business operation of Mercedes-Benz
BIN3022-NGlobal Economics & Business Operations
ECA – Business Operations Part
BA(Hons)International Business Management top-up
Module name: BIN3022-N Global Economics & Business Operations
Module code: BIN3022-N
Module assessment: End assessment – Business Operations Part
Contents
1. Introduction and background
3
1.1 Introduction to Business Operations
3
1.2 What is Operations Management, Operations Strategy, Supply Chain, Supply Chain Management and a Value Chain (Use relevant academic references for the definition) ? 3
1.3 Illustrate a basic Supply Chain of an industry of your choice in the form of a Diagram.
3
2. Industrial Context
3
2.1 Industrial Context of the Business Operations
3
2.2 Define the operations management process of that particular industry
3
2.3 Explain the products and services the industry offers with a short table on their Inputs/Transformation Process and Outputs
3
2.4 Explain the core operations strategy of that industry in the context of the competitive priorities 3
3. Business Processes
4
3.1 Select any 2-3 key business processes discussed in the lecture and provide an outline of how these business processes facilitate businesses to be profitable.
4
3.2 Discuss the Key Strategic Decisions Supply Chain managers make within the selected Business Processes 4
4. Conclusion
4
4.1. List some of the Key Challenges industries are facing in Business Operations due to the ‘New-Normal’ scenario post COVID-19.
4
4.2. Provide recommendations on how to enhance the Business Operations for some of the challenges listed in Section 4.1
4
5. References
5
Name/StudentNumber BIN3022-N
Page | 2
1. Introduction and background
1.1 Introduction to Business Operations
1.2 What is Operations Management, Operations Strategy, Supply Chain, Supply Chain Management and a Value Chain (Use relevant academic references for the definition)?
1.3 Illustrate a basic Supply Chain of an industry of your choice in the form of a Diagram.
2. Industrial Context
Select any Industry of your choice
2.1 Industrial Context of the Business Operations
2.2 Define the operations management process of that particular industry
2.3 Explain the products and services the industry offers with a short table on their Inputs/Transformation Process and Outputs
2.4 Explain the core operations strategy of that industry in the context of the competitive priorities (Cost/Quality/Flexibility/Delivery)
3. Business Processes
3.1 Select any 2-3 key business processes discussed in the lecture and provide an outline of how these business processes facilitate businesses to be profitable.
3.2 Discuss the Key Strategic Decisions Supply Chain managers make within the selected Business Processes and discuss how each of these processes impact the end customer.
4. Conclusion
4.1. List some of the Key Challenges industries are facing in Business Operations due to the ‘New-Normal’ scenario post COVID-19.
4.2. Provide recommendations on how to enhance the Business Operations for some of the challenges listed in Section 4.1
5. References
Global Economic and Business Operations
Assessment Document 2020-21
Module Code:
BIN3022
Module Title:
Global Economics and Business operations
Submission Date:
8th January 2021 16:00hrs UK Time on BlackBoard
Module Aim
This module examines business operations in the context of the global economy. One part investigates the operation of the global economy, looking particularly at international trade, the importance of multinational enterprises and foreign investment, and the growth and development of economics, especially the emerging economies of the BRIC group, among others. Other internationally important global economic issues are also examined, such as globalisation and environmental policy. In the business operations part of the module, the emphasis is on the management methods used to aid resource allocation and decision making in organisations. The nature of the operational process is examined and techniques are developed and applied in practical settings.
Module Learning Outcomes
Module learning outcomes detail the specific knowledge and understanding, cognitive and intellectual skills, practical and professional skills, and the key transferable skills that you will develop during this module. The learning outcomes for this module are detailed below. These learning outcomes will be assessed when marking your assignment.
Personal & Transferable Skills
1. Engage effectively in debate and present arguments in a professional manner.
2. Select and justify approaches to the analysis of organisational dynamics and apply them to produce practical improvements.
3. Develop reflective practice skills in the study and analysis of global business dynamics.
Research, Knowledge & Cognitive Skills
4. Describe and evaluate models of the dynamics of organisational behaviour.
5. Critically evaluate alternative approaches to the modelling of global business dynamics.
6. Effectively organise global business dynamics knowledge using a variety of techniques.
7. Evaluate a range of approaches to the analysis of organisational dynamics models.
Professional Skills
8. Understand and select from a range of key business dynamics modelling skills
Module Assessment
The assessment requirements for the module, in addition to the generic level 6 University Assessment Criteria and correct use of the required referencing format and style, include the following module specific criteria:
In Class Assessment (50% of the final mark based on Business Operations Module):
a 2,000 word assignment for the Business Operations part of this module. The assignment is in the form of an individual essay based on a pre-released case study.
ICA Assignment for Business Operations
Define using academic references on what is Operations Management, Operations Strategy, Supply Chain and a Value Chain.
Choose an industry of your choice and Define the Operations management Management and Strategy with detail explanation on on of the products/servies that company offers in terms of Inputs /Transformation and Outputs
You should also mention the core Operations strategy of tthat specific product/service (cost/quality/delivery/flexibility)
Draw a Basic Supply Chain of that Product and provide a breif explanation
List key challenges that industry has due to ‘New Normal’ post COVID-19
Provide a short analysis on the business process on a part of the supply chain in terms of improving customer service and performance.
ECA (50% of the final mark):
Demonstrate good fundamental academic knowledge of Global Economics;
Critically analyse data using appropriate techniques;
Draw appropriate conclusions;
Present the assignment in a clear and understandable way, using the conventions appropriate to a business report with no spelling or grammatical errors.
The ECA is a 2000-word assignment in the form of an individual report on selected aspects of the module. The subject matter of the report may change from year to year and students will be informed of assignment details during the module.
End Class Assessment Assignment for Global Economics Submission Semester 1: 8.01.2021
Submission: single electronic portfolio document via Blackboard.
Assessment Tasks ECA
The assessment tasks for the ECA are presented in a separate document on Blackboard.
ECA Assignment
Presentation Guidance
Use font size 12;
Use 1.5 Line and Paragraph spacing;
Headings in bold;
Include your name and student number as a header on all pages;
Include page numbers as a footer;
For this reflective report, write in the first person;
Use Harvard referencing throughout;
Include a reference list of all of the sources cited in your work.
Module Assessment Criteria ICA/ECA
Assignments will be marked in accordance with the following marking criteria:
|
ICA Assessment Criteria |
Max Mark |
1st Mark |
2nd Mark |
Feedback Comments: |
|
Knowledge and understanding of Business Operations and Global Economics to be demonstrated through a clearly presented discussion of OPS MGMT and Strategy principles. |
15 |
|||
|
Knowledge and understanding of Supply Chain in Business Operations: to be demonstrated through a clearly presented description of the Supply chain of the product/service |
30 |
|||
|
Illustration and use of examples: to be demonstrated through clearly presented and accurate use of worked examples of the presented company/industry |
20 |
|||
|
Analysis, interpretation and solution of Business Operations and Global Economics: to be demonstrated through a clearly presented and accurate solution based on academic refrences, industrial reports |
||||
|
Presentation: your report should be well structured and written, be free of sentence construction and grammatical errors and include correctly formatted referencing. Analyses should be clearly and logically presented. |
5 |
Module Assessment: Submission Guidelines
The reflective report should be submitted electronically using the ‘Assessment’ link on Blackboard. The deadline for submission is shown at the top of this document. Feedback will be provided for the purposes of guidance and to assist your learning and development. Any reference to marks is entirely provisional and subject to confirmation following University procedures. Only University Assessment Boards are able to issue confirmed, definitive marks.
