INTRODUCTION TO MANAGING
OPERATIONS ACROSS THE SUPPLY CHAIN
OPERATIONS MANAGEMENT
Operations Management is the management of the processes used to
design, supply, produce and deliver valuable goods & services to customers.
Inputs
5M+1I
Materials
Man/ Labor
Machines
Money
Method
Information
Operations Processes
Outputs
Goods
Services
INTRODUCTION TO MANAGING
OPERATIONS ACROSS THE SUPPLY CHAIN
SUPPLY CHAIN FLOW
INTRODUCTION TO MANAGING
OPERATIONS ACROSS THE SUPPLY CHAIN
UPSTREAM VS DOWNSTREAM
OPERATIONS AND SUPPLY CHAIN
STRATEGIES
COMPETITIVE PRIORITIES
Different ways that a company can gain competitive advantage
COST
QUALITY
INNOVATION
TIMELINESS
FLEXIBILITY
OPERATIONS AND SUPPLY CHAIN
STRATEGIES
MAINTAINING THE FIT
Fit: the extent to which there is alignment between the firm’s value
proposition, capabilities, and the desires of its critical customers
“FIT” = COMPETITIVE ADVANTAGE
A capability that allows a company to
deliver more value to customers than its
competitors.
OPERATIONS AND SUPPLY CHAIN
STRATEGIES
CRITICAL CUSTOMERS:
ASSESSING CUSTOMER WANTS AND NEEDS
Order Winners: The product traits cause customers to choose a
product over a competitor’s offering (better performance, cheaper, ...)
Order Qualifiers: minimum standards of trait that must be met. Not
the major competitive determinants, but still important
-Mobifone: stable signal
-Highland Coffee shops: wifi
Order Losers: traits that cause customers dislike your products/
services.
-Vietjet: frequent delays with no explanation
-Shopee: fake products/ scams
PROCESS
MANAGING PROCESSES
AND CAPACITY
A system of structured activities that use resources to turn
input into valuable outputs.
Customer places an
order with the cashier
Customer finds a seat
or leaves the shop
Pay
Customer picks up
Order sent to Barista
Barista makes
the drink
Order called for pick
up
MANAGING PROCESSES
AND CAPACITY
PROCESS CAPACITY
Process capacity refers to the limit on the amount of output per
period of time that a process can generate.
MANAGING PROCESSES
AND CAPACITY
THEORY OF CONSTRAINTS (TOC)
The overall management system that strives to improve performance
by identifying, focusing on and managing bottlenecks.
MANUFACTURING AND SERVICE
PROCESS STRUCTURES
PRODUCT-PROCESS MATRIX
High
Project
Job Shop
Variety
Flexibility
Batch
Repetitive
Process
Continuous
Process
Low
Low
Volume
High
MANUFACTURING AND SERVICE
PROCESS STRUCTURES
Engineer-toOrder (ETO)
unique, customized product
Project
Job Shop
Make-toOrder (MTO)
similar design, customized
during production
Job Shop
Batch
Assemble-toOrder (ATO)
produced from standard
components and modules
Batch
Repetitive
Process
Repetitive
Process
Continuous
Process
Make-toStock (MTS)
finished goods made and
held in inventory
OPERATIONS AND SUPPLY CHAIN
STRATEGIES
OPERATIONAL STRATEGY IN
MANUFACTURING ENVIRONMENT
Lead time: the time between when an order is placed and when the
product is received by the customer.
FORECASTING
INDEPENDENT VS DEPENDANT DEMAND
Independent Demand
Finished Good
Dependent Demand
Raw Materials,
Component Parts, Subassemblies, etc.
PROJECT
MANAGEMENT
DEFINITION
A project is a one-time or infrequent activities that create output
within a specific time and budget.
PROJECT
MANAGEMENT
WHAT MAKES A SUCCESSFUL PROJECT?
PROJECT
MANAGEMENT
PROJECT LIFE CYCLE
PROJECT
MANAGEMENT
PROJECT MANAGER
PROJECT
MANAGEMENT
PROJECT MANAGER
MANAGING
INVENTORIES
TYPES OF INVENTORY
MANAGING
INVENTORIES
MANAGING
INVENTORIES
ORDERING COST
Ordering Cost = Setup Cost
Ordering cost = expenses incurred in placing and receiving
orders from suppliers.
Setup cost = inventory produced internally, is an administrative
expense.
Production line
MANAGING
INVENTORIES
MANAGING
INVENTORIES
MANAGING
INVENTORIES
STOCKOUT COST
Stock-out cost = Shortage cost
MANAGING
INVENTORIES
STOCKOUT: SUPPLY CHAIN DISRUPTION
MANAGING
INVENTORIES
DAY-TO-DAY INVENTORY DECISIONS
MANAGING
INVENTORIES
TECHNIQUE: ABC ANALYSIS
MANAGING
INVENTORIES
“A” ITEMS:
MANAGING
INVENTORIES
“B” ITEMS:
MANAGING
INVENTORIES
“C” ITEMS:
MANAGING
INVENTORIES
“C” ITEMS: TWO BIN SYSTEM
MANAGING
INVENTORIES
“C” ITEMS: TWO BIN SYSTEM
MANAGING
INVENTORIES
“C” ITEMS: TWO BIN SYSTEM
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