VSB 3008 Operations ManagementFall 2012
Welcome!
Matthew J. LiberatoreBartley Hall 3072
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Operations and Supply Chain Management
1. Understand why it is important to study operations and supply chain management.
2. Define efficient and effective operations.3. Categorize operations and supply chain
processes.4. Contrast differences between services and
goods producing processes.5. Identify operations and supply chain
management career opportunities.6. Describe how the field has developed over
time.
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Operations and supply management (OSM): the design, operation, and improvement of the systems that create and deliver the firm’s primary products and services◦ Functional field of business◦ Clear line management responsibilities
Concerned with the management of the entire system that produces a good or delivers a service
Operations: manufacturing, service, and health care processes that transform resources into products desired by customers
LO 1LO 144
LO 2LO 255
Success in today’s global markets requires a business strategy that matches the preferences of customers with the realities of supply networks
A sustainable strategy is critical◦ Meets the needs of shareholders and employees◦ Preserves the environment
Supply refers to processes that move information and material to and from the manufacturing and service processes of the firm
LO 3LO 366
LO 3LO 377
Planning: the processes needed to operate an existing supply chain strategically
Sourcing: the selection of suppliers that will deliver the goods and services needed to create the firm’s product
Making: Where the major product is produced or the service provided
Delivering: carriers are picked to move products to warehouses and customers
Returning: the processes for receiving worn-out, defective, and excess products back from customers
LO 3LO 388
Source: Suppliers of components and raw materials
Make: Physical facilitiesDeliver: Car DealersReturn: Warranty claims
99LO 3LO 3
Source: Medical supplies, cleaning services, disposal services
Make: Hospital rooms, Emergency Room, Operating Rooms
Deliver: Ambulance, Patient’s families driving
Return: Billing errors, follow up visits
1010LO 3LO 3
1. Services are intangible2. Services requires some interaction with the
customer3. Services are inherently heterogeneous
◦ Vary over time based on attitude of customer and server
4. Services are perishable and time dependent◦ Can’t be stored
5. Services are defined and evaluated as a package of features
LO 4LO 41111
LO 4LO 41212
Servitization refers to a company building service activities into its product offerings for its current users◦ Maintenance, spare parts, training, and so on
Success starts by drawing together the service aspects of the business under one roof
Servitization may not be the best approach for all companies◦ May generate higher revenues, but tend to
generate lower profits as percentage of revenues when compared to focused firms
LO 4LO 41313
1414LO 4LO 4
Generate growth through operations and supply chain management
Efficiency: Doing something at the lowest possible cost
Effectiveness: Doing the right things to create the most value for the company
Value: quality divided by price
The objective is how to run the business to generate high levels of value
LO 2LO 21515
Plant manager Hospital
administrator Branch manager Call center manager Supply chain
manager Purchasing manager
Business process improvement analyst
Quality control manager
Lean improvement manager
Project manager Production control
analyst Facilities manager
LO 5LO 51616
At the top: Chief Operations Officer (COO)At the top: Chief Operations Officer (COO)
Lean manufacturing, JIT, and TQC Manufacturing strategy paradigm (competitive
weapon) Service quality and productivity Total quality management (TQM) and quality
certifications Business process reengineering Six-sigma quality Supply chain management Electronic commerce Service science (use IT to improve service productivity organizations)
LO 6LO 61717
1. Coordinating the relationship between mutually supportive but separate organizations
2. Optimizing global suppliers, production, and distribution networks
3. Managing customer touch points4. Raising senior management awareness of
operations as a significant competitive weapon
5. Sustainability and the triple bottom line
LO 6LO 61818