Operations and Supply Chain Strategy.

1a) You are aspiring Operation manager in a global company. What are four major decisions
responsibilities you will have to work with your peers?
Four major decisions categories are
1. Quality
Definition of quality standards, measurement of deviations from design standards,
inspection and control of quality of input materials, prevention of defects.
2. Process
The process of securing the raw materials, transforming and assembling them into a finished
good and packaging the product; job design and establishment of employee benefits.
3. Capacity
Number of units the facility is capable of producing per unit time, size of inventory storage,
hiring of workers and scheduling of shifts.
4. Inventory
Finished goods, work-in-process, and raw materials to smooth production and meet
customer needs.

1b) Several contemporary themes are important in operations making operations an exciting and
interesting place. List eight themes and describe each theme.
Contemporary Operations Themes
1. Service and Manufacturing scope
2. Customer Directed Operations
3. Lean Operations
4. Integration of Operations with Other Functions
5. Environmental Concerns
6. Sustainability
7. Supply Chain Management
o Is network of manufacturing and service operations that supply each other
from raw material through manufacturing to the ultimate customer.
o Consists of physical flow of material, money and information along the
entire chain of purchasing, production and distribution.
o Connects many different organizations.

8. Globalization of Operations

1c) What will be the three Supply Chain strategies you will adopt to support the Operation
objectives?
- Supply Chain Management
1. Is network of manufacturing and service operations that supply each other from raw
material through manufacturing to the ultimate customer.
2. Consists of physical flow of material, money and information along the entire chain
of purchasing, production and distribution.
3. Connects many different organizations.
Product Design and Process Selection
2a) name the three phases in New Product Development and describe four ways in which a
company could collaborate with customers on its new-product design?
New Product Development process is in 3 phase : concept development, product design and pilot
production/testing.
Product should be designed from the start for manufacturability. This is done by considering design
of the production process as part of product design and utilizing a concurrent engineering approach.
Concurrent engineering uses overlapping phases for product design rather than a sequential
approach. An NPD team will be a cross functional, consists of marketing, engineering, operation,
supply chain and finance.
Supply chain collaboration in new product development is essential to flow information from
customer requirement to supplier capability/capacity.
Design for manufacturability can be accomplished by means of product simplification or modular
production.

2b) Describe four Best Practices a company can adopt to ensure an efficient New Product
Development Process.
- 3 ways to develop new product
1. market pull... customer needs are determined >>> marketing dept will lead and little regard
for technology capability of the company
2. technology push ... company will pursue a technology based advantage by developing
superior technologies and product assuming they will have a natural advantage and
customer will want to buy them.
3. Interfunctional company will hold the view that the product should not only fit the market
needs but have a technical advantage as well. This is the better approach.
4. Quality function deployment is used to connect customer attributes to engineering
characteristics. This typically is done through a technique called the house of quality that
can be used for both manufacturing and service.

2c) Name the three types of Order fulfilment and explain how the customer order will be fulfil. For
each approach, describe two characteristics, and list one advantage and one disadvantage.
1. Make-to-Order or MTO
Start production after customer orders
Advantage : no finished goods inventory
Disadvantages : intermittent production
Key performance measures : Lead time/ order completed on time (or late)/ Quality
measures
2. Assemble-to-Order or ATO
Produce parts and subassemblies; finish when customer places order
Advantages: less inventory, faster service
Disadvantage: some WIP inventory
Key performance measures: Speed of service/ Inventory levels/ Quality of product
and service
3. Make-to-Stock or MTS
Produce finished goods; customer buys from inventory
Advantage : smooth production
Disadvantage : inventory
Key performance measures : service level (orders filled when requested) / inventory
turnover (sales/ avg. inventory) / Back order fill rate / Inventory accuracy / Time to
replenish / Others, such as shrinkage rate.
 3 types of Order Fulfillment Examples
Make to stock (MTS) Hand phone Replenishment cycle for inventory is separate from
customer order cycle; provides standard product
Make to Order (MTO) Aero plane Align with customer order; delivery performance is critical
and process is highly customize to customer
Hybrid Assemble to order Automobile Produce subassemblies in advance for inventory and
(ATO) assembles them into a final product when order comes in.

