WARISAN AKADEMI PENDIDIKAN

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PROGRAMME : EXEC. MASTER IN CORPORATE

MANAGEMENT

STUDENT INTAKE : NOVEMBER 2019

MODULE : OPERATIONS MANAGEMENT

DUE DATE : 13 JANUARY 2021

DATE CLASSED : 12 & 13 DECEMBER 2020

DATE SUBMITTED : 13 JANUARY 2021

FACILITATORS NAME : EN. KHAIRUL RUSLI

STUDENT NAME : RAVI VARMAN S/O TANIMALAI

STUDENT NUMBER : WMPK19402

IC/NO : 821023-14-6327

CENTRE : WAP PERAI

QUESTION MARK

TOTAL

FINAL MARKS
Table of contents

Assignment Questions .................................................................................................. 2

1. Supply Chain Management (SCM) is like the backbone for any operations.

Critically discuss this statement with relevant examples. (20m) ............................. 2

2. Inventory Management is another critical area which is under SCM and will be

closely monitored for a successful Operations. Discuss the importance of Inventory

Management, by highlighting the benefits of good inventory management and methods

available to do so. (20m) .............................................................................................. 7

3. Project Management is an important area within Operations, where every now and

then, management will have certain tasks to complete within a stipulated time, in order

to keep the operations running successfully. The below tools are some famous methods

used in managing projects. Discuss each critically using given techniques. (20m)10

a. Critical Path Method (CPM) ......................................................................................... 10

b. Program Evaluation and Review Technique (PERT) ................................................... 13
References ............................................................................................................................ 14

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Assignment Questions
1. Supply Chain Management (SCM) is like the backbone for any operations.

Critically discuss this statement with relevant examples. (20m)

Definition of SCM

Supply Chain Management (SCM) is the main core of an operations because its

centralized management of the flow of goods and services and includes all processes that

transform raw materials into final products. Suppliers are identified and negotiations done to

purchase a raw material and demand. Materials are been sourced, produced, and delivered as

what has been planned. Then the materials are shipped through logistics efficiently to a

manufacturers plant for product assembly and then deliver those products to the next facilities

or end users on time. Facilities include warehouses, factories, processing centers, distribution

centers, retail outlets and officer. The supply chains also known as value chains are essential

in accounting, quality, and marketing in an operation as a value added as goods or services

progress in a chain.

“Supply chain management encompasses the planning and management of all activities

involved in sourcing and procurement, conversion, and all logistics management activities”.

( Florian Winterstein , 2019). For example, refer to figure (fig.1), supply chain

management integrates supply and demand management within and across companies.

Fig.1. Flow Chart of SCM. The planning phase refers to developing an overall strategy for the supply chain, while the

other four elements specialize in the key requirements for executing on that plan. Companies must develop expertise in all five

elements to have an efficient supply chain and avoid expensive bottlenecks. (Jason Fernando, 2020).

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 Supply Chain Management functions:

 Customer Relationship Management: Consistent emphasis on demand from end

consumers to satisfy the rising demands of customers and maintain a high degree

of flexibility.

 Output versatility and demand-oriented: Continuous cost control and optimization

of capital across all stages of the value chain.

 Supply and demand synchronisation: Increasing adaptability.

 Inventory reduction along the value chain,

 Reduction of warehousing costs,

 Safeguarding the just-in-time supply,

 Acceleration of cash-to-cash cycles,

 Improvement of delivery reliability,

 Reduction of throughput times.

Trends in Supply Chain Management

Several strategies are having an impact on the way supply chains are designed and

managed. Among the strategies:

a. Re-evaluation of outsourcing

Outsourcing is an immense decision and not cheap. Make sure the purchasing committee

recognizes the scope of this decision and that they are fully aware of the various types of

requirements for outsourcing assessment that they should base their decision on. Certain

criteria need to be considered when doing outsourcing such as cultural compatibility,

information, specialization, expertise, experience, customization, and client success. The

process needs to be repeated for re-evaluation a certain outsource.

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 b. Risk management

It is the method of taking the steps required to identify, analyze, and minimize the risks of

the supply chain of an enterprise. The introduction of global risk management initiatives in

the supply chain will help an organization function more effectively, minimize costs and

improve customer service. Tools for risk management such as SWOT, RCCA, Kanban etc.

used by professional project managers to manage their projects against the inevitable risks,

issues, and changes.

c. Inventory management

It is important to do inventory reduction because this can reduce lead time and WIP

which is not good for SCM. Technology for inventory management lets the operations to

track products in the supply chain and perform inventory reduction. Stock movements

performed by warehouse staff, delivery drivers, manufacturing employees and vendors which

must be accounted for by inventory overseers. Warehouse managers must also decide which

inventory employees to select and when the items are ready for delivery. (Avery Walts , n.d.).

Techniques used for inventory management are:

 Economic order quantity.

 Minimum order quantity.

 ABC analysis.

 Just-in-time inventory management.

 Safety stock inventory.

 FIFO and LIFO.

 Reorder point formula.

 Batch tracking.

 Cycle counts
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 d. Lean supply chains

Lean supply chain management is about encouraging effectiveness by eliminating from a

network unnecessary or wasted materials. Most commonly, this approach is applied to

production, where products can be ordered as required instead of keeping a tons of inventory

as back stock. (Sidney S., n.d.). In the past, to get better prices, manufacturing firms relied on

buying vast quantities of supplies. The approach included purchasing bulk materials at lower

rates and then storing the materials before they were needed. That said, the notion of bulk

ordering has been eliminated by many businesses. Instead, due to the massive quantities of

materials, they have switched to lean supply chain practices (Fig.2) .

