OPERATIONS &
SUPPLY CHAIN
Course 17629 – Bachelor’s in Management and Technology
Fernando Alfayate Fernández
2023/2024
,Tabla de contenido
1. INTRODUCTION TO OPERATIONS MANAGEMENT ................................................................................................... 3
1.1 GOODS-SERVICE CONTINUUM...................................................................................................................... 3
1.2 OPERATIONS MANAGEMENT ....................................................................................................................... 3
1.3 SUPPLY CHAIN MANAGEMENT ..................................................................................................................... 3
1.4 MEASURES TO TAKE DECISIONS .................................................................................................................... 3
1.5 COMPETITIVE MEASURES .............................................................................................................................. 4
2. STRATEGIC OPERATIONS DECISIONS ........................................................................................................................ 5
2.1 PUSH/PULL SUPPLY CHAIN STRATEGIES ........................................................................................................ 5
2.2 PRODUCTION STRATEGIES ............................................................................................................................. 5
2.3 STUDY CASE: INDITEX (ZARA)......................................................................................................................... 7
2.4 KEY ISSUES IN PROCUREMENT ....................................................................................................................... 7
3. PROJECT MANAGEMENT .......................................................................................................................................... 9
3.1 ELEMENTS OF A PROJECT .............................................................................................................................. 9
3.2 PROJECT SCHEDULING TECHNIQUES ...........................................................................................................10
3.3 OTHER CONSIDERATIONS ............................................................................................................................12
4. FORECASTING .........................................................................................................................................................14
4.1 INTRODUCTION: CHARACTERISTICS, COMPONENTS & METHODS ..............................................................14
4.2 BEHAVIOURS & COMPONENTS OF DEMAND ..............................................................................................14
4.3 STEPS IN FORECASTING ...............................................................................................................................15
4.4 MOVING AVERAGE ......................................................................................................................................15
4.5 EXPONENTIAL SMOOTHING.........................................................................................................................16
4.6 TREND-CORRECTED EXPONENTIAL SMOOTHING (HOLT´S MODEL) ............................................................16
4.7 MEASURES OF FORECAST ERROR ................................................................................................................17
4.8 TREND AND SEASONALITY CORRECTED EXPONENTIAL SMOOTHING (WINTER´S MODEL) ........................17
4.9 METHODS OF FORECASTING .......................................................................................................................18
4.10 QUALITATIVE METHODS OF FORECASTING .................................................................................................18
4.11 METHODS OF FORECASTING .......................................................................................................................18
4.12 CAUSAL (ASSOCIATIVE) FORECASTING ........................................................................................................19
5. PROCESS ANALYSIS .................................................................................................................................................20
5.1 WHAT IS A PROCESS? ...................................................................................................................................20
5.2 PROCESS ANALYSIS ......................................................................................................................................20
5.3 PERFORMANCE MEASURES .........................................................................................................................20
5.4 WHAT IS A BOTTLENECK? ............................................................................................................................21
5.5 IMPLIED UTILIZATION ..................................................................................................................................21
5.6 IMBALANCED UTILIZATION ..........................................................................................................................22
5.7 EFFECT OF BATCH SIZE .................................................................................................................................22
5.8 DIRECT LABOR CONTENT .............................................................................................................................23
6. STATISTICAL PROCESS CONTROL ............................................................................................................................24
6.1 DEFINITION & VARIABILITY ..........................................................................................................................24
6.2 CONTROL CHARTS ........................................................................................................................................24
6.3 PROCESS CAPABILITY ...................................................................................................................................26
7. STRATEGIC DECISIONS ON PROCESSES ...................................................................................................................28
7.1 CAPACITY .....................................................................................................................................................28
7.2 MATCHING CAPACITY & DEMAND ..............................................................................................................29
7.3 RISK POOLING STRATEGIES ..........................................................................................................................30
8. TOTAL QUALITY MANAGEMENT .............................................................................................................................33
8.1 CONTINOUS IMPROVEMENT .......................................................................................................................33
8.2 SIX SIGMA ....................................................................................................................................................33
Fernando Alfayate Fernández –
, 8.3 EMPLOYEE EMPOWERMENT .......................................................................................................................33
8.4 BENCHMARKING ..........................................................................................................................................34
8.5 JUST IN TIME ................................................................................................................................................34
8.6 TAGUCHI CONCEPTS ....................................................................................................................................34
8.7 TOOLS FOR TQM ..........................................................................................................................................34
9. LEAN OPERATIONS..................................................................................................................................................37
