Matthew Courchaine

BUS 355 SPR 2016

Prof. Brian Walsh

CHAPTER 1 Introduction to Operations and Supply Chain

Management
I.

Introduction
Every organization must make a product or service that someone values (**value

added**)
Most organizations function as part of larger supply chains linkage through physical,

information, and monetary flows

Organizations must carefully manage their operations and supply chains in order to

prosper and survive

A. Operations management = planning, scheduling, and control of the activities that transform
inputs into finished goods / services

B. Supply chain management = active management of supply chain activities **and

relationships** in order to maximize customer valye and achieve a sustainable competitive
advantage
C. Terminology
Upstream = activities / firms positioned earlier in the supply chain
Downstream = activities / firms positioned later in the supply chain
First-tier supplier = supplier that provides products / services directly to a firm
Second-tier supplier = supplier that provides products or services to a firms first-tier
supplier (i.e., indirectly)

D. Supply Chain Operations Reference (SCOR) model

1. Planning activities = seek to balance demand requirements against resources and
communicate these plans to various participants
2. Sourcing activities = identifying, developing, and contracting with suppliers, and
scheduling the delivery of incoming goods / services
3. Production activities = cover actual production of good / service

Matthew Courchaine

BUS 355 SPR 2016

Prof. Brian Walsh

4. Delivery activities = entering customer orders and determining delivery dates to storing
and moving goods to their final destination
5. Return activities = activities necessary to return and process defective or excess products
or materials

II.

Important Trands
A. E-commerce = use of compute and telecomm technologies to conduct business via electronic
transfer or data and documents
B. Increasing competition and globalization = customer demands are changing and new
competitors are entering the markets
C. **Relationship management** = organizations must manage the relationships with their

III.

upstream suppliers as well as their downstream customers

Internal and external to organization
Major Operations and Supply Chain Activities
A. Process selection, design, and improvement Six sigma, continuous improvement
B. Forecasting demand planning
C. Capacity planning for capital investment and resource levels
D. Inventory management for amount and location
E. Planning and control production planning and quality control
F. Purchasing procurement, managing supplier relationships (CPFR)
G. Logistics delivery and distribution, reverse logistics