What is Operations & Supply Chain Management?

Mellie PullmanBA 339

Where does operations management fit into a business?

• How are we going to _________ the product or service?

• Other functional areas:– Marketing– Accounting– Finance– Human Resources– Information Systems

What is Operations Management and how does it

fit into the big picture?• The operations function is that part of

the organization that exists primarily to generate and produce the organization’s products or services.

• OM provides a systematic way of looking at organizational processes.

• Concepts and tools of OM are widely used in managing other functions of a business.

Operations as a Process

Transformation(Conversion)

Process

Input Output

Conversions include:

• Physical: manufacturing or haircut• Location: transportation• Exchange: retailing• Storage: warehousing• Physiological: health care• Informational: telecommunications

Operations as a Process

Transformation(Conversion)

Process

EnergyMaterials

LaborCapital

Information

Goods orServices

Feedback information forcontrol of process inputsand process technology

What is managed inside the box?

Plants or Facilities

People

Processes

Planning & Scheduling

Parts & Equipment

Breakout Moment

• How do public concerns about environmental and worker welfare issues affect operations and supply chain management?– Nike– Wal-Mart– Your company– Others examples?

• How does it effect inputs, outputs and transformation changes?

Environmental Concerns

“Volkswagen, Germany’s biggest car maker, was reported to be setting aside DM1 billion ($470m) to pay for compliance with a European directive that will come into force in 2007 forcing car makers to pay for recycling their vehicles. New cars will be

required to be 85% recyclable.” --The Economist, 15 February 2001

Major Decision Responsibilities of Operations (Netflix)

• Process– How to produce & deliver

• Quality– Criteria, measurement & process for achieving

• Capacity– Physical facilities (where, size, activities) & labor

(what kind, how many, when)

• Inventory– What, when & how much?

Key Operating Capabilities (Strategies used to compete in the

market place)• Cost• Quality• Flexibility• Speed• Sustainability (values such as environmental,

social practices, animal practices, and long term economic stability rather than short term profit)

• Movie example

Contemporary Operations & SCM Themes

• Service and Manufacturing (differences and implications)

• Customer-Directed Operations• Time Reduction (Lean Operations)• Integration of Operations and Other Functions• Environmental & Sustainability Concerns• Supply Chain Management• Globalization of Operations