Chapter 1 - Operations & Supply Management

Front 1

Operations & Supply Management

Back 1

the design, operation and improvement of the systems that create and deliver the firm's primary products and services.

Front 2

Producing a product or providing a service involves a complex series of transformation processes

Back 2

true

Front 3

Success in today's global markets require a business strategy that matches the preferences of customers with

Back 3

the realities imposed by complex supply networks

Front 4

In Supply Chain Management, the terms "OPERATIONS" and "SUPPLY" take on special meaning

Back 4

<b>Operations</b>:
Refers to manufacturing and service processes that are used to transform the resources employed by a firm into products desired by customers
Ex.
A MANUFACTURING process will produce some physical product like a car or computer

A SERVICE process would produce and intangible product such as support/user experience

Front 5

In Supply Chain Management, the terms "OPERATIONS" and "SUPPLY" take on special meaning

Back 5

<b>Supply</b>
refers to supply chain processes that move information and material to and from the manufacturing and service processes of the firm.

These include:

Logistics processes
Storage processes

Supply in this context refers to providing goods and service to plants and warehouses at the input end and also the supply of goods and service to the customer on the output end of the supply chain.

Front 6

Supply & Demand Planning

Back 6

forecasting demand

making intermediate term plans for how demand will be met

controlling different types of inventory

detailed weekly scheduling of processes

Front 7

Operations & Supply Processes can be conveniently categorized particularly from the view of a producer of consumer products/services

Back 7

planning

sourcing

making

delivering

returning

Front 8

Supply Chain Processes

Planning

Back 8

Planning:

consists of the <i>processes</i> needed to operate an existing supply chain strategically

During planning a firm must determine HOW anticipated demand will be met with available resource constraints

A major aspect of planning is developing a set of metrics to monitor the supply chain so that it is efficient nd delivers high quality value to customers

Front 9

Sourcing

Back 9

Involves the selection of suppliers that will deliver the goods and services needed to create the firm's product.

A set of:
-pricing
-delivery
-payment processes

are needed together with metrics for monitoring and improving the relationships between partners of the firm.

These processes include:
-receiving shipment
-verifying them
-transferring them to manufacturing facilities
-and authorizing supplier payment.

Front 10

Making

Back 10

Where the major product is produced or the service is provided.

The step requires scheduling processesfor workers and the coordination of material and other critical resources such as equipment to support producing or providing the service.

Metrics that measure speed, quality, and worker productivity are used to monitor these processes

Front 11

Delivering

Back 11

also referred to as Logistics Processes

Carriers are picked to:

move products to warehouses and customers

coordinate and schedule the movement of goods and information through the supply network

develop and operate a network of warehouses

and run the information systems that manage the receipt of orders from customers and invoicing systems to collect payments from customers

Front 12

Returning

Back 12

Involves the processes for receiving worn-out, defective, and excess products back from customers and support for customers who have problems with delivered products.

In the case of services this may involve all types of follow up activities that are requrired for after sales support

Front 13

There are 5 essential differences between services and goods

Back 13

1. A service is an INTANGIBLE process that does not have physical dimensions.

This distinction has important business implications since a service innovation, unlike a product innovation, cannot be patented. As a result a company with an innovative service process must implement and scale it quickly before competitors follow suit.

Front 14

[Edit]
[Delete]


There are 5 essential differences between services and goods

Back 14

2. A service requires some degree of INTERACTION WITH THE CUSTOMER for it to be a service.

The interaction may be brief, bu it must exist for the service to be complete. Where face-to-face service is required the service facility must be designed to hangle the customer's presence.

Goods on the other hand are generally produced in a facility separate from the customer--they can be made on a schedule that is convenient/efficient for the company.

Front 15

[Edit]
[Delete]


There are 5 essential differences between services and goods

Back 15

3. Services are inherently HETEROGENOUS--they vary from day to day and even hour by hour as a function of the attitudes of the customer and the service providers.

Thus, even highly scripted work such as found in call centers can produce different outcomes.

Goods on the other hand can be produced to tight specifications with 0 variability

A defective good can simply be replaced and forgotten, but a service interaction can't necessarily.

Front 16

[Edit]
[Delete]


There are 5 essential differences between services and goods

Back 16

4. Services as a process are PERISHABLE AND TIME DEPENDENT, and unlike goods, they can't be store.

Front 17

[Edit]
[Delete]


There are 5 essential differences between services and goods

Back 17

5. the specifications of a service are defined and evaluated as a PACKAGE OF FEATURES that affect the five senses.

These features are:

Supporting Facility

Facilitating goods

Explicit services

Implicit services

Front 18

The Goods-Service Continuum

Back 18

Most any product offering is a combination of goods and services

Pure Service to Pure Goods

Pure Goods industries have become low-margin commodity businesses and in order to differentiate are bundling services.

Front 19

Servitization

Back 19

refers to when a company chooses to build service activities into its product offerings for its current users/installed user base

IBM is a good example--the hardware they provide is a part of the overall "solution" they provide to customers

Servitization is not always the best strategy. While it may lead to higher revenues it will often decrease margins as the service activities don't generate enough revenue to significantly offset service costs

Front 20

Goal of SC managers is to innovate and craft efficient and effective processes to produce high levels of value for customers and shareholders

Back 20

<b>Efficiency:</b>
Doing something at the lowest possible cost. The goal of an efficient process is to produce a good or provide a service by using the smallest input of resources.

<b>Effectiveness:</b>
means doing the right things to create the most value for the company.

Often times maximizing efficiency and effectiveness will be at odds with eachother (e.g. customer service at a bank desk)

<b>Value<b/>:
metaphorically it equals quality/price.

Goal of OSM is to increase Value for everyone in the Supply Chain

Front 21

Value

Back 21

quality/price

competitive happiness is being able to increase quality and reduce price while maintaining or improving profit margins.

This is a way that operations can DIRECTLY increase customer retention and gain market share

Front 22

sustainability

Back 22

maintaining balance in a system

Front 23

Supply Chain Careers

Back 23

pg. 14

Front 24

Supply Chain Issues

Back 24

pg. 18

Coordinating the relationships btwn mutally supportive but separate organizations

Optimizing global supplier, production, and distribution networks

Managing customer touch points

Raising senior management awareness of operations as a significant competitive weapon

Sustainability & the TBL