The Role of Operations Management - Research Paper Example

 The role of operations management in reducing a business’ carbon footprint The role of operations management In almost every company in a variety of industries, the role of operations manager touches virtually every segment of the business in some fashion. Areas of inventory and warehousing experience OM presence when considering issues of capacity for raw materials and finished product storage. In companies with electronic resource planning software, having real-time access to inventory levels is vital for areas of sourcing, production and order management. The operations manager is also involved in purchasing, as part of sourcing, as any cost leadership effort will require the input of the operations manager in terms of scheduling appropriate manufacturing based on procurement data provided by this division. Even in areas of human resources, the OM has interest for internalised promotional campaigns or motivational strategies to ensure that there is a unified organisational culture that is adaptable to change processes related to production, purchasing or design factors that directly impact issues of productivity and efficiency. There are very few divisions of a mid- to large-sized company that does not, in some way, experience the input or direct involvement of the operations manager, right from sourcing all the way through to delivery of the final product or service. The carbon footprint in design The definition of the carbon footprint is the amount of carbon that each individual business is responsible for generating through regular production, job environment, or supply issues. Carbon is generated by a variety of different sources including machinery, chemical processes, waste creation, poor use of energy resources, and many other activities. In most cases, the carbon footprint is measured solely on the amount of carbon dioxide that a business emits in normal business practice. Production facilities that run on a continuous cycle are at risk of producing even higher amounts of carbon dioxide and these types of businesses require operations management expertise to find areas where these dangerous outputs can be reduced. When considering the entire operations life cycle, the initial planning efforts for reducing the carbon footprint begins with the design phase, in multiple areas of the organisation. In the design phase of a manufacturing facility with multiple support divisions, improving the carbon footprint can begin with assessing the physical construction of the building, analysing the production equipment used for manufacturing a product, and assessing the different steps necessary to achieve final delivery which include supply chain, internalised transportation, and even efficiency measurement of how internal employees utilise their energy consumption in each division. For the pursuit of reducing carbon emissions, design looks at the entire organisation from each divisional perspective to identify areas of improvement. Assume that the manufacturing facility is a foods manufacturer in a large production environment. The OM’s responsibility for design factors could include looking at the current energy model in use, along with structural design elements of the tangible building assets, to consider the potential heat leakages and load that pass through wall insulation along with the different electrical systems in place that provide heating, light or cooling capabilities (Ducoulombiera, Teyssedoua & Sorinb, 2006). This design analysis could include looking at how the foods are handled and refrigerated, when appropriate, to determine whether new upgrades to the refrigeration technology might support a better way of accomplishing the same goal but with much less carbon dioxide emission. In some supermarket environments looking to reduce their carbon footprint, new HVAC systems are being installed with reduced load and with systems that can produce a dehumidification effect using innovative cooling coils or different thermal-hygrometic functions (Capozzoli, Mazzei, Minichiello & Palma, 2006). In the design phase, considering how to retrofit existing equipment with these carbon-reducing abilities would look at areas of cost along with the labour intensity needed to make this a reality. Another method in the design phase is to consider the efficient use of lighting throughout the organisation, considering the opportunity to use more efficient light bulbs or fluorescent systems that require much less energy to sustain. Using an example in a similar industry, the grocery giant Tesco has used pricing promotions to get consumers interested in reducing their own carbon footprint (Brasher, 2008). An operations manager could work dependently with the human resources division to come up with an internal promotional scheme, after installing new energy efficient lighting systems, to get employees aware of their own obligation toward energy consumption. This might involve offering small-scale rewards for measurable decreases in area energy use or simply reinforcing the importance of simple contributions such as turning off computers or other office equipment when not in use. Design is not only about the tangible design of production systems, it is also about assessing the current state of the entire organisational system and identifying opportunities to make quality improvements toward reducing carbon footprint, including the building itself and the employees that support its function. The design phase of this effort also involves having influence in the information technology division, as the use of electronic systems requires considerable demand for energy and some systems produce higher levels of emissions than others. Using the example from ConEdison, a major energy provider, an operations manager can design a new facilities management model that replaces complicated server systems and then deploys the server farm concept that reduces the use of physical computer servers and consolidates their function to a virtual servers or the use of water-cooled server cabinets that cool server drives without the demand of HVAC cooling systems to control the air (conedison.com, 2009). Areas of physical production design include assessing the budget available to replace outdated equipment or that which is known to produce high emissions. In the same example of the foods product manufacturing environment, this could entail enlisting the support of external maintenance crews to run diagnostics on equipment to create a list of which systems are in need of retrofitting or those which should be replaced based on measurable efficiency. This would give the operations manager a clear picture as to the efficiency or capacity levels of all existing production equipment so that they can make budget-based decisions about what systems can be replaced cost-effectively and those that can simply receive modifications to make them more eco-friendly. In the foods manufacturing environment, HVAC needs are some of the largest concerns in production design and need to be addressed based on the output levels of carbon dioxide