Operations 2 473.31 Fall 2015 Bruce Duggan Providence University College.
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Transcript of Operations 2 473.31 Fall 2015 Bruce Duggan Providence University College.
Operations2
473.31Fall 2015
Bruce DugganProvidence University College
Quiz 1
Operations and SCM in Practice
$28.5B Kearl Oil Sands Project • Imperial chose to outsource “modules” of the facility • 2100 km trip for 200+ modules required:
o ocean freight from South Korea to Vancouvero barges up river to Lewiston, Idahoo road transportation through Idaho, Montana, and Alberta.
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Learning Objectives
• Define operations and supply chain management.• Evaluate why understanding operations and supply chain management is
important to any manager. • Discuss the meaning of efficient and effective operations.• Describe transformation processes.• Contrast the differences between services and goods-producing
processes.• Evaluate how operations and supply chain management developed over
time.• Discuss important current challenges facing operations and supply chain
management.
1-2
Definition
Operations and supply chain management (OSCM) is defined as the design, operation, and improvement of the systems that create and deliver the firm’s primary products (goods and services)
LO1
1-3
Operations and Supply Chain Processes
LO1
Operations and Supply Chain Management: Important To Any ManagerOperations and supply chain management is about getting work done quickly, efficiently, without error, and at a low cost.
LO2
Operations and Supply Chain Management: Important To Any ManagerOperations refers to the processes that are used to transform the resources into goods and services. Supply refers to how materials and services are moved to and from those transformation processes.
LO2
Efficiency, Effectiveness, and Value
Efficiency means to produce a good or service by using the smallest input of resources. Effectiveness means doing the right things to create the most value for the company.Value refers to the ratio of quality to price paid.
LO3
Supply Chain Transformation ProcessA transformation process uses resources to convert inputs into some desired output.Transformation processes:
o Physicalo Locationo Exchangeo Storageo Physiologicalo Informational
LO4
Input – Transformation – Output Relationships for Typical Systems
LO4
Differences Between Goods and Services
LO5
Evolution of Operations and Supply Management
LO6
Current Issues in OSCM
1. Coordinating the relationship between mutually supportive but separate organizations.
2. Optimizing global supplier, production, and distribution networks.3. Increased co-production of goods and services.4. Managing customer service points.
LO7
Current Issues in OSCM
5. Raising senior management’s awareness of operations management as a significant weapon.
6. Taking more environmental responsibility.7. Corporate responsibility in supply chains.
Summary
• Operations and supply chain management is important to Canada’s competitiveness.
• Operations and supply activities of the firm are part of the transformation process.
• When managing operations, firms need to focus on efficiency, effectiveness, and value.
End of Chapter 1
Chapter 2
Operations and SCM in Practice
Zara• excels on
• Price• Speed• Flexibility
• retail chain of high-fashion boutique clothing stores• reacts quickly to changes in
customer buying behaviour• use of information technology• clothes produced in small batches• production to retail store cycle as
fast as two weeks
Learning Objectives
List the parameters of a sustainable operations and supply chain strategy.Classify the competitive dimensions of operations and supply chain strategy. Identify order winners and order qualifiers.Discuss how strategy is implemented through operations and supply chain activities. List the concepts of risk assessment and mitigation.
Operations and Supply Strategy
Setting broad policies and plans for using the resources of a firm to best support its long-term competitive strategy• Involves decisions that relate to the design of a process and the infrastructure
needed to support the process.• ‘Triple Bottom Line’
o social objectiveso economic objectiveso environmental objectives
2-3
ExampleStrategy Process
Customer Needs
Corporate Strategy
Operations and Supply Strategy
Decisions on Processes and Infrastructure
More Product
Increase Org. Size
Increase Production Capacity
Build New Factory
Operations and Supply Strategy
Competitive Dimensions
1.quality2.delivery speed3.deliver reliability4.coping with changes in demand5.flexibility and new-product introduction speed6.other product-specific criteria
• technical liaison and support• coordinating between firms• after-sale support
7.environmentalism and corporate social responsibility8.access to information
2-5
Trade-Offs
An operation cannot excel simultaneously on all competitive dimensions.• management has to
o decide which dimensions are critical to the firm’s success • management has to
o concentrate firm resources on these characteristics• employees have to
o execute on those dimensions better than their competitors
Trade-Offs
For example, if a company wants to focus on speed of delivery, it cannot be very flexible in its ability to offer a wide range of products
Cost
Quality
DeliveryFlexibility
Order Qualifiers and Winners
• Order qualifiers are the criteria that are used to screen a product or service as a candidate for purchase.
• Order winners are criteria that differentiate the products or services of one firm from another.
LO3
Fitting Operational Activities to Strategy• All the activities that make up the firm’s operation relate to one
another• The firm must minimize its total cost without compromising
customers’ needs
LO4
TheOperationsStrategyProcess
LO4
Core Capabilities
Core capabilities (or competencies) are the distinctive skills or capabilities that the organization possesses.
LO4
LO5
Risk Mitigation Strategies
1. Identify the sources of potential disruptions. 2. Assessment of the potential impact of the risk. 3. Develop plans to mitigate the risk.4. Develop contingency plans.
RiskMitigation Strategies
Summary
• Overall strategy of a firm can be tied to operations and supply strategy.
• Operations and supply strategy is critical to the firm’s ability to sustain a competitive advantage.
• Operations and supply chain strategies must consider risks in their supply chains and develop risk mitigation strategies to avoid disruptions.
End of Chapter 2
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