The pass mark for this assessment is 40%.
Resit: If you do not reach a pass mark, you will have the opportunity to resit the module assignment by ‘making good’ your original submission using the feedback given by the marker and moderator.
Word limits and penalties for assignments
If the assignment is within +10% of the stated word limit no penalty will apply.
The word count is to be declared on the front page of your assignment and the assignment cover sheet. If this word count is falsified, this will be regarded as academic misconduct.
The word count does not include:
Title and Contents page;
Reference list;
Appropriate tables, figures and illustrations.
Please note, in-text citations [e.g. (Smith, 2011)] and direct secondary quotations [e.g. “dib-dab nonsense analysis” (Smith, 2011 p.123)] are INCLUDED in the word count.
If the word limit of the full assignment exceeds the +10% limit, 10% of the mark provisionally awarded to the assignment will be deducted. For example: if the assignment is worth 70 marks but is above the word limit by more than 10%, a penalty of 7 marks will be imposed, giving a final mark of 63.
Summarising and compressing the information in your assignment into the word limit is one of the skills that students are expected to acquire and demonstrate as part of the assignment process.
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Teesside University Business School
BIN3022-N
Global Economics and Business Operations
2020/2
1
Global Economics
In-Course Assessment November 2020
Word Limit: 2000 words
Submission deadline: Friday 8th January 2021
· One electronic copy to be submitted through this module’s Blackboard site before 4 pm on 8th January 2021
1
You are required to answer all following questions using appropriate theories and concepts that were introduced in our lectures. Use evidence from case study articles where it is relevant.
1. Outline the factors in increased globalization. Discuss how these underling forces are interlinked and reinforce each other.
(40 marks)
2. Outline and discuss both benefits of and issues arising from trade protection. You should include the role of FDI in international trade and use evidence from case studies articles as examples to support your discussion.
(60 marks)
Important instructions:
Word limit: 2,000.
You should make use of the case study articles as supporting documents i.e. use the evidence from these articles to support your answers. You should also draw on the theories, concepts and frameworks that we covered in ‘global economics’ part of the module.
All references, quotes, paraphrasing and summaries should be cited clearly in the text (e.g. page numbers, authors, web address etc.) and sources consulted listed in the bibliography. Use a consistent referencing system, preferably Harvard.
The mark for this assignment is 50% of the final module mark.
Case Study Materials
1. Globalisation 1.0 and 2.0 helped the G7. Globalisation 3.0 helped India and China instead. What will Globalisation 4.0 do
2. The contribution of Chinese FDI to Africa’s growth
3. The return to protectionism
You can access these articles from this module’s blackboard site i.e. under ‘assessment’ page.
https://eat.tees.ac.uk/bbcswebdav/pid-3629529-dt-content-rid-10094321_1/courses/BIN3022-N-BF1-2020/The%20contribution%20of%20Chinese%20FDI%20to%20Africa’s%20growth%20_%20VOX%2C%20CEPR%20Policy%20Portal
https://eat.tees.ac.uk/bbcswebdav/pid-3629529-dt-content-rid-10094320_1/courses/BIN3022-N-BF1-2020/Globalisation%201.0%20and%202.0%20helped%20the%20G7.%20Globalisation%203.0%20helped%20India%20and%20China%20instead.%20What%20will%20Globalisation%204.0%20do_%20_%20VOX%2C%20CEPR%20Policy%20Portal
https://eat.tees.ac.uk/bbcswebdav/pid-3629529-dt-content-rid-10094322_1/courses/BIN3022-N-BF1-2020/The%20return%20to%20protectionism%20_%20VOX%2C%20CEPR%20Policy%20Portal
Global Economics and Business Operations
Dr. –Ing. Rajesh Shankar Priya
Lecturer in Business and Management
TUBS
R.ShankarPriya@tees.ac.uk
Traditional View: Cost breakdown of a manufactured good
Profit 10%
Supply Chain Cost 20%
Marketing Cost 25%
Manufacturing Cost 45%
Profit
Supply Chain
Cost
Marketing
Cost
Manufacturing
Cost
Effort spent for supply chain activities are invisible to the customers.
Notes: Key message here is that logistics costs are a significant fraction of the total value of a product. The problem here is that this a purely cost based view of the supply chain and drives a firm to simply reducing logistics costs. This is an incomplete picture.
What can Supply Chain Management do?
Estimated that the grocery industry could save $30 billion (10% of operating cost) by using effective logistics and supply chain strategies
A typical box of cereal spends 104 days from factory to sale
A typical car spends 15 days from factory to dealership
Faster turnaround of the goods is better?
Laura Ashley (retailer of women and children clothes) turns its inventory 10 times a year five times faster than 3 years ago
inventory is emptied 10 times a year, or an item spends about 12/10 months in the inventory.
To be responsive, it relocated its main warehouse next to FedEx hub in Memphis, TE.
National Semiconductor used air transportation and closed 6 warehouses, 34% increase in sales and 47% decrease in delivery lead time.
Magnitude of Supply Chain Management
Compaq estimates it lost $0.5 B to $1 B in sales because laptops were not available when and where needed
P&G (Proctor&Gamble) estimates it saved retail customers $65 M (in 18 months) by collaboration resulting in a better match of supply and demand
When the 1 gig processor was introduced by AMD (Advanced Micro Devices), the price of the 800 meg processor dropped by 30%
SCM Generated Value
Minimizing supply chain costs
while keeping a reasonable service level
customer satisfaction/quality/on time delivery, etc.
This is how SCM contributes to the bottom line
SCM is not strictly a cost reduction paradigm!
– A supply chain consists of
– aims to Match Supply and Demand, profitably for products and services
SUPPLY SIDE
DEMAND SIDE
The right
Product
Higher
Profits
The right
Time
The right
Customer
The right
Quantity
The right
Store
The right
Price
=
+
+
+
+
+
– achieves
Supplier
Manufacturer
Distributor
Retailer
Customer
Upstream
Downstream
Detergent supply chain:
Customer wants
detergent
Albertson’s
Supermarket
Third
party DC
P&G or other
manufacturer
Plastic cup
Producer
Chemical
manufacturer
(e.g. Oil Company)
Tenneco
Packaging
Paper
Manufacturer
Timber
Industry
Chemical
manufacturer
(e.g. Oil Company)
Notes:
Supply chain involves everybody, from the customer all the way to the last supplier.
Key flows in the supply chain are – information, product, and cash. It is through these flows that a supply chain fills a customer order. The management of these flows is key to the success or failure of a firm. Give Dell & Compaq example, Amazon & Borders example to bring out the fact that all supply chain interaction is through these flows.
Flows in a Supply Chain
Customer
Material
Information
Funds
The flows resemble a chain reaction.
