WSAIEF_MGT311_2

Description

Learning Outcomes: To designing profitable services that provide high level of quality to satisfy business needs.To ensure that the services delivered are reasonable and relevant to the customers.To gain an understanding of the business rules and ensure if the results are in alignment with the organizational goals. Go through the given case scenario ‘There must be a better way of running this place!’ said Dean Hammond, recently recruited General Manager of Boys and Boden, as he finished a somewhat stressful conversation with a complaining customer, a large and loyal local building contractor. ‘We had six weeks to make their special staircase, and we are still late! I’ll have to persuade one of the joiners to work overtime this weekend to get everything ready for Monday. We never seem to get complaints about quality, as our men always do an excellent job … but there is usually a big backlog of work, and something always gets finished late, so how should we set priorities? We could do the most profitable work first, or the work for our biggest customers, or the jobs which are most behind on. In practice, we try to satisfy everyone as best we can, but inevitably someone’s order will be late. In theory, each job should be quite profitable, since we build into the price a big allowance for waste, and for timber defects. And we know the work content of almost any task we would have to do; this is the basis of our estimating system. But, overall, the department is disappointingly unprofitable, and most problems seem to end up with a higher-than-anticipated cost, and with late deliveries!’ Boys and Boden was a small, successful, privately-owned timber and building materials merchant based in a small town. Over the years it had established a large Joinery Department, which made doors, windows, staircases and other timber products, all to the exact special requirements of the customers, mostly comprising numerous local and regional builders. In addition, the joiners would cut and prepare special orders of timber, such as non-standard sections and special profiles, including old designs of skirting board, sometimes at very short notice, and often even while the customers waited. Typically, for larger joinery items, the customer provided simple dimensioned sketches of the required products. These were then passed to the central Estimating and Quotations Department which, in conjunction with the Joinery Manager, calculated costs and prepared a written quotation, which was faxed or posted to the customer. This first stage was normally completed within two or three days, but on occasions could take a week or more. On receipt of an order, the original sketches and estimating details were passed back to the Joinery Manager, who roughly scheduled them into his manufacturing plan, allocating them to individual craftsmen as each became available. Most of the joiners were capable of making any product, and enjoyed the wide variety of challenging work. The Joinery Department appeared congested and somewhat untidy, but everyone believed that this was acceptable and normal for job shops, since there was no single flow route for materials. Whatever the design of the item being made, it was normal for the joiner to select the required bulk timber from the storage building across the yard. This roughly-sawn timber was then prepared using a planer-thicknesser machine which gave it smooth, parallel surfaces. After that, the joiners would use a variety of processes, depending on product. The timber could be machined into different cross-sectional shapes, cut into component lengths using a radial arm saw, joints were formed by hand tools, or using a morticing machine, and so on. Finally the products would be glued and assembled with screws and nails, sanded smooth by hand or by machine, and treated with preservatives, stains or varnishes if required. All the large and more expensive floor-standing machines were grouped together by type (for example, saws) or were single pieces of equipment shared by all 10 joiners. Every joiner also owned a complete set of hand tools which they guarded and cared for with pride. Dean described what one might observe on a random visit to the Joinery Department: ‘One or two long staircases partly assembled, and crossing several work areas; large door frames on trestles being assembled; stacks of window components for a large contract being prepared and jointed, and so on. Offcuts and wood shavings are scattered around the work area, but are periodically cleared when they get in the way or form a hazard. The joiners try to fit in with each other over the use of machinery, so are often working on several, part-finished items at once. Varnishing or staining has to be done when it’s quiet, for example towards the end of the working day or at weekends, or even outside, to avoid sawdust contamination. Long offcuts are stacked around the workshop, to be used up on any future occasion when these lengths or sections are required. However, it is often easier to take a new length of timber for each job, so the offcuts do tend to build up over time. Unfortunately, everything I have described is getting worse as we get busier … our sales are increasing so the system is getting more congested. The joiners are almost climbing over each other to complete