Learning Objectives
1-1: Explain how globalization has influenced the management of supply chains and their operations.
A company managing its global supply chain and operations faces numerous challenges, such as the costs of doing business abroad, the productivity and quality of the work of foreign workers, extended shipping times, and the difficulty of selecting suppliers that a firm isn’t familiar with or familiar suppliers that don’t always perform well. Firms that can handle these challenges well can create a competitive advantage for their organizations. This is particularly true for supply chain management. Supply chain management is the next great competitive frontier.
1-2: Describe the role of operations management within a company and in society.
Operations management is a transformative function. It involves managing a set of processes required to design, produce, and deliver goods or services that add value throughout the supply chain and that benefit the final consumer. Operations management plays a pivotal role in our lives.
1-3: Trace the path of a raw material from the start of the supply chain to the final consumer.
Supply chain management involves managing and integrating key business processes, relationships, and flows of materials, information, money, and people, with the ultimate goal of creating value for a firm’s customers and stakeholders. An organization’s supply chain is made up of numerous inbound and outbound partners. Each supply chain partner has to be managed for a firm to maximize its performance.
1-4: Explain why it is important to have an integrated view of operations from a larger supply chain framework.
Critical decisions made in both operations and supply chain management at the strategic, tactical, and operational levels impact each other as the two are interrelated. First, upstream interfaces or relationships between operations and suppliers must be managed effectively to ensure the right quality materials are obtained at the right quantity and at the right time. Second, the downstream interfaces—the relationship that the firm’s operations has with its customers—have to be managed effectively to improve the firm’s product sales and growth. Finally, the vertical interfaces—the relationship the firm has with suppliers that provide the technology and the skilled labor needed to design the firm’s products, processes, and other services—have to be managed effectively to promote efficiency of operations, produce quality products, and minimize disruptions in production and the delivery of the final products to customers.
1-5: Describe the evolution of operations and supply chain management from the industrial revolution to the present.
The Industrial Revolution vastly changed how products were produced. Most modern innovations took place in the 20th century. These innovations include TQM, Six Sigma, lean and agile manufacturing, BPM, and ERP. In the 21st century, increased globalization has led to a proliferation of strategic partnerships, joint ventures, licensing agreements, research consortia, direct marketing agreements—and above all—the formation of global supply chains.
1-6: Identify some of the current and emerging trends in operations and supply chain management.
The trend toward optimizing the use of raw materials and labor by eliminating waste and maximizing productivity will continue. Methods such as such Six Sigma and lean and agile manufacturing will gain popularity not only in the manufacturing sector but in the service sector as well. Greater supply chain risks and the restructuring of supply chains are likely to continue, as are the trends toward sustainability and corporate social responsibility.