Chapter 1
Introduction to Operations and Supply Chain Management

1-1

Lecture Outline
• Why do we need to study Production & Operations Management? • What Operations and Supply Chain Managers Do? • The Operations Function • Evolution of Operations and Supply Chain Management • Globalization • Productivity and Competitiveness • Strategy and Operations • Learning Objectives for This Course
Copyright 2011 John Wiley & Sons, Inc. 1-2

Why do we need to study POM?
• It is not my major?!!  You’ll be able to use the ideas in this course to organize work, ensure quality, and manage processes. • Regardless of your major, you can still apply some aspects of operations management to your future career. • In general, operations brings together many disciplines and provides an integrated view of business organizations.

Copyright 2011 John Wiley & Sons, Inc.

1-3

Why do we need to study POM?
• Understand how some of the giant companies like Apple and Toyota manage their operations in order to remain competitive in today’s global market.

$153 billion
Copyright 2011 John Wiley & Sons, Inc.

$21.8 billion

What Operations and Supply Chain Managers Do
• What is Operations Management?
• It is the study of processes directly related to the creation and distribution of goods and services.

• What is Operations?
• A function or system that transforms inputs into outputs of greater value. • Operation is often defined as a transformation process.

• What is a Transformation Process?
• A series of activities along a value chain extending from supplier to customer. • Activities that do not add value are superfluous and should be eliminated (non-value adding activities).

Copyright 2011 John Wiley & Sons, Inc.

1-5

Operations as a Transformation Process
INPUT •Material •Machines •Labor •Management •Capital

TRANSFORMATION PROCESS

OUTPUT