KORBELFOUNDATI

ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

SUBJECTCODE:TQM
MODULENO: Modul
e2
SUBJECTNAME:TOTALQUALITYMANAGEMENT
TOPIC:
PERFORMANCE METRI CS, A SYSTEMS APPROACH, THE HISTORI
CAL
EVOLUTIONOFOPERATIONSMANAGEMENT,OPERATIONSTODAY,KEYISSUESFOR
TODAY’SBUSI
NESSOPERATIONS

OBJECTI
VE/S:
Att
heendofthelect
ure/di
scussi
on/week,t
hestudentshoul
dbeablet
o:
 Bri
efl
ydescr
ibethehi
stori
calevol
uti
onofoperat
ionsmanagement.
 Expl
aint
hekeyaspect
sofoper
ati
onsmanagementdeci
si
onmaki
ng.
 Char
act
eri
zecur
rentt
rendsi
nbusi
nesst
hati
mpactoper
ati
onsmanagement

PART1.LECTURE/
DISCUSSI
ON

PERFORMANCEMETRI
CS
Perf
ormance Met ri
cs Allmanagers use met rics to manage and cont r
ol
oper
ati
ons.Ther
ear emanymet r
icsinuse,i
ncludingthoser el
atedtopr of
it
s,cost
s,
qual
i
ty,pr
oduct
ivi
ty,
flexi
bil
i
ty,
assets,
inv
entor
ies,schedules,
andforecastaccur
acy.

Process Per for

mance Met r
ics, also cal
led 
KPI
’
s (Key Perfor
mance
Indi
cators)
 focusesonhow thetaski sbei
ngperf
ormedbymeasur
ingper
for
mance
andifindiv
idualgoal
sarebei
ngachieved.
Page1of1
 KORBELFOUNDATI
ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

Thi
sindi
catorshouldbemeasuredbyarat
io(
gener
all
yrepresent
edbyanumber
)
whi
chport
raystheprogressoft
heprocessasawhol
eorinpart
.
StrategicPr ocessPer f
ormanceMet ri
csserv etoshow i ftheor gani
zationis
achievi
ngt heobject i
vessetbyseniormanagement ,so-cal
l
edstrat
egicgoals.Awi del
y
usedt oolt oassisti ndetermini
ngthesegoalsist he Bal
ancedScorecard.Balanced
scorecardisast rategyperformancemanagementt ool–asemi–st andardstr
uct ur
ed
reportthatcanbeusedbymanager stokeept r
ackoft heexecuti
onofact i
vi
ti
esbyt he
staffwithi
nt hei
rcont r
olandtomoni t
ortheconsequencesar i
si
ngfrom t
heseactions.

Ty
pesofPr
ocessPer
for
manceMet
ri
cs
• Ef
fi
ciencyI
ndi
cat
ors
• Ef
fect
ivenessI
ndi
cat
ors
• Capaci
tyI
ndi
cat
ors
• Pr
oduct
ivi
tyI
ndi
cat
ors
• Qual
i
tyI
ndi
cat
ors
• Pr
ofi
tabi
l
ityI
ndi
cat
ors
• Compet
it
ivenessI
ndi
cat
ors
• Val
ueI
ndi
cat
ors
Ef
fi
ciencyI
ndi
cat
orsv
s.Ef
fect
ivenessI
ndi
cat
ors
• Effect
ivenessisther
elat
ionshi
pbetweentheexpectedresult
sandt
heobt
ained
result
s:thebestwayt
odot hatis= 
achi
evetheexpectedresul
ts.
• Eff
ici
encyi
sther el
ati
onshi
pbetweentheresultsachi
eved,andtheresour
ces
used=makingt
hingsthebestwayusi
ngtheleastamountofresour
ces.
 Wecansayt hatef f
ici
encyistobeef f
ecti
veusingami ni
mum ofresources.
Focusingont hepr ocessandr esourcesappliedto,forexample,
 
reduce
costs.
 Ef
fect
iveness alr
eadyf ocuses on the pr
oductand the obtai
ned
resul
tsandcanbr i
ngbenef i
ts,
through 
higherprof
it
s.
Capacit
yIndi
cat
ors:
 
Ther
ati
obet
weent
heamountt
hatcanbepr
oducedandt
het
ime
fort
histooccur
.
 Forexampl
e,t
heaut
omakerXi
scapabl
eofpr
oduci
ng200car
spermont
h.
Product
ivi
tyIndi
cat
ors:
 Ther
ati
obet
weent
heout
put
sgener
atedbyaj
obandt
he
resour
cesusedtodoit.
 Example:Awor
kercani
nstal
l20m2off l
oor
inginanhour.Anothercan
i
nstal
lonly17m2offl
oori
nginanhour
.Theref
ore,hei
slessproducti
ve

Page2of2
 KORBELFOUNDATI
ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

t
hant
hef
ir
st.

Qual
it
yIndicat
ors:
 
Therel
ati
onship bet
ween totaloutput(t
otalproduced)and t
he
out
putssui
tabl
eandappr
opri
ateforuse,i
.e.
,wi
thoutfault
sordefor
miti
es.
 Exampl
e:980pi
ecessui
tabl
eforev
ery1,
000pr
oduced(
98%compl
i
ance)
.
Pr
ofi
tabi
l
ityI
ndi
cat
ors:
 
Theper
cent
ager
elat
ionshi
pbet
weenpr
ofi
tandt
otal
sal
es.
 Exampl
e:acompanythatsol
dUS$200,000.
00ofgoodsandcal
cul
ateda
US$20,
000.
00pr
ofi
t.Sopr
ofi
tabi
l
ityi
s10%.
Ret
urnonInvest
ment(
ROI
) I
ndi
cat
ors:
 
Theper
cent
ager
elat
ionshi
pbet
weent
hepr
ofi
t
andthei
nvest
mentmadei
nthecompany.
 Example:t he same company from the previ
ous exampl
einv
est
ed
US$500,000.00,
wit
haUS$20,000.
00prof
it.Theyi
eldwas4%.
Competi
ti
venessI
ndicat
ors:
 
