Aligning Operations and SCM with Other Functional Strategies

Aligning Operations and SCM with Other Functional Strategies1. Discuss the brilliance of maculationing trading trading mathematical actions and SCM with opposite functional strategies (e.g. Design, Marketing and Finance) in creating a practicable championship schema.Skinner pretends us a broad picture of how we run across at the business as a whole moving remote from sub optimization which he has criticised it and making choices that atomic number 18 sensible and how entrust compete on the securities industryplace. Skinners work introduced the grandness of the concept of trade-offs and the need to ordain the tar ashess to what market real require on that proposefore the sub-functional trade-off choices are strategic altogethery aligned with aboriginal manufacturing tasks.Hill come with the concept of OWC and offer criteria and highlights the fact that focus should be on what important to the customer and a organisation require a common objective and every no npareil on the scheme is focus on common objective.Rumack Pharmaceuticals is an example of marketing strategy where they draw practically of variants of that ing rosy-cheekedient, different pills, different potions, different bottle sizes, different packages because they dwarfish way of exploiting market probability. The cost of manufacturing is low-down compare to the value of the crossing because of the paten and the manufacturing was bottlenecked in this situation. In this scale manufacturing room to be subordinate to the opportunity of the business and the nature of the product should be supporting the market opportunity.They set aside up with potentiality chores and long setup snips as they did not unders as well asd the implications of higher potpourri on that efficacy. Higher variety agent to go either for large batches still homogeneouswise have a bun in the oven-take or smaller batches and where capacity is to a greater extent absorbed thru setup.Tynd all B is an early(a) example where marketing influenced where company went. Manufacturing invested a lot of effort in soften and their process choice was to go for standard high bulk plainly the consume was more than they would coop with. So marketing made them flavour at skid wells but case goods would not give them so oft return. They were not good in manufacturing producing case goods so the clams was declining. But why they did not invested more in remands and chairs rather than disbursement on galleries where marketing jabbingn to produce a full begin of products causing variety to go up and profits down. They was not paying attention of what manufacturing is capable of delivering. They werent aligned. Compare to Rumack there is no paten but there is capability which erect be exploited. For some(prenominal) companies idea of coalescency strategy was to be for volume and variety. Referring to Babcock Wilcox case study they mix up trade-offs choices because wha t is good for high volume is not good for low volume and choices take to be aligned.Regarding Finance operation strategy from Skinner point of opinion was all rough avoiding local cost and local efficiency. Focus operations on rescue, speed, price and every oneness work together to align themselves. Also he present that quite often in factories every department exploit to optimise local cost and efficiency which encourage push and run thinking. Local optimisation is not aligning with the frame and we substructure face evidence of that at Rumack Pharmaceutical where basically in manufacturing you need to be align with the strategy thats being adopted which is all introducing new products resulting in new product capacity which should not happen as leave require more capacity in the system. Going for higher variety allow for put more pressure on capacity because of the setups. Tyndall they had really good arrangements in equipment casualty of producing tables and chair co lonial style lots of subscribe for them but they wont exploit it because they said that there is no capacity for that so they went for case goods. Problem was that case goods was providing throughput but no revenue. They were doing everything rather then introduceing throughput per bottleneck/minute. There was no alignment to improve throughput per limiting factor or to understand what constraints are and if is a market or resource constraint.Coming to Design from an operation point of view we would like standardisation. From market point of view they want customization. So product excite to be measured as much as we cigaret and have the ability to customise later(a)r in other words to postpone it and reduce division and introduce the winging options as late as possible. Postponement is used to achieve customisation and efficiency at bottom one in operation(p) system.2 critically discuss how developing operational unspoilteousness force out support and lead a business s trategy.Porter argue that operational effectiveness is not a strategy and also run for and TOC are not strategies because they quarter be copied. Lean, TQM, TOC are all astir(predicate) managing fragile in organisation with the idea of cost, push and drag. The main headway is how terminate we improve performance and rid absent of trade-offs or how can we break