Focused Disciplines in Operations Management:

Comment: This is the fifth post is a series on operations management. In this post I want to discuss a few focused areas.. In the future, I may write on more indepth briefs on these topics. But for now, I want to just skim them.

Supply Chain / Logistical Operations

The world is globalizing and populations are decentralizing or sprawling. On a Sunday drive through the countryside it is not uncommon to find manufacturing plants in the middle of nowhere.  Companies, in a capital market, naturally seek the Low Cost Business Design Profit and Experience Curve Profit models spawning the sprawl and off shoring phenomenon. This creates a unique set of business problems. Logistical lines become lengthened and access to persistent and integrated information becomes more important. More critically, the ability of the organization to respond to emergent conditions through strategic, operational, and even tactical business projects attests to the need for an organization's low latency and responsiveness. The combination of project management, IT, and supply chain management is a unique specialty that has the unique skill sets to respond to this need.

Nearly all operations today involve supply chains and/or logistical operations of various sorts.  Some supply operations have a full range from supplier to producer to the customer.  Other operations create intellectual products such as software, reports, or other intellectual products. These operations are mostly the producer to the customer. Everyone seems to have a need to send and recieve goods or services. In fact, the logistical networks are considered by many futurists to be one of the underpinnings of the new economy on the horizon.  Hence, supply chain management is a growing field. As such this deserves focused attention.

The Society for Operations Management, APICS, cites the basic supply chain model as shown in Figure 1.

Figure 1: Supply Chain Basics

There are numerous dynamics that play out with variations of this model.  However, we will remain focused at a high level in this discussion.  As raw materials from suppliers are transformed by the producer for the final customer money, information, and goods/materials flow.  Value is added and ultimately purchased using various forms of money. The money flows in the opposite direction of the product flow as payments. Reverse product flow occurs due to but not limited to warranty, recycling, and buy back programs. Information operates in both directions and is essential to the effective and efficient supply chain process.

One important point to understand is that supply chains involve everyone and cut across entire enterprises. There are also external entities to the supply chain process that have significant impacts on the process such as governments, public utilities, and the educational systems. These external entities affect transportation infrastructures, communications, market forces, the money supply, and the body of knowledge.

Operation managers must understand key processes of the supply chain in order to effectively manage the activities. These processes connect the actors in the chain, involve information flows, and cash flows. One APICS view centers on the supply chain as a series of linked processes detailed in the Supply Chain Operations Reference model (SCOR).  This model is limited to supply operations that extend two tiers in both directions from the principle producer.

I'll discuss the supply chain in more detail in a future series of posts. The take away from this discussion is that supply chain managers must have an end-to-end view of the process as well as all the external influencing factors and technologies in order to effectively manage the process. Issues involving misinformation, mis-interpreted information, or disinformation can grind an operation to a halt, cost money, cause legal issues, and  ultimately loose business.

Agile / SCRUM



Agile is truly a operations management spin off that utilizes operation line manager paradigms of cross-functional training, managing the tempo of operations, clearing backlogs, gut thinking, and production meetings.  Line operations tend to center on the U-Shaped cell concept which is one of self-managing and self-organizing production unit. The line manager is concerned with managing the inputs and outputs of the cell and the flow between cells having metrics, buffers, and having an enterprise view of the operation.  SCRUM is more or less a cooperative effort between self-managing functional areas; Development, Product Owners, and the SCRUM Master / PM. A line operations manager and SCRUM master are very similar yet have a few distinct differences.

Agile's SCRUM Master does the same on-the-fly management as would be expected of a line operations manager.  In manufacturing, work in process goes into work as materials arrive associated with the work in process. This production effort is called a production run.  In SCRUM the production run is the iteration period which is called a sprint.  The primary difference is that most operations, like manufacturing, tend to be linear in nature producing a finished good at the end of the line. Much of the line managers activities are focused in that manner. Whereas, SCRUM's operations tend to be non-linear or iterative. However, a single iteration is linear having several phases along the way. The product undergoes a continuous improvement process having version releases. Perhaps the SCRUM Master could be tagnamed a spiral or spin manager versus line manager. Anyhow, general operations and SCRUM tends to be of  the same character or genere with similiar duties.

• Managers act as the guardian of the production process.
• Both Line managers and SCRUM masters understand the quality, schedules, objectives, and methods promoting the process and controlling digression and changes away from the path towards the endstate. 
• Steer and coach artisans / team members towards production goals
• This is leadership and managerial skills of providing vision, direction, and coaching. Most line managers aspire to Dale Carnegie approaches. However, line positions are typically filled by Type A personalities which usually have an abrasive edge as they drive expectations to the endstate. In SCRUM the manager tends to be more of a facilitator  / coach rather than a driver.
• Minimumizes outside influences keeping the production effort focused.
• In AGILE outside influences tend to be changes and good ideas that if not managed can affect scope and objectives.  In line operations these can be a variety of types of influences from sales volatlity to material shortages to legal issues that can have a direct impact on the operations. For example, OSHA or the EPA making demands on the operations that require an immediate response. While changing legal requirements affect AGILE efforts, they tend to be removed from the AGILE process and viewed in terms of risk rather than an immediate external influence.
• Track work-in-process removing hurdles and bottlenecks
• Classic line manager duties are to delegate work to the experts and clear the way ahead for them. The same is true of SCRUM master activities.
• Develops lessons learned to improve process performance
• This is a practice for nearly every undertaking. Even war fighters return to battle site often as part of a lessons learned conducting battle walks.

Like SCRUM, line operations are often involved in lean processes and continuous improvement. Operational risk management techniques are employed to reduce risk on-the-fly in line operations as required by the line manager. In SCRUM risk is thought of differently though. Risk is more focused and is regularly reviewed  during the sprint.

In conclusion, line operations and SCRUM having many similarities and a few differences. AGILE SCRUM is more focused than line operations and is organized around a functional paradigm for iterative development in lieu of linear operations. 

Comment:  The next post will  explore that a scenario of the adaptive organization. Please stay tuned.

References:

Pham, A., Pham P.V. (2012). Scrum in action: agile software project management and development. Course Technology, USA.

(2011). APICS certified supply chain professional learning system. version 2.2. 2011 ED. APICS. Chicago.