A company
’sr
elat
ionshi
pwi
tht
hecompet
it
ion.Mar
ket
shar
ecanbeusedforthi
s.
Ef
fect
ivenessI
ndi
cat
ors:
 
Eff
ect
ivenessi
sthecombi
nat
ionofef
fi
cacywi
thef
fi
ci
ency
.
ValueIndi
cator
: 
Therelat
ionshi
pbet
weent heper
cei
vedval
uewheny
ougetsomet
hing
(aproduct
,forexample)andtheamountspentt
oobtai
nit
.
WhyusePr
ocessPer
for
manceMet
ri
cs?
• Theypr ov
idet
hei
nfor
mat
iont
hatt
hemanagerneedsf
oreachst
ageoft
he
process
• Theypr
ovi
degr
eat
er 
accur
acy
 i
nmanager
ial
deci
si
onmaki
ng
• Theyai
mtobr
ingmor
eef
fi
ciencyandef
fect
ivenesst
opr
ocesses
• Theybr
ing 
speed,
abet
terunder
standi
ng,
and 
tr
anspar
ency
 todi
scl
osi
ngr
esul
ts
• Pr
ocessPer
for
manceMet
ri
csbecomet
hemeasur
eofacompany
’sexcel
l
ence
• Theyall
ow t
hecr
eat
ionofa 
dashboar
d wi
thal
lthei
nfor
mat
ionav
ail
abl
eina
panor
amicway

ASy
stemsAppr
oach
Asy
stem canbedef
inedasasetofi
nter
rel
atedpar
tst
hatmustwor
ktoget
her
.
Inabusinessorgani
zati
on,t
heor gani
zat
ioncanbet houghtofasasy st
em
composedofsubsyst
ems(e.g.
,market
ingsubsyst
em,operat
ionssubsy
stem,f
inance
subsy
stem)
,whichi
nturnar
ecomposedofl owersubsy
stems.

Page3of3
 KORBELFOUNDATI
ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

Est
abl
i
shi
ngPr
ior
it
ies
•I
nvir
tual
l
yeverysit
uat
ion,manager
sdi
scov
ert
hatcer
tai
nissuesori
temsar
e
mor
eimport
antthanot
hers.
• Recogni
zi
ngthi
senabl
est
hemanager
stodi
rectt
hei
ref
for
tst
owher
etheywi
l
l
dothemostgood.
• Typicall
y,arel
ati
vel
yfewissuesori
temsarev er
yimportant
,sot
hatdeal
ingwith
thosef act
orswil
lgener
all
yhaveadispr
oport
ionatel
ylar
geimpactontheresul
ts
achieved.
 Thi
swel
l
-knownef
fecti
sref
err
edt
oast
hePar
etophenomenon.
 Paret
ophenomenonAf ew f
act
orsaccountf
orahi
ghper
cent
ageoft
he
occur
renceofsomeev
ent(
s).
• Theimplicati
onist hatamanagershoul dexamineeachsi t
uat
ion,sear
chi
ngf or
thefew factor
st hatwi l
lhavethegr eatestimpact,andgi vethem thehighest
pri
ori
ty.Thisisoneoft hemosti mportantandper v
asiveconcept sinoper
ations
management .Infact,thisconceptcanbeappl i
edatal llevel
sofmanagement
andtoev er
yaspectofdeci si
onmaking, bothprof
essionalandpersonal.

THEHI
STORI
CALEVOLUTI
ONOFOPERATI
ONSMANAGEMENT
Systemsf orpr
oducti
onhaveexi
stedsi
nceanci
entt
imes.Theproduct
ionofgoods
f
orsale,atl
eastinthemoder
nsense,andthemoder
nfact
orysyst
em hadthei
rroot
sin
t
heIndustri
alRevol
uti
on.
TheI
ndust
ri
alRev
olut
ion
• TheIndust
ri
alRevol
uti
onbeganint
he1770si
nEngl
andandspr
eadt
other
estof
Eur
opeandt otheUni
tedSt
atesdur
ingt
he19t
hcent
ury
.
 Underthatsystem,itwascommonforoneper
sontoberesponsi
blefor
makingapr oduct,suchasahor
se-
drawnwagonorapi
eceoff ur
nitur
e,
fr
om star
ttofini
sh
• Then,a numberofi nnov
ations i
nt he 18t
h cent
ury changed t
he f
ace of
product
ionf
orev
erbysubst
it
utingmachinepowerf
orhumanpower .
 Perhapst
hemostsigni
fi
cantofthesewasthesteam engi
ne,becausei
t
provi
dedasour
ceofpowertooper
atemachi
nesi
nf act
ori
es
•I
nt he ear
li
estday
s ofmanuf
act
uri
ng,goods wer
e pr
oduced usi
ng cr
aft
pr
oduct
ion

