OPERATIONS MANAGEMENT
The planning, scheduling, and control
Operations of the Chain Management
and Supply
activities
Week 1 that transforminputs into finished
goods1:and
Chapter services. to operations and supply chain management.
Introductions
Operations management = the planning, scheduling, and control of the activities that transform
inputs into finished goods and services.
Transformation process = manufacturing operations, service operations.
9 november 2018
Logistics management = the part of supply chain management that plans, implements and
Asis-y1q2-BE-OSM_Module Operations-Log-SCM-RMannie
controls the efficient and effective forward and reverse flow and storage of goods, services, and
related information between the point of origin and the consumption in order to meet customer
requirement.
The 7 rights of logistics: the right product / to the right customer / at the right time / at the right
place / in the right condition / in the right quantity / at the right cost 5
Supply chain management = the active management of supply chain activities and relationships
in order to maximize customer value and achieve a sustainable competitive advantage. It
encompasses all activities associated with the flow and transformation of goods from the raw
material stage trough to the end user, as well as the associated information flows. It is hard
because of the demand uncertainty or others.
- Upstream = activities or firms positioned earlier in the supply chain relative to other
activities in the supply chain.
- Downstream = activities or firms positioned later in the supply chain.
- First-tier supplier = a supplier that provides products or services directly to a firm.
- Second-tier supplier = a supplier that provides to a firm’s first-tier supplier.
Type of flows: information / physical / monetary.
Ultimate supply chain = maximize the value of the customer, minimize costs of process.
Difficult because of the uncertainty inherent to every supply chain and complexity to (globally)
optimize the SC.
Supply Chain Operations Reference (SCOR) model = a framework to provide standard
descriptions of the processes, relationships, and metrics that define SCM.
Level 1 of the views SCM activities are structured around 5 core management processes:
1. Source. Process that produce goods and services to meet planned or actual demand.
2. Make. Processes that transform product to a finished state to meet planned or actual
demand.
3. Deliver. Processes that provide finished goods and services to meet planned or actual
demand.
4. Return. Process associated with returning or receiving returned products for ant
reasons.
5. Plan. Processes that balance aggregate resources with requirements.
,Important trends for operations and SCM:
- Electronic commerce: the use of computer and telecommunications technologies to
conduct business via electronic transfer. There are now companies building around e-
commerce (Netflix). IT has made communications across the supply chain possible.
- Increasing competition and globalization. This causes managers to have to make
decisions on shorter notice and with higher costs if they make mistakes.
- Relationship management. One mistake in the beginning of the supply chain can reach
the customer. Because of this all relationships in the supply chain need to be managed.
Seven reasons for supply chain failures:
1. Offshoring. Making it increasingly difficult for firms to monitor supply chain adequately.
2. Increasing complexity of supply chains. Meaning companies were often unaware of who
their suppliers were subcontracting to.
3. Cost pressures. Which could lead to compromise on quality and ethics.
4. Geographic clustering. Making manufactures vulnerable to a localized disaster, such as
weather disasters.
5. Modern communication. This can quickly damage reputation.
6. Just-in-time production methods. Which have reduced the time to recover from supply
chain failure.
7. Dependence on multiple suppliers. Increasing overall vulnerability.
Week 2
Chapter 2: Operations and supply chain strategies.
Uncertainties and SC risk:
- Due to its global nature and systematic impact on the firm’s financial performance, the
supply chain arguably faces more risk than other areas of the company.
- Risk is a fact of life for any supply chain, whether it’s dealing with quality and safety
challenges, supply shortages, legal issues, security problems, regulatory and
environmental compliance, weather and natural disasters or terrorism.
- Companies with global supply chains face additional risks. Including, but not limited to,
longer lead times, supply disruptions causes by global economic instability in a source
country, and changes in economic such as exchange rates.
Key interactions in the company of supply chain management:
- Finance: budgeting, analysis, funds.
- MIS: what IT solutions to make it all work together?
- Human resources: skills? Training? # of employees?
- Design: sustainability, quality, manufacturability.
- Accounting: performance measurement systems, planning and control.
- Marketing: what products? What volumes? Costs? Quality? Delivery?
Strategy = a mechanism by which a business coordinates its decisions regarding structural and
infrastructural element.
, Operations and supply chain strategies = indicates how the structural and infrastructural
elements, within the operations and supply chain areas, will be acquired and developed to
support the overall business strategy.
- The mix of structural and infrastructural elements.
- Is the mix aligned in with the business strategy?
- Does it support the development of core competencies?
Structural and infrastructural decisions:
Structural decisions = includes tangible resources, such as buildings, equipment and computer
systems.
- Facilities: services/manufacturing, warehouses, distribution hubs. Size, location, degree
of specialization.
- Capacity: amount, type, timing of capacity changes. 11/16/2018
- Technology: services/manufacturing, material handling equipment, transportation
equipment, information systems.
Infrastructural decisions: includes the policies, people, decision rules, and organizational
structure choices made by a firm.
- Organization: structure, control/reward system, workforce decisions.
- Planning and control: forecasting, tactical planning, inventory management, production
planning and control.
- Business processes and management control: six sigma, continuous improvement,
statistical process control.
Closing the Loop Between Business Strategy
- Product and service development: the developmental process, organizational and
supplier roles.
and Functional Area Strategies
- Sourcing decisions and purchasing process: sourcing strategies, supplier selection,
supplier performance measurement.
A top-down model of
strategy
Core competencies = an
organizational strength or
ability, developed over a
long period, that customers
find valuable and
competitors find difficult to
S & W/ core comp.s copy.