9.1 THE SEVEN DEADLY WASTES (TIMWOOD) ..................................................................................................37
9.2 JIT SYSTEM. SUMMARY ...............................................................................................................................38
9.3 CONCLUSION................................................................................................................................................39
10. SUPPLY CHAIN MANAGEMENT ...........................................................................................................................40
10.1 SUPPLY CHAIN FLOWS .................................................................................................................................40
10.2 SUPPLY CHAIN DECISIONS ...........................................................................................................................40
10.3 DECISION PHASES OF A SUPPLY CHAIN .......................................................................................................40
10.4 NETWORK DESIGN .......................................................................................................................................41
10.5 LOCATION DECISIONS ..................................................................................................................................42
11. CIRCULAR ECONOMY ..........................................................................................................................................44
11.1 HP CASE (RETURNS PROCESS) ......................................................................................................................44
11.2 TYPES OF RETURNS SUPPLY CHAIN (continued HP case).............................................................................44
11.3 LEGISLATION ................................................................................................................................................45
11.4 CORPORATE SOCIAL RESPONSIBILITY ..........................................................................................................46
12. HUMANITARIAN OPERATIONS ...........................................................................................................................47
12.1 DISASTERS ....................................................................................................................................................47
12.2 SUPPLY SOURCES .........................................................................................................................................47
12.3 PLAYERS & STAKEHOLDERS .........................................................................................................................48
12.4 WALMART ....................................................................................................................................................48
12.5 NON-GOVERNMENTAL ORGANIZATIONS & SCM ........................................................................................49
Fernando Alfayate Fernández –
, 1. INTRODUCTION TO OPERATIONS MANAGEMENT
1.1 GOODS-SERVICE CONTINUUM
Tangibility is what differentiates goods and services.
What is Operations Management? → The COO´s roles are divided into two branches: how to handle resources,
transform them to generate an output being efficient in terms of business operations; and in charge to meet
customer requirements.
• Excessive supply
• Excessive demand
1.2 OPERATIONS MANAGEMENT
Management of systems/processes that create goods and/or provide services. See mind map of input to
output.
1.3 SUPPLY CHAIN MANAGEMENT
Sequence of activities and organizations involved in producing and delivering a good or service. Manufacturer
-> Distributor -> Wholesaler -> Retailer. Inventory management is present in all four.
The Supply Chain is divided into four areas: Supply (Raw material); Production (Manufacturing); Inventory
(Warehouse); Sales [indirect & direct] (Wholesaler and Retailer).
1.4 MEASURES TO TAKE DECISIONS
1) Absolute measures
a. Most relevant
b. Revenues, costs, operating income and expense, net income
2) Relative measures
a. Comparing two aspects
Fernando Alfayate Fernández –
SUPPLY CHAIN
Course 17629 – Bachelor’s in Management and Technology
Fernando Alfayate Fernández
2023/2024
,Tabla de contenido
1. INTRODUCTION TO OPERATIONS MANAGEMENT ................................................................................................... 3
1.1 GOODS-SERVICE CONTINUUM...................................................................................................................... 3
1.2 OPERATIONS MANAGEMENT ....................................................................................................................... 3
1.3 SUPPLY CHAIN MANAGEMENT ..................................................................................................................... 3
1.4 MEASURES TO TAKE DECISIONS .................................................................................................................... 3
1.5 COMPETITIVE MEASURES .............................................................................................................................. 4
2. STRATEGIC OPERATIONS DECISIONS ........................................................................................................................ 5
2.1 PUSH/PULL SUPPLY CHAIN STRATEGIES ........................................................................................................ 5
2.2 PRODUCTION STRATEGIES ............................................................................................................................. 5
2.3 STUDY CASE: INDITEX (ZARA)......................................................................................................................... 7
2.4 KEY ISSUES IN PROCUREMENT ....................................................................................................................... 7
3. PROJECT MANAGEMENT .......................................................................................................................................... 9
3.1 ELEMENTS OF A PROJECT .............................................................................................................................. 9
3.2 PROJECT SCHEDULING TECHNIQUES ...........................................................................................................10
3.3 OTHER CONSIDERATIONS ............................................................................................................................12
4. FORECASTING .........................................................................................................................................................14
4.1 INTRODUCTION: CHARACTERISTICS, COMPONENTS & METHODS ..............................................................14
4.2 BEHAVIOURS & COMPONENTS OF DEMAND ..............................................................................................14
4.3 STEPS IN FORECASTING ...............................................................................................................................15
4.4 MOVING AVERAGE ......................................................................................................................................15
4.5 EXPONENTIAL SMOOTHING.........................................................................................................................16
4.6 TREND-CORRECTED EXPONENTIAL SMOOTHING (HOLT´S MODEL) ............................................................16
4.7 MEASURES OF FORECAST ERROR ................................................................................................................17
4.8 TREND AND SEASONALITY CORRECTED EXPONENTIAL SMOOTHING (WINTER´S MODEL) ........................17
4.9 METHODS OF FORECASTING .......................................................................................................................18
4.10 QUALITATIVE METHODS OF FORECASTING .................................................................................................18
4.11 METHODS OF FORECASTING .......................................................................................................................18
4.12 CAUSAL (ASSOCIATIVE) FORECASTING ........................................................................................................19
