Question 3 Do you think that Tyko can avoid the Six Sigma initiative suffering the same fate as the TQM initiative?
1. What are the benefits and problems of training Black Belts and taking them off their present job to run the improvement projects rather than a member of the team, which
This issue centres around balancing experience and technical expertise on one hand against process ownership on the other. Some organizations disagree with the Six Sigma approach of having dedicated improvement practitioners. They prefer improvement to be organized by the people who will be responsible for running the improved process. Six Sigma proponents, however, argue that the accumulated expertise and training of Black Belts is what really counts.
As quoted in the box, it is important to gain the trust and understanding of the staff who will operate the process after the improvement project, and this can be done by an experienced Black Belt with good interpersonal skills.
C H A P T E R 2 1
The operations challenge Teaching guide
Introduction
In some ways this chapter is not really meant to be taught as such. It is there as a rounding off point for those students who wish to connect some of their learning on operations management courses to the more important of the wider issues facing business. As such it is a vehicle to encourage reflection. The material in the chapter can be treated in one of two ways. Either parts of it can be taken out and expanded into a whole lesson, or alternatively, the various parts of the chapter can be incorporated into other lessons.
If the former approach is taken, the most likely candidates for becoming the centre of a whole lesson are the sections on environmental responsibility, social responsibility and globalization.
Using the tables that identify the operations management issues in each of these areas is a useful starting point for planning a lesson.
Exercises/discussion points
• Exercise – Ask the class to relate some of the topics covered on the course to the five themes covered in this chapter. If some of the material in the chapter is incorporated in the previous lesson then the most obvious connections are as follows.
Globalization • Network design
• Supply chain planning and control
• Failure prevention and recovery
Social responsibility • Product service design
• Network design
• Process technology
• Capacity
Environmental responsibility • Product service design
• Process technology
• Quality planning and control and TQM
• Failure prevention and recovery
Technology • Product and service design
• Process technology
• Supply chain planning and control
Knowledge management • Product service design
• Process technology
• Planning and control
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• Exercise – Revisit the Oxfam case mentioned in Chapter 1. Pose the following question to the class. This is one of those cases that can be used either at the beginning or at the end of a course in operations management. If used at the beginning, its purpose would be to demonstrate how operations management is relevant to not-for-profit organizations as well as commercial companies. It could also be used to prompt a discussion of the differences between providing ongoing assistance and development in different parts of the world and the shorter, more dramatic ‘projects’ associated with emergency relief. Both aspects of operations are important to Oxfam. If used at the end of the course, its purpose could be to look at some of the more difficult aspects of how operations practice impacts on the social concerns of a business. Indeed, the question at the end of the case is focused in this direction.
What are the main issues facing Oxfam’s operations managers in terms of
• globalization and international management?
• environmental management?
• social responsibility?
• technology?
• knowledge management?
Globalization and international management – By definition, Oxfam’s scope of operations is global. Anywhere, a disaster is likely to strike could receive the attention of the charity.
However, much of Oxfam’s work is not concerned with the high-profile disaster relief side of its business, but rather the ongoing community development projects it undertakes. Most of these projects will be in the poorer, less-developed parts of the world. The implication of this is that, from an operations point of view, services must be delivered without an assumed level of infrastructural support. The ability to adapt development methodologies to such circumstances would be a key operations task. Another aspect of globalization for Oxfam concerns the coordination of expertise. Experts, either in development or disaster relief, may be located anywhere in the world. The task of understanding and coordinating this pool of potential help must be a major operations task. It will rely on maintaining a database of expertise and on the ability to deploy it, sometimes at short notice.
Environmental management – To Oxfam, the concept of environmental management must be tackled at two levels. The most obvious one is that environmental awareness is an ‘output’ from the charity’s operations. In other words, environmental management, to some extent, is one of the operation’s ‘products’. It will engage in lobbying governments and non-governmental agencies to achieve its aims of greater environmental sustainability. However, there is also another, related, issue. Oxfam’s operations themselves must also be environmentally sound.
Agricultural projects, for example, must be managed to ensure that there is no inappropriate use of fertilizers and pesticides locally, even when there may be local pressures to do so.
Social responsibility – Again, this is one of those issues that is both an output from the operation and an objective for the way it runs its own operations. A key issue here must be the way in which the ‘on the ground’ managers of development projects tackle some of the particularly sensitive cultural issues. For example, ‘gender issues’ are one of Oxfam’s campaigning points; however, appropriate gender roles are seen in very different ways in different parts of the world. Pursuing its own ends in terms of, say girls’ education, must be
balanced against traditional ideas of women’s role. Whereas this difficulty may be relatively straightforward to reconcile at a strategic level back in the charity’s Oxford headquarters, its success depends on how local operations managers deal with the issue at a day-to-day level.
