Kuliah 1 - Operations and IT Strategy

Operations Management: IT for Management: On-Demand
Sustainability and Supply Strategies for Performance, Growth,

and Sustainability
Chain Management
Thirteenth Edition, Global Edition Eleventh Edition, Sale Asia Only
II. Operations and IT Strategy

in a Global Environment
Chapter 2 Chapter 9
Operations Strategy in a
Functional Business
Global Environment
Systems
Copyright ©2018 John Wiley & Sons, Inc.
Boeing’s Global Supply-Chain
Strategy (1 of 3)
Some of the International Suppliers of Boeing 787
Components
HEADQUARTERS
SUPPLIER COMPONENT
COUNTRY
Latecoere France Passenger doors
Labinel France Wiring
Dassault France Design and PLM software
Messier-Bugatti France Electric brakes
Electrical power conversion
Thales France
system
Messier-Dowty France Landing gear structure
Diehl Germany Interior lighting
Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Strategy (2 of 3)
Components
HEADQUARTERS
SUPPLIER COMPONENT
COUNTRY
Cobham UK Fuel pumps and valves
Rolls-Royce UK Engines
Smiths Aerospace UK Central computer system
BAE Systems UK Electronics
Alenia Aeronautica Italy Upper center fuselage
Carbon fiber for wing and

Toray Industries Japan
tail units
Fuji Heavy Industries Japan Center wing box

Strategy (3 of 3)
Components
HEADQUARTERS
SUPPLIER COMPONENT
COUNTRY
Kawasaki Heavy Forward fuselage, fixed
Japan
Industries sections of wing
Teijin Seiki Japan Hydraulic actuators
Mitsubishi Heavy
Japan Wing box
Industries
Chengdu Aircraft China Rudder
Hafei Aviation China Parts
Korean Airlines South Korea Wingtips

Saab Sweden Cargo and access doors
Growth of World Trade
Figure 2.1

Reasons to Globalize
1. Improve the supply chain
2. Reduce costs and exchange rate risks
3. Improve operations
4. Understand markets
5. Improve products
6. Attract and retain global talent

Developing Missions and Strategies
Mission statements tell an organization where it is going
The Strategy tells the organization how to get there
• Mission - where is the organization going?

– Organization’s purpose for being
– Answers “What do we contribute to society?”
– Provides boundaries and focus

Mission (1 of 2)
Figure 2.2

Mission (1 of 2)

Factors Affecting Mission

11
Business Management Systems and

Functional Business Systems
Two types of information systems support different areas
or activities in an organization:
• Business Management Systems (BMS)
o designed to support planning and the implementation process
across the entire organization
• Functional Business Systems (FBS)
o designed to improve the efficiency and performance of a
specific functional area within the organization

12
Solving Business Challenges at All

Management Levels
Figure 9.4 Information flows triggered by a transaction or event.

Strategic Process

Strategy
Strategies require managers to
• Develop action plan to achieve mission
• Ensure functional areas have supporting strategies
• Exploit opportunities and strengths, neutralize threats, and
avoid weaknesses

Strategies for Competitive
Advantage
1. Differentiation – better, or at
least different
2. Cost leadership – cheaper
3. Response – more responsive

OM’s Contribution to Strategy
Figure 2.4

Strategy Development Process
Figure 2.6

Key Success Factors
Figure 2.7
Check!: Activity
Mapping at
Southwest
Airlines
Figure 2.8

Implementing Strategic Decisions
(1 of 2)
Table 2.1 Operations Strategies of Two Drug Companies

Implementing Strategic Decisions
(2 of 2)
Table 2.1 Operations Strategies of Two Drug Companies

Rating Provider Selection Criteria
Table 2.3 Factor Ratings Applied to National Architects'
Potential IT Outsourcing Providers

Global Operations Strategy Options
Figure 2.9

Operations Management: IT for Management: On-Demand
Sustainability and Supply Strategies for Performance, Growth,
and Sustainability
Chain Management
Thirteenth Edition, Global Edition Eleventh Edition, Sale Asia Only
II. Operations and IT Strategy

in a Global Environment
Chapter 2 Chapter 9
Operations Strategy in a
Functional Business
Global Environment
Systems
24
Production and Operations

Management: SCM
Figure 9.5 Companies recognize that careful management of supply chain

processes is critical for success in the highly competitive global economy
25
Transportation Management Systems

