MSCI 320: - University of Canterbury - New Zealand

DEPARTMENT

OF

Management MSCI/MGMT 370 - 2013

STRATEGIC OPERATIONS & SUPPLY CHAIN MANAGEMENT Semester One

15 Credit Points

Course Co-ordinator: Associate Professor Pavel Castka, Office: Block K, Apartment 156: Room 332; Homestead Lane; Phone +64 3 364 2987 ext 8617; [email protected]

Lectures: Tue 12-2PM Room E14 Tutorials: Wed, 9-10AM; Kirkwood KD07 (every second week; see the course outline for the dates) Office Hours: Wed 10-11AM Course description:

In today’s business environment, organisations can no longer view their operations as isolated technical problems. In order to succeed, organisations need to identify their competitive advantages and develop their operations’ capabilities accordingly. This course focuses on the understanding of broader concepts of operations and strategy from the managerial perspective. The course is largely based on case studies from a range of industries (manufacturing, health, retail, etc.) in order to provide specifics and different approaches across a typical set of organisations. Topics covered will include: operations strategy, capacity strategy, vertical integration and outsourcing, operating networks, IT and operations improvement. Text and Readings: Hayes, R., Pisano, G., Upton, D. and Wheelwright, S. (2005). Operations, Strategy and Technology: Pursuing the Competitive Edge. John Wiley.

MSCI/MGMT 370 S1 - Strategic Operations & Supply Chain Management

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1. Course overview and key dates Week 1 2 3

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5

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Lecture and tutorial schedule DATE Topic 19 Feb 26 Feb 5 Mar

Introduction to Operations Management Operations Strategy (Part 1) Operations Strategy (Part 2)

6 Mar

TUTORIAL : Operations Strategy exercise (Balanced Score Card) Sustainable Operations

12 Mar 13 Mar

19 Mar 21 Mar 26 Mar

Presentations

Assessment schedule Assignment

AP1 Nohria et al (2003) AP2 CASE Allegheny Ludlum Steel Corp AP3 Kaplan and Norton (1996)

TUTORIAL: Kristen’s Cookies Company Case Vertical Integration and Outsourcing

Your chance to discuss the assignment with the lecturer AP5 Ferdows et al (2004) Rapid Fire Fulfilment

AP6 Peish (1995) When Outsourcing Goes Awry

7

23 Apr

EASTER BREAK Designing and Managing Operating Networks

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30 Apr

Information Technology and Operations

AP 9 Carr (2003) – IT does not matter

1 May

TUTORIAL: Vandelay Industries (Case study) New Product development (guest lecture: Dr Venkat Pulakanam) New process development

AP10 Vandelay Industries

9

7 May

10

14 May

11

12

15 May 21 May 22 May 28 May

TUTORIAL: Structuring the innovation process Continuous Improvement and Process-based management TUTORIAL: Assessing Business Excellence In-class Test

Assignment instructions issued

AP4 Kolk and Pinkse (2005)

TUTORIAL: Q&As about Assignment

Capacity Strategy

Quizz/Inclass test

AP 7 Narayaman et al (2004) Aligning Incentives AP 8 Butman (2002) A Pain in the Supply Chain

AP 11 McDonalds Case

Assignment due on Tue 26 March in class Quiz on Learn (open for one week from Apr 22-26)

Exam instructions issued

AP 12 Philips Case


Exam in class (90 mins)

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2. Teaching Method The course is largely based on case studies and discussion of these. We will touch upon some theories but our focus will predominantly remain on cases. This will give us an opportunity to review what has happened in ‘real’ companies and learn from their approaches and mistakes. Please notice that most of the cases do not necessarily aim to demonstrate effective or ineffective handling of a particular situation but rather give us a platform for further discussion and learning. Similarly, in many cases there is no right or wrong answer and a particular case can be viewed from many angles and many possible solutions can apply. This may seem rather challenging (and it is!) but I will spend enough time during the lecturers and tutorials to bring you on a “right” track. This course is discussion based – this is inevitable due the nature of the topic and the learning objectives. In order to succeed, you need to be prepared for each lecture. This means not only reading the material but also thinking about it and conceptualising the material. Detailed course outline (please visit Learn) gives you all information about the topic of each lecture; what do you need to prepare and what questions we will debate (obviously, these are not all the questions but this should give you the backbone of our discussions). The reading is from the required text (Hayes et al) plus there are some additional readings available on Learn. Preparation for each class is not overwhelming if you do it on a regular basis! Your reward will be an easy and enjoyable learning during the class and much less (or none) preparation for the test! We will study a range of industries (manufacturing, health, retail, etc.) in order to see specifics & approaches in each industry and what the corresponding challenges are. This should give you a broad background for your future careers. Overview of cases used in the course: Company name APM

