2 473.31 Fall 2015 Bruce Duggan Providence University College Operations 2 473.31 Fall 2015 Bruce Duggan Providence University College

Quiz 1

Operations and SCM in Practice $28.5B Kearl Oil Sands Project Imperial chose to outsource “modules” of the facility 2100 km trip for 200+ modules required: ocean freight from South Korea to Vancouver barges up river to Lewiston, Idaho road transportation through Idaho, Montana, and Alberta. 1-1

Learning Objectives Define operations and supply chain management. Evaluate why understanding operations and supply chain management is important to any manager. Discuss the meaning of efficient and effective operations. Describe transformation processes. Contrast the differences between services and goods-producing processes. Evaluate how operations and supply chain management developed over time. Discuss important current challenges facing operations and supply chain management. 1-2

LO1 Definition Operations and supply chain management (OSCM) is defined as the design, operation, and improvement of the systems that create and deliver the firm’s primary products (goods and services) 1-3

Operations and Supply Chain Processes LO1 Operations and Supply Chain Processes

Operations and Supply Chain Management: Important To Any Manager LO2 Operations and Supply Chain Management: Important To Any Manager Operations and supply chain management is about getting work done quickly, efficiently, without error, and at a low cost.

Operations and Supply Chain Management: Important To Any Manager LO2 Operations and Supply Chain Management: Important To Any Manager Operations refers to the processes that are used to transform the resources into goods and services. Supply refers to how materials and services are moved to and from those transformation processes.

Efficiency, Effectiveness, and Value LO3 Efficiency, Effectiveness, and Value Efficiency means to produce a good or service by using the smallest input of resources. Effectiveness means doing the right things to create the most value for the company. Value refers to the ratio of quality to price paid.

Supply Chain Transformation Process LO4 Supply Chain Transformation Process A transformation process uses resources to convert inputs into some desired output. Transformation processes: Physical Location Exchange Storage Physiological Informational

Input – Transformation – Output Relationships for Typical Systems LO4 Input – Transformation – Output Relationships for Typical Systems

Differences Between Goods and Services LO5 Differences Between Goods and Services

Evolution of Operations and Supply Management LO6 Evolution of Operations and Supply Management

LO7 Current Issues in OSCM Coordinating the relationship between mutually supportive but separate organizations. Optimizing global supplier, production, and distribution networks. Increased co-production of goods and services. Managing customer service points.

Current Issues in OSCM Raising senior management’s awareness of operations management as a significant weapon. Taking more environmental responsibility. Corporate responsibility in supply chains.

Summary Operations and supply chain management is important to Canada’s competitiveness. Operations and supply activities of the firm are part of the transformation process. When managing operations, firms need to focus on efficiency, effectiveness, and value. 6

End of Chapter 1

Chapter 2

Operations and SCM in Practice Zara excels on Price Speed Flexibility retail chain of high-fashion boutique clothing stores reacts quickly to changes in customer buying behaviour use of information technology clothes produced in small batches production to retail store cycle as fast as two weeks

Learning Objectives List the parameters of a sustainable operations and supply chain strategy. Classify the competitive dimensions of operations and supply chain strategy. Identify order winners and order qualifiers. Discuss how strategy is implemented through operations and supply chain activities. List the concepts of risk assessment and mitigation.

Operations and Supply Strategy Setting broad policies and plans for using the resources of a firm to best support its long-term competitive strategy Involves decisions that relate to the design of a process and the infrastructure needed to support the process. ‘Triple Bottom Line’ social objectives economic objectives environmental objectives 2-3

Operations and Supply Strategy Strategy Process Example Customer Needs Corporate Strategy Operations and Supply Strategy Decisions on Processes and Infrastructure More Product Increase Org. Size Increase Production Capacity Build New Factory 3

Competitive Dimensions quality delivery speed deliver reliability coping with changes in demand flexibility and new-product introduction speed other product-specific criteria technical liaison and support coordinating between firms after-sale support environmentalism and corporate social responsibility access to information 2-5

Trade-Offs An operation cannot excel simultaneously on all competitive dimensions. management has to decide which dimensions are critical to the firm’s success concentrate firm resources on these characteristics employees have to execute on those dimensions better than their competitors

Trade-Offs For example, if a company wants to focus on speed of delivery, it cannot be very flexible in its ability to offer a wide range of products Cost Quality Delivery Flexibility

Order Qualifiers and Winners LO3 Order Qualifiers and Winners Order qualifiers are the criteria that are used to screen a product or service as a candidate for purchase. Order winners are criteria that differentiate the products or services of one firm from another. 6

Fitting Operational Activities to Strategy LO4 Fitting Operational Activities to Strategy All the activities that make up the firm’s operation relate to one another The firm must minimize its total cost without compromising customers’ needs 6

The Operations Strategy Process LO4 The Operations Strategy Process 6

LO4 Core Capabilities Core capabilities (or competencies) are the distinctive skills or capabilities that the organization possesses. 6

Risk Mitigation Strategies LO5 Risk Mitigation Strategies 1. Identify the sources of potential disruptions. 2. Assessment of the potential impact of the risk. 3. Develop plans to mitigate the risk. 4. Develop contingency plans. 6

Risk Mitigation Strategies 6

Summary Overall strategy of a firm can be tied to operations and supply strategy. Operations and supply strategy is critical to the firm’s ability to sustain a competitive advantage. Operations and supply chain strategies must consider risks in their supply chains and develop risk mitigation strategies to avoid disruptions. 6

End of Chapter 2 2-16