scm

1. Operations
management and
integration with supply
chain management
Supply chain and Logistics management
OSCM 5140
K. Wanniarachchi C.Eng., MIEE, FCIM,MBA,PMP

2. Learning objectives
• Identify main Organization and Operations management functions
• Analysis the basic operation management processes and activities
• Differentiate the product and service operation
• Identify competitive priorities in an organization
• Identify supply chain function
• Supply chain value proposition

3. Operations management and Main functions
within an organization
What is operations management ?
This is the management of activities and resources that
create goods and /or services.
What is the main objective of operations management ?
• To improve efficiency – minimize cost and time in activities
carried out under operations management
• To improve effectiveness – to achieve intend goals

4. Understanding basic functions units in an
organization
Organization
Finance Operations Marketing
$ Products / services
DemandFunding needs

5. Operations functional – transformation process
Inputs
• Building /Land
• Labour
• Machines
• Materials
• Information
Transformation /
conversion
process
Outputs
Goods and
services
Feedback
Control
Feedback

6. Production of goods – transformation process
Canned food processing
Inputs Process Output
Canned vegetable

7. Production of goods – transformation process
Canned food processing
Inputs Process Output
Raw vegetables Cleaning Canned vegetable
Metal sheets
Water
Making cans
Energy Cutting
Labour Cooking
Building Packing
Equipment Labelling

8. Production of Services – transformation process
Hospital
Inputs Process Output
The performance of the service often occurs at the point of contact

9. Production of Services – transformation process
Hospital
Inputs Process Output
Sick patient,
doctors, nurses
Examination Healthy patients
Building Surgery
Energy Monitoring
Medical equipment Medication
Laboratories Therapy
The performance of the service often occurs at the point of contact

10. Main differences in goods and service operations
Goods Services
Output
Customer contact
Uniformity of input
Labour content
Uniformity of output
Measurement of productivity
Quality assurance

11. Main differences in goods and service operations
Goods Services
Output Tangible Intangible
Customer contact LOW HIGH
Uniformity of input HIGH LOW
Labour content LOW HIGH
Uniformity of output HIGH LOW
Measurement of productivity EASY DIFFICULT
Quality assurance EASY DIFFICULT

12. Operations managers activities
01
02
03
04
Planning Organizing
Directing Controlling

13. Responsibilities of operations managers
Planning Organizing
Capacity
Suppliers
Controlling Directing
Inventory
Logistics

14. Responsibilities of operations managers
Planning Organizing
Capacity Degree of centralization
Location Departments and staff
Mix of products Subcontracting
Production process Suppliers
Layout
Controlling Directing
Inventory Scheduling
Quality Issuance of work orders
Production speed / schedule Job assignments
Cost Purchasing
Logistics

15. Competitiveness
Ability and performance of one organization
compared to another in the market place
offering similar products or services.
Key purchasing criteria : factors that influence customer
to purchase – Competitive priority
• Price
• Quality
• Delivery
• Customer service
• Variety / customization

16. Analyzing competitive priorities
Competitive priority Emphasis Examples
Cost Low cost Superstore, Walmart,
WestJet, IKEA
Quality
Variety / Customization
Delivery
Customer service

17. Analyzing competitive priorities
Competitive priority Emphasis Examples
Cost Low cost Superstore, Walmart,
WestJet, IKEA
Quality Meeting customer
requirements
Innovations
Honda, Apple, 3M, IKEA,
GE, Telsa
Variety / Customization Quantity flexibility
Features and facilities
Dell computer, Most
software companies
Delivery Rapid delivery
On time delivery
Fast food chains, FedEx,
UPS, Amazon
Customer service Customer options
Method of offering
Hotel industry, high end
restaurants, Business class
airline

18. Class Assignment – Mini Case
Lynn

19. Supply chain management
Supply chain management is a set of processes used to
effectively and efficiently integrate suppliers,
manufacturers, distribution centers, distributors and
retailers so that products are produced and distributed at
the right quantities, to the right locations, and at the
right time in order to minimize system-wide costs while
achieving the consumer’s desired value proposition.

20. SUPPLIER
NETWORK
INTEGRATED
ENTERPRISE DISTRIBUTIVE
NETWORK
Information, Product, Service, Financial and Knowledge Flows
M
A
T
E
R
I
A
L
S
THE INTEGRATED SUPPLY CHAIN
Capacity, Information, Core Competencies, Capital and Human Resources
Relationship Management
Sourcing
Operations
Logistics
E
N
D
C
O
N
S
U
M
E
R
S

21. Main activities under SCM and Logistics
management
Operations ProcurementWarehousing
Returns and
repairs
Transportation
Sourcing
Customer
service
Integrated
operations
planning
Inventory mgt
Designing, planning, executing, or
measuring activities related to:

22. Ways in which SCM can add value to Organisations
• Reduced operating cost
• Increased revenue
• Fill rate
• Extended offerings
• Location
• Mix
• Product/Service/Solution
• Customization
• New product introduction
• Asset utilization
• Facilities
• Production
• Transportation
• Inventory

23. Integrated Supply chain
• Consumer / end customer
• Retailer
• Distributor
• Service provider
• Manufacturer
• Material provider

24. Why should companies emphasis on SCM ?
• Time and place positioning (right place at the right time)
• Lowest total cost
• Asset minimization
• Supply chain connectivity
• Synergy and collaboration across channels
• Value and solution delivery

25. Supply chain value proposition
• Service Excellence –
Effectiveness
• Cost Minimization and Avoidance
– Efficiency
• Value Generation – Relevancy
• Continuous Improvement –
Sustainability
Effectiveness
Relevancy
EfficiencySustainability
Value
Creation

26. Video presentation – Ford Supply chain
management
1. Identify Ford’s transformation process (Inputs, Processes, Output)
2. What was the competitive priority that they were trying to achieve?
3. What was their limiting factor to achieve this ?
4. What was the main strategy (s) applied by Ford to overcome or
achieve this competitive priority ?
5. What were the main actions / tactics used to support their strategy