WM9PZ

Operations
Management &
Sustainability
(OMS)

L2 Introduction
to the syndicate
case study
Dr Luodi Pan
Jan 2025
1 | © WMG 2024
Agenda

❖ Case Company: Rocado Group

❖ OMS Chocolate Production Case Study

❖ Group Poster Presentation Assessment

Module Learning Outcomes

• Demonstrate a critical understanding of operations, supply chain and logistics management,

and global supply network. (2)

• Effectively evaluate and present, via group collaboration, the relevance and interconnections
of operations functions across business in a real industrial context. (1)

• Critically appraise sustainability issues and the role of supply chain sustainability, with the
triple bottom line. (2)

• Critically discuss sustainability practices along with the loop of end-to-end supply chain, to
develop a plan towards circular economics. (2)

• Apply subject knowledge, theories, models, and techniques to solve practical problems for
optimization in real business contexts via innovative thinking. (1, 2)
The Case Study
The purpose of this case study is to allow you to practice the
approaches, tools and techniques taught on the module,
using a case study.

In your syndicate groups, you will represent the senior

operations management team of a fictitious online
Supermarket company, Rocado, where you will be responsible
for developing a sustainable supply chain for Rocado
Velouria luxury chocolate.

This is a fictitious business case study to investigate and

simulate operations functions and supply chain processes
(such as supplier/procurement, factory/manufacturing,
distribution centre/inventory). There is no one “right” answer
to this case study , although some decisions will yield better
results than others, and you are expected to provide a solid
justification to your decisions
Rocado Group
Rocado, a trusted leader in redefining retail, e-commerce, and fulfillment solutions for grocery
and beyond.
▪ Launched in 2000 by former investment bankers during first
dot.com boom
▪ Headquartered in Hatfield, UK
▪ 18,869 employees worldwide
▪ Leveraging cutting-edge technologies such as AI
▪ 99% order accuracy and 95% on-time delivery

Mission: To transform the grocery shopping experience through innovative approaches that
prioritize efficiency, sustainability, and customer satisfaction.
Strategic Vision: To be the most trusted leader in online grocery retail, delivering seamless, efficient
and sustainable e-commerce that create lasting value for customers, partners, and communities.
Objective: To optimize e-commerce, distribution, and fulfillment by driving operational excellence,
strengthening supply chain resilience, and embedding sustainability into every aspect of our
operations.
What do we do?

Rocado Group

Rocado Technology Solutions

Rocado Retail Limited Rocado Logistics Limited
Limited

Organizational Structure of Rocado Group

Rocado Group's Geographical Reach
Rocado Retail Limited 's Own-Brand Product Line

Freshness!!! When we say fresh, we mean really fresh.

Effort in Sustainability

91% of Rocado
packaging is recyclable

123 tonnes less

plastic used

24 million plastic
components removed

Our packaging looks pretty and has purpose.

Since 2021 we've optimised the packaging across 750+ Rocado Own Range lines. The result is that we use 123
tonnes less plastic and 17 tonnes less paper annually. Plus, we've made more than 53 tonnes of plastic
recyclable, and removed 24 million unnecessary packaging components. So looking good and doing good for the
environment can go hand-in-hand.
Expanding to Premium

• Organic, high-quality chocolate: Velouria

• In-house production of Velouria with only one factory

in UK or an EU country, covering location decision,
layout design and production process design

• Beside UK and EU, choosing at least one international

market, e.g. China, India, and US

• Online sale only. UK By Rocado Rocado Online

Grocery Shop and international through its regional
partners’ online platforms.
Chocolate Production Example: Ferrero Rocher

https://www.youtube.com/watch?v=eOZxg0cqCS4
Chocolate Production Case Study

In your syndicate teams, you will take on the role of the senior operations management team for
Rocado Retail Limited Limited, a subsidiary of the renowned Rocado Group. Your mission is to
design and develop a sustainable supply chain network for an exciting new product launch:
Velouria, a line of Rocado-branded luxury chocolates. The launch of Velouria marks a
significant step into the premium confectionery market, aligning with Rocado’s commitment to
combining quality, sustainability, and customer satisfaction.

This includes selecting an optimal location, building new factory, sourcing the necessary
materials, and establishing partnerships with new suppliers to ensure a steady supply of the
high-quality ingredients essential for Velouria. You will design a comprehensive supply chain
network that embodies Rocado’s core values of quality, innovation, and sustainability.
There are two key phases in this Case Study

Phase I –Designing a supply chain and decision making of operations functions for Velouria.

