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FT MBA 2024/25

Operations Management

Frank Wiengarten, PhD

Frank.wiengarten@esade.edu
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Course Introduction

• Session 1: Global Operations Strategy

• Session 2: Process Analysis

• Session 3: Capacity Management

• Session 4: Inventory Management

• Session 5: Continuous Improvement Programs

 Technology & Analytics
Term 1 Term 2 Term 3

Business Analytics Operations 1 Operations 2 Technology & Digital Business

Joren Gijsbrechts Frank Wiengarten Ivan Dacosta Jonathan Wareham

Creating a competitive edge through Identify and analyze the key practices Investigate the integral aspects How to implement,
Analytics: Unleashing the power of and strategies in terms of operations that drive an efficient and agile evaluate, and manage
(Big) Data to drive organizational and supply chain management. How supply chain, such as sourcing, sophisticated technologies
value and foster smart Data-Driven these practices affect operational transportation, demand in complex systems and
Decision-Making performance and ultimately the forecasting, and collaboration with organizations?
strategic position of an organization. suppliers. Assess how these
elements contribute to both
operational efficiency and the
Central Topics broader strategic objectives of an
Business Analytics, Machine organization.
Learning, Data-Driven Decision- Operations Strategy, Supply Chain Deep Tech, Life Science,
Making, Smart Algorithms Strategy, Lean Manufacturing, Quality Sourcing, Transportation, Industrial Internet, Complex
Management, TOC, Capacity Manufacturing, Distribution, Sociotechnical Systems
Management, Process Design Forecasting, Operational
Efficiency, Strategic Alignment
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Performance evaluation

Evaluation instruments:
• Group case (due date: 3rd of Feb.) 40%
(Indus Inventory Management)
• Final exam (10th of Feb.) 40%
• Class participation & exercises 20%
GROUP CASE:

INDUS MOTORS: INVENTORY MANAGEMENT

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Group Case Assignment:

Indus Motors inventory management

1. What is the principal dilemma in the case and the

challenges faced by Indus Motors?
2. Analyze the inventory managed at Indus Motors’
warehouses and stores in Kerala and comment on the
stocking issues that you observe from the data
available.
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Group Case Assignment:

Indus Motors inventory management

3. Explain the procurement and ordering practices at

Indus Motors and quantify the stock-outs and excess
(deadstock) inventory in the network. What are the
managerial implications of your observations and
assessment in order to improve inventory
management at Indus?
4. Based on the case analysis, what suggestions should
Unni and Jaleel offer to the company’s directors to
improve and optimize parts management?
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Group Case: Grading Rubic

Internal Weighting distribution
Grading Characteristics: Internal Weight Distribution

1. Formal requirement 5%

2. Writing and style, coherent thoughtful 25%

argumentation for each question

3. Logical sophistication of calculations 30%

4. Interpretation and usage of results incl. usage 40%

of concepts learned in class

Total 100%
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Submission details:

• Maximum 5 written pages, plus excel

• Submission date: 3rd of Feb., 9 am
(ecampus link)
• Report should focus on the 4 questions
and can be organized around them.
 FINAL EXAM

• Mini case

• In presence, open book, calculator

• Applying various concepts to solve a specific issue

• Distributed at the day of the exam

 Global Operations
Session 1. Global Operations Strategy

Overview:

I. Introduction to Operations & Supply Chain

Management
II. Operations Strategy
III. A global view on Operations Strategy
IV. Case: Zalando
 Learning Objectives of Today’s
Session

• Defining/introduction operations and supply

chains

• Process, operations & supply chain types

• Operations strategy: Alignment and Models

• Uncertainties and risks in global operations

• Traceability, visibility, technological solution

I. Introduction to operations & supply chain
management
 What is operations management?

Operations management refers to the systematic design,

direction, and control of input-transformation-output
processes.

Transformed
resources
•Materials
•Information
•Customers

Output
Input products & Customers
resources Transformation process services

Transforming
resources
• Facilities Outputs are products and services
• Staff that add value for customers
 A model of Operations

• Equipment: Capability, capacity, flexibility, reliability

• Workers: Capability, capacity, flexibility, reliability
• Energy: Sustainability, cost, reliability
• Inventory: ?

Transformed
resources

Output
Input products & Customers
resources Transformation process services

Transforming
resources

Outputs are products and services

that add value for customers
 What is service operations and how does it
differ from manufacturing operations?

• Manufacturing operations focus on producing goods and storing them

at a warehouse before delivering them to customers,
• Service-providing operations facilitate simultaneous production and
consumption of services.

• Physical transformation of materials and goods.

• Customers are getting transformed through e.g. experiences

• Generally, the production part is not visible to the customer

• Customers might be part of the “Service process“

Implications for managing

operations/processes?
CONCLUSIONS ABOUT OPERATING PROCESSES

1. Different organizations process (transform) different types of input

2. Operations extends to all departments of the enterprise, not just the
factory; the operations process for such departments can be a
significant factor in the organization’s competitiveness
3. Virtually every process has a number of steps
4. Information about inputs, outputs, and the process itself is required;
this information must also flow to allow managers to control and
evaluate the operation.
5. One organization’s outputs often become another’s inputs
6. Operations links suppliers and customers by adding value for which
custmers hopefully pay.
What is a supply chain (supply chain management)?
 What is supply chain management?

Flow of:
• Information
Internal Supply Chain • Funds
• Products/materials

2nd tier 1st tier Purchasing Production Distributors Retailers Customers

Suppliers Suppliers

Inbound Outbound
Logistics Logistics

(Chen and Paulraj, 2004)

What is operations & supply chain
management?

