Week 1

Engineering Management 2

Changing Challenges for the Operations/Engineering Managers

General discussion

Dr. Farhad Anvari

Room A181 (Hamilton Campus)

farhad.anvari@uws.ac.uk

Changing Challenges

Traditional
Approach

Reasons for
Change

Current
Challenge

Ethics and
regulations
not at the
forefront

Public concern over

pollution, corruption,
child labor, etc.

High ethical and

social
responsibility;
increased legal
and professional
standards

Local or
national
focus

Growth of reliable, low

cost communication
and transportation

Global focus,
international
collaboration

Lengthy
product
development

Shorter life cycles;

growth of global
communication; CAD,
Internet

Rapid product
development;
design
collaboration

Changing Challenges
Traditional
Approach

Reasons for
Change

Current
Challenge

Emphasis on
specialized,
often manual
tasks

Recognition of the
employee's total
contribution; knowledge
society

Empowered
employees;
enriched jobs

In-house
production;
low-bid
purchasing

Rapid technological
change; increasing
competitive forces

Supply-chain
partnering; joint
ventures, alliances

Large lot
production

Shorter product life

cycles; increasing need
to reduce inventory

Just-In-Time
performance;
lean; continuous
improvement, Six
Sigma

Changing Challenges for the

Engineering/Operations Management
From
Local or national focus
Batch shipments
Low bid purchasing
Lengthy product
development
Standard products
Job specialization

To
Global focus
Just-in-time
Supply-chain
partnering
Rapid product
development,
alliances
Mass
customization
Empowered
employees,
teams

Key Points for Discussion

CSR Issues
Supply Chain
Types of Business-Consumer Relationships

Corporate social responsibility

(CSR) and Sustainability

Sustainable development
CSR is closely linked with the principles of
sustainable development
Sustainable development is development
that meets the needs of the present without
compromising the ability of future
generations to meet their own needs.
[Brundtland report (WCED, 1987)]
Read:
http://www.defra.gov.uk/sustainable/governm
ent/

Dimensions of Sustainable Development

Environmenta
l quality

Social equity
Sustainabl
e
developme
nt

Economic
prosperity

Corporate Social Responsibility

(CSR)
Generally, CSR is understood to be the way firms
integrate social, environmental and economic
concerns into their values, culture, decision making,
strategy and operations in a transparent and
accountable manner, and thereby establish better
practices within the firm, create wealth and improve
society.

Environment

Conserving Natural Resources and the Environment

For future generations, reduce resource

consumption, stop pollution and conserve natural
habitats

Life Cycle Analysis

Extract
Grave
Cradle
Process
Dispose

Recycle
Reincarnate
Use

Manufacture
Retail

Transport

Social Development

The relationship between business and

society in general

Throughout the world, people need jobs,

food, education, energy, health care, water

and sanitation. People also need respect for
cultural and social diversity and the rights of
workers. All members of society need a role
in determining their futures.

Economic Growth
Socio-economic or financial aspects,
including describing CSR in terms of its
impact on the business operations.
Foster responsible long-term growth while
ensuring that no nation or community is left
behind.

Supply Chain Challenges

A supply chain for bread

Supply Chain: Cereal manufacturing

Example

Supply Chain: Definition

Supply chain is a network of interconnected
organizations or organizational entities developed
with the goal of getting the right product to
the right place at the right time.
(Chopra, 2004)

Supply Chain Management: Definition

Supply chain management is a set of approaches
utilized to efficiently integrate suppliers, manufacturers,
warehouses, and stores, so that merchandise is
produced and distributed at the right quantities, to the
right locations, and at the right time, in order to minimize
system wide costs while satisfying service level
requirements.
(Simchi-Levi)

Integration
Integration is the central theme in SCM Major
challenge ????
Building synergy by integrating business functions,
departments and companies

Internal Value Chain: Local Focus

Executive
Management

R&D

Information
Technology

Operations

Supply
Management

Logistics

Marketing

Finance

Accounting

Human
Resource
Management

Internal Value Chain: Company

Focus
Executive
Management

R&D

Information
Technology

Upstream
Suppliers

Operations

Supply
Management

Logistics

Marketing

Finance

Accounting

Human
Resource
Management

Downstream
Customers

SCM: Linked Value Chains

Executive
Management

R&D

Information
Technology
Executive
Management

Information
Technology

Executive
Management

R&D

Supply
Logistics
Management

Finance

Accounting

Human
Resource
Management

Marketing

Marketing

Accounting

Supplier

Operations

Logistics

Logistics

Finance
Marketing

Accounting

Human
Resource
Management

Marketing

Accounting

Human
Resource
Management

Marketing

Finance

Suppliers
Supplier

Supply

Logistics
Management

Finance

Human
Resource
Management

R&D

Information
Operations
Technology

Supply
Management

Logistics

Executive
Management

R&D

Information
Technology

Operations

Supply
Management

Finance

Executive
Management

R&D

Information
Operations
Technology

Supply
Management

Operations

Human
Focal Resource
Customer
FirmManagement

Accounting

Customers
Customer

Supply Chain Integration

Internal Process Integration: increase collaboration

among the companys functional groups.
Backward Process Integration: collaboration with 1sttier and 2nd-tier (leading companies) suppliers.

