1. Chapter 1 Introduction to Operations and Supply Chain Management

2. A New Business Environment
Businesses try to break down the “silos” that used to define business functions.

3. A New Business Environment
Technological progress is moving at a tremendous rate
There are many new products and services in addition to old ones
Rapid change is the norm

4. 1. Define Operations Management.

5. Operations Management
What is operations management?
“The management of resources used to create saleable products and services.”
The management of an organization’s productive resources or its production system, which converts inputs into the organization’s products and services.

6. Operations Management
Operations Management – The planning, scheduling, and control of the activities that transform inputs into finished goods and services.
© 2010 APICS Dictionary
Figure 1.1

7. Manufacturing Tangible product
Key decisions driven by physical characteristics of the product:
How is the product made?
How do we store it?
How do we move it?
Etc.

8. Services Intangible Product or Service Key decisions:
Location, Exchange, Storage, Physiological, Information
Key decisions:
How much customer involvement?
How much customization?

9. 2. Define Supply Chain.

10. Supply Chain
Supply Chain – A network of manufacturers and service providers that work together to create products or services needed by end users.

11. 3. What are the components of a Supply Chain?

12. Supply Chains
Basic
Producer
Basic Producer – Mines, extracts or harvests natural resources

13. Supply Chains
Basic
Producer
Converters
Basic Producer – Mines, extracts or harvests natural resources
Converter – Refines natural resources

14. Supply Chains
Basic
Producer
Converters
Fabricators
Basic Producer – Mines, extracts or harvests natural resources
Converter – Refines natural resources
Fabricator – Converts refined materials into usable components

15. Supply Chains
Basic
Producer
Converters
Fabricators
Assemblers
Basic Producer – Mines, extracts or harvests natural resources
Converter – Refines natural resources
Fabricator – Converts refined materials into usable components
Assembler – Assembles components into finished products

16. Supply Chains
Basic
Producer
Converters
Fabricators
Assemblers
Support Services
Transport
Storage
Finance, etc.
Basic Producer – Mines, extracts or harvests natural resources
Converter – Refines natural resources
Fabricator – Converts refined materials into usable components
Assembler – Assembles components into finished products

17. 4. Define Supply Chain Management.

18. Supply Chain Management
Supply Chain Management – The active management of supply chain activities and relationships in order to maximize customer value and achieve a sustainable competitive advantage.
Supply Chain – A network of manufacturers and service providers that work together to create products or services needed by end users. These manufacturers are linked together through physical flows, information flows, and monetary flows.
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19. A Supply Chain Example
Figure 1.2

20. Supply Chain Terminology
Upstream – Activities positioned earlier in the supply chain.
Downstream – Activities positioned later in the supply chain.
First-tier supplier – A supplier that provides products or services directly to a firm.
Second-tier supplier – A supplier that provides products or services to a first-tier supplier.

21. 5. What is the need of studying operations and supply chain management?

22. Why Study Operations and Supply Chain Management?
Every organization must make a product or provide a service that someone values.
Most organizations function as part of larger supply chains.
Organizations must carefully manage their operations and supply chains in order to prosper, and indeed, survive.
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23. 6. What are the important reasons for adopting Supply Chain Management?

24. Adopting SCM Increased competition
The impact of customers on suppliers
The impact of suppliers on customers
Technological advances

25. 6. What are the five components of Supply Chain Management (SCM)?

26. Supply Chain Operations Reference (SCOR) Model
Planning activities, which seek to balance demand requirements against resources and communicate these plans to the various participants.
Sourcing activities, which include identifying, developing, and contracting with suppliers and scheduling the delivery of incoming goods and services.
“Make,” or production activities, which cover the actual production of a good or service.
Delivery activities, which include everything from entering customer orders and determining delivery dates to storing and moving goods to their final destination.
Return activities, which include the activities necessary to return and process defective or excess products or materials.
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27. Supply Chain Operations Reference (SCOR) Model
Supply Chain Operations Reference Model (SCOR) Model
© Supply-Chain Council, 2011
Figure 1.3
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28. 8. Outline the historical developments of operations management.

29. Historical Development of OM
The Industrial Revolution
Post-civil war period
Scientific Management
Human Relations and Behavioralism
Operations Research
Service Revolution
Computer Revolution

30. 9. How has operations management contributed to society?

31. Contributions to Society
Higher standard of living
Better quality goods and services
Concern for the environment
Improved working conditions

32. 10. What are the three important trends that are influencing operations and supply chain management?

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Important Trends
Electronic commerce
The use of computer and telecommunications technologies to conduct business via electronic transfer of data and documents.
Increasing competition and globalization
Customer demands are changing and new competitors are entering the markets.
Relationship management
Organizations must manage the relationships with their upstream suppliers as well as their downstream customers.
© 2013 APICS Dictionary
Copyright © 2016 Pearson Education, Inc.

34. 11. What are the tangible resources used to create value?

35. Tangible Resources
Inventory
Workforce
Capacity
Facilities

36. 12. What are the intangible resources used to create value?

37. Intangible Resources Customer relationships Resource planning
Lean systems
Total Quality management (TQM)
Constraint management
Supply chain management

38. Professional Organizations
APICS – Association for Operations Management
ISM – Institute for Supply Management
CSCMP – The Council of Supply Chain Management Professionals
ASQ – The American Society for Quality

39. Operations and Supply Chain Management and You
Potential Career Paths in Operations and Supply Chain Management
Analyst
Production Manager
Service Manager
Sourcing Manager
Commodity Manager
Supplier Development Manager
International Logistics Manager
Transportation Manager
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