Operations and Supply Chain

Management
Introduction to Operations and Supply Chain Management

Prepared by
Dr. Mohammed Torkey, PhD
[email protected]
 HELLO!
NAME

MY NAME IS

Mohammed Torkey Ph.D., MSc

ABOUT

Lecturer of Business Administration.

Business Transformation Consultant and Trainer
 Criteria Grade
Participation 5%
Quiz I 10%
Quiz II 10%
1st Assessment: Mid-Term Exam (Take-Home Exam) 25%
2nd Assessment: A Final Exam 50%
Total 100%
Introduction to POM & SCM 01

Productivity Measurements 03

Forecasting 04

Product Design 05

Capacity Planning 06

Supply Chain Management 07

Managing Inventory in a Supply Chain 13

Process Layout Decisions 19

Location Decisions 21
 1

What? Why? How?

What?
 1
Strategic
Management
 What is Management?
What is Management?
Is the science and art of efficiently using the available
resources to achieve the organisational objectives
effectively.
Strategy
What is meant by the term Strategy?

What is the importance of a strategy?

To be the best business in our market?
We aim to be No.1 in the Market.

Do these sentences reflect a strategy?

The strategy is this set of actions if done or conducted, your business

could be the best business in the market.
 How to be unique
through your strategy?
Porter = Strategy
Strategy = Porter

Chairman of Institute of Strategy at

Harvard Business School

A strategy is defined with how would you

be distinguished in your market in the
eyes of your customers.
 “Strategy is about
making choices, trade-
offs; it's about
deliberately choosing to
be different”

Michael Porter
Corporate Corporate
Strategy

Business

Strategies Strategy
Functional
Strategy
 Corporate Strategies
Growth
Strategies

Stability
Strategies

Retrenchment
Strategies
 Corporate Strategies
Growth
Strategies

Stability
Strategies

Retrenchment
Strategies
 Corporate Strategies
Integration Strategies
Growth
Strategies

Stability
Strategies

Retrenchment
Strategies
 Corporate Strategies
Integration Strategies
Growth
Strategies
Diversification Strategies

Stability
Strategies

Retrenchment
Strategies
 Corporate Strategies
Integration Strategies
Growth
Strategies
Diversification Strategies

Stability
Strategies

Retrenchment
Strategies
 Corporate Strategies
Forward Integration Strategy
Integration Strategies
Growth
Strategies
Diversification Strategies

Stability
Strategies

Retrenchment
Strategies
 Corporate Strategies
Forward Integration Strategy
Integration Strategies
Backward Integration Strategy
Growth
Strategies
Diversification Strategies

Stability
Strategies

Retrenchment
Strategies
 Corporate Strategies
Forward Integration Strategy
Integration Strategies
Backward Integration Strategy
Growth
Strategies Horizontal Integration Strategy
Diversification Strategies

Stability
Strategies

Retrenchment
Strategies
 Corporate Strategies
Forward Integration Strategy
Integration Strategies
Backward Integration Strategy
Growth
Strategies Horizontal Integration Strategy
Diversification Strategies Related Diversification Strategy

Stability
Strategies

Retrenchment
Strategies
 Corporate Strategies
Forward Integration Strategy
Integration Strategies
Backward Integration Strategy
Growth
Strategies Horizontal Integration Strategy
Diversification Strategies Related Diversification Strategy
Unrelated Diversification Strategy

Stability
Strategies

Retrenchment
Strategies
 Corporate Strategies
Forward Integration Strategy
Integration Strategies
Backward Integration Strategy
Growth
Strategies Horizontal Integration Strategy
Diversification Strategies Related Diversification Strategy
Unrelated Diversification Strategy

Stability
Strategies

Retrenchment
Strategies
 Corporate Strategies
Forward Integration Strategy
Integration Strategies
Backward Integration Strategy
Growth
Strategies Horizontal Integration Strategy
Diversification Strategies Related Diversification Strategy
Unrelated Diversification Strategy

