1. Introduction to Managing Operations Across the Supply Chain
CHAPTER 1
Introduction to Managing Operations Across the Supply Chain
McGraw-Hill/Irwin
Copyright © 2014 McGraw-Hill Higher Education. All rights reserved.

2. Learning Objectives
LO1-1 Explain what operations management is and why it is important
LO1-2 Describe the major decisions that operations managers typically make
LO1-3 Explain the role of processes and “process
thinking” in operations management
LO1-4 Explain what the supply chain is and what it means to view operations management using a “supply chain perspective”
LO1-5 Identify the partners and functional groups that
work together in operations management
LO1-6 Define the planning activities associated with managing operations across the supply chain

3. Operations Management (OM) Is Everywhere – Part I
PRODUCTS: Everything you wear, eat, sit on or in, use, read, or knock about on a sports field comes to you courtesy of operations.
SERVICES: Every book you borrow from the library, every medical treatment you receive, every lecture you attend at a university, every service you receive comes to you courtesy of operations.
LO1-1

4. Operations Management (OM): A Basic Definition
Operations Management (OM): is the management of processes used to design, supply, produce, and deliver valuable goods and services to customers
LO1-1

5. Operations Management (OM): Common Challenges
Lowering costs
Improving quality
Enhancing product desirability
Aligning OM with the company’s competitive strategy
Evolving with the needs of customers, competition, and technology
LO1-1

6. OM From a Supply Chain Perspective: Supply Chain (SC) Defined
Supply Chain (SC): the global network of organizations and activities involved in designing, transforming, consuming and disposing of goods and services.
LO1-1

7. Goods vs. Services Goods Services Tangible Can be inventoried
Little customer contact
Long lead time
Often capital-intensive
Quality easily assured
Material is transformed
Intangible
Cannot be inventoried
Extensive customer contact
Short lead time
Often labor intensive
Quality harder to assess
Information or customer is transformed
LO1-2

8. OM Processes and Process Thinking
Inputs
Transformation
Outputs
A process is a system of activities that transforms inputs into valuable outputs.
LO1-3

9. OM Processes 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.
LO1-3

10. Foundational Concepts in Supply Chain Operations Management
LO1-4

11. OM From Supply Chain Perspective:
Supply Chain Management (SCM) Defined
Supply Chain Management (SCM): is the design and execution of relationships and flows that connect the parties and processes across a supply chain.
LO1-4

12. 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
Suppliers, who provide inputs
Stakeholders, who have an interest in organizational well being and performance
LO1-5

13. Resource and Technology Suppliers
SC Partners and Functional Activities
The Business Enterprise
Resource and Technology Suppliers
Product and
Service
Suppliers
Customers
and
Partners
Internal
Operations
Mgmt.
Customer
(Chapter 9)
Logistics Mgmt.
(Chapter 11)
Supply
(Chapter 10)
Upstream
Supply Management
Finance
Logistics Management
Warehousing/RM planning
Downstream
Marketing
Sales & Distribution
Customer Service
Warehousing/FGI Planning
Figure 1-2
LO1-5

14. 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
LO1-6

15. Introduction to Managing Operations Across the Supply Chain: Summary - I
Operations helps deliver superior products to a firm's targeted customers.
Operations manages the effective and efficient transformation of inputs into outputs.
Operations management partners include customers, suppliers, stakeholders and other business functions within the firm.
Operations management decisions determine firm capabilities and success
Operations management focuses on managing processes, SCM is managing flow and relationships
Operations management is dynamic, it is constantly evolving