Supplier
SCM in a Supply Network
Supply Chain Management (SCM) is concerned with the management and control of the flows of material, information, and finances in supply chains.
Supply
Demand
Products and Services
Cash
Supply Side OEM Demand Side
THAILAND INDIA MEXICO TEXAS US
N-Tier Suppliers Suppliers Logistics Distributors Retailers
Information
The task of SCM is to design, plan, and execute the activities at the different stages so as to provide the desired levels of service to supply chain customers profitably
Supply Chain
Supply Chain
The connected chain of all of the business entities, both internal and external to the company, that perform or support the logistics function
Chapter 14 Supply Chain Management
10
10
Notes:
Many companies are turning to supply chain management for competitive advantage.
A company’s supply chain includes all of the companies involved in all of the upstream and downstream flows of products, services, finances, and information, from initial suppliers (the point of origin) to the ultimate customer (the point of consumption).
Supply Chain Management
Supply Chain
Management
A management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value
Chapter 14 Supply Chain Management
11
11
Notes:
Visualizing the entire supply chain allows managers to maximize strengths and efficiencies at each level of the process to create a highly competitive, customer-driven supply system.
Supply Chain Managers
The philosophy behind supply chain management is that by visualizing the entire supply chain, supply chain managers can maximize strengths and efficiencies at each level of the process to create a highly competitive, customer-driven supply system that is able to respond immediately to changes in supply and demand.
Chapter 14 Supply Chain Management
12
12
Supply Chain Management
Physical flow process that engineers the
movement of goods
Communicator of customer demand
from point of sale to supplier
Chapter 14 Supply Chain Management
13
Notes:
Today, supply chain management plays a dual role.
Supply chain management acts as a communicator of customer demand that extends from the point of sale back to the supplier, and second, as a physical flow process that engineers the timely and cost effective movement of goods throughout the entire supply pipeline.
Benefits of Supply
Chain Management
Supply chain oriented companies commonly report:
Lower inventory, transportation, warehousing, and packaging costs
Greater supply chain flexibility
Improved customer service
Higher revenues
Increased performance and profitability
Chapter 14 Supply Chain Management
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14
Supply Chain Integration
Material and Service Supplier Integration
Internal Operations Integration
Customer Integration
Relationship Integration
Measurement Integration
Technology and Planning Integration
Firm-to-Firm Social Interactions
Operational Planning and Control
Customer Integration
Chapter 14 Supply Chain Management
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15
Notes:
Firms’ success in achieving each of these types of integration is very important.
Highly integrated supply chains (those that are successful in achieving many or all of these types of integration) have been shown to be better at satisfying customers, managing costs, delivering high-quality products, enhancing productivity, and utilizing company or business unit assets, all of which translate into greater profitability for the firms and their partners working together in the supply chain.
Supply Chain Integration
Relationship
Integration
The ability of two or more companies to develop social connections that serve to guide their interactions when working together.
The performance assessment of the supply chain as a whole that also holds each individual firm or business unit accountable for meeting its own goals
Measurement
Integration
Chapter 14 Supply Chain Management
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16
Supply Chain Integration
Technology and planning integration
The creation and maintenance of information technology systems that connect managers across and through the firms in the supply chain
Material and service supplier integration
Requires firms to link seamlessly to those outsiders that provide goods and services to them so that they can streamline processes and provide quality customer experiences.
Chapter 14 Supply Chain Management
17
17
Internal Operations Integration
Links internally performed work into a seamless process that stretches across departmental and/or functional boundaries, with the goal of satisfying customer requirements
A competency that enables firms to offer long-lasting, distinctive, value-added offerings to those customers who represent the greatest value to the firm or supply chain
Customer Integration
Supply Chain Integration
Chapter 14 Supply Chain Management
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18
Key Business Processes
Customer relationship management
Customer service management
Demand management
Order fulfillment
Manufacturing flow management
Supplier relationship management
Product development and commercialization
Returns management
Chapter 14 Supply Chain Management
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19
Notes:
Business processes are composed of bundles of interconnected activities that stretch across firms in the supply chain.
There are eight critical business processes on which supply chain managers must focus. They are listed on this slide.
Customer Relationship Management
Customer
Relationship
Management
(CRM) Process
Allows companies to prioritize their marketing focus on different customer groups according to each group’s long-term value to the company or supply chain
Chapter 14 Supply Chain Management
20
20
Notes:
The customer relationship management process provides a set of comprehensive principles for the initiation and maintenance of customer relationships and is often carried out with the assistance of specialized CRM computer software.
Customer
Service Management
Customer
Service
Management
Process
Presents a multi-company, unified response system to the customer whenever complaints, concerns, questions, or comments are voiced
Chapter 14 Supply Chain Management
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21
Notes:
Whereas the customer relationship management process is designed to identify and build relationships with good customers, the customer service management process is designed to ensure that those customer relationships remain strong.
Demand Management
Demand
Management
Process
Seeks to align supply and demand throughout the supply chain by anticipating customer requirements at each level and create demand-related plans of action prior to actual customer purchasing behavior
Chapter 14 Supply Chain Management
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22
Notes:
Demand management seeks to minimize the costs of serving multiple types of customers who have variable wants and needs.
It is very difficult to predict exactly what items and quantities customers will buy prior to purchase; however, much of the uncertainty in demand planning can be mitigated by conducting collaborative planning, forecasting, and replenishment (CPFR) activities with the company’s customers and suppliers.
Order Fulfillment
Order
Fulfillment
Process
a highly integrated process, often requiring persons from multiple companies and multiple functions to come together and coordinate to create customer satisfaction at a given place and time
Chapter 14 Supply Chain Management
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23
Notes:
One of the most fundamental processes in supply chain management is the order fulfillment process, which involves generating, filling, delivering, and providing on-the-spot service for customer orders.
When the order fulfillment process is managed diligently, the amount of time between order placement and receipt of the customer’s payment following order shipment (known as the order-to-cash cycle) is minimized as much as possible.
Since many firms do not view order fulfillment as a core competency, they often outsource this function to a third party logistics firm that specializes in the order fulfillment process.
Manufacturing Flow Management
Manufacturing
Flow
Management
Process
Concerned with ensuring that firms in the supply chain have the needed resources to manufacture with flexibility and to move products through a multi-stage production process
Chapter 14 Supply Chain Management
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24
Notes:
The goals of the manufacturing flow management process are centered on leveraging the capabilities held by multiple members of the supply chain to improve overall manufacturing output in terms of quality, delivery speed, and flexibility, all of which tie to profitability.
Supplier Relationship Management
Supplier
Relationship
Management
Process
Closely related to the manufacturing flow management process and contains several characteristics that parallel the customer relationship management process
Chapter 14 Supply Chain Management
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25
Notes:
Supplier relationship management provides structural support for developing and maintaining relationships with suppliers.
The management of supplier relationships is a key step toward ensuring that firms’ manufacturing resources are available, and thereby the supplier relationship management process has a direct impact on each supply chain member’s bottom-line financial performance.
Product Development and Commercialization
Product
Development and
Commercialization
Process
Includes the group activities that facilitates the joint development and marketing of new offerings among a group of supply chain partner firms
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26
Notes:
New products and services are not the sole responsibility of a single firm who serves as inventor, engineer, builder, marketer, and sales agent; rather, they are often the product of a multi-company collaboration with multiple firms and business units playing unique roles in new product development, testing, and launch activities, among others.
