INTRODUCTION TO OPERATIONS AND SUPPLY CHAIN MANAGEMENT

FALL 2010KEITH ROGERS

Commerce 341 Operations Management

04/11/2023

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Agenda

­ Introductions­ What­is­SCM­ Dell­success­Story­ Short­discussion­ Outline,­deliverables­&­grading­ Key­ideas­review­ Next­class

What­is­Supply­Chain­Management3

Professor:­Keith­Rogers

Office:­Goodes­Hall­227

Admin­Support:­Jane­O’Donnell­(Goodes­224)

Office­Hours:­Thursday­11:00­–­12:00

­­­(or­by­appointment)

One­Potential­Definition­of­SCM4

A­supply­chain­is­a­network­of­organizations­that­procure­and­transform­inputs­into­intermediate­and­final­goods­and­services.

SCM­in­the­discipline­that­addresses­how­a­supply­chain­can­provide­the­greatest­value­by­performing­activities­efficiently­and­effectively.

What­is­Supply­Chain­Management5

What­SCM­is­not...6

­ Applied­mathematics­or­statistics.­ Organizational­behavior,­strategy­or­marketing.­ Information­systems,­negotiation­or­law.­ Human­resources,­accounting­or­finance.

But­SCM­draws­on­and­impacts­all­of­them.

SCM­Case:­Dell­Computers7

Can­you­think­of­four­computer­manufacturers?

SCM­Case:­Dell­Computers8

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10

20

30

40

50

60

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Combined HP and Dell

Dell

HPQ

Quick­Finance­Question9

What­was­the­approximate­return­on­these­investments?

HP­was­an­awesome­28%­per­year.

Dell­was­an­insane­159%­per­year.

HP DellJan-96 13.21 1.03Jan-00 35.96 46.19

SCM­Case:­Dell­Computers10

In­1996,­Dell­capitalized­on­the­growing­number­of­customers­who­are­using­the­Internet­and­launched­its­online­store­at­dell.com.­The­online­venture­then­proved­to­be­the­most­appropriate­sales­channel­that­matched­the­supply­chain­direct­model­implemented­by­Dell.

In­its­path­to­compete­in­the­market,­Dell­had­to­provide­additional­services­such­as­DellPlus­that­enabled­Dell­to­install­commercial­software­packages,­DellWare­which­provided­hardware­and­software­from­other­vendors,­and­after­sales­and­on-site­support­services.­These­actions,­as­described­by­Michael­Dell,­required­establishing­more­partnerships,­which­Mr.­Dell­describes­as­a­process­of­"trial­and­error".­The­integration­with­partners­was­changing­as­the­technology­is­evolving­and­many­venders­go­volatile­while­others­remain­sold.­Furthermore,­looking­for­an­IT­company­to­build­the­online­store­brought­in­very­few­players,­which­made­Dell­accept­the­overhead­of­developing­the­portal­in-house.

http://ezinearticles.com/?Dell-Online-(Case-Study)&id=1371240

SCM­Case:­Dell­Computers11

Is­it­really­that­difficult­for­you­or­your­competitors­to­set­up­a­website­to­sell­products­through­internet?

1 week

SCM­Case:­Dell­Computers12

What­was­involved­in­Dell’s­success?13

One­Potential­Definition­of­SCM14

A­supply­chain­is­a­network­of­organizations­that­procure­and­transform­inputs­into­intermediate­and­final­goods­and­services.

SCM­in­the­managerial­discipline­that­addresses­how­a­supply­chain­can­deliver­the­greatest­value­by­performing­activities­efficiently­and­effectively.

Dell­Example:­Network­of­Organizations15

Dell­manages­a­network­of­organizations:- Dell­is­integrated­with­many­suppliers.- Information­systems­support­forecasting,­planning­and­scheduling.- Web­allows­low­cost­order­processing­and­demand­shaping.- Just­in­time­(JIT)­manufacturing­processes­minimizes­inventory.

Dell­Example:­Transformation16

Dell­is­involved­in­5­types­of­transformation:- Physical­(manufacturing)- Location­(transportation)- Exchange­(buying­&­selling)- Storage­(maintaining­inventory)- Informational­(informing­customers)

Dell­is­not­involved­in­the­6th­type,­physiological­which­relates­to­the­functioning­of­living­things­as­in­providing­health­care.

Dell­Example:­Goods­and­Services17

Dell­is­known­for­producing­goods­not­services,­though,­actually,­all­there­is­a­continuum:

Aside:­

-­What­are­some­examples­of­services?

-­What­differentiates­services­from­goods?

Pure Good – Core Good – Core Service – Pure Service

Dell­Example:­Goods­and­Services18

Services­differ­from­goods­in­terms­of:1. Intangibility­–­may­not­physically­exist­at­all.

2. Higher­customer­interaction­in­production.

3. Higher­variability­in­production­depending­on­customer­needs.

4. Higher­perishable­and­may­be­completely­time­dependent.

5. Product­specification­is­often­defined­in­terms­of­5­senses.

Value,­Efficiency­and­Effectiveness­19

Dell­is­successful­because­it­creates­more­customer­value.­­To­do­so­it­must­be­mindful­of­efficiency­and­effectiveness.- Efficiency­–­doing­things­with­less.- Effectiveness­–­doing­the­right­things.- Value­–­getting­more­output­for­less­input.

Value = Quality / Resources

Outline,­deliverables­&­grading20

Please­refer­to­the­outline­for­details­on­the­schedule

I­want­to­highlight­a­few­changes:- Innovative­delivery­method- Case­deliverables­in­teams­of­two- Case­competition­in­teams­of­five­

Grade­Breakdown21

Case­Memos­(Team­of­2)

10%­Case­1:­Huxley­Maquiladora­Case­(Due:­October­15th)­

10%­Case­2:­Delays­at­Logan­Airport­(Due:­November­5th)

Case­Competition­(November­27th­and­28th)

10%­Memo

15%­Presentation

Individual

40%­Final­Exam

15%­Participation

Name­Cards

Name cardsEach of you has (or will soon have) a name card.On the back is a place for a summary of what you

thought the main idea was and a question or something you would like to have clarified.

Please fill this out and return it to me each class.Each class you must write something on the card.

This can be a question or a comment regarding what you thought the main point was or something that might improve the class such as an insight, example or suggestion.

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Key­Ideas­Review

- SCM as a combination of transformational processes:

Physical Informational ExchangeStorage Physiological Location

- Effectiveness, efficiency and value- Continuum of goods vs. services

Pure Good – Core Good – Core Service – Pure Service- Characteristics of goods vs. Services

Physical vs. IntangibleLow vs. high Customer InteractionHomogeneous vs. HeterogeneousPerishable vs. StorablePackage of features affecting 5 senses

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For­Next­Class

1. Read chapter 1 and 22. Review the boat building instructions on the course

portal, consider attempting to build a boat.

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