• Unit 1: Introduction to Operations and Supply Chain Management

    Supply chain management is the efficient integration of suppliers, factories, warehouses, and stores so that merchandise is produced and distributed in the right quantities to the right locations at the right time. The main areas of the supply chain are purchasing, manufacturing, warehousing, and customers. These areas have conflicting objectives because of their inherent complexities and competing priorities. Purchasing needs to balance being stable and remaining flexible. Manufacturing needs to balance high quality with low costs. Warehousing needs to maintain low inventory and low transport costs but also have the ability to replenish goods quickly. Finally, customers demand shorter times, lots of inventory, and huge variety at the lowest possible price. Generally speaking, challenges associated with supply chains relate to working in a complex network while managing uncertainty. Virtually every consumer item we own is the result of a successful supply chain that sources raw materials, transports these raw materials to manufacturing sites, and ultimately delivers the products to stores. Managing the network of interconnected steps in a defined system requires designing, planning, executing, controlling, and monitoring with the ultimate objective of creating value, generating competitive advantage, leveraging systemic logistics, and balancing supply with demand with the ability to measure performance. Logistics is focused on managing the flow of items between the point of origin and the point of consumption to meet demand. Essentially, logistics is concerned with managing inventory, purchasing materials, transportation, warehousing, and planning. Whether an entity is a manufacturer of goods or a service-based firm, production and operations management is vital. Organizations are concerned with inputs, outputs, and the many decisions that happen in the process. Operations management has roots in the industrial revolution, when society shifted from small, localized agrarian communities to large-scale, complex production. On a small scale, operations were quite simple and relatively easy to manage. However, as the scale of production, manufacturing, logistics, and distribution increased, organizations sought to increase productivity and decrease costs by increasing their overall efficiency. This focus on effectively managing operations allows companies to strategically position themselves to create results and gain a competitive advantage.

    Completing this unit should take you approximately 13 hours.

    • 1.1: Operations and Productivity

      We'll start by going through an overview of common principles of Operations and Supply Chain Management (OSCM) and the techniques used to analyze, problem-solve, and operationalize operations and supply chains.

    • 1.2: Optimizing Operations

      Efficiency is the key to every supply chain. However, the ultimate goal is to create value for the customer. The recipient of the good or service is one of the most important elements of the supply chain process. The chapter on efficiency and customer satisfaction emphasizes this part of the process. Improving production and overall operations is a continuous evolution. Customers want quality products for the best possible price. To aid in quality improvements, there are process tools that corporations can employ. Some of the more mainstream tools include Total Quality Management (TQM), Six Sigma, International Organization for Standardization (ISO), and Just In Time (JIT), among many others. Productivity can be described as the efficiency with which an entity can transform materials into goods while creating more out of less. The pursuit of efficiency is a driving force to produce more, with less effort, at a lower cost to maximize profits.

      • 1.2.1: Global Optimization

        Supply chain optimization on a global scale poses enormous challenges to corporations that operate in different countries. Particular interest today lies in the environmental costs of doing business around the world. Many products need vast amounts of physical resources to be produced. Once large-scale global production is reached, transporting these goods requires air, land, and water logistics. Maintaining stockpiles then requires a substantial physical footprint to stock sufficient inventory in warehouses to successfully supply retailers and customers. Each step in the process is complex, indicating why managing the supply chain is vital. Optimizing supply chains is a high priority, especially for organizations that operate on a global level. With customers, resources, and operations spread across geographically diverse locations, these organizations must have a global vision to maintain a competitive advantage. On a larger scale, countries rely on their corporations for national imports and exports, which play a key role in the global balance of trade.

        • 1.2.2: Uncertainty in OSCM

          Uncertainty in a supply chain can lead to delays or even drastic consequences. Delays due to bottlenecks can hamper performance, while on the other hand, a total breakdown of the chain can lead to declines in other business' operations. Global supply chains are fragile despite the appearance of being stable, physically strong, and sustainable. Natural and man-made disasters can potentially happen, but also security can be breached from both internal and external sources. The fragility of the supply chain is a high concern due to the number of individuals, communities, organizations, and countries that will suffer negative consequences should there be a disruption.

    • 1.3: Goods vs. Services

      Products that are tangible can be physically held, seen, and experienced. Conversely, an intangible product does not have a physical presence which makes determining its value difficult. While demand refers to what a consumer is willing to buy given a purchase price, supply is the relationship between consumer prices and, given their costs, how much a firm is willing to supply the market. Equilibrium is defined as the balance of consumer demand and producer supply at the prevailing market price.

      • 1.3.1: Manufacturing

        Globalization has caused manufacturers to reconsider the way they produce their goods. Rather than producing goods and pushing to consumers, the opposite effect is, in fact, happening. Consumers are demanding more options, better products, and greater choices at a faster pace. Despite supply chains undergoing radical transformations in an effort to keep up, they will continue to face increasing complexities. As part of these rapid and continuous transformations, technology is quickly changing how manufacturers run their operations. Additive manufacturing simply adds physical material to a production process instantly through the use of 3D printing. This can increase efficiency, quickly solve problems, and potentially reduce producers' dependence on input suppliers.

      • 1.3.2: Services

        Supply chains that are service-based do not have a tangible or physical product. However, the same complexities exist in their supply chain as those with an organization that produces a physical product. Service supply chains must still rely on other industries, people, technology, and a host of other inputs to provide customer service.

      • 1.3.3: Decentralized Supply Chains

        While centralized-supply chains rely on a hierarchy that funnels the decision-making process to a few individuals, decentralization allows decisions to be made at a more local level, thereby speeding up the process. These decentralized organizations may have divisions in different locations around the world, all of which can make decisions independent of the other locations.

      • 1.3.4: Dropshipping

        The advent of the internet has allowed individuals to communicate with one another online. E-commerce has evolved to where consumers can purchase an item from either an individual or business anywhere around the world. Dropshipping is one trend that has changed business supply chains because now an entrepreneur can create a brand product and have it shipped directly to a customer from a supplier without having to maintain any inventory.

    • Study Guide: Unit 1

      We recommend reviewing this Study Guide before taking the Unit 1 Assessment.

    • Unit 1 Assessment

      • Receive a grade