1. Prepared By: Reham Al-Homayan Review class Process Book

2. Prepared By: Reham Al-Homayan Please read the case study and answer the following questions. Smith Wholefoods case study

3. Prepared By: Reham Al-Homayan Q1 : Think about this organization as an open system, and Identify the main activities it performs. List the main inputs and the main outputs of the operations. Q2: Kats & Khan sets 5 sub-systems at work. Identify them according to the case. Q 3: What is the dominant transformed resources-materials, information or customers? List all the information resources you find it in the case. Q4: Identify Porter value chain and choose one area from the primary activities of Smith Wholefoods and apply it to the Porter’s value chain. Q5: “ All parts of the organization are operations” Explain this statement through examples.

4. Prepared By: Reham Al-Homayan Q6: what the advice you might suggests to Mr. smith to shift into capabilities based competitors, and identify the 4 basic principles of capabilities based competitors to clarify the idea. Q7: “For their success, processes should be systems focused”. Discuss this statement using materials and examples from the B200 Processes module. Q8: Discuss why an organisation might choose to recall its products and how this recall take place. Give examples from the B200 Processes module. Q9: Define (OMC) and how can be applied to the case study Q10: 3- Effective logistics management can provide a major source of competitive advantage. Explain. Q11: What are the means to control the manufacturing system? and What are the five inter-related stages of manufacturing system design?

5. Prepared By: Reham Al-Homayan Q1 : Think about this organization as an open system, and Identify the main activities it performs. List the main inputs and the main outputs of the operations. The company as an open system have direct interact with the environment. Open system have 3 major characteristics: Receive input from environment Convert input to output Discharge their outputs into their environment. Environment Input Conversion Output Materials Ideas Staff Finance (budget) Location Manufacturing packaging Marketing Planning Production Bakery Service Breads Crispy potato Cakes

6. Prepared By: Reham Al-Homayan Kats & Khan sets 5 sub-systems at work. Identify them according to the case. Production sub-system: concern with bread and potato production (manufacture, customer service, products, …) Supportive sub-system: concern with relationship between the organization and external environment. ( café, bakery). Maintenance sub-system: concern with stability of the organization (Management rules and reward the staff). Adaptive sub-system: concern with what the organization might become. How the manufacture is working and deliver services and product in unique way. ( more branches ) Managerial sub-system: controlling, coordinating, planning, and taking decision. Ch 1 p 11

7. Prepared By: Reham Al-Homayan What is the dominant transformed resources-materials, information or customers? List all the information resources you find it in the case. The transformation process in operations is closely connected with the nature of its transformed input resources. Transformation mean using resources to change the state or condition. Material Process: Wholefoods using raw materials to develop their products (breads, cakes, potato crisp) Information Process: Wholefoods using customer’s ideas and suggestions to design new products. Customers Process: more branches in the village, and improve the product quality. Ch 2 p 20-21

8. Prepared By: Reham Al-Homayan Identify Porter value chain and choose one area from the primary activities of Smith Wholefoods and apply it to the Porter’s value chain. Value chain definition Select primary activity (e.g sales & marketing). Ch 5 p 51 – 56 & Fig 5.3 p 57

9. Prepared By: Reham Al-Homayan Answer Q5 -Identify operation in the organization, the major and support function -Explain how the organization departments & management are working effectively to reach the goal. -Examples by using table 2.1 p 16 Ch. 2 P. 15 to 17

10. Prepared By: Reham Al-Homayan Answer Q 6: - To be a competitor we need to focus on some effective points ( 5 dimensions) speed, consistency, acuity, agility & innovativeness. -I identify the 4 steps that transferee the company into capabilities- based competitor. -More clarification by mention the 4 principles. Ch. 4 p. 42 - 47. Answer Q 7: Define process, system, competitive advantage, transformation process, OMC, logistic management, …….and any related topic. Ch 1, 2, 11, 14, ….

