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EXERCISE 1.1. ESSAY

1. List and briefly describe five differences between services and

manufacturing. Provide examples to illustrate your arguments.

There are two major types of business that companies adapt to deliver goods
and services to the consumers. Manufacturing and service chains share a lot in
common just as much as they differ. A manufacturing business produces a physical
product for selling whereas a service business delivers service for the customers.
Also, in labor, service is more intensive which means that it requires greater
expenditure on labor than in capital. Since delivery of service products often
involves many manual processes that require the interaction of human beings.
Although manufacturing can also be costly since it uses machineries and large
facilities to create products these can be considered a one time big time purchase.
These purchases can be used for a long time while in service, manual labor might
require more than manufacturing processes will demand. In terms of simultaneity of
production and consumption, unlike manufactured goods, services are created and
consumed at the same moment. Goods can be used for retail or for consumption
that might not be exhausted for a long time. Another difference is when it comes to
inventory, service, unlike in manufacturing, may not hold inventory. But the inventory
is crucial in manufacturing since it is used as a basis for their operations. Location
also differs because in service firms, they do not require a physical production site.
They can deliver service anywhere unlike manufacturers which must have a physical
location for their production and stock holding operations.

2. Identify a large employer in your hometown. Describe this organization’s

inputs, processes, and outputs.

Nestle Philippines, Inc. is a leading manufacturer of foods and beverages in

the philippines. It is a well-known international food manufacturing corporation driven
by its mission to nurture generations of Filipino families, it produces and markets
products under some of the country’s well-known brands such as NESCAFÉ, NIDO,
MILO, NESTEA, MAGGI, BEAR BRAND, NESTLÉ, and PURINA, among others. Its
product range has expanded to include coffee, milk, beverages, non-dairy creamer,
food, infant nutrition, ice cream and chilled dairy, breakfast cereals, confectionery,
and pet-care. Nestlé now has manufacturing facilities in Cabuyao (Laguna),
Cagayan de Oro, Lipa (Batangas), Pulilan (Bulacan) and Tanauan (Batangas) to
meet the growing demand for Nestlé products in the country. The key raw materials
purchased by Nestlé are milk, coffee, and cocoa. These, as well as fruit, vegetables,
cereals, and potatoes are partly sourced directly from farmers. Sugar, oil, meat,
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spices and other ingredients are sourced only through the trade; Sourcing has to
contribute to the sustainable and profitable development of their company by
providing the base for quality differentiation of finished products to customer or
consumer satisfaction. In nestle ice cream, raw materials used are pasteurized milk,
sugar, food coloring, flavoring, nuts, marshmallows, chocolate bits, and ripples. The
Nestle company uses batch processing for their production for the reason that the
volume and variety of the product they need to produce is moderate that requires low
skill level workers to perform the operation. The production process starts from
preparing the ice cream base using appropriate proportions of ingredients, Then it
goes through pasteurization which is heating the ice cream base so that dangerous
bacteria are destroyed. It is also essential for commercial ice cream production. Next
step will be homogenization which is essentially the breaking up of, and better
dispersing of, fat droplets in order to enhance the emulsion of fat into the ice cream
base thereby avoiding that the water and the fat in the ice cream separate. Having
gone through the previous steps and having cooled down to fridge-temperatures, the
ice cream base is given time to age and mature before freezing. After the freezing,
the ice cream is created. However, fresh out of the churning-step, ice cream is
actually only about half-frozen and may need some further time in a freezer to gain
more stability.

3. What are four core processes in a firm and how are they related?

A "core" business process is defined as the minimum individual tasks to be

accomplished to provide a certain level of consistency in output. It can deliver value
to external customers to build relationships and develop new products in connection
with the customers demand. When a core process is implemented, anything can be
added to make the process more efficient and effective.