their work. Unfortunately, despite having more orders, the department has remained stubbornly unprofitable! ’Whilst analysing in detail the lack of profit, we were horrified to find that, for the majority of orders, the actual times booked by the joiners exceeded the estimated times by up to 50 per cent. Sometimes this was clearly attributable to the inexperience of newly employed joiners. Although fully trained and qualified, they might lack the experience needed to complete a complex job in the time an Estimator would expect; but there had been no feedback of this to the individual. We then put one of these men on doors only; having overcome his initial reluctance, he has become an enthusiastic “door expert” and gets closely involved in quotations too, so now he always does his work within the time estimates! However, the main time losses were found to be the result of general delays caused by congestion, interference, double-handling, and rework to rectify in-process damage. Moreover, we found that a joiner walked an average of nearly 5 km a day, usually carrying around heavy bits of wood. ‘When I did my operations management course on my MBA, the professor described the application of cellular manufacturing and JIT. From what I can remember, the idea seems to be to get better flow, reducing the times and distances in the process, and thus achieving quicker throughput times. That is just what we needed, but these concepts were explained in the context of high-volume, repetitive production of bicycles, whereas all the products we make are one-offs. However, although we do make a lot of different staircases, they all use roughly the same process steps: 1 Cutting timber to width and length 2 Sanding 3 Machining 4 Tenoning 5 Manual assembly (glue and wedges) ‘We have a lot of unused factory floor space, so it would be relatively easy to set up a self-contained staircase cell. There is a huge demand for specially-made stairs in this region, but also a lot of competing small joinery businesses with low overheads, which can beat us on price and lead-time. So we go to a lot of trouble quoting for stairs, but only win about 20 per cent of the business. If we could get the cell idea to work, we should be more competitive on price and delivery, hence winning more orders. At least that is the theory. I know we will need a lot more volume to justify establishing the cell, so it’s really a case of whether to construct a cell in anticipation of higher demand, or to try to win more business first. To do the latter, we would have to reduce our selling prices and lead-times, and then allocate more joiners to complete the higher volumes of orders until we had enough work to set up the cell. I personally favour setting up the cell first so that we can have a “capacity leads demand” strategy.’ Questions 1. To what extent could (or should) Dean expect to apply the philosophies and techniques of JIT to the running of the staircase cell? (2.5 MM) 2. What are likely to be the main categories of costs and benefits in establishing the cell? Are there any non-financial benefits which should be taken into account? (2.5 MM) 3.How different would the cell work (job design) be to that in the main Joinery Department? (2.5 MM) 4. What risks are associated with Dean’s proposal? (2.5 MM) Note: You must include at least 5 references.Format your references using APA style.Each answer must not be less than 300 words

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‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
College of Administrative and Financial Sciences
Assignment 2
Introduction to Operations Management (MGT 311)
Due Date: 30/03/2024 @ 23:59
Course Name: Introduction to Operations
Management
Course Code: MGT 311
Student’s Name:
Semester: second
CRN:
Student’s ID Number:
Academic Year:2023-24-2nd
For Instructor’s Use only
Instructor’s Name: Dr. Khadija Saidi
Students’ Grade:
Marks Obtained/Out of 10
Level of Marks: High/Middle/Low
General Instructions – PLEASE READ THEM CAREFULLY
•
•
•
•
•
•
•
•
The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
Assignments submitted through email will not be accepted.
Students are advised to make their work clear and well presented, marks may be reduced
for poor presentation. This includes filling your information on the cover page.
Students must mention question number clearly in their answer.
Late submission will NOT be accepted.
Avoid plagiarism, the work should be in your own words, copying from students or other
resources without proper referencing will result in ZERO marks. No exceptions.
All answered must be typed using Times New Roman (size 12, double-spaced) font. No
pictures containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.
Learning Outcomes:
•
•
•
To designing profitable services that provide high level of quality to satisfy
business needs.
To ensure that the services delivered are reasonable and relevant to the customers.
To gain an understanding of the business rules and ensure if the results are in
alignment with the organizational goals.
Go through the given case scenario
‘There must be a better way of running this place!’ said Dean Hammond,
recently recruited General Manager of Boys and Boden, as he finished a
somewhat stressful conversation with a complaining customer, a large and
loyal local building contractor.