11. Prepared By: Reham Al-Homayan Answer Q8 Identify reverse logistic Classes of recall Steps of recalling Mention examples Ch 12 P 171 Fig 12.1 Answer Q9 Identify OMC, explain each order with example. It can be apply through Improve product Pricing Café Working hours Distribution Management & staff Ch14 p. 188 – 190

12. Prepared By: Reham Al-Homayan Answer Q10 Identify logistics, productivity advantage, value advantage, supply chain management. Ch 11 p.150 – 153 Fig 11.3 Answer Q11 Manufacturing systems must be adaptive to survive through the control system which consider to be a dynamic process to ensure efficiently meet the system objective. Manufacturing system at all levels has to see controller function, information flow system, computers, …. There are two areas of control which have to integrate in practice: Process control – Production control Identify 5 stages Ch 10 p 141 - 144

13. Chapter 1 Organizations As Systems The three major characteristics of open systems are as follows (Fig 1.2): –They receive inputs or energy from their environment –They convert these inputs into outputs –They discharge their outputs into their environment. Systems are divided into sub-systems. In organizations the sub-systems are the various departments. The boundaries between sub-systems are called interfaces Boundaries are based on relationship The result of Management decision and choices that really determines where the organization ends and the environment begins. Prepared By: Reham Al-Homayan

14. Kats & Khan They identified 5 subsystems at work in an Organization: Production or technical sub-system 1.Supportive sub-system 2.Maintenance sub-system 3.Adaptive sub-system 4.Managerial Sub-system Prepared By: Reham Al-Homayan

15. Chapter 2 Effective Operations Management IKEA owes its success to the effectiveness of its operations management, who provide: 1-a smooth customer flow; 2-a clean, well-designed environment; 3-sufficient goods to satisfy demand; 4-sufficient staff to serve customers and stock the warehouse; 5-an appropriate quality of service; 6-a continuous stream of ideas to improve its, already impressive, operations performance. Prepared By: Reham Al-Homayan

16. Operations in the organization Here we divide the organization major functions: the marketing function, the accounting and finance function and the product/service development function. And support functions, which supply and support the operations, function, including: The human resources function, the purchasing function and the engineering/technical function. The operations function of the organization is the arrangement of resources which is devoted to the production of its goods and services. Operations managers are the staff of the organization who have particular responsibility for managing some, or all, of the resources which comprise the operations function. Operations management is the term which is used for the activities, decisions and responsibilities of operations managers. Prepared By: Reham Al-Homayan

17. THE TRANSFORMATION PROCESS MODEL All operations produce goods or services or a mixture of the two, and they do this by a process of transformation. By transformation we mean that they use their resources to change the state or condition of something to produce outputs. For example, hospitals have inputs of doctors, nurses and other medical staff, administrators, cleaning staff, beds, medical equipment, pharmaceuticals, blood, dressings, and so on. Their purpose is to transform sick patients into healthy patients. The outputs from the operation are treated patients, medical test results, medical research and 'best practice' medical procedures. Prepared By: Reham Al-Homayan

18. The inputs to an operation can be conveniently classified as either: 1-transformed resources – the resources (mixture of customers, information and materials) that are treated, transformed or converted in some way; or 2-transforming resources – there are 2 types of operations blocks : the resources that act upon the (for example facilities like building and equipment, the staff who run and manage the operation) transformed resources. Prepared By: Reham Al-Homayan

19. Outputs from the transformation process The outputs from the transformation process are goods are services, which are generally seen as being different, for several reasons: Tangibility- Goods are usually tangible. Storability- Partly because of tangibility, goods can also be stored Transportability- the ability to transport goods. Simultaneity- services are often produced simultaneously with their consumption, happened at the same time as you 'consumed' the service by follow up through the process) ) buying it. Customer contact- in services, because they are produced and consumed simultaneously, they must have high contact between the customer and the operation. Quality- Prepared By: Reham Al-Homayan

20. Chapter 4 Competing on Capabilities by Stalk, Evans and Shulman. A capability is a set of business processes strategically understood. Capabilities based competitors identify their key business processes, manage them centrally, and invest in them heavily, looking for a long term payback. Capabilities based-Competition, is a new concept of corporate strategy that focus on generate new business, speed, quality respond to customer, enter new business. 4 Principles of Capabilities Based Competition. Companies suggest 4 basic principles: is the way of deliver value to the customer. begin with identify customer needs & end with satisfying them all organizations parts need to work together. building strategic capabilities need special supervision and management. Prepared By: Reham Al-Homayan