Sector/Type Paper industry

Form Short case

Crown Equipment Corporation Wal-Mart Stores Inc American Connector Company ALS Corp

Fork lift engineering

Short case

Retail

Short case

Manufacturing

Short case

Steel industry

HBS Case

Zara

Retail

RMC Exceso

Medical centre Fictional case – supply chain focused Manufacturing Software industry

Short article plus video Short case Short case

Capacity planning, continuous improvement, operations Capacity, supply chain, design, strategy Outsourcing and ethics Supply chain, marketing

Short Video HBS Case

ERP, IT implementation IT, ERP, implementation, consulting

Short Video HBS Case TQM Case

New product, process development Services, environmental protection TQM, continuous improvement

ERP Vandelay Industries Genesis McDonald’s Philips

Process Engineering Fast food industry Electronics

Focus of the case Manufacturing Strategy and Operations, Environmental protection, Ethics Strategy and design; service management Strategy formulation and implementation Manufacturing strategy; productivity and flexibility


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3. Grading Article Presentation (Group): Mid semester quiz (open between Apr 22-26) Assignment (due date: 26 March – in class): In-class Final Test (90 min; 28 May):

15% 15% 30% 40%

Article Presentation (AP): For AP, each student will be assigned to a group and each group will be asked to present one article during the course. You will have 10-12 minutes for your presentation (I will ask you to stop immediately once you will reach 12 minutes). Your presentation will be supported by powerpoint slides. You must email me your slides by 10AM on the day when you will present. Late submissions will carry a 10% penalty. In general, your task is:  To summarize the key points from the article/case and present it to the class. You should spend no more than 5 min on this task.  To present the group’s viewpoint on the article/case. You may choose to agree/disagree with the article or debate when the argument from the article is applicable and when it is not. You should bring in examples from your workplace (if you have some) or cite additional literature to demonstrate your points. However, each presentation has some specific instructions. Please see a full list of instructions below. Read the PA specific instructions carefully because you will be graded based on the instructions provided. The grading criteria follow below.

AP specific instructions: AP1 Nohria et al What really works Your task is (a) to summarize the key points from the article and (b) to present the group’s viewpoint on the 4+2 formula. In your presentation, you should debate pros and cons of the 4+2 formula and present your recommendations to the class. AP2 Allegheny Ludlum Steel Corp Your task is (a) to provide the background of the case study organisations (industry, issues that face, etc) and (b) answer Q4 of the case. You should spend minimum time on Task (a) and rather focus on Q4. Your answer should provide a recommendation for one of the options. Your presentation will be at the end of the class after we go through the questions Q1-3. AP3 Balanced ScoreCard (BSC) Your task is (a) to summarize the key points from the article and (b) to present the group’s viewpoint on the BSC. In your presentation you should debate pros and cons of BSC and present your recommendations to the class. AP4 Kolk and Pinkse Business Responses to Climate Change Your task is (a) to summarize the key points from the article and (b) to present the group’s viewpoint on the article especially on the typology provided in Fig 1 - Strategic Options for Climate change. In your presentation you should debate pros and cons of Kolk and Pinkse’s work and present your recommendations to the class. AP5 Ferdows et al - Rapid Fire Fulfilment


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Your task is (a) to summarize the key points from the article and (b) to present the group’s viewpoint on the article. In your presentation, you may choose to agree/disagree with the article’s arguments or debate when the argument from the article is applicable and when it is not. You should study additional literature to substantiate your points. AP6 When Outsourcing Goes Awry Your task is to draw generic lessons about outsourcing based on the case. These lessons should serve you to discuss outsourcing from NZ perspective; i.e. do NZ companies outsource? Is there any evidence about the success of their effort? What a NZ manager should consider before outsourcing decisions? Your task is not to answer the case question – we will go through the questions after your presentation. AP7 Narayaman et al (2004) Aligning Incentives Your task is (a) to summarize the key points from the article and (b) to present the group’s viewpoint on the article. In your presentation, you may choose to agree/disagree with the article’s arguments or debate when the argument from the article is applicable and when it is not. You should bring in examples from your workplace to demonstrate your points and/or study additional literature to substantiate your points. AP8 Butman (2002) A Pain in the Supply Chain Your presentation should summarize key issues from the case and debate whether these issues are typical of most of the supply chains. You should study additional literature to substantiate your points. AP 9 Carr – IT does not matter Your task is (a) to summarize the key points from the article and (b) to present the group’s viewpoint on the article. In your presentation, you may choose to agree/disagree with the article’s arguments or debate when the argument from the article is applicable and when it is not. You should study additional literature to substantiate your points. AP 10 Vandelay Industries Your task is to answer Q4 and draw generic learning lessons about ERP (or other IT systems) in organizations. You should study additional literature to substantiate your points. AP 11 McDonald’s Case Your task is to answer question Q3. Overall, the presentation should focus on issues around environmental protection. We will follow your presentation with an analysis of McDonalds operations strategy and answer questions 1-2 AP 12 Philips Case Your task is to provide a general overview of Philips Electronics and answer Q4.

