2022 t3 mmm710 w010 questions and answers

Once upon a time, companies were used to contributing to good causes by donating part of their profits. This initiative had a twofold benefit: On one side, it was a great opportunity to gain media exposure and brand awareness and improve the donor’s positioning within its target group. On the other side, the company could deduct the donation for fiscal benefit purposes. As social and environmental pressure built up, new groups of interest started to generate concepts like sustainable development goals (SDGs) or environmental, social and corporate governance (ESG) models as an attempt to standardize these practices as a management model and make those initiatives become an operational issue. And thankfully, I think they are largely succeeding. More and more companies of all sizes are treating social and environmental impact as business concerns

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Week 1 - Introduction

Week 2 - Innovation Perspective on Operations Management Week 3 - Sustainability Perspective on Operations Management Week 4 - Strategic Perspective on Operations Management

Week 5 - Mid-term Review

Week 6 - Operations Planning

Week 7 - Forecasting

Week 8 - Resource Management

Week 9 - Quality Management

Week 10 - Operations Resilience

Week 11 - Unit Review

MMM710 Weekly Learning Schedule

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Why study resilience in this subject?

• Times of Great Change

•PESTEL – Disruptions – Shifts in Global Power

• Industry 4.0 to 5.0? See the links ‘MS Links and Videos’

•Technology is pushing significant changes

•Not possible to hold back the tide

• Useful to know what leads to Resilience

•Organisational Skills, Supply Chain Choices,

Organizational Resilience Defined

• “…organizational resilience is a multi-disciplinary concept that has been

developed across several sectors and disciplines…”

• ”…associated ‘resilience’ with the ability of systems to absorb change,

as opposed to ‘stability’, such as the ability of the latter to return to a state of equilibrium after a temporary disturbance”.

• ”…resilience as ‘the measure of a system’s capacity, or part of it, to

absorb and recover from the occurrence of a dangerous event’”.

Reference: Marcucci, G., Antomarioni, S., Ciarapica, F E., & Bevilacqua, M (2021) The impact of Operations and IT-related Industry

4.0 key technologies on organizational resilience Production Planning & Control, 1-15.

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Supply Chain Resilience – Components?

• Resilience as the Interactions between

•The SC and the External Environment

• Environmental Risk Sources

•Interactions among the SC’s Subjects (internal)

• Network-related Risk Sources

• Organisational Risk Sources

– Inter-partner and Intra-partner interactions

•Risks along the Supply Chain

• Internal to the firm (process and control risks – quality)

• External to the firm but internal to the SC Network

– Demand and Supply Risks

• External to the Supply Chain

•We react to changes in our Supply Chain

• Your thoughts – not a hard question

• However

• Firstly a review of resilience

•Based on the the content of the course

•At Society-level, [implications for operations resilience]

 Innovation enables the internationalization of goods and services

 More efficient food production

 Improved medical technologies

 Better transportation

 Increases GDP by making labor and capital more effective and efficient

• However, may result in negative externalities [implications for operations resilience]

 Pollution

 Erosion

 Antibiotic-resistant bacteria

 International security issues

Reference: Schilling, M A (2022) Strategic Management of Technological Innovation McGraw Hill.

Reference: Kim, J & Raswant, A (Forthcoming) International Business and Security Palgrave Macmillan.

W2: Innovation Perspective on Operations

Management

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•Considering Industry + Formulating Strategy, [implications for operations resilience]

 Successful innovation requires carefully formulated strategies

 Successful innovation requires carefully formulated implementation business processes

 Most innovative ideas do not become successful new products, e.g., NPD in Pharmaceutical

Industry

• Be mindful of, [implications for operations resilience]

 Sustainability concerns

 International security issues

Reference: Schilling, M A (2022) Strategic Management of Technological Innovation McGraw Hill.

Reference: Kim, J & Raswant, A (Forthcoming) International Business and Security Palgrave Macmillan.

W2: Innovation Perspective on Operations

Management

Case – Norco Co-operative Limited

Reference: ABC News (2020-09-13)

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Organizational Resilience

• International Maritime Organization (IMO), International Ship and Port Facility Security (ISPS) Code, Container Security Initiative (CSI), and the Customs-Trade Partnership against Terrorism (C-TPAT).

Reference: Barnes, P., & Oloruntoba, R (2005) Assurance of security in maritime supply chains: Conceptual issues of

vulnerability and crisis management Journal of international Management, 11(4), 519-540.

W2: Implications for Operations Resilience

• Resistance of BCOM is largely dependent upon the user’s understanding or perception of challenges and risks associated with the use of the Blockchain Technology (BT) [implications for operations resilience in the context of managing multiple stakeholders]

Reference: Wong, L W., Tan, G W H., Lee, V H., Ooi, K B., & Sohal, A (2021) Psychological and system-related barriers to adopting

blockchain for operations management: an artificial neural network approach IEEE Transactions on Engineering Management.