21. To win the competition we need to focus on five dimensions: Speed, the ability to respond quickly to customer or market demand by creating new ideas and use technology. Consistency, the ability to produce product that satisfies customers’ expectations. Acuity, the ability to see competitive environment and understand customers. Agility, the ability to adapt to different business environments in the same time. Innovativeness, the ability to generate new ideas by combining existing elements and create new source of value. 4 steps to transform to a capabilities based competitor: Shift the strategic framework to achieve aggressive goals choose the qualified staff, training, roles Staff evaluation and customer feedback Do not delegate the leadership of the transformation (CEO) Prepared By: Reham Al-Homayan

22. Chapter 5 The Value Chain and Competitive Advantage by Michael Porter Each organization is a collection of several activities (products, market, deliver, & support) these activities represented by value chain. The value chain is to analyze the specific activities through which firms or organizations can create a competitive advantages. Primary or support value chain. Primary value chain activities: the goal is to create the value that exceeds the cost of providing the product or service. The activities are: Inbound logistic: Receiving input Operation - Material handling Outbound logistic Marketing & sales - advertising and getting buyers Customer services. - Service Prepared By: Reham Al-Homayan

23. Support value chain activities which support the primary value, and the goal is to viewed as overhead to develop a competitive advantages through 4 categories: Procurement, purchasing inputs such as materials, supplies and equipments. Technology development, research and technology development to support the value chain. Human Resources management, recruiting, development, training, … Firm infrastructure, organizational structure, control system, culture, finance, quality, management. There are 4 dimensions of scope that affect the value chain: Segment scope …product they sell or customers they deal with Geographic scope … region, countries (canon factory in Japan but sell them through an offices around the world) Vertical scope … division activities between firm, suppliers and buyers, decide either to perform the activities or using external Industry scope … the range of related industries in which the firm competes with a coordinated strategy. Prepared By: Reham Al-Homayan

24. Chapter 6 Marketing in a Changing World by Kotler, Armstrong, Saunders, and Wong Marketing touches all of us every day of our lives. How? In other words marketing is a process by which organizations acquire customers. To be attractive to customers, the products and services offered must provide value. Selling and promotion are part of a larger marketing mix : the set of marketing tools that work together to affect the marketplace. We have to examine the needs, wants, and demands; products; value and satisfaction; exchange, transactions and relationships; and markets. Prepared By: Reham Al-Homayan

25. Marketing Management Marketing management is demand management. “the analysis, planning, implementation and control of programmes designed to create, build and maintain beneficial exchanges with target buyers for the purpose of achieving organisational objectives.” Marketing managers might face any of the following states of demand: ( various seasonal demand ) Irregular Demand Full Demand No Demand Not satisfied products ) ) Latent Demand Dislike products ) ) Negative Demand Very high ) ) Overfull Demand Chicken and diseases ) ) Falling Demand Prepared By: Reham Al-Homayan

26. Marketing Management Philosophy, the way to approach the buyers by understanding the interest for customer and society. There are five alternative concepts under which organizations can conduct their marketing activities: The production concept When demand exceeds supply, the management need to increase production The product concept organizations should make continuous product improvement. The selling concept Some products need more promotions. The marketing concept Under the marketing concept, organizations produce what consumers want, thereby satisfying consumers and making profit The societal marketing concept Need to know the environmental problem, resources shortage, economic problem, social service. Prepared By: Reham Al-Homayan

27. The 4 goals of the marketing system Marketing system affects both buyers & sellers. Buyers want best quality at reasonable price in convenient locations. Sellers face challenging when preparing the offer for the market. product, consumer, environment, promotion, new ideas. The marketing system goals are: Maximize consumption: which will create maximum production, employment, and wealth. As the more people spend, buy, and consume the happier they are. Maximize consumer satisfaction: the consumer satisfaction is difficult to measure, therefore, some companies develop ways to measure customer satisfaction.. Maximize choice: this would increase the cost to produce verities Maximize life quality, this include quality, quantity, availability, cost, and environment. Marketing challenge, changing world economy, ethics and procedures, competition, …. Prepared By: Reham Al-Homayan

