EHS402: OSCM J UMA MAHEH

ASSISTANT PROFESSOR
INTRODUCTION TO
MECHANICAL DEPARTMENT
OPERATIONS SUPPLY
CHAIN MANGEMENT
OVERVIEW
• Supply chain management includes the collection of materials, the
manufacture of products and the delivery to the consumer. Supply
chain managers coordinate with key players in the supply chain:
suppliers, logistics teams and customers, often working globally
and overseeing suppliers, purchasing orders, warehouses and
forecasting.
• One critical facet of supply chain management is risk evaluation
and security. Today, this also means looking at
cybersecurity in the supply chain. Supply chain managers must
regularly evaluate suppliers and their strategies and protocols,
forecast demand to avoid over-supply, improve customer service,
and coordinate with other departments in the business including
marketing, finance, sales and quality assurance.
• Supply chain management is vital to businesses
because it can help reduce costs with better efficiency
from suppliers and leaner inventories, provide better
customer services with faster delivery and react faster
to market demands and innovations. It also offers
assurance of corporate responsibility in every facet of
production.
OPERATIONS MANGEMENT
Operations management focuses on running a business
effectively and efficiently, including maintenance,
material planning and the analysis of production
systems. Operations managers coordinate the internal
business operations, driving not how the product or
service is moved, but how it is developed. This generally
requires professionals to be skilled in building rapport
with organizational stakeholders, current in technology
applications and adept at analysis.
Why is Supply Chain Management Important in
Operations Management?

• Both operations management and supply chain management

are expected to add value to the business, supporting more
efficient processes and ultimately driving better revenue for
the company. In fact, in pursuit of those objectives, the two
roles are inextricably linked together. Supply chain
management controls the process for having the product
produced; without it, operations management wouldn’t have
a product to oversee operations for.
• Many industries require both supply chain management and
operations management, whether the business is moving
services, products, raw materials, data or money into the
hands of its customers.
• In smaller organizations, it’s also possible for these roles
to overlap or be fulfilled by a single person or
department, as the necessary skillset for both roles is
similar, including:
• Organization
• Decision-making
• Goal-setting
• Cross-functional leadership
• Communication
The Difference Between Supply Chain Management
and Operations Management

• The major difference between supply chain management and

operations management is that supply chain is mainly concerned
with what happens outside the company – obtaining materials
and delivering products – while operations management is
concerned with what happens inside the company.
• This means the supply chain manager spends time negotiating
contracts and evaluating suppliers, whereas the operations
manager is often planning and overseeing the daily operations
and processes. Supply chain management activities are generally
the same across industries; however, operations management
roles and responsibilities can vary widely depending on the
product or service the business produces.
• Supply Chain Management or Operations Management: Which is Right For You?
• Although these roles share many overlapping skills and even intersect, aspiring
professionals should consider whether they would prefer the external focus supply
chain managers adopt or the internal lens of an operations manager.
• If global markets, quality control, transportation and logistics and designing value
in the supply chain are of greater interest, you may wish to pursue supply chain
management. Alternatively, if you would prefer to spearhead production,
planning, workflow and staffing, you may thrive as an operations manager.
• To launch a career in either field, professionals should earn a
bachelor’s degree in management, business administration, or related field. Often,
professionals look for a competitive edge with additional degrees or certifications
that can equip you with in-depth knowledge of fundamentals for these roles. This
can include earning an MS in Supply Chain Management or a
Master’s of Business Administration (MBA).

SOURCE: INTERNET ARTICLE

• https://www.floridatechonline.com/blog/process-improvement/supply-chain-manag
ement-vs-operations-management/
• Operation Management :
Operation Management, as name suggests, is a
management that mainly focuses on managing
operational processes more efficiently that includes
conversion of input into output (goods and services) and
in turn add value for customer.
• Supply Chain Management :
Supply Chain Management, as name suggests, is a
management that mainly focuses handling entire
product flow, management of wide range of
components and processes such as storage of product,
delivering product, etc.
FROM SUNIL CHOPRA TEXT BOOK..[PRESCRIBED AS
PER SYLLABUS]

