Operations Management and Supply Chain Management

1. Beach, R., A.P. Muhlemann, D.H.R. Price, A. Paterson, and J.A. Sharp. “Manufacturing Operations and Strategic Flexibility: Survey and Cases,” International Journal of Operations and Production Management, 20, 1, 2016

a. This journal article outlines the need for flexible manufacturing operations throughout a supply chain. The journal emphasized globalization and its impact on the multinational organization. Here the article addresses many of the common problems associated with global supply chains and how inflexible they have become. The article calls for a much nimbler supply chain predicated on technology and constant information exchange for all stakeholder groups. This includes the suppliers, retailers, wholesalers, and customers. The article notes that constant communication through technology provides supply chains with a continuous stream of feedback and data, which can then be used to further improve efficiencies and data analytics within the organization.

2. Carter, P.J., R.M. Monczka, and J. Mossconi. “Looking at the Future of Supply Management,” Supply Chain Management Review, December 2020

a. This article looks to address how supply chains will evolve both domestically and internationally. Much like other industries, the article references the dramatic changes to supply chains that are occurring as a result of technological advancements. The article also details how data and data analytics will provide long term competitive advantages to organizations that learn how to properly harness its power to improve operations. The future of supply management, according to the article will be based on much lower inventory levels and much smarter procurement processes. Through data analytics a much more collaborative approach is needed between suppliers to orchestrate proper inventory levels and anticipated demand. Through this collaboration, supply chains will become much more dynamic in the future.

3. Chase. R.B., F.B. Jacob, and N.J. Aquilano. Operations Management for a Competitive Advantage, Eleventh Edition. New York: Irwin McGraw-Hill, 2017

a. This textbook provides a comprehensive overview of how companies can leverage their operations management infrastructure to create compelling competitive advantages. The text notes that operations management is now become much more critical to the overall competitive landscape and industries all look to streamline processes. Through the use of data analytics, research, and development, companies have now established strong competitive advantages relative to peers in the industry. The ability to be more efficient while also have low cost infrastructure allows many companies in price competitive fields to flourish. The text uses the example of Amazon and its ability to source, promote, and deliver with unparalleled speed and efficiency. Once the infrastructure was in place, older more archaic competitors were unable to match the overall value proposition of Amazon. As a result of their inability to adapt their supply chains and operations management infrastructure, many of these companies perished.

4. Dischinger, J., D.J. Closs, E. McCulloch, C. Speier, W. Grenoble, and D. Marshall. “The Emerging Supply Chain Management Profession,” Supply Chain Management Review, January–February 2020

a. This article details the changes within the skills needed for supply chain labor within a global context. The article notes that even small businesses have now become global as it relates to their operations. Individuals and sole proprietorships, through technology, have the ability to ship goods overseas. This has required a much more differentiated skills set for working in the supply chain and operations management field. As the article illustrates, individuals will need to have a much more technological focus. The ability to quickly adapt and change positions is also required. The article illustrates that an inquisitive mind that is predicated on relentless execution efficiencies is also needed.

5. Skinner, W. Manufacturing in the Corporate Strategy. New York: John Wiley & Sons, 2020

a. This textbook outline how corporate strategy and operations management are intertwined. Here the text details specific benefits of aligning corporate strategy with operations management. This is particularly important for capital intensive businesses the rely heavily on fixed cost investment. Due in part to the heavy capital requirements needed to successfully run the business, it is important that corporate strategy is aligned with operations management to insure adequate return on invested capital. Through coordinated efforts, corporate strategy can ensure profitable operations that can benefit from economies of scale. In addition, by aligning management bonuses and pay to successful operations management strategy, business owners can align management with outcomes related to corporate strategy. This alignment ultimately benefits all stakeholders involved in the operations and supply chain management segments.

2. Research paper: (2 Pages)

a. Topic: Continuous Transformation Process: Chapter 3, pg. 68

b. Write 800-900 words focusing on the key term provided. This needs to be a deep dive into one of the articles from part one of the instructions.

Continuous transformation process involves the use of operations techniques to allows operations to run continuously, 24 hours a day, 7 days a week. This process is particularly well suited for commodity like products with little to no differentiation between units. As there is little differentiation, operations management allows continuous and routine tasks to be performed throughout the day. This is due to commodity like nature of the product, assembly lines, or other processes do not need to be catered to changing product specifications.

In addition, many manufacturing firms require very large fixed cost investments. These investments include purchases of property, plant, and equipment. It also entails costs associated with maintenance capital expenditures, insurance, transportation costs, and security. Each of these costs are often included in the overall cost of the asset which can be very high. The cost for properly plant and equipment are often high due to the specialized nature of the asset and the unique specifications required. As a result of these high cost, continuous transformation processes require long and substantial operating times. These long operating times justify the high capital expenditures as more units can be produced over a given period. The more units that are produced the cheaper the per unit cost of each unit. This is because the capital invested is fixed irrespective of the amount of the units that are produced. With routine and commodity like products, the variable costs are relatively low. As a result, the more units that are produced, the more profitable the overall operations will be become. This concept is called economies of scale and is the foundational principle of the Continuous Transformation Process. As a result, the size and scales of the business operations is large determinant to how profitable the implementation of Continuous Transformation Process can become (Skinner, 2020)

