ACTIVITY 1: CURRENT CHALLENGES IN OPERATIONS MANAGEMENT
Martin Z. Balisi II (PCBEA-22-301A)
INSTRUCTIONS: DISCUSS AND EXPLAIN THE SIX CURRENT CHALLENGES IN OPERATIONS
MANAGEMENT. GIVE EXAMPLES FOR EACH.
A. GLOBALIZATION
Operations managers are facing tough competition in a highly connected global market. To stay
ahead of the game, companies must constantly seek ways to enhance their efficiency, lower their
expenses, and adjust to evolving customer demands and market trends. Failure to do so can result in
the loss of customers, revenue, and ultimately, the company's market position. Therefore, operations
managers must stay vigilant, knowledgeable, and adaptable to ensure their company's continued
success.
In today's world, companies are constantly seeking to expand their operations globally, but cultural
differences pose significant challenges in achieving this goal. One of the main challenges that
managers face is navigating the complex and often conflicting social and cultural behaviors that
exist across different regions. For instance, what may be considered acceptable conduct in one
culture may be viewed as inappropriate or even illegal in another. This can lead to a range of issues,
such as bribery and child labor, which can significantly hamper a company's ability to succeed in a
new market. As a result, it is essential for companies to carefully consider cultural differences and
devise strategies to navigate them effectively to maximize their potential in today's modern world.
Microsoft, a technology-based company, is one of the top companies in the world in terms of total
earnings. One of the ways they did to achieved this kind of success is how they take advantage of
globalization. Microsoft easily adapts to a changing environment. From faster processors to new
computer languages and improved security protection, these are some of the innovations that they
had introduce in the market in recent decades. These innovations have gathered positive feedback
from users. These innovations have moved Microsoft’s product strategy from operating systems to
office products, to internet service providers, and now to the integrator of computers, cell phones,
games, and televisions.
B. SUPPLY CHAIN PARTNERING
Supply chain partnering refers to the collaborative relationship between companies within their
supply chain network. It involves the coordination among different entities in the supply chain such
as suppliers, manufacturers, distributors, and retailers. The purpose of the partnership is to achieve
common goals, improve supply chain performance and enhance the competitiveness of the network
as a whole. Partnerships can be beneficial, but misaligned goals, processes, and systems can pose
challenges. It may also introduce complexities in communication, coordination, and decisionmaking in the long run and may challenge the efficiency and effectiveness of the company’s
operations. Lastly, a company may be reliant on its partners for inputs, resources, or services. If a
partner fails to do their part, it can negatively impact the company’s operations, leading to delays
and disruptions.
Mercedes-Benz, Ford Motor, and Ballard Power System formed an alliance that aims to develop
green cars and accelerate the adoption of hydrogen fuel technology in the automotive sector, which
offers several environmental benefits, such as zero emissions and improved energy efficiency.
Through this alliance, the companies are working towards a more sustainable future in the
automotive industry.
C. MASS CUSTOMIZATION
Mass customization, together with rapid product development, were identified as challenges to
modern manufacturing operations. Mass customization is a business concept that involves offering
customized products and services that are tailored to customers’ individual preferences. This makes
customers choose from a wide variety of options. This strategy combines low-volume
manufacturing (a process focus) and standardized high-volume (product-focused) production.
However, implementing this concept can be both expensive and complex. Achieving mass
customization requires sophisticated operational capabilities. When it comes to producing custom
products using agile processes, is essential to limit the product line and design modules that can be
rapidly and cost-effectively produced. Besides, companies should make their supply chain
adaptable. Customization can complicate operations, logistics, management, marketing, and
communication. Every member of the chain should be coordinated in any slight change in customer
demand so that lead time could not be affected and quickly react when any unexpected
circumstances happen. Another way to do this is they need to work with reliable suppliers. As there
is not enough time or budget for product inspection, companies should make sure that they work
with suppliers who can deliver high-quality materials on time.