5. PROCESS ANALYSIS .................................................................................................................................................20
5.1 WHAT IS A PROCESS? ...................................................................................................................................20
5.2 PROCESS ANALYSIS ......................................................................................................................................20
5.3 PERFORMANCE MEASURES .........................................................................................................................20
5.4 WHAT IS A BOTTLENECK? ............................................................................................................................21
5.5 IMPLIED UTILIZATION ..................................................................................................................................21
5.6 IMBALANCED UTILIZATION ..........................................................................................................................22
5.7 EFFECT OF BATCH SIZE .................................................................................................................................22
5.8 DIRECT LABOR CONTENT .............................................................................................................................23
6. STATISTICAL PROCESS CONTROL ............................................................................................................................24
6.1 DEFINITION & VARIABILITY ..........................................................................................................................24
6.2 CONTROL CHARTS ........................................................................................................................................24
6.3 PROCESS CAPABILITY ...................................................................................................................................26
7. STRATEGIC DECISIONS ON PROCESSES ...................................................................................................................28
7.1 CAPACITY .....................................................................................................................................................28
7.2 MATCHING CAPACITY & DEMAND ..............................................................................................................29
7.3 RISK POOLING STRATEGIES ..........................................................................................................................30
8. TOTAL QUALITY MANAGEMENT .............................................................................................................................33
8.1 CONTINOUS IMPROVEMENT .......................................................................................................................33
8.2 SIX SIGMA ....................................................................................................................................................33
Fernando Alfayate Fernández –
, 8.3 EMPLOYEE EMPOWERMENT .......................................................................................................................33
8.4 BENCHMARKING ..........................................................................................................................................34
8.5 JUST IN TIME ................................................................................................................................................34
8.6 TAGUCHI CONCEPTS ....................................................................................................................................34
8.7 TOOLS FOR TQM ..........................................................................................................................................34
9. LEAN OPERATIONS..................................................................................................................................................37
9.1 THE SEVEN DEADLY WASTES (TIMWOOD) ..................................................................................................37
9.2 JIT SYSTEM. SUMMARY ...............................................................................................................................38
9.3 CONCLUSION................................................................................................................................................39
10. SUPPLY CHAIN MANAGEMENT ...........................................................................................................................40
10.1 SUPPLY CHAIN FLOWS .................................................................................................................................40
10.2 SUPPLY CHAIN DECISIONS ...........................................................................................................................40
10.3 DECISION PHASES OF A SUPPLY CHAIN .......................................................................................................40
10.4 NETWORK DESIGN .......................................................................................................................................41
10.5 LOCATION DECISIONS ..................................................................................................................................42
11. CIRCULAR ECONOMY ..........................................................................................................................................44
11.1 HP CASE (RETURNS PROCESS) ......................................................................................................................44
11.2 TYPES OF RETURNS SUPPLY CHAIN (continued HP case).............................................................................44
11.3 LEGISLATION ................................................................................................................................................45
11.4 CORPORATE SOCIAL RESPONSIBILITY ..........................................................................................................46
12. HUMANITARIAN OPERATIONS ...........................................................................................................................47
12.1 DISASTERS ....................................................................................................................................................47
12.2 SUPPLY SOURCES .........................................................................................................................................47
12.3 PLAYERS & STAKEHOLDERS .........................................................................................................................48
12.4 WALMART ....................................................................................................................................................48
12.5 NON-GOVERNMENTAL ORGANIZATIONS & SCM ........................................................................................49
Fernando Alfayate Fernández –
, 1. INTRODUCTION TO OPERATIONS MANAGEMENT
1.1 GOODS-SERVICE CONTINUUM
Tangibility is what differentiates goods and services.
What is Operations Management? → The COO´s roles are divided into two branches: how to handle resources,
transform them to generate an output being efficient in terms of business operations; and in charge to meet
customer requirements.
• Excessive supply
• Excessive demand
1.2 OPERATIONS MANAGEMENT
Management of systems/processes that create goods and/or provide services. See mind map of input to
output.
1.3 SUPPLY CHAIN MANAGEMENT
Sequence of activities and organizations involved in producing and delivering a good or service. Manufacturer
-> Distributor -> Wholesaler -> Retailer. Inventory management is present in all four.
The Supply Chain is divided into four areas: Supply (Raw material); Production (Manufacturing); Inventory
(Warehouse); Sales [indirect & direct] (Wholesaler and Retailer).
1.4 MEASURES TO TAKE DECISIONS
1) Absolute measures
a. Most relevant
b. Revenues, costs, operating income and expense, net income
2) Relative measures
a. Comparing two aspects
Fernando Alfayate Fernández –