‘We had six weeks to make their special staircase, and we are still late! I’ll
have to persuade one of the joiners to work overtime this weekend to get
everything ready for Monday. We never seem to get complaints about
quality, as our men always do an excellent job … but there is usually a big
backlog of work, and something always gets finished late, so how should we
set priorities? We could do the most profitable work first, or the work for our
biggest customers, or the jobs which are most behind on. In practice, we try
to satisfy everyone as best we can, but inevitably someone’s order will be
late. In theory, each job should be quite profitable, since we build into the
price a big allowance for waste, and for timber defects. And we know the
work content of almost any task we would have to do; this is the basis of our
estimating system. But, overall, the department is disappointingly
unprofitable, and most problems seem to end up with a higher-thananticipated cost, and with late deliveries!’
Boys and Boden was a small, successful, privately-owned timber and
building materials merchant based in a small town. Over the years it had
established a large Joinery Department, which made doors, windows,
staircases and other timber products, all to the exact special requirements of
the customers, mostly comprising numerous local and regional builders. In
addition, the joiners would cut and prepare special orders of timber, such as
non-standard sections and special profiles, including old designs of skirting
board, sometimes at very short notice, and often even while the customers
waited. Typically, for larger joinery items, the customer provided simple
dimensioned sketches of the required products. These were then passed to
the central Estimating and Quotations Department which, in conjunction
with the Joinery Manager, calculated costs and prepared a written quotation,
which was faxed or posted to the customer. This first stage was normally
completed within two or three days, but on occasions could take a week or
more. On receipt of an order, the original sketches and estimating details
were passed back to the Joinery Manager, who roughly scheduled them into
his manufacturing plan, allocating them to individual craftsmen as each
became available. Most of the joiners were capable of making any product,
and enjoyed the wide variety of challenging work.
The Joinery Department appeared congested and somewhat untidy, but
everyone believed that this was acceptable and normal for job shops, since
there was no single flow route for materials. Whatever the design of the item
being made, it was normal for the joiner to select the required bulk timber
from the storage building across the yard. This roughly-sawn timber was
then prepared using a planer-thicknesser machine which gave it smooth,
parallel surfaces. After that, the joiners would use a variety of processes,
depending on product. The timber could be machined into different crosssectional shapes, cut into component lengths using a radial arm saw, joints
were formed by hand tools, or using a morticing machine, and so on. Finally
the products would be glued and assembled with screws and nails, sanded
smooth by hand or by machine, and treated with preservatives, stains or
varnishes if required. All the large and more expensive floor-standing
machines were grouped together by type (for example, saws) or were single
pieces of equipment shared by all 10 joiners. Every joiner also owned a
complete set of hand tools which they guarded and cared for with pride.
Dean described what one might observe on a random visit to the Joinery
Department:
‘One or two long staircases partly assembled, and crossing several work
areas; large door frames on trestles being assembled; stacks of window
components for a large contract being prepared and jointed, and so on.
Offcuts and wood shavings are scattered around the work area, but are
periodically cleared when they get in the way or form a hazard. The joiners
try to fit in with each other over the use of machinery, so are often working
on several, part-finished items at once. Varnishing or staining has to be done
when it’s quiet, for example towards the end of the working day or at
weekends, or even outside, to avoid sawdust contamination. Long offcuts are
stacked around the workshop, to be used up on any future occasion when
these lengths or sections are required. However, it is often easier to take a
new length of timber for each job, so the offcuts do tend to build up over
time. Unfortunately, everything I have described is getting worse as we get
busier … our sales are increasing so the system is getting more congested.
The joiners are almost climbing over each other to complete their work.
Unfortunately, despite having more orders, the department has remained
stubbornly unprofitable!
’Whilst analysing in detail the lack of profit, we were horrified to find that,
for the majority of orders, the actual times booked by the joiners exceeded
the estimated times by up to 50 per cent. Sometimes this was clearly
attributable to the inexperience of newly employed joiners. Although fully
trained and qualified, they might lack the experience needed to complete a
complex job in the time an Estimator would expect; but there had been no
feedback of this to the individual. We then put one of these men on doors
only; having overcome his initial reluctance, he has become an enthusiastic
“door expert” and gets closely involved in quotations too, so now he always
does his work within the time estimates! However, the main time losses
were found to be the result of general delays caused by congestion,
interference, double-handling, and rework to rectify in-process damage.