The four core processes discussed in the module are:

1. Employees in the ​supplier relationship process select the suppliers of

services, materials, and information and facilitate the timely and efficient flow
of these items into the firm .
2. Employees in the ​new service/product development process design and
develop new services or products.
3. The ​order fulfillment process includes the activities required to produce
and deliver the service or product to the external customer
4. Employees involved in the ​customer relationship process identify,
attract, and build relationships with external customers, and facilitate the
placement of orders by customers.
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These four are interrelated to one another. They emphasized the importance
of acquiring resources needed to provide products through innovation. It also tackled
how these products will attract and be able to reach the customers. It is important to
choose the right supplier since it is the starting point of producing products.
Reliability should be another key consideration for choosing suppliers. Reliable
suppliers deliver the right goods or services on time with the quality that is the best
for your products. In connection with this, you also have to consider first what
product you will produce so that it is easier for you to find the right suppliers that will
give the most suitable goods or services at the most suitable prices and in the right
time frames for your specific business needs. There will be some instances wherein
the materials needed for your planned products are hard to find. That is why right
timing and wise decision making is really significant to the business. Right timing is
also crucial in the fulfillment of customer’s orders. Starting from the production to
delivery, planning the time frame should be done wisely. If you fail to produce it on
time, the worst case that could happen is the customers will transfer to another
product. If you don't want it to happen, the best thing to do is to create a good
relationship with the customers. Brand recognition plays a big part in this. If you were
able to establish a good branding, whatever happens, customers will still patronize
and support your product.

4. How has global competition affected productivity? Cite specific

examples and reference the productivity equation to support your
thesis.

Companies' desire to grow and expand locally and even internationally. Brand
recognition all over the world is a great feat that a company can achieve. In their
effort to generate more sales and recognition, they want to widen the geographical
area they cover that resulted in increasing global competition influenced by this
change in the environment of businesses today. These pressures pushed companies
to enhance their performance by innovating and adopting process and product
improvements. This can lead to higher productivity, which can create sustainable
competitive advantages for companies. Using Nestle Philippines Inc. as an example,
they have been in the industry for quite a long time already and have been exposed
to global competitions. Their productivity became their tool to be in the industry up
until now. Nestle Company produces various flavors of ice cream at an average price
of 160 pesos per gallon. They can produce 1000 tubs of one gallon from 500 gallons
of ice cream base mixture and 500 gallons composed of other ingredients. The
whole process takes place for one and a half hours. The company adjusts their
operations depending on the demand. They operate for 16 hours, two shifts of eight
hours each with four personnel assigned per shift. Using productivity equation,
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Expected Output: 12 tubs/ minute
Output of the day: 16 hours/ 1.5 hours x 1000 tubs= 10667 tubs

Productivity: ​10667 tubs​ = 667 tubs/ hour

16 labor hours
Multifactor Productivity: ​ 10667 tubs​ = 84 tubs/ hour
8 workers x 16 hours

References

Fernandez, R. (n.d.). Nestle. Retrieved September 04, 2020, from

https://www.academia.edu/14728465/Nestle

Shmula, Says, J., Raventos, J., Says, P., Abilla, P., Says, P., . . . Nikita. (2013,
August 13). Difference Between Service and Manufacturing. Retrieved September
04, 2020, from
https://www.shmula.com/lean-difference-between-manufacturing-service/7773/

Williams, M. (2014, July 02). The Key Differences Between Manufacturing and
Service Operations. Retrieved September 04, 2020, from
https://www.changewise.co.uk/the-key-differences-between-manufacturing-and-servi
ce-operations/
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EXERCISE 1.2. MULTIPLE-CHOICE QUESTIONS

1. d. The facilities tend to be smaller.

2. c. In many service organizations, such as hospitals and entertainment
centers, customers themselves are inputs to the transformation
processes.
3. b. system wherein inputs pass through one or more operations and are
transformed into outputs (goods or services).
4. b. core process.
5. c. Support process
6. a. customer relationship process.
7. b. processes.
8. a. Marketing
9. d. Customer participation and information on performance are two
special types of inputs to a production system.
10. d. Customer participation and information on performance are two
special types of inputs to a production system.
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EXERCISE 1.3. RESEARCH ACTIVITY

Download a research paper (related to any topic discussed in this module)

published on an online journal:

Achieving Responsiveness through Supply Chain Integration: A Moderating

Effect of Industry-4.0

by
Dawei Lu, Xuemei Fan, Peiqing Cao

a. Relevance of the Article

The findings of this study will redound to the benefit of the business world and
the society considering that customers responsiveness plays an important role in the
advancement of supply chains today. The greater the effect of the advancement of
technology for businesses justifies for more effective and precise studies. Thus, the
derived result from this study will be used to further improve the impact of industry
4.0 not only in the electronics industry but also with different sectors in the society.
This study is among the pioneering studies on the issues. This study will provide a
foundation for certain issues concerning business operations and such. Also, this will
serve as a basis for future researchers to answer their queries regarding this topic.
Since it provides complex findings and discussion, it will be of great help to develop
theories that can be used in the future.

