Deze samenvatting van Operations and Supply Management (Jacobs & Chase) is gebaseerd op het studiejaar 2013-2014.
Operations and Supply Chain Management (OSCM)
The design, operation, and improvement of the systems that create and deliver the firm’s primary products and services.
A Supply Chain encompasses all activities associated with the flow and transformation of goods and services from the raw materials stage through to the end-user, as well as the associated information flows. The management of supply chain requires effort to integrate the processes in the supply chain. To obtain a valuable chain with satisfied customers it is necessary to have an effective coordination and integration of materials through out the supply chain. Simultaneously, attention can be paid to reduction of costs.
The main task of a supplier is the supply of raw materials, semi-finished products and finished products to downstream customers. Thereby, one can apply different strategies:
Supplying demand at lowest possible costs
Responding quickly to changing requirements and demand to minimise stock outs.
Sharing market research for jointly development of products and services
Manufacturers assemble products and services and concerns with made-or buy decisions regarding components and semi-finished products. They purchase acquisition of goods and services. Their objectives of purchasing are to identify products and services that can be obtained externally and to develop, evaluate and determine the best supplier, price and delivery for those products and services.
Manufacturers that decide to buy instead of making products can follow three-stage process:
Vendor evaluation: finding potential vendors and determining likelihood of their becoming good suppliers
Vendor development: assuming that a firm wants to proceed with supplier, how to integrate activities into its own system?
Negotiations: several strategies exist to determine price(s)
Distributors distribute products from manufacturers to retailers and customers. They are responsible for the temporarily storage of products in warehouses and the balance of fluctuations in production. In addition, distributors handle the transportation of products (e.g. trucks, trains, airplanes, ships or pipelines)
Customers can buy directly products and services at supermarkets or service organisations or get direct delivery of products after ordering on the Internet or phone.
Activities associated from supplier to customer can be described as downstream flows, which is contrary to upstream flows (customer to supplier).The reasons for the occurrence of upstream flows are:
Product-service bundling When a firm builds service activities into its product offerings to create additional value for the customer
Efficiency Doing something at the lowest possible cost
Effectiveness Doing the things that will create most value for the customer
Value The attractiveness of a product relative to its cost
Operations and supply chain processes can be categorized as follows:
Planning: processes needed to operate an existing supply chain strategically
Sourcing: selection of suppliers that will deliver the goods and services needed to create the firm’s product
Making: where product is produced or the service is provided
Delivering: referred to logistic processes
Returning: involves the processes for receiving worn-out, defective, and excess products back from customers and support for customers who have problems with delivered product
The five characteristics of services:
Intangible process
Requires the degree of interaction with the customer to be a service
Heterogeneous (varying day to day between the customer and the servers)
Perishable and time dependent
Specification of a services can be defined as a package of features (supporting facility, facilitating goods, explicit service, implicit service)
The Goods-Services Continuum
Outsourcing means that a third party logistics executes activities of a company. To gain success the third logistics provider actively needs to help solving problems, if there is perfect information exchange and trust between parties.
There are three types of production processes:
Postponement: delaying any modifications or customisation to the product as long as possible in production process (e.g. Hewlett-Packard adds power system the moment the destination country of the printer is known)
Channel assembly: postponement of final assembly until distribution (e.g. Dell makes a computer in its warehouse from standardised components after the order of a customer)
Standardisation: Reduction of the number of variations in materials and components as an aid to reduce costs
Mass customization
The ability to produce a unique product exactly to a particular customer’s requirements
Business analytics
The use of current business data to solve business problems using mathematical analysis.
As operations and supply management is a dynamic field, a global enterprise challenges nowadays different issues:
Coordination between mutually supportive but separate organizations (existence of contract manufacturers that are specialized in performing focused manufacturing activities)
Optimization of global supplier, production, and distribution networks
Management of customer touch points (recognition that making resource utilization decisions must capture the implicit costs of lost customers as well as the direct costs of staffing)
Raising senior management awareness of operations as a significant competitive weapon
Sustainability and the triple bottom line (economic, employee and environmental viability)
Sustainability
The ability to meet current resource needs without compromising the ability of future generations to meet their needs.