g
n
e

Forward Process Integration: collaboration with 1sttier customers.

a
h
C

l
l

Complete Integration: collaboration from the

suppliers supplier to the customers customer.

Some Boeing Suppliers (787)

Firm
Latecoere
Labinel
Dassault

Country
France
France
France

Messier-Bugatti
Thales

France
France

Messier-Dowty
Diehl

France
Germany

2011 Pearson Education, Inc. publishing as

Prentice Hall

Component
Passenger doors
Wiring
Design and
PLM software
Electric brakes
Electrical power
conversion system
and integrated
standby flight display
Landing gear structure
Interior lighting

Some Boeing Suppliers (787)

Firm
Cobham
Rolls-Royce
Smiths Aerospace

Country
UK
UK
UK

BAE SYSTEMS
Alenia Aeronautics

UK
Italy

Toray Industries

Japan

2011 Pearson Education, Inc. publishing as

Prentice Hall

Component
Fuel pumps and valves
Engines
Central computer
system
Electronics
Upper center
fuselage &
horizontal stabilizer
Carbon fiber for
wing and tail units

Some Boeing Suppliers (787)

Firm
Fuji Heavy
Industries
Kawasaki Heavy
Industries

Country
Japan

Component
Center wing box

Japan

Teijin Seiki
Mitsubishi Heavy
Industries
Chengdu Aircraft
Group
Hafei Aviation

Japan
Japan

Forward fuselage,
fixed section of wing,
landing gear well
Hydraulic actuators
Wing box

China

Rudder

China

Parts

2011 Pearson Education, Inc. publishing as

Prentice Hall

Some Boeing Suppliers (787)

Firm
Korean Aviation
Saab

2011 Pearson Education, Inc. publishing as

Prentice Hall

Country
South
Korea
Sweden

Component
Wingtips
Cargo access doors

Types of Relationships in Supply Chains

To......

Busines
s
Business to business (B2B)
Most common, all but the
last link in the supply chain
Business Examples:
Manufacturer and
Wholesaler
Wholesaler and Retailer

From...
.

Consum
er

Consumer to Business
(C2B)

Consumer
Business to consumer
(B2C)
Retail operations
Catalogue operations,
etc.
Examples:
Internet retailers
Amazon.com, etc.

Consumer offer,
business responds

Consumer to
Consumer(C2C)
Trading swap and
auction transactions

E-commerce examples:
Some airline ticket
operators
Priceline.com, etc.

E-commerce examples:
Specialist collector
sites
Ebay.com, etc.

Rolls Royce
RR group is a global business with
customers in 135countries
Address four global market (civil, defence
aerospace, marine and energy)
Production facilities in 14 countries.
Employs around 40,000
Turnover 11 billion (2011)
It has 56,000 aero engines in service with
300 airlines
(Source: www.rolls-royce.com)

Rolls Royce- Some challenges in

OM/EM.
Physical logistics

Complex Supply Chain

Rolls Royce- Some challenges in OM/EM..

Customers demand for higher levels of quality
and service for less money due to their own
competitive environments
Rolls-Royces customers look for a much more
Services service (total customer care - SC
complete
- Responsible for the maintenance, repair and overhaul
relationships)
of customer equipment. Owns overhaul bases either
wholly or in partnership with Airlines

- Manufacture original equipment and supply spare

parts to existing customers and overhaul bases
- In-flight engine monitoring (24/7)

Business pressure
- Cost, delivery, lead-time, quality,
flexibility, sustainability etc

Your Task
Identify organisation (you have worked in
or currently working in)
Type of Business (B2B or B2C ??, SMED or
large??)
Turnover?
Current challenges/issues in
OpsMgt/EngMgt?

Small & Medium Size Enterprises (SMEs)

Category
Medium
Small

Headcount
(Employees)

Turnover

< 250

41 Million

< 50

8.2 Million

Task for Next Week .

Identify the main corporate social responsibility
(CSR) challenges facing your organization
What are the benefits to your organization?

Read Company annual report etc. and make notes

Please be prepared to discuss