Page4of4
 KORBELFOUNDATI
ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

 Craf
tproduct
ionSyst
em inwhichhighl
yski
l
ledworkersusesi
mpl
e,f
lexi
ble
tool
stoproducesmallquant
it
iesofcust
omizedgoods.
• TheI
ndust
ri
alRev
olut
ion
• TheI ndust
ri
alRevol
uti
onbegani nthe1770sinEngl andandspr eadtotherestof
Europeandt otheUnit
edSt atesdur
ingthe19thcentury.Pri
ortothatti
me, goods
werepr oducedinsmal lshopsbycr aft
smenandt heirapprenti
ces.Underthat
system,itwascommonf oroneper sontober esponsibl
eformaki ngapr oduct
,
suchasahor se-
drawnwagonorapi eceoffurnit
ure,fr
om starttofini
sh.Only
si
mpl etoolswereavai
labl
e; t
hemachinesinuset odayhadnotbeeni nvent
ed.
• Then,a numberofi nnovati
ons int he 18th centur
y changed the face of
product
ionforeverbysubstit
uti
ngmachi nepowerf orhumanpower .Perhapsthe
mostsignif
icantofthesewast hesteam engine,becauseitprovi
dedasour ceof
powertooper at
emachi nesinf act
ori
es.Ampl esuppl i
esofcoalandi ronore
provi
ded mat eri
alsforgener at
ing powerand maki ng machinery.The new
machines,madeofi ron,weremuchst rongerandmor edurablethanthesimple
woodenmachi nestheyreplaced.
•Int he ear l
iestday s ofmanuf acturing,goods wer e pr oduced usi ng cr
af t
production:highlyskill
edwor kersusi ngsi mple,flexibl
et oolspr oducedgoods
accordingt ocustomerspecificati
ons.Cr aftproductionhadmaj orshor t
comings.
Becausepr oductswer emadebyski ll
edcr aftsmenwhocust om f i
tt
edpar ts,
productionwassl ow andcost l
y.Andwhenpar tsf ai
led,ther epl acement sal
so
hadt obecust om made,whi chwasal sosl ow andcost l
y .Anot hershor tcomi
ng
wast hatpr oducti
oncost sdidnotdecr easeasv ol
umei ncr eased;t herewereno
economi esofscal e,whichwoul dhav epr ov i
dedamaj orincent i
v ef orcompani es
toexpand.I nst
ead,manysmal lcompani esemer ged,eachwi thi tsownsetof
standards.Amaj orchangeoccur redthatgav et heI ndustrialRev oluti
onaboost :
thedevel opmentofst andar
dgaugi ngsy stems.
• Thi
sgreatl
yreducedtheneedf orcustom-madegoods.Factori
esbegant ospri
ng
upandgrow rapidl
y,provi
dingjobsforcountlesspeopl
ewhower eattract
edin
l
argenumber sfrom ruralareas.Despitethemajorchangest hatwer etaki
ng
pl
ace,managementt heoryandpr acticehadnotpr ogr
essedmuchf rom earl
y
days.Whatwasneededwasanenl i
ghtenedandmor esystematicapproachto
management.

Sci
ent
if
icManagement
Thescient
if
icmanagementer
abroughtwidespreadchangestothemanagementof
factor
ies.Themov ementwasspearheadedbyt heeffi
ciencyengineerandi
nventor
Frederi
ck Winslow Tayl
or,who i
s often r
efer
red to as the fatherofsci
enti
fic
management .Taylorbel
iev
edina“ sci
enceofmanagement ”basedonobservat
ion,

Page5of5
 KORBELFOUNDATI
ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

measurement,analysisandi mpr ovementofwor kmet hods,andeconomi cincenti

ves.
Hestudiedworkmet hodsingr eatdetai
ltoident
ifyt
hebestmet hodfordoingeachj ob.
Tayl
oral sobel
ievedt hatmanagementshoul dber esponsibleforplanning,carefull
y
sel
ecti
ngandt rainingwor kers,findi
ngt hebestwayt oper f
orm eachj ob,achieving
cooper
ation between management and wor ker
s,and separ at
ing management
acti
vi
ti
esf r
om wor kactiv
iti
es.
Anumberofot
herpi
oneer
sal
socont
ri
but
edheav
il
ytot
hismov
ement
,incl
udi
ngt
he
f
oll
owi
ng:
• FrankGi l
bret
hwasani ndustr
ialengineerwhoi
sof
tenref
err
edtoast hef
atherof
mot i
onst udy.Hedevelopedprinci
plesofmoti
oneconomythatcoul
dbeapplied
toincredi
blysmallpor
tionsofat ask.
• HenryGant trecogni
zedt hev al
ueofnonmonet ar
yrewardstomot i
vateworkers,
and dev el
oped a wi del
y used syst em forscheduling,called Ganttcharts.
Harri
ngton Emer son applied Taylor’sideas to organi
zation struct
ure and
encouragedtheuseofexper tstoimpr ov
eor gani
zat
ionalef
ficiency.Hetest
ifi
ed
i
nacongr essionalheari
ngt hatrai
lroadscouldsaveami l
li
ondol larsadayby
apply
ingprincipl
esofscienti
ficmanagement .
• Henr
yFord,thegr
eati
ndust
ri
ali
st,empl
oyedsci
ent
if
icmanagementt
echni
ques
i
nhisfact
ori
es.
AmongFor
d’smanycont
ri
but
ionswast
hemasspr
oduct
ion
Massproduct
ion.Sy
stem i
nwhi chlow-
skil
ledwor
ker
susespeci
ali
zedmachi
ner
yto
pr
oducehighvol
umesofstandar
dizedgoods.
Concept
susedbyFor
d
•I
nterchangeabl
epart
s.Partsofapr
oductmadet
osuchpr
eci
si
ont
hatt
heydo
nothavetobecustom f
it
ted.
• Di
vi
sionofl
abor.Thebreaki
ngupofaproducti
onprocessint
osmal
ltasks,so
t
hateachwor
kerperf
ormsasmallpor
ti
onoftheover
allj
ob.
AmongFor
d’smanycont
ri
but
ionswast
hemasspr
oduct
ion
• Massproducti
onSyst
em i
nwhichl
ow-ski
ll
edworker
susespeci
ali
zedmachi
ner
y
t
oproducehighvol
umesofst
andar
dizedgoods.
Concept
susedbyFor
d
•I
nterchangeabl
epar
tsPartsofapr
oductmadet
osuchpr
eci
si
ont
hatt
heydonot
havetobecustom f
it
ted.
Thismeantt hatpart
sdi dnothavet obecustom f
itt
ed,ast heywer
ei ncraf
t
producti
on.Thest andar
dizedpart
scouldalsobeusedf orrepl
acementpart
s.The
resultwasatremendousdecreaseinassemblyt
imeandcost.For
daccompli
shedthi
s

Page6of6
 KORBELFOUNDATI
ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

byst
andardizi
ngthegaugesusedtomeasurepartsdur
ingpr
oduct
ionandbyusi
ng
newl
ydevelopedprocessest
opr
oduceuni
for
m par
ts.

