,Chapter 01 - Operations and Supply Chain Management
CHAPTER 1
OPERATIONS AND SUPPLY CHAIN MANAGEMENT
Discussion Questions
1. Using Exhibit 1.3 as a model, describe the source-make-deliver-return relationships in the
following systems:
a. An airline
Source: Aircraft manufacturer, in-flight food, repair parts, computer systems
Make: Aircraft and flight crew scheduling, ground services provided at airports, aircraft
maintenance and repair
Deliver: Outbound and arriving passenger service, baggage handling
Return: Resolve any post-service issues such as lost or damaged luggage
b. An automobile manufacturer
Source: Suppliers of components and raw materials
Make: Manufacturing of vehicles and components or subassemblies to be sold as spare
parts
Deliver: Delivery to and sales from dealerships, delivery of spare parts to the wholesale
system
Return: Warranty and recall repairs, trade-ins
c. A hospital
Source: Medical supplies, cleaning services, disposal services, food services, qualified
personnel
Make: Inpatient rooms, outpatient clinics, emergency room, operating rooms
Deliver: Scheduling patients, providing treatment, ambulance service, family counseling
Return: Billing errors, follow up visits
d. An insurance company
Source: Supplies needed for the office, underwriters, legal authority to operate
Make: Establish policy guidelines and pricing, field agent/representative and facility
network, develop Internet service capabilities, establish preferred vehicle repair service
network
Deliver: Meet with and advise clients, write policies, process and pay claims
Return: refund of overpayments
2. Define the service package of your college or university. What is its strongest element? What is its
weakest one?
The categories with examples are:
Supporting facility - location, buildings, labs, parking
Facilitating goods – class schedules, computers, books, chalk
1-1
, Chapter 16 - Sales and Lease Contracts: Performance, Warranties, and Remedies
Explicit services – classes with qualified instructors, placement offices
Implicit services – status and reputation (e.g., Ivy League schools)
At Indiana University and the University of Southern California, among their strongest
elements are their business schools and their Operations Management programs (of course).
Both also have very dedicated alumni networks. A weak element of Indiana University is its
weak football program; for USC, weak elements are on-campus parking and housing.
3. What service industry has impressed you the most with its innovativeness?
Our vote goes to cruise lines which have introduced such onboard innovations as wave
machines for belly boarding and rock climbing walls, as well as all sorts of other amenities to
keep cruisers involved. The industry is doing record business as well.
Some of the standout companies in less innovative industries are Bank of America (has a
formalized research program to try out new customer services/amenities such as video screens
in next to teller lines), Intuit (e.g., putting Quicken money management software online), Ikea,
JetBlue Airlines, and Progressive Insurance (discussed later in the book).
4. What is product-service bundling and what are the benefits to customers?
Product-service bundling is adding Value-added services to a firm’s product offerings to create
more value for the customer. This provides benefits in two areas. First, this differentiates the
organization from the competition. Secondly, these services tie customers to the organization
in a positive way. Alternatively, bundling can also involve adding products to a service, for
example, adding the sale of convenience items and snacks at a hotel.
5. What is the difference between a service and a good?
A service is an intangible process (you can’t hold it in your hands), while a good is the physical
output of a process.
6. Look at the job postings at http://www.indeed.com and evaluate the opportunities for an
OSM major with several years of experience.