and their heavy use of energy. Many product manufacturers rely on packaging to deliver their products to commercial or consumer markets. These guarantee freshness or are used as marketing tools (another area where OM has influence) for competitive advantage. Part of the design process is looking at alternative methods for changing packaging to make it more sustainable or to limit the amount of non-biodegradable components within it. This involves the OM working directly with research and development, procurement and manufacturing to consider whether this is possible. In this phase, the OM can consider making the packaging more lightweight (therefore needing less raw materials) or considering changing current suppliers to make biodegradable components more readily available for manufacturing (Dudlicek, 2010). With the goal of reducing the company’s carbon footprint, design is assessing all aspects related to producing the product and then identifying how to alter these processes to create better eco-efficiency. Some of these design principles might not be possible in just-in-time environments that limit inventory quantities for cost savings or when budget issues simply will not allow for multiple building or process improvements. These must be considered by the OM in this phase of the project. The carbon footprint in sourcing In sourcing, the phase of manufacturing where purchasing decisions are considered and implemented, the OM can take example for reducing the carbon footprint from Wal-Mart. This major multi-national retailer has created a new requirement for 60,000 of its product suppliers to reduce their packaging if they wish to remain retail partners (Winston, 2008). Wal-Mart’s procurement efforts in sourcing is one with a lean inventory focus, however the business is able to use its market size and resources to demand compliance on packaging requirements. In the foods production environment, this would involve the OM working directly with many of its suppliers to discuss methods of changing their own production systems to make packaging more eco-friendly or lightweight. This is not an easy task considering that such a manufacturer maintains many different suppliers with their own capacity issues. However, it is somewhat of an industry norm to adapt to different international regulatory responsibilities for improving carbon dioxide emissions, therefore they might cooperate for the sake of improving their own market position or improving supplier relationships. If such discussions or procurement decisions are feasible for the operations manager, they might develop a total quality management system, with a supplier checklist, identifying their compliance or their measurable changes to meet with supply agreement demands on packaging (or other supply issues). Using Wal-Mart as the example again, this company has developed an environmental scorecard that describes different criteria for meeting with compliance such as facilities, equipment, packaging and fuel use with different suppliers (Rechaussat, 2008). If suppliers are cooperative, sourcing could include this scorecard to show how the supplier has improved in areas of transportation (such as consolidating freight to avoid multiple deliveries) or meeting with a new just-in-time system that limits excess carbon dioxide through delivery rescheduling and consolidation. This scorecard could identify non-compliant suppliers and remove them from the procurement schedule or other electronic business planning resource software in favour of more agreeable or adaptable suppliers. The carbon footprint in order management & transformation Any changes to current production cycles or equipment are going to require the OM to address order management, in terms of whether capacity to produce is improved or reduced. Most companies of any considerable size have some form of electronic system that links order quantities with current production, materials and inventory capacity. These are common under the business resource planning models. In areas of manufacturing, another method to reduce the carbon footprint is to consider retrofitting existing materials so as to avoid any costly disruptions to the current demand schedule for customer orders of finished product. Some efforts for other companies in large industries include installing variable-frequency drives or inverter technology on production fans to reduce electrical consumption and improve efficiency outputs (Newell & Summ, 2010). Other changes include altering the heating and cooling ductwork to allow for faster transport of air to avoid maintenance issues or strain on the HVAC systems (Newell & Summ). Each of these activities would need to be coordinated with demand issues associated with business resource planning and finished product scheduling to ensure profitability is not affected and that there is adequate time between cycles to accomplish these tasks successfully. If the operations manager is educated on multiple areas of the company, other options for reducing the carbon footprint involves keeping a close eye on the current ordering schedule from customers and then adopting technologies that can automatically shut down production equipment when not in use or between finished product job cycles (Gottlieb, 2010). Companies that can support sophisticated BRP software that links production with order demand could probably install a system like this to be programmed within production with the production schedule to help automate reduction of the carbon emissions produced by the manufacturing machinery. This also helps the OM in areas of risk, especially to avoid the costs of training employees to be more proactive with machinery shutdown, allowing training costs to be applied elsewhere within the business. All of these technological improvements would rely on accurate order processing and order fulfilment information as well as the operational expertise to program these systems to be adaptable during production down times. Some companies, in their production systems, also tend to produce more waste than others depending on the product they manufacture. A foods service facility could take a lesson from Anheuser-Busch, a multi-national brewery, that has adapted a Bio-Energy Recovery System using anaerobic digestion to help breakdown natural waste without relying on traditional disposal or burning systems (Gekas, 2009). The foods service company works directly with different organic compounds that are cycled into production to create a final product, with the majority of these being disposed of through landfilling, through internalised decomposition techniques, or recycling of different varieties. If these systems for natural waste digestion could be incorporated into the production system, employees or systems can be trained to add this function to the finished product manufacturing process without causing disruption to order fulfilment. This would require working with procurement divisions to establish a supply system for these anaerobic compounds, however it would significantly reduce the company’s total waste output for natural, unused raw