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Chapter 1

Introduction to the Field

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What is Operations and Supply Management?

Operations and Supply Chain

Management (OM) is defined
as the design, operation, and
improvement of the systems
that create and deliver the
firm’s primary products and
services

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Why Study Operations Management?

Systematic Approach
to Org. Processes

Business Education Operations Career Opportunities

Management

Cross-Functional
Applications

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What is a Transformation Process?

Defined

Transformation
Input Process Output
(Value Adding)

A transformation process is
defined as a user of resources to
transform inputs into some
desired outputs
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Transformations

• Physical--manufacturing
• Locational--transportation
• Exchange--retailing
• Storage--warehousing
• Physiological--health care
• Informational--telecommunications

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Operations and Supply Management

Supply Chain Processes

Manufacturing
Processes
Sourcing Distribution
Processes Processes
Logistics Logistics
Processes Processes

Service
Processes

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What is a Service and What is a Good?

• “If you drop it on your foot, it

won’t hurt you.” (Good or
service?)

• “Services never include goods

and goods never include
services.” (True or false?)

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What about McDonald’s?

• Service or Manufacturing?

• The company certainly

manufactures tangible products

• Why then would we consider

McDonald’s a service business?

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Front and Back Office

Back Office

Service Provider

Front Office

Customer

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Core “Factory Services”

• Quality

• Flexibility – related to cost, how effective you are

or economic scale.

• Speed

• Price (or production cost)

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Value-Added Factory Services

• Information

• Problem Solving

• Sales Support

• Field Support

FAE = field aid engineers

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Development of OM as a Field

Scientific Computers TQM & Quality

Management (MRP) Certification

Moving Assembly JIT/TQC & Business Process

Line Automation Reengineering

Hawthorne Manufacturing Electronic

Studies Strategy Enterprise

Operations Service Quality Global Supply

Research and Productivity Chain Mgmt.

Historical OM's Emergence

Underpinnings as a Field
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Current Issues in OM

• Coordinate the relationships between

mutually supportive but separate
organizations.
• Developing flexible production systems to
enable mass customization of products
and services.
• Optimizing global supplier, production, and
distribution networks.

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Current Issues in OM (cont’d)

• Increased co-production of goods and

services
• Managing the customers experience
during the service encounter
• Raising the awareness of operations
as a significant competitive weapon

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