Introduction to Managing Operations Across the Supply Chain CHAPTER ONE.
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Transcript of Introduction to Managing Operations Across the Supply Chain CHAPTER ONE.
22
What is Operations?What is Operations?
• What is Operations?
a function or system that transforms inputs into outputs of greater value. i.e. a transformation process.
OM is a process oriented disciplineOM is a process oriented discipline
1–1–33
Inputs Transformation Outputs
44
Transformation processTransformation process
• Tuna can process–Inputs and outputs?
• Hospital process –Inputs and outputs?
55
Why do the Operations management and Supply Chain
Management matter?
Why do the Operations management and Supply Chain
Management matter?
• In early 2005, HP– New CEO search committee when Carly Fiorina
stepped down as CEO
– New CEO of HP Mark Hurd improved operations through supply chain
66
• Physical: as in manufacturing operations• Locational: as in transportation or
warehouse operations• Exchange: as in retail operations• Physiological: as in health care• Psychological: as in entertainment• Informational: as in communication
Transformation ProcessTransformation Process
77
What is Operations Management?What is Operations Management?
• What is Operations Management (OM)?–Operations Management is the management of process used to design, supply, produce, and deliver valuable goods and services to customers.
11––88
Sport Teams
Manufacturers
RestaurantsSchools
Gov’tServices
HealthCare
Transportation
Banks
Military
Agriculture
Hospitality
Retail
Municipalities
Not-for-ProfitOrganizations
Construction
Entertainment
Operations Management (OM) is everywhereOperations Management (OM) is everywhere
99
• Operations• Marketing• Finance and
Accounting• Human
Resources• Outside
Suppliers
Operations Management (OM) is everywhereOperations Management (OM) is everywhere
1010
Supply Chain ManagementSupply Chain Management
• Supply chain: the global network of organizations and activities involved in –(1) designing a set of goods and services and their
related processes– (2) transforming inputs into goods and services– (3) consuming goods and services– (4) disposing of these goods and services
• Supply chain management: the design and execution of relationship and flows that connect the parties and processes across supply chain
Supply Chain Network ExampleSupply Chain Network Example
Financial Underwriters
Screen Writers
Talent Agencies
Film Maker /Producer
Costume Supplier
Resources and Technology Supply Chain
Props Supplier
Equipment Supplier
Casting Company
Director
Raw Materials Suppliers
Chemical Dye Manufacturer
Wood Pulp Supplier
Cellulose Acetate Manufacturer
Film Manufacturer
Stock Film Wholesaler
DVDSales/Rentals
Theaters
DistributorsProduction Company
Product Supply Chain
Tier 4 Tier 3 Tier 2 Tier 1 Echelon 1 Echelon 2
Upstream Product Supply Chain Downstream Product Supply Chain11––1111
Characteristics of Goods and ServicesCharacteristics of Goods and Services
11––1212
• Tangible• Can be inventoried• Little customer contact• Long lead time• Often capital-intensive• Quality easily assured• Material is transformed
• Intangible• Cannot be inventoried• Extensive customer contact• Short lead time• Often labor intensive• Quality harder to assess• Information or customer is
transformed
Goods Services
1313
Value-Added & Product PackagesValue-Added & Product Packages
• Value-added is the difference between the cost of inputs and the value or price of outputs.
• Product packages are a combination of goods and services.
• Product packages can make a company more competitive.
1414
Year Mfg. Service45 79 2150 72 2855 72 2860 68 3265 64 3670 64 3675 58 4280 44 4685 43 5790 35 6595 25 7500 30 70
02 25 75
U.S. Manufacturing vs. Service Employment
0102030405060708090
45 50 55 60 65 70 75 80 85 90 95 00 02 05
Year
Per
cent
Mfg.
Service
1515
Decline in Manufacturing JobsDecline in Manufacturing Jobs
• Productivity–Increasing productivity allows companies to maintain
or increase their output using fewer workers
• Outsourcing–Some manufacturing work has been outsourced to
more productive companies
Functional activities that connect Operations managers
Functional activities that connect Operations managers
• Customer Management: interfaces with customers and order processing and fulfillment
• Supply Management: processes to identify, acquire and administer inputs
• Logistics Management: movement of materials and information within, into and out of the firm
11––1616
Historical events in OMHistorical events in OM
• Industrial revolution (Before 1800):
–Steam engine: James Watt
–Division of labor: Adam Smith
–Interchangeable parts: Eli Whitney
• Technical capitalist (1800-1850):
–Improved manufacturing technology
–Emerging transportation network
11––1818
Historical events in OMHistorical events in OM
• mass production (1850-1890):
–Emergence of local factory
–Introduction of steam and electrical power
• Scientific management(1890-1920):
–More scientific management
–Moving assembly (Henry Ford)
11––1919
Historical events in OMHistorical events in OM
• Human relations and Demand growth (1920-1960):– Hawthorne studies (Elton Mayo)– Motivation theories (Abraham Maslow and Douglas
Mcgregor)– Introduction of computer usage and quantitative
methods– Increased automation
11––2020
Historical events in OMHistorical events in OM
• Global competition (1960-1980):
– Just in time system
– Early outsourcing
• World class manufacturing (1980-2000):
– Increased computerization and information system
– Global sourcing and need for supply chain coordination
• E-commerce (2000-present):
– Internet revolution
11––2121
CWU College of BusinessSupply Chain Management specialization
CWU College of BusinessSupply Chain Management specialization
• SCM 310 Supply chain management
• SCM 425 Procurement and supply management
• SCM 435 Advanced topics in operations and supply chain management
• SCM 475 Global supply chain management
• SCM 480 Supply chain strategy
11––2222
CWU College of BusinessSupply Chain Management certificate
CWU College of BusinessSupply Chain Management certificate
• SCM 310 Supply chain management
• SCM 425 Procurement and supply management
• SCM 435 Advanced topics in operations and supply chain management
• SCM 475 Global supply chain management
11––2323
CWU College of BusinessSupply Chain Management certificate
(Choose one from )
CWU College of BusinessSupply Chain Management certificate
(Choose one from )
• ACCT 305 Cost accounting
• Bus 490 Cooperative education
• MGT 384 Intro. to international business
• MGT 484 international management
• SCM 324 Quality and continuous improvement
11––2424