28. Chapter 11 Logistics and Competitive Strategy by Martin Christopher Logistic is the process of strategically managing the procurement, movement and storage of materials, parts and finished inventory through the organization and its marketing channels in such a way that current and future profitability are maximized through the cost- effective fulfillment or orders. Effective logistics management can provide a major source of competitive advantage. How? Prepared By: Reham Al-Homayan

29. Updated by: Reham S. Al- Homayan Simple model is “Competitive Advantage and the Three Cs”. The advantage of 3Cs First: The ability of the organization to differentiate itself, in the eyes of the customer, from its competition. Second : By operating at a lower cost and hence at greater profit. Needs seeking benefits At acceptable prices Assets and Utilisation Assets and Utilisation Customers Company Competitor VALUE

30. Productivity Advantage or Value Advantage The productivity advantage gives a lower cost profile to have greater sales value. Logistic management can provide a multitude of ways to increase efficiency and productivity and contribute to reduce unit costs. and the value advantage gives the product a differential "plus" over competitive offerings.Customers don’t buy products, they buy benefits e.g BMW (as value advantage) – Nissan as (Cost advantage). Prepared By: Reham Al-Homayan

31. Updated by: Reham S. Al- Homayan Logistics and competitive advantage matrix In practice, successful companies will often seek to achieve a position based upon both productivity advantage and value advantage. Fig 11.3 p 153 Service Leader Commodity Market You must differentiate Your self Cost Leader New technology help Cost & service Leader Japanese companies High Low Value advantages Productivity advantages High Low

32. Gain competitive advantage through Value chain (fig 11.5 p 154) Competitive advantage grow out of organize and perform discrete activities within the value chain. To gain competitive advantage over its rival (competitor), must promote value to its customers through performing activities more efficiently that its competitors and in a unique way that create greater buyer value. Gain competitive advantage through logistics (fig 11.6 p 155) Organization will be a leader when they focus on both value advantages and productivity advantages. Prepared By: Reham Al-Homayan

33. The Supply Chain and Competitive Performance “The supply chain is the network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumer.” Supply chain management covers the flows of goods from supplier through manufacture and distribution chain to the end user. The difference between logistics management and supply chain management?? Logistics management is primarily concerned with optimizing flows within the organization. while,supply chain management recognizes that internal integration by itself is not sufficient. Prepared By: Reham Al-Homayan

34. perhaps the most challenging are in the area of logistics: The customer service explosion Time compression Globalization of industry Organizational integration Prepared By: Reham Al-Homayan

35. Chapter 12 Reverse Logistics by Richard Lancioni The urgency of a recall depends upon certain factors – there are three classes: Class I: Immediate risk, such product lead to death or serious injury (e.g Johnson & Johnson) Class II: No immediate hazardous and might still dangerous and cause injury but have to be cleared quickly. Class III : recalled for variety reasons, violation of federal regulations. The scope of the recall process depends on the nature of the product and the level of penetration in the distribution system. The challenge exists for a logistician to design a reverse system of distribution and get it to work at a desired performance level at the lowest possible total cost. Prepared By: Reham Al-Homayan

36. Locating the Product Three distinct levels of increasing difficulty associated with the penetration of the product in the system: Product still under control of he manufacturer in company controlled warehouses or primary distributor controlled warehouses. A simple matter to recall. Product would have to be located and withdrawn from the middlemen involved in the distribution of the product (wholesalers and retailers). Recall Slightly more difficult. Product is in the hand of consumers. the most difficult. Movement of the product into each successive level not only complicates the recall for the logistician but adds to the cost of the operation as well. Prepared By: Reham Al-Homayan

37. Warranty Cards Information that can be coded on computerized warranty cards are: Product description Manufacturing Plans Lot (group) Retrieval of Products After the product is located, logisticians can coordinate the process of retrieving the product in the field either through: the company's field sales force the retailer or other middlemen outside collection specialists Effective retrievals require that: The customer be motivated to return defective products for repair, replacement or refund. Good relationships be established among carriers and other participants in the distribution process such as channel members. The biggest obstacle in recalling products is the consumers.. Prepared By: Reham Al-Homayan

