1. Introduction to Operations and Supply Chain Management

2. Text: Introduction to Operations and Supply Chain Management
Custom edition for Farmingdale State College
Authors: Cecil Bozarth & Robert Handfield
Where appropriate reference text page numbers will be on bottom of slides
OSC may be used as an abbreviation of Operations and Supply Chain

3. Chapter Objectives Be able to:
Describe what the operations function is and why it is critical to an organization’s survival.
Describe what a supply chain is and how it relates to a particular organization’s operations function.
Discuss what is meant by operations management and supply chain management.
Identify some of the major operations and supply chain activities, as well as career opportunities in these areas.
Make a case for studying both operations management and supply chain management.

4. Introduction Why study Operations and Supply Chain Management?
Operations Management
Supply Chain Management
Important trends
LeapFrog case study

5. Focus
Key issues surrounding the design and ongoing management of these areas
Common tools and techniques
Introduction to the SCOR model
Analytical skills (both qualitative and quantitative)

6. Why Study Operations and Supply Chain Management?

7. Three Basic Truths Pervasiveness Interdependence
Profitability and Survival

8. Pervasiveness
Every organization must make a product or provide a service that someone values………….
Manufacturer.
Retailer.
Design firm.
University.
Health services.

9. Interdependence
Most organizations function as part of a larger supply chain
Discussion with class about what kinds of operations and suppliers are required to realize a basic product idea like a running shoe, beginning with the initial design concept.

10. Supply Chains
Networks of manufacturers and service providers that work together to move goods from the raw material stage through to the end user
Linked through physical, information, and monetary flows

11. Profitability and Survival
Organizations must carefully manage their operations and supply chains to prosper, and indeed, survive!
Shoe manufacturer:
How many shoes should we make? What mix?
What resources do we need? What will we outsource?
Location?
Key performance criteria -- Cost? Quality? Speed?

12. Operations Management
The planning, scheduling, and control of the activities that transform inputs into finished goods and services

13. Operations Function
The collection of people, technology, and systems within a company ...
… that has primary responsibility ...
… for providing the organization’s products and/or services.

14. Viewing Operations as a Transformation Process
Manufacturing operations
Inputs
Outputs
Materials
People
Equipment
Intangible needs
Information
Tangible goods
Fulfilled requests
Information
Satisfied Customers
Service operations

15. Manufacturing Tangible product
Key decisions driven by physical characteristics of the product:
How is the product made?
How do we store it?
How do we move it?
Etc.

16. Services Intangible “Product” or Service Key decisions:
Location, Exchange, Storage, Physiological, Information
Key decisions:
How much customer involvement?
How much customization?

17. Cross-Functional Linkages
MIS
What IT solutions
to make it all work
together?
Finance
Budgeting.
Analysis.
Funds.
Human
Resources
Skills? Training?
# of Employees?
Design
Sustainability.
Quality.
Manufacturability.
Operations and Supply Chain
Marketing
What products?
What volumes?
Costs? Quality?
Delivery?
Accounting
Performance measurement systems.
Planning and control.

18. Supply Chain Management
Active management of supply chain activities and relationships to maximize customer value and achieve a sustainable competitive advantage
Example: Buying co-ops for independent hardware dealers

19. Material Flows First Tier Supplier Distributor Retailer
Alcoa
Ball Corp
Anheuser-Busch
M&M
Meijer
First Tier Supplier
Distributor
Retailer
Transportation companies
Final
customers
Upstream
Downstream
Second Tier Supplier

20. Supply Chain Issues Length of the chain Complexity Stability
Physical, informational, and monetary flows
Use Dell Computer as an example for a class discussion of the possible issues.

21. Supply-Chain Operations Reference (SCOR)* Model
Consists of:
Planning activities
Sourcing activities
“Make” or production activities
Delivery activities
Return activities
* Supply-Chain Council,
Discussed in more detail in Chapter 3

22. SCOR Model
© Supply-Chain Council, 2007

23. Wal-Mart — Early 1990s
Individual stores sent sales data daily to Wal-Mart’s suppliers via satellite
Suppliers plan production and ship based on this sales data
Wal-Mart used its own dedicated fleet to ship from its warehouses to stores

24. Panera Bread — 2006
4th quarter revenues and profits up 25% and 8%, respectively, over th quarter*
>200 million pounds of dough delivered by 110 trucks traveling 9.7 million miles annually
*Panera Bread, 4th Quarter 2006 Earnings Report,

25. Important Trends Electronic commerce
Reduces the costs and time associated with supply chain relationships
Increasing competition and globalization
Fewer industries protected by geography
Relationship management
Competition between chains, not individual firms
Trust and coordination
Use Boeing, as an example for reducing supply chain costs and time.

26. Operations and Supply Chain Management and You
Some of the many career positions
Analyst
Commodity Manager
Customer Service Manager
International Logistics Manager
Logistics Services Salesperson
Production Manager
Sourcing Analyst
Logistics and Material Planner
Systems Support Manager (MIS)
Transportation Manager
Process Analyst
Scheduler
Purchasing Agent

27. Operations and Supply Chain Activities
Process selection, design, and improvement
Forecasting for decision making
Capacity planning for capital investment and resource levels
Inventory management for amount and location
Planning and control for work scheduling and meeting demand
Purchasing, managing supplier relationships
Logistics or acquisition and distribution

28. Case Study Introducing Operations and Supply Chain Management
LeapFrog