Triple bottom line
A business strategy that includes social, economic, and environmental criteria.
Shareholders
Own one or more shares of stock in the company
Stakeholders
Indirectly or directly influenced by the activities of the firm.
The Triple Bottom Line captures an expanded spectrum of values by evaluating a firm against the following criteria:
Social: pertains to fair and beneficial business practices toward labor, the community, and the region in which a firm conducts is business
Economic: the firm’s obligation to compensate shareholders who provide capital via competitive returns on investment
Environmental: the firm’s impact on the environment and society at large
Operations and supply chain strategy
The setting of broad policies and plans for using the firm’s resources optimally and must be integrated with corporate strategy.
Operations effectiveness
Performing activities in a manner that best implements strategic priorities at minimum cost.
A planning strategy involves a set of repeating activities, which are performed in different time intervals and in a closed-loop process:
Develop/Refine the Strategy (yearly)
Define vision, mission and objectives
Conduct strategic analysis
Define strategy competitive priorities
Translate the Strategy (quarterly)
Major Focus Points and Projects
There are seven major competitive dimensions forming the competitive position of a firm.
Cost or price: The choice to either make the product or deliver the service cheap
Quality: The firm’s definition of how the product or service is to be made
Delivery speed: The firm’s ability to make the product or deliver the service quickly
Delivery reliability: The firm’s ability to deliver the product when promised
Coping with changes in demand: The firm’s ability to respond to the change in demand
Flexibility and New-Product introduction speed: The firm’s ability to be flexible in order to offer a wide variety of production to its customers in a given time.
Other product-specific criteria relate to specific products or situations. Special services can increase sales of manufactured products such as:
Technical liaison and support
Meeting a launch date
Supplier after-sale support
Environmental impact
Other dimensions (e.g. color, size, weight)
Trade-offs
Occur when activities are incompatible so that more of one thing necessitates less of another (e.g high quality is viewed as a trade-off to low cost).
Straddling
Occurs when a company seeks to match the benefits of a successful position while maintaining its existing position
Order winner
A specific marketing-orientated dimension that clearly differentiates a product from competing products
Order qualifier
A dimension used to screen a product or service as a candidate for purchase
Activity-system maps
Diagrams that show how a company’s strategy is delivered through a set of supporting activities
Supply chain risk
The likelihood of a disruption that would impact the ability of a company to continuously supply products or services
Productivity
A measure of how well resources are used.
Partial measure
Input factors: labor, capital, materials, energy
Multifactor measure includes some, but not all inputs:
Total measure
Includes all outputs and inputs.
Capacity Management in Operations is the ability to hold, receive, store or accommodate a number of customers in a system. Capacity is the amount of resource inputs available relative to output requirements over a particular period of time. However, it does not imply the duration of its sustainability. When looking at capacity, operations managers look at inputs and outputs. Operations management focus also the time dimension of capacity. Capacity planning is views in the following three time durations:
Long range greater than one year
Intermediate range monthly or quarterly plans for the next 6 to 18 month
Short range less than one month
Strategic capacity planning
Finding the overall capacity level of capacity-intensive resources to best support the firm’s long-term strategy.
Capacity
The output that a system is capable of achieving over a period of time.
The Best Operating Level is a level of capacity for which the process was designed and thus is the volume of output at which average unit cost is minimized. The determination of the minimum is difficult as it includes a complex trade-off between the allocation of fixed overhead costs and other costs. A measure to reveal how close a firm is to its best operation level is by calculating the capacity utilization rate.
Capacity utilization rate
Capacity used / Best operating level
Economies of scale
A cost advantage for companies as the volume increases, the average cost per unit of output drops.
Focused factory
When a production facility works best when it focuses on a fairly limited set of production objectives. This concept is focused on the capacity by operationalizing the mechanism by plant within a plant (PWP).
Plant within a plant
An area in a larger facility that is dedicated to a specific production objective. This can be used to operationalize the focused factory concept.