A supply chain consists of all parties involved, directly or indirectly, in

fulfilling a customer request. The supply chain includes not only the
manufacturer and suppliers, but also transporters, warehouses,
retailers, and even customers themselves. Within each organization,
such as a manufacturer, the supply chain includes all functions involved
in receiving and filling a customer request. These functions include, but
are not limited to, new product development, marketing, operations,
distribution, finance, and customer service
SYLLABUS
REFERENCES MATERIAL ARTICLES
TO READ..
To DEVELOP BUSSINESS SENSE AND UNDERSTAND JARGON OF SCM
https://www.business-standard.com/article/companies/processing-abo
ut-1-5-bn-transactions-a-month-phonepe-ceo-sameer-nigam-12108270
0103_1.html
https://hbr.org/2020/09/global-supply-chains-in-a-post-pandemic-worl
d
https://www.softwareadvice.com/resources/supply-chain-disruption-ty
pes/
Production is the creation of goods and services.
Operations management (OM) is the set of activities that creates value
in the form of goods and services by transforming inputs into outputs.
Activities creating goods and services take place in all organizations.
In manufacturing firms, the production activities that create goods are
usually quite obvious. In them, we can see the creation of a tangible
product such as a Sony TV or a Harley-Davidson motorcycle.
In an organization that does not create a tangible good or product, the
production function may be less obvious. We often call these activities
services . The services may be “hidden” from the public and even from
the customer.
The product may take such forms as the transfer of funds from a
savings account to a checking account, the transplant of a liver, the
filling of an empty seat on an airplane, or the education of a student.
Regardless of whether the end product is a good or service, the
production activities that go on in the organization are often referred to
as operations, or operations management
Reference: Operations Management – Dr. Inderdeeep Singh IIT Roorkee NPTEL
FIGURE 1.1 Integration Between Different Functional
Areas of a Business

Figure 1.1 shows operations as one of the

key functions within an organization. The
circular relationships that are shown
highlight the importance of the coordination
among the three mainline functions of any
business: operations, (2) marketing, and (3)
finance.
Each function is unique and has its own
knowledge and skill areas, primary
responsibilities, processes, and decision
domains. From an external perspective,
finance generates resources, capital, and
funds from investors and sales of its goods
and services in the marketplace.
Operations Management: Processes and
supply chain (12e) by Pearson
Figure 1.1 shows how a bank, an airline, and a manufacturing firm organize
themselves to perform these functions. The blue-shaded areas show the
operations functions in these firms.
Scenarios/ Examples where OM
functions
Example 1: Fisher Technologies Firm
LEARNING EXERCISE c What is the impact of only a 15% decrease in costs in the OM option?
Solution:

Example 1 underscores the importance of the effective operations

activity of a firm. Development of increasingly effective operations is
the approach taken by many companies as they face growing global
competition.
What Operations Managers Do
All good managers perform the basic functions of the management
process. The management process consists of planning , organizing ,
staffing , leading , and controlling . Operations managers apply this
management process to the decisions they make in the OM function.
The 10 strategic OM decisions are introduced in Table 1.2 . Successfully
addressing each of these decisions requires planning, organizing,
staffing, leading, and controlling.
Operations Manager Jobs
Where Are the OM Jobs? How does one get started on a career in
operations?
The 10 strategic OM decisions identified in Table 1.2 are made by
individuals who work in the disciplines shown in the blue areas of
Figure 1.1 . Business students who know their accounting,statistics,
finance, and OM have an opportunity to assume entry-level positions in
all of these areas. As you read this text, identify disciplines that can
assist you in making these decisions. Then take courses in those areas.
The more background an OM student has in accounting, statistics,
information systems, and mathematics, the more job opportunities will
be available. About 40% of all jobs are in OM.
 PROFESSIONAL CERTIFICATIONS
The following professional organizations provide various certifications
that may enhance your education and be of help in your career:
◆ APICS, the Association for Operations Management ( www.apics.org )
◆ American Society for Quality (ASQ) (www.asq.org )
◆ Institute for Supply Management (ISM) ( www.ism.ws )
◆ Project Management Institute (PMI) ( www.pmi.org )
◆ Council of Supply Chain Management Professionals ( www.cscmp.org )
INDIA, THE WORLD’S SERVICE PROVIDER
Although we may think of globalization more in the context of products than services, there has been a
dramatic rise in the global outsourcing of services as well. It began with backoffice work such as
accounting, claims processing, and computer programming. Now it extends to call centers, brokerage
firms, financial analysis, research and development, engineering, medical diagnosis, architectural
design, and more advanced work in information technology. As much as China is known as the world’s
manufacturer, India is renowned for its export of services.
India has an enormous resource of highly skilled engineers, scientists, and technically trained workers
available at less than half the cost of those located in developed countries.
In 2009, India exported $47 billion in IT services, a number that is expected to reach $200 billion by
2020. Indian companies, such as WIPRO, Infosys, and Tata Consultancy Services, are world leaders in
software development and business processes, with plenty of room to expand.
According to a Reserve Bank of India survey, released in September, exports of software
services, including services delivered by foreign affiliates of Indian companies, stood at USD
148.3 billion in the fiscal year to March 31, 2021
• Apple, valued at $408,251 million, retained its first
spot for the ninth consecutive year in Interbrand’s list
of the best global brands for 2021. However, it was
Tesla that was the highest gainer with a 184 per cent
increase in value to rest at $36,270 million and the
14th spot.
• The combined value of the top 100 brands increased
from $2,326,491 million in 2020 to $2,667,524 million
in 2021 – a jump of nearly 15 per cent. Technology
remained the fastest growing, most valuable and top
performing sector. The top three brands – Apple,
Amazon (valued at $249,249 million) and Microsoft
($210,191 million) – made up 62.3 per cent of the
total value of the top 10 brands.
• Besides Apple, Amazon and Microsoft, the top ten
brands included Google ($196,811 million), Samsung
($74,635 million), Coca Cola ($57,488 million), Toyota
($54,107 million), Mercedes-Benz ($50,866 million),
McDonald’s ($45,865 million), and Disney ($44,183
million).
• Source: Best Global Brands 2021: Apple retains top
spot, Tesla highest gainer, business standard.
• https://www.business-standard.com/article/internation
al/best-global-brands-2021-apple-retains-top-spot-tesl
a-highest-gainer-121102101699_1.html
THE CHINA FACTOR

China accounts for 20% of the world’s population and is the world’s largest manufacturer,
employing more production workers than the Unites States, United Kingdom, Germany,
Japan, Italy, Canada, and France combined. Its 1.3 billion people represent not only an
immense labor market, but a huge consumer market as well.

As China’s industrial base multiplies, so does its need for machinery and basic materials,
and as more companies move to China, so do their suppliers and their supplier’s
suppliers. Although initially the preferred location for the production of low-tech goods
such as toys, textiles, and furniture, China has become a strategic manufacturing base
for nearly every industry worldwide.
The scale of manufacturing in China is mind-boggling. For example, Foxconn (the trade name
of Taiwan’s Hon Hai Precision Industry Company) has two enormous industrial complexes in
mainland China. The Guangdong Province site employs and houses approximately 270,000
workers,
with its own dormitories, restaurants, hospital, police force, chicken farm, and soccer stadium.
There are 40 separate production facilities “on campus,” each dedicated to one of its major
customers such as Apple, Dell, Motorola, Sony, Nintendo, and HP. Foxconn is the world’s largest
electronics manufacturer and China’s largest exporter. It also represents a shorter supply chain
because it makes components as well as assembles final products.

