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Chapter 1

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Chapter 1

  1. 1. Chapter 1 Operations and Supply Chain ManagementMcGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
  2. 2. Learning Objectives • Understand why it is important to study operations and supply chain management. • Define efficient and effective operations. • Categorize operations and supply chain processes. • Contrast differences between services and goods producing processes. • Identify operations and supply chain management career opportunities. • Describe how the field has developed over time. 1-2
  3. 3. What is Operations and SupplyManagement? • Operations and supply management (OSM): the design, operation, and improvement of the systems that create and deliver the firm’s primary products and services – Functional field of business – Clear line management responsibilities • Concerned with the management of the entire system that produces a good or delivers a service 1-3
  4. 4. Process Steps for Men’s Nylon SupplexParka 1-4
  5. 5. Understanding the Global Supply Chain • Success in today’s global markets requires a business strategy that matches the preferences of customers with the realities of supply networks • A sustainable strategy is critical – Meets the needs of shareholders and employees – Preserves the environment • Supply refers to processes that move information and material to and from the manufacturing and service processes of the firm 1-5
  6. 6. Organization of OSM—The Core 1-6
  7. 7. Operations and Supply Processes 1-7
  8. 8. Work Involved in Each Type of Process • Planning: the processes needed to operate an existing supply chain strategically • Sourcing: the selection of suppliers that will deliver the goods and services needed to create the firm’s product • Making: Where the major product is produced or the service provided • Delivering: carriers are picked to move products to warehouses and customers • Returning: the processes for receiving worn- out, defective, and excess products back from customers 1-8
  9. 9. Differences Between Services and Goods 1. Services are intangible 2. Services requires some interaction with the customer 3. Services are inherently heterogeneous 4. Services are perishable and time dependent 5. Services are defined and evaluated as a package of features 1-9
  10. 10. The Goods-Services Continuum 1-10
  11. 11. Efficiency, Effectiveness, and Value • Efficiency: Doing something at the lowest possible cost • Effectiveness: Doing the right things to create the most value for the company • Value: quality divided by price 1-11
  12. 12. Careers in Operations and SupplyManagement • Plant manager • Business process • Hospital improvement analyst administrator • Quality control • Branch manager manager • Call center manager • Lean improvement • Supply chain manager manager • Project manager • Purchasing • Production control manager analyst • Facilities manager 1-12
  13. 13. Historical Development of Operations andSupply Management • Lean manufacturing, JIT, and TQC • Manufacturing strategy paradigm • Service quality and productivity • Total quality management (TQM) and quality certifications • Business process reengineering • Six-sigma quality • Supply chain management • Electronic commerce • Service science 1-13
  14. 14. Current Issues in Operations and SupplyManagement 1. Coordinating the relationship between mutually supportive but separate organizations 2. Optimizing global suppliers, production, and distribution networks 3. Managing customer touch points 4. Raising senior management awareness of operations as a significant competitive weapon 5. Sustainability and the triple bottom line 1-14