Chapter 14: Management of Operations

Most businesses build a chain of activities that add value at each section of the chain. Each element of the value chain has a capability that provides value added to the product. A new venture manages its value chain to provide the ultimate product to the customer. The firm also moves, stores, and tracks parts and materials to its value-adding partners and strives to ensure timely, efficient production of the service or product. Information flow along the value chain enables the coordination of the distributed tasks. An effective enterprise manages for operational excellence by trying to develop and communicate measurements of efficiency and timeliness.

Using the Internet and related technologies, new enterprises can build a powerful virtual organization. The Internet can be used to communicate with a set of partners in a quick and effective manner. This set of partners can work from a common schedule, manage how jointly assigned tasks are allocated, and see how interdependencies impact a common schedule. Interrelated tasks can be better managed across firms, which results in better forecasting and stronger chances of achieving on-time production.