week 5.pdfbusiness acumen and strategy development
- 1. Business Acumen & Strategy Development MGMT 4080 Tomson Varghese tomson.varghese@georgebrown.ca
- 2. Course Schedule Page 2 Week Week of Topics (subject to change) Grade 1 Sep 5 • Course Introduction & Understanding the Business Environment 2 Sep 12 • Developing & Executing on Strategy 3 Sep 19 • Case Study 1 4 Sep 26 • Developing People, Culture & Ethics 5 Oct 3 • Case Study 2 10% 6 Oct 10 • Managing Operations & Technology 7 Oct 17 • Mid-Term • Group Assignment & Group Project distributed 30% 8 Oct 24 • Intersession (No Class) 9 Oct 31 • Understanding Financial Fundamentals and Risk 10 Nov 7 • Case Study 3 – VIRTUAL CLASS 10% 11 Nov 14 • Managing and Communicating with Stakeholders 12 Nov 21 • Case Study 4 10% 13 Nov 28 • Final Project Status 14 Dec 5 • Course Wrap-Up 15 Dec 12 • Group Project & Assignments due 40%
- 3. Week 5 Agenda Page 3 • Managing Business Operations • Supply Chain Management • Total Quality Management • Role of Technology in Business Operations
- 5. Introduction to Operations Page 5 • Operations consist of whatever an organization does to make inputs become outputs. It's that simple. • Whether the organization is a service company, a government agency, a not-for-profit entity, or a publicly traded corporation, it obtains inputs. • Operations transform these inputs by adding value to them (and sometimes wasted effort) and make them available to others as outputs. • Operations management is about managing for results—that is, desired outputs.
- 6. History of Operations Management Page 6 • History of OM can be traced back to the industrial revolution when production began to shift from small, local companies to large-scale production firms. • One of the most significant contributions to operations management came in the early 20th century when Henry Ford pioneered the assembly line manufacturing process. • This process drastically improved productivity and made automobiles affordable to the masses. • Understanding the motivations behind innovations of the past can help us identify factors that may motivate individuals in the future of operations management.
- 7. Managing Operations Page 7 The top manager of an operations department is usually called the Director of Operations. Most operations departments will report to a Chief Operating Officer (COO), who reports to the Chief Executive Officer (CEO). The COO is often considered the most important figure in a firm, next to the CEO and CFO.
- 8. Operations Management Page 8 Operations Management is a field of business concerned with the administration of business practices to maximize efficiency within an organization. The role of Operations Management is to Design, Plan, Direct and Improve all the activities involved in producing goods and services.
- 9. Operations as a Transformation Function Page 9 INPUTS • Raw materials/ingredients • Physical capital (technology, equipment, land) • Human capital (labor) • Intellectual capital (knowledge) • Social capital (reputation, brand equity, customer loyalty) OUTPUTS • Generally, goods or services, or a combination of both • Can be classified as tangible or intangible • (e.g. working and drinking a cup of coffee at Starbucks)
- 10. Operations as a Transformation Function Page 10 To create any kind of output, an organization transforms inputs. A transformation process is any activity or group of activities that takes one or more inputs, transforms and adds value to them, and provides outputs for customers or clients. MAIN TRANSFORMATION FUNCTIONS Operations are at the core of any enterprise. The effective management of operations is therefore one of the most critical success factors for an organization.
- 11. Development of Operations Management Page 11 • Craft Manufacturing: skilled craftspeople produce goods in low volume, with a high degree of variety, to meet the requirements of their individual customers. Low competition. (e.g. furniture or clock-making) • Mass Production: producing goods in high volume with low variety • Innovation 1: system of standardized and interchangeable parts known as the “American system of manufacture” (Hounshell, 1984). • Innovation 2: system of scientific management of work – redesign jobs by breaking down activities into tasks and assigning those tasks to workers, thus, achieving speed and low costs (Frederick Taylor, 1911) • Innovation 3: moving assembly line by Henry Ford • Mass production worked well as long as high volumes of mass-produced goods could be produced and sold in predictable and slowly changing markets. However, during the 1970s, markets became highly fragmented, product life cycles reduced dramatically, and consumers had far greater choice than ever before.