Moreover, we found that a joiner walked an average of nearly 5 km a day,
usually carrying around heavy bits of wood.
‘When I did my operations management course on my MBA, the professor
described the application of cellular manufacturing and JIT. From what I can
remember, the idea seems to be to get better flow, reducing the times and
distances in the process, and thus achieving quicker throughput times. That
is just what we needed, but these concepts were explained in the context of
high-volume, repetitive production of bicycles, whereas all the products we
make are one-offs. However, although we do make a lot of different
staircases, they all use roughly the same process steps:
1 Cutting timber to width and length
2 Sanding
3 Machining
4 Tenoning
5 Manual assembly (glue and wedges)
‘We have a lot of unused factory floor space, so it would be relatively easy
to set up a self-contained staircase cell. There is a huge demand for
specially-made stairs in this region, but also a lot of competing small joinery
businesses with low overheads, which can beat us on price and lead-time. So
we go to a lot of trouble quoting for stairs, but only win about 20 per cent of
the business. If we could get the cell idea to work, we should be more
competitive on price and delivery, hence winning more orders. At least that
is the theory. I know we will need a lot more volume to justify establishing
the cell, so it’s really a case of whether to construct a cell in anticipation of
higher demand, or to try to win more business first. To do the latter, we
would have to reduce our selling prices and lead-times, and then allocate
more joiners to complete the higher volumes of orders until we had enough
work to set up the cell. I personally favour setting up the cell first so that we
can have a “capacity leads demand” strategy.’
Questions
1. To what extent could (or should) Dean expect to apply the philosophies
and techniques of JIT to the running of the staircase cell?
(2.5 MM)
2. What are likely to be the main categories of costs and benefits in
establishing the cell? Are there any non-financial benefits which should be
taken into account?
(2.5 MM)
3.How different would the cell work (job design) be to that in the main
Joinery Department?
(2.5 MM)
4. What risks are associated with Dean’s proposal?
(2.5 MM)
Note:
•
•
•
You must include at least 5 references.
Format your references using APA style.
Each answer must not be less than 300 words
Answers
1. Answer2. Answer3. Answer4. Answer-
Chapter 1:
Introduction to Operations
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Chapter 1 Learning
Objectives
•LO 1.1 Define operations and supply chain management.
•LO 1.2 Review the role of operations in the firm and the economy.
•LO 1.3 Describe the five main decisions made by operations and supply chain
managers.
•LO 1.4 Explain the nature of cross-functional decision making with operations.
•LO 1.5 Describe typical inputs and outputs of an operations transformation
system.
•LO 1.6 Analyze trends in operations and supply chain management.
COPYRIGHT © 2022 BY THE MCGRAW-HILL COMPANIES, INC.
ALL RIGHTS RESERVED.
1-2
Definition of Operations
Management
Operations management
focuses on decisions for the
internal production of the
firm’s products or services.
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ALL RIGHTS RESERVED.
1-3
A Typical Supply Chain
(Figure 1.1)
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ALL RIGHTS RESERVED.
1-4
Operations and Supply Chain
Management
Deals with the sourcing,
production, and distribution of the
product or service along with
managing the relationships with
supply chain partners.
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ALL RIGHTS RESERVED.
1-5
Importance of
Operations and Supply Chain
Providing the
products and
services that we
use and enjoy
Sustaining our
way of life while
working to
protect the planet
Constantly
improving both
productivity and
innovation
Creating revenue
from products &
services to drive
firm profitability
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ALL RIGHTS RESERVED.
1-6
Role of Operations in the
Economy
Gross Domestic Product (GDP) – monetary value of all goods
and services produced in a country.
Productivity – value of goods/services output, relative to input.
Productivity =
output
capital + labor
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ALL RIGHTS RESERVED.
