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Chapter 1Operations and Supply Chain Management: the design, operation, and improvements of the systems tat create and deliver the firms primary products and servicesOperations: manufacturing and service processes that are used to transform the resources employed by a firm into products desired by customersSupply Chain: processes that move information and material to and from the manufacturing service processes of the firm Processes: activities that transform inputs into outputs1. Planning: processes needed to operate and existing supply chain strategically; anticipate how demand will be met with the available resources2. 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 information5. Returning: processes for receiving worn-out, defective and excess products back from customers and providing customer supportEfficiency: doing something at the lowest possible cost (Productivity) outputs/inputsEffectiveness: 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 between the two goals - Value: “quality divided by price”, attractiveness of a product relative to its cost (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 Service2. CostWorst – ProfitMilk Runs: most efficient pick ups and deliveries; round trip that facilitates distribution and collection80% of volume is typically 20% of the items offered in a firmProduct Design- Manufacturability: appropriate design for manufacturing process capabilities - Flexibility: ability to meet changing market needs- Cost: materials, content, labor, overhead- Cost of ownership: maintenance requirements, MTBFPurchasing- 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 serviceManufacturingInventory strategy- MTS: made to stock- ETO: Engineered to order- ATO: assembled to order- MTO: made to orderProcess 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 guitarCareers in OSCM: managers (plant, facilities, branch, purchasing, quality), master scheduler, andchief operating officerOrder of Planning in ERP Model:1. Business Planning2. Demand Planning3. Production Planning4. Master Scheduling5. Materials Planning6. Procurement and Shop Floor execution of plans APICS: Association for Operations Management – professional in OPM space, nonprofit org. Top Management (1, 2 & 3) Operations Management (3 & 4)Chapter 2Sustainability: 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 long-term value- Environmental: impact on environment; protect the environment or not cause harm, reduce ecological footprintOperations 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 cost1. Develop/Refine StrategyDefine vision, mission and objectivesConduct strategic analysisDefine strategic competitive priorities2. Translate the strategy to ODC Initiatives (Quarterly)Product design/revision initiativesSourcing/location of facilities initialization3. Major Focus Points and ProjectsMajor operations initiativesMajor logistics/distribution initiativesCompetitive Dimensions- Cost or Price- Quality- Delivery Speed- Delivery Reliability- Coping with Changes in Demand- Flexibility and New-Product Introduction Speed- Others (support, customer service)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 purchaseOrder Qualifier: must have certain “qualifying” features to be considered in purchase; dimensions necessary to a firms product that a customers will not foregoe.g. quality in all products, automatic transmission in a carTrade-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 storesProductivity- Measurement of how well resources are usedOutputs/InputsE.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 materialsCore Goods: appliances, automobiles, archery equipmentPure Services: consulting, plumbing, doctorsCore Services: hotels, airlines, cell phone companiesChapter 3Strategic Forecast: medium and long term forecasts that are used for decisions related to strategy and aggregate demandTactical Forecast: short-term forecasts used for making day-to-day decisions related to meeting demandTypes of

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BU OPM 311 - Chapter 1

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