Criteria for assessment: 



Quality of presentation: your presentation has to be well organized; i.e. the flow of the argument needs to be natural, slides need to be engaging and innovative and they need to provide additional value to your talk (pure reading of the slides is a bad practice), the team members need to contribute more or less equally, you need to maintain the 10-12 minutes window (I will ask you to stop your presentation once the time is over); presenters must not read the material and their presentation style needs to be engaging Ability to communicate your ideas: Your presentation has to communicate well your ideas; you need to be able to present the key points without oversimplifying the argument. At the same time, you must not overwhelm the class with a lot of (less important) details. Your talk will also demonstrate that you clearly understand what you talk about. Your argument will make sense and you will be able to substantiate your arguments by a reasonable amount of examples.


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

Preparation: your presentation will clearly show that you have prepared well for this task. If you are presenting a case study, your talk will show that you conducted an in-depth analysis of the case and that you have considered the ways to present it as clearly as possible. If you present an article, it will be clear that you have put an effort in researching the topic and your questions(s).

Assessment Rubric TRAIT Organisation

Delivery

Support material

Content

Exceeds Expectations Content is presented in a clear, logical sequence. The presentation dialogue and content is entirely appropriate to the audience. Clearly engages audience. Speaks clearly. Minimal reference to notes.

Visual aids all improve audience understanding of the material. An error free presentation. Content is of a very high standard. Answers demonstrate a deep understanding of the content.

Meets Expectations Content is presented in a logical sequence. The presentation dialogue and content is mostly appropriate to the audience.

Doesn’t meet Expectations Content is not presented in a clear, logical sequence, or the presentation is not appropriate for the audience.

Speaks clearly. Few distracting movements or words. Occasional reference is made to notes. Visual aids support the delivery. No obvious errors or spelling mistakes in the support material. Content is correct and meets its purpose. Questions are answered accurately.

Minimal eye contact. Reads notes, mumbles, hesitates, or is difficult to follow. Audience not engaged by the presentation. Visual aids distract from the presentation or include spelling mistakes or other errors. Content is not correct or does not meet the intended purpose. Cannot answer audience questions.

Quiz, test & assignment: More details about the content will be confirmed during the course. Please the following coversheets for your assignment. http://www.mang.canterbury.ac.nz/for/CoversheetINDIVIDUAL.doc


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4. Teaching Staff: Associate Professor Pavel Castka Pavel Castka is Associate Professor in Operations Management and Chair of College Research Committee at College of Business and Economics, University of Canterbury. His previous academic appointments include Visiting Research Scholar at UCLA, Anderson School of Management (2010-2011) and Acting MBA Director at the Department of Management at the University of Canterbury (2006). He is advising PhD and MBA students as well as teaching MBA and undergraduate courses in operations and quality management; he previously taught at the University of Salford - UK before coming to UC. Dr. Castka's research interests in focus at the role of standards, self-regulation and certification in the current business environment and at sustainable operations. His work has received numerous international awards and has been published in numerous refereed journals. Pavel's research on implementation of corporate social responsibility and corporate governance has been published by the British Standards Institution (BSi) as well as a newly updated version published by SAI Global Ltd. His current research projects include a study on ISO 9000 and ISO 14000 certification funded by the Joint Accreditation System of Australia and New Zealand (with Prof Amrik Sohal and Assoc Prof Daniel Prajogo from Monash University) and a study on Governance of ecolabeling schemes (with Prof Charles Corbett from UCLA). As a consultant, Dr. Castka works closely with businesses to improve their operations and supply chain systems as well as advising organisations on strategic use of standards. His advised New Zealand as well as oversees organisations such as Solid Energy, Ngai Tahu or the HPO Group. He serves at ISO/TC176/SC1 (ISO 9000) and QR-008 (a committee responsible for preparation of Standards, guides and handbooks for quality management and quality assurance for use in Australia and New Zealand). He recently served as New Zealand nominated expert on Social Responsibility for the International Organization for Standardization (2005-2010). ISO/TMB/WG SR is responsible for the development of ISO 26000 - international guidance standard on social responsibility and consists of more than 300 nominated experts from 52 countries. Pavel also shares his field expertise with Standards New Zealand (SNZ) and the Canterbury Branch of the New Zealand Quality Organisation (NZQO).


