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Lecture Operations and supply chain management: The Core (3/e) – Chapter 1: Operations and supply chain management

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The main goals of this chapter are to: Understand operations and supply chain processes and why it is important to study them, contrast the differences between services and goods producing processes, define efficient and effective operations, identify operations and supply chain management career opportunities, learn how the field has developed over time.

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Operations and Supply Chain Management

Chapter 01

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Learning Objectives

1. Understand operations and supply chain

processes and why it is important to study

them.

2. Contrast the differences between services

and goods producing processes.

3. Define efficient and effective operations.

4. Identify operations and supply chain

management career opportunities.

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Strategy, Processes, and

Analytics

 Operations and supply chain management

involves

 Product design

 Purchasing

 Manufacturing

 Service operations

 Logistics

 Distribution

 Success depends upon

 Strategy

 Processes to deliver products and services

 Analytics to support the decisions needed to manage the firm

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What is Operations and Supply

Chain Management?

 The design, operation, and improvement of

the systems that create and delivery the firm’s primary products and services

 Operations and Supply Chain Management

(OSCM) is

 A functional field of business

 Concerned with the management of the entire

production/delivery system

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Operations and Supply Chain

Processes

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OS CM: The Core -

Organization

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Process Activities

 Planning –processes needed to operate an

existing supply chain

 Sourcing – selection of suppliers that will deliver the goods and services needed to create the

firm’s product

 Making – producing the major product or service

 Delivering – logistics processes such as selecting carriers, coordinating the movement of goods and information, and collecting payments from

customers

 Returning – receiving worn-out, excess, and/or

defective products back from customers

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Goods versus Services

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Efficiency, Effectiveness, and

Value

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Evaluating Efficiency

 Comparison of firms is important to investors

 From an operations and supply chain perspective, the relative cost of providing a good or service is closely related to earnings growth

 Management efficiency ratios

 Labor productivity

 Net income per employee

 Revenue (or sales) per employee

 Asset productivity

 Receivables turnover ratio

 Inventory turnover

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Careers in Operations and Supply Chain Management

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Historical Development of Operations and Supply Chain Management

Late 1970’s

Early 1980’s Mid 1980’s

Early 1990’s

Mid 1990’s

Late 1990’s

Early

Manufacturing strategy developed

J ust-in-time (J IT) production pioneered by the J apanese

Service quality and productivity Total Quality Management

(TQM) and Quality

Certification programs

Business Process Reengineering (BPR)

Electronic commerce

Service Science

Supply Chain Management (SCM)

Six-Sigma Quality

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