OPMA 317 Course Notes PDF

OPMA 317 COURSE NOTES Doing things right Doing right things 2. Introduction to = Operations = Sustainability Operations & Supply (Manageme...

OPMA 317 COURSE NOTES Doing things right Doing right things 2. Introduction to = Operations = Sustainability Operations & Supply (Management) (Leadership) Chain Management Text: Chapter 1 & 2 1 Learning Highlights Can “transformation” mean more than physical? Which department has the biggest impact on the triple bottom line? What are: UN SDGs? Conflict minerals? Blockchains? Hyperloops? How could AI change supply chains? How are Covid lessons changing global supply chain management? How did doubling wages while shortening the week help Henry Ford? What is more challenging: managing a manufacturing organization or a service organization? What are the 8 “strategic priorities” that organizations compete now on? How could we mitigate the supply chain risks of a natural disaster or a supplier strike? OPMA 317 2. Introduction to Operations & Supply Chain Management 2.2 2 1  Topic Summary I. Definition of Operations Management II. Why Study Operations & Supply Chain Management? A. Integration of functional areas B. The Emergence of Operations Management C. The Changing World of OSCM D. OPMA & Society III. Services & OSCM IV. OSCM Strategies V. OSCM Risk Management OPMA 317 2. Introduction to Operations & Supply Chain Management 2.3 3 I. Definition of Operations Management Operations & Supply firm/business Chain Management The design, operation, and improvement of the systems of a that create and deliver goods > - and services. physical Operations intangible Supply Chain Management Manufacturing and service Processes that move information processes that use an and material to and from the organization’s resources to operations processes where transform inputs into outputs. transformation occurs. Simpler “Source” “Make” “Deliver” “Transformation” Physical Physiological Informational examples: (manufacturing) (healthcare) (apps) OSC Processes OPMA 317 2. Introduction to Operations & Supply Chain Management 2.4 ~ Planning 1. 2 4 Sourcing. Supply chain management is the process of coordinating and managing all the steps involved in making and. 3 4 Making delivering a product, from getting raw materials to delivering the final product to customers. It ensures that. Delivering everything flows smoothly and efficiently, reducing costs. 5 Returning and improving service. 2  II. Why Study Operations Management? A. Integration of functional areas: Supply Chain (Outbound) (Inbound) Management Suppliers Operations Management Customers (Transformation Process) Marketing Accounting Human Resources Finance Info. Systems Functional Area Integration with Operations Management Marketing Customer service of what was promised, new product introductions Accounting Recording actual costs vs. budget, product pricing, make vs. buy Human Resources Hiring / layoffs, training & development programs, employee relocation Finance Money required for inventory holdings / space, equipment payback Information Systems Functionality & reporting requirements, system capacity (users / load) OPMA 317 2. Introduction to Operations & Supply Chain Management 2.5 5 III. Why Study Operations Management? B. The Emergence of Operations Management Application of Operations Management to Services Clip: details of how they helped (3 min) (1:02 – 4:08) OPMA 317 2. Introduction to Operations & Supply Chain Management 2.6 6 3  III. Why Study Operations Management? companaent B. The Emergence of Operations Management to sustainability Increasing focus on “Triple Bottom Line” through “Profit” people , profit and planet Overview clip “Planet” “People” Overview Clip (2:36) News Video (2:52) Tentree Dragon’s Den clip (1:42-4:13) Cobalt Circular next? Economy? Modern OPMA 317 Slavery? 7 III. Why Study Operations Management? B. The Emergence of Operations Management How does each “functional area” directly impact an organization’s “Triple Bottom Line” performance? Profit Planet People Operations & SCM efficiency logistics suppliers Accounting / Finance Marketing Information Systems Human Resources Conclusion: Operations and SCM has the largest direct impact ! Further viewing: 2.8 8 4  III. Why Study Operations Management? Sustainability & Management Education Is Haskayne a member? OPMA 317 2. Introduction to Operations & Supply Chain Management 2.9 9 C. The Changing World of Operations Cont’d I. Advances in Technology Information, Manufacturing, Distribution Technologies Amazon warehouse Blockchain & Sustainable 3D Printing (2:21) robots (3:04-6:15) Supply Chains (3:36) In practice, it means that each morsel of cocoa that makes its way into the bloc will need to be linked to the GPS coordinates of the farm where it was harvested Artificial Intelligence Package Drone Delivery Hyperloop (1:56) 10 5  C. The Changing World of Operations Cont’d II. Linking with Customers and Suppliers The integration of independent organizations, suppliers and customers to produce creative solutions in supply chain management. Example: what % of the 787 Dreamliner is being built 85 % outside of Boeing’s major production facilities? 