VSB 3008 Operations Management Fall 2012 Welcome! Matthew J. Liberatore Bartley Hall 3072

1. VSB 3008 Operations Management Fall 2012 Welcome! Matthew J. Liberatore Bartley Hall 3072 Matthew.Liberatore@Villanova.edu

2. Chapter 1 Operations and Supply Chain Management

3. Learning Objectives • Understand why it is important to study operations and supply chain management. • Define efficient and effective operations. • Categorize operations and supply chain processes. • Contrast differences between services and goods producing processes. • Identify operations and supply chain management career opportunities. • Describe how the field has developed over time.

4. 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 • Operations: manufacturing, service, and health care processes that transform resources into products desired by customers LO 1

5. Process Steps for Men’s Nylon Supplex Parka LO 2

6. Understanding the Global Supply Chain • Success in today’s global markets requires a business strategy that matches the preferences of customers with the realities of supply networks • A sustainable strategy is critical • Meets the needs of shareholders and employees • Preserves the environment • Supply refers to processes that move information and material to and from the manufacturing and service processes of the firm LO 3

7. Supply Chain Processes LO 3

8. 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 LO 3

9. Automobile Example • Source: Suppliers of components and raw materials • Make: Physical facilities • Deliver: Car Dealers • Return: Warranty claims LO 3

10. Hospital Example • Source: Medical supplies, cleaning services, disposal services • Make: Hospital rooms, Emergency Room, Operating Rooms • Deliver: Ambulance, Patient’s families driving • Return: Billing errors, follow up visits LO 3

11. Differences Between Services and Goods • Services are intangible • Services requires some interaction with the customer • Services are inherently heterogeneous • Vary over time based on attitude of customer and server • Services are perishable and time dependent • Can’t be stored • Services are defined and evaluated as a package of features LO 4

12. The Goods-Services Continuum LO 4

13. 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 • May generate higher revenues, but tend to generate lower profits as percentage of revenues when compared to focused firms LO 4

14. International Growth in Services LO 4

15. Efficiency, Effectiveness, and Value • Generate growth through operations and supply chain management • 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 • The objective is how to run the business to generate high levels of value LO 2

16. Careers in Operations and Supply Management • Plant manager • Hospital administrator • Branch manager • Call center manager • Supply chain manager • Purchasing manager • Business process improvement analyst • Quality control manager • Lean improvement manager • Project manager • Production control analyst • Facilities manager At the top: Chief Operations Officer (COO) LO 5

17. Historical Development of Operations and Supply Management • Lean manufacturing, JIT, and TQC • Manufacturing strategy paradigm (competitive weapon) • Service quality and productivity • Total quality management (TQM) and quality certifications • Business process reengineering • Six-sigma quality • Supply chain management • Electronic commerce • Service science (use IT to improve service productivity organizations) LO 6

18. Current Issues in Operations and Supply Management • Coordinating the relationship between mutually supportive but separate organizations • Optimizing global suppliers, production, and distribution networks • Managing customer touch points • Raising senior management awareness of operations as a significant competitive weapon • Sustainability and the triple bottom line LO 6