Supply Chain Planning ^0 Operations Part 9.pptx

Supply Chain
Planning &
Operations
Part 9

Lecture
Outline
• What Operations and Supply Chain
Managers Do
• Operations Function
• Evolution of Operations and Supply
Chain Management
• Globalization and Competitiveness
• Operations
• Strategy and Organization of the Text
• Learning Objectives for This Course
1-2

What Operations and
Supply Chain Managers
Do
• What is Operations Management?
■ design, operation, and improvement of productive systems
• What is Operations?
■ a function or system that transforms inputs into outputs of
greater value
• What is a Transformation Process?
■ a series of activities along a value chain extending from
supplier to customer
■ activities that do not add value are superfluous and should be
eliminated 1-3

• Physical: as in manufacturing
operations
• Locational: as in transportation or
warehouse operations
• Exchange: as in retail operations
• Physiological: as in health care
• Psychological: as in entertainment
• Informational: as in communication
Transformation
Process
1-4

INPUT
•Material
Operations as a Transformation
Process
•Machines
•Labor
•Management
•Capital
TRANSFORMATION
PROCESS
OUTPUT
•Goods
•Services
Feedback & Requirements 1-5

Operations
Function
• Operations
• Marketing
• Finance and
Accounting
• Human
Resources
• Outside
Suppliers
1-6

How is Operations Relevant to my Major?
• Accounting
• Information
Technology
• Management
• “As an auditor you must
understand the fundamentals of
operations management.”
• “IT is a tool, and there’s no
better place to apply it than in
operations.”
• “We use so many things you
learn in an operations class—
scheduling, lean production,
theory of constraints, and tons
of quality tools.”
1-7

How is Operations Relevant to my Major?
(cont.)
• Economics
• “It’s all about processes. I live
by flowcharts and Pareto
analysis.”
• “How can you do a good job
marketing a product if you’re
unsure of its quality or
delivery status?”
• “Most of our capital
budgeting requests are from
operations, and most of our
cost savings, too.”
• Marketing
1-8
• Finance

Evolution of Operations
and Supply Chain
Management
• Craft production
■ process of handcrafting products or services
for individual customers
• Division of labor
■ dividing a job into a series of small tasks each
performed by a different worker
• Interchangeable parts
■ standardization of parts initially as
replacement parts; enabled mass production
1-9

• Scientific management
■ systematic analysis of work methods
• Mass production
■ high-volume production of a
standardized product for a mass market
• Lean production
■ adaptation of mass production that
prizes quality and flexibility
Evolution of Operations and Supply Chain
Management (cont.)
1-10

Historical
Events in
Operations
Management
Era Events/Concepts Dates Originator
Industrial Steam engine 1769 James Watt
Revolution Division of labor 1776 Adam Smith
Interchangeable parts 1790 Eli Whitney
Scientific
Management
Principles of scientific
management
Time and motion studies
Activity scheduling chart
Moving assembly line
1911
1911
1912
1913
Frederick W. Taylor
Frank and
Lillian Gilbreth
Henry Gantt
Henry Ford 1-11

Historical Events in Operations
Management (cont.)
Human
Relations
Hawthorne studies 1930 Elton Mayo
Motivation theories
1940s
1950s
Abraham Maslow
Frederick Herzberg
1960s Douglas McGregor
Linear programming 1947 George Dantzig
Digital computer 1951 Remington Rand
Simulation, waiting
line theory, decision
theory, PERT/CPM
1950s
Operations research
groups
Operations
Research
MRP, EDI, EFT, CIM
1960s,
1970s
Joseph Orlicky, IBM
and others
1-12

Management (cont.)
JIT (just-in-time) 1970s Taiichi Ohno (Toyota)
TQM (total quality
management)
1980s
W. Edwards Deming,
Joseph Juran
Quality
Revolution
Strategy and
operations
1980s
Wickham Skinner,
Robert Hayes
Business
process
reengineering
1990s
Michael Hammer,
James Champy
Six Sigma 1990s GE, Motorola
1-13

Internet Internet, WWW, ERP, 1990s ARPANET, Tim
Revolution supply chain management Berners-Lee SAP,
i2
Technologies,
ORACLE
E-commerce 2000s Amazon, Yahoo,
eBay, Google, and
others
Globalization WTO, European Union,
and other trade
agreements, global supply
chains, outsourcing, BPO,
Services Science
1990s
2000s
Numerous countries
and companies
Management (cont.)
1-14

Evolution of Operations and Supply Chain
Management (cont.)
• Supply chain management
■ management of the flow of information, products, and services across
a network of customers, enterprises, and supply chain partners
1-15

Globalization and
Competitiveness
• Why “go global”?
■ favorable cost
■ access to international markets
■ response to changes in demand
■ reliable sources of supply
■ latest trends and technologies
• Increased globalization
■ results from the Internet and falling trade
barriers
1-16

Globalization and
Competitiveness (cont.)
Hourly Compensation Costs for Production Workers
Source: U.S. Bureau of Labor Statistics, 2005.
1-17

Globalization and
World Population Distribution
Source: U.S. Census Bureau, 2006.
1-18

Globalization and
Trade in Goods as % of GDP
(sum of merchandise exports and imports divided by GDP, valued in U.S. dollars)
1-19

Productivity and
Competitiveness
• Competitiveness
■ degree to which a nation can produce goods and
services that meet the test of international
markets
• Productivity
■ ratio of output to input
• Output
■ sales made, products produced, customers
served, meals delivered, or calls answered
• Input
■ labor hours, investment in equipment, material
usage, or square footage
1-20

Productivity and
Measures of Productivity
1-21

Productivity and Competitiveness
(cont.)
Average Annual Growth Rates in Productivity, 1995-2005.
Source: Bureau of Labor Statistics. A Chartbook of
International Labor Comparisons. January 2007, p. 28.
1-22

Productivity and Competitiveness
(cont.)
Average Annual Growth Rates in Output and Input, 1995-2005
Source: Bureau of Labor Statistics. A Chartbook of International
Labor Comparisons, January 2007, p. 26.
Dramatic Increase in
Output w/ Decrease in
Labor Hours
1-23

Productivity and
• Retrenching
■ productivity is increasing, but both output and input
decrease with input decreasing at a faster rate
• Assumption that more input would cause
output to increase at the same rate
■ certain limits to the amount of output may not be
considered
■ output produced is emphasized, not output sold;
increased inventories
1-24

