. movement, management science and the computer 2 The role of
operations management is to transform age. organizational inputs - human
 resources, facilities, 6 OM is a very important function in today's dy -
materials, technology and information - in a dynamic business environment.
Among that company's trends are finished goods or services. have had a
signi fi cant impact on business being fair. 3 Operations management is
responsible for a broad period of time, total quality management,
reengineering, fl exi -range of decisions. They range from strategic deci-
bility, time-based competition, supply chain-man sions, such as designing
the unique characteristics of an agement, a global market, and the
environment product and process, to tactical decisions, such as problems.
planning workers' schedules. 7 Operations managers must work closely with
all 4 Organizations can be divided into manufacturing other business
functions in a team format. Marketing and service operations, which differ in
tangibility, need to provide information about the customer's desires - for the
product and the degree of contact with the customer. tations. Finance needs
to provide information about manufacturing and service operations have
budget constraints. In turn, OM must communicate different operational
requirements. their needs and capabilities to the other functions. Key
Termsoperations management (OM) 3 tactical decisions 9 just-in-time (JIT)
15added value 5 industrial revolution 11 total quality management (TQM)
15effectiveness 5 scientific management 13 organizations 16manufacturing
reengineering 5 Hawthorne studies 14 fl exibility organizations 16service 5
human relations movement 14 mass customization decisions 16strategic 9
management science 14 time-based competition 16

21. 22. 22 • CHAPTER 1 Introduction to functions MANAGEMENTsupply chain

management (SMC) 16 business-to-customer (B2C) resource management
17 enterprise (ERP) 18global market 17 customer-to-customer (C2C) 17
Customer Relationship managementenvironmental issues 17 virtual market
17 18business (CRM) for business (B2B) 17 lean systems 18 cross-
functional decision making 18Discussion Questions 1. Defines the
management of term operations. 9. What are the three historical milestones
in operations Man- 2. explain operations decisions managers make and give
agement? How have management flowed? Threeexamples. 10. Identify
three current trends in operations management. 3. Describe the process of
transforming a company. Give and describe them. How do you think they
will change the future? examples. What constitutes the transformation
process in OM? An advertising agency, a bank and a television station? 11.
De fi ne the terms of total quality management, just in time, 4. What are the
three main functions of the company, and how are they and reengineering.
What do these terms have in common? Are they related to each other? Give
specific examples c. 12. Describe today's OM environment. How different is
 it? 5. What are the differences between strategic and tactical compared to a
few years ago? Identify specific characteristics of thinkcisions, and how do
they relate to each other? characterize today's OM environment. 6. Find an
article that refers to operations management in ei - 13. Describe the impact
of electronic commerce on man- ther Wall Street Journal, Fortune or
Business Week operations. Come to agement class. Identify the challenges
posed by e-commerce in opera, prepared to share with others what you
learned in the article. management of 7. Examine Fortune Magazine's list of
the 100 best companies. 14. Find a company you are familiar with and
explain how it works. Do most of these companies have anything in
common? They are the uses of your operations management function.
Identify which industries are most represented? company is doing correctly.
Do you have any suggestions for me? 8. Identify the two main differences
between service manufacturing and improvement organizations. Find an
example of a service and manufacturing company and compare them.
CASE: Hightone Electronics, Inc. George Gonzales, Director of Operations
at Hightone Electronics, components to small repair shops. The products
are offered forInc., He sat quietly at the conference table overlooking the
sales lobby through a catalog that was mailed to prospective cus-fi ce's
corporate headquarters in Palo Alto, California. He clients every four
months. The company built its reputation on the board meeting that had just
been postponed, and high quality and service. As time passed, HEI began
to provide the challenge that awaited him. The Board had just pronounced
its decision to start an Internet-based division of trainers, computers, and
electrical test equipment. The former HEI. Web-based shopping in the
electronics industry had product line expansion combined with an increase.
growing rapidly. The Board considered that HEI needed to offer the number
and type of customers the company served. It purchased online from its
customers to keep it running even though traditional repair shops were still
part of the competitive position. The Board looked to George to outline the
company's market, technical schools, universities, and key operations
management decisions that were to be known as corporations in Silicon
Valley and added to the list of successful Internet-based companies. The
client meeting. The next tip was just a week away. His job was cut Today
HEI operates the Palo Alto facility with the same for him. Dedication to
supplying quality products through the catalog Hightone Electronics, Inc.
was founded in Palo Alto, California, sales it had when it was first founded.
Customer service for more than fifty years. Originally, the company that
provides radio is still the top priority. HEI stocks and sells over 22,000 dif -

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