Transcript Introduction to Operations and Supply Chain Management

Introduction to
Operations and Supply
Chain Management
Text: Introduction to Operations and Supply Chain
Management
Custom edition for Farmingdale State College
Authors: Cecil Bozarth & Robert Handfield
Where appropriate reference text page numbers will be
on bottom of slides
OSC may be used as an abbreviation of Operations
and Supply Chain
Chapter Objectives
Be able to:
 Describe what the operations function is and why it is
critical to an organization’s survival.
 Describe what a supply chain is and how it relates to a
particular organization’s operations function.
 Discuss what is meant by operations management and
supply chain management.
 Identify some of the major operations and supply chain
activities, as well as career opportunities in these areas.
 Make a case for studying both operations management
and supply chain management.
Introduction
• Why study Operations and Supply Chain
Management?
• Operations Management
• Supply Chain Management
• Important trends
• LeapFrog case study
Focus
• Key issues surrounding the design
and ongoing management of these
areas
• Common tools and techniques
– Introduction to the SCOR model
• Analytical skills (both qualitative and
quantitative)
Why Study Operations and
Supply Chain Management?
Three Basic Truths
I.
Pervasiveness
II. Interdependence
III. Profitability and Survival
Pervasiveness
Every organization must make a product or
provide a service that someone
values………….
Manufacturer.
Retailer.
Design firm.
University.
Health services.
Interdependence
Most organizations function as part of a
larger supply chain
Supply Chains
• Networks of manufacturers and service
providers that work together to move goods
from the raw material stage through to the end
user
• Linked through physical, information, and
monetary flows
Profitability and Survival
Organizations must carefully manage their
operations and supply chains to prosper,
and indeed, survive!
Shoe manufacturer:
How many shoes should we make? What mix?
What resources do we need? What will we outsource?
Location?
Key performance criteria -- Cost? Quality? Speed?
Operations Management
The planning, scheduling, and control
of the activities that transform inputs
into finished goods and services
Operations Function
The collection of people, technology, and
systems within a company ...
… that has primary responsibility ...
… for providing the organization’s
products and/or services.
Viewing Operations as a
Transformation Process
Transformation
Process
Manufacturing operations
Inputs
Materials
People
Equipment
Intangible needs
Information
Outputs
Service operations
Tangible goods
Fulfilled requests
Information
Satisfied Customers
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.
Services
• Intangible “Product” or Service
– Location, Exchange, Storage,
Physiological, Information
• Key decisions:
– How much customer involvement?
– How much customization?
Cross-Functional Linkages
MIS
Finance
What IT solutions
to make it all work
together?
Budgeting.
Analysis.
Funds.
Design
Sustainability.
Quality.
Manufacturability.
Operations and
Supply Chain
Accounting
Performance measurement systems.
Planning and control.
Human
Resources
Skills? Training?
# of Employees?
Marketing
What products?
What volumes?
Costs? Quality?
Delivery?
Supply Chain Management
Active management of supply chain
activities and relationships to maximize
customer value and achieve a sustainable
competitive advantage
Material Flows
Upstream
Second Tier
Supplier
First Tier
Supplier
Alcoa
Ball Corp
Downstream
Distributor
Anheuser-Busch
M&M
Transportation companies
Retailer
Meijer
Final
customers
Supply Chain Issues
•
•
•
•
Length of the chain
Complexity
Stability
Physical, informational, and monetary
flows
Supply-Chain Operations
Reference (SCOR)* Model
Consists of:
• Planning activities
• Sourcing activities
• “Make” or production activities
• Delivery activities
• Return activities
* Supply-Chain Council, 2007. www.supply-chain.org
SCOR Model
© Supply-Chain Council, 2007
Wal-Mart — Early 1990s
• Individual stores sent sales data daily
to Wal-Mart’s suppliers via satellite
• Suppliers plan production and ship
based on this sales data
• Wal-Mart used its own dedicated fleet
to ship from its warehouses to stores
Panera Bread — 2006
• 4th quarter revenues and
profits up 25% and 8%,
respectively, over 2005 4th
quarter*
• >200 million pounds of
dough delivered by 110
trucks traveling 9.7 million
miles annually
*Panera Bread, 4th Quarter 2006 Earnings Report,
www.panera.com/about/investor/reports.php.
Important Trends
• Electronic commerce
– Reduces the costs and time associated with
supply chain relationships
• Increasing competition and globalization
– Fewer industries protected by geography
• Relationship management
– Competition between chains, not individual firms
– Trust and coordination
Operations and Supply Chain
Management and You
Some of the many career positions
• Analyst
• Commodity Manager
• Customer Service
Manager
• International Logistics
Manager
• Logistics Services
Salesperson
• Production Manager
• Sourcing Analyst
• Logistics and Material
Planner
• Systems Support
Manager (MIS)
• Transportation Manager
• Process Analyst
• Scheduler
• Purchasing Agent
Operations and Supply Chain
Activities
• Process selection, design, and improvement
• Forecasting for decision making
• Capacity planning for capital investment and
resource levels
• Inventory management for amount and location
• Planning and control for work scheduling and
meeting demand
• Purchasing, managing supplier relationships
• Logistics or acquisition and distribution
Case Study Introducing
Operations and Supply Chain
Management
LeapFrog