Tsmunt BM 711 Ch1 Handout

Dr. Timothy L Smunt - Bus Mgt 711 Dr.
Timothy L Smunt - Bus Mgt 711
LEARNING OBJECTIVES
1. Identify the elements of operations and supply chain

management (OCSM)
2. Evaluate the efficiency of the firm
3. Know the potential career opportunities in operations and
supply chain management
BUS MGT 711 4. Recognize the major concepts the define the operations and
GLOBAL SUPPLY CHAIN
STRATEGY AND COMPETITIVE supply chain management field
OPERATIONS
Chapter 1 – Operations and
Supply Chain Management
© 2021 - Dr. Timothy L. Smunt
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Dr. Timothy L Smunt - Bus Mgt 711 Dr. Timothy L Smunt - Bus Mgt 711
Operations & Supply Chain Management WHAT IS OPERATIONS AND SUPPLY CHAIN MANAGEMENT?
 The design, operation, and improvement of the systems that

create and deliver the firm’s primary products and services
• What is it about?  Operations and Supply Chain Management (OSCM) is
– Being efficient… concerned with the management of the entire

Low cost
production/delivery system
 One of the functional fields of business
– Being effective…
 Operations and Supply Chain Management
Doing the right things
 Marketing
– Creating value…  Finance
Quality/Price  Sales
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OPERATIONS AND SUPPLY CHAIN PROCESSES STRATEGY, PROCESSES, AND ANALYTICS
 Operations and supply chain management

involves
 Beginning to End:
 Product design
 Purchasing
 Manufacturing
 Service operations
 Logistics
 Distribution (including returns)
 Success depends upon
 Strategy
 Processes to deliver products and services
 Analytics to support the decisions needed to
It’s the transformation process: transforming inputs into outputs manage the firm
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Dr. Timothy L Smunt 1
Dr. Timothy L Smunt - Bus Mgt 711
OPERATIONS AND SUPPLY CHAIN PROCESSES OSCM PROCESS ACTIVITIES
 Planning –processes needed to operate an existing supply chain
Supply  Sourcing – selection of suppliers that will deliver the goods and
Operations services needed to create the firm’s product
Chain  Making – producing the major product or service
 Delivering – logistics processes such as selecting carriers,

coordinating the movement of goods and information, and
Manufacturing and service Processes that move collecting payments from customers
processes used to transform information and material to
resources into products and from the firm  Returning – receiving worn-out, excess, and/or defective
•Manufacturing produces physical
products
•Logistics processes move products
•Warehousing processes store
products back from customers
•Services produce intangible products products
•Information makes the process more
efficient
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GOODS VERSUS SERVICES PRODUCT/SERVICE BUNDLING
 Many firms offer a combination of goods and services

Goods Services
 Products are supported by services such as warranties and training
 Services are enhanced through the inclusion of products
 Product/service bundling refers to the practice of building
Pure Goods Core Goods Core Services Pure Services service activities into products to create additional value for the
customer
Intangible
Tangible
Interaction with customer required
Less interaction with customers
Inherently heterogeneous
Often homogeneous
Perishable/time dependent
Not perishable – can be inventoried
Defined and evaluated as a package of features
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EFFICIENCY, EFFECTIVENESS, AND VALUE EVALUATING EFFICIENCY
 Comparison of firms (benchmarking) is important to investors

Efficiency
 From an operations and supply chain perspective, the relative cost of
• Doing something at the lowest possible cost providing a good or service is closely related to earnings growth
Effectiveness
• Doing the right things to create the most value for

your customer
Value
• The attractiveness of a product relative to its cost
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EVALUATING EFFICIENCY CAREERS IN OPERATIONS AND SUPPLY CHAIN MANAGEMENT
 Management efficiency ratios

Hospital Department store
Plant manager Branch manager
 Labor productivity administrator manager
 Net income per employee
 Revenue (or sales) per employee
Call center Supply chain Purchasing Quality control
 Asset productivity manager manager manager manager
 Receivables turnover ratio
 Inventory turnover
 Asset turnover Business process Lean

Production
improvement improvement Project manager
analyst manager control analyst

Facilities Chief operating
CEO
manager officer

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HISTORICAL DEVELOPMENT OF OSCM TAKEWAYS (SUMMARY OF CURRENT ISSUES)
Coordinating relationships between organizations

Manufacturing strategy developed
Late 1970’s Managing the companies that produce components and supply major business functions for
Just-in-time (JIT) production the firm
Early pioneered by the Japanese
1980’s Optimizing global supplier, production and distribution networks
Mid 1980’s Service quality and productivity
Total Quality Management Early
Leveraging the information available to the firm to make decisions concerning inventory,
(TQM) and Quality Six-Sigma Quality transportation and production
1990’s
Certification programs Mid 1990’s Supply Chain Managing customer touch points
Business Process
Late 1990’s Management (SCM)
Reengineering (BPR) Recognize that resource utilization decisions must consider both the cost of staffing and the
costs associated with lost customers
Electronic commerce
Early Service Science
2000’s Raising awareness of the competitive advantages of OSCM
Mid 2010’s Many companies have created significant advantages through OSCM
Business
Analytics
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Copyright 2021 - Dr. Timothy L Smunt
CHAPTER 1 – OTHER TAKEAWAYS
 Supply Chain and Operations Management are

critical functions of a firm
 These functions MUST be integrated with the
other functions of a firm, especially with
finance and marketing
 Organization strategy must simultaneously
consider the supply chain and operations
design along with marketing and financial
aspects.
 There are many ways to compete – not only on
19-17
cost.
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Dr. Timothy L Smunt - Bus Mgt 711 Dr.

Timothy L Smunt - Bus Mgt 711

1. Identify the elements of operations and supply chain

© 2021 - Dr. Timothy L. Smunt

 The design, operation, and improvement of the systems that

– Being efficient… concerned with the management of the entire

OPERATIONS AND SUPPLY CHAIN PROCESSES STRATEGY, PROCESSES, AND ANALYTICS

 Operations and supply chain management

OPERATIONS AND SUPPLY CHAIN PROCESSES OSCM PROCESS ACTIVITIES

 Planning –processes needed to operate an existing supply chain

 Delivering – logistics processes such as selecting carriers,

Dr. Timothy L Smunt - Bus Mgt 711

GOODS VERSUS SERVICES PRODUCT/SERVICE BUNDLING

 Many firms offer a combination of goods and services

Dr. Timothy L Smunt - Bus Mgt 711

EFFICIENCY, EFFECTIVENESS, AND VALUE EVALUATING EFFICIENCY

 Comparison of firms (benchmarking) is important to investors

• Doing the right things to create the most value for

• The attractiveness of a product relative to its cost

EVALUATING EFFICIENCY CAREERS IN OPERATIONS AND SUPPLY CHAIN MANAGEMENT

 Management efficiency ratios

 Asset turnover Business process Lean

HISTORICAL DEVELOPMENT OF OSCM TAKEWAYS (SUMMARY OF CURRENT ISSUES)

Coordinating relationships between organizations

Copyright 2021 - Dr. Timothy L Smunt

CHAPTER 1 – OTHER TAKEAWAYS

 Supply Chain and Operations Management are

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