Operations management in the supply chain

The distinguishing features of service operations are that the service cannot be provided without customer input and that ownership does not change. Service includes transportation of goods and people. Transportation can only take place if there are goods to move or passengers to carry. At the end of the transportation ownership has not changed, when you travel in a bus or aircraft the passenger 

A service organization exists to interact with customers and to satisfy customers service requirements. For any service to be provided, there has to be a customer. Without a customer, and interaction between customer and the service organization, the objective of providing service cannot exist. 

All of the above represent either a capital investment or an ongoing expense to the organization. Tangible inputs are physical and can be seen and touched, and the amount or rate of use can be measured in quantifiable terms. Intangible inputs are difficult to quantify. They cannot be seen or touched and include knowledge (intellectual capital) culture and values. 

Money is not a resource. Money is used to buy resources (people, machines, buildings, etc. are the resources). 

Likewise time is not a resource. Time, like money, is used to measure efficient use of resource or performance (e.g. on time delivery, lead time, idle time and down time). 

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Anderson, E., Fine, C. and Parker, G. (2000) Upstream volatility in the supply chain the machine tool industry as a case study. Prod Oper Manag, 9(3), 239-261. 

Regulators and customers require assurance in consistency of pharmaceutical and biopharmaceutical manufacturing operations. Today s manufacturing supply chains require multiple sites in varying locations to produce a product. Quality systems must be perceived as an integral part of the value chain. This requires that all sites be compliant in their operations and systems. Strong areas in one location do not make up for weak or absent systems in another location. Fines are levied and business is made or lost based on the individual site or weakest link in the supply chain. Management must have a mechanism to measure its processes, and a comprehensive QMS is the mechanism to demonstrate capability. 

The chemical safety assessment has to consider the manufacture or preparation of the substance as well as all identified uses. An identified use is a use of a substance or preparation containing it that is intended by a person involved in the supply chain or that is made known to him in writing by an immediate downstream user. The assessment shall consider all stages of the life cycle of the substance resulting from its manufacture and identified uses. The assessment has to be based on a comparison of the potential adverse effects of the substance with the known or reasonably foreseeable exposure of man or the environment, taking into account implemented and recommended risk management measures and operational conditions. 

Figure 1.1 also illustrates that the supply chain consists of more than the movement of physical goods between firms. It is also involves the flow of information between firms. This communication is necessary to manage and maintain the supply chain. Another supply chain flow is the flow of money. This is also shown in Figure 1.1 to illustrate that the primary purpose of every firm in the supply chain is to make money. This helps to remind all supply chain members that increasing their own income requires them to do everything in their power to improve the operations of the supply chain. 

Many major retailers and large manufacturers have reduced their operating costs through their use of supply chain management techniques. But, there has been little effect on the price of the item to the consumer. Some argue that this occurred because the total amount of inventory in the supply chain was not reduced. Instead, the inventory may have been transferred to the second and third tier suppliers, but not eliminated from the supply chain. 

The flexible production and customer service themes (themes 2 and 3) required major changes in the way Acme managed its plant capacity and scheduled its operations. These changes reflect focused strategies aimed at the emerging role of distributors in the supply chain. For Acme, this could mean three strategies ... 

With the advent of supply chain management, this U-shaped function must describe not only a single company s operation, but also the supply chain s. Supply chain design must consider the expected range in which the chain must produce to satisfy its markets. In the following sections we describe ways to make this happen. 

The biggest impact on the supply of parts on time was clearly the way the incoming unserviceable turbines were treated. Previously, these units were fed into the process to balance the workload of the whole operation. This meant that turbines could wait several days in the fully assembled state before being disassembled. Although this workload buffer was effective in managing capacity, it caused a major delay in the supply chain dynamics. 

Event An occurrence in the supply chain that triggers the need for action. Supply chain event management refers to software solutions that monitor operating data to determine if such an event has occurred. 

In addition to specifying operating policies for the supply chain, one may find the linear state-space framework useful in studying important issues in supply chain management, such as the assessment of the potential benefits of information sharing between the retailer and the supplier (see more details in 4.3). In fact, it has been shown that in the elementary AR(1) and ARIMA(0,1,1) cases, there is no value for the retailer sharing information about the actual demand realizations with the supplier. This is because the supplier can observe the values of A-2, from the history of retailer s... 

Given the supply-chain context of this book, we will consider only the management of independent-demand items—i.e., those items that move between firms in the supply chain. Throughout this book, we focus on issues related to node-to-node relationships in the supply chain, consistent with the framework developed in Chapter 1 that defines a supply chain as a network of nodes. Dependent demand involves "within-node" effects and is outside the scope of this book, but is discussed extensively in books on production/operations planning and control systems (e.g., Vollmann et al., 2005 or Chapman, 2006, which also contains an excellent discussion on hybrid systems that combine appropriate elements of MRP and kanban control). Note, however, that the classification of an item as an independent-demand item or a dependent-demand item is not an absolute characterization. Rather, it only makes sense in context. For example, to the company that assembles the cell phones, the keypad is clearly a dependent-demand item, provided that its only demand is derived from the production schedule for cell phones (i.e., not from sales of keypads as stand-alone items). To the firm that produces the keypads and sells them to various cell phone manufacturers, however, the keypad is an... 

AirSupply is a central aerospace SCM platform that facilitates secured and traceable communication across companies and provides valuable assistance at both operational and management level. As a result, processes with external partners are more transparent and dependable while various alert mechanisms allow exception-based management of the supply chain. It is based on technology from SupplyOn, a specialist in cross-company supply chain collaboration which is already established in the automotive industry. In close cooperation with BoostAeroSpace, SupplyOn s platform has been adapted to meet aU requirements specific to the aerospace industry. 

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