them.Slack et al. (2004) argue that there are five operations performance objectives cost, role, speed, dependability and flexibility. The jurisprudence of trade-offs states that no single plant can provide high performance in all dimensions simultaneously. We would expect to pay back support for this law if all competitors use similar technologies and are in operation(p) near the asset frontier. If all plants are far from the asset frontier, however, one plant can simultaneously provide higher directs of product quality, flexibility, and delivery at a lower manufactured cost if, through betterment, its centeri ng approaches create an operating frontier which is superior to its competitors. The theory of performance frontiers clarifies the impacts that assets and operating practices have on competitive advantage. However, the resource- ground view took this thinking a measure further through positing that competitive advantage can be free burning only if the capabilities creating the advantage are supported by resources that are not easily duplicated by competitors. Both the asset and the operating frontier can be the source of competitive advantage but they are found on resources of different nature.Armed with an understanding of a firms operating position relative to both competitors and the performance frontiers, strategic planners are better equipped to evaluate and plan manufacturing initiatives. For example, a quality improvement initiative may well be more attractive than a new engine room initiative to a firm that overturns itself far from its asset frontier.Can operation not just follow business strategy and lead business strategy? Hayes and Wheelwright stage 4 evidence that.In 80s quality and lean was a paradigm shift. Operation capability can truly win the orders. Porter(96) argue that Japanese dont have a strategy as they have operational effectiveness which wins on short term but actually Toyota payoff system is still difficult to copy on long term. Thus, the process of strategy development should be based on a sound understanding of electric current operational capabilities and an analysis of how these could be developed in the future. This can then provide the basis for decisions slightly which markets are likely to be the best in which to deploy current and future capabilities, which competitors are likely to be most vulnerable and how attacks from competitors big businessman best be countered (Hayes et al., 2005).organization fits with the resource-based view (RBV) .toc lean etc3 very much evaluate the means of alter clear (e.g. producti on, project and diffusion) referring to the design of a specific planning and control system.Lead time requirements of the customers tend to drive the OPP towards the customer whereas product variability and demand incredulity drive it away from customer. The more product variables, less likely it is economically sustainable to discover every variable in transmission line. thence, often large and steady volume products are kept in ancestry whereas products with a lot of edition are either assembled- or made-to order. Thus, companies have often multiple OPPs depending on the product characteristics.MTS method of production reduces before demand is realise or before orders come in.This are some goods or builds based on capacity or forecast which more often are great than current demand. This is the reason that stocks are made only to be stored or sold at some future date.MTO builds according to actual demand. This system wont produce stock as all outputs are consumed or sold i mmediately. MTO is a pull system since every station doesnt bulge out processing unless pull by demand or next process. Therefore we can talk about a pull line or JIT line. This is a type of MTO system in which all work move are strictly produce according to the takt time. JIT is also known as a lean system or Kanban system. Kanban system control the flow thru a form of electronic or physical signal which regularize to start producing or deliver the next part. In the case of MTO the boilersuit approach is termed Drum Buffer forget me drug (DBR).Pull means small batches and we try get as required by the system. JLR is a pull system because everyone is working at the pace of the system. They relishing car or raw material into the system at the plant rate and everyone is working at the management prescribed rate called takt time.Ohno didnt had physical restriction of quadrangle but he had this rule to do something only if you have a Kanban instruction, the signal. crossways mov ing assembly line physical space was the control, the signal. Kanban was the idea of account in the system and TOC BM was another signal what do I do next? When do I expedite? When do I interfere with the process? Ford had pretty much a lean system that why Ohno quoted from fords book. There is a more complex surround but the principles are the same. planning of stock or raw materials or finished stock in excess is a waste(ford 1926,p99).Ford understood the importance of the flow. He forced everyone to work on the same pace and had the idea of flow line. Ford was applying principles of flow to an environment where it was not so much variety.Ohno had variety and apply principles of flow thru JIT and C.I. linked to law of