Optimize tradeoffs to make and deliver products and services in the most cost effective and efficient ways while maintaining the highest quality. The goals of OSCM is to manage and reduce costs through increased productivity, cost reductions, sourcing and procuring, and increased efficiencies and effectiveness in the chains of logistics. It also involves planning and estimating supply and demand, which is used to coordinate and orchestrate the level of all these activities.

1. Operations and Supply Chain
Management

2. Optimizing Tradeoffs
• Optimize to make and
deliver products and
services in the most
cost effective and
efficient ways while
maintaining the highest
quality

3. OSCM
• Operations and Supply
Chain Management
(OSCM) is defined as the
design, operation and
improvement of the
systems that create and
deliver the products and
services of an enterprise.
• OSCM involves a series of
steps and processes where
inputs are transformed
into the finished good.

4. Origins
• The Industrial Revolution was
predicated on nascent ideas of
OSCM: the division of labor and the
assembly line and analyzing
productivity and efficiency.
• Productivity and efficiency
initiatives were brutal back in the
day; like how many pins could an
eight year old make in a typical 12
hour shift.
• We have tamed a lot of those issues
through regulation and oversight,
making a kinder, gentler work place.
But it is still a problem especially in
factories in outsourcing areas like
Bangladesh and FoxConn in China.

5. Goals of OSCM
The goals of OSCM is to
manage and reduce costs
through increased
productivity, cost reductions,
sourcing and procuring, and
increased efficiencies and
effectiveness in the chains of
logistics.
It also involves planning and
estimating supply and
demand, which is used to
coordinate and orchestrate the
level of all these activities.

6. Key Terms
• Two key terms to define
in relation to relevant
business goals:
– Efficiency: doing
something at the lowest
possible cost
– Effectiveness: doing the
right things to create the
most value for the
company

7. Strategy and Tactics
• Tactical thinking is “doing
things right,” while
Strategic thinking is
“doing the right things.”
Strategic thinking is
typically leadership:
creating the vision.
Whereas Tactical thinking
is management:
implementing the vision.

8. 5 Sequential Steps
• OCSM can be
categorized into these
five sequential steps:
– planning
– sourcing
– making
– delivering
– returning

9. lean supply chains
Hot topics in the field are
lean supply chains and
sustainability, which
increase the efficiency and
environmental impact of
supply chain processes.

10. Operations
Operations refers to the
process steps used to
transform the resources
employed by the company
such as raw materials, labor,
machines, technology, and
scheduling, into products
that are desired by
customers. It can be a
physical or electronic
products, or a service, or
some combination of both.

11. Supply Chains
• Supply Chains refer to the
processes that move
information and material
to and from to and from
the manufacturing or
service and then on to
customers. It also
includes dealing with
follow on support and
returns. Supply chains
are the external part of
operations.

12. SCM

13. Timeline

14. IT
The constant evolution of
information technologies
has made it feasible and
cost effective to capture
information directly from
the source through
systems such as point-of-
sale (POS), identification
tagging, non-invasive
testing, bar code reading
and image recognition.

15. Match Supply & Demand
• You don’t want to order too many
supplies or too little, build more
than you can sell or not enough
and lose customers to your
competitors.
• You don’t want to be carrying too
much inventory which is costly
and can become obsolete. You
want just as much as you need,
when you need it, and you want to
turn your products around fast
and out the door and into the
hands of customers.
• In other words, you want to match
supply and demand. The closer
you anticipate and match demand
with your supply, the less waste
and more profit.

16. Toyota
OSCM evolved rapidly since
the 1980s when Toyota
started innovating in the car
business by adopting,
inventing and employing
new techniques throughout
their manufacturing process
and holding their suppliers
to higher standards and
treating them like the
strategic partners they are.

17. Competitive Advantage
Networked computers have played an immense role
in knitting together and coordinating these
activities. There is emphasis now on the
importance of being lean and green to ensure
competitiveness. It is obviously critical to
successfully manage the entire supply flow: from
the sources and supplies, through the value-added
processes you do in your business, and on to your
customers and delivery. To do this well you need to
know what tools and techniques have been
developed and are available to you to implement in
your own creative and strategic ways.

18. Value Creation
If you are going to be involved
directly in making products or
providing services you need to
know how best to design,
supply and run the processes.
OSCM is a mix of managing
people and applying
technology. The goal is to
efficiently create value and
wealth by supplying quality
goods and services. It’s the
details that count. The deity,
or the devil, is in the details.

20. Henry Ford
OSCM was born with the
industrial revolution and
was really amped up with
Henry Ford and his
assemble line system for
making the Model-T.

21. Frederick Taylor
• Then time and motion
studies were developed
to refine the efficiency
and speed of assembly
lines and mass
production techniques.
Frederick Taylor
developed these
principals of scientific
management.

23. Time and Efficiency

24. Modern Times

25. Digital Taylorism

26. Amazon

27. The Whiz Kids
Ford was again an innovator
when, after WWII, the
company hired en mass a
group of super smart
operations engineers under
the leadership of Robert
McNamara. They were
coined The Whiz Kids and
McNamara became the first
President of Ford outside
the family. They
revolutionized Ford’s
operations.

28. WW II
This group had been
working on calculating the
effectiveness of bombing
raids launched from England
against Germany. They
were based in Washington
and used rooms filled with
rows of people with
mechanical calculating
machines like a coordinated
human-mechanical
computer; real number
crunching!

