Operations and Supply Chain Management - Assignment Example

Operations and Supply chain management Student’s Name: Instructor’s Name: Course Code: Date of Submission: Questions 1 A. Short run/long run paradox facing operations manager The operations managers today are faced with both long run and short run paradox. To start with, there is the challenge of changing market demands. This is a challenge to the operations manager in the sense that it will be hard to plan for the operations due to unpredictable changes in the market demand. Another paradox is lack of ability to design appropriate strategies to improve the corporate social responsibility of an organization. The stakeholder interests may be different from those of the management hence it will be hard to implement sustainable corporate social responsibility strategy. Another challenge is the corporate reporting. This becomes a challenge because when reporting the operations manager may be faced with a challenge if he or she does not report updated operations information to the stakeholders. Finally, competing practices within an organization is also a challenge for an operations manager. For instance top management may prefer communication via email while the operations manager may prefer memos. This is a long term conflicting role between different departments in an organization. B. Short run and long run performance criteria In the short run, an organization can apply the performance criteria to improve its performance as explained by Slack’s Polar diagram. Technical services include hiring equipment to improve the production capacity to meet the demand of the customers. Technical services are hired when it is less costly to hire than to buy. This will help to cut down the cost of production implying that the pricing of the products will be competitive. The firm can also be independent because hiring equipment sometimes may fail, which can lead to frustration in the production process. This could result in serious effects to the customer, therefore it is important to develop alternative equipment which can be more permanent. Quality is another important factor in short run production. The products being produced should be of good quality to meet the needs and demands of the customers. This helps to maintain loyalty among customers. Finally, flexibility of the production process should also be considered. The production process should be flexible to meet the changing demands of the customers which lead to their satisfaction in the short run. For instance, where there is an increase in demand for the products, an organization can decide to hire equipment which will help to improve the production capacity to meet the demand of the customers. This helps to improve customer satisfaction leading to improved performance of the company. On the other hand, in order to improve operational capabilities in the long run it is important to improve employee skills. This will help to improve the long run performance of the employees which will help to improve the performance of an organization. The operations manager should further make a decision of making rather than buying. This will help to improve the performance of the facilities and resources of the organizational hence improving the operational capabilities of the organization. Question2 A. Logistics, materials management, physical distribution and supply chain management Logistics management is the process of managing resources of an organization from their origin to their consumption, so that the organization will be able to meet some specific requirements of an organization like meeting the needs of the customers. It involves material handling, production, packaging transportation and warehousing (Lyson & Farrington 2007). Materials management is the process of planning the design with which to move tangible materials in the supply chain. It covers the acquisition of materials, their replenishment, quality control, ordering of the materials and warehousing. Physical distribution is the process of moving finished products from their point of origin, storage and distribution to customers using various channels of distribution. It helps to improve the delivery of products to customers. Supply chain management is the active management of all activities involved in supply chain from the point of origin to the point of consumption. It helps to improve customer value and also help to improve the competitiveness of an organization. B. Make or buy decisions There are various theories which try to explain the make or buy decisions taken by an organization. The transaction costs theory explains that there are many contracts which are incomplete because of the buying decisions made by an organization. The reason why all transactions are not carried on by one big firm is that when a firm gets big, the management starts to experience diminishing returns to management (Lyson & Farrington 2007). By deciding to internalize all the functions, it will be a waste of resources because some functions are better to buy than making. In this regard, therefore, an organization can decide to make the products when lead time is longer while it has the skills to make the materials or products especially when it is cheaper to make them. For instance, when the supply of spare parts for an assembly factory is expensive than making, an organization can opt to make rather than buying them. This can be achieved if the firm has the capacity to make the spare parts. Alternatively, an organization can decide to outsource for materials if it’s cheaper than making and the organization does not have the skills to manufacture the materials. This helps to cut down the transaction costs of the organization. Question 3 A. Advantages and disadvantages of lean production system The first advantage of lean production system is that it helps to reduce types of wastes in an organization. Lean production cuts down the variety of materials from variety sources. It is easy to identify defect sources and correct on them reducing types of wastes. It leads to employee satisfaction. This is because it need support from the production department because they are able to identify where there is inefficiency. This satisfies the employees as they try to respond in a positive effort. Lean production system creates competitive advantage for firms. This is because it helps to cut down costs of production as it introduces new skills which improve the efficiency of firms leading to better customer service hence attracting and retaining many customers. The disadvantage of lean production system is that it has problems with JIT system. Lean production system works well with stable system hence relying on JIT system can lead to bottlenecks in the products process. It can also lead to employee frustration. This is especially when the management squeezes the economy using lead production methods. This can discourage employees, undermining leadership and reversing motivation of employees. B. Strategic and operational issues of implementing lean system The strategic and operational issues which affect the implementation of lean production system in Toyota Company include difficult in explaining lean production system concepts to employees. This makes it hard to gain commitment from the employees. Another issue is how to motivate the employees to adopt the new changes (Lyson & Farrington 2007). This becomes an issue as some of the employees may resist the change making the implementation process difficult. In addition, it is difficult to design a strategy that will align the Toyota Company organizational strategy with that of lean production. This leads to a breakdown of communication between the two strategies. Moreover, there is the issue of getting support from top management. Sometimes it is difficult to develop a strategy which will ensure top management support. C. Barriers to successful implementation