Review Class - 8 - Final

8/2/2019 Review Class - 8 - Final

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Prepared By: Reham Al-Homayan

Review class

Process Book


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Please read the case study and

answer the following questions.

Smith Wholefoods case study


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Q1 : Think about this organization as an open system, andIdentify 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 themaccording to the case.

Q 3: What is the dominant transformed resources-materials,information or customers? List all the information resourcesyou find it in the case.

Q4: Identify Porter value chain and choose one area from theprimary activities of Smith Wholefoods and apply it to thePorters value chain.

Q5: All parts of the organization are operations Explain thisstatement through examples.


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Q6: what the advice you might suggests to Mr. smith to shift intocapabilities based competitors, and identify the 4 basicprinciples 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 theB200 Processes module.

Q8: Discuss why an organisation might choose to recall its

products and how this recall take place. Give examples fromthe B200 Processes module.

Q9: Define (OMC) and how can be applied to the case study

Q10: 3- Effective logistics management can provide a majorsource 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?


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Q1 : Think about this organization as an open system, and Identify the mainactivities it performs. List the main inputs and the main outputs of theoperations.

The company as an open system have direct interact with the environment. Open systemhave 3 major characteristics:

Receive input from environment

Convert input to output

Discharge their outputs into their environment.

Environment

Input Conversion Output

Materials

IdeasStaff

Finance (budget)Location

Manufacturing

packagingMarketingPlanning

Production

Bakery Service

BreadsCrispy potato

Cakes


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Kats & Khan sets 5 sub-systems at work. Identify themaccording to the case.

Production sub-system: concern with bread and potato production(manufacture, customer service, products, )

Supportive sub-system: concern with relationship between theorganization and external environment. ( caf, bakery).

Maintenance sub-system: concern with stability of the organization(Management rules and reward the staff).

Adaptive sub-system: concern with what the organization mightbecome. How the manufacture is working and deliver services andproduct in unique way. ( more branches )

Managerial sub-system: controlling, coordinating, planning, and takingdecision.

11p1Ch


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What is the dominant transformed resources-materials,information or customers? List all the information resourcesyou find it in the case.

The transformation process in operations is closely connected withthe nature of its transformed input resources. Transformationmean using resources to change the state or condition.

Material Process: Wholefoods using raw materials to develop theirproducts (breads, cakes, potato crisp)

Information Process: Wholefoods using customers ideas andsuggestions to design new products.

Customers Process: more branches in the village, and improve theproduct quality.

21-20p2Ch


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Identify Porter value chain and choose one areafrom the primary activities of Smith

Wholefoods and apply it to the Porters valuechain.

Value chain definition

Select primary activity (e.g sales & marketing).

57p5.3& Fig5651p5Ch


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Answer Q5

- Identify operation in the organization, themajor and support function

- Explain how the organization departments& management are working effectively toreach the goal.

- Examples by using table 2.1 p 16

Ch. 2 P. 15 to 17


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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, .


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Answer Q8

Identify reverse logistic

Classes of recall

Steps of recalling

Mention examples

12.1Fig171P12Ch

Answer Q9Identify OMC, explain each order with example.

It can be apply through Improve product

Pricing

Caf Working hoursDistribution

Management & staff

190188p.14Ch


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Answer Q10

Identify logistics, productivity advantage, value advantage, supply chainmanagement.

Ch 11 p.150 153 Fig 11.3

Answer Q11

Manufacturing systems must be adaptive to survive through the controlsystem which consider to be a dynamic process to ensure efficientlymeet 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


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Chapter 1Organizations 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 arethe 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 wherethe organization ends and the environment begins.



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Kats & Khan

They identified 5 subsystems at work inan Organization:

Production or technical sub-system

1. Supportive sub-system

2. Maintenance sub-system3. Adaptive sub-system

4. Managerial Sub-system



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Chapter 2Effective Operations Management

IKEA owes its success to the effectiveness of itsoperations 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 thewarehouse;

5-an appropriate quality of service;6-a continuous stream of ideas to improve its, alreadyimpressive, operations performance.



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Operations in the organization

Here we divide the organization major functions:

and theaccounting and finance function, themarketing functionthe, which supplysupport functions. Andproduct/service development function

and support the operations, function, including:andpurchasing functionthehuman resources function,The

engineering/technical function.the

Theoperations functionof the organization is the arrangement of resourceswhich is devoted to the production of its goods and services.Operations managersare the staff of the organization who have particularresponsibility for managing some, or all, of the resources which comprisethe operations function.