1-7
Productivity Example
A retail (quick) clinic has the following output (revenue) and labor expenses.
Did productivity improve from Year 1 to Year 2? (assume equivalent capital costs)
Year 1
Annual
Year 2 Inflation
Output (revenue) $thousands
Labor $thousands
$280
$842
$292
$883
4%
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ALL RIGHTS RESERVED.
2%
1-8
Productivity Example Solution
A retail (quick) clinic has the following output (revenue) and labor expenses.
Did productivity improve from Year 1 to Year 2? (assume equivalent capital costs)
Productivity year 1 = Output year 1 = 842 = 3.01
Labor year 1
280
Productivity year 2 = Output year 2 = 883(.98) = 3.09
Labor year 2
292(.96)
Change in productivity = 3.09 = 1.027 which is a 2.7% increase
3.01
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ALL RIGHTS RESERVED.
1-9
Why Study Operations
Management?
Challenging and interesting career
opportunities – domestic, international
Cross-functional nature of decisions
– what every major needs to know
Principles of process thinking can be
applied across the organization
ammentorp/123RF
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ALL RIGHTS RESERVED.
1-10
Careers in
Operations and Supply Chain
Management
Supply Chain Analyst
Supply Chain Analytics
Plant Lead on Sustainability
Sourcing Specialist
Global Sourcing Analyst
Transportation Planner
Risk Consultant
NetPics/Alamy Stock Photo
Customs Specialist
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ALL RIGHTS RESERVED.
1-11
3 Aspects of
Operations and Supply Chain
Management
Decisions:
The operations manager must decide:
• Process, quality, capacity, inventory, and supply chain
Function:
Major functional areas in organizations:
• Operations, marketing, finance
Process:
Planning and controlling the transformation process and its interfaces
(internal/external)
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ALL RIGHTS RESERVED.
1-12
Let’s Manage Operations
at Pizza USA!
Steve Mason/Getty Images
Managing operations
is about making decisions.
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ALL RIGHTS RESERVED.
1-13
Major Decisions at Pizza
USA
Process
◦ How should we produce pizzas?
Quality
◦ How do we meet quality standards and ensure a good customer experience?
Capacity
◦ How much output do we need at various times?
Inventory
◦ Which ingredients, when & how much?
Supply Chain
◦ How to source inputs and manage logistics?
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ALL RIGHTS RESERVED.
1-14
Framework for Operations
Decisions (Figure 1.2)
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ALL RIGHTS RESERVED.
1-15
Cross-Functional Decision
Making
Operations is critical in every firm.
Marketing = create demand
Operations = produce and distribute goods and services
Finance = acquire and allocate capital
Supporting functions: human resources, information systems, accounting
Cross-functional decision making – see Table 1.2
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1-16
Operations as a Process
Inputs
Transformation
(Conversion)
Process
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Outputs
1-17
Operations as a Process
(Figure 1.3)
Energy
Materials
Labor
Capital
Transformation
(Conversion)
Process
Goods or
Services
Information
Feedback information for
control of process inputs
and process technology
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1-18
Transformation Process
Examples (Table 1.3)
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1-19
Trends in
Operations and Supply Chain
Management
▪ Sustainability – triple bottom line
▪ Services
▪ Digital Technologies
▪ Integration of Decisions Internally and Externally
▪ Globalization of Operations and the Supply Chain
StreetVJ/Shutterstock
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1-20
Chapter 1 Summary
•LO 1.1 Define operations and supply chain management.
•LO 1.2 Review the role of operations in the firm and the economy.
•LO 1.3 Describe the five main decisions made by operations and supply chain
managers.
•LO 1.4 Explain the nature of cross-functional decision making with operations.
•LO 1.5 Describe typical inputs and outputs of an operations transformation
system.
•LO 1.6 Analyze trends in operations and supply chain management.
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ALL RIGHTS RESERVED.
1-21
Questions for Discussion
•What do you hope to learn in this course?
•Review the operations and supply chain trends on slide 1-20. Which of
these is most interesting to you and why?
•What production systems have you seen in person? How do they
produce the intended product or service?
•Describe a transformation process that you recently experienced. Think
about a medical or dental clinic visit, or a restaurant visit.