variability and variability moderateing and theory Theory of Swift and Even Flow. He put a lot of effort in minimizing the fluctuations, stabilizing the demand and reduce variability. Ford didnt had Jidoka but he had teams which responded fast. C. I. challenged th e traditional trade-offs model. Batch size reduction was the key for lean (Schronburger 1982).Right from the beginning was all about how to reduce batch quantities and setup time which is interpreted like a source of variability in the process. Batches will be reduced till will create a bottleneck again. Reducing setup times will reduce variability. Kanban represents inventory but also time and they are interrelated. In JLR they have a fast response and they doing first order which is coming compare to pilot light management. In the case of MTO the overall approach is termed Drum Buffer Rope (DBR) introduced by Goldratt(1990) to reduce variation and improve activity. In the next case study SDBR was used with time being the rope and organize the market demand. The drum previously was the roasting and char grill departments which were considered constraints.In the case of Freshcut Foods when it was to manage the flow they was releasing work in the system to first and cause quali ty issues and wastages. They had late demands but they were uncertain if they have the capacity to produce. So they needed a system to tell them if they have capacity to take the orders. Finally a system which can tell them how to grade what they should produce next and when to release the working to the system was put in practice. If is in the red partition off they need to expedite if the red zone is amazeing means that they have a problem and they need to come out it.. So Kanban is like an automatic system where everyone knows how to use it.4 Critically evaluate the circumstances best suited to Kanban and Buffer Management pull systems.Benton (2014, 2) describe that the main objective of manufacturing planning and control function is to find that the desired products are manufactured at the right time, in the right quantities, and meeting quality specifications in the most cost-effective manner.To illustrate the logical implication of BM in TOC, the functions of BM in TOC i s compared with Kanban in TPS. Firstly, both BM and Kanban prioritise work orders albeit with different assumptions and mechanisms. For Kanban, there is a pre-planned quantity or WIP in archetypes designed in between every work center. In addition, there is also a specific routing sequences or dedicated production line required for each product, which results in rigidity in responding to market requirements. In BM however, the priority of work is triggered by the percentage buffer penetration of completion time. As it is time-based, it allows each work center to have flexibility to react (or catch-up with time) to disruptions when Murphy strikes. Other than the function of prioritisation, both BM and Kanban have their own mechanism to monitor and control their production throughput. In Kanban, the deployment of distributed buffers in between work centers enables problems to be immediately surfaced and dealt without passing the problem to the subsequent work centers (Ohno, 198930). In TOC, aggregated buffer is deployed and thus has a certain waiting as problems are only escalated and expedited for attention aft(prenominal) entering into the Red zone of BM. However, as highlighted by Stratton and Knight (2010), though Kanban is more sensitive, the problems highlighted are mainly related to quality and process, whereas in BM, it also includes issues such as product volume and mix changes. In shock of these differences, both BM and Kanban advocates continuous improvement. This is seen in the final steps of both TPS Pursue Perfection (Womack and Jones, 199690) and TOC not to allow inertia to cause a systems constraint (Goldratt and Cox, 2004307). In Kanban, continuous improvement is encouraged through cut inventory to expose problems which then can be puted whereas in BM, causes of delay (Red zone penetration) are being targeted.5. Critically evaluate the use of MTA and driving buffer management as a means of practically enabling a pull distribution system.V MI regularize communicate demand and stock directs thru the system and replenish them on the regular basis. Replenish on the stock target MTA is similar with VMI but give a priority figure in terms of buffer penetration.DBM is less common as the buffer status signals whether the target level is too large or too small and this can be used to signal automatic adjustments. By monitoring how we are performing in terms of green,yellow and red we can determine whether we need to increase or decrease the stock target For example if we are in the green zone reduce stock target and if is in the red zone increase the stock target. It is the means of getting the system to work at the pace of the consumption where drum is the consumer so is signalling down to distribution system what we need to replenish and how fast which resulting in an idea of pull.In the case of Frozen Meals they replenish based on consumption on the 3rd party distributor so is very straight forward till the stock time. MTA will say if there are multiple orders in the system will give an indication what the priority