There are pages and pages of these when you do a search on operations supply chain
management. Here are some examples:
Global Active Ingredient Supply Planner
FMC Corporation
US - PA - Philadelphia
This is your opportunity to join the Agricultural Products Group (APG) and work on the team
responsible for global active ingredient planning. You'll serve as a central Supply Planner
working in tandem …
Purchasing Manager (Buyer)
Texas Dow Employees Credit Union (TDECU)
US - TX - Lake Jackson - Nearest Metro area - South Houston
1-2
, Chapter 01 - Operations and Supply Chain Management
Education Accredited university degree in Business or Marketing with certification in
Purchasing, Inventory Management, or Logistics. Accredited Purchasing Practitioner (APP) or
Certified Purchasing …
Product Line Manager
Cintas Corporation
US - OH - Mason
High School diploma or GED required, 4-year degree preferred Knowledge of and experience
using Internet and Microsoft Office (Word, Excel, PowerPoint, and Email) 3 years management
experience preferred …
Director Purchasing
Legendary Baking
US - CO - Denver
CERTIFICATIONS & LICENSES • Valid Driver’s License and car insurance. • Certified Purchasing
Manager certification (C.P.M.) preferred. • Certified Food Purchasing Manager …
Process Improvement Manager
ARAMARK Corporation
US - TX - Houston
Bachelor's Degree required. Technical Engineering discipline within Industrial, Mechanical,
Chemical, or Food Operations strongly preferred. • Minimum 5 years Lean manufacturing
experience coupled …
7. Recent outsourcing of parts and services that had previously been produced internally is
addressed by which current issue facing operations and supply management today?
The coordination of relationships between mutually supportive but separate organizations.
8. What factors account for the resurgence of interest in OSCM today?
With companies facing competition on a global scale, and ever-advancing manufacturing and
information technologies, firms realize the competitive advantage their OSCM functions can
provide if properly managed. Many have found that the same old way of doing business leaves
them unable to compete successfully.
9. As the field of OSCM has advanced, new concepts have been applied to help companies
compete in several ways, including the advertisement of the firm’s products or services. One
recent concept to gain the attention of companies is promoting sustainability. Discuss how
you have seen the idea of sustainability used by companies to advertise their goods or
services.
There of course will be several examples that students will bring up, though they may need
some prodding to jog their memories. Some examples to start with might be IBM’s “I’m an
IBMer” campaign where they advertise how they are “building a smarter planet.” Bottled
water manufacturers have reduced the amount of plastic used in many of their products, thus
saving production and distribution costs, but also allowing them to advertise how the new
bottles are better for the environment because they result in less waste.
1-3
CHAPTER 1
OPERATIONS AND SUPPLY CHAIN MANAGEMENT
Discussion Questions
1. Using Exhibit 1.3 as a model, describe the source-make-deliver-return relationships in the
following systems:
a. An airline
Source: Aircraft manufacturer, in-flight food, repair parts, computer systems
Make: Aircraft and flight crew scheduling, ground services provided at airports, aircraft
maintenance and repair
Deliver: Outbound and arriving passenger service, baggage handling
Return: Resolve any post-service issues such as lost or damaged luggage
b. An automobile manufacturer
Source: Suppliers of components and raw materials
Make: Manufacturing of vehicles and components or subassemblies to be sold as spare
parts
Deliver: Delivery to and sales from dealerships, delivery of spare parts to the wholesale
system
Return: Warranty and recall repairs, trade-ins
c. A hospital
Source: Medical supplies, cleaning services, disposal services, food services, qualified
personnel
Make: Inpatient rooms, outpatient clinics, emergency room, operating rooms
Deliver: Scheduling patients, providing treatment, ambulance service, family counseling
Return: Billing errors, follow up visits
d. An insurance company
Source: Supplies needed for the office, underwriters, legal authority to operate
Make: Establish policy guidelines and pricing, field agent/representative and facility
network, develop Internet service capabilities, establish preferred vehicle repair service
network
Deliver: Meet with and advise clients, write policies, process and pay claims
Return: refund of overpayments
2. Define the service package of your college or university. What is its strongest element? What is its
weakest one?
The categories with examples are:
Supporting facility - location, buildings, labs, parking
Facilitating goods – class schedules, computers, books, chalk
1-1
, Chapter 16 - Sales and Lease Contracts: Performance, Warranties, and Remedies
Explicit services – classes with qualified instructors, placement offices
Implicit services – status and reputation (e.g., Ivy League schools)
At Indiana University and the University of Southern California, among their strongest
elements are their business schools and their Operations Management programs (of course).
