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Supply Chain Operations summary, H1-2, 4, 7 and reader (BDK, )
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Summary of the book Operations and Supply Chain Management (Jacobs and Chase, fourth edition). The summary is written in English.
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SUPPLY CHAIN OPERATIONS – SAMENVATTINGHOOFDSTUK 1: OPERATIONS AND SUPPL Y CHAIN MANAGEMENT
Operations and supply chain management (OSCM): the design, operation and improvement of the systems
that create and deliver the firm’s primary products and services.
Operations refers to manufacturing and service processes that are used to transform the resources employed
by a firm into products desired by customers.
Supply chain refers to processes that move information and material to and from the manufacturing and
service processes of the firm.
A process can be defined as one or more activities that transform inputs into outputs. The operations and
supply chain processes can be categorized in:
1. Planning consists of the processes needed to operate an existing supply chain strategically. A firm
must determine how anticipated demand will be met with available resource. Developing a set of
metrics to monitor the supply chain so that it’s efficient and delivers high quality and value to
customers.
2. Sourcing involves the selection of suppliers that will deliver the goods and services needed to create
the firm’s product. Pricing, delivery and payment processes are needed together with metrics for
monitoring and improving the relationships between partners of the firm.
3. Making is where the major product is produced or the service is provided. The step requires
scheduling processes for workers and coordinating material and other critical resources such as the
equipment to support producing or providing the service. Metrics that measure speed, quality and
worker productivity are used to monitor these processes.
4. Delivering is when carriers are picked to move products to warehouses and customers, and they
coordinate and schedule the movement of goods and information through the supply network, as well
as they develop and operate a network of warehouses and run the information systems that collect
payments from customers.
5. Returning involves processes for receiving worn-out, defective, and excess products back from
customers and support for customers who have problems with delivered products. With services this
may involve all types of follow-up activities that are required for after-sales support.
Differences between services and goods
A service cannot be physically weighted or measured (intangible).
A service requires interaction with the customers.
A service varies depending on interaction with the customers (heterogenous).
A service cannot be stored (perishable and time dependent).
A service is defined by a set of intangible features (package of features that affect the 5 senses):
o Supporting facility: the physical resources that must be in place before a service can be
offered (location, layout, supporting equipment).
o Facilitating goods: the material purchased or consumed by the buyer or the items provided to
the customer (variety, consistency, quantity of the physical goods that go with the service).
o Information: operations data or information that is provided to the customer to enable
efficient and customized services (weather reports, seat preferences, parts availability).
o Explicit services: the benefits that are readily observable by the senses and that consist of the
essential or intrinsic features of the service (training of service personnel, consistency of
service performance, availability and acces, comprehensiveness of service).
o Implicit services: psychological benefits that the consumer may sense only vaguely, or the
extrinsic features of the service (attitude of servers, atmosphere, waiting time, privacy and
security, convenience).
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