Managing Operations Across the Supply Chain EBook

Content

Chapter1: Introduction to Managing Operations Across the Supply Chain

Chapter Opener
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PART 1
SUPPLY CHAIN: A PERSPECTIVE FOR OPERATIONS MANAGEMENT
1 2 Introduction to Managing Operations Across the Supply Chain Operations and Supply Chain Strategy X X X X X X

What is operations management? Have you ever stopped to consider all of the nuts and
bolts of how organizations (business and not-for-profit) deliver goods and services to their customers? Think of all the details that must be managed to develop product concepts, to identify sources for raw materials, to decide how products will be made and delivered, and to establish how to serve customers. Operations management includes all of these types of decisions: Operations mangement is the management of processes used to design, supply, produce, and deliver valuable goods and services to customers. In Part 1, Supply Chain: A Perspective for Operations Management, we define the scope of operations management as well as its strategic role. Chapter 1 explains what operations management is and why it is important for all managers (accounting, marketing, finance, and other managers) to understand the basics of this management discipline. Chapter 1 also introduces an important perspective, the supply chain, as a way to think about how to coordinate operational activities across different organizations. Chapter 2 describes how strategic choices in operations management relate to an organizations overall objectives and to choices made in marketing, finance, and other functional areas. In addition, Chapter 2 explains how to increase competitiveness through effective operations, and finally how to measure the effectiveness of operations activities.

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CHAPTER OUTLINE

A Broad Definition of Supply Chain Operations Management 4 Get Real: Why You Need to Study Operations Management 5 Important Decisions in Supply Chain Operations Management 6 Differences in Goods and Services Operations 6 Processes and Process Thinking 7 Operations Management Yesterday and Today: Growth of the Supply Chain Management Perspective 9 Advances in Technology and Infrastructure 10 Reduction in Governmental Barriers to Trade 10 Focus on Core Capabilities 11 Collaborative Networks 11 Viewing Operations Management from a Supply Chain Management Perspective 11 Operations Management Partners Across the Supply Chain 12 Cross-Functional Relationships in Operations Management 13 The Changing Nature of Supply Chains 16 Levels of Operational Planning Across the Supply Chain 16 Get Real: Jobs in Operations Management 17 How this Book Is Structured 18 Chapter Summary 20 Key Terms 21 Discussion Questions 21 Case: Business Textbook Supply Chain 22 Selected Readings and Internet Sites 23

LEARNING OBJECTIVES
After studying this chapter, you should be able to: 1 Explain what operations management is and describe the role that it plays in business and society. 2 Describe the major decisions that operations managers typically make. 3 Explain the role of processes and process thinking in operations management. 4 Explain what the supply chain is and what it means to view operations management using a supply chain perspective. 5 Identify the partners and functional groups that work together in operations management. 6 Define the primary activities associated with managing operations across the supply chain.
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In early 2005, HP was not performing well, and its board ousted chief executive Carly Fiorina.
Her replacement, Mark Hurd, quickly developed a plan designed to turn things around at HP. The key to the turnaroundimproved operations through better supply chain management.

Hewlett-Packard Reinvents Its Operations by Reinventing Its Supply Chain

HP improved its customer focus and responsiveness by: Separating its printer business from its PC business. Building strong partnerships with major retail outlets such as Walmart, BestBuy, and Circuit City. Teaming with Walmart to create a build-your-own-PC program. Redesigning its notebooks and desktops to include more consumer-friendly features. Acquiring EDS, Inc., to provide a stronger services arm for the company. HP improved product quality and reduced product cost by: Merging its PC business with Compaq. Reducing the number of contract factories used to build its personal computers from 24 to 10. Creating competition between its suppliers of chips, Advanced Micro Devices and Intel, thus generating even cheaper microchip prices. Continually improving internal operational processes through Six Sigma and other quality management programs. These changes illustrate how HP used improvements both within its internal operations and in activities involving its suppliers, distributors, and customers to create competitive advantages. Today, HP provides its customers with immediate access to in-stock, attractively designed, and competitively priced computers through multiple distribution channels including direct sales, online sales, and a wide variety of retail stores. The company is also growing its support services business. As a result, the new HP has gained ground on competitors such as Dell and IBM.

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In this book, Managing Operations Across the Supply Chain, we bring together two important business concepts: operations management and the supply chain. The book is mainly about operations management, but we will study operations management using a supply chain perspective. This perspective means that this book considers operational activities that cross firms' boundaries, involving suppliers and customers of all types. This larger network of organizations makes up a firm's supply chain. The HP story illustrates the need for this broad perspective of operations management. In order to turn their business around, HP had to improve their relationships with suppliers and customers as well as improve their own internal operations. Operations management by definition spans a large number of activities that take place both inside and outside the business firm.

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