Supply Chain Management
Year 1, quarter 2
,Chapter one: Introduction to operations and supply chain management
Chapter outline
1.1 Why studying operations and supply chain management
1.2 Mportant trends
1.3 Operations and supply chain management and you
1.4 Employability skills
1.5 Purpose and organization of this book
Chapter summary
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 the areas
- Make a case for studying both operations management and supply chain
management
1.1Why studying operations and supply chain management
The first reason is every company must make a product or provide a service that
someone values. Otherwise, why would a company exist.
An operation function is the collection of people, technology, and systems within an
organization that had primarily responsibility for providing the organization’s products of
services.
Secondly, most organizations function as part of larger supply chains. A supply chain is a
network of manufacturers and service providers that work together to create products or
services needed by end users. These manufactures and service providers are linked
together through:
- Physical flows
- Information flows
- Monetary flows
Supply chains link together the operations functions of many different organizations to
provide real value to customers.
Third, organizations must carefully manage their operations and supply chains in order to
prosper and, survive. You should make the right decisions which can lead to higher
profitability and increased market share, while the wrong choices can cost the company
money.
Operations management
, Operations management: the planning, scheduling, and control of the activities that
transform inputs into finished goods and services.
First, inputs to operations can come from many places and take many different forms.
Second, nearly all operations activities require coordination with other business functions.
Third, operations management activities are information and decision intensive.
Supply chain management
As we noted earlier, organizations in the supply chain are linked together through
physical flows, information flows, and monetary flows. The flows go both up and down
the chain.
Upstream: A term used to describe activities or firms that are positioned earlier in the
supply chain relative to some other activities or form of interest.
(Example: corn harvesting takes place upstream of cereal processing, and cereal
processing takes place upstream of cereal packaging)
Downstream: A term used to describe activities or firms that are positioned later in the
supply chain relative to some other activity or firm interest.
(For example: sewing a shirt takes place downstream of weaving the fabric, and weaving
the fabric takes place downstream of harvesting the cotton)
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.
Supply chain management: The active management of supply chain activities and
relationships in order to maximize customer value and achieve a sustainable competitive
advantage. It represents a conscious effort by a firm or group of firms to develop and run
supply chains in the most effective and efficient ways possible.
But what are the supply chain activities? To answer this, we turn to the supply chain
operations reference (SCOR) model. This is a framework that seeks to provide standard
descriptions of the processes, relationships, and metrics that define supply chain
management. According to the SCOR model, supply chain management covers 5 broad
areas:
1. Planning activities
2. Sourcing activities
3. Make or production activities
4. Delivery activities
5. Return activities
Year 1, quarter 2
,Chapter one: Introduction to operations and supply chain management
Chapter outline
1.1 Why studying operations and supply chain management
1.2 Mportant trends
1.3 Operations and supply chain management and you
1.4 Employability skills
1.5 Purpose and organization of this book
Chapter summary
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 the areas
- Make a case for studying both operations management and supply chain
management
1.1Why studying operations and supply chain management
The first reason is every company must make a product or provide a service that
someone values. Otherwise, why would a company exist.
An operation function is the collection of people, technology, and systems within an
organization that had primarily responsibility for providing the organization’s products of
services.
Secondly, most organizations function as part of larger supply chains. A supply chain is a
network of manufacturers and service providers that work together to create products or
services needed by end users. These manufactures and service providers are linked
together through:
- Physical flows
- Information flows
- Monetary flows
Supply chains link together the operations functions of many different organizations to
provide real value to customers.
Third, organizations must carefully manage their operations and supply chains in order to
prosper and, survive. You should make the right decisions which can lead to higher
profitability and increased market share, while the wrong choices can cost the company
money.
Operations management
, Operations management: the planning, scheduling, and control of the activities that
transform inputs into finished goods and services.
First, inputs to operations can come from many places and take many different forms.
Second, nearly all operations activities require coordination with other business functions.
Third, operations management activities are information and decision intensive.
Supply chain management
As we noted earlier, organizations in the supply chain are linked together through
physical flows, information flows, and monetary flows. The flows go both up and down
the chain.
Upstream: A term used to describe activities or firms that are positioned earlier in the
supply chain relative to some other activities or form of interest.
(Example: corn harvesting takes place upstream of cereal processing, and cereal
processing takes place upstream of cereal packaging)
Downstream: A term used to describe activities or firms that are positioned later in the
supply chain relative to some other activity or firm interest.
(For example: sewing a shirt takes place downstream of weaving the fabric, and weaving
the fabric takes place downstream of harvesting the cotton)
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.
Supply chain management: The active management of supply chain activities and
relationships in order to maximize customer value and achieve a sustainable competitive
advantage. It represents a conscious effort by a firm or group of firms to develop and run
supply chains in the most effective and efficient ways possible.
But what are the supply chain activities? To answer this, we turn to the supply chain
operations reference (SCOR) model. This is a framework that seeks to provide standard
descriptions of the processes, relationships, and metrics that define supply chain
management. According to the SCOR model, supply chain management covers 5 broad
areas:
1. Planning activities
2. Sourcing activities
3. Make or production activities
4. Delivery activities
5. Return activities
