Les 1
Operations Management
What is operations management?
• The management of systems or processes that create goods and/or provide services.
Every aspect of business affects or is affected by operations. Many service jobs are closely related
to operations:
• Financial services.
• Marketing services.
• Accounting services.
• Information services.
3 S’es
Sustainablility (linked with supply chain)
Skills (decisions need to be made)
Services (supply is all about production but in Europe service industry is very important, wij
produceren niet veel zelf, we kopen het bij andere landen service)
Good or Service?
Goods are physical items that include raw materials, parts, subassemblies, and final products:
• Automobile.
• Computer.
• Oven.
• Shampoo.
Services are activities that provide some combination of time, location, form or psychological value:
• Air travel.
• Education.
• Haircut.
• Legal counsel.
• Good = tanglible
• Service = non tanglible
nuanceren: continuüm van producten die tss goed en service zitten
Supply Chain
A sequence of activities and businesses involved in producing and delivering a good or service:
• Suppliers.
• Manufacturer.
• Distributor.
• Retailer.
• (Final) customers.
there are always these 5 links, but one party can be more than one link
(vb. warme bakker is manufacturer, distributor and retailer)
Supply Chain Management
In the past, businesses did little to manage the supply chain beyond their own operations and
immediate suppliers, which led to numerous problems:
• Oscillating inventory levels.
• Inventory stock-outs.
• Late deliveries.
• Quality problems.
,Solution to these problems = working together, each party does 1 thing and makes sure they do this
is the best possible way more efficiency
Supply Chain in 2024…
Covid broke supply chains:
o Stay-at-home and reduced workforce availability. (supply)
o Border restrictions and lockdown measures. (delivery)
o Demand pattern fluctuations. (demand)
Reason: we are overproducing which is not a problem if the supply is high as long as supply is
matching demand there is no problem with the supply chain.
Problem during covid: there was a lot of demand for food etc. but the supply suddenly dropped.
On the other hand: supply of toilet paper remained the same, but the demand rocketed in the
covid pandemic
Covid redesigned supply chains:
1. Shift from linear supply chains to more integrated networks.
o Risk of indispensable parts of the global supply chain… (vb. chips)
2. More focused on environmental and sustainability goals.
3. Race is on for digital enablement and automation.
4. Shortening supply chains
= Not less parties, not shorter in distance but concentration of parties in the supply chain
(instead of 5 we have 2 or 3)
o Working with a more concentrated group of suppliers, fostering stronger
relationships and collaboration cheaper if company does more by itself +
more control over the supply chain
o Consisting of local or regional suppliers.
o Strengthening food security and lower carbon emissions need for more
sustainability.
(Vb. Ipv vis te vangen, nr Marokko te sturen om te kuisen en terug te sturen om hier te verkopen,
gaat men hier de vis kuisen en snijden, en verkopen op de lokale markt)
Ander voorbeeld:
Probleem met oorlog in Oekraïne: de supply stopte de hele supply chain ligt stil
Daarom proberen we ervoor te zorgen dat we niet afhankelijk zijn van 1 supplier maar meerdere,
zodat als 1 wegvalt er nog steeds supply is = integrated
Logistics and Supply Chain Management
Difference between logistics and Supply Chains:
• Both are sometimes used interchangeably, or supply chain management is the “new”
logistics? NO
• Logistics
• Refers to the movement, storage, and flow of goods, services and information within
the overall supply chain.
• Activities – transportation, warehousing, packaging and more – that move and
position inventory.
• Where, how and when the customer want the goods or services
,!!! logistics is a (key) activity within the supply chain
Supply chain management is logistics + production so it is at some point the same
The Transformation Process
Feedback = Measurements taken at various
points in the transformation process.
Control = The comparison of feedback against
previously established standards to determine if
corrective action is needed.
!! Missing part: trash (not every input has useful output)
Decision-making process
Most operations decisions involve many alternatives that can have quite different impacts on costs or
profits.
