PS4S26, Operations Management and Research Dr Gareth RT White

Module Format Weekly lecture and tutorial Team Gareth RT White Ademola Afoloyan

Module Format Wk1 Introduction Wk2 Operations Wk3 People Wk4 Quality Wk5 Processes Wk6 Assignment Workshop Wk7 Sustainability Wk8 Assessment Review

Module Assessment Reflective Analysis Report The Portfolio shall be 2000-2500 words in length. At the beginning of the module you will identify ONE personal skill that you aim to develop and improve. Your Reflective Analysis will detail WHAT YOU DID to improve that skill and HOW EFFECTIVE your efforts have been. Report The Report shall be 3000-3500 words in length. It will require you to examine the Job Description for an Operation Manager’s position. Using appropriate theory, literature, techniques and approaches that you have encountered in the module, discuss the following: What are likely to be the operational challenges that the successful candidate would face? (20%) How would you address the main issues? (80%)

Operations – Strategic Significance “For most countries, manufacturing is the most significant wealth-creating activity” (Hill & Hill, 2009, p4) Traditional manufacturing nations have lost ground Emerging nations are competing on a global scale

Operations – Strategic Significance Losing ground in the manufacturing sector: Failing to recognize competition Over-capacity Lack of R&D investment Short term focus and lack of experience

Operations – Strategic Significance “Overcapacity means…productivity will remain key to an organization’s success” (Hill & Hill, 2009, p9) this reinforces the strategic importance of Operations Management

Operations – Strategic Significance Comparative Measures: Country vs Country Sector vs Sector Company vs Company Site vs Site Productivity Labour Productivity Total Factor Productivity

Operations – Strategic Significance Corporate strategy may be defined as: The direction and scope of an organization over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations (Johnson, Scholes and Whittington, 2008) A firm’s theory about how to gain competitive advantage (Barney and Hesterly, 2008)

Operations – Strategic Significance Manufacturing strategy may be defined as The development and deployment of manufacturing capabilities in total alignment with the firm’s goals and strategies (Swamidass, 1989) The patterns of decisions in major areas of manufacturing operations, and the domain of manufacturing as those activities that encompass product design and manufacture, including production planning and control policies, plant layout and location, logistics, manufacturing process technology decisions, degree of vertical integration, and assignment of activities to plants in a multi-plant network (Weelwright, 1984) How the operations management function contributes to a firm’s ability to achieve its competitive advantage in that marketplace (Davis, Aquilano and Chase, 2003)

Operations – Strategy Development The components of corporate and functional strategy are usually simplified: Marketplace Corporate Strategy Marketing Strategy Manufacturing Strategy Finance Strategy SWOT and STEEPLE frameworks

Operations – Strategy Development Internal stakeholders Employees Trade Unions Functional or Departmental Managers When developing complementary functional strategies the Functional or Department Managers are always significant stakeholders. Forms of Internal Stakeholder Power: Formal, through the ability to make decisions Informal, by being charismatic By having control of important resources Through possession of specialist knowledge and skills By having power over others through negotiation (Adapted from Johnson, Scholes and Whitington, 2008)

Operations – Strategy Development Different stakeholders have different levels of interest and power, and are managed differently: Level of Interest low high low A – Minimal Effort B – Keep Informed C – Keep Satisfied D – Key Players A B Level of Power C D high

Operations – Strategy Development “Since operations accounts for some 60-70 per cent of assets, expenditure and people, operations managers must be more involved in strategic decisions and senior executives must fully appreciate their arguments” (Hill & Hill, 2009, p14) Decline in Manufacturing Output Decline in Skilled Operations Managers

Operations – Strategy Development Other factors can also influence manufacturing strategy development and effectiveness: Organisational culture and learning (Fang and Wang, 2006) “firms that wish to raise their manufacturing quality and capability should also be concerned about organizational structure, decision models and managerial styles.” Organizational culture (Bates, Amundson, Schroeder and Morris, 1995) “a manufacturer with a well-aligned and implemented manufacturing strategy exhibits a group-oriented culture with coordinated decision making, decentralized authority and a loyal workforce.”

Operations – Strategy Development Generic plan of strategy development:

Operations – Strategy Development “The failure of a company to monitor its competitors is at best a mark of corporate complacency and at worst a sign of strategic naivety” (Hill & Hill, 2009, p97) Can be undertaken in different ways: Internal comparison between areas of the same company External against direct competitors External against similar non-competitors External against dissimilar industry leaders

Operations – Strategy Development Strategies are: Market-driven Market-driving Combination of both Developed iteratively strategy must change to fit shifting markets strategy may change to accommodate changes in capabilities

Operations – Strategy Development The process of strategy development can be broadly divided into two phases and five stages: Analyze Markets Develop an Operations Strategy Agree markets Determine market order-winners and qualifiers Identify key strategic task Review current performance and identify improvements Prioritize investment and development See: Exhibit 4.1, p112-113

Operations – Strategy Development Business Focus:

Operations – Strategy Development Operations Focus: Individual manufacturing facilities will also require focusing upon the needs of their intended market and their intrinsic capabilities.

Operations – Strategy Development Maintaining Focus Strategy development is iterative corporate strategy cascades into manufacturing strategy while manufacturing capabilities feed into corporate strategy manufacturing strategy needs to harmonize with other functional strategies Strategies are dynamic corporate strategy must take account of changes in the marketplace as well as changes (improvements) in internal capabilities

Activity Identify the ONE SKILL that you will improve upon over the duration of this module. Also Explore the skill of ‘reflective writing’. Prepare the first part of your Portfolio: reflect upon this week!