Operations Strategy (MGSC 402)
Instructor Information
Professor Saibal Ray
Room: SBB 538; Tel :(514)398-3270; E-mail : saibal.ray@mcgill.ca
Course Evaluation Scheme
Case study – reports and presentations (3):
Case Critique Report:
Individual Case Study Report:
Final Exam (case study based):
Participation:
33%
22%
13%
20%
12%
Teaching Assistant Information
McGill University values academic integrity, and therefore all students must understand the
meaning and consequences of cheating, plagiarism and other academic offences under the code
of student conduct and disciplinary procedures (see www.mcgill.ca/integrity for more
information).
Office Hours
I use a true "open-door" policy. You are welcome to contact me in my office SBB 538 at any time. If
I am not available, a meeting at an alternative time can be arranged. You can also contact me by email (saibal.ray@mcgill.ca) to set up a meeting.
You are encouraged to use e-mail as an extension of office hours and as a means of communication
on course related matters. I will collect student e-mail addresses in the first week of class in order to
create a student e-mail list that will be used to communicate information related to the class.
These communications may include:
o
clarification of concepts discussed in class,
o
administrative information,
o
assignments,
o
formats for exams, etc.
Course Overview
Strategic management of operations has become a topic of increasing importance in recent years.
However, operations do not become a strategic weapon by accident. It requires deliberate managerial
actions that are designed to bring the manufacturing system under the direction and discipline of
competitive strategy.
The old view of operations as the task of running and maintaining a comparatively static production
facility has given way to one characterized by a need for renewed flexibility, relentless improvement,
and the development of new capabilities. As the firms are being exposed to the mounting pressures of
increasing customer expectations and worldwide competition, there is a need to search out new
sources of competitive advantage that are harder to replicate. The continued focus on outsourcing has
also given rise to an additional aspect. Production and delivery of goods/services is not anymore the
responsibility of a single organization. Rather, it is taking place through a web of organizations
(termed supply chains) that consists of manufacturers, distributors, suppliers, retailers as well as
consumers. According to recent reports, even the focus of competition has shifted from the level of
firms to that of entire supply chains. The success of any organization is now measured in terms of the
effectiveness of its supply chain strategy, rather than firm level strategy.
The first effect of the present environment on an operations manager is a change in the context in
which he/she works – from one of administering an operation to one that emphasizes improvement.
Second, as result of this changing environment, the skills required of operations managers have
begun to change. The tools of control are now overshadowed by the tools of operations improvement.
The ability to involve a workforce as a central part of creating new capabilities has become more
important than the ability to control them as part of a static process. There are also few operations
today in which information technology (IT) does not play a central role. Operations managers now
require an intimate understanding of IT and how to mesh it with operation to build superior
performance and new ways of competing. Third, the scope of the operating manager’s job is
broadening. Progressive waves of “rightsizing” and more plants that must compete directly on the
open market rather than as protected feeder-plants in larger networks now mean that the unit manager
must often be a strategist for the plant while still acting as the steward of its diverse community,
building a deep understanding of how the operation and its technology work, and developing an
improvement path to keep it ahead of its competition.
As compensation for these new challenges, the power of operations to create competitive advantage
is now becoming broadly understood. Operation is seldom now seen as the “tail of the dog,” whose
job is simply to avoid messing up too badly. In a growing number of companies, operations has
become an equal partner whose potential to create difficult-to-imitate and competitively significant
capabilities is appreciated and exploited. This course provides students with the tools, conceptual
frameworks, and technological understanding necessary to manage operations in this increasingly
challenging world.
Course Focus and Objectives
This course is mainly aimed at students who intend either to manage or consult for operations in the
manufacturing and service industries. While many of the topics are informative for senior managers,
the primary focus is on preparing more junior operations managers to take effective action early in
their careers. A major part of the course is devoted to exploring strategic issues at the intersection of
information systems and operations management and issues related to supply chain strategy.
The topics are biased towards action and implementation, but nevertheless rest on a common,
conceptual premise: that striving to create a “world-class” operation is not enough to guarantee longterm success. Even “continuous improvement” is insufficient if competitors are improving more
rapidly, on more important dimensions of performance, over a longer period of time. The key to
success lies in designing operations to provide a foundation for subsequent improvement, managing
them in a way that directs, fuels and sustains that improvement path, and improving the operating
unit with an explicit and effective strategy. Traditional courses in operations management have
typically focused on one or the other of these activities. This course aims to integrate them.
The teaching objectives are:
1. To develop students’ understanding of the importance of effective management at the
operating unit level, as well as at the supply chain level.
2. To provide action-oriented tools and frameworks that equip students to be effective
operations managers and consultants.
3. To show students how to combine new information technologies with existing operations to
build ongoing performance improvement, rather than simply to provide data or replace labor.
4. To teach new operations management and design principles that facilitate the ongoing
improvement of processes, systems and operating units.
5. To introduce the concept of an operations strategy, and to develop students’ abilities to
design and manage operations innovation in a broad range of environments.
6. To stimulate critical thought about emerging concepts in operations management/strategy and
information technology.
Course Content and Structure
Most sessions will be case-based, although there will be a number of short lectures delivered as part
of case-based session, in addition to some sessions that will be wholly lecture-based. There will also
be a number of guest lectures (tentatively three). Class time will be mostly devoted to case
discussions and the lectures will be used to introduce important concepts and guide the students
through their readings. Students will be expected to read the assigned readings, prepare a careful
analysis of the assigned cases, and come to class prepared to argue/defend/lead a discussion in class
on the readings and the cases.
