Operations Management (Prof. Bechis)

Operations Management

Defined as the operation and improvement of the systems that create a firm’s/organization’s primary products and services.

Topics

• Quality
• Sustainable Development
• Corporate Social Responsibility
• Occupational Health and Safety

Sustainable Development

(Rio de Janeiro 1992): Development that meets the needs of the present without compromising the ability of future generations to meet their own needs. Sustainable Development is about integrating the goals of high quality of life, health, and prosperity with social justice and maintaining the earth’s capacity to support life in all its diversity. These social, economic, and environmental goals are independent and mutually reinforcing. “S.D.” expresses the broader expectation of society as a whole.

Corporate Social Responsibility

Definition from the Green Paper of the European Commission 2001 (promoting a European Framework for Corporate Social Responsibility): Social Responsibility is a concept whereby companies/organizations integrate social and environmental concerns in their business operations and in their interactions with stakeholders (=interested parties). It is on a voluntary basis, something more than the law. Being socially responsible means not only fulfilling legal expectations but also going beyond compliance and investing “more” into human capital, environment, and relations with the stakeholders.

Definition from ISO Guide 26000 (2011), the International Standard Organization: Social Responsibility is the responsibility of the organization for the impacts of its decisions and activities on society and the environment through transparent and ethical behavior that:

• Contributes to Sustainable Development, including the health and welfare of society.
• Takes into account the expectations of the stakeholders (not just interaction as the previous definition).
• Is in compliance with the applicable laws and with international norms/standards of behavior, for example, treaties, conventions, and agreements (new part respect the previous definition).
• Is integrated throughout the organization and practiced in its relationships (in its sphere of influence).

Definition from European Commission 2011: Corporate Social Responsibility is the responsibility of enterprises (or organizations) for the impact on society: respect for the applicable legislation and for collective agreements between social partners is a prerequisite to meet this responsibility. To fully meet their “C.S.R”, organizations should have a process to integrate social, environmental, ethical, human rights, and consumer concerns into their business operations and core strategy in close collaboration with stakeholders, with the aim of:

• Maximizing the creation of shared value for their customers/stakeholders and for their other stakeholders and society at large.
• Identifying, preventing, and mitigating their possible adverse impact.

Operations Management

Operations Management, of course, consists in designing and improving the system that creates and delivers (deliver Supply Chain Management). Supply Chain Management is concerned with setting broad policies and plans for using the resources of an organization and must be integrated with corporate strategy (for example a strategy can include goals related to the environment and Social Responsibility).

Principles of Social Responsibility

(ISO 26000) Basis for Social Responsibility:

• Accountability
• Transparency
• Ethical behavior
• Respect for Stakeholders interests
• Respect for the rule of the Law
• Respect for the international norms of behavior
• Respect for Human Rights

PDCA (Plan-Do-Check-Act)

PDCA is a methodology of improvement for organizations to produce (goods and services) based on activities, inputs, and outputs (which consist in a process).

• Plan: establishing the objectives and processes necessary to deliver results in accordance with customer requirements and the organization’s policies.
• Do: implement the processes.
• Check: monitor and measure processes and products against policies, objectives, and requirements for the product and report the results.
• Act: take actions to continually improve process performance (innovation).

A Process can be convergent (different raw materials → 1 product) or divergent (1 raw material → different products).

Definitions

Project: series of related jobs usually directed toward some major output and requiring a significant period of time to perform.

Project (ISO definition): is a unique process consisting of a set of coordinated and controlled activities with start and finish dates, undertaken to achieve an objective conforming to specific requirements, including the constraints of time, cost, and resources. The outcome of a project can be one or several units of product.

Project Management: planning, directing, and controlling resources (people, equipment, material) to meet the technical, costs, and time constraints of the project.

Customer: organization or person that receives a product or a service (can be internal or external to the organization).

Supplier: organization or person that provides a product or a service (can be internal or external to the organization).

Stakeholder: person or group having an interest in the performance or success of an organization.

Product: result of a process.

Design & Development: is a set of processes that transforms requirements into specified characteristics or into the specification of a product/service/process or system (ISO 9000).

Requirement: is a need or an expectation that is stated, generally implied, or obligatory (e.g., law).

Specification: is a requirement written in a document/a document stating a requirement.

Characteristic: is a distinguishing feature and can be:

• Inherent: existing in something, especially as a permanent characteristic (physical, sensorial, behavioral, temporal, ergonomic, functional).
• Assigned: is not a quality characteristic (e.g., price).

Document: information with its supporting medium (specification, report, record, procedure).

Record: is a document stating results achieved or providing evidence of an activity performed.

Procedure: specified way to carry out an activity or a process.