Operations managementis the term which is used for the activities, decisionsand responsibilities of operations managers.



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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 theyuse their resources to change the state or condition of something toproduce 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' medicalprocedures.



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The inputs to an operation can be conveniently classified as either:

1-transformed resources the resources (mixture of customers, informationand materials) that are treated, transformed or converted in some way; or

2-transforming resources there are 2 types of operations blocks : theresources that act upon the (for example facilities like building andequipment, the staff who run and manage the operation) transformedresources.



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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 theirconsumption, happened at the same time as you 'consumed' the service byfollow up through the process)(buying it.

Customer contact-in services, because they are produced and consumedsimultaneously, they must have high contact between the customer and theoperation.

Quality-



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Chapter 4Competing 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, managethem centrally, and invest in them heavily, looking for a long term payback.

Capabilities based-Competition, is a new concept of corporate strategy thatfocus 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.



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To win the competition we need to focus on five dimensions:

, the ability to respond quickly to customer or market demand bySpeed

creating new ideas and use technology., the ability to produce product that satisfies customersConsistency

expectations., the ability to see competitive environment and understand customers.Acuity, the ability to adapt to different business environments in the same time.Agility

, the ability to generate new ideas by combining existingInnovativeness

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)



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Chapter 5The Value Chain and

Competitive Advantageby Michael Porter

Each organization is a collection of several activities (products, market, deliver,.value chain& support) these activities represented by

The value chain is to analyze the specific activities through which firms or

organizations can create a competitive advantages.

Primary or support value chain.

: the goal is to create the value that exceeds thePrimary value chain activitiescost of providing the product or service.The activities are:

Inbound logistic: Receiving input

Operation

- Material handlingOutbound logistic

Marketing & sales - advertising and getting buyers

Customer services.-Service



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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 supportthe value chain.

Human Resources management, recruiting, development, training,

Firm infrastructure, organizational structure, control system, culture, finance,

quality, management.

:dimensions of scope that affect the value chain4There are

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 competeswith a coordinated strategy.



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Chapter 6Marketing 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 acquirecustomers. To be attractive to customers, the products and servicesoffered 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; andmarkets.



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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 thepurpose 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 DemandDislike products )(Negative Demand

Very high )(Overfull Demand

Chicken and diseases )(Falling Demand



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Marketing Management Philosophy,the way to approach the buyers by understanding the interest for customer andsociety.

There are five alternative concepts under which organizations can conduct theirmarketing activities:

The production concept

When demand exceeds supply, the management need to increase production

The product conceptorganizations 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, therebysatisfying consumers and making profit

The societal marketing concept

Need to know the environmental problem, resources shortage, economic problem, socialservice.



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The 4 goals of the marketing system

Marketing system affects both buyers & sellers. Buyers want best quality atreasonable 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 theyare.

Maximize consumer satisfaction: the consumer satisfaction is difficult tomeasure, therefore, some companies develop ways to measure customersatisfaction..

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, .



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Chapter 11Logistics and Competitive Strategy by Martin

Christopher

Logistic is the process of strategically managing the procurement,movement and storage of materials, parts and finished inventorythrough the organization and its marketing channels in such a waythat current and future profitability are maximized through the cost-

effective fulfillment or orders.

Effective logistics management can provide a major source of competitiveadvantage. How?



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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 andhence at greater profit.

Needs seeking benefitsAt acceptable prices

Assets andUtilisation

Assets andUtilisation

Customers

Company Competitor

VALUE VALUE


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Productivity Advantage or ValueAdvantage

gives a lower cost profile to have greaterproductivity advantageThesales value.

Logistic management can provide a multitude of ways to increaseefficiency and productivity and contribute to reduce unit costs.

gives the product a differential "plus" overvalue advantageand the

competitive offerings.Customers dont buy products, they buybenefits

e.g BMW (as value advantage) Nissan as (Cost advantage).



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Updated by: Reham S. Al-Homayan

Logistics and competitive advantage matrix

In practice, successful companies will often seek to achieve aposition based upon both productivity advantage and valueadvantage. Fig 11.3 p 153

Service

Leader

CommodityMarket

You must differentiate

Your self

CostLeader

New technology help

Cost & service

LeaderJapanese companiesH

ig

h

Low

V

alueadvantages

Productivity advantages

HighLow


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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 itscompetitors 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 andproductivity advantages.