is. If the consumption was high and replenishing the full quantity in the distribution depot will be less stock. This stock will have to be replenish very quickly so VMI will communicate consumption across the whole write out normally replenishing it within a day or couple of days. So all the demand in the distribution depot will go in the red zone. So VMI says communicate demand and stock level always thru the system and replenishing to the stock target.The problem come when Frozen Meals tried to replenish and couldnt because the warehouse was full. Analysing demands and orders there is obviously that demands are pretty stable and orders are more volatile in demand represented by the consumption of consumer in Weatherspoon. This difference was caused by 3rd party distributer which has his own warehouse and has more stock that he needed and fluctuating and planning orders ad hoc. Bec ause placing order in ad hoc manors caused Frozen Meals to ask for 7 days delay of publish. The ordering system from 3rd party distributer was ad hoc. There was a stock target so why not just replenish this stock automatically communicate down the supply chain whats required.The solution was to go for VMI rather than 3rd party distributer placing orders on Frozen Meals. A pull system was created when the supplier is prudent for maintaining agreed target stock levels.6 Discuss the strategic importance of postponement through configuration, packaging and distribution, making reference to the concept of an rank Penetration Point (OPP).In the first part I was discussing about focus factory and separating different orders. This can be also fall apart by postponing which means that will be 2 strategies. one at the first part of the supply chain which is looking to stabilise and standardise and a different strategy at the later stages with a decupling point. How can we design the suppl y chain to postpone the impact of variation and uncertainty? This can be done in the manufacturing process but distribution side as well.Skinner strategy is about how we take the system perspective and how we meet the needs of the market reducing variability in the process. With TQM the reason why ends up with variability in the process is that no-one consider how to reduce variation. This is what SPC done to focus on variation which will bring the cost down. Unless will do that then the variability tend to be there which make the trade-off choices about quality and cost. So all of them are about reducing variability.Agility is about dealing with demand uncertainty and demand variability. Stability is associated with lean and uncertainty demand with agility. This table is similar with line vs jobbing looking for both extremes such as delivery speed and low cost. Skinner will argue that this should be two different factories because the owc are differentFisher model talking in the i dea of Skinner operation trade-offs in terms of a supply chain. If we have variability in demand we need to buffer like any variation. The ideal efficient model will have flow, stripped variation in demand and process, minimum buffering. In contrast the reactive model demand varies and also product changes in the same time and we got demand uncertainty and we ll buffer with inventory capacity.Talking about lean and agile supply viewed in terms of dependency, fluctuation, buffer capacity and buffer inventory we can refer to law of variability, law of variability buffering, law of variability pooling.Talking about service it represents the customer input which can be put on MTS which can be a date, a forecast. MTA say that the priority of the order all depends on what stock level is, if the stock level goes down rapidly the priority goes up, if the stock level is not priority (demand is low) the priority goes down.In Lego case they was doing bad because they grow over the years resu lting in too much variety as increasing number of elements, to many colours and they diversified to do other things(low of focus)As a start-up they cut the number of colours and elements (no elements to be curious to one product stated by the law of variability pooling).In manufacturing they section some of the machines as all machines should be able to do everything. They organised and streamlined how they going to manufacture elements. They rationalized the suppliers which is a lean thing. The distribution changed to a pull system and the they supply to one distribution centre in Europe in 3-4 days which is consider closer to the customer. In terms of packaging machines and capacity. By reducing the range of colours and elements setup process variability all this helped to reduce variation and uncertainty. Buffering packaging they postponed rather than dimension stock in packets they opted for a centralized distribution centre and more frequent distributions. All this system wa s about flow.Production is lean if is courtly with minimal waste due to unneeded operations, inefficient operations, or profligate buffering in operations. Production is agile if it efficiently changes operating states in response to uncertain and changing demands placed upon it ( Narasimban et al..,2006)ReferencesBenton, W. C. Jr. 2014. Supply Chain focussed Manufacturing Planning and Control. Stamford, Connecticut Cengage Learning