Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
The operations challenge
Chapter 21
Source: Provided by the Sea W: FS Project, Nasa/Goddard Space Flight Center and ORBIMAGE
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Five of the challenges for operations managers
Operations strategy
Design Improvement
Planning and control
Globalization
Corporate social responsibility
Technology Knowledge management
Environmental responsibility
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Operations decisions have a corporate social responsibility dimension
Product/service design – customer safety, recyclability of materials, energy consumption
Network design – employment implications and environmental impact of location
Layout of facilities – staff safety, disabled customer access
Process technology – staff safety, waste and product disposal, noise pollution, fumes and emissions
Job design – workplace stress, unsocial working hours
Capacity planning and control – employment policies
Inventory planning and control – price manipulation
For example …
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Decision area Some globalization issues
Product/service design Transferability of product/service design
Adaptation of design to fit culture and legislation
Network design Location of global network of facilities
Ownership and capacity change legislation
Layout of facilities Cultural reaction to work organization
Process technology Serviceability and maintenance of technology
Skills availability
Job design Cost of labour
Skills availability
Cultural reaction to work requirements
Planning and control (including MRP, JIT and project planning and control)
Cultural reaction to necessity for planning
Cultural reaction to need for flexibility
Globalization
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Decision area Some globalization issues
Capacity planning and control
Differences in seasonality and demand patterns
Legislation on part-time or temporary work contracts
Legislation and cultural view of flexible working
Inventory planning and control
Storage conditions and climatic sensitivity
Cost of capital and other storage cost differences
Supply chain planning and control
Real cost of transportation
Differences in contractual arrangements
Supplier conformance to employment standards
Quality planning and control and TQM
Cultural views of acceptable quality
Cultural views of participation in improvement groups
Safety
Failure prevention and recovery
Maintenance support
Cultural attitude to risk
Flexibility of response to failure
Globalization
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
‘CSR is the business contribution to our sustainable development
goals. Essentially it is about how business takes account of its
economic, social and environmental impacts in the way it operates
– maximising the benefits and minimising the downsides.
Specifically, we see CSR as the voluntary actions that business can
take, over and above compliance with minimum legal requirements,
to address both its own competitive interests and the interests of
wider society.’ (UK Government)
Corporate social responsibility
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
‘Corporate Social Responsibility … is listening and responding to the needs of a company's stakeholders. This includes the requirements of sustainable development. We believe that building good relationships with employees, suppliers and wider society is the best guarantee of long-term success. This is the backbone of our approach to CSR.’ (Marks & Spencer, retailer)
‘[Our vision is to] … enable the profitable and responsible growth of our airports. One of our six strategies to achieve that purpose is to earn the trust of our stakeholders. Corporate responsibility is about how we manage our social and environmental impacts as part of our day to day business, in order to earn that trust.’ (BAA, airport operator)
Corporate social responsibility
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
One way of demonstrating that operations, in a fundamental way, are at the heart of environmental management is to consider the total environmental burden (EB) created by the totality of operations activities:
whereP = the size of the population
A = the affluence of the population (a proxy measure for consumption)
T = technology (in its broadest sense, the way products and services are made and delivered, in other words operations management)
Environmental burden (EB)
EB = P × A × T
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Product/service design – recyclability of materials, energy consumption, waste material generation
Some environmental considerations of operations management decisions
Network design – environmental impact of location, development of suppliers in environmental practice, reducing transport-related energy
Layout of facilities – energy efficiency
Process technology – waste and product disposal, noise pollution, fume and emission pollution, energy efficiency
Job design – transportation of staff to and from work, development in environmental education
Planning and control (including MRP, JIT and project planning and control) – material utilization and wastage, environmental impact of project management, transport pollution of frequent JIT supply
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Some environmental considerations of operations management decisions (continued)
Capacity planning and control – over-production waste of poor planning, local impact of extended operating hours
Inventory planning and control – energy management of replenishment transportation, obsolescence and wastage
Supply chain planning and control – minimizing energy consumption in distribution, recyclability of transportation consumables
Quality planning and control and TQM – scrap and wastage of materials, waste in energy consumption
Failure prevention and recovery – environmental impact of process failures, recovery to minimize impact of failures
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Is packaging necessary?
Can packaging
be reduced?
Yes
Reduce packaging
Yes
Reuse
YesRecycle
Yes
Eliminate unwanted packaging
No
Can packaging be reused?
No
Can packaging
be recycled?
NoMinimize
packagingNo
Identifying waste minimization in packagingS
ourc
e: A
we
Insp
iring
Im
ages
/Pho
togr
aphe
rs D
irect
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
ISO 14000The ISO 14000 standard has a three-section environmental management system that covers initial planning, implementation and objective assessment
ISO 14000 makes a number of specific requirements:
a commitment by top-level management to environmental management
the development and communication of an environmental policy
the establishment of relevant and legal and regulatory requirements
the setting of environmental objectives and targets
the establishment and updating of a specific environmental programme,or programmes, geared to achieving the objectives and targets
the implementation of supporting systems such as training, operationalcontrol and emergency planning
regular monitoring and measurement of all operational activitiesa full audit procedure to review the workings and suitability of the system
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Key Terms TestGlobalizationThe extension of operations supply chains to cover the whole
world.
Environmental protectionActivities and decisions in operations management that
minimize the negative impact of processes, products and services on the environment.
ISO 14000An international standard that guides environmental
management systems and covers initial planning, implementation and objective assessment.
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Key Terms Test
Disruptive technologiesTechnologies which in the short term cannot match the
performance required by customers but may improve faster than existing technology to make that existing technology redundant.
ProcessesAn arrangement of resources that produces some
mixture of products and services.