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Summary of 57 pages for the course Supply Chain Management at HZ
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Mitch LowesPart one: Creating Value through Operations and Supply Chains.
, Introduction to Operations and Supply Chain Management. Ch.1
Why Study Operations and Supply Chain Management?
1. Every organisation must make a product or provide a service that someone values.
Each organisation has an operations function (or operations), which is the collection
of people, technology, and systems within the organisation that has primary
responsibility for providing the organisation’s products or services.
2. Most organisations function as part of larger supply chains. A supply chain is a
network of manufacturers and service providers that work together to create products
or services needed by end users and are linked together through physical flows,
information flows, and monetary flows.
3. Organisations must carefully manage their operations and supply chains in order to
prosper and, indeed, survive.
Operations Management:
Operations management is ‘the planning, scheduling, and control of the activities that
transform inputs into finished goods and services’.
Supply Chain Management:
Upstream is a term used to describe activities or firms that are positioned earlier in the supply
chain relative to some other activity or firm. Downstream, on the other hand, is a term used
for activities or firms that are positioned later in the supply chain. A first-tier supplier is a
supplier that provides products or services directly to a firm. A second-tier supplier is a
supplier that provides products or services to a firm’s first-tier supplier. Supply chain
management is the active management of supply chain activities and relationships in order to
maximise customer value and achieve sustainable competitive advantage. It represents a
conscious effort by a firm or group of firms to develop and run supply chains in the most
effective and efficient ways possible. The Supply Chain Operations Reference (SCOR) model
is a framework developed and supported by the Supply Chain Council that seeks to provide
standard descriptions of the processes, relationships, and metrics that define supply chain
management. According to the SCOR model, supply chain management covers 5 broad areas:
1. Planning activities; seek to balance demand requirements against resources.
2. Sourcing activities; include identifying, developing, and contracting with suppliers.
3. ‘Make’, or production activities; actual production of a good or service.
4. Delivering activities; entering customer orders to moving goods to final destination.
5. Return activities; return and process defective or excess products or materials.
Important Trends:
Three major developments have brought operations and supply chain management to the
forefront of managers’ attention are:
Electronic Commerce:
Electronic commerce (or e-commerce) refers to ‘the use of computer and telecommunications
technologies to conduct business via electronic transfer of data and documents’.
Increasing Competition and Globalisation:
The rate of change in markets, products, and technology is escalating, escalating to situations
where managers must make decisions on shorter notice, with less information, and with
higher penalty costs if they make mistakes.
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