Level of Analysis

Operation & Supply Chain

Processes – External

Processes – Internal
How should I manage/design my processes?
 Processes – Internal
(manufacturing)

Project Job Batch Line Continuous

Processes

Increase in volume – typically competing on cost via scale of economies

Increase in variety – typically competing on capabilities of scope

(Slack et al. 2023)

 Bakery example products:
Process design considerations
Process design: Selecting the right procces to support
your strategy
Process Process
tasks flow

High
Diverse/ Project
Intermittent
complex

Jobbing

Variety
Batch

Mass

Contin-
Low

Repeated/ Continuous uous

divided
Low Volume High
 Processes – Internal
(service)

Professional Services Service Shop Mass Services

Increase in volume – typically competing on cost via scale of economies

Increase in variety – typically competing on capabilities of scope

(Slack et al. 2023)

Bank example products/services:
Process design considerations
Process design: Selecting the right procces to support
your strategy

High
Professional
service

Service
shop
Variety

Mass
services
Low

Low Volume High

Silvestro et al., 1992
 Processes – External

Functional Innovative

Product Type

Push Push/Pull Pull

Process Type

Physically Efficient Market Responsiveness

Supply Chain Type

Chopra and Meindl, 2023
How would you design/imagine the processes
for the following products?
II. Operations Strategy
 Tactical and strategic concerns in operations

Examples of the firm’s

operations in tactical
and strategic areas
TACTICAL Operations Activities STRATEGIC

Day-to-Day Scheduling; Future capacity – expansion

loading; task allocations CAPACITY/SCHEDULING of existing sites; Location of
new sites

Process quality impacting QUALITY MANAGEMENT TQM – on costs, reliability

SPC charts delivery
monitoring

Change-over times,
tooling, maintenance PROCESS TECHNOLOGY Investing to meet customer
specifications: Process choice
decisions

Buying materials INVENTORY MANAGEMENT Strategic purchasing;

buy/make decisions; Strategic
relationships
 Defining Operations Strategy:
Strategy Alignment
Top-Down Approach

External
Capabilities: Competitors
Suppliers
Operations
Strategy

Internal Customers
Capabilities

Bottom Up Approach
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Developmental Models of Operations Strategy

1. Trade-off Model (e.g., Skinner (Harvard
Business Review))

2. Cumulative Model (e.g., Ferdows and De

Meyer (Journal of Operations Management)

3. Hub-and-Spoke Capability Model C4 C3

C4

(Wiengarten et al. 2022, Harvard Business

Review) C1

C2 Level of
Prolificacy
C5
III. A global view on operations Strategy
Opportunities of going global: An operations and
supply chain perspective

Exploring the Trade-Off Perspective

Fast High
Delivery Quality
Flexibility

Environmental Innovative
Friendly
Consistent On-time
Performance Delivery

Social Responsible
Low
Cost
How does operations contribute to the
economic bottom line?
Capabilities for
future innovation
Secure
Lower revenue
costs
Opportunities for
process learning
Enhanced
Process service
efficiency

Operations
Excellence

Reduced errors,
and gives better Higher capacity
resilience utilization

Capabilities for Lower capital

future innovation requirements
Performance Objectives

Quality Doing things right

Doing things cheaply

Cost
(productive)

Speed Doing things fast

Flexibility Being able to change

Dependability Doing things on time

Sustainability Doing things ethical
 Operations Performance

Efficiency Effectiveness

What is the difference between efficiency versus

effectivneness?
 Operations Performance

Efficiency Effectiveness

Does efficnecy comes at the cost of effectiveness

and vice versa?
 Performance objectives: Trade- offs

“You can’t have an aircraft which flies at the speed of sound,

carries 400 passengers and lands on an aircraft carrier.
Operations are just the same”.
(Skinner)

“Trade-offs in operations are the way we are willing to sacrifice

one performance objective to achieve excellence in another”.
(Slack et al. 2023)
 Threats of going global: An operations and
supply chain perspective

Risks & Uncertainties

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Solutions (concepts) that are tradionally

proposed in the operations and supply
chain literature:
• Transparency
• Risk management
• Integration, collaboration, coordination
• Digitalizing the supply chain (i.e., IoT, AI,
Big Data)
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Some case suggestions:….

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General company cases we

worked with:
Gartner Top 25 SCM companies
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P&G
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Zalando Case
 Group discussion: 10 mins

1. Discussion Point: Operations & Supply Chain

• What do think is critical to describe Zalando’s
operation and supply chain?
• Describe its corporate and operations/supply
chain stragegy. Are they fitting?
 Group discussion: 10 mins

2. Discussion Point: Development of Zalando

portfolio and service offers
• Is Zalando’s business model too complex?
• How has Zalando designed its network to manage
its complexity?
 Group discussion: 10 mins

3. Discussion Point: Strategic Alignment

• Describe its corporate and operations/supply
chain stragegy.
• Are they in alignment?
 Group discussion: 10 mins

4. Trade off & Digitalization

• Is (are) there a trade off dilemma(s)?
• Can digitalization overcome the potential trade
off(s)?
• Is there business model doomed to fail in the long
run?
 Group discussion: 10 mins

Discussion Points: (Digital Experience)

• Endless Choice
• Seemless Convinience
• Delivery fee, delivery reliability
• Delivery time
• ”one box” approach
• Returns
• Taylored Digital Experience