Operations & Supply Chain Management Summary
Chapter 1 introduction
Operations function = the collection of people, technology, and systems within
an organization that has primary responsibility for providing the organization’s
products or services.
Supply chain = a network of manufacturers and service providers that work
together to create products or services needed by end users.
These manufacturers and service providers are linked together through:
physical flows (conversion, storage, movement of materials and products#
information flows (providing intangible service#
monetary flows (providing intangible service#
Operations management = the planning, scheduling and control of the activities
that transform inputs to fnished goods and services.
When doing it well: proftss
Information could be: demand forecast
Logistics management = part of the supply chain that plans, implements and
controls the efcient, efective forward and reverse fow and storage of goods,
services, and related information between the point of origin and the point of
consumption in order to meet customers’ requirements.
7 rights of logistics: getting the…
1. the right product
2. to the right customer
3. at the right time
4. at the right place
5. in the right condition
6. in the right quantity
7. at the right cost
A supply chain encompasses all activities associated with the flow and
transformation of goods from the raw material stage (extraction#, through to the
end user, as well as the associated information flows.
Supply chain management = the active management of supply chain activities in
order to maximize customer value and achieve a sustainable competitive
advantage.
Supply chain management = efciently integrate suppliers, manufacturers,
warehouses, distributors and other partners; 7 rights; system wide costs
minimized; service level requirements satisfed.
,Example of supply chain:
Upstream = activities of a frm that are positioned earlier in the SC relative to
some other activity of a frm or interest.
Downstream = activities of a frm that are positioned later in the SC…
First-tier supplier = a supplier that provides products/services directly to a frm
(your direct supplier#.
Second-tier supplier = a supplier that provides products or services to a frm’s
frst-tier supplier (the supplier of your supplier#.
3 developments that brought operations & SCM to the manager’s
attention:
1. Electronic commerce / e-commerce: use of computer and
telecommunications technologies to conduct business via electronic
transfer of data and documents. IT made constant communication across
SC partners reality.
2. Increasing competition and globalization. The rate of change in markets,
products, and technology continues to escalate.
3. Relationship management. E-commerce gives companies a wide range of
options for better managing their operations and SC’s.
Relationship management is risky: poor relation with any link in the SC can
have consequences for all other SC members.
7 reasons for SC failures:
1. Ofshoring. aaking it increasingly difcult for frms to monitor SC
efectively.
2. Increasing complexity of supply chains (companies were often unaware of
who their suppliers were subcontracting to#.
3. Cost pressures (could lead to compromise on quality and ethics#.
4. Geographic clustering.
5. aodern communications, can quickly damage reputations.
6. Just-in-time production methods, which reduced time to recover from SC
failures.
7. Dependence on multiple suppliers, increasing overall vulnerability
(=kwetsbaarheid#.
Chapter 2 Operations and Supply chain strategies
2 elements that together defne a business: see page 39 for examples
1. Infrastructural elements: intangible resources. Helps you organize
something (I organize transport from Rotterdam to Amsterdam#
, People, policies, decision rules, organizational structure choices made by
the frm.
2. Structural elements: tangible resources (equipment, building#
Helps you achieving that what you organized (I hire trucks to do the
transport to Amsterdam#.
Strategy = a mechanism by which a business coordinates its decision regarding
structural and infrastructural elements.
Business strategy = the strategy that identifes a frm’s targeted customers and
sets time frames and performance objectives for the business.
Diferent types of strategies:
1. Low-cost strategy
2. Diferentiation strategy
3. Focus strategy (many strategies# Stuck in the middle?
Core competency = organizational strengths or abilities that customers fnd
valuable and that competitors fnd difcult/impossible to copy.
Functional strategy = translates a business strategy into specifc actions for
functional areas (like marketing, HR, fnance#.
When the diferent levels of the strategic planning process ft together will,
an organization has a good strategic alignment.
Operations and supply chain strategy = a functional strategy that indicates how
structural and infrastructural elements within the operations and supply chain
areas will be acquired and developed to support the overall business strategy. 3
primary objectives:
1. aanagement chooses right mix of structural and infrastructural elements.
2. Both structural and infrastructural need to be strategically aligned with the
business strategy.
3. Support the development of core competencies in the operations and
supply chain of the frm.
Value index = measure that uses the performance and importance scores for
various dimensions of performance for an item/service, to calculate a score that
indicates the overall value of an item/service to a customer.
n
Formula V =∑ I n Pn
i=1
(page 41 example#
V= Value index for product/service
I= Importance of dimension n
P= Performance with regard to dimension n
4 performance dimensions relevant to operations & SCM
1. Quality: the ability to satisfy stated or implied needs.
- Performance quality: basic operating characteristics of product/service
- Conformance quality: is product made/service performed to
specifcations?
- Reliability quality: will product work for a long time without failing?
