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MIM 558 Comparative Operations Management

MIM 558 Comparative Operations Management. 2014. Class Rules. Questions Yes/No Donuts. Global Supply and Logistics Specialization. MIM 558 Operations MIM 524 Sourcing and Supply MIM 534 Logistics MIM 544 Integrated SLM.

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MIM 558 Comparative Operations Management

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  1. MIM 558Comparative Operations Management 2014

  2. Class Rules • Questions • Yes/No • Donuts

  3. Global Supply and Logistics Specialization • MIM 558 Operations • MIM 524 Sourcing and Supply • MIM 534 Logistics • MIM 544 Integrated SLM

  4. Issues From Recent Conferences • Phoenix Conference • Manufacturing Excellence • North American Purchasing Research Symposium • Michigan Purchasing Conference • San Diego - Cisco

  5. Goals of Supply Chain Management • Quality • Time • On Time • Short Cycle Time • Flexibility • Total Cost - Not Just Price • Profitable and Sustainable

  6. Three Flows of Supply Chain and Operations Management • Information • Materials • Funds • Design Processes to Manage in Both Directions

  7. Supply Chain Trends • Global Competition • Global Operations • Global Sourcing and Logistics • Increased Supply Chain Risk • Risk Management • Relationship Management • Customers, Suppliers, Employees • Technology Utilization • Outsourcing/Insourcing/Near Shoring • Sustainability

  8. Supply Chain Management and Operations Management • Functional Integration • Purchasing and Supply Management • Transportation and Logistics • Warehousing and Inventory Control • Production/Operations Planning and Control • Finished Product Distribution • Global Business Environment

  9. Types of Firms • Make To Stock • Standard PRODUCTS • Made in ANTICIPATION of Demand • Assemble To Order • Standard COMPONENTS • Custom Assembled • Assembled AFTER Receipt of Order

  10. Types of Firms • Make To Order • Standard PRODUCT • Made AFTER Receipt of Order • Make Parts to Customer’s Specifications • Engineer To Order • Custom Design and Build

  11. Process Types • Project • Construction, Other One-time, Custom • Job Shop • Printing • Small Batch Steel Fabricator • Repetitive • Assembly Line Autos • Mass Customization Dell • Continuous • Oil Refinery

  12. Service Firm Types and Processes • Are they different from manufacturing?

  13. Global Operations • Global Significance of MIM 558 Topics • Where Value is Created • Where Products are Made • Where Services are Generated and Delivered • Forecasting • Global Supply Chains • Global Distribution • Quality Processes • Strategy Development

  14. Elements of Global Strategy • Position and Resources of Organization • Industry Globalization Drivers • Raw Materials Availability • Market Factors • Cost Factors • Environmental Factors • Competitive Factors • Porter’s Five Factor Model

  15. Porter’s Five Forces Model

  16. Porter’s Five Forces of Competition • New Market Entrants • Entry ease/barriers • Geographical factors • Incumbents resistance • New entrant strategy • Routes to market • Supplier Power • Brand reputation • Geographical coverage • Product/service level • Quality • Relationships w/ customers • Bidding processes • Capabilities • Competitive Rivalry • Number & size of firms • Industry size & trends • Cost bases • Product/service ranges • Differentiation, strategy • Buyer Power • Buyer choice • Buyer size/number • Change cost/frequency • Product/service importance • Volumes, • JIT scheduling • Product & Technology Development • Alternatives price/quality • Market distribution changes • Fashion & trends • Legislative effects

  17. Strategic Planning • Mission Statement • Vision Statement • Strategies • Long-Term Action Plan • Commits Organizational Resources • Creates Competitive Advantage • Performance Measures

  18. Strategic Planning Steps • Developing the Vision • Translating the Vision into Goals • Developing the Strategies to Achieve the Goals • Selling the Strategies • Executing the Strategies • Tracking Progress

  19. Strategic Planning Steps: Developing the Vision • Determining the Time Horizon • The Macro View • Global Economy • National Economy • Industry Development • The Micro View • What is Desired State for the Organization

  20. Strategic Planning Steps: Translating the Vision into Goals • Vision Drivers • Activities • Materials • People • Technologies • Stretch Targets

  21. Strategic Planning Steps: Developing Strategies to Achieve Goals • Strategies Should: • Mold Decisions to Produce a Consistent Pattern • Focus Resources • Ease Trade-off Decisions

