MBA9 OPERATIONS & SUPPLY CHAIN MANAGEMENT...7.6.2 ETHICS IN SCM • While theoretical and...

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Brad Bell

September 2017

MBA9

OPERATIONS &

SUPPLY CHAIN

MANAGEMENT

SESSION 4

FROM THE PREVIOUS SESSION …

• Have you bought and read your copy of the prescribed

textbook?

• Have you almost finished doing all your MCQs online for

the previous sections?

CLASS SCHEDULE 2017

SCOPE OF CONTENT

Day

17.1

Supply chain, performance drivers & metrics 1

Supply chain, performance drivers & metrics 2,3

Day

2

7.2 The supply chain process 5,6

7.3 Forecasting & planning 7,8

Day

3

7.4 Global sourcing & procurement 15

7.5 OSCM – management information systems (18)

Day

4

7.6 Ethics & CSR in OSCM 17

Overview of group & individual assignments

Unit in study guide Chapter in prescribed text book

MBA9

Operations & Supply Chain Management

SECTION 7.6

Enterprise ethics and corporate

social investment in OSCM

HOW’S OUR PROGRESS?

7.1 (a) Supply chain, performance drivers & metrics

7.1 (b) Supply chain, performance drivers & metrics

7.2 The supply chain process

7.3 Forecasting and planning

7.4 Global sourcing and procurement

7.5 OSCM – management information systems

7.6Enterprise ethics and corporate social

investment in OSCM

Overview of assignments

7.6.1 ETHICS AND CORPORATE GOVERNANCE

• ‘Corporate governance’ is a risk management system designed to protect organisations from the people who lead and manage them

Public sector: SCM is bedevilled by corruption

• Employers are at risk from staff and suppliers who might commit fraud, individually or in collusion, falsifying paperwork, making post-tender award changes to specifications, overcharging or backdating orders, etc.

Private sector: SCM is bedevilled by cost-cutting

• Promoting financial instability, climate change, covering up information, procurement from organisations that treat their workers badly, or do not manage their resources sustainably, etc.

7.6.2 ETHICS IN SCM

• While theoretical and empirical investigations of ethical

judgment at the level of supply chain management are

limited, a study by Ha (2016) showed the impact of ethical

judgement on trust in the operations and supply chain

environment

• High levels of ethical judgment in those within the supply

chain have been proven to enhance trust between buyers

and suppliers. There is also a positive link between trust

and supply chain collaboration, showing that the

relationship between the buyer and supplier continues to be

based on trust when supply chain managers’ ethical

judgment level is high

HA (2016)

7.6.3 SUSTAINABLE SCM

• Shareholder activists are starting to show their teeth when poor governance harms the businesses

• Sustainable supply chain management (SSCM) is characterised by the explicit integration of environmental and social objectives into traditional indicators of economy and efficiency

• SSCM uses fewer resources and produces less waste by enabling better resource utilisation

• SSCM extends the responsibility of business organisations, from being reactive with regard to reducing pollution and waste and making other sustainability efforts, to proactively assuming full responsibility for their products, from the acquisition of raw materials to the final disposal of the products.

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https://www.youtube.com/

watch?v=_sV5P_F3frY

watch?v=OwOBRH56Ic0

VIDEO: The ‘economic miracle’ in China

https://www.youtube.com/watch?v=_sV5P_F3frY

VIDEO: The real cost of that so-called ‘miracle’

https://www.youtube.com/watch?v=OwOBRH56Ic0

7.6.4 REPUTATIONAL RISK MANAGEMENT IN

SCM

• The astute business manager owner may be aware of the

impact of risks in their businesses, but the impact of

reputational risk is overlooked, specifically in the supply

chain

• Are your suppliers following good practices or will you

discover in the media that they have not been doing so?

These could be related to the abuse of labour as in the

cases of child labour. Or spewing out harmful gases into the

atmosphere or waste into water systems

• Is your organisation “guilty by association”?

CORPORATE REPUTATION

• The reputation of any company is thus a valuable resource.

