Chapter 1: Introduction to Managing Operations Across the Supply Chain
Operations management: The management of processes used to design, supply, produce,
and deliver valuable goods and services to customers
Supply chain: The global network of organizations and activities involved in designing,
transforming, consuming, and disposing of goods and services
Supply chain management: The design and execution of relationships and flows that
connect the parties and processes across a supply chain
Dematerialization: The process of transforming a tangible good into an intangible product or
service, through digitization or direct service replacement
Total product experience: All the goods and services that are combined to define a
customer’s complete consumption experience
Process: A system of activities that transforms inputs into valuable outputs
Lean operation: An operation that produces maximum levels of efficiency and effectiveness
using a minimal amount of resources
Core capability: A unique set of skills that confers competitive advantages to a firm,
because rival firms cannot easily duplicate them
Types of suppliers:
Upstream product suppliers typically provide raw materials, components, and
services directly related to manufacturing or service production processes.
Downstream product suppliers typically provide enhancements to finished goods
such as assembly, packaging, storage, and transportation services.
Resource and technology suppliers provide equipment, labour, product and process
designs, and other resources needed to support a firm’s processes.
Aftermarket suppliers provide product service and support such as maintenance,
repair, disposal, or recycling
Customer management: The management of the customer interface, including all aspects of
order processing and fulfillment
Supply management: The identification, acquisition, positioning, and management of
resources and capabilities that a firm needs to attain its strategic objectives
Logistics management:
Management of the movement
and storage of materials at lowest
cost while still meeting
customers’ requirements
Tier: An upstream stage of
supply
Echelon: A downstream stage of
supply or consumption
,Strategic planning: A type of planning that addresses long-term decisions that define the
operations objectives and capabilities for the firm and its partners
Tactical planning: A type of planning that addresses intermediate-term decisions to target
aggregate product demands and to establish how operational capacities will be used to meet
them
Operational planning: A type of planning that establishes short-term priorities and
schedules to guide operational resource allocations
Chapter 2: Operations and Supply Chain Strategy
Corporate strategy: Determines
the overall mission of the firm
and the types of businesses that
the firm wants to be in
Strategic business units (SBUs):
The semi-independent
organizations used to manage
different product and market
segments
Business unit strategy:
Determines how a strategic
business unit will compete
Functional strategy: Determines
how the function will support the overall business unit strategy
Operations strategy: A set of competitive priorities coupled with supply chain structural and
infrastructural design choices intended to create capabilities that support a set of value
propositions targeted to address the needs of critical customers Defined by:
Key customers: Customers that the firm has targeted as
being important to its future success
Value proposition: A collection of product and service
features that is both attractive to customers and different
than competitors’ offerings
Capabilities: Unique and superior operational abilities
that stem from the routines, skills, and processes that the
firm develops and uses
1. Order winners: Product traits that cause a customer to select one product over its
competitors
2. Order qualifiers: Product traits that must be met at a certain level for the product to
be considered by the customer
3. Order losers: Product traits that, if not satisfied, cause the loss of either the current
order or future orders
Timeliness: The degree to which a product is delivered or available when the customer wants
it
, Lead time: The amount of time that passes between the beginning and end of a set of
activities. Two types:
Time to market: The total time that a firm takes to conceive, design, test, produce,
and deliver a new or revised product for the marketplace
Order-to-delivery lead time: The time that passes from the instant the customer
places an order for a product until the instant that the customer receives the product
Risk management: Developing operations that anticipate and deal with problems resulting
from natural events, social factors, economic issues, or technological issues
Internet of Things (IoT): The network of physical devices (e.g. phones, vehicles, machines,
etc) that are embedded with sensors, software, and connectivity that enable data exchange
and analysis
Big data: Large data sets generated by technologies such as social media and the Internet of
Things (IoT). Big data are often paired with predictive analytics or other similar analytical
procedures
Analytics: The application of sophisticated operations research techniques to big data with
the goal of identifying, interpreting, and communicating meaningful patterns in the data
Robotics: A branch of
engineering that involves
the conception, design,
manufacture, and
operation of robots. This
field overlaps with
electronics, computer
science, artificial
intelligence,
mechatronics,
nanotechnology and
bioengineering
Fit: The extent to which
there is alignment
between the firm’s
operational capabilities,
its value proposition,
and the desires of its
critical customers
Strategic profit model
(SPM): A model that
shows how operational
changes affect the
overall performance of a
business unit --- >