The course is divided into three modules:
 Module 1: Designing, Managing and Improving Operations Processes
 Module 2: Operations Systems and Information Technology
 Module 3: Designing and Implementing Operations Improvement Strategies
The following provides a brief outline of each of the modules.
Module 1: Designing, Managing and Improving Operations Processes
The first module of the course looks at the mechanisms by which the performance of operations
processes can be improved. It introduces students to the competitive importance of rapid process
improvement, and shows how operations managers can make a difference to the rate of that
improvement. The module begins by considering processes designed for single products or services,
then turns to multi-product processes and the management of flexibility.
Module 2: Operations Systems and Information Technology
The second module of the course looks at the integration of processes into systems. Its focus is
primarily on the role of information technology (IT) in building operations systems, rather than the
more traditional systems-level issues such as production control and scheduling (these are typically
addressed in other operations management courses). This module is important for two reasons. First,
it explores an important set of technologies that many students find difficult and unfamiliar. Second,
it proposes a radically different approach to the management of those technologies in operations.
Module 3: Designing and Implementing Operations Improvement Strategies
Having explored the improvement of processes and systems, Module 3 looks at the management and
improvement of the operating unit as a whole. This integrative module uses many of the ideas and
approaches seen in earlier modules to examine the challenges of designing and managing the
improvement path of the operating unit. This third module develops the idea of an improvement
strategy for an operating unit that integrates the processes within an operation, the systems that
control and coordinate it, and the community in which they exist.
Course Material
Required Coursepack - Collection of case studies, the primary teaching material in the course;
would be available at the McGill Bookstore from the 1st week of class.
Recommended Textbook: Designing, Managing and Improving Operations by David M. Upton,
Prentice Hall, 1998.
The coursepack contains all the cases to be used as assignments in the course. Some of the discussion
case studies would be from the recommended textbook. Three copies of the textbook would be
available at the reserve desk of the library for short-term borrowing. Other readings and cases will be
distributed in class from time to time. There will also be some reference readings (listed in the course
schedule) that will be available with me and can be borrowed for reading/photocopying.
Other reference books:




Clockspeed: Winning Industry Control in the Age of Temporary advantage, by Charles Fine
(Perseus Books)
Manufacturing Strategy: How to Formulate and Implement a Winning Plan, by J. Miltenburg
(Productivity Press)
Manufacturing Strategy – Text and Cases, 3rd Edition, by Terry Hill (Irwin McGraw-Hill)
Supply Chain Management – Strategy, Planning and Operation, by Chopra and Meindl
(Prentice Hall)
Tentative Course Plan & Handouts
Session 1:
Lecture:
Introduction
Course Introduction and Overview; Fundamental Concepts of
Strategy; Fundamental Concepts and Role of Operations Strategy
Session 2:
Discussion Case Study:
Lecture:
Readings: Handout 2
Module 1
Display Technologies Inc.
Module 1 Introduction
Session 3:
Guest Lecture:
Discussion Case Study:
Module 1 (contd.)
TBA.
Nucleon Inc.
Session 4:
Discussion Case Study:
Lecture:
Readings: Handout 3; What
Process Knowledge.
Session 5:
Assignment Case Study:
Lecture:
Readings: Handout 4
Session 6:
Lecture:
Assignment Case Study:
Module 1 (contd.)
Solagen
Management of Operations Flexibility
Really makes Factories Flexible? (from book); Handout on Stages of
Module 1 (contd.)
Istituto Clinico Humanitas (Major Case Study for Group 1 and
Critique Case Study for Group 7)
Module 1 Wrap-up
Module 2
Module 2 Introduction
Industrie Pininfarina: The New Customer Decision (Major Case
Study for Group 2 and Critique Case Study for Group 8)
Readings: Handout 5
Session 7:
Guest Lecture:
Assignment Case Study:
Module 2 (contd.)
TBA
Aerotech Service Group, Inc. (Major Case Study for Group 3 and
Critique Case Study for Group 5)
Session 8:
Lecture:
Readings: Handout 6
Discussion Case Study:
Module 2 (contd.)
Module 2 wrap-up
Session 9:
Lecture:
Assignment Case Study:
Module 3
Module 3 Introduction
GM Powertrain (Major Case Study for Group 4 and Critique Case
Study for Group 6)
Readings: Handout 7
Vandelay Industries Inc.
Session 10:
Assignment Case Study:
Discussion Case Study:
Everdream (Major Case Study for Group 5 and Critique Case Study
for Group 1)
Zara: IT for Fast Fashion or Supply Chain Management at World Co.
Ltd.
Session 11:
Guest Lecture:
Assignment Case Study:
Module 3 (contd.)
TBA
Flextronics International Ltd (Major Case Study for Group 6 and
Critique Case Study for Group 3)
Session 12:
Assignment Case Study:
Module 3 (contd.)
Southwest Airlines – 2002: An Industry Under Siege (Major Case
Study for Group 7 and Critique Case Study for Group 2)
Supply Chain Strategy
Lecture:
Readings: Handout 8
Session 13:
Module 3 (contd.)
Assignment Case Study:
The Acer Group’s China Manufacturing Decision (Major Case Study
for Group 8 and Critique Case Study for Group 4)
Lecture:
Module 3 and Course Wrap-up
Readings: Handout 9