INTRODUCTION TO OPERATIONS

AND SUPPLY CHAIN MANAGEMENT

Chapter One
McGraw-Hill/Irwin Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
 LO1-1: Identify the elements of operations and
supply chain management.
 LO1-2: Know the potential career opportunities in
operations and supply chain management.
 LO1-3: Recognize the major concepts that define
the operations and supply chain management field.
 LO1-4: Evaluate the efficiency of a firm.

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 1. Identify the elements of operations and
supply chain management

 Operations and supply chain

management involves
 Product design
 Purchasing
Strategy  Manufacturing
 Service operations
 Logistics
 Distribution
 Success depends upon
 Strategy
Analytics Processes  Processes to deliver products and
services
 Analytics to support the decisions
needed to manage the firm

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Supply
netwonrk
operations
in Procter
and
Gamble

https://www.youtube.com/watch?v=qfw4
RmbKB-M

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 A good starting point  Thing are made using
for understanding a operation processes
supply chain is to sketch  Thing are moved and
out the network from stored using supply chain
start to finish processes
 Supply chain management
is the integrated
management of operations
and supply chain processes.

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What Is Operations and Supply Chain
Management?
 The design, operation, and improvement of the
systems that create and delivery the firm’s primary
products and services
 Operations and supply chain management (OSCM)
is
A functional field of business
 Concerned with the management of the entire
production/delivery system

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 Operations and Supply Chain
Processes

Operations Supply
Chain
Manufacturing and Processes that move
service processes information and
used to transform material to and
resources into https://www.youtube.c from the firm
products om/watch?v=mdtjggxq
Kjw

https://www.youtube.com/wa
https://www.youtube.com/watch?v=1r
tch?v=j6JX579FjtU https://www.youtube.com/watch
-zqttFK3M
?v=rdRkZLymkE0 1-7
 Process Steps for Men’s Nylon Supplex
Parkas

https://www.youtube.com/wat 1-8
Content in Brief of OSCM
1. Manufacturing
1. Introduction
Processes
2. Strategy
3. Design product and 2. Facility Layout
Services 3. Service Processes
4. Waiting line Analysis
4. Project Management
5. Strategic Capacity
1. Strategy, 2.Manufacturing and Simulation
Management Product and and Service 5. Process Design and
6. Learning Curve Capacity Processes 6.
Analysis
Six Sigma Quality
7. Statistical Quality
Control

1. Enterprise Resource
4. Supply and Planning
1.
2.
Lean Supply Chain
Logistic, Distribution and
3. Supply Chain Demand 2. Forecasting

Transportation Processes Planning and 3. Sales and Operations

Planning
3. Global Sourcing and Control 4. Inventory Management
Procurement 5. Material Requirement
Planning
6. Workcenter Schedulling
7. Theory of Constrain

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Each Section of OSCM: What Is
Accomplished?

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Operations and Supply Chain
Processes
 Operations and Supply Chain processes can
be conveniently categorized, particularly
from the view of a producer of consumer
products and services, as planning, sourcing,
making, delivering and returning.

Planning Sourcing Making Delivering Returning

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Operations and Supply Chain
Processes

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Process Activities
 Planning – processes needed to operate an existing
supply chain
 Sourcing – selection of suppliers that will deliver the
goods and services needed to create the firm’s product
 Making – producing the major product or service
 Delivering – logistics processes such as selecting
carriers, coordinating the movement of goods and
information, and collecting payments from customers
 Returning – receiving worn-out, excess, and/or
defective products back from customers

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 Goods versus Services

Goods Services

Pure Goods Core Goods Core Services Pure Services

Intangible
Tangible Interaction with customer required
Less interaction with customers Inherently heterogeneous
Often homogeneous Perishable/time dependent
Not perishable – can be inventoried Defined and evaluated as a package of
features

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Goods Services

dokter

Data Storage System

akuntan
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 The things produced  Product service
by a service are bundling, when a firm
intangible service builds service activities
processes tend to be into its product
highly variable and offerings to create
time dependent additional value for
compared to goods the customer
producing processes

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Careers in Operations and Supply
Chain Management

Plant manager Hospital Branch Department

administrator manager store manager

Call center Supply chain Purchasing Quality control

manager manager manager manager

Business process Lean Project Production

improvement improvement manager control analyst
analyst manager

Facilities Chief
manager operating
officer

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Historical Development of Operations and Supply
Chain Management

Manufacturing strategy developed

Late 1970s
Just-in-time (JIT) production
Early 1980s pioneered by the Japanese
Mid 1980s Service quality and productivity
Total quality management Early 1990s
(TQM) and Quality certification Six-sigma quality
programs Mid 1990s Supply chain
Business process management (SCM)
Late 1990s
reengineering (BPR)
Electronic commerce
Early 2000s Service science

Mid 2010s
Business analytics

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Current Issues in OSCM
 Coordinating relationships between members of SC
 https://www.youtube.com/watch?v=X_cHhzwUOeM

 Optimizing global network of suppliers, producers,

and distributors https://www.youtube.com/watch?v=mbGukMPPvl0
 Managing customer touch points
 https://www.youtube.com/watch?v=Ij258_QAfrE

 Raising awareness of OSCM as a competitive

weapon
 Sustainability and triple bottom line
 Digital SCM 4.0 https:// www.youtube.com/watch?v=pdcJJpsOPGw

 www.strategyand.pwc.com/industry4-0
https://www.youtube.com/watch?v=q0_9tx2mUJ4
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Efficiency, Effectiveness, and Value

Efficiency

• Doing something at the lowest possible cost

Effectiveness

• Doing the right things to create the most value for your
customer

Value

• The attractiveness of a product relative to its cost

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Efficiency and Wall Street


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