What is Operations and

Supply Management?
 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
Careers in Operations
and Supply
Management
 Plant manager  Business process
 Hospital administrator improvement analyst
 Quality control manager
 Branch manager
 Lean improvement
 Call center manager manager
 Supply chain manager  Project manager
 Purchasing manager  Production control
analyst
 Facilities manager
 Understanding the
Global Supply Chain
 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
 Current Issues in
Operations and Supply
Management
1. Coordinating the relationship between mutually
supportive but separate organizations
2. Optimizing global suppliers, production, and
distribution networks
3. Managing customer touch points
4. Raising senior management awareness of
operations as a significant competitive weapon
5. Sustainability and the triple bottom line
Strategic Planning
 Strategic Planning
 What is strategic planning?

Goals Strategies

 Developing a strategic plan:

- internal factors – resources, capabilities,
strengths and weaknesses
- external factors - political conditions,
economic conditions, social conditions,
competition, customer needs, technology
Triple Bottom Line
 What is Operations and
Supply Strategy?
 Operations and supply strategy:
setting broad policies and plans for using
the resources of a firm to best support its
long-term competitive strategy
 Part of a planning process that coordinates
operational goals with those of the larger
organization
 Developing a Successful
Operations and Supply
Strategy
 support the business strategy
 provide the necessary resources and
capabilities for success
 begin with an understanding of the
market
 Order qualifiers
 Order winners
Operations Decisions are Full
of Trade-offs
 Examples:
 if we reduce costs by reducing product
quality inspections, we might reduce product
quality
 if we improve customer service problem
solving by cross-training personnel to deal
with a wider-range of problems, they may
become less efficient at dealing with
commonly occurring problems
Keys to Successful Strategy
Implementation
 Well-defined goals/direction
 Communicate goals & strategy
throughout the firm
 Translate strategy into a set of
achievable tasks
 Make consistent choices
 Across functions
 Top-to-bottom
 3 Levels of Operations
Decision-making
Decreasing scope, time horizon

Strategic

Tactical

Operational planning & control

Note that higher level,

longer term decisions place
constraints on lower level, shorter
 Efficiency,
Effectiveness, and
Value
 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

All three are necessary for a firm to succeed

Productivity Measurement

 Productivity is a common measure of

how well an organization is using its
resources
 Fundamental to understanding operations-
related performance
 In its broadest sense productivity is
outputs divided by inputs
 To increase productivity, we want to make
this ratio as large as practical
Productivity Measurement

 Productivity is a relative measure

 Can be compared with similar operations
within its industry
 Can be compared over time
 Productivity may be expressed as:
1. Partial measures: output to one input
2. Multifactor measures: output to a group of
inputs
3. Total measures: output to all inputs
Examples of Productivity
Measures
Partial Measures of
Productivity