Chapter 1 introduction
Operations function = the collection of people, technology, and systems within
an organization that has primary responsibility for providing the organization’s
products or services.
Supply chain = a network of manufacturers and service providers that work
together to create products or services needed by end users.
These manufacturers and service providers are linked together through:
physical flows (conversion, storage, movement of materials and products#
information flows (providing intangible service#
monetary flows (providing intangible service#
Operations management = the planning, scheduling and control of the activities
that transform inputs to fnished goods and services.
When doing it well: proftss
Information could be: demand forecast
Logistics management = part of the supply chain that plans, implements and
controls the efcient, efective forward and reverse fow and storage of goods,
services, and related information between the point of origin and the point of
consumption in order to meet customers’ requirements.
7 rights of logistics: getting the…
1. the right product
2. to the right customer
3. at the right time
4. at the right place
5. in the right condition
6. in the right quantity
7. at the right cost
A supply chain encompasses all activities associated with the flow and
transformation of goods from the raw material stage (extraction#, through to the
end user, as well as the associated information flows.
Supply chain management = the active management of supply chain activities in
order to maximize customer value and achieve a sustainable competitive
advantage.
Supply chain management = efciently integrate suppliers, manufacturers,
warehouses, distributors and other partners; 7 rights; system wide costs
minimized; service level requirements satisfed.
,Example of supply chain:
Upstream = activities of a frm that are positioned earlier in the SC relative to
some other activity of a frm or interest.
Downstream = activities of a frm that are positioned later in the SC…
First-tier supplier = a supplier that provides products/services directly to a frm
(your direct supplier#.
Second-tier supplier = a supplier that provides products or services to a frm’s
frst-tier supplier (the supplier of your supplier#.
3 developments that brought operations & SCM to the manager’s
attention:
1. Electronic commerce / e-commerce: use of computer and
telecommunications technologies to conduct business via electronic
transfer of data and documents. IT made constant communication across
SC partners reality.
2. Increasing competition and globalization. The rate of change in markets,
products, and technology continues to escalate.
3. Relationship management. E-commerce gives companies a wide range of
options for better managing their operations and SC’s.
Relationship management is risky: poor relation with any link in the SC can
have consequences for all other SC members.
7 reasons for SC failures:
1. Ofshoring. aaking it increasingly difcult for frms to monitor SC
efectively.
2. Increasing complexity of supply chains (companies were often unaware of
who their suppliers were subcontracting to#.
3. Cost pressures (could lead to compromise on quality and ethics#.
4. Geographic clustering.
5. aodern communications, can quickly damage reputations.
6. Just-in-time production methods, which reduced time to recover from SC
failures.
7. Dependence on multiple suppliers, increasing overall vulnerability
(=kwetsbaarheid#.
Chapter 2 Operations and Supply chain strategies
2 elements that together defne a business: see page 39 for examples
1. Infrastructural elements: intangible resources. Helps you organize
something (I organize transport from Rotterdam to Amsterdam#
, People, policies, decision rules, organizational structure choices made by
the frm.
2. Structural elements: tangible resources (equipment, building#
Helps you achieving that what you organized (I hire trucks to do the
transport to Amsterdam#.
Strategy = a mechanism by which a business coordinates its decision regarding
structural and infrastructural elements.
Business strategy = the strategy that identifes a frm’s targeted customers and
sets time frames and performance objectives for the business.
Diferent types of strategies:
1. Low-cost strategy
2. Diferentiation strategy
3. Focus strategy (many strategies# Stuck in the middle?
Core competency = organizational strengths or abilities that customers fnd
valuable and that competitors fnd difcult/impossible to copy.
Functional strategy = translates a business strategy into specifc actions for
functional areas (like marketing, HR, fnance#.
When the diferent levels of the strategic planning process ft together will,
an organization has a good strategic alignment.
Operations and supply chain strategy = a functional strategy that indicates how
structural and infrastructural elements within the operations and supply chain
areas will be acquired and developed to support the overall business strategy. 3
primary objectives:
1. aanagement chooses right mix of structural and infrastructural elements.
2. Both structural and infrastructural need to be strategically aligned with the
business strategy.
3. Support the development of core competencies in the operations and
supply chain of the frm.
Value index = measure that uses the performance and importance scores for
various dimensions of performance for an item/service, to calculate a score that
indicates the overall value of an item/service to a customer.
n
Formula V =∑ I n Pn
i=1
(page 41 example#
V= Value index for product/service
I= Importance of dimension n
P= Performance with regard to dimension n
4 performance dimensions relevant to operations & SCM
1. Quality: the ability to satisfy stated or implied needs.
- Performance quality: basic operating characteristics of product/service
- Conformance quality: is product made/service performed to
specifcations?
- Reliability quality: will product work for a long time without failing?