• Strategy
■ Provides direction for achieving a mission
• Five Steps for Strategy Formulation
■ Defining a primary task
• What is the firm in the business of doing?
■ Assessing core competencies
• What does the firm do better than anyone else?
■ Determining order winners and order qualifiers
• What qualifies an item to be considered for purchase?
• What wins the order?
■ Positioning the firm
• How will the firm compete?
■ Deploying the strategy
Strategy and
Operations
1-25

Strategic
Planning
Mission
and Vision
Corporate
Strategy
Operations
Strategy
Marketing
Strategy
Financial
Strategy 1-26

The Business Strategies Behind Trader Joe’s,
Primark, Chipotle and More

Order Winners
and Order Qualifiers
Source: Adapted from Nigel Slack, Stuart Chambers, Robert Johnston, and Alan
Betts, Operations and Process Management, Prentice Hall, 2006, p. 47 1-28

Positioning the
Firm
• Cost
• Speed
• Quality
• Flexibility
1-29

Positioning the
Firm: Cost
• Waste elimination
■ relentlessly pursuing the removal of all waste
• Examination of cost structure
■ looking at the entire cost structure for
reduction potential
• Lean production
■ providing low costs through disciplined
operations
1-30

Positioning the
Firm: Speed
• fast moves, fast adaptations, tight linkages
• Internet
■ conditioned customers to expect immediate responses
• Service organizations
■ always competed on speed (McDonald’s, LensCrafters, and
Federal Express)
• Manufacturers
■ time-based competition: build-to-order production and
efficient supply chains
• Fashion industry
■ two-week design-to-rack lead time of Spanish retailer, Zara
1-31

Positioning the
Firm: Quality
• Minimizing defect rates or conforming to
design specifications; please the customer
• Ritz-Carlton - one customer at a time
■ Service system is designed to “move heaven
and earth” to satisfy customer
■ Every employee is empowered to satisfy a
guest’s wish
■ Teams at all levels set objectives and devise
quality action plans
■ Each hotel has a quality leader 1-32

Positioning the
Firm:
Flexibility
• ability to adjust to changes in product mix,
production volume, or design
• National Bicycle Industrial Company
■ offers 11,231,862 variations
■ delivers within two weeks at costs only 10%
above standard models
■ mass customization: the mass production of
customized parts
1-33

Policy
Deployment
• Policy deployment
■ translates corporate strategy into measurable
objectives
• Hoshins
■ action plans generated from the policy
deployment process
1-34

Policy
Deployment
Derivation of an Action Plan Using Policy Deployment
1-35

Balanced
Scorecard
• Balanced scorecard
■ measuring more than financial performance
• finances
• customers
• processes
• learning and growing
• Key performance indicators
■ a set of measures that help managers evaluate
performance in critical areas
1-36

Balanced Scorecard
Copyright 2009 John Wiley &
Sons, Inc.
1-37

Balanced
Scorecard
1-38
Dashboard

Operations
Strategy
S
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oc
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es
ss
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a
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nd
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P
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du
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ts
s
T
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ec
ch
hn
no
ol
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y
Capacity
Human
Resources Quality
Facilities Sourcing Operating
Systems
1-39

Learning Objectives
of this Course
• Gain an appreciation of strategic importance
of operations and supply chain management
in a global business environment
• Understand how operations relates to other
business functions
• Develop a working knowledge of concepts
and methods related to designing and
managing operations and supply chains
• Develop a skill set for quality and process
improvement 1-40

41
Learning Objectives
To understand the escalating importance of
logistics and supply-chain management as
crucial tools for competitiveness.
To learn about materials management and physical
distribution.
To learn why international logistics is more complex
than domestic logistics.
To see how the transportation infrastructure in host
countries often dictates the options open to the
manager.
To learn why international inventory management is
crucial for success.

42
International Logistics
International logistics is the
design and management of a
system that controls the forward
and reverse flow of materials,
services, and information into,
through, and out of the international
corporation.

43
International Logistics (cont.)
Through the implementation of international logistics,
the firm can implement cost-saving programs such as
just-in-time (JIT), electronic data interchange (EDI),
and early supplier involvement (ESI).
The two phases of the movement of materials include:
materials management, or the timely movement of
materials, parts, and supplies.
physical distribution, or the movement of the firm’s physical
product to its customers.

44
Three Concepts of Business Logistics
Total Cost Concept Trade-off Concept
Systems Concept

45
Supply-Chain Management
Supply-chain management is the integration
of business processes from end user through
original suppliers, that provide products,
services, and information that add value for
customers.
Supply-chain management connects a company’s supply
side with its demand side.
It opens up supplier relationships for companies outside of
the buyer’s domestic market.

 Any organization, anywhere in the world, offering
a product or a service has a supply chain.
 Products and Services are created from materials, using
equipment, labor, time, money, and other resources.
 Producing and delivering products and services requires
Suppliers, Manufacturers, and Customers; all of which
make up the links in a supply chain.
 Supply chains exist in organizations that are:
– Large or Small (i.e., a multinational corporation or a “mom & pop shop” on the local corner)
– Public or Private (i.e., a publically traded company or a privately held company)
– For-Profit or Not-for-Profit (i.e., a commercial business, government or a charitable institution)
What is a Supply Chain?
46

Suppliers Customers
Finished
Material
Suppliers
(Tier 1)
Intermediate
Suppliers
(Tier 2)
Raw
Material
Suppliers
(Tier 3)
Wholesaler &
Distributor
Customers
(Tier 1)
Retail
Customers
(Tier 2)
Consumers
(Tier 3)
Manufacturer
(Your Company)
Finished
Product
Manufacturer
Internal
Internal
Internal
External
External
External
What is a Supply Chain? (continued)
 From SUPPLIERS: Raw Material, Intermediate, and/or Finished Material Suppliers
 To MANUFACTURERS: Finished Product Manufacturers (Internal and/or External)
 To CUSTOMERS: Wholesalers, Distributors, Retailers and/or Consumers
Each of these are “Links” in the supply chain
Inbound Transportation Outbound Transportation
Air
Truck Rail Water
Pipeline
Facilitated through the use of Logistics
Warehousing
A supply chain consists of the flow of materials and products . . .

Think about typical products that you buy
 Automobiles
 Books
 Candy Bars
 Cell phones
 Clothes / Shoes
 Fast food
 Laptop computers
 Soft Drinks
What is your favorite Candy Bar?
48
Do you know what goes into making it?

