VSB 3008 Operations ManagementFall 2012

Welcome!

Matthew J. LiberatoreBartley Hall 3072

Matthew.Liberatore@Villanova.edu

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Operations and Supply Chain Management

1. Understand why it is important to study operations and supply chain management.

2. Define efficient and effective operations.3. Categorize operations and supply chain

processes.4. Contrast differences between services and

goods producing processes.5. Identify operations and supply chain

management career opportunities.6. Describe how the field has developed over

time.

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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

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

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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

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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

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Source: Suppliers of components and raw materials

Make: Physical facilitiesDeliver: Car DealersReturn: Warranty claims

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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

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1. Services are intangible2. Services requires some interaction with the

customer3. Services are inherently heterogeneous

◦ Vary over time based on attitude of customer and server

4. Services are perishable and time dependent◦ Can’t be stored

5. Services are defined and evaluated as a package of features

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Servitization refers to a company building service activities into its product offerings for its current users◦ Maintenance, spare parts, training, and so on

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

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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

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Plant manager Hospital

administrator Branch manager Call center manager Supply chain

manager Purchasing manager

Business process improvement analyst

Quality control manager

Lean improvement manager

Project manager Production control

analyst Facilities manager

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At the top: Chief Operations Officer (COO)At the top: Chief Operations Officer (COO)

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)

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1. Coordinating the relationship between mutually supportive but separate organizations

2. Optimizing global suppliers, production, and distribution networks

3. Managing customer touch points4. Raising senior management awareness of

operations as a significant competitive weapon

5. Sustainability and the triple bottom line

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