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5. B.Com. (Management Science and Operations Management) Learning Outcomes and Rubrics College Learning Goals

BCom in Management Science and Operations Management

Goal 1: Graduates can demonstrate advanced knowledge of their selected subject major, informed by the broader context of Commerce

Apply advanced Management Science and Operations Management theories, models and techniques to a previously unseen problem situation. Discuss the implications of implementing a particular solution on an organisation as a whole Discuss the ethical implications of a decision when evaluating options.

Goal 3: Graduates can understand issues from a range of ethical, global and multicultural perspectives Goal 4: Graduates are able to communicate effectively both orally and in written form.

MSCI/MGMT 370 (measured by) Quiz and Test

Assignment

Assignment

Write an essay on a given topic using an appropriate structure, correct spelling, correct grammar and correct referencing.

Assignment

Present a case and/or recommendation clearly using an appropriate presentation structure and visual aids

Article Presentation


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5. Detailed Course Outline


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Lecture 1: Introduction to Operations Management _____________________________________________________________________

Topics Introduction to the course and housekeeping issues - Operations Manager – what does he/she actually do? – Assessment - What is Operations Management – Globalization and OM - Value-adding and Supply Chains - Coping with the increased pressures in the market (OM initiatives) - New and Old Economy operations Before Class Readings Hayes et al, Chapter 1


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Lecture 2: Operations Strategy (Part 1) _____________________________________________________________________

Topics Operations Management and Operations Strategy - Sources of Competitive Advantage - What really works? Another viewpoint on success (AP 1 presentation) – Attacking and Defending through Operations Before class preparation Hayes et al, Chapter 2; please study very carefully Examples 2.1 – 2.4 (pp.57-59 in Hayes et al) to be able to discuss these cases in the class Article Presentation (Note: presenters please read the instructions in the course outline) Group 1 needs to prepare AP1: Nohria, Joyce and Robertson (2003) What really works, Harvard Business Review, Jul, 2003.


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Lecture 3: Operations Strategy (Part 2) _____________________________________________________________________

Topics CASE STUDY (Allegheny Ludlum Steel ALS Corp) – Balanced Score Card Before class readings: CASE: Allegheny Ludlum Steel Corp (please look at the questions below) Article Presentation (Note: presenters please read the instructions in the course outline) Group 2 needs to prepare a presentation of AP2 Allegheny Ludlum Steel Corp; Group 3 to prepare a presentation of AP3 Kaplan and Norton (1996) Using the balanced scorecard as a Strategic Management System, Harvard Business Review, Jan 1996. Case and Article Questions (be prepared to discuss the following questions): Allegheny Ludlum Steel Corp. Q1. What accounts for ALS’s steady improvement in productivity in recent years? Q2. Why did ALS fall behind in silicon steel? Q3. Where does the ALS’s competitive advantage lies? Q4. What are the ALS’s ‘silicon’ options? Write down pros and cons of the following options: meet the Japanese head on? Joint venture with Japanese? Adapt some silicon facilities for making stainless? Run silicon as a cash cow and get out of the business? Balanced Score Card (BSC). Q1. What are the four perspectives of the scorecard? Explain each. Q2. “With the balanced scorecard, I can continually test my strategy. It is like performing real-time research (p.158). Explain! Figure on page 160 may help you! Q3. What does it mean that the balanced scorecard is “… not really a ‘strategy formulation’ tool”? If not, then what is it?


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Lecture 4: Sustainable Operations _____________________________________________________________________

Topics Operations and Sustainability - Certificates and Labels – Product versus Process approach – Strategy and Sustainability Before class readings: Kolk and Pinkse (2005) Business Responses to Climate Change: Identifying emergent strategies, California Management Review, Vol 47 No. 3. Article Presentation (Note: presenters please read the instructions in the course outline) Group 4 needs to prepare a presentation of AP4 Kolk and Pinkse


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Lecture 5: Capacity Strategy _____________________________________________________________________

Topics Definitions and basics - Queuing Theory: practical usage (Video) - The role of context in capacity decision-making - Factors influencing the overall level of capacity – CASE (ZARA)

