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Summary Operations and Supply Chain Management
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Summary operations and supply chain management for the study international business in year 1 quarter 2
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Global Supply Chain Management; Chapter summary
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Summary Global Supply Chain Management VU IBA
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TRL3709 Prescribed Book - Supply Chain Management: Strategy, Planning, and Operation, Chopra, S. 7th Edition
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Summary operations and supply chain management(Chapter: 1,2,3,4,5)
1.1 why study operations and supply chain management?
Every organization must make a product or provide a service that someone values. Each organization
has an operations function. The operations function is the collection of people, technology and
systems within an organization that has primary responsibility for providing the organization’s
products or service.
Most organizations 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. These providers are linked through physical flows, information flows and monetary flows.
Supply chains link together the operations functions of many different organizations to provide real
value to customers.
Organizations must carefully manage their operations and supply chains in order to prosper and
indeed survive. There are questions such as ‘how many should we make’ ‘what kind of people skills
and equipment do we need’ ‘where should we locate’.
Operations is a transform process that takes a set of inputs and transforms them in some way to
create outputs, goods or services, that a customer values.
Inputs transformation process outputs
-materials -manufacturing operations -tangible goods
-intangible needs → -service operations → -fulfilled needs
-information -satisfied customers
The operation function can also provide intangible services, as in the case of a law firm. Input is legal
advice, law firm transforms the knowledge into valuable legal advice, fulfilling the customers need.
Inputs to operations van come from many places and take many different forms. Nearly all
operations activities require coordination with other business functions, including engineering,
marketing and human resources.
Operations management is the planning, scheduling and control of the activities that transform
inputs into finished goods and services. Organizations hope to provide the best value to their
customers while making the best use resources. A simplified view of the supply chain of anheuser
busch.
Organizations in the supply chain are linked together through physical flows, information flows and
monetary flows. These flows go up and down the chain. The firms whose inputs feed into its
operations are positioned upstream. Firms who take anheuser busch products and move them along
to the final customers are positioned downstream. Ball corporation is a first-tier supplier to
anheuser busch because it supplies materials directly to the brewer. Alcoa provides to ball
corporation providing goods to the first-tier supplier which makes them the second-tier supplier.
Anheuser busch sells the final product to m&m which is a wholesaler that distributes the product to
retailers, in this case Meijer.
The flow of goods and information goes both ways. Ball corporation can place an order for alcoa and
in return alcoa ships the asked product. Physical goods can also go back up the supply chain, f.e.
when anheuser busch returns empty pallets or containers.
, Supply chain management is the active management of supply chain activities and relationships in
order to maximize 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 way possible.
In the supply chain operations reference (scor) model you can see the activities. It’s a framework that
seeks to provide standard descriptions of the processes, relationships and metrics that define supply
chain management. It covers five broad areas; planning activities-balance demand requirements
against resources and communicate these plans to participants, sourcing activities-identifying,
developing and contracting with suppliers and scheduling the delivery of incoming goods and
services, make or production activities-the actual production of a good or service, delivery activities-
everything from entering customers’ orders and determining delivery dates to storing and moving
goods to their final destinations, return activities-activities necessary to return and process defective
or excess products or materials. Supply chain operations reference model, scor.
Seven reasons for supply chain failures
-offshoring, difficult to monitor supply chain completely
-increasing complexity of supply chains, unaware of who their suppliers were subcontracting to
-costs pressures, compromise on quality and ethics
-geographic clustering, vulnerable for local disasters such as a tsunami
-modern communications, can quickly damage reputations
-just in time communications, reduce the time of failure in a supply chain
-dependence on multiple suppliers, increasing overall vulnerability
Why is scm difficult?
-uncertainty: long chain, weather, politics etc
-complexity: minimize costs, minimize uncertainty while focusing on performance
1.2 important trends
Three enduring trends that will continue to attract the attention of operations and supply chain
management professionals for the foreseeable future: agility, information technologies and people.
Agility is the ability to recalculate plans in the face of market, demand and supply volatility and
deliver the same or comparable cost, quality and customer service. (behendigheid)
Electronic commerce, e-commerce is the use of computer ad telecommunications technologies to
conduct business via electronics transfer of data and documents.
People, specifically the current shortage of talented operations and supply chain professionals and
the importance of relationship management.
2.1 elements of the business
Structural elements are tangible resources, such as buildings, equipment and information
technology. These resources require large capital investments that are difficult to reverse. Because of
this their cost and flexibility change infrequently and only after much deliberation. Infrastructural
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