MGT 302 Ch. 1

What does Operations and Supply Chain Management Involve?
– Purchasing
– Manufacturing
– Service Operations
– Logistics
– Distribution
What does Success depend on?
– Focused operating strategy
– Processes to deliver products and services
– Analytics to support the decisions needed to manage the firm
What is the business impact of Supply Chain Management?
– Reduce Operating Costs
– Improve Financial Position
-Boost Customer Service
What is Operations and Supply Chain Management?
– The design, operation, and improvement of systems that create and deliver the firm’s primary products and or services
– functional field of business
– concerned with the management of the entire production/delivery system
“encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities; includes coordination and collaboration with channel partners; integrates supply and demand management within and across companies”
Manufacturing and service processes used to transform resources into products
Supply Chain
Processes that move information and material to and from the firm
Operations and Supply Chain Processes
1. Source
2. Make
3. Deliver
4. Return
5. Plan
Process Definitions
1. Planning: processes needed to operate an existing supply chain, to meet demand with available resources

2. Sourcing: selection of suppliers that will deliver the goods and services needed to create the firms value

3. Making: producing the major product or service. Scheduling with cost and quality implications

4. Delivering: logistics processes such as selecting carriers, coordinating the movement of goods and information, and collecting payments from customers

5. Returning: receiving worn-out, excess or defective products back from customers

Goods v. Services
Pure Goods<=Core Goods Core Services=>Pure Services

Goods: tangible, less interaction with customers, often homogeneous, not perishable (can be inventoried)
Core Goods: automobile manufacturer providing extensive spare parts at repair centers

Services: Intangible, interaction with customer required, heterogeneous, perishable/time dependent, defined and evaluated as a package of features.
Core Services: cable television company provides cable services as well as high definition cable boxes

Doing something at the lowest possible cost
Doing the thing right!
Creating the most value for your customer
Doing the right thing!
The attractiveness of a product relative to its cost
(Quality) / (Price)
Product Service Bundling
refers to a company building service activities into its product offerings for its customers
Timeline Depicting major OSCM concepts
Late 1970s: Manufacturing strategy developed
Early 1980s: Just- In-Time production
Mid 1980s: Service quality and productivity
early 1990s: Total Quality Management (TQM)
Six Sigma Quality
Mid 1990s: Business Process Reengineering (BPR)
Late 1990s: Supply Chain Management (SCM)
Early 2000s: Electronic Commerce
Service Science
Mid 2010s: Business Analytics
Current Issues in OSCM
1. global coordination
2. outsourcing
3. Managing customer touch points
4. controlling costs with SC expansion/complexity
5. Trade Offs and Triple Bottom Line
6. Matching strategy to market demand

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