Stability
Strategies

Retrenchment
Strategies
 Corporate Strategies
Forward Integration Strategy
Integration Strategies
Backward Integration Strategy
Growth
Strategies Horizontal Integration Strategy
Diversification Strategies Related Diversification Strategy
Unrelated Diversification Strategy

Pause/Proceed with Caution Strategy

Stability
Strategies

Retrenchment
Strategies
 Corporate Strategies
Forward Integration Strategy
Integration Strategies
Backward Integration Strategy
Growth
Strategies Horizontal Integration Strategy
Diversification Strategies Related Diversification Strategy
Unrelated Diversification Strategy

Pause/Proceed with Caution Strategy

Stability
Strategies No Change Strategy

Retrenchment
Strategies
 Corporate Strategies
Forward Integration Strategy
Integration Strategies
Backward Integration Strategy
Growth
Strategies Horizontal Integration Strategy
Diversification Strategies Related Diversification Strategy
Unrelated Diversification Strategy

Pause/Proceed with Caution Strategy

Stability
Strategies No Change Strategy
Profit/Harvest Strategy

Retrenchment
Strategies
 Corporate Strategies
Forward Integration Strategy
Integration Strategies
Backward Integration Strategy
Growth
Strategies Horizontal Integration Strategy
Diversification Strategies Related Diversification Strategy
Unrelated Diversification Strategy

Pause/Proceed with Caution Strategy

Stability
Strategies No Change Strategy
Profit/Harvest Strategy

Retrenchment
Strategies
 Corporate Strategies
Forward Integration Strategy
Integration Strategies
Backward Integration Strategy
Growth
Strategies Horizontal Integration Strategy
Diversification Strategies Related Diversification Strategy
Unrelated Diversification Strategy

Pause/Proceed with Caution Strategy

Stability
Strategies No Change Strategy
Profit/Harvest Strategy

Turnaround Strategy
Retrenchment
Strategies
 Corporate Strategies
Forward Integration Strategy
Integration Strategies
Backward Integration Strategy
Growth
Strategies Horizontal Integration Strategy
Diversification Strategies Related Diversification Strategy
Unrelated Diversification Strategy

Pause/Proceed with Caution Strategy

Stability
Strategies No Change Strategy
Profit/Harvest Strategy

Turnaround Strategy
Retrenchment Captive Company Strategy
Strategies
 Corporate Strategies
Forward Integration Strategy
Integration Strategies
Backward Integration Strategy
Growth
Strategies Horizontal Integration Strategy
Diversification Strategies Related Diversification Strategy
Unrelated Diversification Strategy

Pause/Proceed with Caution Strategy

Stability
Strategies No Change Strategy
Profit/Harvest Strategy

Turnaround Strategy
Retrenchment Captive Company Strategy
Strategies Divestiture Strategy
 Corporate Strategies
Forward Integration Strategy
Integration Strategies
Backward Integration Strategy
Growth
Strategies Horizontal Integration Strategy
Diversification Strategies Related Diversification Strategy
Unrelated Diversification Strategy

Pause/Proceed with Caution Strategy

Stability
Strategies No Change Strategy
Profit/Harvest Strategy

Turnaround Strategy
Retrenchment Captive Company Strategy
Strategies Divestiture Strategy
Liquidation/Bankruptcy Strategy
 Corporate Strategies
Forward Integration Strategy
Integration Strategies
Backward Integration Strategy
Growth
Strategies Horizontal Integration Strategy
Diversification Strategies Related Diversification Strategy
Unrelated Diversification Strategy

Pause/Proceed with Caution Strategy

Stability
Strategies No Change Strategy
Profit/Harvest Strategy

Turnaround Strategy
Retrenchment Captive Company Strategy
Strategies Divestiture Strategy
Liquidation/Bankruptcy Strategy
Business Corporate
Strategy

Business

Strategies Strategy
Functional
Strategy
Porter’s Generic Business Strategies
 Cost Leadership Strategy
Cost Leadership (Minimizing your costs below your competitors costs)
1. Raw material at reasonable Price
2. Acquiring High Productivity Machinery
3. Highly effective and productive Employees

If a business that adopts this strategy sold at prices that are

similar to competitors, it will make better profits than them.

