Operations management & logistics
Hoorcollege 1
Operations refer to the transformation of inputs (material,
human and asset resources) into outputs (products), they
involve the workflow ordering of activities to produce the
product. Functional-based workflow in the technical system →
The materials inputs and products outputs need to be
physically moved and warehoused and stored: logistics.
Supply chain refers to the processes that move information
and material to and from firms, ranging from raw materials to consumers. Becomes
important when taking control of the logistical processes.
Operations and logistics are considered primary (production process) activities as part of a
value chain within an organization.
A supply chain may consist of multiple value chains.
The success of producing at low costs while meeting (mass) customer demand depends on
clever integration of:
- A great operations-related strategy
- The process to produce and deliver products and services
- Analytics to support the decisions needed to manage the firm
The design of transformation processes is guided by basic principles:
- How different types of processes are organized
- How to determine the capacity of a process
- How long it should take to make a unit
- How the quality of a process is monitored
- How information is used to make decisions
,But the improvement of the processes and systems that create and deliver the firm’s
primary products and services is also part of OSCM
• Change of OSC strategies
• New production technologies and modes of transport
• Optimizing the processes of production and logistics activities
• Improvements in data analytics and how to use them in decision making
Designing and improving operations often requires changes in workflow ordering and
organizational structure.
Batch-based → the process is set to make one type of product, and is changed when another
product needs to be produced
Operations and supply chain processes are interlinked so require analytics (based on
metrics) to steer
Producing and delivering goods is different compared with services
,The various OSC processes reflect different job positions and career perspectives, they have
become popular through time.
, Current issues in operations and supply chain management
• Coordinating the relationships between mutually supportive but separate
organizations
• Optimizing global supplier, production, and distribution networks
• Managing customer touch points
• Raising senior management awareness of OSCM as a significant competitive weapon
• Uncertainty in global tariffs and regulations
• Difficulty in hiring and keeping employees
• Adapting to change in business technology and infrastructure
• Sustainability and the triple bottom line (Life cycle analysis)
• Servitization, digitalization, BIG data, Artificial Intelligence (Industry 4.0)
Evaluating operations and supply chain processes on efficiency and effectiveness.
• Efficiency: doing something at the lowest possible cost (is doing things right)
• Effectiveness: doing the right things to create the most value for the company
• Value: quality divided by price
• Quality: the attractiveness of the product, considering its features and durability
• Price: costs plus margin
• So, what is customer value?
From a marketing point of view, customer value is the benefits perceived by the customer
minus the costs of acquisition and use of a product
Use efficiency ratios to benchmark over time with self and with competitors
Summary of chapter 1
• Various processes are associated with OSCM and used to implement the strategy of
the firm
• Analytics are used to support the ongoing decisions needed to manage the firm
• OSCM hands-on-people specialize in managing the production and delivery of goods
and services
• Firms face increasing pressure on mass customization and quality in combination
with efficiency and speed that is reflected in OSCM
• Currently, supply chain control, servitization, sustainability and Industry 4.0 are of
paramount importance
• Efficiency ratio’s help benchmarking firm practices to meet goals
Hoorcollege 1
Operations refer to the transformation of inputs (material,
human and asset resources) into outputs (products), they
involve the workflow ordering of activities to produce the
product. Functional-based workflow in the technical system →
The materials inputs and products outputs need to be
physically moved and warehoused and stored: logistics.
Supply chain refers to the processes that move information
and material to and from firms, ranging from raw materials to consumers. Becomes
important when taking control of the logistical processes.
Operations and logistics are considered primary (production process) activities as part of a
value chain within an organization.
A supply chain may consist of multiple value chains.
The success of producing at low costs while meeting (mass) customer demand depends on
clever integration of:
- A great operations-related strategy
- The process to produce and deliver products and services
- Analytics to support the decisions needed to manage the firm
The design of transformation processes is guided by basic principles:
- How different types of processes are organized
- How to determine the capacity of a process
- How long it should take to make a unit
- How the quality of a process is monitored
- How information is used to make decisions
,But the improvement of the processes and systems that create and deliver the firm’s
primary products and services is also part of OSCM
• Change of OSC strategies
• New production technologies and modes of transport
• Optimizing the processes of production and logistics activities
• Improvements in data analytics and how to use them in decision making
Designing and improving operations often requires changes in workflow ordering and
organizational structure.
Batch-based → the process is set to make one type of product, and is changed when another
product needs to be produced
Operations and supply chain processes are interlinked so require analytics (based on
metrics) to steer
Producing and delivering goods is different compared with services
,The various OSC processes reflect different job positions and career perspectives, they have
become popular through time.
, Current issues in operations and supply chain management
• Coordinating the relationships between mutually supportive but separate
organizations
• Optimizing global supplier, production, and distribution networks
• Managing customer touch points
• Raising senior management awareness of OSCM as a significant competitive weapon
• Uncertainty in global tariffs and regulations
• Difficulty in hiring and keeping employees
• Adapting to change in business technology and infrastructure
• Sustainability and the triple bottom line (Life cycle analysis)
• Servitization, digitalization, BIG data, Artificial Intelligence (Industry 4.0)
Evaluating operations and supply chain processes on efficiency and effectiveness.
• Efficiency: doing something at the lowest possible cost (is doing things right)
• Effectiveness: doing the right things to create the most value for the company
• Value: quality divided by price
• Quality: the attractiveness of the product, considering its features and durability
• Price: costs plus margin
• So, what is customer value?
From a marketing point of view, customer value is the benefits perceived by the customer
minus the costs of acquisition and use of a product
Use efficiency ratios to benchmark over time with self and with competitors
Summary of chapter 1
• Various processes are associated with OSCM and used to implement the strategy of
the firm
• Analytics are used to support the ongoing decisions needed to manage the firm
• OSCM hands-on-people specialize in managing the production and delivery of goods
and services
• Firms face increasing pressure on mass customization and quality in combination
with efficiency and speed that is reflected in OSCM
• Currently, supply chain control, servitization, sustainability and Industry 4.0 are of
paramount importance
• Efficiency ratio’s help benchmarking firm practices to meet goals
