Operations and Information Systems
Management
Session 22
New Trends and Challenges
Circular Economy
Don't throw out that broken toaster:
it's key to our prosperity.
Redesigning the economy so that
all waste is reused or recycled
would be good for business.
China is already pushing the circular
economy. According to its 12th fiveyear plan covering 2011-15 China
will "plan, construct and renovate
various kinds of industrial parks
according to the requirements of the
circular economy".
http://www.newscientist.com/article/dn21532-nowaste-circulareconomy-is-good-business--ask-china.html
12/04/16
Dr L Breen OISM
A general model of operations management
IMPACT OF
IS?
ENVIRONMENT
Operations
strategic
objectives
Operations
strategy
The operations
competitive role
and position
Input
transformed
resources
Materials
Information
Customers
Facilities
Staff
Input
transforming
resources
Design
Improvement
Output
products and
services
Input
resources
Customers
Planning and
control
ENVIRONMENT
12/04/16
Dr L Breen OISM
The Strategic Role of the Operations Function
The 3 key attributes
of operations
Implementing
Operations Contribution
be Dependable
Operationalise strategy
explain Practicalities
Supporting
be Appropriate
Understand strategy
Contribute to decisions
Driving
be Innovative
provide Foundation of strategy
Develop long-term Capabilities
12/04/16
Dr L Breen OISM
The strategic role of operations can be defined
by its aspirations (Hayes and Wheelwright)
Give an
Operations
Advantage
Link Strategy
With
Operations
Adopt best
Practice
Correct the
Worst
Problems
c
In
g
in
s
a
re
b
tri
n
co
Be as good
as
competitors
Be
clearly
the best
in the
industry
Externally
supportive
Internally
supportive
Externally
neutral
Stop holding
the
organization
back
STAGE 1
Internally
neutral
STAGE 2
The
ability
to
Implement
12/04/16
n
tio
er
p
fo
Redefine the
industrys
expectations
ns
it o
STAGE 3
The ability
to
support
Strategy
Dr L Breen OISM
STAGE 4
The
ability
to
Drive strategy
The benefits of excelling
Minimum price, highest value
Cost
Quick
delivery
Dependable
delivery
Speed
Dependability
Minimum cost,
maximum value
Fast
throughput
Reliable
operation
Error-free
processes
Ability to
change
Quality
Flexibility
Error-free
products and
services
12/04/16
Frequent new
products,
maximum
choice
Dr L Breen OISM
Operations provide competitive advantage
Effective use of
Satisfying customer needs
resources
Innovative use of facilities and resources
Building competences & capability
The environment is changing
o
o
Increased cost based competition
Higher quality expectations
Demands for better service
More choice and variety
Frequent new product introduction
Increased ethical sensitivity
Environmental impacts are more
transparent
More legal regulations
Greater security awareness
o
o
o
o
o
o
o
o
o
o
Globalization of operations networks
Technologies replacing manual jobs
Internet-based integration of operations
activities
Supply chain management
Flexible working patterns
Mass customization
Fast time-to-market methods
Lean process design
Environmentally sensitive design
Supplier partnership and development
Failure analysis
Business recovery planning
Prompting responses such as
Slack, Chambers & Johnston e5
12/04/16
Dr L Breen OISM
Broad strategic objectives for an operation applied to
stakeholder groups
Society
Increase employment
Enhance community well-being
Produce sustainable products
Ensure clean environment
Suppliers
Customers
Continue business
Develop supplier
capability
Provide transparent
information
Shareholders
Employees
Economic value from
investment
Ethical value from investment
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Appropriate product or
service specification
Consistent quality
Fast delivery
Dependable delivery
Acceptable price
Continues employment
Fair pay
Good working conditions
Personal development
Dr L Breen OISM
Five challenges for operations managers
Globalization
Social
responsibility
Environmental
responsibility
Operations
Managers
Knowledge
management
Technology
12/04/16
Dr L Breen OISM
Responding to change
What internal and external changes will impact on
service/product provision and operational success? E.g.
.
12/04/16
Dr L Breen OISM
10
Terrorism
Economic Climate
Availability of resources
Government
Restructuring
Efficiencies?
The way forward?
How do we ensure that our operation is robust and
not vulnerable to threat?
