Operations and Supply Chain Management Evolution

Operations and Supply Chain Management Evolution

Historically, Operations and Supply Chain Management (OSCM) has changed in the last 40 years. In the late 1970s and early 1980s we saw the development of the manufacturing strategy paradigm. The big idea was the notion of factory focus and manufacturing trade-offs. They believed that a factory cannot excel on all performance measures, therefore its management must devise a focused strategy, creating a focused factory that performs a limited set of tasks extremely well. In 1980s came the notion of Just-In-Time, TQC (Total Quality Control), and Lean Manufacturing. In the next couple of decades we were introduced to Service Quality and Productivity, Six Sigma Quality, Business Process Reengineering, Supply Chain Management, Electronic Commerce, Service Science, and Business Analytics.

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Jacobs, R. F., & Chase, R. B. (2014). Operations and Supply Chain Management 14th Edition. New York: McGraw-Hill/Irwin.

Differences Between Services and Goods

When we look at services and goods, many people confuse these definitions and exactly what are services versus goods. In Chapter one they simplify it to “The first is that a service is an intangible process that cannot be weighed or measured, whereas a good is a tangible output of a process that has physical dimensions. This distinction has important business implications since a service innovation, unlike a product innovation, cannot be patented. Thus, a company with a new concept must expand rapidly before competitors copy its procedures. Service intangibility also presents a problem for customers since, unlike with a physical product, customers cannot try it out and test it before purchase.”(Operations and Supply Chain Management, Ch.1)

Secondly, for a service to happen there must be a customer interaction take place to create a service between a company and customer. Without this there can’t be a service. I work for a Class 2 Medical facility, and we provide goods in medical equipment, while we provide a service to them when they call and initiate a sales order in wanting our goods.

Business Analytics

Business Analytics uses mathematical analysis of current business data to solve business problems. Although the concept has been used for many years, modern technology has improved the ability to forecast more accurately and improve processes based on the information from the past. Modern day analytics software results make it possible to automate decision making completely or the information may be used to support or test decisions that were not automated.

The hospital I work for uses business analytics as a way to identify issues within the hospital. Business Analytics software is used to drill down to the root of the problem so it may then be addressed and resolved. We had an issue with the amount of money spent purchasing surgical implants being slightly below the amount of money received as payments for implants, which should never be the case. Drilling down and locating the root of the problem identified as the surgical biller responsible for adding new items to the system and billing them had been tossing her work in the shredder when it began to pile up. She was replaced and the issue was resolved.

Reference

Jacobs, R. F., & Chase, R. B. (2014). Operations and Supply Chain Management 14th Edition. New York: McGraw-Hill/Irwin.

Supply chain risks

Supply chain risk is the likelihood of a disruption that would impact the ability of a company to continuously supply products or services. Companies put a lot of emphasis on reducing the supply chain risks. Supply chain risks are categorized in two types. The first is supply chain coordination risks that are associated with the day-to-day management of the supply chain, which are normally dealt with using safety stock, safety lead time, overtime, employees, etc. The second type is disruption risks, which are caused by natural or manmade disasters, such as earthquakes, hurricanes, tsunamis, and terrorism. In all cases managers are expected to manage the risks by first identifying the sources of risk, assessing the impact of the risk, and finally develop a plan to mitigate the risk.

Jacobs, R. F., & Chase, R. B. (2014). Operations and Supply Chain Management 14th Edition. New York: McGraw-Hill/Irwin.