Coyle Supply Chain Management: A Logistics Perspective, 10
th
Edition
Chapter 6 Test Bank
6-5
executed, supply chain tradeoffs must be understood and made, and economies of scale need to
be achieved, all while the organization addresses competitive challenges and other problems.
Manufacturers, contract assemblers, and service providers all engage in production processes.
These organizations perform a group of related activities during which inputs are transformed
into outputs. This production process also uses resources such as facilities, equipment,
knowledge, labor, and capital to support the transformation. Feedback of key information is used
to make adjustments within the process in an attempt to synchronize production more closely to
demand. Ignoring these feedback signals will lead to excess inventory of unpopular products or
inventory shortages of hot items. While the basic input-transformation-output principle applies to
all production processes, no two are organized exactly alike or perform to the same level.
organized exactly alike or perform to the same level.
Process functionality also plays a role in the success of an organization. The ability to perform
different processes from those of competitors to create unique products and services can create a
competitive advantage.
31. Discuss the challenges facing production managers.
ANSWER: Operations managers face numerous challenges and tradeoffs that must be managed
successfully if the organization and supply chain are to achieve their performance goals. These
challenges were highlighted by Ferrari and Parker in a Supply Chain Management Review article:
“Intensified competition, more demanding customers, and relentless pressure for efficiency and
well as adaptability are driving significant changes across many manufacturing industry settings.
According to the authors, long-term profitable growth is dependent on manufacturing and supply
chain organizations’ abilities to address these challenges through process innovation.
Competitive pressures are a major challenge for many established manufacturers and service
providers. As the global reach of supply chains makes it possible to source product from nearly
anywhere in the world, companies need to continually update their production capabilities and
develop innovative responses to upstart competitors.
Customers’ demand for choice and rapidly changing tastes make life difficult for product makers.
The expectation today of customized products that meet the specifications of individual buyers
requires far different production processes than the assembly methods needed for standardized
goods. The shrinking life cycle of products today also renders long production runs of these
common goods obsolete. In response, companies like Dell and Nike have developed responsive
capabilities by building supply chains around assemble-to-order production capabilities. Today,
you can design your own Nike shoes at Nikei.com.
While the use of responsive, small quantity production processes is growing, company executives
still demand productivity and efficiency. Leanness and adaptability are requirements for success,
though many organizations struggle to make the transition from traditional production methods
and strategies to more contemporary ones that can better balance product quality, process
flexibility, fulfillment speed, and execution costs.
Operations managers face many other operations challenges. Labor availability and productivity
issues, synchronization of activities with the supply chain, and capital costs are just a few of the
additional obstacles that must be overcome.
32. What is the “bullwhip effect,” and how does it affect manufacturing?