Category Archives: Operations Management

Business, Innovation, Leadership, Management, Operations Management, Technology

Being Disruptive

Layton Christensen (2015, p.150) who is being broadly viewed as world’s principal management guru of recent times, had portrayed disruption as a diagram with both vertical and horizontal axes, with every industry having a unique metric on the vertical axis. For instance, in the airline industry, the vertical axis represents routes’ length that would ultimately measure their success. And for any airline company, they would prefer longer routes than shorter ones which is obviously due to profitability reasons. Consequently, giant airliners do focus on their business modeling, promotions and marketing campaigns on the long destinations, that has led new entrants like Ryan Air in Europe and Southwest in the United States to seize the opportunity and disrupt the area that was neglected by industry leaders, which is exactly the way that disruption basically happens.

While in the Information Technology sector, then Christensen highlighted that the vertical axis in their case is the magnitude of engagement, along with the growth potential with involved clients, where usually large IT firms focus more on big accounts and clients due to the same profitability reason mentioned in the earlier example. Consequently, the room will be opened for smaller IT players to grasp the market with less attention, and try to do the disruption there.

Reference:

Christensen, C. (2015), ‘Disruptive Innovation is a Strategy, Not Just the Technology’, Business Today, 23, 26, pp. 150-158, Business Source Complete, EBSCOhost. Available online from: https://goo.gl/7aFBnI.

Business, Digital Transformation, Innovation, Leadership, Management, Operations Management, Technology

Business Digitization

Business digitization is not just the concern of the IT executives; it is strategically significant and serious to business leadership that should take a strong stand through adjacently running both the operations and technology. Considering this, once things are concerned with digitizing business processes, company’s leadership is generally accountable for managing and controlling the transformation.

As a result, digital transformation is becoming more of a management concern, which where it should be. Digital transformation at the same time shall consider agility and speed as fundamental factors whenever business processes are being evaluated and re-engineered. Business operations and processes are supposed to be transformed radically and operate faster, become more secure, and more resilient (Hottges, 2017).

References:

Hottges, T. (2017) ‘Digital Transformation Is a Management Issue’, Abolhassan, F. (ed.) The Drivers of Digital Transformation. Switzerland: Springer, p. 8. (Accessed: 8 November 2018).

Innovation, Leadership, Management, Operations Management

The prominence of sustainability in insuring company’s success

Accenture and back in 2010 surveyed more than 700 global executives, from which 93% have firmly admitted the prominence of sustainability in insuring the future success of their companies. Accordingly, the vision of integrating sustainable strategies into companies’ strategic endeavors is in the heart of most global corporations, but varies between those who just have it on papers, partially applied it and companies that lead the domain of sustainable strategies similar to Dow Chemical, Nestle, General Electric and Walmart. The majority of organizations that work on generating value out of sustainability will initially consider the required measures to increase profits on capital, which commonly signifies decreasing operating expenses via enhancing the management of natural resource, similar to waste and energy usage. Corporations can as well work on cutting unnecessary operational expenses through methodically supervising their value chains. Moreover, organizations might bring more value thru enhancing workers’ motivation or retention by embracing activities with sustainable nature or through increasing prices or attaining greater share of market by employing current or new sustainable products (Bertels 2010).

Organizations that thoroughly follow sustainability are as well repeatedly reexamining their business portfolios for the sake to define the probable influence of developments, similar to present or probable environmental or trade regulations, which might lead to different development of market prospects. Waste management, for instance, rediscovered itself as a supplier of incorporated ecological contributions through totaling waste to energy and waste decrease solutions to its portfolio of offerings. Corporations correspondingly scrutinize strictly for unfulfilled necessities generated through sustainability developments in accordance with their strategies, and consequently recognize probable consumer segments. While on the other hand, and speaking of the range of accompanied risks as part of this process, then the improved management of risks that appear from sustainability concerns commences with identifying significant threats of operational disturbances from resource shortage, climate change, or public concerns, similar to commercial boycotts or interruptions in receiving clearance to undertake business operations (Bonini 2011).

For global corporations to develop a sustainable supply chain, they should consider some crucial constraints. The initial and most significant one is the complete backing of the executive team and board of directors, to be followed with a series of changes and enrichments on corporate procedures related to ecological enhancement, as well as to conform to legal ecological necessities, apply to ISO 14001 certification and select adequate suppliers based on ecological benchmarks. Moreover, the management should furnish the atmosphere to cooperate jointly along with suppliers in order to comply with ecofriendly objectives, in addition to allocate adequate resources to develop internal techniques and tools to asses suppliers’ credibility based on ecological standards.

Additionally, the executive team has to cooperatively work with current and potential customers in order to achieve eco-designs and undertake cleaner methods during construction. Furthermore, sustainable supply chain adoption includes the procurement of green technologies and applications, with construction designs that recycle, decrease, reclaim or reprocess energy, resources, or components, along with layouts that decrease or dodge the usage of poisonous or dangerous components (Cucchiella & Koh 2012). Nevertheless, any change experience is going to be encountered with different set of challenges, which will require a solid and proven change management methodology in place. Accordingly, it is essential to recognize the main burdens for adopting sustainable supply chain prior accepting the change. The first burden will be generated from general public, second from government regulations while the third from clients. Without ignoring that the staff working circumstances, ecological and green concerns, corporate social responsibility and sustainability are the main present barriers in front of the sought mission (Malviya & Kant 2017).