Returns Management
Returns
Management
Process
Enables firms to manage volumes of returned product efficiently, while minimizing returns-related costs and maximizing the value of the returned assets to the firms in the supply chain
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27
Notes:
In addition to the value of managing returns from a pure asset-recovery perspective, many firms are discovering that returns management also creates additional marketing and customer service touch points that can be leveraged for added customer value above and beyond normal sales and promotion-driven encounters.
the process of strategically managing the efficient flow and storage of raw materials, in-process inventory, and finished goods from point of origin to point of consumption.
Logistics is…
Logistics
Notes:
Orchestrating the physical means through which products move it is critical to any supply chain.
Chapter 14 Supply Chain Management
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Logistical Components
of the Supply Chain
Supply
Chain
Team
Sourcing & Procurement
Production Scheduling
Order Processing
Inventory Control
Warehouse & Materials Handling
Transportation
Logistics Information System
Chapter 14 Supply Chain Management
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Notes:
The supply chain consists of several interrelated and integrated logistical components, as shown on this slide.
Integrating and linking all of the components is the logistics information system.
The supply chain team orchestrates the movement of goods, services, and information from the source to the consumer.
The best supply chain teams move beyond the organization to include external participants, such as suppliers, transportation carriers, and third-party logistics suppliers. Members of the supply chain communicate, coordinate, and cooperate extensively.
Sourcing and Procurement
Plan purchasing strategies
Develop specifications
Select suppliers
Negotiate price and service levels
Reduce costs
The Role of Purchasing:
© iStockphoto.com/Maria Toutoudaki
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Notes:
One of the most important links in the supply chain is that between the manufacturer and the supplier. Purchasing professionals are on the front lines of supply chain management, planning purchasing strategies, developing specifications, selecting suppliers, and negotiating price and service levels.
The goal of most activities is to reduce the costs of raw materials and supplies. Instead of tough negotiations to get the best possible price, purchasing helps establish and cooperative relationships with vendors.
Production Scheduling
Push / Pull
Strategy
Traditional Focus
Push
Start of
Production
Manufacturing
Inventory-
Based
Mass Production
Customer Focus
Pull
Customer-Order
Based
Mass Customization
Chapter 14 Supply Chain Management
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Notes:
In a traditional mass-marketing manufacturing, production begins when forecasts call for additional products to be made or inventory is low.
In a customer-focused “pull” manufacturing environment, production of goods is not started until an order is placed by the customer specifying the desired configuration, also known as mass customization or build-to-order.
In this environment of customer demand and mass customization, supply chains need to be flexible and be able to shift production based on demand.
Just-in-Time Manufacturing
A process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials at the precise time they are needed on the production line.
JIT
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Notes:
JIT, or lean production, was borrowed from the Japanese. Manufacturers work with suppliers to get necessary items to the assembly line at the precise time they are needed for production.
For the manufacturer, JIT means that raw materials arrive at the assembly line “just in time” to be installed.
For the supplier, JIT means supplying customers with products in just a few days rather than weeks.
For the consumer, JIT means lower costs, shorter lead times, and products that closely meet the consumer’s needs.
Benefits of JIT
For manufacturers: reduces raw material inventories; immediate shipping of products
For suppliers: daily or hourly deliveries rather than weekly
For customers: lower costs; shorter lead times; products tailored to customer needs
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Notes:
The benefits of JIT are shown on this slide.
Order Processing
Order processing is becoming more automated through the use of computer technology known as ELECTRONIC DATA INTERCHANGE (EDI).
a system whereby orders are entered into the supply chain and filled.
An Order Processing System is…
Notes:
As an order enters the system, management must monitor two flows: the flow of goods and the flow of information.
Shipping incorrect merchandise or partially filled orders can create just as much dissatisfaction as stockouts or slow deliveries.
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Inventory Control
Inventory
Control
System
A method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer’s or a customer’s demand
Notes:
The goal of inventory management is to keep inventory levels as low as possible while maintaining an adequate supply of goods to meet customer demand.
Chapter 14 Supply Chain Management
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Inventory Control
Tools for managing inventory include:
materials requirement planning (MRP) or materials management – supplier to manufacturer
distribution resource planning (DRP) – manufacturer to end user
automatic replenishment programs – minimal forecasting
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Warehousing and Materials Handling
Most manufacturers today have moved to AUTOMATED materials-handling systems to minimize the amount of handling.
a method of moving inventory into, within, and out of the warehouse.
A Materials-Handling System is…
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37
Notes:
Although JIT manufacturing processes may eliminate the need to warehouse many raw materials, manufacturers keep some safety stock on hand in the event of an emergency. Additionally, inventory may be stored for seasonally-demand products.
Storage helps manufacturers manage supply and demand.
A materials-handling system moves inventory into, within, and out of the warehouse, performing the functions shown on this slide.
Transportation
Airways
Water
Pipelines
Motor Carriers
Railroads
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38
Notes:
Supply chain logisticians must decide which mode of transportation to use to move products from supplier to producer and from producer to buyer. These decisions are related to other logistics decisions. The five major modes of transportation are listed on this slide.
Transportation Mode Choice
Cost
Transit time
Reliability
Capability
Accessibility
Traceability
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39
Notes:
Supply chain managers choose a mode of transportation on the basis of the criteria shown on this slide.
Criteria for Ranking Modes of Transportation
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Trends in Supply Chain
Management
Electronic distribution
Outsourcing of logistics functions
Advanced computer technology
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Notes:
Several technological trends are affecting the job of the supply chain manager:
Advanced computer technology has boosted the efficiency of logistics with tools such as automatic ID systems, radio frequency technology, and supply chain software systems.
Outsourcing of logistics functions is a rapidly growing segment in which a manufacturer or supplier turns over the entire or partial function of supply chain management to an independent third party.
Electronic distribution includes any kind of product or service that can be distributed electronically. For instance, computer software can be purchased and downloaded electronically.
Advanced Computer
Technology
Automatic identification systems
– Bar coding
– Radio frequency technology
Communications technology
Supply chain software systems
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Discussion/Team Activity:
Discuss examples of the use of advanced computer technology from the text including Amazon.com, Walmart, and American Apparel.
Outsourcing Logistics
Functions
Outsourcing Benefits
Reduce inventories
Locate stock at fewer plants and distribution centers
Provide same or better levels of service
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Notes:
Turning their logistics functions over to firms with expertise in that area allows companies to focus on their core competencies.
Digital Distribution
a distribution technique that includes any kind of product or service that can be distributed electronically, whether over traditional forms such as fiber-optic cable or through satellite transmission of electronic signals.
Digital Distribution is…
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Green Supply Chain Management
Requires integrating green thinking into all phases of the supply chain
Green materials sourcing
Environmental impact of packaging, shipment, use
Incorporate end-of-life management
Recycling
Clean disposal
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Global Logistics and Supply Chain Management
Logistical challenges of global markets:
Understanding and coping with the legalities of trade in other countries
Uncertainty regarding shipping
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BIN3022-N Global Economics and Business Operations
Lecture 1: International Business
and Globalization
Dr Dongna Zhang
Textbooks for Global Economics
Harrison, A., 2013. Business environment in a global context. Oxford University Press.
