1. Operations and Supply Chain Management CHAPTER 1and 2

2. 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

3. 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 LO 1

4. Supply Chain Processes LO 3

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

6. 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

7. Differences Between Services and Goods • Services are intangible • Services requires some interaction with the customer • Services are inherently heterogeneous • Services are perishable and time dependent • Services are defined and evaluated as a package of features LO 4

8. 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 LO 1

9. Triple Bottom Line LO 1

10. 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 LO 1

11. 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 LO 4

12. 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 LO 2

13. 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 LO 2

14. 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 LO 3

15. 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 LO 6

16. 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

17. This Semester what will we cover.

18. Any Questions?