TheHumanRel
ati
onsMov
ement
Whereast
hescienti
fi
cmanagementmov ementheavi
lyemphasi
zedthet
echnical
aspectsofworkdesi
gn,thehumanr
elat
ionsmovementemphasi
zedthei
mpor
tanceof
thehumanelementinjobdesi
gn.
• Li
ll
ianGi l
bret
h,apsy chologi
standt hewi f
eofFr ankGi lbreth,workedwithher
husband,focusingont hehumanfact orinwork.(TheGilbrethswer ethesubject
ofaclassic1950sf i
l
m, CheaperbytheDozen.)Manyofherst udi
esinthe1920s
dealtwi
thwor kerfat
igue.Int
hefoll
owi ngdecades,ther
ewasmuchemphasi son
mot i
vat
ion.
• Duringt he1930s,EltonMay oconductedst udiesattheHawt hornediv
isi
onof
West ern Elect
ri
c.His studi
es reveal
ed thatin addi
tion t
ot he physi
caland
technicalaspectsofwork,workermoti
vat
ioni scri
ti
cal
forimprovingpr
oducti
vi
ty.
• Dur
ing t
he 1940s,Abraham Masl
ow dev
eloped mot
ivat
ionalt
heor
ies,whi
ch
Fr
ederi
ckHert
zbergref
inedi
nthe1950s
• Dougl egoraddedTheor
asMcGr yXandTheor
yYi
nthe1960s.
• Theor
yX,onthenegat
iveend,assumedthatworker
sdonotli
ketowork,
andhavet
obecontr
oll
ed—rewardedandpuni
shed—togett
hem t
odogood
work.
• TheoryY,ontheot
herendofthespect
rum,assumedt
hatworker
senj
oy
thephysi
cal
andmental
aspect
sofworkandbecomecommit
tedtowor
k
• Wi
l
li addedTheor
am Ouchi yZ,
• whichcombi nedtheJapaneseapproachwi thsuchf eaturesasl i
fet
ime
employment,employeeprobl
em solv
ing,andconsensusbui ldi
ng,andthe
tr
adit
ional Wester
n approach that feat
ures short-
ter
m empl oyment
,
speci
ali
sts,
andindivi
dual
decisi
onmakingandr esponsi
bil
i
t y
.
• Dougl
asMcGr
egoraddedTheor
yXandTheor
yYi
nthe1960s.
• Theset
heori
esr
epr
esent
edt
het
woendsoft
hespect
rum ofhow empl
oyees
vi
ewwork.
• TheoryX,ont henegati
v eend,assumedthatworker
sdonotl i
ketowork,and
havet obecontrol
l
ed—r ewardedandpunished—togetthem t
odogoodwor k.
Thisatti
tudewasquitecommoni ntheautomobil
eindust
ryandinsomeother
i
ndustri
es,unti
lthethreatofgl obalcompeti
ti
onforcedthem t
orethi
nkthat
approach.

Page7of7
 KORBELFOUNDATI
ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

• TheoryY,ont heotherendofthespectrum,assumedt hatwor kersenj

oythe
physicaland mentalaspect
sofwor kand becomecommi tt
ed t o wor
k.The
TheoryXappr oachresul
tedi
nanadversari
alenv
ironment
, whereastheTheoryY
approachresultedi
nempoweredworkersandamor ecooperat
ivespiri
t
Inthe1970s,Wi ll
iam OuchiaddedTheoryZ,whichcombi nedtheJapaneseapproach
wit
hsuchf eatur
esasl i
fet
imeemployment,employeeproblem sol
vi
ng,andconsensus
buil
ding,andt hetradi
ti
onalWesternapproachthatfeaturesshor
t-t
erm empl
oyment,
special
ist
s, andi
ndivi
dualdeci
sionmaki
ngandr esponsi
bili
ty.

OPERATI
ONSTODAY
• E-
busi
nessUseoft
heI
nter
nett
otr
ansactbusi
ness.
• E-
commer
ceConsumer
-t
o-busi
nesst
ransact
ions
• TechnologyTheapplicat
ionofscient
if
icdi
scov
eri
est
othedev
elopmentand
i
mpr ovementofgoodsandserv
ices.
• Adv ancesini nformati
ontechnologyandglobalcompet i
ti
onhav ehadamaj or
i
nfluenceonoper ati
onsmanagement .Whi
letheInt
ernetoffersgreatpotent
ialf
or
business organizati
ons,the potenti
alas wellas the risks mustbe cl earl
y
under st
oodinor dertodeter
minei fandhow toexploitthispot ent
ial
.Inmany
cases, t
heInternethasalt
eredthewaycompani escompetei nthemar ketpl
ace.
• Elect r
onicbusi ness,ore- business,i nvolvestheuseoft heI nternett ot r
ansact
busi ness.E-businessi schangi ngt hewaybusi nessor ganizationsi nteractwith
theircust omer sandt hei
rsuppl iers.Mostf amili
art othegener alpubl i
ci se-
commer ce, consumer –busi ness t r
ansactions such as buy ing onl ine or
request i
ngi nformat i
on.Howev er ,business-
to-businesstransact i
onssuchase-
procur ementr epresentani ncreasi ngshareofe- business.E-busi nessi sreceivi
ng
i
ncr eased at tention f rom busi ness owner s and manager si n dev elopi
ng
strategies,planni ng,and deci sionmaki ng.Thewor dtechnol ogyhassev eral
definiti
ons,dependi ng on t he cont ext.Gener al
ly,technol ogy r eferst ot he
appl i
cationofsci ent i
fi
cdi scov er i
est ot hedev el
opmentandi mprov ementof
goods and ser v ices.I t can i nvol
v e knowledge,mat er
ials,met hods,and
equi pment .The t er
m hi gh t echnol ogy referst ot he mostadv anced and
dev elopedmachi nesandmet hods.
Thr
eeki
ndsoft
echnol
ogy
• Pr
oductandser
vicetechnol
ogyr
efer
stot
hedi
scov
eryanddev
elopmentofnew
pr
oduct
sandservices
• Pr
ocesstechnol
ogyref
ersto methods,pr
ocedur
es,and equi
pmentused t
o
pr
oducegoodsandpr
ovi
deserv
ices.