Technology – Again, this has elements of both output and process. Developing appropriate technologies for use in developing countries is both an output in terms of the charity wishing to influence technology usage, but also an issue which it must demonstrate itself. Also, although we are used to thinking of ‘good’ technology as being ‘high’ technology, in many cases ‘good’
technology for Oxfam means ‘appropriate’ technology. Thus, technology that is sustainable, capable of being made and/or adapted locally and maintainable under normal conditions of use, is just as challenging a task as developing high-tech solutions to operations problems.
Knowledge management – The work of charities such as Oxfam is extremely practical. It cannot rely on a theoretical knowledge base (although obviously it makes use of many branches of science and economics). The knowledge embedded within Oxfam’s operations is the result of many years of attempting difficult tasks in very difficult conditions. It is vital for operations such as Oxfam that this knowledge is captured and deployed. Reinventing the wheel, or learning from scratch, on every project is a waste of the charity’s resources and a failure in its responsibility to the people it is trying to help. The capture and development of knowledge through manuals, databases and (even more important) discussions and on-the-job training must be a key issue for charities such as Oxfam.
Case study teaching notes
Corporate social responsibility as it is presented
What are the similarities and differences between these statements?
They are all similar in so much as they all try to give a sense of a far broader set of stakeholders than a purely economic model would imply. All of them mention the benefits to stakeholders that come from the company’s activities. Also, they all use the type of language that reflects positive values, for example, ‘respect’, ‘commitment to community’, ‘responsibility’ and so on. None of them mentions making profits.
Why do large companies like these go to so much trouble to invest in CSR?
Companies go to so much trouble to invest in CSR partly for ethical reasons, and also because it provides a positive image that reflects their customers’ values and aspirations. In this sense it is like any other form of promotional activity. There is also an issue of risk mitigation. Should a public relations disaster affect the company, it can always point to its core principles. In other words, the company may have made a mistake, but it is not fundamentally negligent. This is not to try and sound cynical. In many areas (e.g. treating staff with respect) the aims of the company and its stakeholders are more or less identical.
Of these companies, two, HSBC and Starbucks, have been the target of anti-globalization violence. Why these two?
Simple. They have been the target of anti-globalization violence because they are among the most well known companies in their businesses with a global brand awareness. Anti- globalization protesters are often trying to achieve maximum publicity for their views. This is best served by attacking well-known brands. No news channel is going to broadcast a story around the world about some protesters demonstrating outside a small local and unimportant
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organization. Also, by definition, global brands represent the type of organizations and views that anti-globalization protesters are opposed to.
Short case model answers
HP’s Recycling Program
HP (Hewlett Packard) provides technology solutions to consumers and businesses all over the world. Its recycling program seeks to reduce the environmental impact of its products, minimize waste going to landfills by helping customers discard products conveniently in an environmentally sound manner. Recovered materials, after recycling, have been used to make products, including auto body parts, clothes hangers, plastic toys, fence posts and roof tiles. In 2005 it proudly announced that it had boosted its recycling rate by 17 % in 2005, to a total of 63.5 million kilograms globally, the equivalent weight of 280 jumbo airliners. 'HP's commitment to environmental responsibility includes our efforts to limit the environmental impact of products throughout their life cycles,' said David Lear, vice president, Corporate, Social and Environmental Responsibility, HP. 'One way we achieve this is through developing and investing in product return and recycling programs and technologies globally, giving our customers choices and control over how their products are managed at end of life.'
But HP’s interest in environmental issues goes back some way. It opened its first recycling facility in Roseville, California, in 1997, when it was the only major computer manufacturer to operate its own recycling facility. Now the company’s recycling program goal is to expand its product return and recycling program and create new ways for customers to return and recycle their electronic equipment and print cartridges. As well as being environmentally responsible, all initiatives have to be convenient for customers if they are to be effective. For example, HP began a free hardware recycling service for commercial customers in EU countries who purchase replacement HP products, in advance. Partly, this reflects the EU Waste Electrical and Electronic Equipment Directive. A similar offer exists for HP commercial customers in the Asia Pacific region. In some parts of the world, HP has developed partnerships with retailers to offer free recycling at drop-off events.
Why do companies like HP go to so much effort to promote recycling schemes such as this one?
As usual, it is a mixture of corporate responsibility and self-interest. It also seems that many parts of the world will introduce legislation that requires companies to take responsibility for the end-of-life reuse and disposal of their products. While this is most prevalent in Europe, it could spread to other parts of the world. Therefore, HP is, in effect, investing in developing capabilities that it will have to deploy elsewhere in the world sooner or later. Of course, there are other advantages. Carefully reused materials can help reduce costs. But, possibly the most important advantage is that it allows the company to examine how its products perform in use. Careful examination of recycled cartridges can give an indication of potential failure points and/or aspects of the product design that could be improved.
HP has been engaged in environmental matters for some years, how might this help them to be more effective at it?
HP opened its first recycling facility in Roseville, California, in 1997. Then it was the only major computer manufacturer to operate its own recycling facility. This has both advantages and disadvantages. The disadvantage is that it had to ‘make up the rules as it went along’. After all, there was no one else to learn from. The major advantage is that, in doing so, it acquired