References:

Bertels, S. (2010) ‘Embedding Sustainability in Organizational Culture’. Simon Fraser University & Network for Business Sustainability. Available online from: http://nbs.net/wp-content/uploads/Executive-Report-Sustainability-and-corporate-culture.pdf, (Accessed: December 12 2017).

Bonini, S. & Gorner, S. (2011) ‘The Business Of Sustainability: McKinsey Global Survey Results’. McKinsey. Available online from: http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/the-business-of-sustainability-mckinsey-global-survey-results, (Accessed: December 12 2017).

Cucchiella, F. & Koh, L. (2012) ‘Green Supply Chain: How Do Carbon Management and Sustainable Development Create Competitive Advantage for the Supply Chain?’ N.P.: [Bradford, England]: Emerald Group Pub., 2012. University of Liverpool Catalogue, EBSCOhost, (Accessed: December 12 2017).

Malviya, R. & Kant, R. (2017) ‘Modeling The Enablers Of Green Supply Chain Management’, Benchmarking An International Journal, 24, 2, pp. 536-568, Business Source Complete, EBSCOhost, (Accessed: December 12 2017).

Business, Leadership, Management, Operations Management, Supply Chain

Just in Time, Lean Manufacturing and Manufacturing Resource Planning

Just in Time and Lean Manufacturing:

JIT enables companies to uplift efficiency standards, enhance quality and boost productivity through decreasing materials’ waste, improving production efficiency in addition to decreasing production’s associated time and effort. Accordingly, and in order to execute this philosophy, then Kanban system shall be presented to guarantee that the company is operating its SC both expertly and efficiently. The part taken care by Kanban is to bond diverse manufacturing procedures jointly, decrease work in progress, maintain low cost of operations in addition to minimize lead and setup times (Wang & Sarker 2004).

Manufacturing Resource Planning:

MRP as a core module within ERP systems helps in substituting complicated and manual connections amongst diverse corporate functions and systems, with the main benefit is in decreasing the headcount in finance and the operating capital. Moreover, the entire business data is assembled for one time throughout the preliminary initiation, then saved centrally, to be consequently amended on instant basis. By that, business can guarantee that all stages of scheduling are grounded on the exact data, and that the subsequent procedures accurately replicate the dominant operating circumstances of the company. Additionally, system generated reports offer executives with a holistic sight of business’s health in different areas of the company, which can be utilized to recognize required enhancements and take benefit of market prospects (Hendricks et al. 2007).

My Position from Both Approaches:

Following the earlier discussion, MRP can be positioned as a technology that permits for an astonishing level of progressive planning for cases that can be found in companies with high-volume production or even with relatively average inventory (Aggarwal 1985). However, is seen by many as a standout amongst the most costly methods for gaining zero or at least a negative ROI. The execution is quite expensive; signaling one of the top issues with the MRPs’ rollout. Where every implementation is subject for medium to heavy levels of customization, which will go in parallel with recognizing its consequences on the company, in addition to the exhausting part of training the employees to effectively use it (Slack 2014).

While on the other hand, JIT preserves low inventory expenses and includes workforce, yet necessitates excellent structure of supply lines and supportive employees (Aggarwal 1985). Nevertheless, there is a general observation concerning a major hindrance towards JIT’s full adoption in the SME organizations, which is usually due to their less accessibility to needed assets. While in the case of giant corporations, then the case is different, due to their better positioning in terms of their financial status as well as the volume and skills of their workforce (Bayo-Moriones et al. 2008).

Possibility of Forming a Hybrid Setup:

Some studies can be found describing the connection between JIT and ERP as so close leading to consider JIT as part of some ERPs. In line with that, (Cagliano & Spina 2000) and through their review to the subject, realized that companies with desire to gain the most possible improvement out of their business operations are highly advised to consider the hybrid adoption between both, the ERP (technology) and JIT (philosophy). Their justification was built on studies that proved where sole dependence on technology, or excessive usage of it, would most likely not improve the overall performance, but rather with the combined usage of technology and process enhancement that will eventually end up with bigger influence. Where the technology can bring operational discipline and relatively better handling of process changes. While the philosophy will offer a reliable and robust supporting framework (Bayo-Moriones et al. 2008).

References:

Aggarwal, S.C. (1985) ‘MRP, JIT, OPT, FMS?’, Harvard Business Review, 63, 5, p. 8, EBSCOhost, [Accessed on April 29 2017].

Bayo-Moriones, A., Bello-Pintado, A. & Merino-Díaz-de-Cerio, J. (2008) ‘The role of organizational context and infrastructure practices in JIT implementation’, International Journal of Operations & Production Management, 28 (11), pp. 1042-1066, [Accessed on April 29 2017].

Cagliano, R. & Spina, G. (2000) ‘Advanced manufacturing technologies and strategically flexible production’, Journal of Operations Management, 18, pp. 169-190, ScienceDirect, EBSCOhost, viewed 29 April 2017.

Hendricks, K., Singhal, V. & Stratman, J. (2007) ‘The impact of enterprise systems on corporate performance: A study of ERP, SCM, and CRM system implementations’, Journal Of Operations Management, 25, pp. 65-82, ScienceDirect, EBSCOhost, [Accessed on April 29 2017].

Slack, N., Brandon-Jones, A. & Johnston, R. (2014) Operations management. 7th ed. Harlow: Pearson Education.

Wang, S. & Sarker, B. (2004) ‘A Single-Stage Supply Chain System Controlled by Kanban under Just-in-Time Philosophy’, The Journal of the Operational Research Society, 5, p. 485, JSTOR Journals, EBSCOhost, viewed 29 April 2017.