Every business consists of functional groups such as internal operations, marketing, accounting, engineering, supply? management, logistics, and finance. In addition, each functi

Every business consists of functional groups such as internal operations, marketing, accounting, engineering, supply

management, logistics, and finance. In addition, each function has to generate a strategic plan—one that is coordinated

with and strategic business plan.

1. What specifically would you do to support a corporation and strategic business unit strategies?

2. What are the critical resources that you have to manage carefully if you are able to achieve the corporate/strategic

business unit objectives?

3. What metrics should you have in place to ensure you are making progress on these plans?

4. What capabilities in your function should be considered or recognized by two higher stage of strategy?

5. 500 – 700 words

6. Two outside sources needed

7. MLA format Header and Reference page

8. Due: Wednesday 8/28

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Chapter 1

Introduction to Managing Operations Across the Supply Chain

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Learning Objectives

1-1 Explain what operations management is and why it is important.

1.2 Describe the major decisions that operations managers typically make.

1.3 Explain the role of processes and “process thinking” in operations management.

1.4 Explain what the supply chain is and what it means to view operations management using a “supply chain perspective.”

1.5 Identify the partners and functional groups that work together in operations management.

1.6 Define the planning activities associated with managing operations across the supply chain.

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Learning Objective 1-1

Operations Management at Its Best: Apple’s Success Story

Basic Elements of Apple’s Operational Strategy:

• Capitalize on volume

• Work closely with suppliers

• Focus on new product lines

• Ensure supply availability and low prices

• Keep close eye on demand

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Learning Objective 1-1

Why Study Operations Management (OM)?

Application of OM is everywhere

• Products

• Services

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Learning Objective 1-1

OM and Supply Chain Defined

Operations Management (OM) is the management of processes used to design, supply, produce, and deliver valuable goods and services to customers

Supply Chain (SC): the global network of organizations and activities involved in:

• designing,

• transforming,

• consuming, and

• disposing of goods and services.

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Learning Objective 1-2

Importance of OM

OM activities create and enhance the value of goods and services by way of the following:

1. How resources are developed and used to accomplish business goals.

2. OM is about designing, executing, and improving business processes.

3. OM deals with processes that transform inputs into goods and services.

4. OM brings together four major sets of players: the firm, customers, suppliers, and stakeholders.

5. OM must be consistent with the strategic goals of the firm to be effective.

6. OM is dynamic because of changes in customers’ demands, resources, competition, and technologies.

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Learning Objective 1-2

OM and Supply Chain: Important Decisions What?

How? When? Where? And Who? (1 of 2)

• What?

– types of goods and services to be delivered?

– activities and resources are needed? How should they be developed, allocated, and controlled?

• How?

– is the good and service designed, made, and delivered?

– much should process be able to deliver?

– should performance be measured and assessed?

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Learning Objective 1-2

OM and Supply Chain: Important Decisions What?

How? When? Where? And Who? (2 of 2)

• When?

– should products be made, activities be carried out, services be delivered, or capacities/facilities come on line?

• Where?

– should certain activities be done?

• Who?

– should do them: suppliers, partners, or the firm?

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Learning Objective 1-2

Goods versus Services Differences in Operations?

Table 1-1 Characteristics of Goods and Services

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Learning Objective 1-3

Process and Process Thinking Input, Transformation, Output

A process is a system of activities that transforms inputs into valuable outputs.

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Learning Objective 1-3

Process and Process Thinking Process Types?

• Design processes develop new goods and services.

• Strategic planning processes determine how the firm should compete.

• Production processes plan and execute the supply, manufacture, and delivery of goods and services to customers.

• Evaluation processes measure and report how well they are meeting their goals or using their resources.

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Learning Objective 1-3

OM and Supply Chain: Foundational Concepts

Figure 1-1 Foundational Concepts in Supply Chain Operations Management

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Learning Objective 1-4

Brief History of OM (1 of 2)

Table 1-2 A Brief History of Operations Management

Operations Era

Technological Advances Operations Operations Management Span

of Focus

1800–1850 Technical Capitalists

Improved manufacturing technology; interchangeable parts; locating factories on waterways and in industrial centers; emerging transportation network

Internal production

1850–1890 Mass Production

Emergence of local factory; movement to urban areas; introduction of steam and electrical power; new machines; economies of scale

Internal production

1890–1920 Scientific Management

More systematic approaches to operations management; moving assembly line; beginnings of process thinking

Internal production

1920–1960 Demand Growth Increased automation; introduction of computers and quantitative analysis

Internal production

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Brief History of OM (2 of 2)

Table 1-2 A Brief History of Operations Management

Operations Era

Technological Advances Operations Operations Management Span of Focus

1960–1980 Global Competition

Just-in-time systems; emergence of statistical process control; early outsourcing

Internal production

1980–2000 World-Class Manufacturing

Increased computerization and information systems; world-class practices and benchmarks; greater global sourcing and need for supply chain coordination

Production, design, supply

2000–2010 E-commerce Internet; enhanced communications and transportation technologies; integrated management across functions, including goods and services operations