Candy Bar Supply Chain (Simplified)
49
Suppliers Customers
Manufacturer
Chocolate
Sugar
Packaging
Soy
Lecithin
Milk
Milk Fat
Lactose
Cocoa
Butter
Sugarcan
e
Paper
Cocoa
Beans
Consumers
Candy Bar
Manufacturer
Wholesalers
and
Distributors
Retailers
(Stores)

50
Chocolate
Sugar
Packaging
Soy
Lecithin
Milk
Milk Fat
Lactose
Cocoa
Butter
Sugarcan
e
Paper
Cocoa
Beans
Supply
Disruption
Consumers
Candy Bar
Manufacturer
Wholesalers
and
Distributors
Retailers
(Stores)
Supply Chain Disruption 1
What happens if there is a shortage of
Cocoa Beans ???
Suppliers Customers
Manufacturer

51
Chocolate
Sugar
Packaging
Soy
Lecithin
Milk
Milk Fat
Lactose
Cocoa
Butter
Sugarcan
e
Paper
Cocoa
Beans
Supply
Disruption
Consumers
Candy Bar
Manufacturer
Wholesalers
and
Distributors
Retailers
(Stores)
Suddenly, you cannot get the Chocolate
and Cocoa Butter that you need to make
your Candy Bars
Meanwhile . . .
your other suppliers will continue to ship
their products to you
Suppliers Customers
Manufacturer

52
Consumers
Candy Bar
Manufacturer
Chocolate
Sugar
Packaging
Soy
Lecithin
Milk
Milk Fat
Lactose
Cocoa
Butter
Sugarcan
e
Paper
Cocoa
Beans
Wholesalers
and
Distributors
Retailers
(Stores)
Supply
Disruption
Candy Bar production will be
forced to stop
Your customers still have inventory of candy
bars that they previously purchased from
you which they can continue to sell
and your inventory of the other materials
will start to build up
Suppliers Customers
Manufacturer

53
Consumers
Candy Bar
Manufacturer
Chocolate
Sugar
Packaging
Soy
Lecithin
Milk
Milk Fat
Lactose
Cocoa
Butter
Sugarcan
e
Paper
Cocoa
Beans
Wholesalers
and
Distributors
Retailers
(Stores)
Supply
Disruption
The disruption
impacts all suppliers
You are forced to cancel your orders for materials
from all your suppliers until Cocoa Beans are
available again
Suppliers Customers
Manufacturer

54
Consumers
Candy Bar
Manufacturer
Chocolate
Sugar
Packaging
Soy
Lecithin
Milk
Milk Fat
Lactose
Cocoa
Butter
Sugarcan
e
Paper
Cocoa
Beans
Wholesalers
and
Distributors
Retailers
(Stores)
Supply
Disruption
The disruption impacts
all customers
Your customers sell out all remaining
inventory of candy bars which creates a
TOTAL MARKET STOCKOUT
Suppliers Customers
Manufacturer

Candy Bar Supply Chain (Simplified)
55
Chocolate
Sugar
Packaging
Soy
Lecithin
Milk
Milk Fat
Lactose
Cocoa
Butter
Sugarcan
e
Paper
Cocoa
Beans
Consumers
Candy Bar
Manufacturer
Wholesalers
and
Distributors
Retailers
(Stores)
All supply chain links are interconnected
and a disruption with one will likely impact
all
The supply chain is only as
strong as its weakest link
Suppliers Customers
Manufacturer

Service firms offer
intangible products,
meaning products
that cannot be
physically touched.
Supply Chains in the Service Industry
It is not just products . . . services have a supply chain as well.
56
Many services require the use of Facilitating Goods which are tangible elements that are
used along with the service provided.
These items need to be purchased, transported, received, and warehoused in order to
provide the service activity, and each has a supply chain.

57
It is the coordination of a network of otherwise independent
trading partners creating a desired product or service, and
moving it from suppliers, through manufacturing, and out to
customers when and where they want it.
Supply Chain Management is the way business gets done.
It is the execution process of any business.
What is a Supply Chain Management?

Supply Chain Management accounts for $1.4 trillion (≈8%) of the total
U.S. economy ---> annually.
Companies have been expanding globally and speeding up every link
in the supply chain to stay competitive.
This has created a significant and growing shortage of supply
chain talent --- which translates to JOBS !!!
Current trends will continue to raise the bar in supply chain
management, and by extension, the skills required:
 Continued and accelerated pace of globalization
 Expansion of e-Commerce
 Heightened focus on supply chain risk
 Widespread adoption of new technologies and innovations
Talent Shortage in Supply Chain Management

Supply Chain Management is a skilled profession with cutting edge technologies
and major innovations happening at an accelerated pace. Just a few examples:
Technology and Innovation

Logistics: Warehousing, Transportation, and Distribution
Finished
Material
Suppliers
(Tier 1)
Wholesaler &
Distributor
Customers
(Tier 1)
Finished
Product
Manufacturer
Intermediate
Suppliers
(Tier 2)
Raw
Material
Suppliers
(Tier 3)
Retail
Customers
(Tier 2)
Consumers
(Tier 3)
Purchasing
Strategic Sourcing
Ethical and Sustainable Sourcing
Supplier Relationship Management
Customer Service
Forecasting and Demand Planning
Distribution Channel Management
Customer Relationship Management
Planning & Scheduling
Operations
Management
Quality Assurance
International Trade
Risk Management
Project Management
Typical Supply Chain Career Areas
Suppliers Customers
Manufacturer
Inbound Transportation
Warehousing
Outbound Transportation
Distribution
Inventory Management
Material Handling
Abundant job opportunities across all of these functional areas

Careers in Supply Chain Management
Top 10 things you can expect from a career in Supply Chain Management
1. Job Availability (entry level and advanced)
2. Accelerated Growth and Advancement opportunities
3. Job Security
4. Excellent Income and Compensation packages
5. Career Contentment
6. Supply chain jobs available in every Industry and Worldwide
7. Work Location choices. Your supply chain skills are portable!
8. Travel and Relocation opportunities
9. Opportunities to Specialize in supply chain Disciplines & Sectors
10. Innovation and cutting edge Technologies
Recent survey = 79% content with their career

62
Transportation Infrastructure
A firm’s logistics platform is determined by a
location’s ease and convenience of market reach
under favorable cost circumstances.
The public sector’s investment priorities, safety
regulations, tax incentives, and transport policies
can have major effects on the logistics decisions of
firms.
The logistics manager must learn about existing and
planned infrastructures abroad and at home and
factor them into the firm’s strategy.

