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Chapter 1 - Introduction to operations and supply chain management. This chapter includes contents: What operations and supply chain managers do, operations function, evolution of operations and supply chain management, globalization and competitiveness, operations, strategy and organization of the text, learning objectives for this course.
Chapter OPERATIONS MANAGEMENT: Creating Value Along the Supply Chain, Canadian Edition Robert S Russell, Bernard W Taylor III, Ignacio Castillo, Navneet Vidyarthi CHAPTER Introduction to Operations and Supply Chain Management 1-1 Learning Objectives • Describe what the operations function is and how it relates to other • • • • • business functions Discuss the key factors that have contributed to the evolution of operations and the initiation of supply chain management Discuss how and why businesses operate globally and explain the roles China and India play in the current global market Calculate and interpret productivity measures used for measuring competitiveness Discuss the process of developing, deploying, and monitoring the success of an operations strategy Organization of This Text Learning Objectives of This Course Lecture Outline • What Operations and Supply Chain Managers Do • Operations Function • Evolution of Operations and Supply Chain • • • • Management Globalization and Competitiveness Operations Strategy and Organization of the Text Learning Objectives for This Course What Operations and Supply Chain Managers Do • What is Operations Management? design, operation, and improvement of productive systems • What is Operations? a function or system that transforms inputs into outputs of greater value • What is a Transformation Process? a series of activities along a value chain extending from supplier to customer activities that not add value are superfluous and should be eliminated Transformation Process • Physical: as in manufacturing operations • Locational: as in transportation or warehouse • • • • operations Exchange: as in retail operations Physiological: as in health care Psychological: as in entertainment Informational: as in communication Operations as a Transformation Process 1-6 Operations Function Operations Marketing Finance and Accounting Human Resources Outside Suppliers 1-7 How is Operations Relevant to my Major? Accounting “As an auditor you must understand the fundamentals of operations management.” Information Technology Management “IT is a tool, and there’s no better place to apply it than in operations.” “We use so many things you learn in an operations class—scheduling, lean production, theory of constraints, and tons of quality tools.” 1-8 How is Operations Relevant to my Major? Economics Marketing Finance “It’s all about processes I live by flowcharts and Pareto analysis.” “How can you a good job marketing a product if you’re unsure of its quality or delivery status?” “Most of our capital budgeting requests are from operations, and most of our cost savings, too.” 1-9 Evolution of Operations and Supply Chain Management Craft production process of handcrafting products or services for individual customers Division of labor dividing a job into a series of small tasks each performed by a different worker Interchangeable parts standardization of parts initially as replacement parts; enabled mass production 1-10 Positioning the Firm Cost Speed Quality Flexibility 1-31 Positioning the Firm: Cost Waste elimination relentlessly pursuing the removal of all waste Examination of cost structure looking at the entire cost structure for reduction potential Lean production providing low costs through disciplined operations 1-32 Positioning the Firm: Speed Fast moves, Fast adaptations, Tight linkages Internet Customers expect immediate responses Service organizations always competed on speed (McDonald’s, LensCrafters, and Federal Express) Manufacturers time-based competition: build-to-order production and efficient supply chains 1-33 Positioning the Firm: Quality Minimizing defect rates or conforming to design specifications Ritz-Carlton - one customer at a time Service system designed to “move heaven and earth” to satisfy customer Employees empowered to satisfy a guest’s wish Teams set objectives and devise quality action plans Each hotel has a quality leader 1-34 Positioning the Firm: Flexibility Ability to adjust to changes in product mix, production volume, or design Mass customization: the mass production of customized parts National Bicycle Industrial Company offers 11,231,862 variations delivers within two weeks at costs only 10% above standard models 1-35 Policy Deployment Policy deployment translates corporate strategy into measurable objectives Hoshins action plans generated from the policy deployment process 1-36 Policy Deployment 1-37 Balanced Scorecard Balanced scorecard measuring more than financial performance finances customers processes learning and growing Key performance indicators .set of measures to help managers evaluate performance in critical areas 1-38 Balanced Scorecard Worksheet 1-39 Balanced Scorecard Radar Chart Dashboard 1-40 Operations Strategy 1-41 Organization of This Text: Part I – Operations Management Intro to Operations and Supply Chain Management Quality Management Statistical Quality Control Product Design Service Design Processes and Technology Capacity and Facilities Design Human Resources Project Management 1-42 Organization of This Text: Part II – Supply Chain Management 10 Supply Chain Strategy and Design 11 Global Supply Chain Procurement and Distribution 12 Forecasting 13 Inventory Management 14 Sales and Operations Planning 15 Resource Planning 16 Lean Systems 17 Scheduling 1-43 Learning Objectives of this Course Gain an appreciation of strategic importance of operations and supply chain management in a global business environment Understand how operations relates to other business functions Develop a working knowledge of concepts and methods related to designing and managing operations and supply chains Develop a skill set for continuous improvement 1-44 COPYRIGHT Copyright © 2014 John Wiley & Sons Canada, Ltd All rights reserved Reproduction or translation of this work beyond that permitted by Access Copyright (The Canadian Copyright Licensing Agency) is unlawful Requests for further information should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd The purchaser may make back-up copies for his or her own use only and not for distribution or resale The author and the publisher assume no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information contained herein ... flexibility 1- 1 1 Historical Events in Operations Management 1- 1 2 Historical Events in Operations Management 1- 1 3 Historical Events in Operations Management 1- 1 4 Historical Events in Operations. .. Operations Management 1- 1 5 Historical Events in Operations Management 1- 1 6 Evolution of Operations and Supply Chain Management Supply chain management management of the flow of information,... Increased globalization results from the Internet and falling trade barriers 1- 1 8 Hourly Compensation 1- 1 9 GDP per Capita 1- 2 0 Trade in Goods, % of GDP 1- 2 1 Productivity and Competitiveness Competitiveness