•Why are global factors important in operations and supply chain?
•How is operations and supply chain related to environmental
responsibility?
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1-22
Chapter 2:
Operations and Supply Chain Strategy
McGraw-Hill Education
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ALL RIGHTS RESERVED.
Chapter 2 Learning
Objectives
LO 2.1 Define operations strategy.
LO 2.2 Describe the elements of operations strategy and alignment with business
and other functional strategies.
LO 2.3 Differentiate the ways to compete with operations objectives.
LO 2.4 Compare product imitator and innovator strategies.
LO 2.5 Explain the nature of global operations and supply chains.
LO 2.6 Analyze two types of supply chain strategies.
LO 2.7 Illustrate how operations and supply chain can become more sustainable.
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2-24
Operations Strategy
“A consistent pattern of business decisions for operations and the
associated supply chain …
… that are linked to the business strategy and other functional
strategies, leading to a competitive advantage for the firm.”
The operations strategy at Southwest
Airlines includes using only one type of
airplane.
This lowers staff training and
maintenance costs, and reduces on
hand spare parts.
These decisions support the business
strategy of being a low cost carrier.
Markus Mainka/123RF
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2-25
Operations
Strategy
Process (Figure 2.1)
Corporate strategy
Operations Strategy
Mission
Objectives: (cost, quality,
delivery, flexibility, sustainability)
Strategic Decisions: (process,
quality, capacity, inventory, supply chain)
Functional strategies in
marketing,
finance,
engineering,
human resources,
and
information systems
Distinctive
Competence
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2-26
Operations Strategic Objectives
Cost – resources used
Quality – conformance to customer expectations
Delivery – quickly and on time
Flexibility – ability to rapidly change operations
Sustainability – environmental, social, economic
How do firms
use these
objectives to
gain
competitive
advantage?
What tradeoffs exist
among the
objectives?
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2-27
Examples of Important
Strategic Decisions in Operations
(Table 2.2)
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2-28
Distinctive Competence
This operations capability is something an
organization does better than any
competing organization that adds value for
the customer.
Examples:
• patents, proprietary technology,
operations innovations
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2-29
Linking Operations to Business
Strategy
Business strategy alternatives
◦ Product Imitator
◦ Operations must focus on keeping costs low.
◦ Product Innovator
◦ Operations must maintain flexibility in processes, labor, and suppliers.
Customer perspective
◦ Order Qualifier
◦
Objective that must be delivered at an acceptable level for customer to consider
product/service. Can be an order loser if not met.
◦ Order Winner
◦
Objective that causes customer to choose a particular product/service.
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2-30
Linking Operations to Business
Strategy
◦ Product Imitator
◦ Order Winner = price (low cost)
◦ Order Qualifiers = flexibility, quality, delivery
◦ Product Innovator
◦ Order Winner = flexibility (rapid introduction of new products)
◦ Order Qualifiers = cost, delivery, quality
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2-31
Example:
McDonald’s Operations Strategy
Mission
fast product/service, consistent quality, low cost, clean/friendly environment
Operations Objectives
cost, quality, service
Strategic Decisions
process, quality, capacity, inventory, supply chain
Distinctive Competence
today: continuous improvement of the transformation system, and brand
(originally: unique service/supply chain)
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2-32
Characteristics of “Global
Corporations”
 Facilities located worldwide, not country by country.
 Products & services can be shifted among countries.
 Sourcing on a global basis.
 Supply chain is global in nature.
 Product design & process technology are global.
 Products/service fit global tastes.
 Demand is considered on worldwide basis.
 Logistics & inventory control is on worldwide basis.
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2-33
Supply Chain Strategy
To achieve competitive advantage for entire supply chain, rather
than individual entities.