Page8of8
 KORBELFOUNDATI
ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

•Infor
mati
ontechnol
ogy(
IT)ref
erstothesci
enceanduseofcomput
ersandot
her
elect
roni
cequi
pmenttostor
e,process,
andsendinf
ormat
ion.
Operat
ionsmanagementi spri
maril
yconcernedwi ththreeki
ndsoft echnol
ogy:
pr
oductandserv
icetechnol
ogy,pr
ocesstechnol
ogy,andinformat
iont echnology(I
T).
Al
lthr
eecanhaveamaj ori
mpactoncosts,pr
oducti
vi
ty,andcompetit
iveness.
• Productandser vi
cet echnol
ogyr
efer
stothedi
scov er
yanddevelopmentofnew
productsandser vices.Thi si
sdonemainl
ybyr esearcher
sandengineers,who
uset hescienti
fi
cappr oachtodevel
opnew knowledgeandt r
anslat
et hatint
o
commer ci
al appl
ications.
• Pr
ocesstechnol
ogyref
ersto methods,pr ocedur
es,and equi
pmentused t
o
pr
oducegoodsandprovi
deserv
ices.Theyincludenotonl
yprocesseswi
thi
nan
or
gani
zat
ionbutal
sosuppl
ychai
npr ocesses.
Infor
mationt echnology(IT)referstot hescienceanduseofcomput ersandot her
elect
roni
cequi pmentt ostore,process,andsendi nformati
on.I
nformati
ont echnology
i
sheav i
l
yi ngrained intoday’sbusi nessoper at
ions.Thisincl
udesel ect
ronicdat a
processi
ng,theuseofbarcodest oi dent
if
yandt r
ackgoods,obtaini
ngpoi nt
-of-
sale
i
nf or
mation,datatransmi
ssion,theInternet
,e-commer ce,e-
mail
,andmor e.

Thi
sfi
gur
eshowst
hehi
stor
icalsummar
yofoper
ati
onsmanagement
Duet o Compet
iti
vepressur
esandchangingeconomi
ccondi
ti
onshav
ecaused
busi
nessorgani
zat
ionst
oputmor eemphasi
son
 Oper
ati
onsSt
rat
egy

Page9of9
 KORBELFOUNDATI
ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

 Wor
kingwi
thf
ewerr
esour
ce.
 Revenuemanagementi samet hodusedbysomecompaniestomaximizethe
rev
enue t
heyr eceivefrom f
ixed oper
ati
ng capaci
tybyi
nfl
uenci
ng demand
thr
oughpr
icemani pul
ati
on.
 Pr
ocessanal y
sisandimprovementincludescostandt
imereduct
ion,pr
oduct
ivi
ty
i
mpr ovement,process yield improvement,and quali
tyimpr ov
ement and
i
ncreasingcustomersat
isfacti
on.Thisissometimesref
err
edtoasasi xsi
gma
pr
ocess.
o Sixsigmaisaprocessf
orr
educi
ngcost
s,i
mpr
ovi
ngqual
i
ty,
andi
ncr
easi
ng
customersat
isf
acti
on.
 Agil
i
tyref
erst
otheabi
l
ityofanor
gani
zat
iont
orespondqui
ckl
ytodemandsor
opport
uni
ti
es.
 Leansy
stem.Syst
em thatusesmini
malamountsofr
esour
cest
opr
oduceahi
gh
vol
umeofhighqual
it
ygoodswi t
hsomev ar
iet
y.
1.Duri
ngt he1970sand1980s,manycompani esneglect
edtoincl
udeoperat
ions
str
ategyintheircorporatestrategy
.Someoft hem pai
ddearl
yfort
hatneglect
.
Now mor eandmor ecompani esarer ecogni
zingtheimport
anceofoperat
ions
str
ategyont heov erallsuccessoft heirbusinessaswellasthenecessi
tyfor
rel
ati
ngittotheiroverall
businessstrat
egy .
2.Workingwithfewerresourcesduetolay
off
s,corpor
atedownsizi
ng,andgener al
costcutti
ng isforcing managersto make tr
ade-of
fdecisi
ons on resource
al
locati
on,andt oplaceincreasedemphasi
soncostcont rolandpr oduct
ivi
t y
i
mpr ovement.
3.Rev enuemanagementi samet hodusedbysomecompani est omaxi mizethe
revenue theyrecei
vef rom f ixed operat
ing capaci
tybyinfl
uencing demand
thr
ough pr i
ce mani
pulation.Al so known as yiel
d management ,i
thas been
successfull
yusedinthet ravelandt ouri
sm i
ndustri
esbyairl
ines,crui
selines,
hotels,amusementparks, andrentalcarcompanies,andi
notherindustr
iessuch
ast rucki
ngandpubl
icutil
ities.
4.Pr
ocessanal y
sisandimprovementincludescostandt
imereduct
ion,pr
oduct
ivi
ty
i
mpr ovement,process yield improvement,and quali
tyimpr ov
ement and
i
ncreasingcustomersat
isfacti
on.Thisissometimesref
err
edtoasasi xsi
gma
pr
ocess.
5.Agili
tyreferstotheabili
tyofanor ganizationtor espondquicklyt
odemandsor
opportuniti
es.I
tisastrategythatinv ol
vesmai ntainingaflexi
blesyst
em t hatcan
quickl
yr espond to changesi n eithert hev ol
umeofdemand orchangesi n
product/servi
ce off
erings.Thi si s par t
icul
arl
yi mport
ant as or ganizati
ons
scramblet oremaincompet it
iveandcopewi t
hi ncreasi
nglyshort
erpr oductlif
e

Page10of10
 KORBELFOUNDATI
ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

cy
clesandst
ri
vet oachi
eveshor
terdev
elopmentt
imesf
ornew ori
mpr
oved
pr
oduct
sandser
vices.
6.Leansy stem Sy stem thatusesmi ni
malamount sofresourcest oproduceahi gh
volumeofhi ghqual i
tygoodswi thsomev ari
ety.Leansy st emsaresonamed
becauset heyusemuchl essofcer tai
nr esourcesthant y
picalmasspr oducti
on
systemsuse—space,i nventory,andwor kers—topr oduceacompar ableamount
ofoutput.Leansy stemsuseahi ghlyskil
ledwor kfor
ceandf lexibl
eequipment .I
n
eff
ect,theyi ncorporateadv antagesofbot hmasspr oduction( hi
ghv ol
ume,l ow
unitcost)andcr aftproducti
on( vari
etyandf l
exibil
it
y).Andqual it
yishigherthan
i
nmasspr oduction.Thisappr oachhasnowspr eadt oservices,i
ncl
udingheal t
h
care,of
fices,andshi ppinganddel ivery
.