• Relied on to handle transportation planning including
shipping consolidation, load and trip planning, route
planning, fleet and driver planning, and carrier selection.
o Four trend factors contributing to TMS growth:
§ Outdated transportation systems need to be
upgraded or replaced
§ Growth of intermodal transport
§ TMS vendors add capabilities
§ TMSs handle big data

26
Logistics Management
• Inbound logistics refers to receiving.
o Outbound logistics refers to shipping.
o Inventory control systems are stock control or inventory
management systems.
o Logistics management systems:
o Optimize transportation operations
o Coordinate with all suppliers
o Integrate supply chain technologies
o Synchronize inbound and outbound flows of materials or goods
o Manage distribution or transport networks

27
Inventory Control Systems

• Inventory Control Systems
o Important because they minimize the total cost of inventory while
maintaining optimal inventory levels. Inventory control systems minimize
the following three cost categories:
§ Inventory holding costs
§ Ordering and shipping costs
§ Cost of shortages
• Safety Stock
o Extra inventory used as a buffer to reduce the risk of stockouts. Also called
buffer stock.
• Stockouts
o Inventory shortage arising from unexpected demand, delays in scheduled
delivery, production delays or poor inventory management.
28
Lean Manufacturing Systems

• Leverages suppliers delivering small lots on a daily or frequent
basis, and production machines are not necessarily run at full
capacity.
• Empowers workers so that production decisions can be made by
those who are closest to the production processes.
• JIT success factors also apply to lean manufacturing.
• Requires quality, on-time inventory

29
Quality Control Systems

• Stand-alone or part of an enterprise-wide total quality
management (TQM) effort providing data about the quality of
incoming materials or parts, as well as the quality of in-process
semi-finished and finished products.
• Data collection by sensors or RFID and interpreted in real-time, or
stored in a database for future analysis.

30
Computer-integrated Manufacturing (CIM)

Systems
• Custom-designed software that controls day-to-day shop floor
activities
• Data-driven automation
• Benefits:
o It simplifies manufacturing technologies and techniques
o Automates as many of the manufacturing processes as possible,
o Integrates and coordinates all aspects of design, manufacturing, and related
functions.

31
Sales and Marketing Systems

• Digital advertising
• Social media monitoring and promotions
• Sales and customer support
• Automated ad placement and media buying
• Market research
• Intelligence gathering
• Distributing products and services to customers
• Order tracking
• Online and mobile order processing
• Online and mobile payment methods
32
Data-Driven Marketing
• Data-driven, fact-based decision making relies on hot, current
data, that has immediate impact on the business.
• Pay-per-click (PPC) advertising is one use of this type of data.
• FaceBook pushes ads to people based on their self-reported
demographics

33
Social Media Customer Service

• Monitoring Social Media
o Many companies now employ customer support
representatives to monitor social media platforms.
o Offer support and solutions to customer problems
o Retains the customer’s loyalty and demonstrates the brand’s
commitment to customer satisfaction.
o Companies stand to benefit by demonstrating their
responsiveness to a wide audience of prospective customers

34
Marketing Management
• Pricing of Products or Services
o Sales volumes as well as profits are determined by the prices of
products or services.
• Salesperson Productivity
o Collected in the sales and marketing TPS and used to compare
performance along several dimensions, such as time, product,
region, and even the time of day.
• Profitability Analysis
o Profit contribution or profit margin of certain products and
services derived from the cost accounting system.

35
Accounting, Finance, and Regulatory Systems

• Income Statement
o Summarizes a company’s revenue and expenses for one quarter
of a fiscal year or the entire fiscal year.
o Also known as a P&L (profit and loss) or earnings statement.
• Compliance
o Generally accepted accounting principles (GAAP) and the
Financial Accounting Standards Board (FASB).
• Financial Misrepresentation
o Occurs when a company has intentionally deceived one or more
other parties.

36
Fraud Prevention and Detection

• Why Fraud Occurs
o Fraud occurs because internal controls to prevent insider fraud
– no matter how strong – will fail on occasion.
o Terms used for Insider fraud are internal, employment, or
occupational fraud.
o Insider fraud is a term referring to a variety of criminal
behaviors perpetrated by an organization’s employees or
contractors.

37
Fraud Risk Management

• Fraud Risk Management
o A system of policies and procedures to prevent and detect
illegal acts committed by managers, employees, customers, or
business partners against a company’s interests.
• Fraud Risk Factors
1. A high level of trust in employees without sufficient oversight
to verify that they are not stealing from the company.
2. Relying on informal processes of control.
3. A mindset (belief) that internal controls and fraud prevention
systems are too expensive to implement.
4. Assigning a wide range of duties for each employee, giving
them opportunities to commit fraud.