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The Supply Chain and Competitive Performance

The supply chain is the network of organizations that are involved,through upstream and downstream linkages, in the differentprocesses and activities that produce value in the form of productsand services in the hands of the ultimate consumer.

Supply chain management covers the flows of goods from supplierthrough manufacture and distribution chain to the end user.

The difference between logistics management and supply chainmanagement??

Logistics management is primarily concerned with optimizing flowswithin the organization. while ,supply chain management recognizesthat internal integration by itself is not sufficient.



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:perhaps the most challenging are in the area of logistics

The customer service explosion

Time compression

Globalization of industry

Organizational integration



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Chapter 12Reverse 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 causeinjury 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 andthe level of penetration in the distribution system.

The challenge exists for a logistician to design a reverse system ofdistribution and get it to work at a desired performance level at the lowestpossible total cost.



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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 controlledwarehouses or primary distributor controlled warehouses. A simplematter to recall.

Product would have to be located and withdrawn from the middlemen involved

in the distribution of the product (wholesalers and retailers). RecallSlightly 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.



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Warranty Cards

Information that can be coded on computerized warranty cards are:

Product description

Manufacturing PlansLot (group)

Retrieval of Products

After the product is located, logisticians can coordinate the process of retrieving

the product in the field either through:he company's field sales forcet

the retailer or other middlemen

outside collection specialists

Effective retrievals require that:

The customer be motivated to return defective products for repair, replacementor refund.

Good relationships be established among carriers and other participants in thedistribution process such as channel members.

The biggest obstacle in recalling products is the consumers. .



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Chapter 13The Triumph of Process by Michael Hammer

,redesign organisationsBPR is the term applied to a range of techniques that aim tobased on their business processes.

BPRBusiness Process Reengineering: the fundamental rethinking and radicalredesign of business processes to achieve dramatic improvement in critical currentmeasure of performance , such as cost, quality, service, and

speed.

The problems that affect modern organizations are not task problems, they:Some of the problems.are process problems

to deliver results not because our people are performing their individualslowWe aretasks slowly and inefficiently, but because some of our people are performingtasks that need not to be done at all to achieve the result and because weencounter 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.

not because individuals are locked into fixed way of operating, butinflexibleWe arebecause no one has an understanding of how individual tasks combine to createresult. Understanding important to solve this problem.



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Implementation

Organizations found themselves in a situation where they have to implementthe new process where processes play a central role in the operation and

management of the business: the process centered organization.

things:fourTo start taking a process centered approach, a company must do

-The company must recognize and name its processes. Often companiesdivide primary processes into a small number of sub processes which arethen describable in terms of basic tasks or activities.

-Ensure that everyone in the company is aware of these processes and theirimportance to the organization as a whole.

-Pprocess measurement.-Process management, looking for opportunities.



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Chapter 14Staple Yourself to an Order by Shapiro, Rangan and Sviokla.

a process perspective on its activity forces the organisation to becomecustomer focused.

orderEvery customers experience is determined by a companys

(OMC).management cycle

The order management cycle offers managers the opportunity to look attheir company through the eyes of the customer, to see andexperience transactions the way as a customer.

.



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There are 10 stages to walk through the OMC:

Order planning, show how and why bad customer service and fragmented operationscan cripple a company. Sales people, marketing and operation need to cooperate.

Order generation, this stage usually produces a gap between order generation, orderplanning, and later steps.

Cost estimation and pricing, the battles between engineers who estimating, accountantwho calculate the cost, a headquarters group that oversees pricing, and sales thatactually develop the price.

Order receipt and entry, takes place in customer services department when thecustomer reps in contact with the customers, sometimes no connection with the topmanagement.

Order selection and prioritisation, the process of choosing which order to accept andwhich to decline. Smart company like the order with business strategy. The decision

are taking by top management, customer service reps.



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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 topmanagement 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 customersactivities (complain, order, pay, )



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How to fix an OMC

Analysis understand the flow of activities and to have a clear picture aboutorder flow, difficulties and discuss a solutions in visible way.

.Companies need to look at the OMC from the customers point of viewmaybe 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 toclose the loop between service provider and strategy setter. the customermay like to have their things in a drum rather than plastic rapping !

Benefits

improved customer satisfaction, interdepartmental problems will recede, andcompanies will improve their financial performance.


Review Class - 8 - Final

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