KEYI
SSUESFORTODAY’
SBUSI
NESSOPERATI
ONS
There are a number of i ssues that ar
e high pr
ior
it
ies of many busi
ness
or
ganizati
ons.Althoughnoteverybusi
nessisfacedwit
htheseissues,
manyare.Chi
ef
amongt heissuesarethefol
l
owing:
• Economi
c condi
tions.The l
i
ngeri
ng recessi
on and sl
ow recov
eryinvari
ous
sect
orsoftheeconomyhasmademanager scaut i
ousaboutinvest
mentand
rehi
ri
ngwor
kersthathadbeenlai
doffduri
ngtherecessi
on.
•I
nnovat
ing.Findingnew ori mprov edproduct
sorser vicesareonl ytwooft he
manypossibi
lit
iesthatcanpr ovi
dev al
uet oanorganizati
on.Innovati
onscanbe
madeinprocesses,theuseoft heInternet
,orthesupplychainthatreducecosts,
i
ncr
easeproduct i
vi
ty,expandmar kets,
orimprovecustomerser vi
ce.
• Quali
typrobl
ems.Thenumer ousoper
ationsfailur
esment i
onedatt hebeginni
ng
ofthechapterunder
scoretheneedtoimpr ovet hewayoperationsaremanaged.
That rel
ates to product desi
gn and t esti
ng,ov er
sight of suppl
ier
s,r i
sk
assessment,andti
melyresponsetopotential
problems.
• Riskmanagement.Theneedf ormanagi ngr i
skisunderscoredbyr ecentevent
s
thati
ncl
udet hecr
isi
sinhousing,productrecall
s,oi
lspil
l
s,andnat uralandman-
madedi sast
ers,and economicupsand downs.Managi ng r
isksst art
swi t
h
i
denti
fyi
ngr i
sks,assessi
ngv ul
nerabil
it
yandpot ent
ialdamage( l
iabil
i
tycosts,
reput
ati
on,demand),andtaki
ngstepstor educeorshareri
sks.
 Risk management ..Low l aborcost si nt hi
rd-worl
d countri
es have
i
ncreasedpressuretor educel
aborcosts.Compani esmustcarefull
yweigh
thei
ropti
ons,whichi ncludeout
sourci
ngsomeoral lofthei
roperati
onsto
l
ow- wageareas,reducingcostsint
ernall
y,changingdesigns,andwor ki
ng
toimproveproducti
vity
.
KEYI
SSUESFORTODAY’
SBUSI
NESSOPERATI
ONS

Page11of11
 KORBELFOUNDATI
ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

• Economi
ccondi
ti
ons.
•I
nnov
ati
ng
• Qual
i
typr
obl
ems
• Ri
skmanagement
.
• Ri
skmanagement
.
Env
ironment
alConcer
ns
• Sust
ainabi
li
tyrefer
stoser v
iceandpr oduct
ionprocessesthatuseresour
cesin
waysthatdonothar m ecologi
calsy
st emsthatsupportbothcurr
entandfut
ure
humanexistence.
Concernaboutgl obalwar mingandpol luti
onhashadani ncreasi
ngeffectonhow
busi
nesses oper at
e.St ri
cterenv i
ronment alregul
ati
ons,par t
icul
arl
yi n devel
oped
nati
ons,arebei ngimposed.Fur thermore,businessorgani
zati
onsar ecomi ngunder
i
ncreasingpressuretor educet hei
rcarbonf ootpri
nt(theamountofcar bondioxide
generat
ed byt heiroperations and thei
rsuppl ychains)and t o gener
allyoperate
sustai
nableprocesses.
Sust ai
nabi l
it
yr eferstoser vi
ceandpr oductionpr ocessest hatuser esourcesinway s
thatdonothar m ecol ogicalsy stemst hatsuppor tbot hcur rentandf ut
urehuman
exist ence.Sust ainabili
tymeasur esof t
en go bey ond tradit
ionalenv ir
onment aland
economi cmeasur est oincludemeasur est hati ncorporatesoci alcr it
eriaindeci sion
maki ng.Al lareasofbusi nesswi l
lbeaf f
ectedbyt his.Areast hatwi l
lbemostaf fected
i
ncl ude pr oduct and ser vice desi gn,consumer educat i
on pr ograms,di saster
prepar ati
on and r esponse,suppl y chai n wast e management ,and out sourcing
deci sions.Becauset heyallf allwithintherealm ofoper ations,oper ati
onsmanagement
i
scent raltodeal i
ngwi t
ht hesei ssues.Somet imesr eferr
edt oas“ greeni nit
iat
ives,”the
possi bil
it
iesi ncluder educi ngpackagi ng,mat eri
als,wat erandener gyuse,andt he
env i
r onment alimpactoft hesuppl ychain,includingbuy inglocal l
y.Ot herpossi bil
it
ies
i
ncl uder econdi ti
oni ng used equi pment( e.g.,pr i
ntersand copi ers)f orr esale,and
recy cling.
Et
hical
Conduct
Theneedforethi
calconductinbusinessi sbecomi ngi
ncr easi
nglyobvious,gi
ven
numerousexampl esofquestionableactionsi nrecenthistory.Inmaki ngdecisions,
managersmustconsi derhow theirdecisi
onswi l
laff
ectshar eholders,management ,
employees,cust
omers,thecommuni tyatlarge,andtheenv i
ronment .Findi
ngsoluti
ons
thatwil
lbeinthebestinter
est
sofal loft
hesest akeholdersi
snotal way seasy,butiti
s
agoal t
hatallmanager
sshouldstri
vet oachieve.
Oper at
ionsmanagers,li
keal
lmanagers,havether esponsi
bil
i
tyt
omakeethical
deci
sions.Et
hical
issuesari
seinmanyaspectsofoperat
ionsmanagement,
incl
udi
ng