  22. Strategic Planning Steps: Developing Strategies to Achieve Goals • Global Operations Strategies May Involve • Staff • Technology • Resources • Time • Supply Base

  23. Strategic Planning Steps: Developing Strategies to Achieve Goals • Corporate Goal Congruency • Internal Customer Impacts • External Supplier and Customer Impacts • Resources to Implement • Resources to Sustain • Structure

  24. Strategic Planning Steps: Selling the Strategies • What are the Benefits • WHO Benefits • Making the Business Case • Finding the Right Avenue • Finding the Right Pitch • How to Get your Point Across in 30 Seconds or Less Milo Frank

  25. Strategic Planning Steps: Executing the Strategy • Operationalizing the Strategy • Organizational Structure • Staff • Investment • Capital Equipment • Training

  26. Strategic Planning Steps: Tracking Progress • Establishing Metrics • What to Measure • Production? • Purchasing? • Logistics? • Setting Milestones • FIVE MINUTE EXERCISE

  27. Forecasting Product Design Process Design Purchasing Inbound Transportation In-House Transportation Inventory Planning and Control Production Planning and Control Process/Quality Control Distribution Maintenance Supply Chain Management Activities

  28. General Supply Chain Strategies Supply Base Reduction Supply Base Addition Supplier Development Inventory Strategies VMI Consignments Lean Operations Simplification Standardization Automation Risk Management Identification Mitigation Cost Reduction Administrative Commodities Services Leveraging Technology Lead Time Management Sustainability

  29. Outsourcing • Book: Whenever volume is greater than a specific quantity, the firm should produce the part in-house. Otherwise, it is best to outsource. (p. 36) • Other Reasons? • Outsourcing vs Make/Buy

  30. Supply Chain Challenges • Pace of Technological Change • Long Supply Chains • Risk • Lean • Environmental Concerns • Cost • Others?

  31. The Importance of Supply Chain Management • Changes in Supply Chains • Extensive • Lengthy • Complex • Geographically Disbursed • Global Nature Creates Uncertainty and Risk • The Riskier the Transaction, The More Likely a Disaster Will Result

  32. Supply and Logistics Risks Origin Risk Analysis Natural Disasters Labor Issues Political Issues Logistics Risk Capacity In-transit Loss or Damage Labor Issues Clearance Delays Infrastructure Constraints

  33. Supply and Logistics Risks • Inventory Risk • Loss or Damage • Obsolescence • Shrinkage • Technology Risk • Bad Selection Process • Lack of Training • Late Adopter

  34. Operations Risks • Financing Availability and Cost • Labor Relations • Marketplace Changes • Political Risks • Currency Exchange Rate Risk • Others?

  35. Operations Risk Management • Global Supply Chains Increase Risk • Continuity (Risk) Planning • Suppliers’ Plans • Carriers • Numbers of Suppliers • Emergency Inventory • Disaster Planning • Why Bother?

  36. Why Do We Care? • From 11-1-12 through 11-10-12 • 831 Earthquakes Worldwide • 37 Were Magnitude 5 or Greater • Superstorm Sandy • Japanese Quake • Thai Floods

  37. 2012 Earthquakes • Magnitude   Number • 8 - 9.9 2 • 7 - 7.9 13 • 6 - 6.9 204 • 5 - 5.9 1313 • Total 1450 • http://quakes.globalincidentmap.com/

  38. 2013 Earthquakes • 9.0 Magnitude+ 0 • 8.0−8.9 Magnitude 2 • 7.0−7.9 Magnitude 15 • 6.0−6.9 Magnitude 114 • 5.0−5.9 Magnitude 1.064 • Totals 1,195 • Total fatalities 1,463

  39. Risk: Size vs Probability • Differing Actions Have Different Risk Probabilities and Costs • We Overemphasize High Cost, Low Probability Events • We Underemphasize Lower Cost, High Probability Events • Single Source or Multiple Sources? • Risk of Supplier Failure vs. Cost of Failure

  40. Prioritize • Fix Small Disasters Before They Become Large Disasters • Focus on the Controllable • Evaluate Entire Supply Chains – Not Just First Tier • Concentrate on Purchase Types That Cause Disasters • Allow Enough Time

  41. Risk Mitigation Strategies • Much Better Forecasting • Look for Causes of Change • Intense Market Study • Hedging • Reduce Lead Times • Superior Supplier and Carrier Communication • Emphasis on Supplier and Carrier Partnerships • Problem Prevention Plans

  42. Matthew Yachts

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