Rugman, A.M. and Collinson, S., 2009. International business. Pearson Education.
Daniels, J.D., Radebaugh, L.H. and Sullivan, D.P., 2018. International business: Environments and operations. Pearson Education.
Krugman, P.R., 2008. International economics: Theory and policy. Pearson Education.
Learning Objectives (1 of 2)
1-1 Relate globalization and international
business (IB) to each other and explain why
their study is important
1-2 Grasp the forces driving globalization and IB
1-3 Discuss the major criticisms of globalization
Learning Objectives (2 of 2)
1-4 Assess the major reasons companies seek to
create value by engaging in IB
1-5 Define and illustrate the different operating
modes for companies to accomplish their
international objectives
1-6 Recognize why national differences in
companies’ external environments affect how
they may best improve their IB performance
The Globalized Business of sports
Factors in IB Operations
Objective 1-1
Figure 1.1 Factors in IB Operations
Learning Objective 6: Recognize why national differences in companies’ external environments affect how they may best improve their IB performance.
The conduct of a company’s international operations depends on two factors: its objectives and the means by which it intends to achieve them. Likewise,
its operations affect, and are affected by, two sets of factors: physical/social and competitive, as you can see from this chart.
Globalization and IB
Objective 1-1
What is Globalization?
Why Globalization?
The connection between Globalization and IB.
Why study IB?
Learning Objective 1: Relate globalization and international business (IB) to each other and explain why their study is important.
Globalization is the widening and deepening of interdependent relationships among people from different nations. The term sometimes refers to the elimination of barriers to international movements of goods, services, capital, technology, and people that influence the integration of world economies.
Globalization enables us to get more variety, better quality, or lower prices.
The global connections between supplies and markets result from the activities of IB, which are all commercial transactions.
Why study IB? Simply, it makes up a large and growing portion of the world’s business. There is a good chance each and every one of you will be involved in IB in some way or another, depending on the type of companies you work for. Studying IB is important because
• Most companies are either international or compete with international companies.
• Modes of operations may differ from those used domestically.
• It helps managers to decide where to find resources and
to sell.
• The best way of conducting business may differ by country,
• An understanding helps you make better career decisions.
• An understanding helps you decide what governmental policies to support.
The Forces Driving Globalization and IB
Objective 1-2
Globalization
Has been growing.
Is less pervasive than generally thought.
Has economic and noneconomic dimensions.
Is stimulated by several factors.
Learning Objective 2: Grasp the forces driving globalization and IB.
Although hard to measure, Globalization:
• Has been growing.
• Is less pervasive (unwelcome effects are less than what was thought) than generally thought. Fifteen percent of US consumption comes from other countries—many would think this number is much higher.
• Has economic and noneconomic dimensions (such as ease of travel, people to people contacts, use of technology).
• Is stimulated by several factors.
Currently, about a quarter of world production is sold outside its country of origin, compared to about 7 percent in 1950.
Studies beyond economic factors for the driving force of globalization state:
Size of countries—Smaller countries tend to be more globalized than larger ones, mainly because their smaller land masses and populations permit a lower variety of production.
Per capita incomes—Countries with higher per capita incomes tend to be more globalized than those with lower ones because their citizens can better afford foreign products, travel, and communications.
Variance among globalization aspects—Although a country may rank as highly globalized on one dimension, it may be low on another, such as the United States being high on technological scales but low on economic ones.
Case: Dubai Ports World
Factors in increased Globalization
Objective 1-2
Factors in increased Globalization
Rise in and application of technology
Liberalization of cross-border trade and resource movements
Development of services that support IB
Growth of consumer pressures
Increase in global competition
Changes in political situations and government policies
Expansion of cross-national cooperation
Learning Objective 2: Grasp the forces driving globalization and IB
Factors in increased Globalization:
Rise in and application of technology
Many of the proverbial “modern marvels” and efficient means of production have come about fairly recently. These include new products, such as handheld mobile communications devices, as well as new applications of old products, such as Indian guar beans in oil and natural gas mining. Thus, much of what we trade today either did not exist or was unimportant in trade a decade or two ago.
Strides in communications and transportation now allow us to discover, desire, and demand goods and services from abroad.
2. Liberalization of cross-border trade and resource movements
Barriers to trade are reduced. To protect its own industries, every country restricts the entry and exit of not only goods and services but also the resources—workers, capital, tools, and so on—needed to produce them. Such restrictions, of course, set limits on IB activities and, because regulations can change at any time, contribute to uncertainty. Over time, however, most governments have reduced such restrictions, primarily for three reasons:
Their citizens want a greater variety of goods and services at lower prices.
Competition spurs domestic producers to become more efficient.
3. They hope to induce other countries to lower their barriers in turn.
3. Development of services that support IB
Companies and governments have developed services that facilitate global commerce. For example, because of bank credit agreements—clearing arrangements that convert one currency into another and insurance that covers such risks as nonpayment and damage en route—most producers can be paid relatively easily for their sales abroad.
4. Growth of consumer pressures
More consumers know more today about products and services available in other countries, can afford to buy them, and want the greater variety, better quality, and lower prices offered by access to them. However, this demand is spread unevenly because of uneven affluence, both among and within countries as well as from year to year
5. Increase in global competition
Increased competitive pressures can persuade companies to buy or sell abroad. For example, a firm might introduce products into markets where competitors are already gaining sales, or seek supplies where competitors are getting cheaper or more attractive products.
6. Changes in political situations and government policies
Governments support programs, such as improving airport and seaport facilities, to foster efficiencies for delivering goods internationally.
For nearly half a century after World War II, business between Communist countries and the rest of the world was minimal. Today, only a few countries are heavily isolated economically or do business almost entirely within a political bloc. In fact, political changes sometimes open new frontiers, such as diplomatic relations between the United States and Cuba.
7. Expansion of cross-national cooperation
Governments have come to realize that their own interests can be addressed through international cooperation by means of treaties, agreements, and consultation. The willingness to pursue such policies is due largely to these three needs:
1. To gain reciprocal advantages
2. To attack problems jointly that one country acting alone cannot solve
3. To deal with areas of concern that lie outside the territory of any nation
Criticisms of Globalization and IB
Objective 1-3
Threats to sovereignty
Environment
Income equality
Increase to personal stress
Learning Objective 3: Discuss the major criticisms of globalization.
• Countries sovereignty is diminished.
Local objectives and policies may be negatively affected with pressure from globalization. In other words, countries may feel more pressure to confirm to global standards rather than stick with their own objectives and policies.
Smaller economies may have more dependence on larger countries
Cultural homogeneity—that is the change to everyone being the “same” across cultures and losing things like language.
The resultant growth hurts the environment.
Greater carbon footprint as products travel from country to country
Greater carbon footprint as a result of increased travel.
However, increased cooperation between countries to be concerned with environment may be an upside some people lose both relatively and absolutely.
Income inequality in that the disparity of incomes may grow more as globalization occurs greater insecurity increases personal stress.
