1. Operations and Supply Strategy 2 . Project Management
T W E N T Y- F I R ST- C E N T U RY O P E R AT I O N S A N D S U P P LY M A N AG E M E N T Managing a modern supply chain involves specialists in manufacturing, purchasing, and distribution, of course. However, today it is also vital to the work of chief financial officers, chief information officers, operations and customer service executives, and chief executives. Changes in operations and supply management have been truly revolutionary, and the pace of progress shows no sign of moderating. In our increasingly interconnected and interdependent global economy, the process of delivering supplies and finished goods from one place to another is accomplished by means of mind-boggling technological innovation, clever new applications of old ideas, seemingly magical mathematics, powerful software, and old-fashioned concrete, steel, and muscle. In the first section of Operations and Supply Management: The Core we lay a foundation for understanding the dynamic field of operations and supply management. This book is about designing and operating processes that deliver a firm’s goods and services in a manner that matches customers’ expectations. Really successful firms have a clear and unambiguous idea of how they intend to make money. Be it highend products or services that are custom-tailored to the needs of a single customer or generic inexpensive commodities that are bought largely on the basis of cost, competitively producing and distributing these products is a great challenge. In Chapter 1, “Operations and Supply Strategy,” we show the critical link between the processes used to deliver goods and services and customers’ expectations. Customers make a choice between different suppliers that is based on key attributes of the product or service. Aligning the processes used to deliver the product or service is important to success. If, for example, cost is the key customer order winning attribute, the firm must do everything it can to
design processes that are as efficient as possible. Competing on the basis of cost alone can be a brutal way to do business, and so many firms today move into other market segments by offering products with innovative service and feature characteristics that attract a loyal customer following. Take, for example, the U.S. motorcycle manufacturer Harley-Davidson. Customers pay top dollar for a unique and classic motorcycle that can be individualized by each customer through the selection of dealer-installed options. Further, the firm has developed a highly profitable line of clothing, memorabilia, and other accessories to complete the HarleyDavidson concept. Processes needed to support that concept certainly need to be efficient, but even more important is the ready availability of the options and accessories that are often purchased on impulse and for gifts.
Business today is constantly changing. HarleyDavidson, for example, cannot continue to be successful without improving its motorcycles and delivering innovative new accessories every year. In Chapter 2, “Project Management,” techniques for managing longer-duration projects are discussed. The topic is quite appropriate since (1) it is likely that many of the students in the course will participate in projects as an ongoing part of their jobs and (2) the concepts involved in managing projects are directly transferable to the design of repetitive processes, a topic that is covered in the second section of the book. The successful coordination of activities such as new product introductions, the construction of new plants and warehouses, and the building of new retail sites is important to a firm’s growth in today’s dynamic business environment.
OPERATIONS AND SUPPLY STRATEGY
After reading the chapter you will: 1. 2. 3. 4. 5. 6. Know why it is important to study operations and supply...