supply chain exam 1

3 pillars of any business

marketing, production/operations, & finance

basic operations management functions

• planning

• organizing

• staffing

• leading

• controlling

heritage of operations management

1. Adam Smith’s division of labor

2. Whitney’s standardized parts

3. Taylor’s scientific management

4. Ford’s assembly line

5. Gantt charts

6. Gilbreth’s motion study

7. Deming’s quality control

Henry Ford

creating first moving assembly line to make the Model-T; cut down to 1/10 of speed

goods vs. services

goods are tangible; services intangible & very few pure services

economic system inputs

labor, capital, & management

economic system outputs

goods and services

U.S. economic inputs to outputs increase per year

2.5%

productivity increase is a result of 

capital (38%), labor (10%), & management (52%)

key variables for improved labor productivity

basic education, diet, and social overhead (transportation, sanitation, etc)

the more capital you have

the more productive an operation is

productivity

ratio of outputs (goods & services) divided by the inputs (resources like labor & capital); O/I

productivity improvement

result of managing & intervening in transformation of work process

PI will occur if

• outputs increase & inputs decrease/stay the same

• outputs stay the same & inputs decrease

• outputs increase & inputs increase

• outputs decrease & inputs decrease

(basically everything but outputs decrease & inputs increase/stay the same)

labor productivity

units produced/labor hours used

multi-factor productivity

output / (labor + material + energy + capital + miscellaneous)

% of productivity improvement

(new productivity - old productivity) / old productivity

reasons to globalize

• improve the supply chain

• reduce costs

• improve operations

• understand marketing

• improve products

• attain & retain global talent

mission statements

tell an organization where it is going