- 12. Development of Operations Management Page 12 Modern Period More recently, the mass production paradigm has been replaced, but there is yet no single approach to managing operations that has become similarly dominant. The different approaches for managing operations that are currently popular include: • Flexible specialization (Piore and Sabel, 1984) in which firms (especially small firms) focus on separate parts of the value-adding process and collaborate within networks to produce whole products. Such an approach requires highly developed networks, effective processes for collaboration and the development of long-term relationships between firms. • Lean production (Womack et al., 1990) which developed from the highly successful Toyota Production System. It focuses on the elimination of all forms of waste from a production system. A focus on driving inventory levels down also exposes inefficiencies, reduces costs, and cuts lead times. • Mass customisation (Pine et al., 1993) which seeks to combine high volume, as in mass production, with adapting products to meet the requirements of individual customers. Mass customisation is becoming increasingly feasible with the advent of new technology and automated processes. • Agile manufacturing (Kidd, 1994) which emphasizes the need for an organization to be able to switch frequently from one market-driven objective to another. Again, agile manufacturing has only become feasible on a large scale with the advent of enabling technology.
- 13. Development of Operations Management Page 13
- 14. Innovation in Operations Page 14 • Major innovations are made through operations. • Operational innovation means coming up with entirely new ways of filling orders, developing products, providing customer service, or doing any other activity that an enterprise performs. • Organizations are always looking for new ideas, tools and improvement suggestions to improve the effectiveness and efficiency of its operations. • Effectiveness refers to making the right actions and plans in order to improve the business and add value for the customer. It is helping to get the business doing the right things for the customer. • Efficiency is different. To be efficient means doing things well at the lowest cost possible. To be efficient, we look for ways to reduce unnecessary or redundant activities that add unnecessary cost and could be avoided. • Often, decisions that must be made will involve a trade-off between effectiveness and efficiency.
- 16. Business Decision Making Page 16 Strategy Management Product Design Supply Chain Management Quality Management
- 17. Supply Chain Management Page 17
- 18. Supply Chain Management Page 18 A supply chain is a network of individuals and companies who are involved in creating a product and delivering it to the consumer. Links on the chain begin with the producers of the raw materials and end when the van delivers the finished product to the end user. Supply chain management is a crucial process because an optimized supply chain results in lower costs and a more efficient production cycle. Companies seek to improve their supply chains so they can reduce their costs and remain competitive.
- 19. Value Chain Analysis Page 19 A value chain is a series of consecutive steps that go into the creation of a finished product, from its initial design to its arrival at a customer's door.
- 21. Total Quality Management Page 21 • Customer-focused: The customer ultimately determines the level of quality • Total employee involvement: All employees participate in working toward common goals. There is a common focus on continuous improvement efforts. • Process-centered: The steps required to carry out the process are defined, and performance measures are continuously monitored. • Integrated system: An organization may consist of many different teams, it is the horizontal processes interconnecting these functions that are the focus of TQM. • Strategic and systematic approach: Strategic planning includes the formulation of a plan that integrates quality as a core component. • Continual improvement: Continual improvement drives an organization to be both analytical and creative in finding ways to become more competitive. • Fact-based decision making: The organization continually collects and analyzes data in order to improve. • Communications: Effective communications plays a large part in maintaining morale and in motivating employees at all levels.
- 22. Lean Six Sigma Page 22 Six Sigma focuses on reducing process variation Six Sigma tends to use statistical data analysis, design of experiments, and hypothesis testing. Lean Six Sigma is a fact-based, data-driven philosophy of improvement that values defect prevention over defect detection. It drives customer satisfaction and bottom-line results by reducing variation, waste, and cycle time, while promoting the use of work standardization and flow, thereby creating a competitive advantage. It applies anywhere variation and waste exist, and every employee should be involved. Lean drives out waste (non-value added processes and procedures) Lean achieves its goals by using less technical tools such as kaizen (Plan-Do-Check-Act), workplace organization, and visual controls.
- 24. Technology Impact Page 24 Beyond providing the basis for continuous improvement, information technologies can have far-reaching effects. By overcoming the need for organizations and/or individuals to be located in the same time and space, the impact of these technologies on business includes the following: • Creating access and immediacy, which enables businesses to reach customers, suppliers, and employees anytime, anywhere • Driving and enabling globalization, thus intensifying the competitive pressures against and heightening the social expectations of businesses of all sizes • Changing organizational and industry structures, which facilitates outsourcing, consolidation, and dynamic collaborations • Transforming work and careers, creating pressure on individuals to continually upgrade their capabilities to remain employable
- 26. Elements of a Successful Business Transformation Page 26
- 27. Technology in Operations Page 27 Enterprise Resource Planning (ERP) Customer Relationship Management (CRM) Supply Chain Management Knowledge Management Systems
- 28. Next Week Page 28 IN CLASS CASE STUDY DISCUSSION