Chapter 1 of mcgraw hill oscm management .pptx

mcgraw hill presentation of oscm

1. Chapter 1 Introduction © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.

2. Chapter 1: Introduction L O1-1: Identify the elements of operations and supply chain management (O S C M). L O1-2: Know the potential career opportunities in operations and supply chain management. L O1-3: Recognize the major concepts that define the operations and supply chain management field. L O1-4: Evaluate the efficiency of a firm. 2

3. Southwest Airlines Turnaround Efficiency 4,000 flights a day using 740 planes. An average of 5 flights per plane. Can do a turnaround in 30 to 55 minutes. No assigned seats helps in the effort. Any saving in turnaround could mean more flights per plane per day. More revenue per day. Southwest is a leader in minimizing turnaround time. An example of operational efficiency. 3

4. Introduction—The Elements of O S C M Clever integration of a great operations-related strategy. Processes to deliver products and services. Analytics to support the decisions needed to manage the firm. 4

5. O S C M Specialist Areas Product design. Purchasing. Manufacturing. Service operations. Logistics. Distribution. 5

6. What Is Operations and Supply Chain Management? Operations and supply chain management (O S C M) is defined as the design, operation, and improvement of the systems that create and delivery the firm’s primary products and services. O S C M is a functional field of business with clear line management responsibilities. Operations and supply chain management (O S C M) is: A functional field of business. Clear line management responsibilities. Concerned with the management of the entire production/delivery system. 6

7. Jeans Supply Chain Access the text alternative for slide images. 7

8. Distinguishing Operations versus Supply Chain Processes Operations Manufacturing and service processes used to transform resources into products. Supply Chain Processes that move information and material to and from the firm. 8

9. Questions for the O S C M 9

10. Categorizing Operations and Supply Chain Processes Planning Processes needed to operate an existing supply chain Sourcing Selection of suppliers that will deliver the goods and services needed to create the firm’s product Making Producing the major product or service Delivering Logistics processes such as selecting carriers, coordinating the movement of goods and information, and collecting payments from customers Returning Receiving worn-out, excess, and/or defective products back from customers 10

11. Operations and Supply Chain Processes Access the text alternative for slide images. 11

12. Differences between Services and Goods A service is an intangible process that cannot be weighed or measured, whereas a good is a tangible output of a process that has physical dimension. A service requires some degree of interaction with the customer for it to be a service. Services are inherently heterogeneous . With the big exception of hard technologies and information technologies. Service as a process is perishable and time dependent , and unlike goods, can’t be stored. The specifications of a service are defined and evaluated as a package of features the affect customer perceptions. 12

13. Categorization of Service Businesses Businesses impacting human bodies (e.g., salons, fitness center, health center) Businesses that are directed at physical products (e.g., freight transportation, laundry) Businesses that are directed at people’s minds (e.g., advertising, education, arts and entertainment) Businesses directed at risk and money management (e.g., insurance, legal services, banking) 13

14. Product–Service Bundling Product–service bundling refers to a company building service activities into its product offerings for its customers. Companies that are most successful in implementing this strategy start by drawing together the service aspects of the business under one roof in order to create a consolidated service organization. 14

15. The Goods–Services Continuum 15

16. Blueprint 16

17. Service Blueprint 17

18. Blueprinting a Hotel Visit 18

19. WHAT IS ELSE? 19

20. Careers in O S C M O S C M careers specialize in managing the planning, production, and distribution of goods and services. An operations and supply chain manager works with people to figure out the best way to deliver the goods and services of the firm. O S C M jobs are hands-on, working with people and figuring out the best way to do things. 20

21. Possible Careers in O S C M Plant manager. Hospital administrator. Branch manager. Department store manager. Call center manager. Supply chain manager. Purchasing manager. Quality control manager. Business process improvement analyst. Lean improvement manager. Project manager. Production control analyst. Facilities manager. Chief operating officer. 21

22. Chief Operating Officer (C O O) Works with C E O and president to determine the company’s competitive strategy. C O O determines: Location. Facilities. Vendors to use. Implementation of the hiring policy. Once key decisions are made, lower-level operations personnel carry them out. 22

23. The Major Concepts that Define the O S C M Field 1 Manufacturing strategy Emphasizes how a factory’s capabilities could be used strategically to gain advantage over a competing company. Just-in-time (J I T) An integrated set of activities designed to achieve high-volume production using minimal inventories of parts that arrive exactly when they are needed. Total quality management (T Q M) Managing the entire organization so it excels in all dimensions of products and services important to the customer. Lean manufacturing A production system that aims to reduce waste and increase productivity 23

24. The Major Concepts that Define the O S C M Field 2 Business process reengineering (BPR) An approach to improving business processes that seeks to make revolutionary changes as opposed to evolutionary (small) changes. Six Sigma A statistical term to describe the quality goal of no more than 3.4 defects out of every million units. Also refers to a quality improvement philosophy and program. Mass customization a business strategy that allows companies to efficiently produce personalized products or services for individual customers, combining the efficiency of mass production with the flexibility of customization. 24

25. The Major Concepts that Define the O S C M Field 3 Electronic commerce The use of the Internet as an essential element of business activity. Sustainability The ability to meet current resource needs without compromising the ability of future generations to meet their needs. Triple bottom line A business strategy that includes social, economic, and environmental criteria. Business analytics The use of current business data to solve business problems using mathematical analysis. Internet of Things Refers to the billions of devices that are connected to the Internet. 25

26. Time-Line Depicting When Major O S C M Concepts Became Popular Access the text alternative for slide images. 26

27. Current Issues in Operations and Supply Chain Management Disruptions in global supply chains. Uncertainty in global tariffs and regulations. Difficulty in hiring and keeping employees. Adapting to change in business technology and infrastructure. 27

28. Digital Supply Chain 28

29. The Future of Supply Chain 29

30. Efficiency, Effectiveness, and Value Efficiency A ratio of the actual output of a process relative to some standard. Also, being “efficient” means doing something at the lowest possible cost. Effectiveness Doing the things that will create the most value for the customer. Value The attractiveness of a product relative to its price. 30

31. Analytics Exercise: Comparing Companies Using Wall Street Efficiency Measures Earnings growth is largely a function of profitability. Profits can be increased through higher sales or lower cost. Highly efficient firms usually do well during recessions. Benchmarking — a process in which one company studies the processes of another company (or industry) to identify best practices. 31

32. Management Efficiency Ratios 32

33. Management Efficiency Ratios BP Shell ExxonMobil Management Efficiency Days sales outstanding 29.47 42.70 34.40 Days inventory 28.85 26.51 31.51 Days payables 61.31 53.23 68.69 Cash conversion cycle Receivables turnover 12.39 8.55 10.64 Inventory turnover 12.65 13.77 11.58 Total Asset turnover 1.04 0.93 0.78 33

34. Summary Processes are used to implement the strategy of the firm. Analytics are used to support the ongoing decisions needed to manage the firm. O S C M people specialize in managing the production of goods and services. O S C M jobs are hands-on and require working with others and figuring out the best way to do things. The chief operating officer (C O O) works with the C E O and company president to determine the company’s competitive strategy. C O O s determine an organization’s location, its facilities, which vendors to use, and how the hiring policy will be implemented. Many of the concepts that form the O S C M field have their origins in the Industrial Revolution in the 1800s. 34