Companies embarking on mass customization are required to invest in specialized equipment and
efficient processes that can produce different product colors, shapes, etc. This investment requires a
substantial amount of money and it will be impractical for companies that are operating on tight
margins.
Nike offers a wide range of customizable products such as shoes, apparel, and accessories in which
customers can choose different colors, patterns, and materials that match their preferences. Coca–
Cola introduces less and free sugar drinks to cater their products to people suffering from diabetes.
Lastly, cosmetics brands are making more shades of make-up for darker tones and people with skin
conditions.
D. RAPID PRODUCT DEVELOPMENT
Rapid product development is a method of developing products in the shortest timescales possible
while ensuring that the quality and customers' preferences are being satisfied. It allows companies to
rapidly develop, introduce new products and make these products penetrate the market easily.
The speed of the creation of the product may compromise the thoroughness of quality checks and
testing. This can result in a higher possibility of defects and performance issues, leading to
customers being dissatisfied. In addition, the fast-paced nature of development may not allow
sufficient time for companies to conduct market research and analysis. As a result, it may penetrate
the market successfully but fail in meeting the needs of customers.
One example of rapid product development is the smartphone industry. Tech giants like Apple,
Samsung, and Google continuously release new models with upgraded features and technologies at
a rapid pace. These companies employ a streamlined product development process that involves
intensive research, design, manufacturing, and marketing efforts.
E. SUSTAINABILITY
Sustainability refers to meeting the needs of the present without putting the resources of future
generations at risk. Sustainability is more than recycling, global warming, or saving forests. It
involves managing business operations in a way that minimizes negative environmental impact and
maximizes social and economic benefits.
The challenge of sustainability arises due to an increasing number of socially conscious consumers.
As consumers become socially aware, they started to become more sensitive to the environmental
impact of their shopping decisions – and companies started to incorporate eco–friendly practices.
Sustainability demands companies minimize their environmental footprints by reducing their energy
consumption and managing their waste efficiently. Companies must seek ways how to incorporate
these practices in their production processes, from sourcing raw materials to waste disposal and
make decisions prioritizing environmental preservation. The challenge in sustainability also
involves the social impacts of their activities. This includes fair labor practices, employee welfare,
and engagement in the community. Companies need to ensure that ethical working conditions,
diversity, and inclusion are present within their operations.
Sustainability also emphasizes the importance of the companies’ participation in the circular
economy. This entails the responsible and efficient utilization of resources, as well as the creation of
products and processes that are recyclable, reusable, and remanufactured. Though it is beneficial for
a company, it can also be challenging for some reasons. It is hard to transition to a circular model
because it requires significant changes in the way how business operates, especially in
manufacturing and sourcing raw materials. This change requires a huge amount of money to
materialize. They need to recalibrate and update their system to keep up with the requirements of the
circular economy.
In the circular economy, companies are also having a hard time complying with environmental
regulations. These regulations are evolving and complex in nature Companies must comply with
environmental regulations, waste management policies, and product standards, which can be
expensive and time-consuming.
One of the profound examples of a sustainable company is Patagonia, a clothing company. They are
committed to practicing sustainability within their operations. They prioritize the use of
environmentally friendly materials in their products such as organic cotton. They are committed to a
shift in the use of renewable energy in their operations. They also have a program named “Worn
Wear” where their customers can trade their used or damaged clothes and Patagonia will offer to
repair clothes or use them as materials to create another product. Lastly, they are using their reach to
actively advocate and raise awareness for some environmental concerns.
F. LEAN OPERATIONS
Lean operations is an approach to operations management that focuses on eliminating waste and
maximizing value for customers. Implementing this approach requires a significant change in the
processes and workflows of a certain company. The problem is employees may resist these changes
fearing that their job roles may be impacted.
Companies may have a hard time sustaining lean operations over a long period as it requires
consistent monitoring, measurement, and improvement to ensure that waste is continuously
eliminated in the system. It requires a high level of discipline and commitment from the top
management to their employees.