Table of Contents
Dr. Donald Rosenfield presents a thoughtful and comprehensible discussion on the management of sourcing strategies in his lecture. He seeks to answer such questions as, how and where should the company outsource, should it do it internally or externally. Rosenfield attempts to answer each of these questions in detail in order to illustrate the purpose of the sourcing strategies. He regards the questions related to suppliers both on local and global levels. In terms of vertical integration, Dr. Rosenfield examines four main factors such as strategic, market, economic, and product and technology issues.
Having a closer look at strategic issues in vertical integration, firstly, Rosenfield emphasizes the importance of correspondence between the chain supply choices and the general strategy of the company. Secondly, the lecturer asks the important question of whether the operations are essential for the business. In other words, the company should recognize whether the operation is fundamental to the competitive advantage of the company. Another significant factor that influences the company’s strategic choices refers to the access to capacity. It is important for the management of the company to timely answer the question whether the outsourcing or vertical integration is necessary when the company is expanding rapidly. Many companies make common mistake choosing to use outsourcing when they actually need an extra boost of capacity. Finally, Rosenfield underlines the importance of combination of the operation question and scale, competency, and the skills of the company. The lecturer warns that if there is a significant difference between these variables, then outsourcing might be a better way than the vertical integration to improve the situation (Rosenfield, 2012).
In the next lecture, Professor Jiri Chod focuses on the issues related to flexibility in general and resource flexibility in particular. The lecture starts with the general talk about the benefits and costs of resource flexibility and smoothly flows to the issues related to practical implications of risk pooling such as inventory centralization, mass customization, etc. Jiri Chod also addresses such topics as volume flexibility, flexibility in operations, and flexibility in global operations. The discussion presented by Prof. Chod is essential in understanding flexibility and, therefore, should be more closely analyzed.
The first question that Prof. Chod seeks to answer in his lecture is the definition of flexibility. He identifies flexibility as the ability to adapt or change (Chod, 2012). Chod emphasizes that oftentimes the success of the company depends on its ability to adapt and go through the transformation demanded by the market. From the operations management point of view, there are two the most important types of flexibility, such as volume flexibility and resource flexibility. According to Chod (2012), volume flexibility is the ability to change the production volume without significantly increasing unit cost. Resource flexibility, on the other hand, is the ability of a single resource to perform multiple activities. This type of flexibility has different dimensions that influence the overall efficiency of the flexibility strategy such as scope flexibility and agility. The lecturer notes that flexible resources are more expensive, and flexibility involves loss of specialization and efficiency (Chod, 2012). However, resource flexibility has three major benefits that justify all the costs, such as risk pooling, revenue maximization, and operational hedging.
Operational and Financial Hedging
John Birge presents the next lecture and refers to the issues related to operational and financial hedging. According to Birge (2012), operational and financial hedging can reduce risks and increase value for companies. The lecturer explains how operational hedging differs from the traditional form of financial hedging. Birge starts his lecture with the basic motivation for operational hedging and outlines its benefits for the company. For instance, operational hedging can mitigate risk across the entire enterprise of various effects such as demand, supply, price, currency exchange, volatility, and technology. Financial instruments can also reduce risks but only when they have zero net present values and financial markets are efficient.Want an expert to write a paper for you Talk to an operator now
The major questions that Birge raises in his lecture are what the value of operational hedging is and how it interacts with financial methods in order to reduce risks. The lecture addresses different types of risks and includes examples of foreign exchange, value calculations, operational policies, and the conclusions derived from the detailed discussion. In other words, Birge (2012) describes hedging as reducing risks or volatility. The lecturer describes the main difference between operational and financial hedging as creating value. For example, operational hedging can create value (e.g. positive NPV), while financial hedging cannot. He explains this by pointing that value comes from flexibility in output and correlation between demand and prices, which is not present in financial hedging.