b. Objectives of the Journal Article

General Objective:
This study aims to investigate the emerging impact of industry-4.0 on
supply chain integration and responsiveness in the electronics industry in China. ​The
research objective of this study, therefore, is to investigate whether there is
any substantive moderating effect that Industry-4.0 could impinge upon the
integration-responsiveness relationship for a manufacturing supply chain; and
to construct a conceptual framework whereby the inter-play of the constructs,
including Indus-try-4.0, responsiveness, and the three sub-dimensional components
of SCI, are captured.
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Specific Objectives:

● to investigate the moderating effect of industry-4.0 as a strategic factor

on the causal relationship from operational integration to supply chain
responsiveness.
● To answer many queries, such as how organisations can exploit
the increasingly powerful information processing capabilities that
today’s digital has to offer; and in doing so, how supply chain
integration (SCI) might be harnessed with the Industry-4.0 initiatives
specifically.
● To explore the conceptual development in our understanding of
SCI and its effect on SCR under the impact of industry-4.0.
● To theorise the notion of industry-4.0into a key independent construct
of relevant business model which may offer better assistance for
effective managerial decision-making.

c. Highlights of Findings, Conclusions and Recommendations

By taking the structural perspectives of SCI at the decoupling point, our

results indicate that downstream (DI) and internal integration (II) appear to have
significantly higher impact to the SCR than that of the upstream integration(UI).
This result suggests that the effectiveness of SCI – SCR causality does not
always demonstrate itself on the amalgamated overall SCI strength level, but
often depends on how the individual dimensional level integration is configured.
From OIPT one can argue that the upstream information flows from the
decoupling point mainly serve the functions of forecasting and scheduling
needs for adjusting the capacity and resource levels from the suppliers; whilst
the downstream information flows mainly serve the functions of ‘make-to-order’ and
‘respond-to-demand’. It is these differentiated roles of information process capability
at different segments of a supply chain that ultimately fit to the differentiated
levels of effectiveness of the SCI – SCR causality. The configuration approach, as
described in the Configuration Theory by Miller, stipulates that an organization is
a set of interrelated activities rather than pairwise relationships in isolation.
The configuration approach views the fit in terms of ‘gestalts’ of various elements
and their relationships. The choices of managerial actions towards the
upstream, downstream or internal integration is part of the configuration
design. Thus, it is reasonable to argue that our results from the dimensional SCI
analysis facilitate supply chain’s configuration design, especially by being
contingent upon an emergent exogenous factor – Industry-4.0. Further on the
result that the UI has no significant direct effect on the SCR, nor under the
moderating effect of ID4.0, we may interpret that this could be due to the
limited cyber-physical information processing capabilities in the upstream, at least it
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is so in case of the China’s electronics industry. Upstream integration, in general,
appears to benefit the supply chain through efficiency oriented realignment rather
than customer satisfaction. The in-formation flow used to integrate upstream tends to
be the aggregated ones concerning more generic components and their stock
levels, not usually the customized products. On the other hand, downstream
integration appears to be particularly capable of benefiting the responsiveness
through services and customized flexible delivery. The findings on the moderating
effects of industry-4.0 also echo the well-established contingency-based
management thinking. It suggests that the effectiveness of a firm’s promotion on
responsiveness will not only depend on the initiatives of Industry-4.0 per se, but also
very much on the relevant integrative actions that are moderated by
industry-4.0 with a non-trivial measure. In other words, the causal relationship
between SCI and responsiveness has been significantly contingent on the level of
up-taking of industry-4.0.