Currently, Foxconn is making a bid to enter the retail market in China and is expanding
production into Mexico to better serve the U.S. market.
Foxconn manufactures electronic products for major American,
Canadian, Chinese, Finnish and Japanese companies. Notable
products manufactured by Foxconn include the BlackBerry,[7]
iPad,[8] iPhone, iPod,[9] Kindle,[10] all Nintendo gaming systems
since the GameCube (except subsequent Nintendo DS models),
Nokia devices, Sony devices (including the PlayStation 3 and
PlayStation 4 gaming consoles), Google Pixel devices, Xiaomi
devices, every successor to Microsoft's first Xbox console,[11] and
several CPU sockets, including the TR4 CPU socket on some
motherboards
• An organization in the manufacturing industry for the
creation of production. In the mechanical and electrical
engineering industries, a manufacturing system, in general,
has an integrated group of functions, e.g., the sales, design,
production, and shipping functions. A research function may
provide a service to one or more of the other functions.
• Note: Despite the conceptual difference between
“production” and “manufacturing,” in English usage, the term
“manufacturing system” addresses a complete enterprise or a
group of enterprises, an individual production department
(e.g., foundry, turnery), or even a single work station (CIRP
Dictionary of Production Engineering 2004).
• An organization in the manufacturing industry for the
creation of production. In the mechanical and electrical
engineering industries, a manufacturing system, in general,
has an integrated group of functions, e.g., the sales, design,
production, and shipping functions. A research function may
provide a service to one or more of the other functions.
• Note: Despite the conceptual difference between
“production” and “manufacturing,” in English usage, the term
“manufacturing system” addresses a complete enterprise or a
group of enterprises, an individual production department
(e.g., foundry, turnery), or even a single work station (CIRP
Dictionary of Production Engineering 2004).
Manufacturing systems can refer to the top-level distinction
between discrete and process manufacturing. Broadly, the
former is assemblies of standardized parts, that could be
disassembled later—things like cars and computers. The latter is
a chemical transformation such as food and pharmaceuticals.
Types of manufacturing systems
Source : Internet
https://www.ptc.com/en/blogs/iiot/navigating-types-of-manufacturing-systems
Manufacturing Systems
In the world of manufacturing, there are a lot of systems to choose
from, each with its ideal use case and set of advantages and
drawbacks. Having the appropriate manufacturing system for your
product can yield a variety of benefits, including the ability to
maintain the high quality of your goods, being more efficient in your
production processes and saving money across the board. The right
system can also help you produce higher volumes, thereby meeting
your production volume targets.
According to the book Handbook of Design, Manufacturing, and
Automation by Richard C. Dorf and Andrew Kusiak, there are four
types of manufacturing systems: custom manufacturing, intermittent
manufacturing, continuous manufacturing and flexible
manufacturing.
• Custom Manufacturing Systems
• Custom manufacturing is by far the oldest and most popular type of
manufacturing system in existence. It also happens to be associated
with both the highest-quality products and the lowest-volume efficiency.
• In the custom manufacturing system, each item is produced by a single
craftsperson, who works solely by hand or with the help of a machine.
When machines are used, they tend to be highly specialized to their
task and cannot produce more than one item at a time.
• This system will tend to have the highest unit cost for the product
manufactured. As a result, custom-manufactured products are of the
highest quality but are also the most expensive products in the market.
• Examples: wedding cake, tailor made suits, hand make
furnitures
• Intermittent Manufacturing Systems
• The intermittent manufacturing system allows companies to make different
types of goods using the same production line. Therefore, the manufacturing
facility is designed to handle different product sizes and requirements.
Generally, the goods are processed in lots to fulfill orders.
• This system is commonly referred to as a “job shop” due to its popularity in
countries with relatively cheap labor making products for multi-national
based thousands of miles away. The goods made using this manufacturing
method are produced in small quantities, so they may not be suitable for
stock. Customization is typically done post-purchase.
• This type of system is designed for production runs that happen
intermittently, hence the name, or products that don’t require high volumes.
It uses general purpose machines and requires highly skilled labor.
• Examples: Clothing
• Continuous Manufacturing Systems
• Continuous manufacturing systems are designed to enable the
mass production of a single product. The product goes through
an assembly line with different stations where parts are added
or worked on a little further. This method first arose during the
Industrial Revolution and is most closely associated with the
Ford Company, which employed the system to produce Model Ts
in the 1920s.
• This type of production system is ideal when a company has
very high volume targets since it reduces the unit cost of the
product. It does, however, require a massive capital injection at
startup due to the investment in equipment and labor required.
• Flexible Manufacturing Systems
• Flexible manufacturing is a modern manufacturing system that
has become very popular. It involves a significant investment in
machinery, although it reduces labor costs by implementing
robots eschewing human labor altogether. These machines can
easily be reconfigured to manufacture different products in
different quantities, and the whole process is automatic.

