INTRODUCTION
“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.
1-2
Strategy, Processes, and Analytics
◻ Operations and supply chain management involves
• Product design
• Purchasing
• Manufacturing
• Service operations
• Logistics
• Distribution
1-3
Strategy, Processes, and Analytics
◻ Success depends upon:
• Strategy
• Processes to deliver products and services
• Analytics to support the decisions needed to manage
the firm
1-4
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
1-5
Operations and Supply Chain
Processes
Supply
Operations
Chain
Manufacturing and
Processes that
service processes
move information
used to transform
and material to
resources into
and from the firm
products
1-6
Operations and Supply Chain Processes
1-
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.
1-8
Process Activities
◻ 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.
1-9
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
1-10
Careers in Operations and
Supply Chain Management
Department
Plant Hospital Branch Call center
store
manager administrator manager manager
manager
Business
Lean
Supply chain Purchasing Quality control process
improvement
manager manager manager improvement
manager
analyst
Production Chief
Project Facilities
control operating
manager manager
analyst officer
1-11
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)
reengineering (BPR) Late 1990s
Electronic commerce
Early 2000s Service science
Mid 2010s
Business analytics
1-12
Current Issues in OSCM
◻ Coordinating relationships between members of
SC,
◻ Optimizing global network of suppliers,
producers, and distributors,
◻ Managing customer touch points,
◻ Raising awareness of OSCM as a competitive
weapon,
◻ Sustainability and triple bottom line.
1-13
1-14