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Chapter 1 Case Study: Supply Chain Challenge At LeapFrog
Chapter 1
Introduction to Operations and Supply Chain Management
Copyright © 2019, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
Copyright © 2019, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
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Chapter Objectives
Describe what the operations function is and why it is critical to an organization’s survival.
Describe what a supply chain is and how it relates to a particular organization’s operations function.
Discuss what is meant by operations management and supply chain management.
Identify some of the major operations and supply chain activities, as well as career opportunities in these areas.
Make a case for studying both operations management and supply chain management.
Copyright © 2019, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
Why Study Operations and Supply Chain Management? (1 of 7)
Every organization must make a product or provide a service that someone values.
Most organizations function as part of larger supply chains.
Organizations must carefully manage their operations and supply chains in order to prosper and, indeed, survive.
Copyright © 2019, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
Why Study Operations and Supply Chain Management? (2 of 7)
Operations Management – The planning, scheduling, and control of the activities that transform inputs into finished goods and services.
© 2016 J.H. Blackstone, ed., APICS DICTIONARY, 15th ed. (Chicago, IL: APICS, 2016)
Figure 1.1 Viewing Operations as a Transformation Process
Copyright © 2019, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
Why Study Operations and Supply Chain Management? (3 of 7)
Supply Chain Management – The active management of supply chain activities and relationships in order to maximize customer value and achieve a sustainable competitive advantage.
Supply Chain – A network of manufacturers and service providers that work together to create products or services needed by end users. These manufacturers and service providers are linked together through physical flows, information flows, monetary flows, and people.
Copyright © 2019, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
Why Study Operations and Supply Chain Management? (4 of 7)
Supply Chain Terminology
Upstream – Activities or firms positioned earlier in the supply chain.
Downstream – Activities or firms positioned later in the supply chain.
First-tier supplier – A supplier that provides products or services directly to a firm.
Second-tier supplier – A supplier that provides products or services to a firm’s first-tier supplier.
Copyright © 2019, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
Why Study Operations and Supply Chain Management? (5 of 7)
Figure 1.2 A Simplified View of Anheuser-Busch’s Supply Chain
Copyright © 2019, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
Why Study Operations and Supply Chain Management? (6 of 7)
Supply Chain Operations Reference (SCOR) Model
Planning activities, which seek to balance demand requirements against resources and communicate these plans to the various participants.
Sourcing activities, which include identifying, developing, and contracting with suppliers and scheduling the delivery of incoming goods and services.
“Make,” or production, activities, which cover the actual production of a good or service.
Delivery activities, which include everything from entering customer orders and determining delivery dates to storing and moving goods to their final destination.
Copyright © 2019, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
Why Study Operations and Supply Chain Management? (7 of 7)
Return activities, which include the activities necessary to return and process defective or excess products or materials.
Supply Chain Operations Reference (SCOR) Model
Figure 1.3 Supply Chain Operations Reference Model (SCOR) Model
© SCOR Framework, www.apics.org/apics-for-business/products-and-services/apics-scc-frameworks/scor
Copyright © 2019, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
Important Trends (1 of 2)
Agility
The ability to recalculate plans in the face of market, demand and supply volatility and deliver the same or comparable cost, quality and customer service.
Information Technologies
Internet
Electronic Commerce
Copyright © 2019, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
Important Trends (2 of 2)
People
There is currently a shortage of talented operations and supply chain professionals.
Poor relationships within any link of the supply chain can have disastrous consequences for all other supply
Copyright © 2019, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
Operations and Supply Chain Management and You (1 of 3)
Potential Career Paths in Operations and Supply Chain Management
Analyst
Production Manager
Service Manager
Sourcing Manager
Commodity Manager
Supplier Development Manager
International Logistics Manager
Transportation Manager
Copyright © 2019, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
Operations and Supply Chain Management and You (2 of 3)
Professional Organizations
APICS – The Association for Operations Management
ISM – The Institute for Supply Management
CSCMP – The Council of Supply Chain Management Professionals
ASQ – The American Society for Quality
Copyright © 2019, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
Operations and Supply Chain Management and You (3 of 3)
Major Operations and Supply Chain Activities
Process selection
Forecasting
Capacity planning
Inventory management
Planning and control
Purchasing
Logistics
Copyright © 2019, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
Employability Skills
Critical Thinking
Collaboration
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