Chapter 1 – Introduction to Operations and Supply Chain Management

Operations Function (Operations) –
is the collection of people, technology and systems within an organization that has primary responsibility for providing the organization’s products and services.
A Supply Chain –
is a network of manufacturers and service providers that work together to create products or services needed by end users. These manufacturers and service providers are linked together through physical flows, information flows and monetary flows.
Transformation Process –
The traditional way to think about operations. Operations takes a set of inputs and transforms them in some way to create outputs – either good or services – that a customer values.
Operations Management –
is the planning, scheduling and control of the activities that transform inputs into finished goods and services
Upstream –
A term used to describe activities or firms that are positioned earlier in the supply chain relative to some other activity or firm of interest.
Downstream –
A term used to describe activities or firms that are positioned later in the supply chain relative to some other activity or firm of interest.
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 –
is 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.
Supply Chain Operations Reference (SCOR) Model –
A frame work developed and supported by the Supply Chain Council that seeks to provide standard descriptions of the processes, relationships and metrics that define supply chain management.
1. Planning Activities (SCOR Model) –
which seek to balance demand requirements against resources and communicate these plans to the various participants.
2. Sourcing Activities (SCOR Model) –
which include identifying, developing and contracting with suppliers and scheduling the delivery of incoming goods and services
3. ‘Make’ or Production Activities (SCOR Model) –
which cover the actual production of a good or service
4. Delivery Activites (SCOR Model) –
Which include everything from entering customers orders and determining delivery dates to storing and moving goods to their final destination
5. Return Activities (SCOR Model) –
which include the activities necessary to return and process defective or excess products or materials.
Electronic Commerce (E-Commerce) –
is the use of computer and telecommunications technologies to conduct business via electronic transfer of data and documents
3 major developments that have brought supply chain management to the forefront –
1. Electronic Commerce (E-Commerce)
2. Increasing Competition and Globalization
3. Relationship Management