Typical operations decisions include:
• What: What resources are needed, and in what amounts?
• When: When will each resource be needed? When should the work be scheduled? When
should materials and other supplies be ordered?
• Where: Where will the work be done?
• How: How will the product or service be designed? How will the work be done? How will
resources be allocated?
• Who: Who will do the work?
Understanding Models
We need mathematical models to help with the decision making
Benefits
1. Generally easier to use and less expensive than dealing with the real system.
2. Increase understanding of the problem.
3. Enable managers to analyze what-if questions.
Limitations
1. Quantitative information may be emphasized at the expense of qualitative information.
2. Models may be incorrectly applied and the results misinterpreted.
3. The use of models does not guarantee good decisions
, Les 2
Why do some businesses fail?
1. Neglecting operations strategy.
2. Failing to consider customer wants and needs based on
historical and other data.
3. Failing to take advantage of strengths and opportunities
and/or failing to recognize competitive threats.
4. Too much emphasis on short-term financial performance
at the expense of R&D.
5. Too much emphasis on product and service design and
not enough on process design and improvement.
6. Neglecting investments in capital and human resources.
7. Failing to establish good internal communications and cooperation.
Competitiveness
How effectively a business meets the needs of customers relative to others that offer similar goods or
services.
• Combination of price, delivery time and differentiation (operations strategy)
Organizations compete through some combination of their marketing and operations functions.
• What do customers want? = marketing
• How can these customer needs best be satisfied? = operations
Business competes using operations: better quality, higher productivity, lower costs…
Strategy
Hierarchical structure:
• Mission.
• Goals.
• Organizational strategies.
• Functional strategies.
• Tactics.
• Operations.
Interconnected between functions and top-down
If the org. strategy is clearly defined, the
operating strategies will be overlapping and
contribute.
Mission (top)
Mission:
• The reason for an organization’s existence.
Mission statement:
• States the purpose of the organization.
• The mission statement should answer the question of “What business are we in?”
not for external use: only people working at the company need to know the mission
Operations Management
What is operations management?
• The management of systems or processes that create goods and/or provide services.
Every aspect of business affects or is affected by operations. Many service jobs are closely related
to operations:
• Financial services.
• Marketing services.
• Accounting services.
• Information services.
3 S’es
Sustainablility (linked with supply chain)
Skills (decisions need to be made)
Services (supply is all about production but in Europe service industry is very important, wij
produceren niet veel zelf, we kopen het bij andere landen service)
Good or Service?
Goods are physical items that include raw materials, parts, subassemblies, and final products:
• Automobile.
• Computer.
• Oven.
• Shampoo.
Services are activities that provide some combination of time, location, form or psychological value:
• Air travel.
• Education.
• Haircut.
• Legal counsel.
• Good = tanglible
• Service = non tanglible
nuanceren: continuüm van producten die tss goed en service zitten
Supply Chain
A sequence of activities and businesses involved in producing and delivering a good or service:
• Suppliers.
• Manufacturer.
• Distributor.
• Retailer.
• (Final) customers.
there are always these 5 links, but one party can be more than one link
(vb. warme bakker is manufacturer, distributor and retailer)
Supply Chain Management
In the past, businesses did little to manage the supply chain beyond their own operations and
immediate suppliers, which led to numerous problems:
• Oscillating inventory levels.
• Inventory stock-outs.
• Late deliveries.
• Quality problems.
,Solution to these problems = working together, each party does 1 thing and makes sure they do this
is the best possible way more efficiency
Supply Chain in 2024…
Covid broke supply chains:
o Stay-at-home and reduced workforce availability. (supply)
o Border restrictions and lockdown measures. (delivery)
o Demand pattern fluctuations. (demand)
Reason: we are overproducing which is not a problem if the supply is high as long as supply is
matching demand there is no problem with the supply chain.
Problem during covid: there was a lot of demand for food etc. but the supply suddenly dropped.
