1. 2 473.31 Fall 2015 Bruce Duggan Providence University College
Operations 2
473.31
Fall 2015
Bruce Duggan
Providence University College

2. Quiz 1

3. 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

4. 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

5. 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

6. Operations and Supply Chain Processes
LO1
Operations and Supply Chain Processes

7. 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.

8. 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.

9. 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.

10. 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

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

12. Differences Between Goods and Services
LO5
Differences Between Goods and Services

13. Evolution of Operations and Supply Management
LO6
Evolution of Operations and Supply Management

14. 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.

15. 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.

16. 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

17. End of Chapter 1

18. Chapter 2

19. 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

20. 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.

21. 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

22. 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

23. 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

24. 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

25. 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

26. 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

27. 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

28. The Operations Strategy Process
LO4
The Operations Strategy Process 6

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

30. 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

31. Risk Mitigation Strategies6

32. 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

33. End of Chapter 2
2-16