Stress results from real and perceived economic social positions by individuals. Being able to see what others have/don’t have with the click of a button (TV, Internet) can cause stress.
Why engage in IB?
Objective 1-4
Sales expansion
Resource acquisition
Risk reduction
Learning Objective 4: Assess the major reasons companies seek to create value by engaging in IB.
Why do companies engage in IB:
Sales expansion: more potential customers worldwide
A company’s sales depend on consumers’ demand. Obviously, there are more potential consumers in the world than in any single country. Now, higher sales ordinarily create value, but only if the costs of making the additional sales don’t increase disproportionately.
Resource acquisition: lower costs, new or better products, additional operating knowledge.
Producers and distributors seek out products, services, resources, and components from foreign countries—sometimes because domestic supplies are inadequate (such as industrial diamonds in the United States). They’re also looking for anything that will create a competitive advantage. This may mean acquiring any resource that cuts costs.
Risk reduction: differences in business cycles, preventing competitors from gaining advantage
Selling in countries with different timing of business cycles can decrease swings in sales and profits (e.g., increasing sales stability through operations in countries that enter and recover from recessions at even slightly different times). Moreover, by obtaining supplies of products or components both domestically and internationally, companies may be able to soften the impact of price swings or shortages in any one country.
IB Operating Modes
Objective 1-5
Merchandise Exports and Imports
Service Exports and Imports
Investments
Learning Objective 5: Define and illustrate the different operating modes for companies to accomplish their international objectives.
Merchandise exports and imports.
Tangible products—goods—that are respectively sent out of and brought into a country.
Service exports and imports and are referred to as invisibles.
The provider and receiver of payment makes a service export; the recipient and payer makes
a service import. Services constitute the fastest growth sector in international trade and take
many forms.
For example:
• Tourism and transportation.
• Service performance—services such as banking who charges fees.
• Asset use—Royalties from licensing agreements.
Investments
Direct (FDI) In foreign direct investment (FDI), sometimes referred to simply as direct investment, the investor takes a controlling interest in a foreign company.
Portfolio Investments: a noncontrolling financial interest in another entity. It consists of shares in or loans to a company (or country) in the form of bonds, bills, or notes purchased by the investor.
Types of International Organizations
Objective 1-5
Multinational Enterprise
Collaborative Arrangements
Strategic Alliance
Learning Objective 5: Define and illustrate the different operating modes for companies to accomplish their international objectives.
Multinational enterprise or MNE (sometimes called MNC or TNC) is a company with foreign direct investments.
Basically, an “international company” is any company operating in more than one country, but a variety of terms designate different ways of operating.
Collaborative arrangements denotes companies’ working together, for example:
Joint ventures.
Licensing agreements.
Management contracts, minority ownership.
Long-term contractual arrangements.
Strategic Alliance is sometimes used to mean the same as collaborative arrangement, but it usually refers either to an agreement that is of critical importance to a partner or one that does not involve joint ownership.
Factors Affecting Ability to Operate Abroad
Objective 1-6
Physical factors
Institutional factors
Competitive factors
Learning Objective 6: Recognize why national differences in companies’ external environments affect how they may best improve their IB performance.
Physical factors.
Geographic: Geographic barriers—mountains, deserts, jungles, and land-locked areas—often affect communications and distribution channels. And the chance of natural disasters and adverse climatic conditions can make business riskier in some areas than in others while affecting supplies, prices, and operating conditions in far-off countries.
Demographic: Finally, countries’ populations differ in many ways, such as density, education, age distribution, and life expectancy. These differences impact IB operations, such as market demand and workforce availability.
Institutional factors.
Institutions refer to “systems of established and prevalent social rules that structure social interactions. Language, money, law, systems of weights and measures, table manners and firms (and other organizations) are thus all institutions. Examples include:
Culture
Politics
Law
Economy
Competitive factors (such as the number and strength of suppliers, customers, and rival firms)
Products compete by means of cost or differentiation strategies, the latter usually by developing a favorable brand image, usually through advertising or from long-term consumer experience with the brand; or developing unique characteristics, such as through R&D efforts or different means of distribution
BIN3022-N Global Economics and Business Operations
Lecture 2: Trade Protectionism
Dr Dongna Zhang
Learning Objectives (1 of 2)
1 Recognize the conflicting outcomes of trade
protectionism
2 Assess governments’ economic rationales and
outcome uncertainties with international trade
intervention
3 Assess governments’ noneconomic rationales
and outcome uncertainties with international
trade intervention
Learning Objectives for the chapter.
Learning Objectives (2 of 2)
4 Describe the major instruments of trade control
5 Classify how companies deal with governmental trade influences
Learning Objectives for the chapter.
The trade war
Protectionism
Objective 1
What is protectionism?
Learning Objective 1: Recognize the conflicting outcomes of trade protectionism.
Governmental actions to influence international trade are known as protectionism.
This figure illustrates the variety of factors that can affect trade restrictions and trade enhancements.
Protectionism
Objective 1
Why do governments intervene in trade?
Stakeholders and protectionism
Learning Objective 1: Recognize the conflicting outcomes of trade protectionism.
Despite free-trade benefits, governments intervene in trade to attain economic, social, or political objectives
Proposals on trade regulations often spark fierce debate among people who believe they will be affected—the so-called stakeholders. Of course, those most directly affected are most apt to speak out, such as workers, owners, suppliers, and local politicians whose livelihoods depend on the actions taken.
Economic Rationales for Trade Restrictions
Objective 2
To fight unemployment
To protect infant industries
To develop an industrial base
Economic relationships with other countries
Learning Objective 2: Assess governments’ economic rationales and outcome uncertainties with international trade intervention.
Import restrictions to create domestic employment
may lead to retaliation by other countries,
affect large and small economies differently,
reduce import handling jobs,
may decrease jobs in another industry, or
may decrease export jobs because of lower incomes abroad.
The infant-industry argument says that production becomes more competitive over time because of
increased economies of scale, and
greater worker efficiency.
To develop an industrial base: Since the industrial revolution, countries increasing their industrial bases grew their employment and economies more rapidly. This observation led to protectionist arguments to spur local industrialization. These arguments have been based on the following assumptions:
Surplus workers can increase manufacturing output more easily than agricultural output.
Import restrictions lead to foreign investment inflows, which provide jobs in manufacturing.
Prices and sales of agricultural products and raw materials fluctuate widely, which is a detriment to economies that depend heavily on them, especially if the dependence is on just one or a few commodities.
Markets for industrial products grow faster than markets for both agricultural and raw material commodities.
Economic Relationships with other countries: Nations monitor their absolute economic situations and compare their performance to other countries. Among their many practices to improve their relative positions, four stand out: making balance-of-trade adjustments, gaining comparable access to foreign markets, using restrictions as a bargaining tool, and controlling prices.
Noneconomic Rationale for Trade Restrictions
Objective 3
Maintain essential industries
Promoting acceptable practices abroad
Maintain or extend spheres of influence
Preserve national culture
Learning Objective 3: Assess governments’ noneconomic rationales and outcome uncertainties with international trade intervention.
Maintaining essential industries (especially defense): not dependent on foreign supplies during hostile political periods.
