The strategic and operations management paper examines both the breadth in the compulsory section a and depth in section b of candidates knowledge of the subject. At the strategic level, company management makes highlevel strategic supply chain decisions that are relevant to whole organizations. The concept of supply chains in these firms developed from the purchasing and operations management. In operations management, the 10 decisions relate to such aspects as product design, quality management, process and capacity design, and location strategy, as well as inventory management.
Analyzing and evaluating critically tescos current. Value chain for strategic management accounting in higher. Operations is the stage at which the raw materials are turned into the. Value chain analysis is a strategy tool used to analyze internal firm activities. It works by breaking an organizations activities down into strategically relevant pieces, so that you can see a fuller picture of the cost drivers and sources of differentiation, and then make changes appropriately. The discipline draws from earlier thinking and texts on strategy dating back thousands of years. Digital operations management kellogg executive education. One of the goals of value chain analysis is to ensure the product is. In the strategic side of supply chain management, however, there is no established. Strategic sourcing is an approach to supply chain management that formalizes the way information is gathered and used so that an organization can leverage its consolidated purchasing power to find the best possible values in the marketplace. Key considerations include transfer pricing, a tax incurred when goods are services are moved across borders, based on the value added to the product. Strategic supply chain management training course sim pd. The function of value chain activities is to add value to product at every stage before it is delivered to the customers.
Understand the strategic significance of operations management to organizations of all kinds. Strategic management texts were carrying a caveat that value chain analysis. Underlying issues related to the observed transformation processes and value creation are analysed. This approach is used when organizations try to compete on costs. Institute of management studies, banaras hindu university, varanasi221005, uttar pradesh, india. Prepared for the international development research centre. Pdf basics of supply chain and operations management. Tescos operations management with increasing global competition. In the future, operations related to the storage and shipping of. Value chain transformation vct can help determine where key parts of your operations need to be located in china and. Characterizing the ideal model of value chain management and. The decisions that are made with regards to the supply chain should reflect the overall corporate strategy that the.
Adopting a value chain approach, it seeks to instruct and inform the reader on the importance of the strategic issues in operations thought and practice. A value chain is the full range of activities including design, production, marketing and distribution businesses conduct to bring a product or service from conception to delivery. Business management a value chain approach 2nd edition pdf. Value chain analysis to improve corporate performance.
Organization of economic cooperation and development. Their input, advice, and lessons learned, both successes and failures, have been incorporated into this document so that we may all apply better strategic management processes in our organizations. Costco wholesale corporation successfully applies the 10 strategic decisions of operations management in all of its business areas through standards and policies for efficiency and productivity, despite variations in market conditions costco wholesales operations management, 10 decision areas. Business management a value chain approach covers basic points of theory, but it also has a strong practical approach, and includes selfevaluation exercises, challenging experiential exercises, information about relevant websites, interesting discussion questions and case studies, as well as useful lists of key terms. The strategic importance of supply chain management. The value chain framework has made its way to the forefront of management thought as a powerful analysis tool for strategic planning. According to strategic management insight, there are two approaches to the value. A value chain is a set of activities that a firm operating in a specific industry performs in order to deliver a valuable product i. Operations management refers to the administration of business practices to create the highest level of efficiency possible within an organization. It is difficult for candidates to secure a good result by picking isolated sections of the syllabus to study. Supply management leaders must communicate these tradeoffs to functional teams, so they thoroughly understand them, mr. A value chain is being derived by analyzing areas where competitive advantage can be attained by the actors in an organization ensign, 2001. Relate inventory management to financial performance. Scm is the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage, according to robert handfield, ph.
Its ultimate goal is to maximize value creation while minimizing costs. The value chain is a systematic approach to examining the development of. There are two components, which make value chain primary activities and secondary activities. Project management and the competitive advantage implementing project management across the organization helps create a strategic value chain that gives companies an edge on their competetors, particularly in highrisk sectors and markets. In this book david walters applies the framework to strategic decision making in the field of operations management. The value chain is a systematic approach to examining the development of competitive. Value chain analysis smi strategic management insight. Today, as part of the pwc network, we turn vision into reality. Value chain analysis strategic management value chain analysis in strategic management is the primary activities inbound logistics, operations production, outbound logistics, marketing, and services and supportive activities firms infrastructure, human resource management, technological development, procurement. Value chain represents the internal activities a firm engages in when transforming inputs into outputs. Strategic management value chain the value chain to better understand the activities through which a firm develops a competitive advantage and creates shareholder value, it is useful to separate the business system into a series of valuegenerating activities referred to as the value chain. The value chain approach is considered most useful for strategic management and planning. Five steps to align business strategy with supply chain. Supply chain management scm is an important part of every organization, whether small or large.