Two supply chain strategies:
◦ Imitative Products (e.g. commodities)
◦ Predictable demand
◦ Efficient, low-cost supply chain
◦ Innovative Products (e.g. new technologies)
◦ Unpredictable demand
◦ Flexible, fast supply chain
Firms design supply chain for each product/service or group of
products/services
◦ Avoid “one size fits all” strategy
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Supply Chain Strategy (Table
2.4)
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Sustainability is in Operations
Operations Sustainability:
* minimizing or eliminating environmental impact of operations
* social and financial viability of the firm for future generations
Operations ‘greening’ may include:
◦ Curtailing air, water, landfill pollution
◦ Reducing energy consumption
◦ Minimizing transportation and total carbon footprint
◦ Working with suppliers to use recyclable and biodegradable packaging
◦ Incorporating product reuse, end-of-life return, recycling
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TEA/123RF
British retailer Marks & Spencer has met goals to
send zero waste to landfills and is the first major
retailer to be carbon neutral.
Supply chain partners have been an important
source of support for this effort.
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Chapter 2 Summary
LO 2.1 Define operations strategy.
LO 2.2 Describe the elements of operations strategy and alignment with business
and other functional strategies.
LO 2.3 Differentiate the ways to compete with operations objectives.
LO 2.4 Compare product imitator and innovator strategies.
LO 2.5 Explain the nature of global operations and supply chains.
LO 2.6 Analyze two types of supply chain strategies.
LO 2.7 Illustrate how operations and supply chain can become more sustainable.
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Questions for Discussion
•Describe operations strategy in your own words.
•What is the relationship between a firm’s business strategy and its
operations strategy?
•Think of examples of manufacturing and service firms that pursue the
operations objectives of cost, quality, delivery, flexibility, sustainability.
•How do Apple’s operations and supply chain characteristics support their
product innovator strategy?
•What are some operations or supply chain challenges facing global
corporations?
•Describe recent examples you have seen in person or in the media that
illustrate how operations is closely tied to environmental, social, and
financial sustainability.
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Chapter 3:
Product Design
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Chapter 3 Learning
Objectives
LO 3.1 Compare the three strategies for new product introduction.
LO 3.2 Describe the three phases of new product development.
LO 3.3 Evaluate how concurrent engineering deals with misalignment.
LO 3.4 Describe the criteria for selecting suppliers for collaboration.
LO 3.5 Evaluate an example of Quality Function Deployment.
LO 3.6 Explain the benefits of modular design.
McGraw-Hill/Irwin
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Product Design:
Why Does Operations Care?
In the past: Throw product design “over the wall”
Today:
◦ Must be able to produce the product (design the process)
◦ technology
◦ availability of resources
◦ Must have the right type and amount of capacity
◦ Must deliver a quality product or service
◦ Must have right inventory at right time
The LEGO Group is investing over $100 million
and hiring 100 workers to redesign its product.
The goal is to make the product entirely from
plant or recycled materials by 2030.
McGraw-Hill/Irwin
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Milosh Kojadinovich/12RF
3-42
Strategies for New Product
Introduction
Market Pull: “Make what we can sell”
◦ Organize resources to fulfill customer demand
◦ Food industry
Technology Push: “Sell what we can make”
◦ Develop superior technologies and products
◦ Electronics
Interfunctional View: most difficult
◦ Cross-functional design team – marketing, engineering, operations, finance
◦ Challenge to gain cooperation of all functions
◦ Consider existing and new markets
McGraw-Hill/Irwin
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McGraw-Hill/Irwin
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New Product Development
Process
Concept Development
◦ Idea generation and evaluation of alternative ideas
Product Design
◦ Design of the physical product
◦ Design of the production process
Pilot Production/Testing
◦ Testing production prototypes (e.g., 3D printing)
Shutterstock/Gorodenkoff
◦ Finalizing production process
◦ Finalizing ‘information package’ specifying product and process design details
McGraw-Hill/Irwin
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New Product Design Process
(Figure 3.2)
Concept development
McGraw-Hill/Irwin
Product design
Preliminary process design
Pilot production/testing
Final process design
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Production Prototypes
Robert Clark/Getty Images
3D Printing or Additive Manufacturing
–
McGraw-Hill/Irwin
Creates physical prototype
Allows rapid production of prototype designs
Software and hardware continue to improve
Now possible to print metal and human cells
Speeds entire product design process
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47
Cross-Functional Product
Design
Sequential approach
◦ Functions (marketing, engineering, operations) work independently
before passing work to next step. This is the ‘over the wall’ approach.