63
Vessels Used in Ocean Shipping
Liner Service
Bulk Service Tramp Service

64
Airfreight
Airfreight is available to and from most countries,
including the developing world.
Forty percent of the world’s manufactured travel by
air.
Items that are high-value or high in density tend to
travel by air.

65
Considerations for Selecting a Mode of Transport
Predictability
Transit Time
Cost Non-economic
Factors

66
Export Documentation
A bill of lading is a contract between the exporter and
the carrier indicating that the carrier has accepted
responsibility for the goods and will provide transportation
in return for payment.
A commercial invoice is a bill for the goods stating basic
information about the transaction, including a description
of the merchandise, total cost of the goods sold,
addresses of the shipper and seller, and delivery and
payment terms.
A freight forwarder specializes in handling export
documentation.

67
International Inventory Issues
Inventories tie up a major portion of corporate funds,
therefore proper inventory policies should be a major
concern to the international logistician.
Just-in-time inventory policies minimize the volume
of inventory by making it available only when
needed.
The purpose of establishing inventory systems are:
to maintain product movement in the delivery pipeline
to have a cushion to absorb demand fluctuations

68
Three Factors that Decide the Level of Inventory
Order Cycle Time
Desired Customer
Service Levels
Use of Inventories as
a Strategic Tool

69
International Packaging Issues
Packaging is instrumental in getting the merchandise to
the destination in a safe, presentable condition.
Because of the added stress of international shipping,
packaging that is adequate for domestic shipping may be
inadequate for international shipping.
Packaging considerations that should be taken into
account are environmental conditions and weight.
One solution to the packaging problem has been the
development of inter-modal containers.
Cost attention must be paid to international packaging.

70
Storage Facilities
A stationary period is involved when merchandise
becomes inventory stored in warehouses.
The location decision addresses how many
distribution centers to have and where to locate them.
Storage facilities abroad can differ in availability and
quality.
The logistician should analyze international product
sales and then rank order products according to
warehousing needs.

71
Special Trade Zones
Foreign trade zones are areas where
foreign goods may be held or processed
and then re-exported without incurring
duties.
Trade zones can be useful as
transshipment points to reduce logistics
cost and redesign marketing approaches.
Governments and firms benefit from
foreign trade zones.

72
Export Processing Zones and Economic Zones
In export processing zones, special rules apply that are
different in other regions of the country.
These zones usually provide tax-free and duty-free
treatment for production facilities whose output is
destined abroad.
The maquiladoras of Mexico are one example of a
program that permits firms to take advantage of sharp
differentials in labor costs.
Through the creation of special economic zones, the
Chinese government has attracted many foreign
investors bringing in millions of dollars.

73
Centralized Logistics Management
In international logistics, the existence of a
headquarters staff that retains decision-making
power over logistics is important.
To avoid internal problems, both headquarters staff
and local management should report to one person.
This individual can contribute an objective view
when inevitable conflicts arise in international
logistics coordination.

74
Decentralized Logistics Management
When a firm serves many diverse international markets,
total centralization might leave the firm unresponsive to
local adaptation needs.
If each subsidiary is made a profit center in itself, each
one carries the full responsibility for its performance.
Once products are within a specific market, increased
input from local logistics operations should be expected
and encouraged.

75
Outsourcing Logistics Services
The systematic outsourcing of logistics
capabilities is a third option.
By collaborating with transportation
firms, private warehouses, or other
specialists, corporate resources can be
concentrated on the firm’s core product.
One-stop logistics allows shippers to
buy all the transportation modes and
functional services from a single carrier.

76
The Supply Chain and the
Internet
Because of the internet, firms are able to conduct
many more global comparisons among suppliers and
select from a wider variety of choices.
When customers have the ability to access a
company through the internet, the company must be
prepared for 24-hour order-taking and customer
service.
For all countries, but particularly in developing
nations, the issue of universal access to the internet
is crucial.

77
Logistics and Security
After the terrorist attacks of 2001, companies have to
deal with the fact that the pace of international
transactions has slowed down and that formerly
routine steps will now take longer.
Logistics systems and modern transportation
systems are often the targets of attacks.
The need to institute new safeguards for international
shipments will affect the ability of firms to efficiently
plan their international shipments.

78
Logistics and the Environment
Since environmental laws and regulations differ
across the globe, the firm’s efforts need to be
responsive to a wide variety of requirements.
Reverse distribution systems are instrumental in
ensuring that the firm not only delivers the product
to the market, but also can retrieve it from the
market for subsequent use, recycling, or disposal.
Companies need to learn how to simultaneously
achieve environmental and economic goals.

Why The EV Industry Has A Massive Supply Problem

Understanding
Distribution in the
Supply Chain: Role
and Significance

Where Did the Process
of Distribution in
Supply Come From?
▶ The process of distribution in
supply can be traced back to the
early days of commerce. As
trade between different regions
and cultures began to increase,
the need for a system to
distribute goods and services
became apparent

The Evolution of
Distribution in Supply
▶ The growth of trade: As trade between
different regions and cultures has
increased, the need for a system to
distribute goods and services has
become more important.
▶ The development of new transportation
technologies: The development of new
transportation technologies, such as
railroads and steamships, has made it
possible to move goods more quickly and
efficiently.
▶ The growth of cities: The growth of cities
has created a demand for new
distribution methods, as people begin to
live farther from where their goods are
produced.
▶ The rise of globalization: The rise of
globalization has led to even more
changes in distribution, as businesses
need to find ways to distribute their
products to a global market.

The Future of
Distribution in Supply
▶ The continued growth of e-
commerce: E-commerce is growing
rapidly, and this is likely to have a
significant impact on the way goods
and services are distributed.
▶ The development of new
technologies: The development of
new technologies, such as drones
and self-driving vehicles, is likely to
revolutionize the way goods and
services are distributed.
▶ The changing needs of
customers: The needs of customers
are constantly changing, and
businesses need to be able to adapt
their distribution strategies to meet
these needs.

The Rise and Fall of
Montgomery Ward
▶ Montgomery Ward was one of the first
major retailers in the United States.
The company was founded in 1872 by
Aaron Montgomery Ward, and it
quickly became a leader in the mail-
order business.
▶ Ward's innovation was to offer a wide
variety of products at discounted prices
through a catalog that was distributed
nationwide.
▶ Ward's business model was very
successful, and the company grew
rapidly during the Industrial Revolution.
By the early 1900s, Montgomery Ward
was one of the largest retailers in the
United States.