(same)
Figure 2.5
C opyright © 2013 Pearson Educ ation, Inc . publishing as 2 - 13
Prentic e Hall
The planning, scheduling, and control
Operations of the Chain Management
and Supply
activities
Week 1 that transforminputs into finished
goods1:and
Chapter services. to operations and supply chain management.
Introductions
Operations management = the planning, scheduling, and control of the activities that transform
inputs into finished goods and services.
Transformation process = manufacturing operations, service operations.
9 november 2018
Logistics management = the part of supply chain management that plans, implements and
Asis-y1q2-BE-OSM_Module Operations-Log-SCM-RMannie
controls the efficient and effective forward and reverse flow and storage of goods, services, and
related information between the point of origin and the consumption in order to meet customer
requirement.
The 7 rights of logistics: the right product / to the right customer / at the right time / at the right
place / in the right condition / in the right quantity / at the right cost 5
Supply chain management = the active management of supply chain activities and relationships
in order to maximize customer value and achieve a sustainable competitive advantage. It
encompasses all activities associated with the flow and transformation of goods from the raw
material stage trough to the end user, as well as the associated information flows. It is hard
because of the demand uncertainty or others.
- Upstream = activities or firms positioned earlier in the supply chain relative to other
activities in the supply chain.
- Downstream = activities or firms positioned later in the supply chain.
- First-tier supplier = a supplier that provides products or services directly to a firm.
- Second-tier supplier = a supplier that provides to a firm’s first-tier supplier.
Type of flows: information / physical / monetary.
Ultimate supply chain = maximize the value of the customer, minimize costs of process.
Difficult because of the uncertainty inherent to every supply chain and complexity to (globally)
optimize the SC.
Supply Chain Operations Reference (SCOR) model = a framework to provide standard
descriptions of the processes, relationships, and metrics that define SCM.
Level 1 of the views SCM activities are structured around 5 core management processes:
1. Source. Process that produce goods and services to meet planned or actual demand.
2. Make. Processes that transform product to a finished state to meet planned or actual
demand.
3. Deliver. Processes that provide finished goods and services to meet planned or actual
demand.
4. Return. Process associated with returning or receiving returned products for ant
reasons.
5. Plan. Processes that balance aggregate resources with requirements.
,Important trends for operations and SCM:
- Electronic commerce: the use of computer and telecommunications technologies to
conduct business via electronic transfer. There are now companies building around e-
commerce (Netflix). IT has made communications across the supply chain possible.
- Increasing competition and globalization. This causes managers to have to make
decisions on shorter notice and with higher costs if they make mistakes.
- Relationship management. One mistake in the beginning of the supply chain can reach
the customer. Because of this all relationships in the supply chain need to be managed.
Seven reasons for supply chain failures:
1. Offshoring. Making it increasingly difficult for firms to monitor supply chain adequately.
2. Increasing complexity of supply chains. Meaning companies were often unaware of who
their suppliers were subcontracting to.
3. Cost pressures. Which could lead to compromise on quality and ethics.
4. Geographic clustering. Making manufactures vulnerable to a localized disaster, such as
weather disasters.
5. Modern communication. This can quickly damage reputation.
6. Just-in-time production methods. Which have reduced the time to recover from supply
chain failure.
7. Dependence on multiple suppliers. Increasing overall vulnerability.
Week 2
Chapter 2: Operations and supply chain strategies.
Uncertainties and SC risk:
- Due to its global nature and systematic impact on the firm’s financial performance, the
supply chain arguably faces more risk than other areas of the company.
- Risk is a fact of life for any supply chain, whether it’s dealing with quality and safety
challenges, supply shortages, legal issues, security problems, regulatory and
environmental compliance, weather and natural disasters or terrorism.
- Companies with global supply chains face additional risks. Including, but not limited to,
longer lead times, supply disruptions causes by global economic instability in a source
country, and changes in economic such as exchange rates.
Key interactions in the company of supply chain management:
- Finance: budgeting, analysis, funds.
- MIS: what IT solutions to make it all work together?
- Human resources: skills? Training? # of employees?
- Design: sustainability, quality, manufacturability.
- Accounting: performance measurement systems, planning and control.
- Marketing: what products? What volumes? Costs? Quality? Delivery?
Strategy = a mechanism by which a business coordinates its decisions regarding structural and
infrastructural element.
, Operations and supply chain strategies = indicates how the structural and infrastructural
elements, within the operations and supply chain areas, will be acquired and developed to
support the overall business strategy.
- The mix of structural and infrastructural elements.
- Is the mix aligned in with the business strategy?
- Does it support the development of core competencies?
Structural and infrastructural decisions:
Structural decisions = includes tangible resources, such as buildings, equipment and computer
systems.
- Facilities: services/manufacturing, warehouses, distribution hubs. Size, location, degree
of specialization.
- Capacity: amount, type, timing of capacity changes. 11/16/2018
- Technology: services/manufacturing, material handling equipment, transportation
equipment, information systems.
Infrastructural decisions: includes the policies, people, decision rules, and organizational
structure choices made by a firm.
- Organization: structure, control/reward system, workforce decisions.
- Planning and control: forecasting, tactical planning, inventory management, production
planning and control.
- Business processes and management control: six sigma, continuous improvement,
statistical process control.
Closing the Loop Between Business Strategy
- Product and service development: the developmental process, organizational and
supplier roles.
and Functional Area Strategies
- Sourcing decisions and purchasing process: sourcing strategies, supplier selection,
supplier performance measurement.
A top-down model of
strategy
Core competencies = an
organizational strength or
ability, developed over a
long period, that customers
find valuable and
competitors find difficult to
S & W/ core comp.s copy.
(same)
Figure 2.5
C opyright © 2013 Pearson Educ ation, Inc . publishing as 2 - 13
Prentic e Hall