Capacity Flexibility
The ability to rapidly increase or decrease production levels, or to shift production capacity quickly from one to another.
Flexible plants changeover-time zero
The ultimate in plant flexibility is the plant. Such a plant can adapt to change by the use of movable equipment, knockdown walls, and easily accessible.
Flexible processes
Flexible manufacturing processes permit low-cost switching from one product to another and enable economies of scope.
Flexible workers
Flexible workers have multiple skills and the ability to switch easily from one kind of task to another. They require broader training than specialized workers and need managers and staff support to facilitate quick changes in their work assignments.
Economies of scope
When multiple products can be produced at lower cost in combination than they can be separately.
Changing the capacity it is important to maintain system balance, frequency of capacity additions or reductions, and the use of external capacity. The objectives of strategic capacity planning are to provide an approach for determining the overall capacity level of capital-intensive resources that best supports the company’s long-range competitive strategy. It has an impact on:
Capacity cushion
Refers to the amount of capacity in excess of expected demand. It is the reserve capacity that handles sudden increases in demand or temporary losses of production capacity.
Deterministic Performance Estimation
Design capacity is the theoretical maximum output of a system or process in a given period.
Effective capacity
The capacity that can be expected given the product mix, methods of scheduling, maintenance and standards of quality.
Interarrival time
The time between two subsequent arrivals of products at their entrance in the process.
Throughput time
The time that passes between the moment at which the customer/product enters the system and the moment at which the customer/product is ready
Arrival rate
The number of products that arrive per time unit
Departure rate
The number of products that leave the system per time unit. It is determined by the speed of the bottleneck. Only if the arrival process is the bottleneck, then the departure rate equals the arrival rate.
Bottleneck
An operation that limits output in the system and are constraints that limit output of production. If none of the machines, workers, etc. in the system is a bottleneck, then we say that the arrival process is the bottleneck.
Determining a bottleneck requires the following:
Calculate the design capacity of each process.
Calculate the expected number of products arriving at the system
If design capacity of all processes is sufficient, arrival process is bottleneck; else, process with smallest design capacity is bottleneck
The utilisation rate for a workstation consisting of n identical, parallel servers can be computed from = (n x ) : arrival rate and : production rate
Productive utilisation rate is calculated similar to normal utilisation but exludes set-up times.
The Work-in Progress (WIP): L = W
is the average number of produced units per time-unit,
There are three methods to calculate the capacity:
Deterministic performance estimation | Analytical modelling (such as waiting lines) | Simulation (approximation of reality) |
| | You cannot determine all characteristics or not all characteristics can be modelled. You cannot incorporate all external influences. Incorporated external influences will be approximated.
|
In deterministic performance estimation we assume there is no uncertainty but overly optimism. Therefore, the deterministic estimate will be
too low for throughput times
too low for Work-In-Progress
quite good for the departure rate
quite good for the utilisation rate
Lead time
The time needed to respond to a customer order
Customer order decoupling point (CODP)
Determines where inventory is positioned to allow process or entities in the supply chain to operate independently. It separates order-driven activities from forecast-driven activities. As closer the decoupling point is to the customer, the quicker the customer can be served.
Make-to-stock
Firms that serve customers from finished goods inventory. Essential issue in satisfying customers is to balance the level of inventory against the level of customer service.
Easy with unlimited inventory but inventory costs money
Trade-off between the costs of inventory and level of customer service must be made
Forecasting is very important task
Firms applying make-to-stock use lean manufacturing to achieve higher service levels for a given inventory investment
Assemble-to-order
Used by those firms that combine a number of preassembled modules to meet a customer’s specification.
Requires a design that enables as much flexibility as possible in combining components
Significant advantages from moving the customer order decoupling point from finished goods to components
Manufacturing results in customer specific products, assembled in a similar way
Make-to-order
Used by firms that make the customer’s product from raw materials, parts and components. Essential issue is to deliver on time, while keeping costs low through high capacity utilization
Catalogue products with small demand and specific customer details/specification
Limited inventory of raw materials, extensive planning and scheduling efforts
Engineer-to-order
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