There are three foundations of corporate reputation:

• Reputation is based on subjective impressions;

• It is the aggregate perception of all stakeholders; and

• It is comparative.

REPUTATIONAL RISK MANAGEMENT

• Organisations need to address three aspects when managing reputational risk:

1.The probability of the event occurring,

2.The total social cost if the risk were to be realised; and

3.What portion of the burden the organisation would incur.

• Once those three things have been weighed up, there are four possible lines of action:-

1.Risk avoidance;

2.Loss prevention and control;

3.Risk transference; and

4.Risk retention.

• Risk retention is the most viable option, after avoiding risky behaviour altogether via corporate social responsibility

CORPORATE SOCIAL RESPONSIBILITY

• There are four areas of corporate social responsibility:-

1.economic (profitability),

2. legal (obey the law),

3.ethical (obligation to do what is right), and

4.discretionary (voluntary activities).

‘SHARED’ REPUTATIONAL RISK IN SCM

• In OSCM, some reputational aspects may become

transferable from one party to another – including

reputational spillover effects among supply chain members

• Firms need to identify and understand their exposure to all

the risks in a supply chain, so reputational risk is one type

of risk that managers should mitigate

• Individual members in the process need to analyse how

their social responsibility principles tie into those of others

in chain

• If there are differences, the exposure of members to

reputational risk increases

www.regenesys.co.za

https://www.youtube.com/

watch?v=fuzB8W8jvvU

VIDEO: KPMG South Africa

https://www.youtube.com/watch?v=fuzB8W8jvvU

• Solly Moeng, 20 Sep 2017

• http://www.fin24.com/Opinion/toxic-tentacles-of-the-zupta-

net-may-smother-kpmg-20170920

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END

OF

THE

UNIT

Congratulations!

Nice going … !!

Please remember not to forget to

remember to:-

1. Check out the ‘Key Points’

summarising this unit

2. Do your digital assessment

(MCQs) for this unit online

MBA9

Operations & Supply Chain Management

DAY 4

Assignment Overview

HOW’S OUR PROGRESS?

7.1 (a) Supply chain, performance drivers & metrics

7.1 (b) Supply chain, performance drivers & metrics

7.2 The supply chain process

7.3 Forecasting and planning

7.4 Global sourcing and procurement

7.5 OSCM – management information systems

7.6Enterprise ethics and corporate social

investment in OSCM

Overview of assignments

GROUP ASSIGNMENT

• Your role

• For the purposes of this exercise, your group is to advise Amazon founder Jeff Bezos on high-level supply chain strategy for the combined Amazon-Whole Foods enterprise.

• Your mission

• Scrutinise both operations’ outputs, and map their broad process requirements against the Four V typology of processes, noting the implications for each good or service, and bearing in mind Amazon’s strategic objectives.

• Using your findings, write a report for Bezos on where, how and why competitive strategic advantage might be leveraged in the supply chain through the takeover, given the combined resources available, and considering how any constraints identified might be overcome.

• Recommend how the options that could be implemented should be evaluated, and suggest ways to mitigate possible risks.

REFERENCES TO GET STARTED

Study guide:-

• 7.1.5 Process types (p 24)

Prescribed textbook:-

• 1.6 Examples of supply chains (pp 26 – 28)

• 2.2 Achieving strategic fit (pp 38 – 39)

INDIVIDUAL ASSIGNMENT

BUT IT’S 150 MARKS … ??

For this assignment you are required to:-

• Review your organisation’s supply chain (or that of one with which you are familiar) in light of environmental developments, strategic fit, and constraints, and

• Make feasible recommendations to improve it.

Note that you are required to:

• Clearly indicate in your submission which organisation you have chosen.

• Your submission should take the format of a four-part report, and include:-

• An executive summary,

• A situation analysis,

• A section in which you consider and evaluate options, and

• A final section in which you offer recommendations.

