Introduction

to
Operations
Managemen
t
Milan Kumar
IIM Visakhapatnam

1
Course Structure
• There are three modules in the course:
• Process and Capacity Analysis (Sessions
1-7)
• Supply Chain and Coordination (Sessions
8-10)
• Operations Planning and Strategy
( Sessions 11-20)

2
Careers in OSCM
• OSCM careers specialize in managing the planning,
production, and distribution of goods and services

• Operations and supply chain manager works with

people to figure out the best way to deliver the goods
and services of the firm

• OSCM jobs are hands-on, working with people and

figuring out the best way to do things

1-3
OSCM Specialist Areas
• Product design

• Purchasing

• Manufacturing

• Service operations

• Logistics

• Distribution
1-4
Possible Careers in OSCM
Hospital Branch Department
Plant manager
administrator manager store manager

Call center Supply chain Purchasing Quality control

manager manager manager manager

Business
Lean
process Project Production
improvement
improvement manager control analyst
manager
analyst

Facilities Chief operating

manager officer

1-5
Chief Operating Officer (COO)
• Works with CEO and president to determine the
company’s competitive strategy
• COO determines…
• Location
• Facilities
• Vendors to use
• Implementation of the hiring policy
• Once key decisions are made, lower-level operations
personnel carry them out

1-6
What Is Operations and Supply
Chain Management?
• The design, operation, and improvement of the systems
that create and delivery the firm’s primary products and
services

• Operations and supply chain management (OSCM) is

• A functional field of business
• Clear line management responsibilities
• Concerned with the management of the entire
production/delivery system

7
Considerations in different part of
decision-making

8
Operations and Supply Chain Terms

Operatio Supply
ns Chain
Manufacturing
and service Processes that
processes used to move information
transform and material to
resources into and from the firm
products
9
Process Activities
• Planning – processes needed to operate an existing
supply chain
• Sourcing – selection of suppliers that will deliver the
goods and services needed to create the firm’s product
• Making – producing the major product or service
• Delivering – logistics processes such as selecting
carriers, coordinating the movement of goods and
information, and collecting payments from customers
• Returning – receiving worn-out, excess, and/or
defective products back from customers
1-10
Supply Chain Processes

11
The Goods-Services Continuum

•Goods are physical

items produced by
business organization
•Services are activities
that provide some
combinations of time,
location, form and
psychological value

12
Timeline Depicting When Major
OSCM Concepts Became Popular

1-13
Exhibit 1.5
The Major Concepts that Define the
OSCM Field
• Manufacturing strategy paradigm
• Lean manufacturing, JIT, and TQC
• Service quality and productivity
• Total quality management and quality certification
• Business process reengineering
• Six sigma quality
• Supply chain management
• Electronic commerce
• Sustainability and the triple bottom line
• Business strategy that includes social, economic and environmental criteria
• Business analytics

1-14
Current Issues in Operations and
Supply Chain Management
1. Uncertainty in global tariffs and regulations

2. Difficulty in hiring and keeping employees

3. Adapting to changes in business technology and

infrastructure

1-15
Customer Customer Need Causes Implied Demand
Uncertainty to …

Needs and
Range of quantity Increase because a wider range
required increases of the quantity required implies
greater variance in demand

Implied Lead time decreases Increase because there is less

time in which to react to orders

Demand
Variety of products Increase because demand per
required increases product becomes less
predictable

Uncertainty Required service

level increases
Increase because the firm now
has to handle unusual surges in
demand
Rate of innovation Increase because new products
increases tend to have more uncertain
demand
Number of channels Increase because the total
through which customer demand per channel
product may be becomes less predictable
acquired increases

16
Success Depends
On
•Clever integration of a great
operations-related strategy

•Processes to deliver products and

services

•Analytics to support the decisions

needed to manage the firm

17
Where do we place Operations
Strategy?

18
Desired Outcomes of Strategy
Formation
• Any strategy formation process has four desired
outcomes (Nielsen-Englyst, 2003)
1. Evaluating alternatives.
2. Improving long-term and short-term performance.
3. Creating/maintaining an ability to respond to new
circumstances.
4. Consistency with business and other functional
strategies.

19
Competitive Dimensions
• Price
• Make the product or deliver the service cheap. Eg. Walmart, Southwest Airlines,
Indigo Airlines, Xiaomi
• Quality
• Make a great product or delivery a great service. Eg. Apple, Samsung, BMW
• Delivery Speed
• Make the product or deliver the service quickly. Eg. Amazon
• Delivery Reliability
• Deliver it when promised. E.g. Dominoes
• Coping with Changes
• Change its volume. Eg. Zara
• Flexibility and new product introduction
• Change it. Eg. Honda, Toyota
20
Demand Management:
Customer Order Decoupling Points
Long Low
Engineer-
to-order (ETO)
Make-to-order
(MTO)
Lead Volume
Assemble-
Time
to-order
(ATO) Make-
to-stock
(MTS)
Short High

Raw Work-in-process Finished

Suppliers
materials parts and components goods
Decoupling Point
21
Trade-Offs: Example of a Call
Centre

22
Trade-Offs: Example of a Call
Centre contd..

Trade-off between Labour Productivity 23

and Responsiveness
Trade-Offs: Example of a Call
Centre contd..

Redesigning the Process to Operate at an

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Improved Frontier
Trade-offs
• Management decide which parameters of performance are critical and
concentrate resources on those characteristics.
• Efficiency, Effectiveness and Value:
• Efficiency - Doing something at the lowest possible cost.
• Effectiveness - Doing the right things to create the most value for the
company.
• Value - Quality divided by price.
• Quality - The attractiveness of the product, considering its features and
durability.
• Benchmarking is a process in which one company studies the processes of
another company or industry to identify best practices.
25
Order Winners and Order Qualifiers
• Order qualifiers: those dimensions that are
necessary for a firm’s products to be considered
for purchase by customers
• Order winners: criteria used by customers to
differentiate the products and services of one
firm from those of other firms

26
Questions

27
References
Jacobs, F. R., Shankar, R., & Chase, R. B. (2024). Operations and supply chain
management (17th ed., Chapter 1). McGraw Hill.

Chopra, S., & Kalra, D. (2019). Supply chain management (7th ed., Chapters
1-2). Pearson.

Simchi-Levi, D., Kaminsky, P., Simchi-Levi, E., & Shankar, R. (2022).

Designing and managing the supply chain: Concepts, strategies, and case
studies (4th ed., Chapter 1). McGraw Hill.
Cachon, G., & Terwiesch, C. (2023). Chapter 1: Matching supply with
demand: An introduction to operations management. In Matching supply
with demand (4th ed.). McGraw Hill.

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