2.11 11 C. The Changing World of Operations III. Globalization & Post Covid Supply Chains Clip: (2:38) OPMA 317 2. Introduction to Operations & Supply Chain Management 2.12 12 6  D. OPMA & Society Henry Ford’s prosperity secret: Double wages, shorter work week? “The people who consume the bulk of goods are the people who make them.” Henry Ford doubled workers wages to an unheard of $5 a day in 1914  attracting the best workers (tens of thousands applied) and reducing employee turnover Secondly, he cut the work week from six days down to five days while continuing to pay employees the equivalent of a six day week.  The five day work week was quickly adopted by the fifty industries that supplied Ford Workers not only had increased incomes, they also had more family and leisure time: "The industry of this country could not long exist if factories generally went back to the ten hour day, because the people would not have the time to consume the goods produced. Just as the eight hour day opened our way to prosperity, so the five day week will open our way to a still greater prosperity.” Sources: Samuel Crowther Henry Ford: "Why I Favor Five Days' Work With Six Days' Pay", World's Work, October 1926 pp. 613–616. “Ford: Expansion and Challenge”, 1915–1933 (1957); by Allan Nevins and Frank Ernest Hill. My Life and Works, Henry Ford, 1st World Library - Literary Society, September, 2004 ISBN - 10:1595400346, ISBN - 13:9781595400345 Henry Ford & Sustainability?... Source: http://www.autofocus.ca/news- events/features/ford-used-to-test-model-ts-on-the-roof-of- this-toronto-factory OPMA 317 2. Introduction to Operations & Supply Chain Management 2.13 13 III. Services & OSCM A. Growth of the Service Sector Employment by industry, monthly, seasonally adjusted and unadjusted, and trend-cycle, last 5 months, Table:14-10-0355-01 DOI: https://doi.org/10.25318/1410035501-eng Statistics Canada Employment by Industry (July 2024 Data) OPMA 317 2. Introduction to Operations & Supply Chain Management 2.14 14 7  III. Services & OSCM B. Distinctions between Services and Goods Implications for Manufacturing Service Operations Operations Yes No Tangibility of Product Easier to see & Complex to see & measure measure Yes No Inventory of Output Can shelf excess / Staff scheduling is key, build in advance increased forecasting Customer/Process Low High Can recruit staff with Recruit staff with technical Interaction technical skills only skills and people skills Market Scope Global Local One (centralized) facility Many locations (global expansion) with effective distribution (decentralized) required to respond to local market Quality Measurement Objective Subjective Meets requirements or not Customer opinion (ex. safety ratings, etc.) (ex. teaching, entertainment) OPMA 317 2. Introduction to Operations & Supply Chain Management 2.15 15 IV. OPMA & SCMA Strategies Timeline Source: Adapted from Exhibit 2.4, Fundamentals of Operations Management, Second Canadian Edition, McGraw-Hill, 2007 ? Social Responsibility Environmentalism Competitive Priority Service Flexibility Delivery Quality Cost 1950's 1960's 1970's 1980's 1990's 2000's 2010's 2020's Operations Cost Value Paradigm: Minimization Maximization OPMA 317 2. Introduction to Operations & Supply Chain Management 2.16 16 8  IV. OPMA & SCMA Strategies Operations and supply chain strategy is concerned with the development of a long-term plan for determining how to best utilize the major resources of the firm so that there is a high degree of compatibility between these resources and the firm’s long-term corporate strategy. OSCM ‘Strategic Priorities’: A successful operations and supply chain strategy adds value for the customer. How can it accomplish this? Value  Performance 1. Cost 2. Quality Cost 3. Delivery 4. Flexibility Quality, Delivery, Flexibility, Service, 5. Service = Environmentalism, Social Responsibility 6. Environmentalism Cost 7. Social Responsibility OSCM Decision Strategies Areas OPMA 317 2. Introduction to Operations & Supply Chain Management 2.17 17 Emerging OSCM Strategies (#8?) “Information Access”  Customer’s desire to have knowledge about background / usage of product or service Order tracking (couriers, pizza, etc.) Supply Chain Transparency via Blockchain Seafood processing traceability Childcare webcams “Boat to plate” OPMA 317 2. Introduction to Operations & Supply Chain Management 2.18 18 9 High Level Decision Areas Some Considerations to Support Chosen OSCM Strategic Priorities OSCM Decision Strategies Areas Structural / Tangible Infrastructural / Intangible Capacity Human Resources  How Much?  #? Skills? Compensation? Training? Distribution Research & Development  Fast / flexible or rigid?  Invest heavily or follow others? Facilities Organizational Structure  How Many? Where?  Centralized or decentralized? Process Technology Planning & Control  How advanced?  Build to stock or make to order? Vertical Integration Supplier Relationships  Make or buy?  Long term or short term? OPMA 317 2. Introduction to Operations & Supply Chain Management 2.19 19 V. Supply Chain - Risk Management Text: p. 34-36 Choosing to use a global supply chain increases risk  Unanticipated events can expose the organization to supply chain disruptions (and operational and financial risks). Risk Management Framework:  Identify sources of potential disruptions  Assess the potential risk (probability * impact)  Develop plans to mitigate the risk (reduce the risk)  Develop contingency plans (if event occurs) How could a Supply Chain be setup to mitigate the problems from a … 1. Natural Disaster  multiple regions 2. Supplier Strike  multiple suppliers 3. Logistics Failure  “safety stock” OPMA 317 2. Introduction to Operations & Supply Chain Management 2.20 20 10