OM/U1 Topic 6 Recent Trends in Operations Management
Day by day latest trends keeps changing the entire world. I would like to share few those latest trends in Supply Chain Management, Operations Management and Research.
Agile – The New Lean:
Agile methodology is an alternative to traditional project management, typically used in software development. It helps teams respond to unpredictability through incremental, iterative work cadences, known as sprints. Agile methodologies are an alternative to waterfall, or traditional sequential development.
Considering individualization and growing complexity, the lean concept is, however, no longer sufficient. Now and in the future, processes in the supply chain must rather be agile or, more clearly, flexible and interactive, ensuring high-quality delivery results. To expand upon Agile in the supply chain management model, agile supply chain management stands for the ability to cope with unforeseen events through the use of lightning-fast decision making. The implementation of this management approach requires more than just the commitment of those involved. An additional technological component is essential and enables people to deal with the unplannable.
Achieving agile leadership skills is actually more of a process than a supply chain trend.
Supply Chains will Look to Go Digital:
Digital technology is disrupting traditional operations and now every business is a digital business. The impact on supply chain management is particularly great. Businesses cannot unlock the full potential of digital without reinventing their supply chain strategy.
Many companies understand the elemental nature of these changes and are already working to introduce digital technology into their operations. However, simply adding digital technology is not the answer.
This approach overlooks the fundamental difference between traditional supply chains that have been “digitally enhanced” and truly integrated, re-invented supply chains whose DNA is fundamentally digital
For digital technology to create significant improvement in business outcomes, businesses need to:
Reinvent their supply chain strategy
Re imagine supply chain as a digital supply network (DSN) that unites not just physical flows but also talent, information and finance. This new breed of supply chain is more connected, intelligent, scalable and rapid than traditional supply chain management. In a metaphorical sense, the DSN enables people and data—as well as materials, products and supplies—to travel together across the extended enterprise.
This is vastly different from digitally enhanced supply chains which (because they are never stronger than their weakest links) have less potential to help companies:
Develop new synergies
Relate more fully to customers
Rapidly reach new markets and quickly build and scale new offerings
In today’s global and connected economy, digital supply chains are the on-ramp to innovation and success. And if you want to be among the winners, you need to get on the highway and go fast. Start today by re-imagining your supply chain. Develop digital strategies that allow you to proactively evolve ahead of the competition. Employ comprehensive solutions that support the entire source-to-settle process and create value for all parties involved in it.
From Division of Labour to Scientific Management and Mass Production, Operations has always tried to adjust to the need of the businesses by improvising and innovating with several trends.
Similarly, the following discussion illustrates how Operations are strategized these days and what are the recent trends, which are affecting Operations Management.
COMPUTER AIDED DESIGN AND MANUFACTURING
After the trend of Scientific Management and automation, the next big step was CAD/CAM. These computer-aided operations meant that all the designing and manufacturing of the product would be done with the help of computers making the operations way more efficient.These systems immensely helped in new product development and redesigning the processes.
General Motors had its first brush with computer-aided systems in 1996 and ended up saving time and money by using these systems. It helped the company launch new vehicles faster and more efficiently by making the process much smoother.
SHRINKING PRODUCT LIFE CYCLE
In the past, product life cycle used to be comparatively longer and when a product was introduced, it generally stayed in the market for a longer period of time. Now with the fast expansion of technology, product life cycles have become short and almost every product gets replaced by a new product in shorter time spans (Stevenson, 2005). Due to this reason, companies are forced to introduce rapid development of new products with encouraging innovation. This has provided a new challenge and requires redesigning of operations making the process faster.
SUPPLY CHAIN MANAGEMENT
Supply Chain partners are required to be more in tune with the needs of the end users as a result of shorter product life cycles, demanding customers, fast changes in technology, material and processes. And because suppliers can contribute unique expertise, operations managers are outsourcing and building long-term partnerships with critical players in the supply chain.
In the past, there used to be large-scale standardized mass production to gain economies of scale. Now with increased flexibility and competition, companies are forced to respond with creative product designs and flexible production processes that cater to the individual whims of consumers (Stevenson, 2005). The trend has now been changing towards customized production of goods, whenever and wherever needed. This has led to change in the way operations were designed earlier leading to better and more efficient processes.
In the past, employees were treated as just another input to the production process where they were treated more or less like machines and worker concerns were generally ignored. The knowledge explosion and more technical workplace have combined to require more competence in the workplace.
Operations managers now respond by moving more decision making to individual workers. With the development of HRM alongside, firms tend to focus more on employee empowerment, treating employees as resources that bring competitive edge to the firm. Quality management training based on lean philosophy has been very popular recently, making employee involvement an essential part of the improvement process.
In the past, the focus of the production was aimed on obtaining resources at lowest possible cost ignoring the damage made to the environment. Operations’ managers now are increasingly getting concerned with design of products and processes that are ecologically sustainable. That means designing and packaging products that minimize resource use, are biodegradable, can be recycled and generally environment friendly.
In other words, Green production has been seen as a recent trend in operations management concerning ecological sustainability.
OPERATIONS TURNING LEAN
Interestingly, all the trends discussed above can boil down to the “Lean” philosophy. Be it Sustainability or Mass Customization, both the trends are two different aspects of lean operations. Businesses can lead to successful Sustainable Management, only by following a part\ of lean philosophy: continuous improvement. In fact, Mass Customization has been possible just because JIT, since it helps customise the products according to the customers’ needs or preferences without increasing costs or manufacturing time.
LEAN OPERATIONS – JUST IN TIME
JIT is a method of planning and control and an operations philosophy that aims to meet demand instantaneously with perfect quality and no waste (Slack et al, 2007). Lean Operations philosophy replaces the past methods of mass production where there were batches of produced goods sold at mass, generating economies of scale. The recent trend in operations management era has shifted this to Just in Time production where goods and services are produced upon the receipt of order with customizations, resultant being a drastic reduction of inventory cost.
Lean philosophy is based on the principle of moving towards the elimination of all the waste in order to develop an operation that is faster, more dependable, produces higher-quality products and services and above all, operates at low cost. An understanding of lean operations can be
developed through the phrase that is often used interchangeably with ‘lean’ – just in time or sometimes lean synchronization. This is because apparently the means to achieve the lean state are less easily explained and sometimes counterintuitive (Slack et al, 2007).