Both also have very dedicated alumni networks. A weak element of Indiana University is its
weak football program; for USC, weak elements are on-campus parking and housing.
3. What service industry has impressed you the most with its innovativeness?
Our vote goes to cruise lines which have introduced such onboard innovations as wave
machines for belly boarding and rock climbing walls, as well as all sorts of other amenities to
keep cruisers involved. The industry is doing record business as well.
Some of the standout companies in less innovative industries are Bank of America (has a
formalized research program to try out new customer services/amenities such as video screens
in next to teller lines), Intuit (e.g., putting Quicken money management software online), Ikea,
JetBlue Airlines, and Progressive Insurance (discussed later in the book).
4. What is product-service bundling and what are the benefits to customers?
Product-service bundling is adding Value-added services to a firm’s product offerings to create
more value for the customer. This provides benefits in two areas. First, this differentiates the
organization from the competition. Secondly, these services tie customers to the organization
in a positive way. Alternatively, bundling can also involve adding products to a service, for
example, adding the sale of convenience items and snacks at a hotel.
5. What is the difference between a service and a good?
A service is an intangible process (you can’t hold it in your hands), while a good is the physical
output of a process.
6. Look at the job postings at http://www.indeed.com and evaluate the opportunities for an
OSM major with several years of experience.
There are pages and pages of these when you do a search on operations supply chain
management. Here are some examples:
Global Active Ingredient Supply Planner
FMC Corporation
US - PA - Philadelphia
This is your opportunity to join the Agricultural Products Group (APG) and work on the team
responsible for global active ingredient planning. You'll serve as a central Supply Planner
working in tandem …
Purchasing Manager (Buyer)
Texas Dow Employees Credit Union (TDECU)
US - TX - Lake Jackson - Nearest Metro area - South Houston
1-2
, Chapter 01 - Operations and Supply Chain Management
Education Accredited university degree in Business or Marketing with certification in
Purchasing, Inventory Management, or Logistics. Accredited Purchasing Practitioner (APP) or
Certified Purchasing …
Product Line Manager
Cintas Corporation
US - OH - Mason
High School diploma or GED required, 4-year degree preferred Knowledge of and experience
using Internet and Microsoft Office (Word, Excel, PowerPoint, and Email) 3 years management
experience preferred …
Director Purchasing
Legendary Baking
US - CO - Denver
CERTIFICATIONS & LICENSES • Valid Driver’s License and car insurance. • Certified Purchasing
Manager certification (C.P.M.) preferred. • Certified Food Purchasing Manager …
Process Improvement Manager
ARAMARK Corporation
US - TX - Houston
Bachelor's Degree required. Technical Engineering discipline within Industrial, Mechanical,
Chemical, or Food Operations strongly preferred. • Minimum 5 years Lean manufacturing
experience coupled …
7. Recent outsourcing of parts and services that had previously been produced internally is
addressed by which current issue facing operations and supply management today?
The coordination of relationships between mutually supportive but separate organizations.
8. What factors account for the resurgence of interest in OSCM today?
With companies facing competition on a global scale, and ever-advancing manufacturing and
information technologies, firms realize the competitive advantage their OSCM functions can
provide if properly managed. Many have found that the same old way of doing business leaves
them unable to compete successfully.
9. As the field of OSCM has advanced, new concepts have been applied to help companies
compete in several ways, including the advertisement of the firm’s products or services. One
recent concept to gain the attention of companies is promoting sustainability. Discuss how
you have seen the idea of sustainability used by companies to advertise their goods or
services.
There of course will be several examples that students will bring up, though they may need
some prodding to jog their memories. Some examples to start with might be IBM’s “I’m an
IBMer” campaign where they advertise how they are “building a smarter planet.” Bottled
water manufacturers have reduced the amount of plastic used in many of their products, thus
saving production and distribution costs, but also allowing them to advertise how the new
bottles are better for the environment because they result in less waste.
1-3
