Lecture 1
Introduction to Operations & Supply Chain Management
Model of operations management
Operations Strategy
What is a Supply Chain?
- A supply chain is a system of organizations, people, activities, information, and
resources involved in moving a product or service form supplier to customer…
(Wikipedia)
- Supply chain activities involve the transformation of natural resources, raw materials,
and components into a finished product that is delivered to the end customer…
(LumenLearning)
- A supply chain is a network between a company and its suppliers to produce and
distribute a specific product, and the supply chain represents the steps it takes to get
the product or service to the customer. (Investopedia)
Example: Food Supply Chain
,Supply Chain or Not?
- Selling iPhones through Media Markt? – Retail logistics
- Making cars? – production logistics
- Arranging a football match? – events logistics
- Traffic flowing though Eindhoven X a network of supply chains
- Following a course in business process management – service logistics
Operations and Supply Chain Management
The goal of supply chains:
- Every organization must make a product or a service that someone values
Supply chains are distributed and decentralized:
- Most organizations function as part of larger supply chains
Supply chains are often expensive:
- Think of all costs from materials, staff, buildings…
- Think of the time it takes to bring products from China (electronics, sneakers, solar
cells…) to Europe
- Organizations must carefully manage their operations and supply chains in order to
prosper, and indeed, survive.
Supply Chains have many Aspects
,A Simpler View
Inputs
- Materials
- Intangible needs
- Information
Transformation process
- Manufacturing operations
- Service operations
Outputs
- Tangible goods
- Fulfilled needs
- Satisfied customers
Overlapping Terminology
Supply Chain Management
The active management of supply chain activities and relationships over the longer term, in
order to maximize customer value and achieve a sustainable competitive advantage.
Includes contracts, audits, forecasting, …
Operations Management
The planning, scheduling, and control of the activities that transform inputs into finished
goods and services. Often used interchangeably with Supply Chain Management but typically
refers to the day-to-day running of the supply chain or a particular company location.
Key Terms
Upstream – Activities positioned earlier in the supply chain
Downstream – Activities positioned later in the supply chain
First-tier supplier – A supplier that provide products or services directly to a firm
Second-tier supplier – A supplier that provides products or services to a first-tier supplier
Inbound logistics – Goods arriving to a location, either from upstream or downstream
Outbound logistics – Goods leaving a location, either going upstream or downstream
Soft Drink Supply Chain Management
The active management of supply chain activities and relationships in order to maximize
customer value and achieve a sustainable competitive advantage.
, Operations management at IKEA
They are all Operations
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