BEM2007 OPERATIONS MANAGEMENT.

Supply Chain.
Avitesh Pal Bhatia. Candidate Number: 020355. Student ID: 590066261.

UNIVERSITY OF EXETER BUSINESS SCHOOL.

Supply Chain can be defined as a network of activities that delivers a finished product or service to its customer. These may include sourcing raw materials and part, manufacturing and assembling of products, warehousing, distribution, delivery of product or service to the customer etc. The supply chain of an organization may be facilitated by an information system that allows relevant information such as sales data, sales forecast, promotion etc to be shared within the members of this supply chin. Product based supply chain is related to the production of physical tangible goods that can be stored in the inventory before they are needed. The recently launched Microsoft Surface tablet has a very simple supply chain for the glass it uses to make the screen of the tablet. Firstly, waste flat glasses are collected and recycled by a company named Strategic Materials Inc. The end product is then passed on to a firm named Corning, which manufactures it into Gorilla glass 2. Microsoft uses this glass as a screen for its range of tablets (Microsoft Surface). The tablets then reach the consumers through various retail stores such as Carphone Warehouse etc.

Glass recycle.

Glass Manufacturing.

Microsoft Surface

Carphone Warehouse.

Consumers.

Supply Chain Management is also valuable in service industry. This can be clearly demonstrated through a very simple and basic example where an injured patient visits the hospital for checkup. The supply chain shown in the diagram below displays the chain as it serves the customer (patient). Here, a as the patient goes for a checkup, the hospital appoints a doctor for the checkup process. There is an upstream and downstream flow of information observed in this chain. The patient may provide his blood sample to the doctor, which is taken for analysis in the hospital lab. The hospital in return provides a blood checkup report, which passes the information for required medical assistance for the patient well-being. Accepting the information (prescriptions), the patient purchases medicines from the hospital itself.

Patient.

Hospital.

Blood Checkup.

Blood Report.

Purchase of Medicines.
The objectives of both Services and the Manufacturing sector remain the same, to fulfill the wants and demand of the customer with appropriate levels of quality, speed, dependability, flexibility and cost. There are few situations where the supply chain for a service may differ from a traditional product based supply chain. Quality: The quality of the end product or service that the customer receives is one of the indicators of the quality performance at each stage of the supply chain. The product-based category may be evaluated on how efficiently the raw materials have taken the form of finished goods. Products such as mobile phones etc. can be compared on their usage and availability. On the other side, the services are assessed by how efficiently they are served to the customer. Example, has the doctor given the right medicines for the injury? Or how the University of Exeter better than any other UK based university?

Costs: The supply chain in both paths requires input of labors to complete the processing necessary to satisfy their promise to the end customer. The primary difference under the inputs category for product-based chain is that the labor costs here are involved in procuring, transporting and manipulating of physical products whereas in service-based the labor costs are expend on manipulating information and developing relationships. Speed, Cost & Dependability: Traditional product-based supply chain focuses on logistics in terms of moving physical goods from one location to another. Here the size and weight of the goods along with the shipping from the supplier to the consumer can play an important role for deciding the price of the product. On the other hand, the focus is mostly on factors that can speed up and ease the flow of information and communication between the supplier and the customer. Example, Vodafone may have large number of staffs as compared to t-mobile at their store to reduce waiting time. At the end all that the customer would notice is the affordability of the product or service and the time it takes to be delivered. It is this that will shape up the previous parts of supply chain. Flexibility: Traditionally a finished good a product that is completely transformed from a selection of raw materials into a form that is ready for customers. The process includes assembling, testing, packaging etc. In services, the finished service may be within the pages of a file or a computer. Examples such as loan booked, hospital prescriptions etc and basically satisfies the customer who paid for the service. Another way an organization can improve its product based supply chain is by partnering with companies that may lower their costs. For service based this can be improved by fast information flows and other methods discussed earlier. These steps are taken to over come the supply chain agilities that they might encounter.

Although there might be few differences between the two types of supply chain, they share similar challenges in their operations: The bullwhip effect: the inaccurate or distorted demand information created in the supply chain. High costs due to inefficiency in the stages of the chain. This might result in higher costs and reduce affordability. Dell have an excellent supply chain with a fast delivery service which saves them 10% to 20% on costs as compared to other companies. Mobility of resources: All the stages involved in the chain might be located at different or far locations and costs rise when they are combines together in the process. This also increases the waiting and the delivery time. Partnering with suppliers or companies can help solve the matter. High Exchange rates today are also responsible for rising costs when raw materials or finished products are shipped internationally. The coast of an Apple iPhone might be cheaper in US than in India.

In the end, it can be said that supply chain forms an integral part of all the sectors regardless of it being in manufacturing or services. It highly impacts the business as well as the customers. The necessity of supply chain can be indicated by its role in the success or failure of products, services and various companies considering the points highlighted in the essay. Therefore, companies should equally focus on this part as compared to others. Improving it consistently may prove really successful for the growth and success of any business.

BIBLIOGRAPHY. Sanders, N. and Reid, R. (2002) Operations management: an integral approach. 4th ed. USA: John Wiley & Sons, Inc., p.99-105. SLACK, N., CHAMBERS, S., & JOHNSTON, R. (2010). Operations management. Harlow, England, Financial Times Prentice Hall.

www.newhope360.com (2012) Top 4 challenges facing global supply chains. [online] Available at: http://newhope360.com/supply-chain-management/top4-challenges-facing-global-supply-chains?page=2 [Accessed: 12 Dec 2012].

Small Business - Chron.com (2002) Differences in Supply Chain Designs for a

Manufacturing Industry vs. a Service Industry.
[online] Available at: http://smallbusiness.chron.com/differences-supply-chain-designs-manufacturingindustry-vs-service-industry-14610.html [Accessed: 13 Dec 2012].