Before class preparation Hayes et al, Chapter 3 Article Presentation (Note: presenters please read the instructions in the course outline) Group 5 needs to prepare a presentation of AP5 Ferdows, Lewis and Machuca (2004) Rapid-Fire Fulfilment, Harvard Business Review, July-August, 1995 Tutorial preparation Study the case Kristen’s Cookie Company (available on Learn). We will answer the following questions during the tutorial: Q1. What are key characteristics of the product that drive the design of the production system? Q2. What is the capacity of the system? Draw a flow chart and include on the chart what it takes to do a batch of cookies. Q3. What is a throughput time. Develop a Gantt chart. Just how busy is Kristen and her room mate? Q4. Are there any changes you can make in your production plans that will allow you to make better cookies or more cookies in less time or at lower costs? Q5. What happens if you are trying to do this by yourself without a roommate? Q6. Assuming that you are able to get 5$ per dozen cookies and material expense is 0.70$ per dozen, how much does it leave for Kirsten and her roommate? How that changes if Kirsten runs the business by herself?


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Lecture 6: Vertical Integration and Outsourcing _____________________________________________________________________

Topics Examples of outsourcing - Defining Vertical Integration (VI) - Analysing outsourcing - Governance Structures - Factor Influencing VI decision – CASE (Outsourcing in a medical centre)

Before class preparation Hayes et al, Chapter 4 Article Presentation (Note: presenters please read the instructions in the course outline) Group 6 needs to prepare a presentation of AP6 Peish (1995) When Outsourcing Goes Awry, Harvard Business Review, May-June 1995. Case and Article Questions (be prepared to discuss the following questions): Q1. Why did Newman outsource to PDS at the first place? Q2. What Newman should have done 18 months ago whilst negotiating with PDS? Q3. What should Newman do? (Should he cancel the meeting? If not what should he say?; What are the interests of parties involved?) Q4: What are the options?: Let Jacques to walk out and leave it to PDS to sort out the problem; Mediate the dispute; Play it hard with ODS and side with Jacques


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Lecture 7: Designing and Managing Operating Networks _____________________________________________________________________

Topics Structural, infrastructural and ownership & governance issues - Fisher (1997) Matching Supply Chains and products - Incentives and Supply Chains - Dynamics of Supply Chains Before class preparation Hayes et al, Chapter 5 Article Presentation (Note: presenters please read the instructions in the course outline) Group 7 needs to prepare a presentation of AP7 Narayaman et al and Group 8 needs to prepare AP 8 Pain in the supply chain.


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Lecture 8: IT and Operations _____________________________________________________________________

Topics IT doesn’t matter: or does it? - IT and Operations: key issues - ERP systems Before class preparation Hayes et al, Chapter 6 Article Presentation (Note: presenters please read the instructions in the course outline) Group 9 needs to prepare a presentation of AP9 Carr (2003), IT Doesn't Matter. For tutorial, Group 10 will prepare for AP10 Vandelay Industries.

Case and Article Questions (be prepared to discuss the following questions): Q1. Why has R/3 been so successful? Why does it appear to be so far ahead of its competitors? Q2. Why are consultants so often a part of ERP implementations? 50% of Deloitte’s professionals have more than 3 years experience with SAP product. What can be concluded from this? Q3. If you were Elaine Kramer, what would your greatest worries be as you started this implementation? What about the Vandelay CEO? Q4. What competitive requirement does R/3 fulfil for Vandelay? Will it bring a sustainable competitive advantage?


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Lecture 9: Guest Lecture by Dr Venkat Pulakanam _____________________________________________________________________

Topics Details to be announced


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Lecture 10: New Process Development _____________________________________________________________________

Topics The interplay between new product and process development - Innovation Process - New Product Development - New Process Development – Innovation Tournaments Before class preparation Hayes et al, Chapter 7 Article Presentation (Note: presenters please read the instructions in the course outline) Group 11 needs to prepare a presentation of AP 11 McDonalds Case

Case and Article Questions (be prepared to discuss the following questions): Q1. Why has McDonald’s sustained its prosperity so long? Q2. What are key threats to its future success? Q3. What is the motivation for McDonald’s to undertake its collaboration with the EDF?


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Lecture 11: Continuous Improvement _____________________________________________________________________

Topics Learning (individual, team, organizational) – Continuous Improvement (pros and cons) – TQM and Business Process Reengineering – Case: Philips Before class preparation Hayes et al, Chapter 10 Article Presentation (Note: presenters please read the instructions in the course outline) Group 12 needs to prepare a presentation of AP 12 Philips Case

Case and Article Questions (be prepared to discuss the following questions): 1. Describe the ‘quality journey’ in Philips, drawing a chart of activities which a company in a similar industry could follow if it was beginning the implementation of TQM 2. What role does the Philips’ brand play in company-wide improvement initiative? 3. Evaluate the approach taken by Philips. What are the strengths of their approach? 4. Where would be Philips’ approach most appropriate? Inappropriate?


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