New Business Approaches to Operations Management

Managers Too Busy Being Busy?

• Free Up Front-line Capacity with a New Approach to Operations Management by Diana Davis, Eric Sharp, Richard Jeffery, and Aravind Immaneni

Front-line managers are the critical link of organizational performance, but they also have to spend time firefighting issues, which they are too busy to do being busy with other responsibilities. The four main objectives of a given webinar are: defining why people feel they do not have time to change the way they work; advising on how to overcome the common reasons of clinging to firefighting approach to work; defining an organization’s current operations management method positioning based on a recognized Capability Maturity Model; and introducing an alternative method for front-line managers of taking advantage of the latent capacity and gaining control.

Being caught up in a daily routine, front-line managers have to deal with non-managerial and administrative tasks and long meetings. When they finally have time to meet and check on their team, they lack knowledge and information. It is a commonly held belief that automated technology can reduce costs and alleviate human contest. However, installing new hardware or software is much easier than changing the human brainware – management must search and facilitate new approaches to meet the requirements of successful modern businesses.

Speakers emphasize the breakthrough thinking – a new deliberate and focused effort aimed at developing atypical approaches to overcoming constraints, instead of making incremental changes in the former methods. Sharp and Jeffery (2013) compare the top-down management command, or central control, where one team is fully responsible for everything, with the more efficient front-line control, which implies providing front-line management with control and accountability at the most effective point in the organization. Jeffery provides an overlook of the capability maturity model, which implies a five-level framework for the identification of the level of organization’s operations management (2013).

Finally, Aravind Immaneni provides an overlook of the new integrative strategic tool - active operations management method (AOM). AOM enables managers to track and manage capacity, forecast demands, use resources more effectively, and deliver better outcomes. Organization that practices AOM views the entire work of all teams as its own work. At the core of AOM lie its strategic advantages – cross-functional integration and cross-training. They facilitate knowledge transferring, enhance skill, expertise, and flexibility of the organization.

• Supply Chain Risk Management: from a “necessary evil” to a “core organizational competency” by Dr. Sinead Roden

Dr. Roden starts her webinar by taking a look at the gross revenue of the 40 largest consultancy firms, where 31% of budget spent is attributed to the supply chain management (SCM) (2014). Many companies don not pay enough attention to its importance, failing to understand the complexity and capacity of the supply chain. However, in reality, everything that companies do, every single value that they produce, is delivered by supply chain. Therefore, supply chain management is vital to the business success.

SCM implies efficient integration of all companies’ stakeholders and thorough consideration of the operations concerned with supply. Successful SCM is based on three key premises that must go together: in the right quantities, to the right locations, at the right time. Comparing two giant companies Ford and Japanese Toyota, speaker emphasizes that many firms fail due to the lack of synergy between the core business and its supply chain (Roden, 2014). They resort to focusing on the vertical integration, control and coordination, which emphasize mass production and economies of scale with no collaboration (Roden, 2014). However, in 1970-80s business concepts considerably moved on with Toyota’s evolutionary view on the SCM that included collaboration with other businesses and organizations. Business world introduced a shift towards strategic supply chain management. In her webinar, Dr. Roden (2014) presents various business cases uncovering their failures to integrate core business with their supply chains, which leads to the supply chain risk management (SCRM). Dr. Roden quotes Tang stating that efficient SCRM relies on the premises of “coordination and collaboration among the supply chain partners in order to ensure profitability and continuity” (2014). SCRM can be very vague, as the risks are not always visible. Common business scenario illustrates that companies anticipate the risk, but, since they cannot predict it, they are not willing to waste time and effort, which implies additional costs. However, such attitude leads to business failures.

Today, supply chains are considerably vulnerable to world’s macroeconomic trends, and, thus, businesses cannot afford to rely on the assumptions that nothing bad will ever happen and accept lower failure chances. Indeed, companies must dedicate time and effort to SCRM and develop contingency plans in order to avoid or prevent possible risks.

Future Logistics and Supply Chain by Patrick Dixon

Contemporary businesses must a have much more sophisticated approach to contingency planning. Now it is all about customers, who take perfection for granted. Patrick Dixon (2011) emphasizes the major concepts that will transform the future: growing passion, emotion and concern for the planet, and increasing oil prices. In today’s world dynamics, all methods and approaches, which were efficient before, become questionable. Logistics and supply management become more complex because of the long distance, world prices and customers’ standards alter due to the growing impatience.

The customers’ demand and expectations for perfection, innovation and time-management have grown dramatically. Today, it is a closed circle: the more the companies offer – the more the customers want – the more the companies must provide. Along with the increasing prices for oil, fast-growing demand and opportunities are becoming a major challenge within the supply chain management for most firms and organizations. Patrick Dixon (2011) presents numerous examples of modern technology innovations within the world context alongside with their business implications. He includes green technology and its progress, sun batteries and their possible use in desserts, comparison of the transportation of goods by planes, ships, railroads, etc. (Dixon, 2011). Comparing the transportation costs by land and by the sea in the UK, Dixon concludes that under the supervision and collaboration of both, the business world and the governments may collaborate in a coherent way and produce maximum effectiveness (Dixon, 2011). In particular, Dixon talks about the efficiency of truck transportation and its opportunities – if trucking was more integrated, businesses would be able to utilize the same resources (2011). Moreover, if an average truck was renovated, it could become more efficient and environmentally-friendly. Dixon’s major idea about logistics implies the usage of the same transportation resources, which would result in many benefits, including higher productivity and environmental sustainability (2011).

Patrick Dixon strongly holds on to the idea “do more with less” advocating considerable integration of the government and business (2011). It will result not only in the progress and improvement of the SCM and logistics systems, but also a more efficient allocation of resources and preservation of the planet (Dixon, 2011).

• Demand-driven Supply Chain Strategy by Dr. Maria Rey-Marston

The webinar on the demand-driven supply chain strategy starts with a brief introduction about the demand management, which is the basis of the most efficient supply chain strategies. In general, this webinar was more of a question-answer structured discussion. The connection between demand and supply lies at the bottom of economic system. The world has become more demand-driven in all industries. The author draws a distinctive line between supply chains and supply networks, claiming that supply network is more relevant and fundamental in terms of today’s business world (Rey-Marston, 2013).

First of all, the world’s business operations have transformed from a linear structure into an amorphous self-defining structure with numerous clusters and divisions (Rey-Marston, 2013). Secondly, the roles of specific members in the supply chain transform accordingly into the more diverse, multi-functional and flexible figures, which may change their time, location, and mission (Rey-Marston, 2013). In such a way, changing macroeconomic trends refine the idea of supply chain into the supply network, which is significantly interrelated with demand. In order to build a successful demand-driven strategy, companies must always consider demand management. It covers three major economic elements with their relationships: demand, product, and supply (Rey-Marston, 2013). The coherent combination of demand, product and supply results in four new capabilities: demand creation, demand sensing, demand shaping, and demand response (Rey-Marston, 2013). The speaker provides an example of a successful demand-driven business model in the image of Amazon.com – a company that mastered the four capabilities. The author concludes that the key in developing the demand-driven strategy is cultural transformation of the people, who define and lead the processes of the strategy building (Rey-Marston, 2013).

Finally, Dr. Rey-Marston in her webinar provided a description and explanation of the demand-driven supply chain strategy with an emphasis on customers, who are at the center of the strategy structure (2013). Also, the author provided a critical distinction between the concepts of supply chain and supply network in order to illustrate the idea of a successful demand-driven strategy better (Rey-Marston, 2013).