On the other hand: supply of toilet paper remained the same, but the demand rocketed in the
covid pandemic
Covid redesigned supply chains:
1. Shift from linear supply chains to more integrated networks.
o Risk of indispensable parts of the global supply chain… (vb. chips)
2. More focused on environmental and sustainability goals.
3. Race is on for digital enablement and automation.
4. Shortening supply chains
= Not less parties, not shorter in distance but concentration of parties in the supply chain
(instead of 5 we have 2 or 3)
o Working with a more concentrated group of suppliers, fostering stronger
relationships and collaboration cheaper if company does more by itself +
more control over the supply chain
o Consisting of local or regional suppliers.
o Strengthening food security and lower carbon emissions need for more
sustainability.
(Vb. Ipv vis te vangen, nr Marokko te sturen om te kuisen en terug te sturen om hier te verkopen,
gaat men hier de vis kuisen en snijden, en verkopen op de lokale markt)
Ander voorbeeld:
Probleem met oorlog in Oekraïne: de supply stopte de hele supply chain ligt stil
Daarom proberen we ervoor te zorgen dat we niet afhankelijk zijn van 1 supplier maar meerdere,
zodat als 1 wegvalt er nog steeds supply is = integrated
Logistics and Supply Chain Management
Difference between logistics and Supply Chains:
• Both are sometimes used interchangeably, or supply chain management is the “new”
logistics? NO
• Logistics
• Refers to the movement, storage, and flow of goods, services and information within
the overall supply chain.
• Activities – transportation, warehousing, packaging and more – that move and
position inventory.
• Where, how and when the customer want the goods or services
,!!! logistics is a (key) activity within the supply chain
Supply chain management is logistics + production so it is at some point the same
The Transformation Process
Feedback = Measurements taken at various
points in the transformation process.
Control = The comparison of feedback against
previously established standards to determine if
corrective action is needed.
!! Missing part: trash (not every input has useful output)
Decision-making process
Most operations decisions involve many alternatives that can have quite different impacts on costs or
profits.
Typical operations decisions include:
• What: What resources are needed, and in what amounts?
• When: When will each resource be needed? When should the work be scheduled? When
should materials and other supplies be ordered?
• Where: Where will the work be done?
• How: How will the product or service be designed? How will the work be done? How will
resources be allocated?
• Who: Who will do the work?
Understanding Models
We need mathematical models to help with the decision making
Benefits
1. Generally easier to use and less expensive than dealing with the real system.
2. Increase understanding of the problem.
3. Enable managers to analyze what-if questions.
Limitations
1. Quantitative information may be emphasized at the expense of qualitative information.
2. Models may be incorrectly applied and the results misinterpreted.
3. The use of models does not guarantee good decisions
, Les 2
Why do some businesses fail?
1. Neglecting operations strategy.
2. Failing to consider customer wants and needs based on
historical and other data.
3. Failing to take advantage of strengths and opportunities
and/or failing to recognize competitive threats.
4. Too much emphasis on short-term financial performance
at the expense of R&D.
5. Too much emphasis on product and service design and
not enough on process design and improvement.
6. Neglecting investments in capital and human resources.
7. Failing to establish good internal communications and cooperation.
Competitiveness
How effectively a business meets the needs of customers relative to others that offer similar goods or
services.
• Combination of price, delivery time and differentiation (operations strategy)
Organizations compete through some combination of their marketing and operations functions.
• What do customers want? = marketing
• How can these customer needs best be satisfied? = operations
Business competes using operations: better quality, higher productivity, lower costs…
Strategy
Hierarchical structure:
• Mission.
• Goals.
• Organizational strategies.
• Functional strategies.
• Tactics.
• Operations.
Interconnected between functions and top-down
If the org. strategy is clearly defined, the
operating strategies will be overlapping and
contribute.
Mission (top)
Mission:
• The reason for an organization’s existence.
Mission statement:
• States the purpose of the organization.
• The mission statement should answer the question of “What business are we in?”
not for external use: only people working at the company need to know the mission