29. The Whiz Kids

30. Japan Inc.
• In the 1980s Japan Inc.
and especially Toyota
developed an array of
new and refined
techniques to capitalize
on manufacturing as a
competitive advantage.
• Here is a quick recap of
how the field has
developed over the last
thirty years:

31. Just In Time
• Just In Time (JIT)
production was a major
breakthrough in
manufacturing philosophy.
Pioneered by the Japanese,
JIT is an integrated set of
activities designed to
achieve high volume
production using minimal
inventories of parts that
arrive at the work station in
a production line exactly
when they are needed.

32. Total Quality Control
• Total Quality Control
(TQC) these concepts
relentlessly seek to
eliminate the causes of
production based
defects.

33. Lean Manufacturing
• Lean Manufacturing: JIT
coupled with TQC is now
the basis of many
production and service
processes. Lean
Manufacturing is the term
used to refer to these
practices and tools. Lean
process ideas have been
applied to many business
disciplines. One of the
interesting ones is in
thinking about Start Ups
and entrepreneurial
activities.

34. Manufacturing Strategy Paradigm
• Manufacturing Strategy Paradigm
was developed at the Harvard
Business School by William
Abernathy, Robert Hayes, Kim Clark
and others to show executives how
they could harness their
manufacturing capability as a
strategic competitive advantage. This
was accomplished by creating a
focused factory concept that
optimized a set of tasks and limited
them for high performance. This
type of design and analysis requires
trade-offs between performance
measures such as low cost, high
quality, and flexibility. These
techniques have been hugely
influential in the management of
factories.

35. Total Quality Management
• Total Quality Management TQM W
Edwards Demming was an early
apostle of the quality movement and
his legacy is related to TQM. The
Baldridge National Quality Award
recognizes companies for
outstanding quality management
systems and their adherence to TQM.
ISO 9000 is a certification standard
developed to help implement,
manage and measure compliance to
these concepts. ISO plays a major
role in setting quality standards for
global manufactures. Many
companies require that their vendors
meet these standards as a condition
for obtaining contracts.

36. Six-Sigma
• Six-Sigma Quality has to do with refining
manufacturing processes to achieve
quality by reducing defects to one in less
than six standard deviations. A standard
deviation is a statistical measure of
deviation from a norm. Six standard
deviations represent a tolerance of
approximately 99.999%. That is
considered the gold standard of quality
and as close as is practically possible
these days to attaining the holy grail of
zero defects. These tools have been
taught to managers as part of “Green
Belt” and “Black Belt” programs.
Besides manufacturing, Six-sigma has
been applied across lots of repetitive
error-prone business areas such as:
accounts receivables, sales, finance, IT,
legal, marketing, HR, R&D and
environmental, health and safety
services at companies.

37. Six Sigma

38. Stock just enough to satisfy the
Demand
Companies know that to keep earnings high and
sustainable they need to get their products in
stores or to customers as quickly as possible.
They need to be able to create precise ordering
systems so they can make and stock just enough
to satisfy the demand. Until recently phone and
fax was used to place big orders. This was a
manual, slow and error-prone process.

39. Efficient logistics
Advances in software and technology are enabling this
coordination and helping provide more stable,
sustainable and predictable profitability. Profit margins
have improved at many smart retailers due to these
technology advances. Efficient logistics have taken on a
whole new level of strategic importance. It also helps
ease the reliance on price markdowns and sales, which
cut into earnings, to move merchandise. You can also
order less and order more often, reducing risk and
increasing the ability to test a demand and adjust orders
if something fails to sell or catches on more than was
anticipated.

40. match supply and demand
The goal is to have the right product at the right
place at the right time. A company needs to be
agile and flexible and have the ability to react to
what is selling. It cannot afford a leaky, mushy
system and to carry excess inventory. Leading
companies are using operations and supply chain
management techniques to match supply and
demand as closely and quickly as possible. This
strategy is called minimizing concept to cash time:
the time between developing a concept and the
horizon of receiving revenues from sales of the
product.

41. Computer Simulation
• Here is a link to a great operations simulation
model that can help you quickly gain some
intuition and experience in planning and
executing these processes by seeing the
implications of manipulating different
variables.
• www.responsive.net

42. Digital First
This is important for making and delivering physical
products, and for services delivered by personnel
directly to customers. Strategic new business
models have developed surrounding digital
downloads and products and services that can scale
to demand while not being physical. This
eliminates a lot of these concerns. You can sell as
many or as few and in any geographical market
without concern for stocking or manufacturing or
delivery. This is the basis of the book Long Tail
which I highly recommend reading.

43. Operations and Strategy
• The strategy guru Michael Porter
came up with a concise and clear
framework for thinking about
strategic goals as the search for
Competitive Advantage. A
company can perform effectively
by some combination of
Differentiation and Cost
Leadership. Differentiation
means that you products or
services have distinct features
that set them apart from other
offerings and stand out as being
superior in customers’ opinions.
Cost Leadership means that a
company provides the best value:
faster, better, cheaper, to
customers.

44. Careers in Operations
• Career opportunities in
operations and supply
management are plentiful today
as companies strive to increase
profitability by improving
quality, productivity and
reducing costs. Some of the
jobs are:
– Manager of a plant, call center,
bank
– Hospital administrator
– Supply chain, purchasing, or
quality control manager
– Facilities manager
– Project manager
– The top of the heap is Chief
Operating Officer or COO.

45. John Cousins
MBA ASAP
Twitter: @jjcousins