What Montgomery Ward Did Well
▶ Offered a wide variety of products at discounted prices through its catalog
▶ Catalog was also very well-designed

What Montgomery Ward
Did Not Do Well
▶ Failed to adapt to the changing
retail landscape.
▶ Focused on low prices, which led
to a decline in customer
satisfaction and a loss of market
share

Where Montgomery
Ward Is Today
▶ The Montgomery Ward brand is
now owned by Sears Holdings
Corporation. Sears has been
struggling financially in recent
years, and it is unclear whether
the Montgomery Ward brand will
be revived.

Conclusion
▶ The process of distribution in supply has come a long way
since its early days. Today, it is a complex and
sophisticated field that is essential to the smooth
functioning of the global economy. As businesses continue
to grow and expand, the need for efficient and effective
distribution systems will only become more important.

Definition of Distribution
in the Supply Chain
▶ Warehousing: Goods are stored in
warehouses until they are needed to be
shipped to customers.
▶ Transportation: Goods are transported
from the warehouse to the customer using
a variety of methods, such as trucks,
ships, and airplanes.
▶ Logistics: Logistics is the process of
managing the flow of goods through the
distribution system. This includes
activities such as inventory management,
order fulfillment, and transportation
scheduling.
▶ Customer service: Customer service is
the process of interacting with customers
to ensure that they are satisfied with the
distribution process. This includes
activities such as answering questions,
resolving problems, and providing
feedback.

Role of Distribution
in the Supply Chain
▶ Customer satisfaction: Customers
expect to receive products when they
need them. If products are not delivered
on time, customers may become
dissatisfied and switch to a competitor.
▶ Profitability: Efficient distribution can
help to reduce costs and increase profits.
This is because it can help to reduce
inventory levels, improve transportation
efficiency, and provide better customer
service.
▶ Competitive advantage: Efficient
distribution can give businesses a
competitive advantage. This is because it
can help businesses to deliver products
more quickly and cheaply than their
competitors.

Ensuring Smooth Flow of
Products to Meet Customer
Demands Efficiently
▶ The location of customers: Businesses need
to ensure that they have warehouses and
distribution centers located in close proximity
to their customers. This will help to reduce
transportation costs and improve delivery
times.
▶ The type of product: The type of product
being distributed will also affect the
distribution strategy. For example, perishable
goods will need to be distributed more
quickly than non-perishable goods.
▶ The needs of customers: Businesses need to
understand the needs of their customers in
order to provide them with the best possible
distribution experience. This includes factors
such as delivery speed, delivery options, and
customer service.

Conclusion
▶ Distribution is a critical part of the
supply chain. It is responsible for
getting goods and services from
the producer to the consumer in a
timely and efficient manner. By
understanding the role of
distribution and the factors that
affect it, businesses can develop
distribution strategies that ensure
a smooth flow of products to meet
customer demands efficiently.

Functions and
Responsibilities of a
Distributor
▶ Inventory management: Distributors are
responsible for managing the inventory of
products that they sell. This includes
ordering the correct amount of product,
storing it in a safe and secure location,
and tracking inventory levels.
▶ Order fulfillment: Distributors are
responsible for fulfilling orders from
customers. This includes picking the
products from the warehouse, packing
them, and shipping them to the customer.
▶ Customer service: Distributors provide
customer service to customers who have
questions or problems with their orders.
This includes answering questions,
resolving problems, and providing
feedback.
▶ Marketing and sales: Distributors may
also be responsible for marketing and
selling products to retailers or other
businesses. This includes developing
marketing plans, generating leads, and
closing sales.

Importance of
Distributors in Expanding
Market Reach
▶ Distributors can play an important
role in expanding the market reach
of manufacturers. They can help to
reach a broader customer base by
providing products to retailers in
different geographic areas. They
can also help to expand market
coverage by providing products to
retailers in different channels, such
as online or brick-and-mortar
stores.

Understanding the
Difference Between
Distribution and Logistics
▶ Distribution refers to the process
of moving products from the
manufacturer to the customer.
▶ Logistics, on the other hand,
refers to the overall
management of the flow of
goods and services. This
includes activities such as
transportation, warehousing,
and inventory management.

Distribution's Focus on
Product Delivery and
Customer Satisfaction
▶ Distribution places emphasis on
delivering products to customers and
meeting customer demands
efficiently.
▶ This includes activities such as order
fulfillment, customer service, and
inventory management.
▶ Distributors strive to ensure that
customers receive the products they
need when they need them.
▶ Distributors also strive to provide
excellent customer service, such as
answering questions and resolving
problems quickly.

Conclusion
▶ Distributors play an important role
in the supply chain by providing a
link between producers and
consumers.
▶ Distributors help to ensure that
products are available when and
where customers need them, and
they can also provide valuable
services such as inventory
management and order fulfillment.
▶ By focusing on product delivery
and customer satisfaction,
distributors can help
manufacturers to increase sales
and improve their reputation.

Additional
Information
▶ Marketing and sales support:
Distributors may help
manufacturers to develop
marketing plans, generate leads,
and close sales.
▶ Financial services: Distributors
may offer financial services to
manufacturers, such as credit,
financing, and inventory
management.
▶ Technical support: Distributors
may provide technical support to
manufacturers, such as product
training and troubleshooting

Impact of Logistics' Emphasis
on Transportation,
Warehousing, and Inventory
Management
▶ Logistics is the process of planning, organizing, and
managing the flow of goods and services from the point
of origin to the point of consumption. It encompasses a
wide range of activities, including transportation,
warehousing, inventory management, and customer
service.
▶ Transportation is the movement of goods from one
location to another. It is a critical part of logistics, as it
determines how quickly and efficiently goods can be
delivered to customers. There are a variety of
transportation options available, each with its own
advantages and disadvantages.
▶ Warehousing is the storage of goods in a secure facility.
It is important for businesses to have enough warehouse
space to store their products, as well as the right
equipment to handle the loading and unloading of goods.
▶ Inventory management is the process of ensuring that
the right amount of goods is available in the right place at
the right time. This is important for businesses to avoid
stockouts, which can lead to lost sales, and to avoid
overstocking, which can lead to unnecessary costs.

Importance of Effective
Distribution Management
▶ Supply chain performance: Effective
distribution management can help to
improve supply chain performance
by reducing lead times, improving
inventory turns, and increasing
customer service levels.
▶ Cost control: Effective distribution
management can help to control
costs by optimizing transportation
routes, negotiating favorable freight
rates, and managing inventory
levels.
▶ Customer satisfaction: Effective
distribution management can help to
improve customer satisfaction by
ensuring that products are delivered
on time, in good condition, and at
the right price.

