business operation of Mercedes-Benz
Global Economics and Business Operations
Dr. –Ing. Rajesh Shankar Priya
Lecturer in Business and Management
TUBS
R.ShankarPriya@tees.ac.uk
Welcome to the Business Operations element of your module!
Global Economics
The first part of your module investigated the operation of the global economy, looking particularly at international trade, the importance of multinational enterprises and foreign investment, and the growth and development of economics. Other internationally important global economic issues were also examined, such as globalisation and environmental policy.
Business Operations
In this part of the module, emphasis is on the management methods used to aid resource allocation and decision making in organisations. The natures of operational processes are examined and techniques are developed and applied.
Short Introduction
Module Leader for the Business Operations
15 Years of Business, Technology and Management Experience
Engineering Doctorate in Supply Chain from University of Warwick
Studied and Worked in different countries
I am here to help you
All information about the module is in Blackboard
Overall - Learning Objectives for BOP
Operations strategy and operations management
The nature of operational processes and the concept of client oriented value chains
Optimisation, allocation and resource management issues
Design issues relating to operational processes, quality and service delivery
Assessing, evaluating and improving performance in processes and functions
The role of information and digital technologies in supporting operational processes and functions
How has COVID-19 changed the Business Landscape
Source: McKensie
Source: KPMG
Welcome to the Business Operations element of your module!
Image Source: Locus
Reading lists of the modules for Business Operations can be found in the Blackboard!
Questions?
Global Economics and Business Operations
Image Source: Sripak .et.al
Basics of Operations
Self-sufficiency?
Still needed initial supplies!
And what about …
Metals?
Glass?
Tiles?
Global Economics and Business Operations
What is Operations Management?
Inputs
Transformation of Inputs
Outputs (Product or Service)
Money put in…
…operations take place…
…wealth is generated…
...by owners,
…by investors
…and distributed to…
Slide illustrates working capital cycle: input; transformation; output; redistribution of wealth.
Building is Clark’s first shoe factory.
15
Effect of transformation process on working capital
working capital converted
into assets
assets used in the
business operations
assets converted back
into wealth
working capital
money paid
wealth generated
breakeven point
Breakeven illustration.
16
Money buys resources to use in the business. . .
Money is received from customers…
Premises
Equipment
Labour
Utilities
Vehicles
Materials
Etc
Money is used in the transformation process – either manufacturing or service provision
working capital / budget
business assets
Working capital cycle: focus on money received, either form customers directly, or indirectly through taxation and budgets for public sector operations.
17
input...
transformation...
output!
service provision
Input; transformation; output in education.
18
input...
transformation...
output
manufacturing operations
Example of input; transformation; output in steel industry.
19
Global Economics and Business Operations
Image Source: Sripak .et.al
Global Economics and Business Operations
Image Source: Slack & Lewis 2001
Operations Strategy
Manufacturing strategy content model (based on Leong et al. 1990)
Competitive priorities
Decision categories
Business Strategy
Manufacturing Strategy
Competitive Priorities
Decision Categories
Business Strategy
Manufacturing Strategy
Business Strategy
Manufacturing Strategy
Competitive Priorities
Decision Categories
Manufacturing Capabilities
Manufacturing Performance
Cost
Delivery
Quality
Flexibility
Structural
Infra-Structural
Productivity
Efficiency
External
Internal
Competitive priorities
| Quality | Manufacture of products with high quality and Performance Standards |
| Delivery | Reliable (on time) and fast (short delivery lead time) |
| Cost | (Production and distribution of the product at low cost ) |
| Flexibility | (Ability to handle volume and product mix changes) |
Competitive priorities
Competitive priorities defines the set of manufacturing objectives and represents the link to market requirements (e.g. Hayes and Wheelwright, 1984; Leong et al. 1990; Dangayach and Deshmuhk, 2001; Slack and Lewis, 2002; Greasley, 2006).
Dimensions commonly used are; cost, quality, flexibility, and delivery (Hayes and Wheelwright, 1984; Leong et al. 1990; Garvin, 1993; Hill, 2000)
some studies suggests innovativeness and service as additional priorities BUT empirical research and strategy theories consistently stress the four basic dimensions (Schmenner and Swink, 1998; Ward et al., 1998; Boyer and Lewis, 2002; Größler and Grübner, 2006; Schroeder et al., 2006).
Manufacturing strategy as the link between market requirements and manufacturing (e.g. Hill, 2000; Slack and Lewis, 2002; Greasley, 2006)
Among the competitive priorities there are often trade-offs inherent and to focus the attention to certain dimensions is the essence in the factory focus literature drawing on Skinner’s (1974) work.
Hill (1995) presented the concept of order winners and qualifiers related to the importance of competitive priority dimensions.
Qualifying criteria (dimensions) are those that a company must meet for the product to even be considered in the market place. Common criterions considered qualifiers are conformance quality and delivery reliability (Hill 1998)
Global Economics and Business Operations
Image Source: Slack & Lewis 2001
Real World Examples
Supply Chain
Manufacturing
Production
IT
Global Economics and Business Operations
Image Source: Slack & Lewis 2001
Global Economics and Business Operations
Image Source: Sripak .et.al
What are Operations?
productive functions or systems that transform inputs into outputs of greater value
What is Operations Management?
the design, operation, and improvement of productive systems
What is a Transformation Process?
a series of activities along a value chain extending from supplier to consumer
Global Economics and Business Operations
Image Source: Sripak .et.al
Some definitions …
Logistics = Supply + Materials Management + Distribution
Rushton et al (2006)
Supply Chain Management (SCM) can be defined as the management of flows of goods between the different stages in a supply chain in order to minimise system-wide cost and satisfy customer requirements.
Seliaman (2012)
Global Economics and Business Operations
Image Source: Sripak .et.al
Killingsworth (2011)
Basic static supply chain
Supplier
Factory
Distributor
Retail
Customer
Constant Production and Shipments
Constant Orders
Global Economics and Business Operations
Image Source: Sripak .et.al
Decision-making framework for operations in the supply chain
Schroeder et al (2013)
Global Economics and Business Operations
Image Source: Sripak .et.al
In the context of flows of goods between the different stages of a supply chain, write down a definition of
Flow:
The volume of goods passing a particular point in the supply chain per specified time interval.
E.g. The shipment rate from a supplier is 100 tonnes per week.
Level:
The volume of goods stored at a particular point in the supply chain at a particular time.
E.g. The goods inventory in the warehouse is 500 tonnes.
Transformation Processes
Physical: as in manufacturing operations
Locational: as in transportation or warehouse operations
Exchange: as in retail operations
Physiological: as in health care
Psychological: as in entertainment
Informational: as in communication
Nature of different transformation processes.
33
Operations: Transforming Inputs into Outputs
Environment, National/Global Economy and Government Regulations
Performance Measurement and Control - Quality
INPUTS
People
Materials
Energy
Capital
Data
RESOURCES
OUTPUTS
Services
Goods
Information
PRODUCTS
OPERATIONS PROCESSES
Illustrates concept of Input; Transformation; Output model as basis for business operations management.
34