Phase II – Exploring the SC dynamics and developing a sustainable supply chain network (by
upgrading everything in phase I)
Module Assessment

The module will be assessed via a number of

different activities:
❖ Group Poster Presentation: 20%, A1
▪ OMS Case Exercise
▪ 15mins presentation + 5min Q&A, marketing criteria:
• Content Comprehension
• Systematic Thinking and Critical Analysis
• Teamwork
• Presentation Skills
• Poster Formatting
▪ The presentation will be marked collectively, and tutors may adjust
the mark for individuals based on their observations of individuals’
contributions as well as the departmental peer adjustment principle.
❖ Individual Essay: 80%, 3200 words
Group Poster Presentation Tasks

1) Map out a visual representation (e.g., flowcharts, graphs, diagrams) of

the supply chain processes based on the simulation group work; then
describe the main roles/functions in operations and supply chains (e.g.
Supplier, Factory, Distributor, Wholesaler, Retailer etc.) and the key
responsibilities of each role within the supply chain; also further highlight
how do these roles interconnect to ensure smooth operations? (33%)
2) What is the Bullwhip Effect? What are the main challenges faced during
the simulation, and how did your team address them? How limited
communication and visibility impact supply chain efficiency and the
interconnections between different operations functions? (33%)
3) Based on your learning and experience, what
approaches/strategies/technologies could be implemented to minimize
the Bullwhip Effect meanwhile enhancing the sustainability in operations
and supply chain? How can these be applied to optimize supply chain
operations in real business contexts? (34%)
Peer Adjustment

Group receives a base mark below the pass mark

If the group is awarded a base mark below the pass mark (50%) then the
whole group fails regardless of the impact of peer adjustment.

Non-submission of Peerwork activity

Students who fail to complete the Peerwork activity by the deadline
forfeit 20% of the mark. This is automatically adjusted in the Moodle
Peerwork plug-in.

Deadline for OMS Peerwork activity

Opens: Thursday, 30 January 2025, 1:00 PM
Due: Friday, 31 January 2025, 4:30 PM
Do you
have any
questions?

17 | © WMG 2024
 WM9PZ
Operations
Management &
Sustainability
(OMS)

L2 Sourcing

Dr Luodi Pan
Jan 2025
18 | © WMG 2024
Learning Objectives of this session

• What is a business relationship?

• What influences business relationships?
• What are different types of relationships and how can they
be categorized?
• How and why do we apply specific typologies to
relationships?
• How do we manage strategic relationships?
Supply chain news: Brompton Bikes
This is an interesting story which talks about
supplier relationships and in particular how
developing supplier relationships -not contracts-
can be beneficial to the company. Especially the
latter part of the article is very relevant.

We were handed a contract that was 50 pages long.

“We have a relationship with our suppliers. One of
them is a husband and wife team who have been
with us for 22 years. This thing is like a declaration
of war, it is so aggressive,” he said. “What we need
is a contract where we understand what is fair and
reasonable. You need to build a strong relationship
with your suppliers so that if they make a mistake
you help them get out of trouble. You don’t drive
them to the wall and make them go bust.”
So what is a relationship?

Social Exchange Theory Perspective

The essence of any personal relationship is interaction. Two individuals may be

said to have formed a relationship when on repeated occasions they are
observed to interact.

…and by interaction it is meant that they [individuals] emit behaviours in each

other’s presence, they create products for each other, or they communicate with
each other.
Thibaut and Kelley (1959)
So what is a relationship?
Social Network Perspective
A relationship is a collection of ties of a given kind among pairs of
actors. The defining future of a tie is that it establishes a linkage
between a pair of actors.
(Wassermann and Faust, 1994)

Examples of ties are:

 Evaluation of one person by another (e.g. expressed friendship, liking);
 Transfer of material resources (e.g. business transactions);
 Association or affiliation (e.g. jointly attending a social event);
 Behavioural interaction (e.g. talking together, sending messages);
 Formal relations (e.g. authority);
 Biological relationship (e.g. kinship or descent).
Question # 1:
What is a business relationship?
Business relationship: Also called
Inter-organisational relationship (IOR)

7 Principles of IORs
1. An IOR is considered to be a separate entity outside organisational boundaries
(cf. Van de Ven, 1976)
2. A relationship is formed through interactions or linkages amongst organisations
(Thibaut and Kelley, 1959; Wasserman and Faust, 1994)
3. An IOR is not an entity that is purely controlled by one organisation only (Pfeffer,
1982; Salancik, 1979).
4. Naturally, a relationship is formed between two or more organisations (Håkansson
and Snehota, 1995).
Business relationship: Also called
Inter-organisational relationship (IOR)

5. From a network perspective, a relationship is a collection of both direct and

indirect interactions on the organisations involved (Thibaut and Kelley, 1959;
Wasserman and Faust, 1994).
6. IORs are multi-dimensional. They could be vertical in the form of relationships with
customers or suppliers and they can also be horizontal in the form of relationships
with alliances, partners and joint ventures (Gulati and Kletter, 2005).
7. IORs are context specific and they cannot be readily transferred to other contexts
(Ford et al., 1998; Håkansson, 1982; Håkansson and Snehota, 1989).
Definition

An inter-organisational relationship is an entity outside

organisational boundaries which is a collection of direct
or indirect interactions amongst the actors and
organisations involved.
When dealing with a supplier what do we value?

• Availability?
• Quality?
• Ethical sourcing?
• Low carbon supply chain?
• Speed of delivery?
• Customization?
• Right price?
• Longevity?
• Certainty of delivery?
• Reliability of product?
• Information?
Question # 2:
What influences a relationship?
What influences a relationship?

IMP Model
What influences a relationship?

