Chapter 1 Operations and Supply Chain Management the design operation and improvements of the systems tat create and deliver the firms primary products and services Operations manufacturing and service processes that are used to transform the resources employed by a firm into products desired by customers Supply Chain processes that move information and material to and from the manufacturing service processes of the firm Processes activities that transform inputs into outputs 1 Planning processes needed to operate and existing supply chain strategically anticipate how demand will be met with the available resources 2 Sourcing the selection of suppliers that will deliver the goods and services needed to create the firms product pricing delivery and payment 3 Making where the major product is produced or the service is provided scheduling processes for workers coordination of resources 4 Delivering logistics processes movement of goods and information 5 Returning processes for receiving worn out defective and excess products back from customers and providing customer support Efficiency doing something at the lowest possible cost Productivity outputs inputs Effectiveness doing the right things to rete the most value for the company achieving objectives Maximizing effectiveness and efficiency at the same time often creates conflict Value quality divided by price attractiveness of a product relative to its cost between the two goals perceived by the customer Benchmarking Comparison of firm s performance to the industry s best internally or to other industries externally important to investors Two most important measures in operations performance 1 Customer Service 2 Cost Worst Profit Milk Runs most efficient pick ups and deliveries round trip that facilitates distribution and collection 80 of volume is typically 20 of the items offered in a firm Product Design Flexibility ability to meet changing market needs Manufacturability appropriate design for manufacturing process capabilities Cost materials content labor overhead Cost of ownership maintenance requirements MTBF Decisions to Single Source have many options but choose to buy from one supplier by choice Sole Sourcing when there is only one place to get item or service Purchasing Manufacturing Inventory strategy MTS made to stock ETO Engineered to order ATO assembled to order MTO made to order Process Quality FTQ First Time Quality RTQ Roll Through Quality FTQ manufactured correctly the first time without need for inspection rework or replacement Returns Reverse Logistics Receiving worn out excess or defective products back from customers Made locally or handmade items have added value buck knife mcpherson guitar Careers in OSCM managers plant facilities branch purchasing quality master scheduler and chief operating officer Order of Planning in ERP Model 1 Business Planning 2 Demand Planning 3 Production Planning 4 Master Scheduling 5 Materials Planning 6 Procurement and Shop Floor execution of plans Top Management 1 2 3 Operations Management 3 4 APICS Association for Operations Management professional in OPM space nonprofit org Chapter 2 Sustainability the ability to meet current resource needs without compromising the ability of future generations to meet their needs Triple Bottom Line evaluates the firm against social economic and environmental criteria Social fair and beneficial business practices seeks to benefit employees the community and other impacted by firms existence Economic obligated to compensate shareholders should promote growth and grow Environmental impact on environment protect the environment or not cause harm long term value reduce ecological footprint Operations and Supply Chain Strategy Setting broad policies and plans for using the resources of a firm Must be integrated with corporate strategy Operations effectiveness core business processes needed to run the business performing activities that best implement strategic priorities at a minimum cost 1 Develop Refine Strategy Define vision mission and objectives Conduct strategic analysis Define strategic competitive priorities 2 Translate the strategy to ODC Initiatives Quarterly Product design revision initiatives Sourcing location of facilities initialization 3 Major Focus Points and Projects Major operations initiatives Major logistics distribution initiatives Competitive Dimensions Cost or Price Quality Delivery Speed Delivery Reliability Coping with Changes in Demand Others support customer service Flexibility and New Product Introduction Speed Order Winner closer choose you over competitor criteria used by a customer to differentiate products and services of one firm from those of other firms used to determine which product to ultimately purchase Order Qualifier must have certain qualifying features to be considered in purchase dimensions necessary to a firms product that a customers will not forego e g quality in all products automatic transmission in a car Trade offs management must decide which parameters of performance are critical and concentrate resources on those characteristics e g top two metrics are in conflict must trade off between customer service and cost Straddling seeking to match a successful competitor by adding features services to existing activities often a risky strategy e g Sears opening hardware stores Productivity Measurement of how well resources are used Outputs Inputs E g Operator technician productivity hours earned hours paid Operation Productivity output input at operation level Company Productivity output input at the company level Partial Productivity compare outputs to a single input output to utility cost Multifactor Productivity compares output to a group of inputs output to manpower Total Productivity compare outputs to all inputs Most common in manufacturing Hours earned Payroll hours Pure Goods commodities chemicals steel raw materials Core Goods appliances automobiles archery equipment Pure Services consulting plumbing doctors Core Services hotels airlines cell phone companies Chapter 3 Strategic Forecast medium and long term forecasts that are used for decisions related to strategy and aggregate demand Tactical Forecast short term forecasts used for making day to day decisions related to meeting demand Types of Forecasting Qualitative subjective or judgmental based on estimates and opinions Time Series Analysis data relating to past demand can predict future demand Casual Forecasting assumes demand is related