Promoting acceptable practices abroad: Governments limit exports, even to friendly countries, of strategic goods that might fall into the hands of potential enemies. They also limit exports and imports to compel a foreign country to change some objectionable policy or capability. The rationale is to weaken the foreign country’s economy by decreasing its foreign sales and by limiting its access to needed products, thus coercing it to amend its practices on some issue such as human rights, environmental protection, military activities, and production of harmful products.
Maintaining or extending spheres of influence: Governments use trade to support their spheres of influence—giving aid and credits to, and encouraging imports from, countries that join a political alliance or vote a preferred way within international bodies.
Preserving national culture: To help sustain a collective identity that sets their citizens apart from other nationalities, governments prohibit exports of art and historical items deemed to be part of their national heritage. In addition, they limit imports that may either conflict with or replace their dominant values.
China’s rare earth elements strategy
Instruments of Trade Control: Tariffs
Objective 4
Tariff (Duty)
Types of Tariffs
Why are Tariffs levied?
Learning Objective 4: Describe the major instruments of trade control.
Tariff barriers directly affect prices, and nontariff barriers may directly affect either price or quantity. A tariff (also called a duty) is a tax levied on a good shipped internationally. That is, governments charge a tariff on a good when it crosses an official boundary— whether it be that of a nation or a group of nations that have agreed to impose a common tariff on goods crossing the boundary of their bloc.
Tariffs may be levied:
on goods entering, leaving, or passing through a country,
for protection or revenue, or
on a per-unit basis, a value basis, or both.
A tariff assessed on a per-unit basis is a specific duty, on a percentage of the item’s value an ad valorem duty, and on both a compound duty
How the trade war hurts US farmers
Instruments of Trade Control: Non-tariff
Objective 4
Subsidies
Aids and Loans
Quotas
Buy Local Legislation
Specific Permission Requirements
Administrative Delays
Learning Objective 4: Describe the major instruments of trade control.
Subsidies offer direct assistance to companies to boost their competitiveness. Although this definition is straightforward, disagreement on what constitutes a subsidy causes trade frictions. In essence Governmental subsidies may help companies be competitive.
But there is little agreement on what a subsidy is.
Agricultural subsidies are difficult to dismantle. Especially to overcome market imperfections because they are at least controversial
The one area in which everyone agrees that subsidies exist is agriculture especially in developed countries. The official reason is that food supplies are too critical to be left to chance. Although subsidies lead to surplus production, they are argued to be preferable to the risk of food shortages.
Aid and Loans: When governments require foreign aid and loan recipients to spend the funds in the donor country, a situation known as tied aid or tied loans, some otherwise noncompetitive output can compete abroad. For instance, tied aid helps win large contracts for infrastructure, such as telecommunications, railways, and electric power projects.
A quota limits the quantity of a product that can be imported or exported in a given time frame, typically per year. Import quotas normally raise prices because they (1) limit supplies and (2) provide little incentive to use price competition to increase sales. A specific type of quota that prohibits all trade is an embargo. As with quotas, a country or group of countries may place embargoes on either imports or exports, on particular products regardless of origin or destination, on specific products with certain countries, or on all products with given countries.
Buy local legislation sets rules whereby governments give preference to domestic production in their purchases.
Specific Permission Requirements: Countries may require that importers or exporters secure governmental permission (an import or export license) before transacting trade.
Administrative delays: Closely akin to specific permission requirements are administrative customs delays that may be caused by intention or inefficiency.
How Companies Deal with Governmental Influences
Objective 5
Threats from import competition
Options for companies:
Convincing decision-makers
Involving the industry and stakeholders
Preparing for changes in the competitive environment
Learning Objective 5: Classify how companies deal with governmental trade influences.
When companies are threatened by import competition, they have several options, four of which stand out.
Move operations to another country.
Concentrate on market niches that attract less international competition.
Adopt internal innovations, such as greater efficiency or superior products.
Try to get governmental protection.
BIN3022-N Global Economics and Business Operations
Lecture 3: Forms and Ownership of Foreign Production I
Dr Dongna Zhang
Learning Objectives (1 of 2)
1 Comprehend why export and import may not
suffice for companies’ achievement of IB
objectives
2 Explain why and how companies make wholly owned foreign direct investments
3 Ascertain why companies collaborate in
international markets
Learning Objectives for the chapter.
Learning Objectives (2 of 2)
4 Compare different international collaborative arrangements
5 Grasp why IB collaborative arrangements succeed
Learning Objectives for the chapter.
Foreign Expansions
Objective 1
Foreign Expansions: Alternative Operating Modes
Learning Objective 1: Comprehend why export and import may not suffice for companies’ achievement of IB objectives.
This figure shows alternate foreign expansion (as opposed to export).
Why Export and Import May Not Suffice
Objective 1
Advantages to locate production in another country as opposed to exporting:
Production costs
Transportation costs
Domestic capacity
Product alterations
Trade restrictions
Country of origin
Learning Objective 1: Comprehend why export and import may not suffice for companies’ achievement of IB objectives.
Companies may find more advantages to locate production in foreign countries than export to them. The advantages occur under six conditions, when,
production abroad is cheaper than at home,
transportation costs are too high for moving goods or services internationally,
companies lack domestic capacity,
products and services need to be altered substantially to gain sufficient consumer demand abroad,
governments inhibit the import of foreign products, or
buyers prefer products originating from a particular country.
Why Wholly-Owned FDI?
Objective 2
Market Failure
Internalization Theory
Appropriability Theory
Freedom to Pursue Global Objectives
Learning Objective 2: Explain why and how companies make wholly owned foreign direct investments.
Recap: foreign direct investments (FDI): . It is an operation in which an investor holds a controlling interest in a foreign company.
There are four primary explanations for companies to make a wholly owned FDI.
Market Failure Collaboration is appealing as an entry strategy because it is a means whereby a firm may reduce its liability of foreignness. But this works only if management can find an associate knowledgeable about the host country at acceptable terms, which may be impossible since such companies may be inadequately equipped to deal efficiently with the entry company’s technology.
Internalization Theory: Internalization is control through self-handling of operations. The concept comes from transactions cost theory, which holds that companies should seek the lower cost between self-handling of operations and contracting another party to do so for them.
Appropriability Theory: The idea of denying rivals access to resources is called the appropriability theory. Companies are reluctant to transfer vital resources—capital, patents, trademarks, and management know-how—to another organization for fear of their competitive position being undermined.
Freedom to Pursue Global Objectives. A wholly owned foreign operation permits a company to more easily participate in a global strategy.
Acquisition versus Greenfield
Objective 2
Acquisition
Greenfield Investments
Leasing
Learning Objective 2: Explain why and how companies make wholly owned foreign direct investments.
Acquisition: One reason for a company to invest abroad via acquisition is to obtain some vital resource that may otherwise be slow or difficult to secure.
Making Greenfield Investments: Foreign companies may face local roadblocks to acquisitions. For example, local governments may want more competitors in the market because of fearing market dominance. In addition, a foreign company may find that development banks prefer to finance new operations because they create new jobs.