Sometimes, these cost leaders can sell at prices lower than

the market and it continues making profits.

Sometimes, these cost leaders can sell at prices higher than

the market and it will lead to more and more profits above the
market.
 Cost Leadership Strategy
Does Cost leadership strategy mean
lowering Prices?

Good Purchases mean Good Sales

 Cost Leadership Strategy
International Examples
 Differentiation Strategy
It’s all about the perceived value and quality in the minds of
our consumers.

It’s a long-term strategy that depends on Brands Building

A business could be differentiated by many aspects, such as:

1. Speed

2. After-selling service

3. Premium quality finishing

4. Attractive Designs

5. Creativity

6. Innovativeness
 Differentiation Strategy
International Examples
 Focus Strategy
A Focus Strategy means working on few
specific products and serving few specific
customers.

Examples:
• Hair Transplantation Clinics

• Orthodontics

• Crocs

• Harley-Davidson
 Focus Strategy
The Focus Strategy in itself is not a
complete strategy to create an
advantage for customers…..

So, How can Focus strategy create

value or an advantage for business
customers?

This strategy should be converted into

one of two other ways as follows:
1. Cost-Leadership Focus
2. Differentiation Focus
 Stuck in the Middle
If a business strategy is not matching
any one of the Four quadrants, This
means that the business Stuck in the
Middle.

They are already working but not

working well. Most probably they may
fail to continue their operations for
longer periods.

Most probably they can work well if

they could be moved to one of the
Functional Corporate
Strategy

Business

Strategies Strategy
Functional
Strategy
Operations
Strategies
What? Why? How?
• What makes for good operations as a way to answer that.
• We're going to introduce the first pillar of the course: “The Strategic View of
Operations” which is an attempt to tie between the

• “The strategic view of Operations” which is an attempt to tie

between the strategy of the firm and the way the firm structure its
operation and execute its work.
• When we say operations, usually most of us the first image that
comes to mind is of a Ford assembly line manufacturing plant only if
you have served any time spent any time in manufacturing plant a
few aspire to work for manufacturing plant.

• We are still guessing that most of you are going to work for service
organizations retail organization nonprofit for profit.
• The idea will be to try to think about operations in a way that can
encompass all of that.
• For example we would like to discuss retail Zara for example uses
time as a way to differentiate itself from its competitors like H&M.
• It takes Zara four weeks from design to shops allowing it to take a
that they saw last week on the runway and bring them in a few weeks
to your nearest store.
How do they do that?
• let's go back to the origin of the word operations for that let us go
back to Latin.
• What does the word operation mean?
The word Opus means work and that's exactly the appreciation we
would like to have in this class we

Opus (Latin) = Work

 The Smart Choice Fly Emirates, Fly Better

Secondary Airports Main Airports

Cost Leadership

Differentiation
Cheaper Airplanes Relatively Quality Airplanes

Low cost Flights High cost Flights

Indirect Flights Direct Flights

No Flight Catering Premium Quality Flight Catering

Limited no Plane Crew Large Number of Plane Crew

Unclear policy in dealing with Paying more attention to luggage

missing luggage shipment
 2. Operations Strategy
• Operations strategy determines:
• how and where a product or service is to be manufactured,

• the level of vertical integration in the production process,

• the deployment of physical resources,

• and relationships with suppliers.

• It should also deal with the optimum level of technology the firm should use in its operations processes.

• Example:
• Mass Production (Cost Leadership), Mass Customization or Customization (Differentiation)

• Single Sourcing vs Multiple Sourcing

• JIT: concept of having the purchased parts arrive at the plant just when they are needed rather than keeping
inventories.
THANK YOU!