◦ Often results in misalignment of market needs, design, and production
process.
Concurrent approach
◦
◦
◦
◦
McGraw-Hill/Irwin
Also called concurrent engineering.
Functions cooperate, work together over the same time frame.
Cross-functional teams are common.
Not always “best” approach (e.g. high uncertainty of market or
technology).
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Cross-Functional Product
Design (Figure 3.3)
McGraw-Hill/Irwin
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Supply Chain Collaboration
Relationships with Customers
◦ Ask right questions
◦ Align incentives to share knowledge
◦ Create collaborative technology platform
◦ Include as advisors to design team
McGraw-Hill/Irwin
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Supply Chain Collaboration
Relationships with Suppliers
◦ Technical expertise
◦ Capabilities – cost, time, quality targets
◦ Capacity availability
◦ Low risk
McGraw-Hill/Irwin
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Quality Function Deployment
(QFD)
“House of Quality”
Tool for coordinating and communicating between functions
Helps identify tradeoffs
Customer Attributes
“Voice of the
Customer”
McGraw-Hill/Irwin
Engineering Characteristics
“Voice of the
Engineer”
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House of Quality (QFD) (Figure
3.4)
McGraw-Hill/Irwin
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House of Quality
(Figure(QFD)
HOUSE(QFD)
OF QUALITY
3.5)
McGraw-Hill/Irwin
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HOUSE
QUALITY (QFD)
QFD for Pizza
USAOF
Delivery
(Figure 3.6)
McGraw-Hill/Irwin
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Modular Design
Allows greater product variety through ‘mixing and
matching’ modules
Design, develop, and manage basic components
(modules) to (re)use in multiple products
Controls costs while enabling customer choice
Small number of components creates large number of
combinations, e.g., Dell notebooks, IKEA cabinets
McGraw-Hill/Irwin
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Modular Design
Most automobile manufacturers use modular design.
MINI Cooper’s basic model has
many choices:
◦ 4 body colors
◦ 3 wheel designs
◦ 8 interior finishes
◦ 2 engines
◦ 11 styles
The theoretical number of different
cars that can be produced:
4 × 3 × 8 × 2 × 11 = 2112
McGraw-Hill/Irwin
Robert Wilson/123RF
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Chapter 3 Summary
LO 3.1 Compare the three strategies for new product introduction.
LO 3.2 Describe the three phases of new product development.
LO 3.3 Evaluate how concurrent engineering deals with misalignment.
LO 3.4 Describe the criteria for selecting suppliers for collaboration.
LO 3.5 Evaluate an example of Quality Function Deployment.
LO 3.6 Explain the benefits of modular design.
McGraw-Hill/Irwin
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3-58
Questions for Discussion
•Can you think of examples of new products that did not function well for
the customers who bought them? What went wrong?
•Describe what can happen if product design and process design are
approached separately by different work teams.
•What are the key activities in pilot production?
•What do you know about 3D printing? 4D printing?!
•What do marketing, finance, and HR do when they are involved in a crossfunction concurrent engineering team?
•How can suppliers be involved in new product development?
•Can you think of products you own that include modular design
elements?
McGraw-Hill/Irwin
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Chapter 4:
Process Selection
McGraw-Hill Education
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Chapter 4 Learning
Objectives
LO 4.1 Contrast and compare the five types of product-flow processes.
LO 4.2 Describe the differences among order fulfillment processes.
LO 4.3 Explain how companies should make process selection decisions.
LO 4.4 Correctly place examples of products on the product-process matrix.
LO 4.5 Describe the features of focused operations.
LO 4.6 Discuss the uses of mass customization and 3D printing.
LO 4.7 Contrast pollution prevention, pollution control and pollution practices.
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Product-Flow Characteristics
Types of Product Flow
◦ Continuous process
◦ Assembly line
◦ Batch flow
◦ Job shop
◦ Project
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Product-Flow Characteristics:
Continuous Process
Highly standardized and automated
Flexibility limited
High volumes of production
Commodity products