Lgt 2106 Notes

Lecture 1 Introduction

What’s Operation Management?

• Management of the conversion process
• Transforms inputs to outputs
• Focusing on adding value
• The study and practice of better matching supply and demand

Value Chain

• All steps an organization requires a good/ a service
• Aims: Eliminate all non-value-added steps

(Top-down Approach) Operations strategy decisions

• (long-range) Strategic: needs of customers (capacity planning)
• (medium-range) Tactical: efficient planning of resources
• (short-range) Planning and control: immediate tasks and activities

Contribution to Society

• higher standard of living: increase productivity
• better quality goods and services: competition
• concern of the environment: recycling
• improved working conditions: better job design

OM from manufacturing →services

Competitive Dimensions

1. Price →low cost
2. Quality →great product/service
3. Delivery speed →make/deliver quickly
4. Delivery reliability →deliver as promised
5. Coping with changes in demand →change volume & variety
6. Flexibility & new product introduction →quick to market

Order Qualifier

→A screening criterion

→Permits a firm’s products to be considered as possible for purchase

→a firm must “re-quality the order qualifiers” every day

e.g. automobile →a car can run

Quality standard: ISO9000, ISO14000, QS9000

Order winners

→A criterion that differentiates the products from others

→drives the customer to buy a product → Competitive Dimensions

e.g. automobile →after-sale service

environmental concern & social responsibility

→green production, emission control

Order winners

1. cost/price →make/deliver cheaply
2. quality →        design/process→defect-free
3. delivery speed →make/deliver quickly
4. delivery reliability →supply the product on/before the due date

Lecture 2 Supply Chain Management

What’s Supply Chain Management?

→long term relationship (a firm and suppliers)

→to ensure the timely delivery of goods & services

→that are competitively priced

A company’s supply chain

Suppliers→company→customers

Evolution of supply chain management

1. Isolating the technical core
2. JIT concepts
3. Using a single logistics partner
4. Bringing suppliers into plant

Uncertainty →create mismatch between supply and demand

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