• This method is called flexible manufacturing due to the flexibility

in the variety of high-volume goods it can produce. Due to the
automated process, quality control is a lot easier, and unit costs
are low.
 Production Systems

A production system is a collection of people, equipment, and procedures organized to

perform the manufacturing operations of a company. It consists of two major components
as indicated in Figure 1.1:
1. Facilities. The physical facilities of the production system include the equipment,
the way the equipment is laid out, and the factory in which the equipment is located.
2. Manufacturing support systems. These are the procedures used by the company to
manage production and to solve the technical and logistics problems encountered
in ordering materials, moving the work through the factory, and ensuring that products
meet quality standards. Product design and certain business functions are included
in the manufacturing support systems.
In modern manufacturing operations, portions of the production
system are automated and/or computerized. In addition, production
systems include people.
People make these systems work. In general, direct labor people (blue-
collar workers) are responsible for operating the facilities, and
professional staff people (white-collar workers) are responsible for the
manufacturing support systems.
Introduction to Manufacturing
systems
Manufacturing Support Systems

1.1.2 Manufacturing Support Systems

To operate the production facilities efficiently, a company must organize itself to design
the processes and equipment, plan and control the production orders, and satisfy product
quality requirements. These functions are accomplished by manufacturing support
systems—
people and procedures by which a company manages its production operations.
Most of these support systems do not directly contact the product, but they plan and
Control its progress through the factory.
Manufacturing support involves a sequence of activities, as depicted in Figure 1.3.
The activities consist of four functions that include much information flow and data
processing: (1) business functions, (2) product design, (3) manufacturing planning, and
(4) manufacturing control.
Reference :Automation,Production Systems, and Computer-Integrated
Manufacturing Mikell P. Groover Professor Emeritus of Industrial and
Systems Engineering Lehigh University
How ML will help manufacturing system?
Topics to be covered in the class

Case study: Global Supply Chains in a Post-Pandemic

WorldCompanies need to make their networks more
resilient. Here’s how. by Willy C. Shih [from HARVARD
BUSSINESS REVIEW]
Productivity and competitiveness
Summary of Article in HBR
• The U.S.-China trade war and the supply and demand shocks brought on by the
Covid-19 crisis are forcing manufacturers everywhere to reassess their supply
chains. For the foreseeable future, they will face pressure to increase domestic
production, grow employment in their home countries, reduce their dependence
on risky sources, and rethink strategies of lean inventories and just-in-time
replenishment, which can be crippling when material shortages arise.
• This article provides advice to make your supply chain more resilient without
sacrificing competitiveness. Start by mapping the full extent of your supply
network to identify both direct and indirect sources. Determine how quickly those
that are most vital for you could either recover from a disruption or be replaced
by an alternative. Address the vulnerabilities by diversifying your suppliers or
stockpiling essential materials. Explore production-process improvements or new
technologies—such as automation, continuous-flow manufacturing, and 3D
printing—that could lower your costs or increase your flexibility when faced with a
shock. And revisit your product strategies: Offering consumers more choices isn’t
always better.
• What Is a Global Supply Chain?

• Global supply chains are networks that can span across multiple continents and
countries for the purpose of sourcing and supplying goods and services. Global supply
chains involve the flow of information, processes and resources across the globe.

What Is the Difference Between Global Supply Chain vs Local Supply Chain?

A global supply chain utilises low-cost country sourcing and refers to the procurement of
products and services from countries with lower labour rates and reduced production costs
than that of the home country.

A global supply chain will usually flow from your own organisation in your home country as a
buyer across your supplier tiers; it is these suppliers who will be located in other areas of the
globe.

A local supply chain will look to optimise suppliers who are regional to your own organisation,
in some instances organisations will look to leverage “home grown” supply routes, so all
suppliers feeding into your supply chain will be located within the country in which your
organisation is based, or the supply chain can be even closer in to your organisation and may
even be within the same state/city/district, which often gives a clearer visibility of the whole
supply chain from raw material through to consumer.