Q2.1

• Assess changes in the organisation’s environment, and

critically evaluate the implications of these changes for

the organisation [10 marks]

Study guide:-

• 7.1.6 Supply chain decisions (p 26)

• 7.2.1 Supply chain management 2.0 (p 33)

Prescribed textbook:-

• 1.5 Process views of a supply chain (p 22)

• 2.4 Challenges to … strategic fit (pp 45 – 47)

Q2.2

• Evaluate the organisation’s supply chain performance,

using financial data. Benchmark it against industry norms.

State your conclusion [15 marks]

Session 1 Slides:-

• 7.1.8 Performance measures (Slides 52 – 59)

Prescribed textbook:-

• 3.1 Financial measures of performance (pp 52 – 53)

Q2.3

• Map the organisation’s product or service operations typology, and assess whether it is necessary, given any environmental changes noted in your situational analysis, and given the organisation’s supply chain performance, to adjust the basis on which the organisation competes.

• Assess the implications for the organisation’s value proposition, and for its supply chain, should changes be needed [12 marks]

Study guide:-

• 7.1.5 Process types (pp 24 – 25)

Prescribed textbook:-

• 2.2 Achieving strategic fit (pp 38 – 39)

Q2.4

• Assess the capabilities and constraints of the supply chain,

briefly considering each of the organisation’s drivers of

supply chain performance , as well as the key metrics

associated with each [30 marks]

Study guide:-

• All of Section 7.1 (pp 15 – 30)

Prescribed textbook:-

• All of Chapter 2 (pp 31 – 49)

Q2.5

• Map three of your organisation’s products or services on the demand uncertainty spectrum, and critically evaluatehow parts of your supply chain could be tailored to improve responsiveness, as well as how other components could be tailored to concentrate on efficiency. Describe the implications for the supply chain and for the business of adjusting your supply chain in this way [8 marks]

Study guide:-

• 7.1.7 Supply chain strategy (pp 27 – 29)

Prescribed textbook:-

• 1.4 Decision phases in a supply chain (pp 19, 24)

• 2.2 Achieving strategic fit (pp 34 – 35)

Q3.1

• Generate options, for each supply chain performance

driver, to improve the strategic fit between the

organisation’s competitive strategy and its supply chain

strategy, including strategies to overcome constraints [10

marks]

(same as previous question)

Study guide:-

• 7.1.7 Supply chain strategy (pp 27 – 29)

Prescribed textbook:-

• 1.4 Decision phases in a supply chain (pp 19, 24)

• 2.2 Achieving strategic fit (pp 34 – 35)

Q3.2

• Use a decision tree to evaluate critically the options open to your organisation, local and offshore, and to take uncertainty into account.

• Your evaluation should consider the life span of assets such as facilities and machinery; regional demand; infrastructure; labour, logistics, factor and other costs; taxes; the cultural implications of changes; quality of life issues; product quality; environmental responsibility; lead times; flexibility and responsiveness requirements; capacity optimisation; minimum order quantities; and any other operational dimensions relevant to your organisation.

• It should also identify risks associated with each option, and what will be required to mitigate them.

• Show all workings, as well as your decision tree [40 marks]

Study guide:-

• 7.2.6 Using decision trees to evaluate network design

decisions (pp 41 – 42)

Facilitation slides:-

• 7.2.6 Decision trees (Session 2; slides 30 – 33)

Prescribed textbook:-

• 6.5 Evaluating network design decisions using decision

trees (pp 165 – 167)

Q4

• Set out your recommendations for the organisation, with a

brief explanation of how each one is expected to

contribute to the triple bottom line [15 marks]

Study guide:-

• 7.1.6 Supply chain decisions (p 26)

Prescribed textbook:-

• 17.7 Summary (p 520)

Q1

• Write a one-page executive summary your review,

describing briefly your findings, your recommendations, and

the rationale behind your recommendations. Include the

organisation’s vision, mission and strategic objectives to put

your recommendations in context [10 marks]

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END

OF

THE

OVERVIEW

Congratulations!

Nice going … !!

www.regenesys.co.za

Brad Bell

September 2017