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Lecture notes Operations and supply chain management
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Lecture notes on all Operations and supply chain management basics.
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LECTURE 1: process view of organizationOperation and supply chain management aims to :
1. Reduce cost
2. Reduce risk exposure
3. Increase customer satisfaction
4. Meet sustainable/ESG goals
Operations: Creation and delivery of products and services to the customers
Three Core Functions of an Organization
Marketing (&Sales): communicating the organization’s products and services
to its markets.
Product/Service Development: developing new and modified offerings.
Operations: creation and delivery of products and services to customers.
Any operation can be represented as:
Inputs -> PROCESS -> Outputs
- Inputs: items that flow into the process
Mainly materials, information, customers, money energy. Usually, one is
dominant.
- Process: a transformation that converts inputs into outputs.
May transform the physical properties, store or change location of the
materials/customers. Synthetize/analyze information. Transform
physiological or psychological state of customers.
, - Outputs: items that flow from the process.
Are somethings products or services but can be a mixture of the two. All
processes are service providers, who may (or may not) produce products as a
means of serving their customers.
FIVE ELEMENT OF PROCESS VIEW
The process view can be applied at operational, organizational or supply chain
level.
1. Inputs and outputs
2. Flow units
Depending on the process, the flow unit may be a unit of input, such as a customer
order, or a unit of output, such as a finished product. he flow unit can also be the
financial value of the input or out- put.
3. Network of activities and buffers
An activity is the simplest form of transformation; it is the building block of a
process.
A buffer stores flow units that have finished with one activity but are waiting for
the next activity to start. For example, a patient who has registered at an emergency
, room waits in a waiting room to see the doctor. Process activities are linked so that
the output of one becomes an input into another, often through an intermediate
buffer.
Storage = Inventory = the total number of flow units present within process
boundaries.
4. Resources
Resources are tangible assets that are usually divided into two categories:
- Capital—fixed assets such as land, buildings, facilities, equipment, machines,
and infor- mation systems
- Labor—people such as engineers, operators, customer-service
representatives, and sales staff.
Resources facilitate the transformation of inputs into outputs during the process
5. Information structure.
Shows what information is needed and is available to whom in order to perform
activities or make managerial decisions.
business process as a network of activities separated by buffers and performed by
resources that transform inputs into outputs.
Process design specifies the structure of a business process in terms of inputs,
outputs, the network of activities and buffers, and the resources used.
Process flow management, therefore, is a set of managerial policies that specify
how a process should be operated over time and which resources should be allocated
to which activities.
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