Service Delivery System Design

3a) name the five types of Customer introduced variability that causes uncertainty in
Service business.
Product simplification is done through value analysis, which achieves the maximum usefulness for
the customer at the lowest cost. Modular design is used to minimize the number of different parts
needed to make a product line of related products. This can be done by designing standard modules
and considering only the combinations of options that have significant market demand
2 key dimensions for Process Classifications ... 1. Product flow and 2. Order Fulfillment type Product-
Process Matrix matches the Product choices made by Marketing and Process choices made by
Operations.
- 5 types of Processes Examples Suited for
:
Continuous Toys, packaging High volume, standardized, low cost, limited flexibility
Assembly line Hand phone
Batch Fashion apparel Low to Moderate volume, customized, high variety
Job Shop Jewelry Process/Layout flow is jumbled and can cause lower productivity
benchmark against Assembly line
Project Construction Unique and creative product, Lot size=1; requires intensive
planning and scheduling; costly product or services

3b) describe the difference in service delivery system design between customer-routed services and
provider-routed services. Give an example for each.
Service matrix aligned the customers wants & needs to the service delivery system design

customers wants & needs

Service Many process pathways, jumbled
Delivery flows, complex work with many
System exceptions
Moderate # of process, flexible
Design
flow with some dominant paths,
moderate work complexity
Limited # of process pathway, line
flow, low work complexity
increased level of technology to automate service to improve efficiency (lower cost) and quality (uniform)
Highly customize, unique
process sequence, Customer
has great decision making
power
Customer-routed e.g. Buying a
house /insurance/tour,
Register for training course
Standard with options, Standardized with highly repeated
using moderately repeated sequence, Cust. has low decision
sequence, Cust. has some making power
decision making power
Co-routed e.g. On line
hotel booking
Ordering a bowl of noodle
at food court.
Provider-routed SAM/ATM
service; fast food ordering

Operation managers must be concerned with the amount of customer contact because higher levels of customer contact
can introduce variability into a process. Types of Customer introduced Variability are the uncertainty in ...

- when customer will arrive to consume a service ( Arrival variability)

- what customer will ask for in the service-product bundle (Request variability)
- customer's ability to participate in service (Capability variability)
- willingness to perform appropriate actions (Effort variability)
- the intangible preferences of customers in how the service is carried out (Subjective-preference variability)
3c) with the aid of the of a diagram, describe the Heskett and colleagues model ‘Service-Profit Chain’
(1977)’ on how the seven links in the model generate the customer loyalty which is the key to
revenue growth and profitability.

Lean Thinking and System

4a) Lean Thinking has 5 tenets which leads to the way of thinking to eliminate non value added
activities and waste in the system. Name the five tenets.

4b) Describe the six elements in Lean concepts, principles, and tenets can be deployed to reduce
waste in manufacturing and service firms.
Kaizen emphasizes continuous improvement. Kaizen events are used to implement lean
thinking improvements quickly in one week or less on a particular process.
In a lean production system...
 1. manufacturing is supported by a stable and level master schedule. This requires consistent
daily production within the time frame of the master schedule and mixed model assembly.
Takt time matches the rate of output with the average demand rate in the market.
2. A kanban system is used to pull parts through the production system to meet the master
schedule. A fixed number of containers is provided for each part, thus limiting the amount of
work in progress inventory. The pull system can also be applied in service operations by
providing only what is needed when it is needed by the customer.
3. Reducing lot size, set up and lead time is the key to decrease inventories. Service and
administration should also have fast changeover from one customer to next and a reduce
lead time for service.
4. the plant layout requires much less space and encourages evolution toward cellular or group
technology layouts.
5. workers are multi function and cross trained to perform multiple tasks. Moving forward a
flexible work force will require changing the way workers are selected, trained, evaluated
and rewarded.
6. frequent deliveries and reliable quality from suppliers, thus single source contracts will be
negotiated with committed suppliers.
7. Lean concepts, principles and techniques can be applied to design, manufacturing,
distribution, services and the supply chain.

4c) Describe the seven forms of waste associated with a Lean System.
Managing quality
5a) Define the five dimensions of service quality often use in customer survey.
Service Quality : The 5 dimensions are
1. tangibles
2. reliability
3. responsiveness
4. assurance
5. empathy. ..............these measures can be obtained by surveying customers

5b) Describe any six quality tools and their usages.

7 Tools of Quality Control :
1. Process Flow Chart
2. Data Check Sheet
3. Scatter Diagram
4. Histogram
5. Control Charts
6. Ishikawa Chart (Cause and effect diagram)
7. Pareto Chart .