From a theoretical development perspective, this study has attempted a

number of areas to enrich the existing literature. First, the concept of SCI defined in
the literature as a unidimensional entity is no longer theoretically fit for purpose; and
it helps when it is understood as a multidimensional structure which is subject to the
contingency effect of exogenous factors. Our finding shows that Industry-4.0 is one
of such exogenous factors, which could exert a significant level of moderating
effect on the causal relation-ship between SCI and SCR. Second, this study
explores the roles of emerging industry-4.0 from a perspective of OIPT.
Previous studies on industry-4.0 has been largely technological, and its theoretical
linkage with SCI has been unexplored. It becomes clear in this study the advent of
industry-4.0 has profound implications as to how SCR should be modelled.
Third, this study models both the direct effect of industry-4.0 and the indirect
moderating effects on the causality of SCI – SCR simultaneously. This extends our
understanding on the contingency-based causal connections at the integrative
dimensional level. In regards to the managerial practices, the findings of this
study could also have some significant implications for the practitioners.
First, the model developed could serve as a decision-making tool, which can
support managerial decisions on the initiatives of integrations in a particular
segment of supply chain; on the intended investment in upgrading with the
industry-4.0; and on the effort to enhance the market responsiveness. All
too often, managerial decisions and subsequent actions are taken in complete
isolation, ignoring the interplay of those constructive factors. Second, the results
showing the different moderating effects on SCI can guide the practitioners on
prioritizing their efforts to ensure the resources are mobilized optimally. Our results
indicate that in order to reap the maximum benefit, managerial efforts on SCI must
be prioritized first to the area of downstream integration, and then internal integration
and finally to the up-stream integration, given that a discernible level of indus-try-4.0
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has been a contextualized factor. Third, the finding suggests that the managerial
effort on upgrading the level of industry-4.0 will, according to the model
developed, directly and positively promote the SCR, and more so in the
downstream segment.

This research adds to the concurrent literature some empirical

exploration as to how Industry-4.0 has reshaped ​today’s manufacturing
industry in a global scale, and provides better understanding on how its
resultant business impact can be interpreted more rigorously through the
perspective of information process theory. In particular, a cohesive conceptual
framework capturing 7 hypotheses has been developed and tested based on
the empirical data collected from the electronics industry in China. The key
contribution of this research can be judged from the conceptual model of the
moderating effect of industry-4.0 onto the causal relationship between the SCI and
the level of SC responsiveness. This research not only theorizes an emerging
industrial shift led by industry-4.0 across the world today, but also provides some
informed guidance to the decision-makers as well as practitioners on how to
better harness their SC responsiveness with industry-4.0. In view of the
research developments on the long path of continuing evolution of supply chain
management, a new step forward may have just been accomplished.

d. Points of Agreement

● Many scholars claim that the 4th industrial revolution is dawning, and a
nomenclature of “Industry-4.0” was born. However, this is more than just a
trendy jargon. Its active roles and profound implications in our
understanding of those essential managerial theories and practices are far
from being clear.
● Industry-4.0 has reshaped ​today’s manufacturing industry in a global scale,
and provides better understanding on how its resultant business impact
can be interpreted more rigorously through the perspective of
information process theory.

“Industry-4.0” was first proposed as part of the “High-Tech ​Strategy 2020

Action Plan” of the German government. The concept has since been endorsed
by researchers around the world. The term Industry-4.0 means the fourth
industrial revolution whereby smart shop floor devices and machines form a
self-organized system, and the big data analytics provides global feedback for
their coordination. Industry-4.0 thus represents a production oriented
Cyber-Physical System that integrates production facilities, warehousing systems,
logistics, and even social requirements to establish the value creation networks .
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It is more than just a technology advancement. It is now convincingly an
emerging business paradigm for manufacturing supply chains. The core idea of
Industry 4.0 is to use the emerging information technologies to create
unprecedented in-formation processing capability that integrates market
information with supply chain resource to deliver greater flexibility and
responsiveness. The key feature of In-dustry-4.0 is the digital
technology-facilitated platform, including integration through value networks to
facilitate inter-organizational collaboration, internal vertical integration to create
reconfigurable manufacturing systems, and end-to-end engineering integration to
support product customization.

● Proper ​application of digital information processing technology has

strengthened the supply chain integration and improved supply chain
visibility, and resulted in higher level of supply chain responsiveness.

Newly emerged digital technologies have been widely ​recognized as

a powerful information processing capability that delivers flexibility and
responsiveness for businesses. An adequate information platform is also essential
to the intended integrative performance of a supply chain. ​An empirical study by
Gosain, Lee (2007), concludes that ​effective information systems that
inter-connecting the supply chain organizations were required if the supply
chain was to be elevated to a higher level of responsive-ness. In analyzing
the roles that an e-hubs or the cloud-based information services have played,
White, Daniel (2008), concludes that such systems have strengthened supplier
partnership and markedly increased the supply chain’s operational flexibility
and responsiveness.

e. Points of Disagreement
● To reap the maximum benefit, managerial efforts on SCI must be prioritised
first to the area of downstream integration, and then internal integration
and finally to the upstream integration.