The articles that explore the interface of operations management with other functional areas, e. A value chain approach can break down organizational barriers using appropriate technology and best practices to improve performance throughout the enterprise. Value chain analysis vca is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation. Porters value chain is a useful strategic management tool. Walmart excels in terms of speed and cost by locating all domestic stores within one days drive of a. Strategy should reflect a distinctive value chain that configures all key business processes and operations operations, hrm, marketing, service delivery, etc. Apics scc maintains the supply chain operations reference scor model, the supply chain management communitys most widely accepted framework for evaluating and comparing supply chain activities and performance. The primary activities are directly associated with the manufacturing of products like supply management, plant operations, etc. The value of strategic supply chain management is reflected in how firms such as walmart have used their supply chains as competitive weapons to gain advantages over peers. Costcos operations management, 10 decisions, productivity. Strategic positioning business management techniques.
The aim of this essay is to objectively present tescos strengths and weaknesses in operations management and give some appropriate recommendations. In porters value chains, inbound logistics, operations, outbound logistics. As organizations have become more complex and much more international in their scope, the strategic process by which materials, goods and information flow between suppliers. Special thanks is extended to those who participated in the case studies by sharing the details of their strategies. The strategic management discipline originated in the 1950s and 1960s. In contrast to the strategic management perspective, commodityvalue chain. He is also a faculty member at university of groningen in netherlands. Among the numerous early contributors, the most influential were peter drucker, philip selznick, alfred chandler, igor ansoff, and bruce henderson. Managing value chain strategy academic and business research. The firms expertise in operations strategy was further enhanced by the acquisition of management engineers in 20, adding deep operations capabilities, and implementationdriven approach, and experience across the manufacturing, chemicals and industrials sectors. Supply chain engineering considers how modern production and operations management pom techniques can respond to the pressures of the competitive global marketplace by integrating all activities.
A value chain is a set of activities that a firm operating in a specific industry performs in order. Pdf strategic operations management radhitya wirawan. Often known as strategic sourcing, it begins the critical process and lays the foundation for creating value through the purchasing process. He was instrumental in introducing supply chain management programmes mba, ms and ph. Value chain analysis in strategic management is the primary activities inbound logistics, operationsproduction, outbound logistics, marketing, and services and supportive activities firms infrastructure, human resource management, technological development, procurement. Another major aspect of modern operations management is supply chain management. Since these works the value chain approach has diffused into a wide array of. In taking a dualistic black and white approach to arguing that supply chains and value chains. Value, value chain, strategy, differentiation, customers. As the first part of study was undertaken in england, and then applicability of the model was tested in jordan, findings are generalisable. The text provides an uptodate, accessible approach to operations strategy, with a comprehensive overview of the subject area as a whole. Strategic management notes pdf, book, paper mba 2020. If you continue browsing the site, you agree to the use of cookies on this website.
Quality control operations management supply chain inventory. Outline the difference between types of inventory and their roles in a productbased value chain. Scm also deals with the movement and storing of materials needed to create a product, as well as inventory management. Use of the value chain in the process of generating a. Read free full ebook download strategic operations management. Perspectives in operations management springerlink. This chapter introduces global supply chain and operations management. Learn about a digital approach to effective inventory management. The articles deal with continuous improvement, quality, services, supply chain management, and creating value through operations. Barger said they must be able to translate them into specific functional strategies that support cost, speed, service or other supply chain segmentation outcomes.
The concept comes through business management and was first described by michael porter in his 1985 bestseller, competitive advantage. Read free full ebook download strategic operations. Strategic management courses is considered one of the most important courses that you will take during mba postgraduate degree as it integrates other courses, builds on them, and acts as a steppingstone to the real world of business the purpose of this course is to enhance your capacity to do the job of a general manager responsible for strategic performance. Faculty of corporate strategy, department of management, institute of technology. Description of the book strategic operations management. Being able to deliver projects on time and within budget often determines whether a company. Offerings valued by external customers drive supply chain strategy and tradeoffs. Show the impact of digitization on strategic inventory management. What is strategic sourcing and why is it important. Operations strategy or strategic operations management modules. A value chain is a set of activities that a firm operating in a specific industry performs in order to. Operations and value chain management chapter 16 0 slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Costco wholesales products are retail service, optical.