Leasing: This mode is much like an acquisition, but one that forgoes the need to invest. While common in the hospitality industry, it is not common in others. Although companies in other industries might lease certain assets abroad—computers, vehicles, buildings—such arrangements are quite different from leasing an entire operating facility.
Foreign Investments in Hotel Industry
Questions?
Global Economics and Business Operations
Dr. –Ing. Rajesh Shankar Priya
Lecturer in Business and Management
TUBS
R.ShankarPriya@tees.ac.uk
Welcome to the Business Operations element of your module!
Global Economics
The first part of your module investigated the operation of the global economy, looking particularly at international trade, the importance of multinational enterprises and foreign investment, and the growth and development of economics. Other internationally important global economic issues were also examined, such as globalisation and environmental policy.
Business Operations
In this part of the module, emphasis is on the management methods used to aid resource allocation and decision making in organisations. The natures of operational processes are examined and techniques are developed and applied.
Short Introduction
Module Leader for the Business Operations
15 Years of Business, Technology and Management Experience
Engineering Doctorate in Supply Chain from University of Warwick
Studied and Worked in different countries
I am here to help you
All information about the module is in Blackboard
Overall – Learning Objectives for BOP
Operations strategy and operations management
The nature of operational processes and the concept of client oriented value chains
Optimisation, allocation and resource management issues
Design issues relating to operational processes, quality and service delivery
Assessing, evaluating and improving performance in processes and functions
The role of information and digital technologies in supporting operational processes and functions
How has COVID-19 changed the Business Landscape
Source: McKensie
Source: KPMG
Welcome to the Business Operations element of your module!
Image Source: Locus
Reading lists of the modules for Business Operations can be found in the Blackboard!
Questions?
Global Economics and Business Operations
Image Source: Sripak .et.al
Basics of Operations
Self-sufficiency?
Still needed initial supplies!
And what about …
Metals?
Glass?
Tiles?
Global Economics and Business Operations
What is Operations Management?
Inputs
Transformation of Inputs
Outputs (Product or Service)
Money put in…
…operations take place…
…wealth is generated…
…by owners,
…by investors
…and distributed to…
Slide illustrates working capital cycle: input; transformation; output; redistribution of wealth.
Building is Clark’s first shoe factory.
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Effect of transformation process on working capital
working capital converted
into assets
assets used in the
business operations
assets converted back
into wealth
working capital
money paid
wealth generated
breakeven point
Breakeven illustration.
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Money buys resources to use in the business. . .
Money is received from customers…
Premises
Equipment
Labour
Utilities
Vehicles
Materials
Etc
Money is used in the transformation process – either manufacturing or service provision
working capital / budget
business assets
Working capital cycle: focus on money received, either form customers directly, or indirectly through taxation and budgets for public sector operations.
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input…
transformation…
output!
service provision
Input; transformation; output in education.
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input…
transformation…
output
manufacturing operations
Example of input; transformation; output in steel industry.
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Global Economics and Business Operations
Image Source: Sripak .et.al
Global Economics and Business Operations
Image Source: Slack & Lewis 2001
Operations Strategy
Manufacturing strategy content model (based on Leong et al. 1990)
Competitive priorities
Decision categories
Business Strategy
Manufacturing Strategy
Competitive Priorities
Decision Categories
Business Strategy
Manufacturing Strategy
Business Strategy
Manufacturing Strategy
Competitive Priorities
Decision Categories
Manufacturing Capabilities
Manufacturing Performance
Cost
Delivery
Quality
Flexibility
Structural
Infra-Structural
Productivity
Efficiency
External
Internal
Competitive priorities
Quality Manufacture of products with high quality and Performance Standards
Delivery Reliable (on time) and fast (short delivery lead time)
Cost (Production and distribution of the product at low cost )
Flexibility (Ability to handle volume and product mix changes)
Competitive priorities
Competitive priorities defines the set of manufacturing objectives and represents the link to market requirements (e.g. Hayes and Wheelwright, 1984; Leong et al. 1990; Dangayach and Deshmuhk, 2001; Slack and Lewis, 2002; Greasley, 2006).
Dimensions commonly used are; cost, quality, flexibility, and delivery (Hayes and Wheelwright, 1984; Leong et al. 1990; Garvin, 1993; Hill, 2000)
some studies suggests innovativeness and service as additional priorities BUT empirical research and strategy theories consistently stress the four basic dimensions (Schmenner and Swink, 1998; Ward et al., 1998; Boyer and Lewis, 2002; Größler and Grübner, 2006; Schroeder et al., 2006).
Manufacturing strategy as the link between market requirements and manufacturing (e.g. Hill, 2000; Slack and Lewis, 2002; Greasley, 2006)
Among the competitive priorities there are often trade-offs inherent and to focus the attention to certain dimensions is the essence in the factory focus literature drawing on Skinner’s (1974) work.
Hill (1995) presented the concept of order winners and qualifiers related to the importance of competitive priority dimensions.
Qualifying criteria (dimensions) are those that a company must meet for the product to even be considered in the market place. Common criterions considered qualifiers are conformance quality and delivery reliability (Hill 1998)
Global Economics and Business Operations
Image Source: Slack & Lewis 2001
Real World Examples
Supply Chain
Manufacturing
Production
IT
Global Economics and Business Operations
Image Source: Slack & Lewis 2001
Global Economics and Business Operations
Image Source: Sripak .et.al
What are Operations?
productive functions or systems that transform inputs into outputs of greater value
What is Operations Management?
the design, operation, and improvement of productive systems
What is a Transformation Process?
a series of activities along a value chain extending from supplier to consumer
Global Economics and Business Operations
Image Source: Sripak .et.al
Some definitions …
Logistics = Supply + Materials Management + Distribution
Rushton et al (2006)
Supply Chain Management (SCM) can be defined as the management of flows of goods between the different stages in a supply chain in order to minimise system-wide cost and satisfy customer requirements.
Seliaman (2012)
Global Economics and Business Operations
Image Source: Sripak .et.al
Killingsworth (2011)
Basic static supply chain
Supplier
Factory
Distributor
Retail
Customer
Constant Production and Shipments
Constant Orders
Global Economics and Business Operations
Image Source: Sripak .et.al
Decision-making framework for operations in the supply chain
Schroeder et al (2013)
Global Economics and Business Operations
Image Source: Sripak .et.al
In the context of flows of goods between the different stages of a supply chain, write down a definition of
Flow:
The volume of goods passing a particular point in the supply chain per specified time interval.
E.g. The shipment rate from a supplier is 100 tonnes per week.
Level:
The volume of goods stored at a particular point in the supply chain at a particular time.
E.g. The goods inventory in the warehouse is 500 tonnes.
Transformation Processes
Physical: as in manufacturing operations
Locational: as in transportation or warehouse operations
Exchange: as in retail operations
Physiological: as in health care
Psychological: as in entertainment
Informational: as in communication
Nature of different transformation processes.
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Operations: Transforming Inputs into Outputs
Environment, National/Global Economy and Government Regulations
Performance Measurement and Control – Quality
INPUTS
People
Materials
Energy
Capital
Data
RESOURCES
OUTPUTS
Services
Goods
Information
PRODUCTS
OPERATIONS PROCESSES
Illustrates concept of Input; Transformation; Output model as basis for business operations management.
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