INTRODUCTION—THE ELEMENTS OF OSCM

Really successful firms have a clear and focused idea of how they intend to make money. Whether it be high-end products and services custom-tailored to the needs of a single customer or generic and inexpensive commodities bought largely on the basis of cost, competitively producing and distributing these products is a major challenge. The chapter opening describes the importance of turning planes around quickly at Southwest Airlines. Keeping planes in the air each day is a key factor in the profitability of the company. The process Southwest uses when their planes are on the ground was carefully studied by OSCM (operations and supply chain management) specialists to make it as efficient as possible. In the context of major business functions, operations and supply chain management involves specialists in product design, purchasing, manufacturing, service operations, logistics, and distribution.

These specialists are mixed and matched in many different ways depending on the product or service. For a firm that sells televisions, like Sony, these are the functions responsible for designing televisions, acquiring materials, coordinating equipment resources to convert material to products, moving the product, and exchanging the final product with the customer. Some firms are focused on services, such as a hospital.

Here the context involves managing resources, including the operating rooms, labs, and hospital beds used to nurse patients back to health. In this context, acquiring materials, moving patients, and coordinating resource use are keys to success.

Other firms are more specialized, such as Amazon. Here purchasing, website services, logistics, and distribution need to be carefully coordinated for success. In our increasingly interconnected and interdependent global economy, the process of delivering finished goods, services, and supplies from one place to another is accomplished by means of mind-boggling technological innovation, clever new applications of old ideas, seemingly magical mathematics, powerful software, and old-fashioned concrete, steel, and muscle.