INTRODUCTION

Chapter One
McGraw-Hill/Irwin Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.
Course Requirements
 Required Book: Operations and Supply Chain
Management. (14th Edition)
 By : F. Robert Jacobs
Richard B. Chase
 Attendance. (Please write down your name and signature
on spaces provided for)
 Follow House (Class) Rules:
 Each student must have his/her own book
 Cellphone is not allowed in the class. Phones will be
confiscated when being used during classes
 List down group members.
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Learning Objectives
 LO1-1: Identify the elements of operations and
supply chain management.
 LO1-2: Know the potential career opportunities in
operations and supply chain management.
 LO1-3: Recognize the major concepts that define
the operations and supply chain management field.
 LO1-4: Evaluate the efficiency of a firm.

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Strategy, Processes, and Analytics
 Operations and supply chain management involves
 Product design
 Purchasing
 Manufacturing
 Service operations
 Logistics
 Distribution
 Success depends upon
 Strategy
 Processes to deliver products and services
 Analytics to support the decisions needed to manage the firm
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What Is Operations and Supply Chain
Management?

 The design, operation, and improvement of the

systems that create and deliver the firm’s primary
products and services
 Operations and supply chain management (OSCM)
is
 A functional field of business
 Concerned with the management of the entire
production/delivery system

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Operations and Supply Chain Processes

Supply
Operations
Chain
Manufacturing and
Processes that move
service processes
information and
used to transform
material to and
resources into
from the firm
products

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Process Steps for Men’s Nylon
Supplex Parkas

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Each Section of OSCM: What Is Accomplished?

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Operations and Supply Chain Processes

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Process Activities
 Planning – processes needed to operate an existing
supply chain
 Sourcing – selection of suppliers that will deliver the
goods and services needed to create the firm’s product
 Making – producing the major product or service
 Delivering – logistics processes such as selecting
carriers, coordinating the movement of goods and
information, and collecting payments from customers
 Returning – receiving worn-out, excess, and/or
defective products back from customers
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Goods versus Services
Ser
Go
vic
ods
es

Pure Goods Core Goods Core Services Pure Services

Intangible
Tangible
Interaction with customer required
Less interaction with customers
Inherently heterogeneous
Often homogeneous
Perishable/time dependent
Not perishable – can be inventoried
Defined and evaluated as a package of features

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Careers in Operations and Supply Chain
Management

Hospital Branch Department

Plant manager
administrator manager store manager

Call center Supply chain Purchasing Quality control

manager manager manager manager

Business
Lean
process Project Production
improvement
improvement manager control analyst
manager
analyst

Facilities Chief operating

manager officer

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Historical Development of Operations and Supply Chain
Management

Manufacturing strategy developed

Late 1970s
Just-in-time (JIT) production
Early 1980s pioneered by the Japanese
Mid 1980s Service quality and productivity
Total quality management Early 1990s
(TQM) and Quality Six-sigma quality
certification programs Mid 1990s Supply chain
Business process management (SCM)
Late 1990s
reengineering (BPR)
Electronic commerce
Early 2000s Service science

Mid 2010s
Business analytics

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Current Issues in OSCM
 Coordinating relationships between members of SC
 Optimizing global network of suppliers, producers,
and distributors
 Managing customer touch points
 Raising awareness of OSCM as a competitive
weapon
 Sustainability and triple bottom line

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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 your
customer

Value

• The attractiveness of a product relative to its cost

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Efficiency and Wall Street


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 Efficiency and Wall Street
 A Comparison of Automobile Companies
General
Toyota INDUSTR
Efficiency Measure Motors Ford (F) Nissan
(TM) Y
(GM)
Income per $ 13,694 $ 25,075 $ 39,982 $ 4,044 $ 17,545
employee
Revenue (or sales)
per employee $ 756,669 $ 671,248 $ 786,305 $ 607,044 $ 550,751

Receivables
12.8 16.7 17.7 2.4 10.8
Turnover
Inventory Turnover 12.2 10.7 19.9 7.9 9.5
Asset Turnover 0.7 1.0 0.7 0.7 0.8

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