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W3: Sustainability + Operations Resilience

1 Environmental Sustainability (i.e Planet perspective)

• Organization’s commitment to the long-term quality of the environment

2 Social Sustainability (i.e People perspective)

• Organization’s commitment to maintain healthy communities and a society that improves the

quality of life

3 Economic Sustainability (i.e Profit perspective)

• Address current business needs and economic vitality

• Have the agility and strategic management to prepare successfully

• for future businesses, markets and operating environments

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W4: Consider the link between Strategy and

Operations Management/Resilience

• Corporate level strategy addresses a distinct set of questions compared to

business level strategy

• Corporate level strategy is fundamentally concerned with the scope of the firm

synergy (to support operational objectives)

• Considering corporate level decisions and firm’s overall strategic perspective allows you to evaluate the “What”, “Where” and “How” of corporate strategy and it’s link with operations management

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Case – (Climate + Operations) Resilience

Reference: World Economic Forum (2020-01-16)

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Reference: World Economic Forum (2020-01-16)

Case – (Climate + Operations) Resilience

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Case – (Climate + Operations) Resilience

Reference: World Economic Forum (2020-01-16)

Risk management in supply chains

• Need to identify and monitor risks to the supply chain on an ongoing basis and

• have effective counter-measures in place

• avoid or minimize the impact of any disruptions.

• In the post-pandemic business world,

• Need to identify and take into consideration risks posed by extreme events

• is getting widely recognized –

• NOTE the events that have a very small probability of occurrence

• (1 in 100 year events)

• but a massive potential impact if they do occur.

Risk Management

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OHS Matrix

• Useful

Calculating Total Supply Chain Cost (TSCC)

Calculating Total Supply Chain Cost (TSCC)

Procurement cost/unit (P) $7.65 $7.60 $7.00 Mgmt oversight cost/unit (O) $0.55 $0.65 $1.25 Unit transportation cost (Ct) $0.60 $0.35 $0.75 Order cost/order (Co) $625.00 $400.00 $850.00 Holding cost per unit (Ch) $1.35 $1.35 $1.35

Annual Demand (D) 400,000

Order Quantity (Q) 40000

Avg no of orders/year (D/Q) 10

Avg daily demand (D/250) 1600

Calculating Total Supply Chain Cost (TSCC)

Total procurement cost 7.65 x 400000 = $3,060,000 $3,040,000.00 $2,800,000.00

Total management oversight cost 0.55 x 400,000 = $220,000 $260,000.00 $500,000.00

Total annual transportation cost 0.60 x 400,000 = $240,000 $140,000.00 $300,000.00

Annual order cost 10 x 625 = $6250 $4,000.00 $8,500.00

Annual holding cost (1/2) x 40000 x 1.35 = $27,000 $27,000.00 $27,000.00

Avg annual pipeline inv cost 1600 x 60 x 1.35 = $129,600 $97,200.00 $259,200.00

Total Supply Chain Costs (TSCC) $3,682,850 $3,568,200.00 $3,894,700.00

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Including the resilience factor in TSCC

calculations

• The lowest Total Supple Chain Cost (previous slide) does not take into account the resilience factor.

• The precision of the calculated figures (eg $3,682,850) is deceptive -

• they are estimations

• They do not include the cost of the potential changes to reality (the future)

• Organizations should estimate and impose a ‘penalty’ on supply points

• or regions that are more prone or vulnerable to large-scale disruptive events.

• Including the estimated ‘penalty’ for lack of resilience in the TSCC calculations

• can materially alter the outcomes.

• Russia, Ukraine, China demonstrate this point

• What other countries in your Supply Chain would you attach a Risk Component?

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27 AU 2020 SYDNEY 2022

Including the resilience factor in TSCC

calculations

• This can be demonstrated mathematically

• Let there be n alternative supply points S 1 , S 2 , … , S n such that 1 < j < n.

• The resilience of a supply point j may be formally indicated by the

conditional probability that it will still remain functional given that all other alternative supply points have been rendered non-functional by a disruptive event.

• Mathematically, Resilience of S j = P[S j |{(S 1 ) c ꓵ (S 2 ) c ꓵ … ꓵ (S n ) c }]

• Then, one way to assign a penalty for lack of resilience is to simply consider

• the reciprocal of the resilience i.e., K/S j = K x P[S j |{(S 1 ) c ꓵ (S 2 ) c ꓵ … ꓵ (S n ) c }] – 1 , where K is a

pre-determined constant Obviously, higher the resilience of a supply point, lower will be the associated

penalty.

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Supply Chain Resilience - the state of play in a

post-COVID world

• Extreme events (like a once-in-a 100 years pandemic)

• have a very small probability of occurrence

• but a potentially massive impact cutting across the globe, or in the very least, across several geographical

regions

• Prior to the COVID-19 pandemic,

• businesses and supply chains everywhere were all too focused on efficiency rather than resilience

• The objective was to make operations as lean as possible to avoid ‘waste’ and cut costs.

• In the post-pandemic business world,

• organizations are increasingly realizing or re-discovering the need to focus on resilience

• to make themselves better positioned to absorb the shock of a future massive disruption.

• ‘Waste’ is being re-examined in light of this new-found focus on resilience

• (as the link on the following slide elaborates on),

• with organizations learning (many of them the hard way) that excessively trimming the fat off supply chains to improve efficiency

• can prove counter-productive if an unforeseen extreme event occurs.

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Supply Chain Resilience - the state of play in a

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What do I think?

• This subject is pretty interesting

•Definitely not a ‘boring’ management subject

• You are going to be leaders

•In a very complex and fragile world

•We are now sensitive to the shocks that might be on the way

• It is possible to face the future intelligently

•Many things are predictable (consequences of your actions)

•Your destiny lies in the connections that you make – SC

•A deep understanding of the challenges

• will enable you to address them directly and navigate your Org’n (and Industry) through the inevitable changes that they bring

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Global Value Chain - Presentation