What is Operations & Supply Chain Management? Mellie Pullman BA 339

Where does operations management fit into a business? How are we going to _________ the product or service? Other functional areas: –Marketing –Accounting –Finance –Human Resources –Information Systems

What is Operations Management and how does it fit into the big picture? The operations function is that part of the organization that exists primarily to generate and produce the organization’s products or services. OM provides a systematic way of looking at organizational processes. Concepts and tools of OM are widely used in managing other functions of a business.

Operations as a Process Transformation (Conversion) Process InputOutput

Conversions include: Physical: manufacturing or haircut Location: transportation Exchange: retailing Storage: warehousing Physiological: health care Informational: telecommunications

Operations as a Process Transformation (Conversion) Process Energy Materials Labor Capital Information Goods or Services Feedback information for control of process inputs and process technology

What is managed inside the box? Plants or Facilities People Processes Planning & Scheduling Parts & Equipment

Breakout Moment How do public concerns about environmental and worker welfare issues affect operations and supply chain management? –Nike –Wal-Mart –Your company –Others examples? How does it effect inputs, outputs and transformation changes?

Environmental Concerns “Volkswagen, Germany’s biggest car maker, was reported to be setting aside DM1 billion ($470m) to pay for compliance with a European directive that will come into force in 2007 forcing car makers to pay for recycling their vehicles. New cars will be required to be 85% recyclable.” --The Economist, 15 February 2001

Major Decision Responsibilities of Operations (Netflix) Process –How to produce & deliver Quality –Criteria, measurement & process for achieving Capacity –Physical facilities (where, size, activities) & labor (what kind, how many, when) Inventory –What, when & how much?

Key Operating Capabilities (Strategies used to compete in the market place) Cost Quality Flexibility Speed Sustainability (values such as environmental, social practices, animal practices, and long term economic stability rather than short term profit) Movie example

Contemporary Operations & SCM Themes Service and Manufacturing (differences and implications) Customer-Directed Operations Time Reduction (Lean Operations) Integration of Operations and Other Functions Environmental & Sustainability Concerns Supply Chain Management Globalization of Operations