Page12of12
 KORBELFOUNDATI
ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

•Fi
nanci
alst
atement
s:accur
atel
yrepr
esent
ingt
heor
gani
zat
ion’
sfi
nanci
alcondi
ti
on.
•Workersaf
ety:pr
ovidi
ngadequatet
rai
ning,mai
ntai
ningequi
pmenti
ngoodwor
king
condi
ti
on,mai
ntai
ningasaf
ewor ki
ngenvi
ronment
.
•Productsaf
ety:pr
ovi
dingproduct
sthatmi
nimi
zet
her
iskofi
njur
ytouser
sordamage
toproper
tyortheenvi
ronment.
•Qual
i
ty:
honour
ingwar
rant
ies,
avoi
dinghi
ddendef
ect
s.
•Theenv
ironment
:notdoi
ngt
hingst
hatwi
l
lhar
mtheenv
ironment
.
•Thecommuni
ty:
bei
ngagoodnei
ghbour
.
•Hir
ingandfi
ri
ngworkers:avoidi
ngf
alsepr
etenses(
e.g.
,pr
omi
si
ngal
ong-
ter
mjob
whenthati
snotwhati
sintended).
•Closi
ngfaci
li
ti
es:taki
ngint
oaccountt
hei
mpactonacommuni
ty,andhonor
ing
commitment
sthathavebeenmade.
•Workers’r
ight
s:r
espect
ingwor
ker
s’r
ight
s,deal
i
ngwi
thwor
ker
s’pr
obl
emsqui
ckl
y
andf
airl
y.
Et
hicsi
sast
andar
dofbehav
iort
hatgui
deshowoneshoul
dacti
nvar
ioussi
tuat
ions.

Fi
vepr
inci
plesf
ort
hinki
nget
hical
l
y:
Ethi
csisdefi
nedasast andardofbehavi
ort
hatgui
deshowoneshoul
dactinvar
ious
si
tuati
ons.TheMar kul
aCenterforAppl
i
edEthi
csatSantaCl
araUniv
ersi
tyi
dent
ifi
es
fi
vepri
ncipl
esfort
hinki
ngethical
ly
:
 TheUt
il
it
ari
anPr
incipl
eisthatthegooddonebyanact
ionori
nact
ionshoul
d
out
wei
ghanyhar
mi tcausesormightcause.
 Anexampl
eisnotal
l
owi
ngaper
sonwhohashadt
oomucht
odr
inkt
o
dr
ive.
 TheRight
sPr
inci
plei
sthatact
ionsshoul
drespectandpr
otectt
hemor
alr
ight
s
ofot
hers.
 Anexampl
eisnott
aki
ngadv
ant
ageofav
ulner
abl
eper
son.
 TheFai
rnessPr
inci
plei
sthatequal
sshoul
dbehel
dto,
orev
aluat
edby
,thesame
st
andar
ds.
 Anexampl
eisequal
payf
orequal
wor
k.
 Manyor
ganizat
ionshav
edev
elopedcodesofet
hicst
ogui
deempl
oyees’
or
member
s’conduct.
 TheCommonGoodPr i
nci
plei
sthatact
ionsshoul
dcont
ri
but
etot
hecommon
goodoft
hecommuni
ty.
Page13of13
 KORBELFOUNDATI
ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

 Anexampl
eisanor
dinanceonnoi
seabat
ement
.
 TheVi
rt
uePr
inci
plei
sthatact
ionsshoul
dbeconsi
stentwi
thcer
tai
nideal
vir
tues.
 Examples i
ncl
ude honest
y,compassi
on,gener
osi
ty,t
oler
ance,f
idel
i
ty,
i
ntegr
it
y ,
andsel
f-
contr
ol
An ethicalfr
amewor kis a sequence ofst
eps i
ntended t
o gui
de t
hinki
ng and
subsequentdeci
sionsoract
ions.
Et
hical
Framewor
k
1.Recognizeanethicali
ssuebyaski
ngifanacti
oncouldbedamagi
ngt
oagr
oup
oranindivi
dual
.Isther
emoretoitt
hanjustwhati
slegal
?
2.Makesurethepert
inentf
act
sar
eknown,
suchaswhowi
l
lbei
mpact
ed,
andwhat
opt
ionsar
eav ai
l
able.
3.Ev
aluat
etheopt
ionsbyr
efer
ri
ngt
oeachoft
hepr
ecedi
ngf
iveet
hical
pri
nci
ples.
4.I
denti
fyt
he“best”opti
onandt
henf
urt
herexami
nei
tbyaski
nghowsomeoney
ou
r
espectwoul
dv i
ewi t
.
5.I
nret
rospect
,consi
dert
heef
fecty
ourdeci
si
onhadandwhaty
oucanl
ear
nfr
om
i
t.
Thecenterexpandst
heseprinci
plestocreateafr
ameworkforethi
calconduct
.An
ethicalfr
ameworkisasequenceofst epsintendedt
oguidet
hinki
ngandsubsequent
decisionsoracti
ons.Herei
st heonedev elopedbyt heMar
kulaCenterforApplied
Ethics:
1.Recognizeanethicali
ssuebyaski
ngifanacti
oncouldbedamagi
ngt
oagr
oup
oranindivi
dual
.Isther
emoretoitt
hanjustwhati
slegal
?
2.Makesurethepert
inentf
act
sar
eknown,
suchaswhowi
l
lbei
mpact
ed,
andwhat
opt
ionsar
eav ai
l
able.
3.Ev
aluat
etheopt
ionsbyr
efer
ri
ngt
oeachoft
hepr
ecedi
ngf
iveet
hical
pri
nci
ples.
4.I
denti
fyt
he“best”opti
onandt
henf
urt
herexami
nei
tbyaski
nghowsomeoney
ou
r
espectwoul
dv i
ewi t
.
5.I
nret
rospect
,consi
dert
heef
fecty
ourdeci
si
onhadandwhaty
oucanl
ear
nfr
om
i
t.