Impact on Supply Chain
Performance and
Customer Satisfaction
▶ Reduce lead times: By optimizing
transportation routes and managing
inventory levels, well-managed
distribution can help to reduce lead times,
which can improve customer satisfaction.
▶ Improve inventory turns: By managing
inventory levels effectively, well-managed
distribution can help to improve inventory
turns, which can reduce costs.
▶ Increase customer service levels: By
ensuring that products are delivered on
time, in good condition, and at the right
price, well-managed distribution can help
to increase customer service levels.

Role of Distribution
Management in Cost
Control and Optimization
▶ Optimize transportation routes: By
optimizing transportation routes,
well-managed distribution can
help to reduce transportation
costs.
▶ Negotiate favorable freight
rates: By negotiating favorable
freight rates, well-managed
distribution can help to reduce
transportation costs.
▶ Manage inventory levels: By
managing inventory levels
effectively, well-managed
distribution can help to reduce
inventory carrying costs.

Conclusion
▶ Logistics is a complex and
essential part of the supply chain.
Effective distribution management
can help to optimize supply chain
performance, cost control, and
customer satisfaction. By
emphasizing transportation,
warehousing, and inventory
management, logistics can support
the distribution process and help
businesses achieve their goals.

Additional
Information
▶ Increase market share: By
providing superior customer
service and meeting customer
demand, well-managed
distribution can help businesses to
increase market share.
▶ Improve brand reputation: By
delivering products on time and in
good condition, well-managed
distribution can help to improve
brand reputation.
▶ Reduce risk: By managing
inventory levels effectively, well-
managed distribution can help to
reduce risk.

Improved Inventory
Control and Demand
Forecasting
▶ By tracking inventory levels and sales data,
distribution managers can identify trends and
patterns that can be used to forecast future
demand. This information can then be used
to ensure that the right amount of inventory
is on hand to meet customer demand.
▶ By using data analytics, distribution
managers can identify and optimize
distribution routes and schedules. This can
help to reduce transportation costs and
improve delivery times, which can lead to
improved inventory turnover.
▶ By working closely with suppliers,
distribution managers can ensure that there
is a smooth flow of goods throughout the
supply chain. This can help to reduce the
risk of stockouts and ensure that customers
receive their orders on time.

Better Coordination Between Suppliers,
Manufacturers, and Retailers
▶ Distribution management can also foster better coordination among supply
chain partners. This can be done by sharing information about inventory levels,
sales data, and demand forecasts. By working together, supply chain partners
can ensure that goods are delivered to the right place at the right time, which
can lead to improved efficiency and profitability.

Enhanced Customer
Service and
Satisfaction
▶ By ensuring that products are delivered on
time and in good condition, distribution
managers can help to improve customer
satisfaction. This can lead to repeat
business and increased sales.
▶ By providing accurate information about
product availability, distribution managers
can help customers to make informed
purchasing decisions. This can help to
reduce customer frustration and improve the
overall customer experience.
▶ By offering flexible delivery options,
distribution managers can meet the needs of
different customers. This can help to
improve customer satisfaction and loyalty.

Optimal Use of
Resources and Reduced
Operating Costs
▶ Optimizing transportation routes
and schedules. This can help to
reduce transportation costs and
improve delivery times.
▶ Managing inventory levels
effectively. This can help to reduce
inventory carrying costs and
improve inventory turnover.
▶ Using data analytics to identify and
optimize distribution
processes. This can help to
reduce waste and improve
efficiency.

Conclusion
▶ Effective distribution
management can play a vital
role in improving inventory
control, demand forecasting,
coordination among supply
chain partners, customer
service, and satisfaction. By
optimizing the flow of goods and
services throughout the supply
chain, distribution managers can
help businesses to reduce costs,
improve efficiency, and increase
profitability.

Additional
Information
▶ Increase market share: By providing
superior customer service and
meeting customer demand, well-
managed distribution can help
businesses to increase market
share.
▶ Improve brand reputation: By
delivering products on time and in
good condition, well-managed
distribution can help to improve
brand reputation.
▶ Reduce risk: By managing inventory
levels effectively, well-managed
distribution can help to reduce risk.

Supply Chain
Complexity and Global
Operations
▶ Inventory management: Managing inventory
in a global supply chain can be complex, as
businesses must consider factors such as
different product regulations, varying
demand patterns, and longer lead times.
▶ Demand fluctuations: Demand for products
can fluctuate rapidly in a global market,
which can make it difficult to forecast
demand and ensure that the right amount of
inventory is on hand.
▶ Transportation and logistics: Transportation
and logistics can be more challenging in a
global supply chain, as businesses must
often deal with multiple carriers and different
shipping regulations.
▶ Maintaining service quality and consistency:
Maintaining service quality and consistency
can be difficult in a global supply chain, as
businesses must often deal with different
cultures and languages.

Inventory Management and
Demand Fluctuations
▶ The challenges of inventory
management and demand
fluctuations are closely related.
When demand for a product
fluctuates, businesses must adjust
their inventory levels accordingly.

Inventory Management
and Demand
Fluctuations
▶ Inventory management is the
process of planning, organizing,
and controlling the flow of goods
and materials from the point of
production to the point of
consumption. Demand
fluctuations refer to the changes
in the demand for a product or
service over time.

Impact of Inventory
Management Challenges and
Demand Fluctuations on
Distribution Activities
▶ The impact of inventory
management challenges and
demand fluctuations on distribution
activities can be significant.
▶ Demand fluctuations can also have a
significant impact on distribution
activities.

Strategies for Managing
Inventory and Demand
Fluctuations
▶ Demand forecasting: Businesses can use
demand forecasting to predict future demand
for their products. This information can then
be used to adjust inventory levels
accordingly.
▶ Just-in-time (JIT) inventory management: JIT
inventory management is a system where
businesses only order the amount of
inventory they need to meet immediate
demand. This can help businesses to reduce
inventory costs and improve efficiency.
▶ Demand pooling: Demand pooling is a
strategy where businesses pool their
demand for a product or service. This can
help businesses to get better pricing from
suppliers and improve efficiency.
▶ Flexible manufacturing: Flexible
manufacturing is a system where businesses
can quickly and easily change the
production of a product to meet changing
demand. This can help businesses to adapt
to demand fluctuations and avoid stockouts.