Prioritizing the area of downstream integration may be important but it is

better to first take into consideration the internal integration which involves the
coordination, collaboration and integration of logistics activities with other functional
areas in an organisation. It b​reaks down functional barriers within the
organisation. ​On the other hand, downstream integration is essentially a forward
integration strategy designed to get more direct access to the demand
information flows. Its intention as well as result are often demonstrated in the
improved supply chain responsiveness to the market demand changes. It is an
important part of the supply chain’s external integration that enables it to better share
the demand information. It is better to prioritize internal integration that functions
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within the organization because before we function externally, we need to make sure
that all matters within the organization are polished.

● The managerial effort on upgrading the level of industry-4.0 will, according

to the model developed, directly and positively promote the SCR, and
more so in the downstream segment.

Although it is evident that upgrading industry 4.0 will directly and positively
promote SCR, this could still possibly affect SCR negatively. Newly emerged digital
technologies have been widely recognised as a powerful information processing
capability that delivers the flexibility and responsiveness for businesses. The
core idea of Industry 4.0 is to use the emerging information technologies to
create unprecedented information processing capability that integrates market
information with supply chain resources to deliver greater flexibility and
responsiveness. However, because of the great impact of this, it also became prone
to more abuse to this powerful information processing capability. That is why we
cannot guarantee that it will only positively promote SCR.

f. Recommendations for Further Study

Limitations of this research, however, are unavoidable. Previous researches
on the supply chain’s integration-responsiveness relationship appear to be
diverse and abundant. However, none has been specifically carried out under the
influence of industry-4.0, at least not at the time of writing. It looks though that
most researchers agree that SCI in general contributes significantly to SCR, and to
other measures of supply chain performances too. Future research could address
the joint moderating effects of two or more exogenous factors, although there is
no definitive logic that the results of two or more factors will necessarily negate the
results of a single factor analysis. Also, it might be useful to explore the impact of
Industry 4.0 across different industry sectors and different geopolitical locations to
capture a more complete picture.
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2. Prepare a reflection paper regarding the Great Debate on Corporate Strategy

Video.

The Great Debate on Corporate Strategy video showed different expert

panels that tackled and answered questions through various media properties. With
the help of the panel, queries of the business enthusiasts were aligned to navigate
them on how to deal with certain obstacles in the business, how influential social
media are, and how to address contrasting issues in the business world. Their
discussions also focused on the importance of team members, its role clarity,
involvement and establishing relationships. Their significance is often overlooked,
which is why the panels need to pinpoint their key role in establishing a business.
The right level of support of everyone in the business is also undoubtedly important.
It's not only about the middle and low level management but the top line should also
be involved in the day-to-day operations. All of them need to be on the same page in
crafting an end goal in mind. As one of the panel said, they need to always be on a
hunt mentality especially when the operations of the business is on the line. Unity
between the members is not enough but also they need the experience to enable
them to address issues and concerns in the company. This is also the reason why
the panels identify how recruitment is a big deal and how it can affect the business.
Recruiting people who are well established and experienced is an investment since it
will be very beneficial in the long run. They efficiently fill the skills gap within your
organization and often bring strong communication and leadership skills to the table.
The business doesn't need to train them anymore since they are already equipped
with skills. Hiring a more experienced employee should mean that there will be fewer
chances of blunders and mistakes that can potentially harm the business. Their
accountability should always be present in handling their tasks. They also have the
ability to provide a strong foundation in the organization. The panels also pointed out
how beneficial it is to be able to control a deal. Controlling a deal is a crucial part of
business operations. This will enable the company to create a competitive
environment not only externally but also in their internal transactions and
negotiations. When it comes to social media, the panels are asked if it is just
overhyped or will it actually help the business. Social media is an essential piece of
business marketing strategy. Social platforms help connect with customers, increase
awareness about the brand, and boost leads and sales. It is really important also in
recruitment as it is much easier to reach people so the recruitment takes less time
and the quality may be much higher. Social media is not overhyped but rather it
keeps getting real as the time passes by.
To conclude, watching these panels talk about these topics made me realize
how important it is that expert persons talked about these concepts because you
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know that they actually understand what is being discussed. This is just some of the
topics from a wide variety of corporate strategies that must be considered. But
because of the panels this discussion became really meaningful and informative
especially for us, business students and business operators.