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Everyone is...
An Ops Manager
All managers should be operating from a
Holistic Perspective
Holistic perspective focuses on what 3 pillars?
Economic, Social, Environmental
Operations Management (OM)
The management of the entire process that transforms INPUTS to OUTPUTS
What is supply chain?
Network of organizations:
- Raw materials providers
- Manufacturers
- Wholesalers and distributers
- Retailers
- Service Providers
How is the supply chain connected?
Forward and reverse flow of goods, information, and enabling resources.
Are partnerships beneficial in the supply chain?
Yes. However, they should be driven by corporate strategy.
The supply chain is interested in creating...
Value for the consumer.
How to improve the supply chain?
- Demand management / mapping
- Diversify Supplier Base
- New/Modified channel options
- Increase production/distribution capacity
- Constant/direct communication with SC partners
Where does operations management fit in the supply chain?
Everywhere
CSCMP Definition of Supply Chain Management
Management of relationships that plans and manages all activities involved in sourcing and procurement, conversion. and all logistics management activities.
Supply Chain Management in essence...
Integrates supply and demand management within and across companies.
Efficient Supply Chain Management
Demand is stable, organizations are competing on cost strategy
Supply Chain Management - Boundaries and Relationships
Drives coordination of processes and activities with and across marketing, sales, product design, finance, and information technology.
As production systems are developed, managed, and improved...
Chaos turns to Order
Strategy of Root Beer Simulation
- doing things differently from competitors in a way that lowers costs or better serves customers needs
- what a firm chooses to do to create and sustain value for stakeholders
- Represents a framework for the utilization of resources
> Lowers costs
> Increases customer service
(Root Beer Simulation) Company's strategy is determined by...
the type of initiatives that management invests in.
Role of the Operations Manager
1) Management
2) Betterment
3) Fulfill Purpose - make decisions to achieve organizational objective
Management
The finite assignment of resources to tasks in order to achieve organizational objectives (e.g. meeting customers needs)
Bettermization
The allocation of resources that improves the bang (achievement of objectives) to buck (total system cost) ratio.
Purpose of the Operations Manager
Make decisions with resources and tasks to achieve organizational objectives
What was the objective of "The game"?
Maximize revenue
When a bottleneck exists and supply outstrips demand...
prices for "space" tend to increase
How does Jonah Define Productivity?
The act of bringing a company closer to its goal
What effect did improving the efficiency of robots have on sales? Inventory? Costs?
Sales remained the same, Inventory increased, and costs increased
What should be more important to the plant: efficiencies or money?
Money
Which two phenomena are found in every plant?
Dependent Events and Statistical Fluctuations
Can a system ever have a capacity greater than the bottleneck?
No
What is a bottleneck?
Any resource whose capacity is equal to or less than the demand placed upon it
What is a non-bottleneck?
Any resource whose capacity is greater than the demand placed on it
What is the relationship between a bottleneck and a non-bottleneck?
When non-bottlenecks do more work, they produce excess inventory.
Is achieving 100% efficiency for all operations always a good thing? Why?
No - because this creates excess inventories which is against "the goal"
What is the difference between activating a resource and utilizing a resource (pg. 96)?
Activating - Simply turning on a resource (power button)
Utilizing - Making use of it in way that moves the system toward "the goal"
Are bottlenecks always people or machines (pg. 128)?
No - It can be a department, or people, or even a policy
What are the 5 focusing steps of the Theory of Constraints (pg. 130)?
1) Identify the system's constraint(s)
2) Decide how to exploit the system's constraint(s)
3) Subordinate everything else to the above decision(s)
4) Elevate the system's constraint(s)
5) Go back to step 1
- Do not allow inertia to cause a system's constraint(s)
What has gotten in the way of improved operational performance (pg. 128)?
Constraints
What does Jonah Teach at the end of the book?
Jonah teaches that a system of local optimums is not an optimum system at all; it is a very inefficient system.
5S (Know Order)
1. Sort
2. Straighten
3. Shine
4. Standardize
5. Sustain
HEB's success was the result of...
Supply chain partnerships (alliances - which can be costly)
HEB's success was also the result of...
Corporate Strategy
- Increased production capacity
- Communicated with supply chain partners
- Limited how much customers can purchase
- Diversified supplier base
How to avoid bullwhip effect
•Improve information sharing
•Improve channel alignment
•Improve operational efficiency
Drivers of the bullwhip effect
•Lag Time
•Lack of communication/information sharing
•Fluctuation or oscillations in demand
Bullwhip effect
results from the combination of demand variability, combined with the time lag in receiving information
Impacts of bullwhip effect
- No collaboration, leading to independent (and conflicting) decisions
- Poor customer service
- Lag time - lead time from order to delivery is often difficult to calculate
- Increased stock on hand driving an increase in inventory holding costs
- filtered information - kind of like the telephone game
- "Black box" observing patterns - don't know what's happening with your SC partners
According to Dr. Goldratt, we do not see the ________ because we don't think ________
obvious; globally
According to Dr. Goldratt, Companies should work within a _______, the unit that interacts with the _______ _______
system; external world
According to Dr. Goldratt, when facing recessions companies tend to reduce_______ versus looking at the complete supply chain system and on a global scale.
Inventories
According to Dr. Goldratt, in a supply chain when the ____ _______ makes a purchase, the whole chain has made a sale.
end customer
Inventories
All raw materials, WIP, finished goods in a supply chain
Is inventory an asset or a liability?
asset