38
Internal Controls
• Strong Internal Controls to prevent fraud
consist of:
o Segregation of duties
o Job rotation
o Oversight
o Safeguard of assets
o IT policies

39
Auditing Systems
• Auditing Information Systems
o Fraud can be easy to commit and hard to detect.
o Information systems can provide a federated approach
to auditing payroll, scheduling, accounts
payable/receivable, and other electronic data.
o Federated systems are the combination of
independent systems designed with unique functions.

40
Human Resource Systems, Compliance,

and Ethics
• HR Information Systems (HRIS)
o Systems that focus on legal and compliance responsibilities,
employee development, talent management, hiring, and
succession planning.
o HRIS moved into intranets or clouds, including leasing external
information system software as a service (SaaS):
§ Reduce demand on internal businesses and IT resources.
§ Dramatically improve time to value without overstretching internal IT
resources.
§ Reduce development/implementation times for new systems.

41
HR Management Activities
Figure 9.11 HR management activities.

42
Management and Employee Development

Activities
• Management and Employee Development
o Performance Evaluation
§ Corporate managers can analyze employees’ performances with the
help of intelligent systems, which provide systematic interpretation
of performance over time.
o Training and Human Resources Development
§ Provide career development plan for each employee. IT can support
the planning, monitoring, and control of these activities by using
workflow applications.

43
HR Planning, Control, and Management

• HR Planning, Control, and Management
o Personnel Planning and HR Strategies
§ Forecasts requirements for people and skills, planning how to locate
sufficient human resources or develop them from within.
o Benefits Administration
§ Salary/wage, bonuses, and other rewards for service.
o Employee Relationship Management
§ Self-service personal information tracking, online training, and other
employee-focused tasks.

44
HRIS Ethics
• Ethical Challenges and Considerations
o Recruiting, training, and performance evaluation procedures
may involve ethical issues.
o Information and employee privacy should be protected.
o Employment laws make securing HR information necessary for
the protection of employees and the organization


Kuliah 1 - Operations and IT Strategy

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Kuliah 1 - Operations and IT Strategy

Uploaded by

Copyright:

Available Formats

Operations Management: IT for Management: On-Demand

Sustainability and Supply Strategies for Performance, Growth,

II. Operations and IT Strategy

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Alenia Aeronautica Italy Upper center fuselage

Carbon fiber for wing and

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Hafei Aviation China Parts

Korean Airlines South Korea Wingtips

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

• Mission - where is the organization going?

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Business Management Systems and

Copyright ©2018 John Wiley & Sons, Inc.

Solving Business Challenges at All

Figure 9.4 Information flows triggered by a transaction or event.

Copyright ©2018 John Wiley & Sons, Inc.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

Copyright © 2020 Pearson Education Ltd. All Rights Reserved.

II. Operations and IT Strategy

Production and Operations

Figure 9.5 Companies recognize that careful management of supply chain

Transportation Management Systems

Copyright ©2018 John Wiley & Sons, Inc.

Copyright ©2018 John Wiley & Sons, Inc.

Inventory Control Systems

Lean Manufacturing Systems

Copyright ©2018 John Wiley & Sons, Inc.

Quality Control Systems

Copyright ©2018 John Wiley & Sons, Inc.

Computer-integrated Manufacturing (CIM)

Copyright ©2018 John Wiley & Sons, Inc.

Sales and Marketing Systems

Copyright ©2018 John Wiley & Sons, Inc.

Social Media Customer Service

Copyright ©2018 John Wiley & Sons, Inc.

Copyright ©2018 John Wiley & Sons, Inc.

Accounting, Finance, and Regulatory Systems

Copyright ©2018 John Wiley & Sons, Inc.

Fraud Prevention and Detection

Copyright ©2018 John Wiley & Sons, Inc.

Fraud Risk Management

Copyright ©2018 John Wiley & Sons, Inc.

Copyright ©2018 John Wiley & Sons, Inc.

Copyright ©2018 John Wiley & Sons, Inc.

Human Resource Systems, Compliance,

Copyright ©2018 John Wiley & Sons, Inc.

Figure 9.11 HR management activities.

Copyright ©2018 John Wiley & Sons, Inc.

Management and Employee Development

Copyright ©2018 John Wiley & Sons, Inc.

HR Planning, Control, and Management