Flow Shop is a natural extension of the continuous process management techniques. Here an additional lawyer of complexity is added as different operations are needed to complete a standardized process. Although multiple processes are needed, the general premise still remains. Here, the process is routine, don’t require a large degree of differentiation, are require large amounts of fixed cost investment. The key differentiated aspect is that separate processes are needed to complete the overall manufacturing of the product. A common example is an automobile assemble line. Here, on an individual basis, the assembly is standardized and automated. However different operations are requiring additional operations to assemble certain elements of the vehicle. As a result, the vehicle is transferred from one “flow” to the next, to complete the overall manufacturing of the car. The primary disadvantage of this technique is that output is difficult to alter. In the case of the automobile, certain operations are dependent on the completion of other elements within the process (Beach, 2020). Even with separate operations, it is difficult to alter output positively as certain elements are dependent on others. As a result, the only way to increase output would be through increase costs related to employee overtime. Here, the output has increased on due the number of hours being worked increasing. The increase output did not arise from productivity gains. This ultimately makes the manufacturing process much more cost as compared to the elements discussed above. These cost increase can either be passed to the consumer through increased costs or taken by the business in the form of lower profit and margins. Finally, the larges drawback is due to absenteeism or higher employee turnover. Using the assembly line example earlier, each process in the “flow” requires human capital to complete their respective process. As a result, inefficiencies due to absenteeism, sickness, or higher turnover can result in large declines in output. This decline in output will result in higher costs to the manufacturer as supply chain operations are inefficient (Carter, 2020).

In conclusion, supply and operations management is predicated on a few key factors and elements. First, the product should be a commodity that has very little differentiation within the product. Due to the nature of the product, continuous transformation processes with manufacturing facilities can product units 24 hours a day, 7 days a week. This allows higher fixed cost investments to be spread out over as many units as possible resulting in higher margins and profitability. Likewise flow shop management is a natural extension of this process but looks to leverage and merge multiple operations into one. A classic example is an assemble line which requires different manufacturing processes to complete the overall assembly of the car. This, much like the other processes provides a much more automated and streamlines process, which spread production over a large asset base. However, it does have the drawback of being much more dependent on human capital and the negative elements of employing human capital. As a result, irrespective of the approach, manufactures must operate a scale in order to take advantage of economies of scale within the overall supply chain and operations processes.

References

Meredith, Jack. (2020) Operations and Supply Chain Management for MBAs 7th edition. ISBN-13: 978-1-119-56323-5. John Wiley & Sons, Inc. Pg.68

After reading the articles, select 1 article relating to your key topic that you wish to focus on. Adhere to the following format:

1. Key Concept Explanation: Define your key topic by using a source other than the textbook. Give a clear, concise overview of the essential elements relevant to understanding your key topic. In addition, explain why you are interested in this topic (e.g., academic curiosity, application to a current issue related to employment, or any other professional rationale). This section must be at least 100 words.

The key concepts and the corresponding explanation were explained above. In summary supply and operations management is predicated on a few key factors and elements. First, the product should be a commodity that has very little differentiation within the product. Due to the nature of the product, continuous transformation processes with manufacturing facilities can product units 24 hours a day, 7 days a week. This allows higher fixed cost investments to be spread out over as many units as possible resulting in higher margins and profitability

2. Comparison: Compare your research with what you have studied during the module in which the key topic/thread is assigned. Note differences or commonalities about your key topic, providing evidence that you have extended your understanding of this topic beyond the textbook readings. This is an opportunity for you to cite the additional articles you originally researched. This section must be at least 200 words.

Articles Being Compared: Manufacturing in the Corporate Strategy and Manufacturing Operations and Strategic Flexibility: Survey and Cases

The key concepts between the textbook and my research are very similar. The major difference is related to investment and overall attractiveness of the field. Through my, research, there appeared to be negative connotation related to supply chain management, logistics, and operations. I believe many investors and business owners are attracted to the technology sector due to its low fixed cost investments. As a result, other sectors appear more attractive than supply chain management. In addition, the high fixed cost investment is extremely risk given the operating environment of today. COVID-19 shut down operations for many months which cause significant financial strain on companies. Due to high fixed costs, companies were unable to mitigate the influence of a business slowdown on their operations. Compounding the issue was that many of the fixed assets were finances with debt.

In comparison, Manufacturing Operations and Strategic Flexibility: Survey and Cases looks to review management and corporate incentives. In certain companies’ management has incentive to engage in excessive risk-taking behavior which can have implications for both management and its supply chain. For example, management may be compensated on aspects such as cost savings or output which are intended to incentivize innovation. However, management will use these incentives to cut corners or behave in a manner that improves short term profits at the expense of long-term profits. For example, management could not invest in technology that can improve efficiencies in order to increase short term profit. This occurs as expenses used to acquire the new equipment or machinery are no longer incurred while revenue remains the same. As a result, profitability throughout the supply chain is enhance. However, if competitors sacrifice short-term profitability and purchase the new innovative equipment, their operations will be more efficient in the future, putting the company who didn’t purchase the equipment at a disadvantage operationally. We see this occurring now with computer chips as many supply chains did not invest for the future during COVID-19. As a result, the industry is experiencing chip shortages that could have been averted if investments where made earlier.