Global supply chain

2010–Present Intelligent Operations

Artificial intelligence, advanced robotics, and global connectivity combine to create highly automated, responsive supply chains

Digital supply chain

Learning Objective 1-4

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Learning Objective 1-4

From OM to Supply Chain Management Advances in Technology and Infrastructure

Advances in communication, computers, and transportation:

• Faster, more extensive connectivity

• Strengthening of partnerships with better communication

• Faster, more reliable, and more economical shipping

• Growing transportation infrastructure in developing countries

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Learning Objective 1-4

From OM to Supply Chain Management Reduction in Governmental Barriers to Trade

Shifting economies, governmental control, and societal expectations:

• Economic decentralization in favor of free market systems

• Growing potential for improved product costs and quality

• Increased complexity and exposure to risk

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Learning Objective 1-4

From OM to Supply Chain Management Focus on Core Capabilities

Unique sets of skills that confer competitive advantages to a firm, because rival firms cannot easily duplicate them:

• Concentration on few skills and areas of knowledge that make the firm distinct and competitive

• Ability to focus the firm’s efforts in what it does best, thus producing greater product value through higher quality and greater efficiencies

• Increased interdependence along the supply chain

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Learning Objective 1-4

From OM to Supply Chain Management Collaborative Networks

Greater influence of, and reliance upon, business partners:

• Firms becoming more reliant on their suppliers

• Product value improvements are achieved through better coordination and collaboration

• Opportunities to combine assets and make stronger product offerings through partnerships

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Learning Objective 1-4

Supply Chain Management

• Supply chain management is the design and execution of relationships and flows that connect the parties and processes across the supply chain.

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Learning Objective 1-5

Supply Chain Partners and Functional Activities (1 of 2)

Upstream

• Supply Management

• Finance

• Logistics Management

• Warehousing/Raw Materials Planning

Downstream

• Marketing

• Sales and Distribution

• Customer Service/Relationship Management

• Logistics Management

• Warehousing/Finished Goods Materials Planning

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Learning Objective 1-5

Supply Chain Partners and Functional Activities (2 of 2)

Figure 1-2 Partners and Operations Functional Activities in the Supply Chain

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Learning Objective 1-5

OM Partners Across the Supply Chain

Operations managers interact with three important groups that are external to the firm:

• Customers, who use or consume output (internal, intermediate, and final customers)

• Suppliers, who provide inputs

• Stakeholders, who have an interest in organizational well-being and performance

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Learning Objective 1-5

OM Partners Across the Supply Chain: Customers

Individuals or organizations that use or consume products.

Customers can be:

• Internal

• Intermediate

• Final

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Learning Objective 1-5

OM Partners Across the Supply Chain: Suppliers

Individuals or organizations that provide inputs to operational processes.

Suppliers can be:

• Upstream product suppliers

• Downstream product suppliers

• Resource and technology suppliers

• Aftermarket suppliers

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Learning Objective 1-5

OM Partners Across the Supply Chain: Stakeholders

People other than customers and suppliers who have an interest in the well-being of a firm.

Stakeholders include:

• Employees

• Unions

• Local community and social groups

• Government

• Financial investors

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Learning Objective 1-5

Functional Activities That Connect Operations Managers

Customer Management: mediation/interfacing between customers and the order processing and fulfillment side of the operation

Supply Management: processes to identify, acquire, and administer inputs

Logistics Management: movement of materials and information within, into, and out of the firm

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Learning Objective 1-5

Functional Activities That Connect Operations Managers: Customer Management

Relevant functional groups:

• Distribution

• Sales

• Order fulfillment

• Customer service

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Learning Objective 1-5

Functional Activities That Connect Operations Managers: Supply Management

Relevant functional groups:

• Purchasing

• Sourcing

• Procurement

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Learning Objective 1-5

Functional Activities that Connect Operations Managers: Logistics Management

Relevant functional groups:

• Transportation/traffic management

• Warehousing

• Materials managers

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Learning Objective 1-5

Supply Chain Network Example

FIGURE 1-3 Partial Supply Chain Network for a Restaurant Chain

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Learning Objective 1-6

Student Activity

Explore the information on restaurant supply chains provided at Supplychainscene.org. Learn about ways that technologies and changing customer demands are changing restaurant operations. Which of the stages and organizations depicted in Figure 1-3 are likely to be most affected by a shift to more digital processes? How will the structure of the overall supply chain be changed?

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Learning Objective 1-6

Supply Chains and Change: Key Factors

• New business models

• Regulations and laws

• Advances in technology

• Evolution of markets and customer expectations

• Growing environmental concerns

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Learning Objective 1-6

Levels of Planning

• Strategic Planning: long-term decisions defining the objectives and capabilities

• Tactical Planning: intermediate-term decisions defining how capacity is used to meet demand

• Operational Planning: short-term priorities and schedules for resource allocation

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Learning Objective 1-6

Supply Chain Planning Activities

FIGURE 1-4 Operations Management: Planning Activities Across the Supply Chain

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Every business consists of functional groups such as internal operations, marketing, accounting, engineering, supply? management, logistics, and finance. In addition, each functi

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