12/04/16
Dr L Breen OISM
11
Resilient operations
We define resilience as the ability of a system to return to its original state
or move to a new, more desirable state after being disturbed. Implicit in this
definition is the notion of flexibility, and given that the desired state may be
different from the original, adaptability earns a place in our thinking too.
(Christopher and Peck, 2004)
In this work we use risk in line with common usage in the sense that it
relates to supply chain vulnerability, as at risk: vulnerable; likely to be lost or
damaged.
Resilience implies flexibility and agility. Its implications extend beyond
process redesign to fundamental decisions on sourcing and the
establishment of more collaborative supply chain relationships based on far
greater transparency of information.
12/04/16
Dr L Breen OISM
12
Risk Management
What is risk?
Supply risk is defined as the potential occurrence of an incident or
failure to seize opportunities with inbound supply, the outcome
of which results in a financial loss for the firm (Zsidisin et al,
2006).
The essence of risk management lies in
maximising the areas where we have some
control over the outcome while minimising the
areas where we have absolutely no control
over the outcome and the linkage between
effect and cause is hidden from us.
Peter Bernstein - Against the Gods (Buck and Riches 1999)
12/04/16
Dr L Breen OISM
13
Category of Risk
Drivers of Risk
Disruptions
Natural disaster
Labour dispute
Supplier bankruptcy
War and terrorism
Dependency on a single source of supplier as well as the capacity and
responsiveness of alternative suppliers
Delays
High capacity utilisation at supply source
Inflexibility of supply source
Poor quality or yield at supply source
Excessive handling due to border crossings or to change in transportation modes
Systems
Forecast
Inaccurate forecasts due to long lead times, seasonality, product variety, short-life
cycles, small customer base
Bullwhip effect or information distortion due to sales promotions, incentives, lack of
supply-chain visibility, and exaggerations of demand in times of product shortage
Intellectual
property
Vertical integration of supply chain
Global outsourcing and markets
Procurement
Exchange rate risk
Percentage of a key component or raw material procured from a single source
Industry wide capacity utilisation
Long-term versus short-term contracts
Information infrastructure breakdown
System integration or extensive systems networking
E-commerce
Chopra
and Sodhi 2004. Pg 54
12/04/16
Dr L Breen OISM
14
Supply Risk Sources
Financial instability or financial failure of a supplier
ineffective management in the supplier firm
problems in electronically sharing information with suppliers
suppliers incorrectly interpreting our requirements
natural disasters or acts of God affecting suppliers operations
political instability/ war affecting suppliers operations
long physical distances between buyer and suppliers
inability to influence suppliers
lack of alternative suppliers
inability of supplier to meet increases in required volumes (>20%)
new or unproven product/process technology being used by suppliers
transportation disruptions with inbound supply channels
variability in transportation times with inbound supply channels
possibility of suppliers putting your firm on allocation
incoming product quality problems
labour/management problems at suppliers
suppliers exiting market on short notice
supply disruptions in the second tier
currency rate fluctuations
material price fluctuations
pass-through pricing (costs transferred from suppliers increasing price).
12/04/16
Dr L Breen OISM
(Zsidisin et al,
15
Operations strategies have an ethical dimension
Product/service design - customer safety, recyclability of
materials, energy consumption.
Network design - employment implications and environmental
impact of location.
Layout of facilities - staff safety, disabled customer access.
Process technology - staff safety, waste and product disposal,
noise pollution, fumes and emissions.
Job design - workplace stress, unsocial working hours.
Capacity planning and control - employment policies.
Inventory planning and control - price manipulation.
Corporate and Social Responsibility
All of the above - The right thing to do or Greenwash???
Dr L Breen OISM
12/04/16
16
Corporate and Social Responsibility
Slack,
Chambers & Johnston e6
12/04/16
Dr L Breen OISM
18
These organisations tend to have
impressive business results, financial
and non-financial (employee/customer
satisfaction,market share)
They are often quoted as benchmarking
organisations, their approaches being
imitated by others and they accumulate
a range of accolades and
service/quality awards.
12/04/16
Dr L Breen OISM
19
The characteristics of WC
organisations at a corporate level
include:
Great leadership
Clear vision
Clarity of concept
Supportive culture
A well-developed strategy
12/04/16
Dr L Breen OISM
20
These organisations are set apart by:
Willingness to listen
Continuous process development
Responsiveness
can do attitude
Big and little thinking
Supportive and committed staff
Excellent performance management
Lack of complacency
12/04/16
Dr L Breen OISM
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