Service Operations Strategies
Rich Metters, Tenneco professor of management, discusses the topic of service operations strategies in the next lecture. The main reason to study service operations, in Metters’ (2012) opinion, is that the service sector is much larger than the industrial and equals to approximately 80% of Western economies. Moreover, it is important to note that not all management tools that are appropriate for manufacturing are transferable into a service environment. Therefore, studying the service operations strategies is a matter of a great importance for the managers. In his lecture, Metters mainly defines service operations and its characteristics. He describes it as the transformation process that turns inputs into outputs. In other words, it is the act of combining people, raw materials, technology, etc. to create useable services and products. Metters (2012) points that the major feature of operations management is that it involves much more people than financial management, for example. It involves about 80% of the employees of the company: from those people who actually produce the product or perform a service to managers of all levels (Metters, 2012). The characteristics of services oftentimes include rules and exceptions that allow the firm to function efficiently and in accordance with the ethical norms. In the end of his lecture, Metters presents major service operations strategies emphasizing that the main concern in terms of developing such strategy refers to aligning functional and corporate service strategies.
Sustainability in Operations
The next step in studying operations is learning about sustainability in operations. Prof. Arnd Huchzermeier presents an insightful lecture on this topic. Prof. Huchzermeier starts with a brief introduction of sustainability in operations, and then presents a detailed overview of sustainability, focusing on its definition, benefits for companies, and particularly business cases in order to examine the subject to the utmost. Finally, the lecture ends with a conclusion and outlook of sustainability in operations.
In order to understand what sustainability is, Huchzermeier explores the problems of population growth, climate change, oil wells and their influence on the world economy. He emphasizes that these problems make the preservation of resources a very important matter. To preserve the resources, Prof. Huchzermeier presents four areas of actions for the companies, such as selling goods for customers, buying resources for production, designing products for the future, and reporting about the emissions across the value chain. In general, according to the lecturer, sustainability refers to three categories: social, environmental, and economic (Huchezmeier, 2012). Each of these categories has its own measure indicators. For instance, measures for social category include employee’s health and safety, company’s culture and diversity, and education, training, and talent management. Huchezmeier focuses on each category in detail, making the lecture a valuable source of knowledge about sustainability.
Operations Strategy: Competition, Competencies, and Trade-Offs
In his lecture, Prof. Gad Allon presents a detailed introduction into the subject of operations strategy. He focuses on the importance of competitive cost understanding and presents both the internal and the external views on this matter. Prof. Allon teaches how to analyze a competitive threat relying on cost advantage analytics and using trade-offs curves. Finally, the lecturer demonstrates how to design strategies to gain competitive advantage through operations on the example of a particular case study.
On the example of the food industry, Allon presents a strategy that allows gaining a competitive advantage for Sugar and Spice Company in the cupcake market. He explores the major competitive threats and opportunities for the company in order to identify whether the operations strategy utilized in the company fits the organizational goals. Allon (2012) shows how to analyze a competitive threat using either differentiation strategy or taking a low cost position. Discussing the topic of operations strategy, Prof. Allon focuses on various questions related to the topic and gives thorough and comprehensible answers to them, making the lecture a great guideline for operations managers.
Retail Buying: Better Purchasing and Inventory Control
In the last lecture, Dr. Susan Fiorito introduces the subject of retail buying. Dr. Fiorito presents the efficient strategies for improving purchasing and inventory control and outlines the biggest problems related to the topic. To understand how to deal with these problems efficiently and achieve the company’s goals with the lowest cost, Dr. Fiorito (2012) focuses on the importance of inventory control, explains key inventory terminology, presents key assortment strategies and other assortment factors, and discusses the major types of merchandise. Moreover, the lecture gives a notion on how to develop strong customer relationships, forecast inventory needs, and outlines the basic inventory functions. Finally, inventory management systems and inventory replenishment systems are explored in detail in this lecture.
All the issues considered in this lecture by Dr. Fiorito help to understand how to improve purchasing and inventory control, utilizing the most efficient and innovative strategies without significant losses and risks. The lecturer emphasizes the importance of inventory control and places this issue as a top priority in retailing business. The lecture presents the complex concepts in a simple and comprehensible way, what allows to a better understanding of the topic without significant efforts.