Inventory management and demand
fluctuations are important challenges that
businesses must face. By using the
strategies outlined above, businesses can
manage these challenges and ensure that
they have the right amount of inventory to
meet customer demand.

Transportation and
Logistics Challenges
▶ Transportation and logistics can
also be challenging in a global
supply chain. Businesses must
often deal with multiple carriers
and different shipping regulations.
This can make it difficult to track
shipments and ensure that they
arrive on time.

Maintaining Service
Quality and Consistency
▶ Maintaining service quality and
consistency is important for any
business, but it can be
especially challenging in a
global supply chain.

Conclusion
▶ The challenges posed by supply
chain complexity and global
operations can make distribution
management difficult. However, by
carefully planning and managing
the supply chain, businesses can
overcome these challenges and
deliver products to customers on
time and in good condition.

121
Operations Management
= OM
Management of ANY activities/process that create goods and
provide services
Exemplary Activities: Forecasting, Scheduling, Quality management
Why to study OM
At a typical manufacturing company
Profit 5%
OM Cost 21%
Marketing
Cost 26%
Manufacturing
Cost 48%

122
The management of systems or processes that create goods
and/or provide services
Organization
Finance Operations Marketing
The distinct –active- role of operations:
Inputs become Outputs after some
Transformation
Operations Management = OM

MGT 236 123
Typical Organization
Chart

124
Operations example in Manufacturing:
Food Processing
INPUTS PROCESS OUTPUTS
Raw vegetables Cleaning Clean vegetables
Metal sheets Cutting/Rolling/Welding Cans
Energy, Vegetables Cutting Cut vegetables
Energy, Water,
Vegetables
Cooking Boiled
vegetables
Energy, Cans,
Boiled vegetables
Placing Can food

125
Types of Operations
Operation Examples
Goods producing Farming, mining, construction
Storage/transportation Warehousing, trucking, mail, taxis,
buses, hotels, location
Exchange Trade, retailing, wholesaling, renting,
leasing, loans
Entertainment Radio, movies, TV, concerts, recording
Communication Newspapers, journals, magazines, radio,
TV, telephones, satellite

126
Why OM?
Core of all business organizations
Many areas interrelated with OM activities
Management of operations is critical to create and maintain competitive
advantages

127
Organization of
Businesses
Three basic functions
Operations/Production
Goods oriented (manufacturing and assembly)
Service oriented (health care, transportation and retailing)
Value-added (the essence of the operations functions)
Finance-Accounting
Budgets (plan financial requirements)
Economic analysis of investment proposals
Provision of funds (the necessary funding of the operations)

128
Organization of Businesses (Cont.)
Marketing
Selling
Promoting
Assessing customer wants and needs
Communicating those needs to operations
The need for working closely
Operations
Finance
Marketing

130
Systems (Holistic)
Approach
Emphasizes interrelations among subsystems.
A systems approach is essential whenever something is
being designed, redesign implemented, or improved. It is
important to take into account the impact on all parts of the
system.
Example: A new feature is added to a product.
Designer must take into account how customers will view the
change, instruction for using new feature, the cost, training of
workers, production schedule, quality standard, advertising
must be informed about the new feature.

131
Systems Approach
“The whole is greater than
the sum of the parts.”
Suboptimization

132
Value Added
Value added: The difference between cost of inputs and price (??) of outputs.
Is this definition right? Should value added include profit?
Value added: The difference between the cost of inputs
and the (market or fair) value or price of outputs.

Value-Added
Inputs
Land
Labor
Capital
Transformation/
Conversion
process
Outputs
Goods
Services
Control
Feedback
Feedback
Feedback
Value added

MGT 236 134
OM’s
Transformation
Role
To add value
Increase product value at each stage
Value added is the net increase between output product value and input
material value
Provide an efficient transformation
Efficiency – means performing activities well for least possible cost

135
Degree of
Standardization !
Standardized output
Take advantage of standardized methods, less skilled workers, materials…
Example: Iron, Wheat, most of commodities
Customized output
Each job is different
Workers must be skilled
Example: Hair cut

136
Manufacturing (=Goods) vs. Service operations
Production of goods (goods oriented)
Tangible products
Automobile
Refrigerator
Services (TV and auto repair, lawn care)
Government
Regulatory bodies, FAA, FDA
Wholesale/retail
Financial services
Education

137
Similarities for
Service/Manufacturers
Both use technology
Both have quality, productivity, & response issues
Both must forecast demand
Both can have capacity, layout, and location issues
Both have customers, suppliers, scheduling and
staffing issues

138
Goods vs. Service
Operations (Cont)
Differences
1. Customer contact
2. Uniformity of input
3. Labor content of jobs
4. Uniformity of output
5. Measurement of productivity
6. Production and delivery
7. Quality assurance
8. Amount of inventory

139
Manufacturing vs. Service
!
Characteristic Manufacturing Service
Output Tangible Intangible
Customer contact Low High
Uniformity of output High Low
Labor content Low High
Uniformity of input High Low
Measurement of
productivity
Easy Difficult
Opportunity to correct
quality problems
Easy Difficult

140
Steel production
Automobile fabrication
Home remodeling
Retail sales
Auto Repair
Appliance repair
Maid Service
Manual car wash
Teaching
Lawn mowing
High percentage goods
Low percentage service
Goods-service Continuum
Low percentage goods
High percentage service

141
U.S. Manufacturing vs. Service Employment
0
20
40
60
80
100
45 50 55 60 65 70 75 80 85 90 95 00
Year
Percent
Year Mfg. Service
45 79 21
50 72 28
55 72 28
60 68 32
65 64 36
70 64 36
75 58 42
80 44 46
85 43 57
90 35 65
95 32 68
00 30 70
Manufacturing vs.
Service Industries in
US

Growth of the Service Sector
Service sector growing to
50-80% of non-farm jobs
Global competitiveness
Demands for higher
quality
Huge technology changes
Time based competition
Work force diversity

143
Responsibilities of Operations Management
Planning
Capacity, utilization
Location
Choosing products or services
Make or buy
Layout
Projects
Scheduling
Market share
Plan for risk reduction, plan B?
Forecasting

144
OM Decisions
All organizations make decisions and follow a similar path
First decisions very broad – Strategic decisions
Strategic Decisions – set the direction for the entire company; they are broad in
scope and long-term in nature

