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Samenvatting Operations & Supply Chain Management
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Complete summary of the Operations & Supply Chain Management course of the Transport & Supply Chain Management master.
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Samenvatting OSCMLecture 1: Strategies, Disruptions & Transformations I
Structure Lecture 1:
1. Problems traditional supply chains face & Possible disruptive trends
2. Strategic frameworks to assess and manage SC impact
3. Dynamically aligning supply chains
4. Inputs for supply chain transformation
5. Tailoring supply chains
Operations management: the activity of managing the resources and processes that
produce products and services.
• Process: arrangement of resources that transform inputs into outputs to satisfy
customer demand
• Operations: how an organization produces products or services
Why do companies bother about operations and process management?
• “A company’s operations function is either a competitive weapon or a corporate
millstone (=causes you troubles). It is seldom neutral.” (Skinner, 1969)
Operations management offers the key to superior performance in any industry
• How do companies categorize customer expectations they want to fulfil?
• Which metrics are used to monitor and manage performance?
• How are organizations structured to deliver superior (financial) performance?
Expanding the scope of OMP
,Operations Research and Analytics: data → information → insights for making better
decisions and improving results
• They enable organizations to turn complex challenges into substantial
opportunities. (INFORMS)
Supply chain management and logistics are key research domains within OM and OR (OA)
• Supply chain management → management of supply chain assets and flows in order
to maximize total supply chain surplus
• 𝑆𝐶 𝑠𝑢𝑟𝑝𝑙𝑢𝑠 = 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟 𝑣𝑎𝑙𝑢𝑒 – 𝑆𝐶 𝑐𝑜𝑠𝑡
• 𝑆𝐶 𝑝𝑟𝑜𝑓𝑖𝑡 = 𝑝𝑟𝑖𝑐𝑒 – 𝑆𝐶 𝑐𝑜𝑠𝑡
Supply chains are key to contemporary (current) value chains (case of Ramirez et al. 2020)
“Why investing in procurement (het verkrijgen) makes organizations more resilient (veerkrachtig)”
This raises the following questions
• What makes supply chains successful?
• What is the impact of recent and future trends?
• How to realign businesses?
1. Problems traditional supply chains face & Possible disruptive trends
Many problems traditional supply chains facing to handle a fast-moving operating
environment
• Political instability
• Increasing administrative burden (administrative lasten)
• Trade wars
• Brexit
• Fighting long term risks with short term solutions
• Post Covid-19 related SC disruptions: inflation, risk of recession climate related issues
Main trends that are challenging supply chains
• Sustainability
• Technology
• Uberization (=different way of buying or using things, especially using mobile technology) of supply
chains: sharing resources
• Social media and social license: interaction and support from customers and other
stakeholders to develop and maintain business
• Volatility: increased change in key parameters negatively impacts supply chain
performance (see law of variability, Theory of Swift and Even Flow, Schmenner and Swink, 1998)
• Vulnerability & resilience (=kwetsbaarheid en weerstand kunnen bieden)
Compounding effects for this are ‘One-size-fits-all approach’
• Problems:
o Over-& underservicing for customer segments
• Therefore: tailored supply chains
o Better use of resources
o Higher customer satisfaction
, o Promises for higher margins (up to 2x)
• Less forgiving environment
2. Strategic frameworks to assess and manage SC impact
Strategic frameworks to assess and manage SC impact:
• Large potential for new technologies, supply chain optimization models etc. but they
do not make a supply chain successful
• Strategic frameworks help to decide on the overall focus of a supply chain, identify
under which conditions technologies can benefit, and – in general- help to assess the
impact of disruptive trends
• Briefly introduce approach of Gattorna and Ellis (2020) before examining
more established frameworks
Fisher (1997): product types and nature of demand
• Article van Fisher, M. (1997): “What is the right supply chain type for your product?”
• Objective: offer framework to understand nature of demand and devise SC to satisfy
that demand
• Point of departure:
o Two main types of products:
▪ Functional
▪ Innovative
o Two main types of supply chain focus:
▪ Efficient
▪ Responsive
Product types
Functional products:
• Satisfy basic needs
• Stable demand
• Low forecast error
• Low margins
Products can be both: basic t-shirt or designer t-shirt
Supply chain strategies
Matching supply chains with problems
, Combining both product types and supply chain strategies:
• Companies in lower left cell are rare, in the upper right are common!
• Mismatch: change the product or the supply chain
• For innovative products, improvements in responsiveness tend to pay off more than
efficiency gains
Demand uncertainty Supply uncertainty
Low High Low High
Article Lee: “Aligning supply chain strategies with product uncertainties”
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