This chapter introduces operations and supply chain management. It defines OSM as designing, operating, and improving systems that create and deliver products and services. The chapter outlines the learning objectives which are to understand the importance of OSM and define efficient and effective operations. It describes the core processes in OSM like planning, sourcing, making, delivering, and returning. It also contrasts services and goods processes and careers in OSM. Finally, it discusses the historical development and current issues in the field.

1. Chapter 1
Operations and Supply Chain Management
McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

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.
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3. What is Operations and Supply
Management?
• 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
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4. Process Steps for Men’s Nylon Supplex
Parka
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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
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6. Organization of OSM—The Core
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7. Operations and Supply Processes
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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
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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
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10. The Goods-Services Continuum
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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
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12. Careers in Operations and Supply
Management
• 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
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13. Historical Development of Operations and
Supply 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
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14. Current Issues in Operations and Supply
Management
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
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