145
OM Decisions
Following decisions focus on specifics - Tactical
decision
Tactical decisions: focus on specific day-to-day issues like
resource needs, schedules, & quantities to produce
are frequent
Strategic decisions less frequent
Tactical and Strategic decisions must align

147
Operations Managers
Controlling
Inventory
Quality
Costs
Organization
Degree of standardization
Subcontracting
Process selection
Staffing
Hiring/lay off
Use of overtime
Incentive plans
Job assignments

148
Operations Management includes:
Forecasting
Capacity planning
Scheduling
Managing inventories
Assuring quality
Motivating employees
Deciding where to locate facilities
And more . . .
Scope of Operations Management

149
Help comes from Models
A structure which has been built purposefully to exhibit features and characteristics of
some other object.
Do not use “thing” or “something” in a definition.
For
Improved understanding and communication
Experimentation
Standardization for analysis
Abstraction vs. computability

150
Modeling !
Use models
Physical models (prototypes)
Schematic models (Graphs, charts, pictures)
Mathematical models,
Statistical models
Inventory models
Linear programming
Queuing techniques
Project management models

151
What type of models
Simulation models : to test a proposed idea
– Monte Carlo Simulation
Optimization models : to create an optimal idea
– Linear programming
Pattern recognition models : to recognize a pattern
– Statistics, Forecasting, data mining

152
Decision Making
Models
Quantitative approaches
Analysis of trade-offs
Systems approach

153
Models Are Beneficial
Easy to use, less expensive
Require users to organize
Increase understanding of the problem
Consistent tool
Standardized format
Specific objectives
Systematic approach to problem solving
Analysis of tradeoffs
Enable “what if” questions
Power of mathematics

154
Pareto Phenomenon
• A few factors account for a high percentage of the
occurrence of some event(s).
• 80/20 Rule - 80% of problems are caused by 20% of
the activities.
How do we identify the vital few?

155
Historical Evolution of Operations Management
Industrial revolution (1770’s)
Scientific management (1911)
Mass production
Interchangeable parts
Division of labor
Human relations movement (1920-60)
Unemployment insurance
Pension plans
Decision models (1915, 1960-70’s)
Influence of Japanese manufacturers (1970-1990)

MGT 236 156
Historical Development
con’t
Reengineering 1990s
Global competition 1980s
Flexibility 1990s
Time-Based Competition 1990s
Supply chain Management 1990s
Electronic Commerce 2000s
Outsourcing & flattening of world 2000s
For long-run success, companies must place much importance on their
operations

157
Trends in Business
Major trends
The Internet, e-commerce, e-business
Management technology
Globalization
Management of supply chains
Agility

158
Recent Trends !
Worker involvement
Environmental issues, emission reductions are popular after Central
European floods
Service economy in US, foreign production
E-business – information technology
Supply chain management
Total Quality Management
Globalization, emerging markets, NAFTA
Lean Production – see the next page

159
Production systems
classified
Craft Production : System in which highly skilled workers use
simple, flexible tools to produce small quantities of
customized goods.
Carpenter
Lean production : System that uses minimal amounts of
resources to produce a high volume of high-quality goods
with some variety.
Dell
Mass production: System in which lower-skilled workers use
specialized machinery to produce high volumes of
standardized goods.
Ford

160
Production systems
classified
Agile=Lean
manufacturing
It provides flexibility to switch quickly and economically from
one product design to another with little disruption. This
characteristic, in turn enables faster response to changes in
customer demand.
A sophisticated computerized inventory control system allows
the plant to keep track of large number of parts.
Keys to being an agile manufacturer are :
Reduction in inventories,
Reduction in turnaround times,
Availability of automated flexible machinery,
Rapid collection and processing of information

161
Suppliers’
Suppliers
Direct
Suppliers Producer Distributor Final
Consumer
Simple Product Supply Chain
Supply Chain: A sequence of activities and
organizations involved in producing and delivering
a good or service

162
Stage of Production Value
Added
Value of
Product
Farmer produces and harvests wheat $0.15 $0.15
Wheat transported to mill $0.08 $0.23
Mill produces flour $0.15 $0.38
Flour transported to baker $0.08 $0.46
Baker produces bread $0.54 $1.00
Bread transported to grocery store $0.08 $1.08
Grocery store displays and sells bread $0.21 $1.29
Total Value-Added $1.29
A Supply Chain for Bread

163
Other Important Trends
Ethical behavior
Operations strategy
Working with fewer resources
Cost control and productivity
Quality and process improvement
Increased regulation and product liability
Lean production

MGT 236 164
Today’s OM Environment
Customers demand better quality, greater speed,
and lower costs
Companies implementing lean system concepts – a
total systems approach to efficient operations
Recognized need to better manage information
using ERP and CRM systems
Increased cross-functional decision making

MGT 236 165
OM in Practice
OM has the most diverse organizational function
Manages the transformation process
OM has many faces and names such as;
V. P. operations, Director of supply chains, Manufacturing
manager
Plant manger, Quality specialists, etc.
All business functions need information from OM in
order to perform their tasks

MGT 236
Business Information Flow

167
OM Across the
Organization
Most businesses are supported by the functions of operations, marketing, and
finance
The major functional areas must interact to achieve the organization goals

168
OM Across the
Organization – con’t
Marketing is not fully able to meet customer needs if they do
not understand what operations can produce
Finance cannot judge the need for capital investments if they
do not understand operations concepts and needs
Information systems enables the information flow throughout
the organization
Human resources must understand job requirements and
worker skills
Accounting needs to consider inventory management,
capacity information, and labor standards

169
Summary
Definition of OM
OM’s relationship with Marketing, Finance and Accounting
Goods vs. service industries
OM issues, trends and models
Manufacturing systems

170
Highlights
OM is the business function that is responsible for managing
and coordinating the resources needed to produce a
company’s products and services.
The role of OM is to transform organizational inputs into
company’s products or services outputs
OM is responsible for a wide range of decisions, ranging from
strategic to tactical.
Organizations can be divided into manufacturing and service
organizations, which differ in the tangibility of the product or
service

171
Highlights – con’t
Many historical milestones have shaped OM. Some of these
are the Industrial Revolution, scientific management, the
human relations movement, management science, and the
computer age
OM is highly important function in today’s dynamic business
environment. Among the trends with significant impact are
just-in-time, TQM, reengineering, flexibility, time-based
competition, SCM, global marketplace, and environmental
issues
OM works closely with all other business functions

Supply Chain Planning ^0 Operations Part 9.pptx

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