38. Chapter 13 The Triumph of Process by Michael Hammer BPR is the term applied to a range of techniques that aim to redesign organisations, based on their business processes. BPR – Business Process Reengineering: the fundamental rethinking and radical redesign of business processes to achieve dramatic improvement in critical current measure of performance, such as cost, quality, service, and speed. The problems that affect modern organizations are not task problems, they are process problems. Some of the problems: We are slow to deliver results not because our people are performing their individual tasks slowly and inefficiently, but because some of our people are performing tasks that need not to be done at all to achieve the result and because we encounter agonizing delays in getting the work from the person who does one task to the person who does the next one. So, the staff will misunderstand their supervisor instruction and do wrong things. We are inflexible not because individuals are locked into fixed way of operating, but because no one has an understanding of how individual tasks combine to create result. Understanding important to solve this problem. Prepared By: Reham Al-Homayan

39. Implementation Organizations found themselves in a situation where they have to implement the new process where processes play a central role in the operation and management of the business: the process centered organization. To start taking a process centered approach, a company must do four things: -The company must recognize and name its processes. Often companies divide primary processes into a small number of sub processes which are then describable in terms of basic tasks or activities. -Ensure that everyone in the company is aware of these processes and their importance to the organization as a whole. -Pprocess measurement. -Process management, looking for opportunities. Prepared By: Reham Al-Homayan

40. Chapter 14 Staple Yourself to an Order by Shapiro, Rangan and Sviokla. a process perspective on its activity forces the organisation to become customer focused. Every customer’s experience is determined by a company’s order management cycle (OMC). The order management cycle offers managers the opportunity to look at their company through the eyes of the customer, to see and experience transactions the way as a customer.. Prepared By: Reham Al-Homayan

41. There are 10 stages to walk through the OMC: Order planning, show how and why bad customer service and fragmented operations can cripple a company. Sales people, marketing and operation need to cooperate. Order generation, this stage usually produces a gap between order generation, order planning, and later steps. Cost estimation and pricing, the battles between engineers who estimating, accountant who calculate the cost, a headquarters group that oversees pricing, and sales that actually develop the price. Order receipt and entry, takes place in customer services department when the customer reps in contact with the customers, sometimes no connection with the top management. Order selection and prioritisation, the process of choosing which order to accept and which to decline. Smart company like the order with business strategy. The decision are taking by top management, customer service reps. Prepared By: Reham Al-Homayan

42. Scheduling, when the order slotted into an actual production or operation sequence, there will be a fight between sale people, marketing, and operation. Focus on the service or the production way? Fulfilment, the actual provision of the product or service. This is complex step and vary from company to another, it depend on the industry. Location, product, …. Billing, is designed to serve the need and interests of the company not the customer. Is handled by finance people. Returns and claims, this step affect admin cost, transportation, and customer relations. Some companies set a rules to protect them self and dissatisfied customers. Post sales service, this step can affect customer satisfaction and company profitability. it can include such elements as product, repair, maintenance, customer training, …. The quality assurance team responsible to follow this step. Prepared By: Reham Al-Homayan

43. FOUR KEY PROBLEMS After tracing some individual orders four problems emerged: 1- Most companies never view the OMC as a whole system. Each department think separately, and they count on each other. 2- Overlapping responsibilities. The department can not differentiate between the primary and the sole responsibilities. 3- The people in the bottom of the organization know more than top management but can not communicate with them. 4 -The customer remains as remote from the OMC as top management do. The top management out of the picture completely regarding customers activities (complain, order, pay, … ) Prepared By: Reham Al-Homayan

44. How to fix an OMC Analysis – understand the flow of activities and to have a clear picture about order flow, difficulties and discuss a solutions in visible way. Companies need to look at the OMC from the customer’s point of view. maybe the organization reach the goal but the customer not satisfied. System Focus – Put the pieces together, move across boundaries Political Strategy – Staple yourself to an order Political Strategy - The best way to improve the situation in any company is to ‘close the loop’ between service provider and strategy setter. the customer may like to have their things in a drum rather than plastic rapping ! Benefits improved customer satisfaction, interdepartmental problems will recede, and companies will improve their financial performance. Prepared By: Reham Al-Homayan