VSB 3008 Operations Management
Fall 2012
Welcome!
Matthew J. Liberatore
Bartley Hall 3072
Matthew.Liberatore@Villanova.edu
1
Operations and Supply Chain
Management
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6.
Understand why it is important to study
operations and supply chain management.
Define efficient and effective operations.
Categorize operations and supply chain
processes.
Contrast differences between services and
goods producing processes.
Identify operations and supply chain
management career opportunities.
Describe how the field has developed over time.
3

Operations and supply management (OSM): the
design, operation, and improvement of the
systems that create and deliver the firm’s primary
products and services
◦ Functional field of business
◦ Clear line management responsibilities
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Concerned with the management of the entire
system that produces a good or delivers a service
Operations: manufacturing, service, and health
care processes that transform resources into
products desired by customers
LO 1
4
LO 2
5
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Success in today’s global markets requires a
business strategy that matches the preferences
of customers with the realities of supply
networks
A sustainable strategy is critical
◦ Meets the needs of shareholders and employees
◦ Preserves the environment

Supply refers to processes that move information
and material to and from the manufacturing and
service processes of the firm
LO 3
6
LO 3
7
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Planning: the processes needed to operate an
existing supply chain strategically
Sourcing: the selection of suppliers that will
deliver the goods and services needed to create
the firm’s product
Making: Where the major product is produced or
the service provided
Delivering: carriers are picked to move products
to warehouses and customers
Returning: the processes for receiving worn-out,
defective, and excess products back from
customers
LO 3
8
 Source:
Suppliers of components
and raw materials
 Make:
Physical facilities
 Deliver: Car Dealers
 Return: Warranty claims
LO 3
9
Source: Medical supplies, cleaning
services, disposal services
 Make:
Hospital rooms, Emergency
Room, Operating Rooms
 Deliver: Ambulance, Patient’s families
driving
 Return: Billing errors, follow up visits

LO 3
10
Services are intangible
Services requires some interaction with the
customer
Services are inherently heterogeneous
1.
2.
3.
◦
Vary over time based on attitude of customer and
server
Services are perishable and time dependent
4.
◦
5.
Can’t be stored
Services are defined and evaluated as a
package of features
LO 4
11
LO 4
12

Servitization refers to a company building
service activities into its product offerings for
its current users
◦ Maintenance, spare parts, training, and so on
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
Success starts by drawing together the
service aspects of the business under one
roof
Servitization may not be the best approach
for all companies
◦ May generate higher revenues, but tend to generate
lower profits as percentage of revenues when
compared to focused firms
LO 4
13
LO 4
14
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Generate growth through operations and
supply chain management
Efficiency: Doing something at the lowest
possible cost
Effectiveness: Doing the right things to create
the most value for the company
Value: quality divided by price
The objective is how to run the business to
generate high levels of value
LO 2
15
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Plant manager
Hospital administrator
Branch manager
Call center manager
Supply chain manager
Purchasing manager
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Business process
improvement analyst
Quality control
manager
Lean improvement
manager
Project manager
Production control
analyst
Facilities manager
At the top: Chief Operations Officer (COO)
LO 5
16
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Lean manufacturing, JIT, and TQC
Manufacturing strategy paradigm (competitive
weapon)
Service quality and productivity
Total quality management (TQM) and quality
certifications
Business process reengineering
Six-sigma quality
Supply chain management
Electronic commerce
Service science (use IT to improve service
productivity organizations)
LO 6
17
1.
2.
3.
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5.
Coordinating the relationship between mutually
supportive but separate organizations
Optimizing global suppliers, production, and
distribution networks
Managing customer touch points
Raising senior management awareness of
operations as a significant competitive weapon
Sustainability and the triple bottom line
LO 6
18