IMP Model
10 minutes break

31 | © WMG 2024
Typologies of inter-organisational relationships

Question # 3:
What useful relationship typologies (classifications)
would you suggest?
Typologies of inter-organisational relationships

Key dimensions
➢Structure
➢Governance
➢Duration
➢Development stage
➢Nature of exchange
Typologies of inter-organisational relationships

Based on the structure:

➢A dyad (e.g. buyer – supplier)
➢A triad (e.g. supplier-supplier-buyer)
C

S C
S C
S S
S
C C
S
S

S
S Example of
C supplier-buyer
dyad
Example of
supplier- supplier-buyer
triad
Typologies of inter-organisational relationships

Based on the governance:

➢Formal
➢Informal
Formal Informal

Based on duration:
➢Long-term
➢Short-term

Long-term Short-term
Typologies of inter-organisational relationships

Based on the development

stage:

IOR development Time

phase/stage
Awareness Exploration Expansion Commitment Dissolution
Dwyer et al. (1987)
phase phase phase phase phase
Pre-relationship Early Development Long-term Final
Ford (1980) stage stage stage stage stage
Typologies of inter-organisational relationships

Based on the nature of exchange:

➢Adversarial (arms-length, transactional)
➢Collaborative (partnering, relational)
Adversarial Collaborative

? Number of Suppliers ?
? Time horizon ?
? Mentality / Orientation ?
? Risk-reward sharing ?
? Information exchange ?
? Communication ?
? Levels of trust ?
? Levels of commitment ?
? Understanding ?
? Governance ?
A spectrum of relationships

Large/Market Number of Suppliers Few

Short-term Time horizon Long-term
Win-lose Mentality / Orientation Win-win
Low or none Risk-reward sharing Fair
Low or none Information exchange High
Infrequent / few Communication Frequent / many
Low Levels of trust High
Low Levels of commitment High
Superficial Understanding In-depth
Tends to formal Governance Tends to informal
B2B Relationships
 Question # 4:
When dealing with external firms, where and why
do we apply specific typologies?
Kraljic’s 4 Steps
1. Classification
Profit impact vs supply risk

2. Market analysis
Assess bargaining power

3. Strategic positioning
Identify opportunities and vulnerabilities

4. Action plans
Step 1- Kraljic’s Matrix
Step 2- Market Analysis
Portfolio Analysis – Who has the power?
Buyer or seller?

Buyer Power Interdependent -

Shared Power

Seller Power
Step 3 Strategic Positioning
Step 4 Action Plans
An Example ZARA

e.g. Fabric garment

supplier

e.g. energy, electric

& gas suppliers

e.g. sewing
workshops

e.g. zips, buttons

hooks
Let’s classify

How would these items and materials be classified?

• Titanium (high value, limited supply)
• Fasteners (commodity)
• Accountancy (high value, numerous suppliers)
• Electric motors (low value, limited supply)
Portfolio Analysis

Buyer tactics
for each
quadrant
 
Portfolio Analysis

Supplier


tactics
for each
quadrant

What are the limitations of Kraljic’s Framework?

Too much reliance on power but power is dynamic and market

forces constantly change

There are multiple types of strategic collaborative relationships

and all cannot be treated in the same way
But the key question is how do we manage,
measure and differentiate strategic relationships?

Value Joint Ventures &

Consortiums
Partnerships & Alliances

Coalition

Coordination

Cooperation

Adversarial

Level of Collaboration
BS11000 – British Standard for Collaboration
ISO 44001 – International Standard (now)
8 key stages of collaboration development
1. Awareness – addresses the overall strategic policy and processes
2. Knowledge – looks at the development of knowledge in relation to a specific business
opportunity
3. Internal Assessment – requires organisations to take a structured and mature look at their
capability to partner effectively
4. Partner Selection – requires a structured approach to the evaluation and selection of partners
5. Working Together – focuses on the governance roles responsibilities that deliver a successful
outcome
6. Value Creation – focuses on methods for building on and gaining value and desired results
from the collaboration
7. Staying together – ensures the relationship is monitored to achieve it’s optimum performance
8. Exit strategy – aims to require systems that support an effective and controlled
disengagement when required
A structure for measuring the maturity of collaborative
relationships of an organisation based on the international standard
Task: Create a relational strategy

As an OM Director to Rocado Retailer, your task is to propose a relational strategy for the four

quadrants based on Kraljič's matrix. In your proposal you have to consider the following aspects:

1. Nature of exchange (adversarial vs. collaborative)

2. Type of governance (contract type/length (long or short term)/detail)
3. Level of trust and commitment (build trust and long-term commitment OR little investment)
4. Management of supply structure (e.g. single source OR multiple source from alternative suppliers)
5. Performance criteria (cost?, quality?, innovation?, flexibility etc.)
6. Significant risks related to your proposed strategy

Use the template of Kraljič's matrix and populate it with your choices
Do you
have any
questions?

56 | © WMG 2024
Thank you.

WMG warwick.ac.uk/wmg @wmgwarwick

University of Warwick
Coventry wmgwarwick
CV4 7AL
United Kingdom
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57 | © WMG 2024