“
CONCEPT OF VALUE
? ▪️ VALUE is the perception of the benefits associated with
a good, service or bundle of both in relation to what
…
buyers are willing to pay for them.
▪️ The customer’s cumulative judgment of the perceived
benefits leads to either satisfaction or dissatisfaction.
VALUE = Perceived Benefits 2
B Price(cost) to the Customer
A
PERCEIVED BENEFITS PRICE(COST) TO THE CUSTOMER
Customer Benefit
Packages
▪️Set of tangible (goods-content) and
intangible (service-content) features that the
customer recognizes, pays for, uses or
experiences.
▪️A CBP consists of a primary good or service
coupled with peripheral goods and/or services,
and sometimes variants.
CUSTOMER BENEFIT PACKAGES (CBP)
Is the “core offering” that
attracts customers and
responds to their basic
needs.
PRIMARY GOOD
OR SERVICE
CUSTOMER BENEFIT PACKAGES (CBP)
Are those that are not
essential to the primary
good or service, but
enhance it.
PERIPHERAL
GOODS
CUSTOMER BENEFIT PACKAGES (CBP)
Is a CBP feature that departs
from the standard CBP and
is normally location or firm
specific.
VARIANTS
VALUE
CHAINS ▪️ A value chain is a network of facilities and
processes that describes the flow of materials,
finished goods, services, information, and financial
transactions from suppliers, through the facilities
and processes that create goods, and services, and
those that deliver them to the customer.
▪️ Value chains involve all major functions in an
organization. This includes not only operations but
also purchasing, marketing, sales, human resource
management, finance and accounting, information
systems and technology, distribution and service
and support.
VALUE CHAIN FRAMEWORKS
VALUE CHAINS: PRE-AND POST
VALUE CHAINS: AN INPUT- PRODUCTION
OUTPUT FRAMEWORK SERVICESFRAMEWORK
Pre-and Post Production services complete the
The value chain begins with suppliers who ownership cycle for the good or service.
provide inputs to a goods-or service- Preproduction services include customized
providing process or network of processes. and team-oriented product design, consulting
Inputs are transformed into value-added services, contract negotiations, guarantees,
goods and services through processes that customer financing, etc.
are supported by resources as equipment Postproduction services include on-site
and facilities, labor, money and information. installation or application services,
maintenance and repair, warranty and claim
services, warehouse and inventory
management, etc.
VALUE CHAIN FRAMEWORKS
VALUE CHAINS:
operations, inventory and materials
HIERARCHICAL SUPPLY management, transportation and distribution,
CHAIN FRAMEWORK information management, finance and customer
service.
Supply chains are the foundation of most A goods-producing supply chain consists of
value chains. suppliers, manufacturers, distributors, retailers,
The purpose of supply chain is to and customer arranged in hierarchical
coordinate the flow of material, services, structure.
and information among the elements of the Raw materials and components are ordered
supply chain to maximize customer value. from suppliers and must be transported to
The key functions include purchasing and manufacturing facilities for production and
procurement of materials and supplies, assembly into finished goods.
sales and order processing, Finished goods are shipped to distributors
who operate distribution centers.
AN INPUT-OUTPUT FRAMEWORK OF A VALUE
CHAIN
PRE-AND POST PRODUCTION SERVICES FRAMEWORK OF A VALUE
CHAIN
TYPICAL GOODS-PRODUCING SUPPLY CHAIN
STRUCTURE
MAJOR ERAS OF OPERATIONS MANAGEMENT
MAJOR ERAS OF OPERATIONS MANAGEMENT
A FOCUS ON COST AND THE QUALITY REVOLUTION
EFFICIENCY
After World War II, Japanese companies
During the Industrial Revolution, many embarked on a massive effort to train the
inventions came into being that allowed workforce and other innovative management
goods to be manufactured with greater tools to identify causes of quality problems
ease and speed, and led to the and fix them.
development of modern factories.
By the mid-1970s, the world discovered that
The development of computers and other Japanese goods had fewer defects, were more
forms of technology during the last 50 reliable, and better met customer needs than
years has revolutionized operations. American goods.
MAJOR ERAS OF OPERATIONS MANAGEMENT
CUSTOMIZATION AND
TIME-BASED COMPETITION
DESIGN
Quick response is achieved by continually
Companies began to emphasize innovative improving and reengineering processes, that
designs and product features to gain a is, rethinking and redesigning processes to
competitive edge. achieve dramatic improvements in cost,
quality, speed and service.
New types of operating systems emerged Tasks includes developing products faster than
that enabled companies to manufacture competitors, speeding ordering, and delivering
goods and services better, cheaper, and processes, rapidly responding to changes in
faster than their competitors, while customer needs’, and improving the flow of
facilitating innovation and increasing paperwork.
variety.
MAJOR ERAS OF OPERATIONS MANAGEMENT
THE SERVICE REVOLUTION SUSTAINABILITY
In 1955, about 50% of the workforce was
SUSTAINABILITY refers to an organization’s
employed in goods-producing industries
ability to strategically address current business
and 50% in service-providing industries.
needs and successfully develop a long-term
strategy that embraces opportunities and
In December 2023, a total of 50.5 million
manages risk for all products, systems, supply
Filipino people were employed and more
chains, and processes to preserve resources
than half of them were in services (57.3%),
for future generations.
about a quarter from agriculture (24.4%),
and less than a fifth from industry (18.3%)
sectors.
PERSPECTIVES OF SUSTAINABILITY
Is an organization’s
commitment to the long-
term quality of our
environment.
ENVIRONMENTAL
MAJOR ERAS OF OPERATIONS MANAGEMENT
PERSPECTIVES OF SUSTAINABILITY
Is an organization’s
commitment to maintain
healthy communities and a
society that improves the
quality of life.
SOCIAL
MAJOR ERAS OF OPERATIONS MANAGEMENT
PERSPECTIVES OF SUSTAINABILITY
Is an organization’s commitment to
address current business needs and
economic vitality, and to have the
agility and strategic management to
prepare successfully for future
business, markets, and operating
environments.
ECONOMIC
MAJOR ERAS OF OPERATIONS MANAGEMENT
