Chapter 1: Operations and Supply Chain Management

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Operations and supply chain management involve
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Product design, purchasing, manufacturing, service operations, logistics, and distribution.
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Success in supply chain management depends on
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Focused operating strategy, processes to deliver products and services, and analytics to support the decisions needed to manage the firm.
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Operations and Supply Chain Management (OSCM)
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The design, operation, and improvement of the systems that create and deliver the firm’s primary products and services.
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Operations
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Manufacturing and service processes used to transform resources into products.
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Supply Chain
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Processes that move information and material to and from the firm.
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The five process activities
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Planning, sourcing, making, delivering, and returning.
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Planning
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Consists of the processes needed to operate an existing supply chain, to meet demand with available resources.
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Sourcing
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Involves selecting supplies that will deliver the goods and services needed to create the firm’s product.
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Making
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Producing the major product or service. Scheduling with cost and quality implications.
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Delivering
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Logistics processes such as selecting carriers, coordinating the movement of goods and information, and collecting payments from customers.
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Returning
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Receiving worn-out, excess, and/or defective products back from customers.
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Goods
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Tangible. Less interaction with customers. Often homogeneous. Not perishable-can be inventoried.
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Services
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Intangible. Interaction with customer required. Inherently heterogeneous. Perishable/time dependent. Defined and evaluated as a package of features.
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Pure Goods
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Food products, chemicals, book publishing.
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Core Goods
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Appliances, data storage systems, automobiles.
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Core Services
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Hotels, airlines, internet service providers.
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Pure Services
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Teaching, medical advice, financial consulting.

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