Operations and Supply Chain ManagementC
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Learning Objectives
After completing the chapter you will: Know why it is important to study operations and supply
management Understand the meaning of efficient and effective operations See how operations and supply strategy relates to marketing and
finance Understand the competitive dimensions of operations and supply
strategy Know what order winners and order qualifiers are Know what measures Wall Street analysts use to evaluate
operations
What is Operations and Supply Chain Management?
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
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Supply Chain Processes
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Process Steps for Men’s Nylon Supplex Parka
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Work Involved in Each Type of Process
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
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Differences Between Services and Goods
1. Services are intangible
2. Services requires some interaction with the customer
3. Services are inherently heterogeneous
4. Services are perishable and time dependent
5. Services are defined and evaluated as a package of features
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A Sustainable Strategy
Shareholders: Those individuals or companies that legally own one or more shares of stock in the company
Stakeholders: Those individuals or organizations who are influenced, either directly or indirectly, by the actions of the firm
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Triple Bottom Line
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Triple Bottom Line Continued
Social: pertains to fair and beneficial business practices toward labor, the community, and the region in which a firm conducts is business
Economic: the firm’s obligation to compensate shareholders who provide capital via competitive returns on investment
Environmental: the firm’s impact on the environment
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Servitization Strategies
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
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Efficiency, Effectiveness, and Value
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
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Competitive Dimensions
Price: make the product or deliver the service cheap Quality: make a great product or deliver a great
service Delivery speed: make the product or deliver the
service quickly Delivery reliability: deliver it when promised Coping with changes in demand: change its volume Flexibility and new product introduction speed:
change it
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Order Qualifiers and WinnersDefined
Order qualifiers: the basic criteria that permit the firms products to be considered as candidates for purchase by customers
Order winners: the criteria that differentiates the products and services of one firm from another
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Historical Development of Operations and Supply Management
Lean manufacturing, JIT, and TQC Manufacturing strategy paradigm Service quality and productivity Total quality management (TQM) and quality
certifications Business process reengineering Six-sigma quality Supply chain management Electronic commerce Service science
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Current Issues in Operations and Supply Management
1. Coordinating the relationship between mutually supportive but separate organizations
2. Optimizing global suppliers, production, and distribution networks
3. Managing customer touch points
4. Raising senior management awareness of operations as a significant competitive weapon
5. Sustainability and the triple bottom line
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This Semester what will we cover.
Any Questions?