products. Most of the improvements suggested for reducing the carbon footprint in an industry such as foods production have been involved with process changes through transformation of existing systems, technologies and support. There are significant human relations and human resources issues involved in the entire OM life cycle that must be addressed in order to achieve maximum project productivity. Perry (2007) offers that in order to find success in reducing the company’s total carbon footprint, it is necessary to get only the right people to support the effort. Again, to accomplish this, it would be necessary for the OM (in all stages of the life cycle) to consult with human resources experts to identify employees most likely to champion these efforts and promote them internally to the entire business staff. Especially for businesses that already have a strong competitive edge or already are benchmarked for their innovations, prompting organisational change is a difficult challenge and could meet with considerable staff resistance. The operations manager should act as the change agent in all phases, including the transformation of current production processes, to gain support from key personnel. This could include consultation with senior-level administrators to gain budget support or demand compliance when necessary. Such discussions would also be vital for divisional managers to monitor whether employees are taking an active role in energy reduction efforts or creating a performance appraisal for eco-friendly assistance that measures strengths and weaknesses of different operating divisions. Transformation is not just about changing the tangible elements of building or production, it is about developing a total quality management system that identifies key players and builds the measurement tools necessary to ensure compliance and efficiency with the new objective. Additional OM phases for consideration Delivery of the product to the customer involves the activities of warehousing personnel in shipping and receiving (when appropriate) and this group’s participation and input will be required. There may be changes proposed to reducing reliance on various transport equipment, such as the propane-charged hydraulic lift systems or maybe something as simple as reducing the amount of shrink wrap used when delivering a pallet, therefore saving energy and waste. The development of a shipping/receiving scorecard can balance intention with actual strategic output to identify weaknesses or support issues. If the facility relies on its own transportation fleet, the OM can work with divisional leadership to coordinate deliveries using consolidation or through outsourcing to avoid adding further strain to the company’s CO2 output. Such efforts during the product delivery phase of OM might recognise additional benefits such as improved cost leadership in shipping that could lead to bonuses for the project team leaders for meeting budget goals. These would be motivational factors that are very important in operations for improving future efficiency and productivity as well as overall job satisfaction. The OM, through total quality management practices, could develop an appropriate cost savings scorecard or spreadsheet measurement tool that tracks improvements in shipping efficiency (or cost) as a quantitative tool to identify improvements made in reducing the carbon footprint. Simple auditing in the shipping area might identify factors that were not considered in regular analysis of processes such as employees who leave the shipping doors open too long, therefore putting further strain on heating and cooling systems for environmental controls. The shipping department represents, usually, the final point within the business that is responsible for moving product out of the company and into the customer’s facility and these types of audits should look for process improvement opportunities or failures in meeting carbon footprint reduction standards. This is the nature of the total quality management system with the proper checks and controls in place to ensure compliance and efficiency. Conclusion Reducing the company’s carbon footprint involves the OM having direct access to all systems required to support the business and the people involved that offer administrative or customer support. Since many of these options, such as changing packaging or improving waste disposal will require additional support expertise, the OM can even consult with marketing experts that work with new product development and understand how to use external promotion to help give the business a better market reputation related to eco-friendly business practices. Pricing might have to be adjusted to offset process improvements, such as installing new technologies with better efficiency, and these decisions require consultation with marketing professionals in the business as well as senior strategists. Cost performance, competitive positioning, and cycle times are all involved in the operations management role and should be part of the total quality management system necessary to minimize carbon outputs. Corporate reputation is important for operations managers to consider because it provides them with a unique opportunity to consult with various experts in sales and marketing to use different promotions to show the general public and the commercial buyer that the business is serious about its new supply agreements and its focus on helping the environment. In all phases, from design through final delivery, the OM must rely on human support systems as well as technical upgrades or scorecards, to make such an effort a success from the budget view and involving all areas that work within the life cycle. References Brasher, R. (2008). Save the environment, the polar bears and money on your bills, Marketing Week, London. March 27, p.13. Capozzoli, A., Mazzei, P., Minichiello, F. & Palma, D. (2006). Hybrid HVAC systems with chemical dehumidification for supermarket applications, Applied Thermal Engineering, 26(8/9), pp.795-805. Conedison.com. (2009). Reducing emissions associated with information technology. http://www.conedison.com/ehs/annualreport/climate_change/reducing_carbon_footprint_coned/IT_emissions.asp (accessed March 28, 2010). Ducoulombiera, M., Teyssedoua, A. & Sorinb, M. (2006). A model for energy analysis in supermarkets, Energy and Buildings, 38(4), pp.349-352. Dudlicek, J. (2010). Containment field, Dairy Foods, 111(3), pp.100-104. Gekas, K. (2009). National brewery benefits from biogas, BioCycle, Emmaus. 50(10), pp.36-39. Gottlieb, D. (2010). Purchasing counts the carbons, Purchasing, 139(2), p.52. Newell, S. & Summ, K. (2010). One of Europe’s largest steel producers asks: What carbon footprint?, Pollution Engineering, 42(3), pp.23-28. Perry, S. (2007). How big is yours?, The Safety & Health Practitioner, Borehamwood. 25(1), pp.52-56. Rechaussat, P. (2008). Value proposition for reducing the carbon footprint. http://www.logisticsit.com/downloads/ILOG_Green_Logistics.pdf (accessed March 28, 2010). Winston, A. (2008). The green wave, Retail Merchandiser, 48(5), p.15. Read More