of lean production system The first barrier is the misunderstanding of a lean production system. Many companies such as Toyota regard lean production as a system of reducing costs and not a method of serving customers. This leads to lack of effective implementation of its core philosophies. Another barrier is lack of broad organizational commitment. Lean production should gain commitment from all its stakeholders for successful implementation. With no organizational commitment, it will be hard to implement it. Conflicts with other initiatives is another barrier to lean production system. Some departments such as quality management might have conflicting roles with lean production and this becomes a barrier to implementation process. Finally, lack of alignment with enterprise resource planning systems will be a barrier to effective implementation of lean production system. Question 4 A. Capacity planning and control Capacity planning and control is the process of planning what the organization is able to produce and the demand for the customers (Lyson & Farrington 2007). Capacity planning and control is the management, supply against the demand, implying that it is the process of matching the demand with the production capacity of an organization. Capacity planning has various implications for a micro organization such as Tip Top bakeries. The first implication is that it helps in budgeting by outlining the resources required to maintain the current operations. There is also the scalability implication. Capacity planning helps Tip Top bakery to plan how to expand its operations. For instance, if the demand for products goes up the organization should plan how to increase the production capacity to meet the demand. It also helps to plan for growth of the organization. This is done by assessing the needs of the organization such as if there is need to increase the physical location Tip Top bakeries. B. Types of capacity plans The first capacity plan is the lead strategy plan. This is the capacity plan which aims to add production anticipating increase in demand (Lyson & Farrington 2007). This kind of strategy can be based on past performance and when the organization anticipates increase in demand, it increases its capacity. There is also lag planning. This is the capacity planning technique which is adding capacity when the organization at its full capacity when there is increase in demand. It helps to reduce wastes. Match strategy plans are the plans whereby an organization increases its capacity in correspondence with increase in demand. This is a moderate strategy which helps an organization to match the demand with the production capacity. Finally, there is adjustment strategy which is the strategy of reducing the capacity production due to decrease in consumer demand. This helps to cut down the expenses of producing extra products which exceed the market demand. C. Production planning and control techniques The first technique is the application of control charts and graphs. These are the graphs which are used to gauge the progress of the production process. It is used to measure the actual performance against the planned output. There are also control boards. These are the automatic boards which measure the progress of the production process. There are also quantitative techniques which include PERT and Critical path management. These techniques are helpful in linear programming. Question 5 A. Scenario planning Scenario planning is a strategic management tool used by managers to make long terms strategies but which are flexible. It is important in the following ways; It promotes effective thinking and utilization of time. This is because of the upfront planning which promotes effective utilization of resources such as time. It helps in organizational planning and learning. This is because the organization can be able to make decisions based on past information, hence there will be no repeat of mistakes. It helps to promote organizational change. Scenario planning helps an organization to know when to advance or retreat, thus the organization can be able to focus on the impending danger. B. Sustainability, smart city and future resilience Sustainability is the aspect of meeting the needs of the present situation without compromising the future situation. This is achieved by developing effective supply chain strategy. Smart city is the city which has human and capital investments and communication systems which help to accelerate the economic development of the city (Lyson & Farrington 2007). It has high quality of life and there is effective utilization of resources. Future resilience is whereby a city has developed supply chain and operations of resources of the city with the aim of meeting the future needs of the city to avoid shocks and shortages of important resources. Sustainability impacts on future urban supply chain management in that it helps to ensure there is adequate supply of resources such as water to meet the needs of the city. The city will be able to assess the demand of the water and the capacity hence develops a strategy to meet the needs of the city. On the other hand, these concepts help to set a car free city centers. This is in the sense that the city will be able to supply the city with alternative means of transport like using trains. This helps to minimize the number of cars which enter into the city hence reducing car traffic. In addition, future resilience impacts on the city by providing the city dwellers with adequate resources for human survival. For instance, it provides the city population with basic needs such as food. Moreover, it enables the city to provide the city with adequate infrastructure facilities which simplifies transport and communication within the city. C. Compare and contrast Millions of markets and global Millions of market production scenario is the market where there are many firms producing similar but differentiated products with the aim of meeting the needs of the local market while in global production scenario is the scenario where the production is meant to serve the global demand. Millions of markets and global production scenario can be compared in the following ways. To start with, they are both enabled by the operational efficiency. All the production processes are efficient improving the production capacity of the firms to meet the demands in the market. Another enabler of both markets is the cost optimization factor. In both market, there are different strategies applied to optimize the production cost. This helps to meet the demands of the customers by satisfying their needs. This helps to improve the competitiveness of an organization in any production scenario as a result of the low cost of production. In addition in both production scenarios, organizations strive to improve their competitiveness by designing strategies which will enable them improve their market share. Due to high competition in both production scenarios, each organization is trying to be unique in the market so that it can create competitive advantage. Therefore, there is high competition in both production scenarios. On the other hand, there are contrasts in the two production scenarios. The first one is that in global production scenario, there is mass production while in the millions of markets there is low production. This is because in global market there is large market than in millions of markets where the market is limited and there are many production firms competing for the market. Moreover, technology applied in the global production scenario is high compared to millions of markets production scenario. This is due to high competition in global production market and high quality of the produce thus there is need for quality production than in millions of markets scenario. Reference Lyson, K & Farrington, B 2007, Purchasing and supply chain management, Pearson Education Limited. Read More