Thei
ssuesonsuppl
ychai
nmanagement
• Lar
geosci
l
lat
ionsofi
nvent
ori
es,
•I
nvent
oryst
ockout
s,
• Lat
edel
i
ver
ies,
Page14of14
 KORBELFOUNDATI
ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

• Qual
i
typr
obl
ems
• Theneedt
oimpr
oveoper
ati
ons
•I
ncr
easi
ngl
evel
sofout
sour
cing

TheNeedt
oManaget
heSuppl
y
ChainSupplychainmanagementi sbeinggi veni ncreasi
ngattenti
onasbusi ness
organizat
ionsfacemount ingpr essuretoimprov emanagementoft heirsupplychai ns.
Inthepast ,mostorganizationsdidlitt
letomanaget heirsupplychains.Instead,they
tendedt oconcentrat
eont hei
rownoper ati
onsandont hei
rimmedi atesuppl iers.
Mor eover
,theplanni
ng,mar keti
ng,product
ionandi nventorymanagementf unctionsin
organizat
ionsinsupplychai nshav eoftenoper at
edi ndependentlyofeachot her.Asa
result
,supplychai
nsexper iencedar angeofpr oblemst hatwereseemi ngl
ybey ondt he
controlofi ndi
vi
dualorgani zati
ons.Theseandot heri ssuesnow makei tclearthat
managementofsuppl ychai nsi sessenti
alt
obusi nesssuccess.
Theproblemsincl
udedlar
geosci
l
lat
ionsofi
nvent
ori
es,i
nvent
oryst
ockout
s,l
ate
del
i
ver
ies,andqual
it
yprobl
ems.
• Theneedt oimproveoperations.Duringthelastdecade,manyor gani
zat
ions
adoptedpracti
cessuchasl eanoper at
ionandtotalquali
tymanagement( TQM).
Asar esult
,theywereablet oachieveimprovedquali
tywhi lewri
ngi ngmuchof
the excess cost
s outoft heirsy st
ems.Al t
hough t hereis stillroom for
i
mpr ovement,formanyor ganizat
ions,the majorgains hav e been real
i
zed.
Opportuni
tynow liesl
argel
ywi thprocurement,di
str
ibution,andl ogi
sti
cs—the
supplychai
n.
•Incr
easingl ev elsofout sour ci
ng.Or ganizationsarei ncreasingt heirlevel
sof
outsourcing,out sourci
ngmeansbuy inggoodsorser vicesi nsteadofpr oducing
orpr oviding them t hemsel ves.As out sour ci
ng increases,or ganizati
ons are
spendingi ncreasingamount sonsuppl y
-relatedactivi
ties( wr apping,packaging,
mov i
ng, l
oadingandunl oadi ng, andsorti
ng).Asi gni
ficantamountoft hecostand
timespentont heseandot herr el
atedactivi
tiesmaybeunnecessar y.Issueswith
i
mpor tedpr oduct s,i
ncludingt aintedfoodpr oducts,
t oothpast e,andpetf oods,as
wellasunsaf et i
resandt oy s,hav el
edtoquest i
onsofl iabil
ityandt heneedf or
compani est otaker esponsi bil
it
yf ormonitoringthesaf etyofout sourcedgoods.
•I
ncreasi
ngtr
anspor
tat
ioncosts.Tr
anspor
tat
ioncost
sar
eincr
easi
ng,andt
hey
needtobemorecar
efull
ymanaged.
• Competiti
vepressur
es.Compet i
ti
vepressur
eshaveledtoanincreasi
ngnumber
ofnewpr oduct
s,short
erproductdevel
opmentcycl
es,andi
ncreaseddemandf or
customizati
on.And in some indust
ri
es,mostnotablyconsumerel ect
roni
cs,
productlif
ecy cl
esarer el
ati
velyshort
.Addedt othi
sareadopt ionofquick-

Page15of15
 KORBELFOUNDATI
ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

r
esponsest
rat
egi
esandef
for
tst
oreducel
eadt
imes.
•Incr
easing globali
zati
on.I ncreasi
ng globalizati
on has expanded the physical
l
engt h ofsupplychai ns.A gl obalsuppl ychai nincreasest hechall
engesof
managi ngasuppl ychai n.Hav i
ngf ar-
fl
ungcust omersand/ orsuppli
ersmeans
l
ongerl eadt i
mesandgr eateroppor t
uniti
esf ordisrupti
onofdel i
veri
es.Often
currencydiff
erencesandmonet ar
yf l
uctuati
onsar efactors,aswellaslanguage
andcul tur
aldiff
erences.Also,t i
ghtenedbor dersecurit
yi nsomei nst
anceshas
slowedshi pmentsofgoods.
•I
ncreasi
ngimportanceofe-busi
ness.Theincreasi
ngi
mport
anceofe-
business
hasaddednew di mensi
onstobusinessbuyingandsell
i
ngandhaspresented
newchall
enges.
• Thecompl exi
tyofsupplychai ns.Supplychai
nsar ecomplex;theyaredy namic,
andt heyhavemanyi nherentuncertai
nti
esthatcanadverselyaffectthem,such
as inaccurat
e forecasts, late deli
veri
es, subst
andar
d qual ity, equi
pment
breakdowns,andcanceledorchangedor ders.
Theneedt omanagei nvent
ori
es.Inventor
iesplayamaj orrol
einthesuccessor
fai
lureofasuppl ychain,soiti
simportanttocoordinat
einv
entoryl
evel
sthr
oughouta
supplychain.Shortagescansev er
elydisruptthetimelyfl
ow ofworkandhav efar
-
reachingimpacts,whileexcessinventor
iesaddunnecessar ycost
s.Itwoul
dnotbe
unusualt ofi
ndi nventoryshort
agesi nsomepar tsofasuppl ychainandexcess
i
nv ent
oriesi
notherpartsofthesamesuppl ychain.

Thi
sshowst
heel
ementofsuppl
ychai
nmanagement

Page16of16
 KORBELFOUNDATI
ONCOLLEGE,
INC.
Pur
okSpr
ing1,
Brgy
.Moral
es,KoronadalCi
ty
Cont
actNo.228-1996/
887-
2051
Busi
nessDepar
tment
korbel
businessdepar
tment
@gmai
l
.com
Lectur
er:ReyApaez Y.2NDSEMESTER,
A. 2020-
2021

PARTI
I.ASSESSMENT
1.Expl
aint
hedi
ff
erencebet
weene-
commer
ceande-
busi
ness.Pr
ovi
deanexampl
e.

PARTI
II
.SOURCES/
REFERENCES
Oper
ati 11thedi
onsManagement( ti
on)
ByWi
l
li
am St
evenson

Page17of17