Fig.2. Figure 1 illustrates the basic conceptual mode Lean supply chain performance categories and measures.

(Farzad Behrouzi, 2016)

Three terms often used together in the Toyota Production System (and called the Three

M’s) that collectively describe wasteful practices to be eliminated. A simple illustration

(Fig.3) shows how Muda (wastefulness), Mura (imbalance), and Muri(overload) often are

related so that eliminating one also eliminates the others. (3M; Three Ms, n.d.).

Fig.3

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 As a summary, technology growth goes together with the future of management of the

supply chain. Newly developed tools and technologies are all but crucial for survival as we

head into 2021 and beyond, whether to allow supply chain teams to develop or add to their

current processes in some way or another. More precisely, over the next four to five years,

more businesses are expected to adopt the use of autonomous mobile robots (AMR).

Organizations would be able to simplify and streamline picking and packing processes

directly by implementing this technology. For instance, while AMR tech focuses on

automating the actual picking process, it relies on data from the warehouse management

system of the organization to do so, as controlled by the supply chain team.

(www.tradegecko.com, 2020).

Consequently, as we head into 2021, recognizing the value of integrating technology

into their processes, not being overwhelmed by it, is important for supply chain teams.

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 2. Inventory Management is another critical area which is under SCM and will be

closely monitored for a successful Operations. Discuss the importance of

Inventory Management, by highlighting the benefits of good inventory

management and methods available to do so. (20m)

The basis of a well-functioning retail sector is inventory management. Inventory

management systems track the inventory and stock lifecycle as it comes and goes out of your

business. (Avery Walts , n.d.).

It is important to do inventory reduction because this can reduce lead time and WIP

which is not good for SCM. Technology for inventory management lets the operations to

track products in the supply chain and perform inventory reduction. Stock movements

performed by warehouse staff, delivery drivers, manufacturing employees and vendors which

must be accounted for by inventory overseers. Warehouse managers must also decide which

inventory employees to select and when the items are ready for delivery. (Avery Walts , n.d.).

Good inventory management as listed as below with their own methods.

 Economic order quantity - EOQ, with a collection of variables such as overall

production costs, demand rate, and other factors, is a formula for the optimal order

quantity a business requires to buy for its inventory.

 Minimum order quantity - The minimum order quantity (MOQ) on the supplier side is

the smallest quantity of fixed stock a supplier can sell. The supplier will not sell it to

if retailers are unable to buy the MOQ of a product.

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 Push inventory - Management of push inventory relies heavily on forecasting.

Basically, for the next month, quarter, or year, your company predicts how many units

of a particular product need. Then you order all the units at once that you will need.

 Pull inventory - The pull inventory system operates whereby the end user decides the

location of an order through the shop, who then places an order with the dealer, who

then places an order with the manufacturer, who then places an order with their

suppliers.

 Just-in-time inventory management - A simple inventory system where goods are not

stored or additional resources required to manufacture certain items, but instead

produce them when your products or services are in demand.

 Safety stock inventory - To avoid an out-of-stock case, safety stock is an additional

volume of a commodity that is kept in the warehouse. It acts as protection against

demand fluctuations.

 FIFO - First-In, First-Out (FIFO). It is presumed, under FIFO, that the inventory that

is the oldest is first sold. For most businesses, the FIFO approach is the traditional

inventory method. Because of inflation, FIFO gives a lower-cost inventory; lower-

cost products are typically older.

 LIFO - Last-in, First-out (LIFO). LIFO is a newer methodology (accepted in the

1930s) for inventory cost valuation, which means that the newest inventory is first

sold. LIFO provides higher inventory prices.

 Reorder point formula - Regular unit sales compounded by delivery lead time are the

reorder point formula, with some safety stock for good measure. The point of the

reorder is not a static number. It is based on own purchasing and sales cycles, and on

a per-product basis which fluctuates.

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  Batch tracking - also known as lot tracking, enables goods to be tracked from the

producer, to the supplier, right through to the end customer. The tracking of motion

from a batch from the start to the end of its journey through the inventory chain.

 Cycle counts - Cycle counting is a common technique for inventory management

where a subset of inventory is counted on a rotating basis in specific locations, on

specific days. Cycle counting systems are created to replace physical counts once a

year or to more frequently count unique items.

In a summary, for today's modern supply chain, maintaining correct inventory is mission

critical. For inventory and production planning and to execute an effective fulfilment process,

exact on-hand quantities are required. Implementing an inventory method is one way to

ensure that precision. Overall costs and forecasting potential revenue to planning on an

operation or company for the unexpected and keeping business stable can be done with a

good inventory management system in place.

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 3. Project Management is an important area within Operations, where every now

and then, management will have certain tasks to complete within a stipulated

time, in order to keep the operations running successfully. The below tools are

some famous methods used in managing projects. Discuss each critically using

given techniques. (20m)

a. Critical Path Method (CPM)

CPM is a project modelling methodology which was developed by Morgan R. Walker in

the 50s. It was a competing with PERT method which was created around the same era. CPM

was created in the success of The Manhattan project which uses boxes and arrows to

represent an activity. With this information, we can easily calculate the longest path to

completion of tasks.

The Critical Path is the longest path of scheduled activities that must be met in order to

execute a project. (ibm-institute.com, 2018).

To initiate CPM, there are 6 steps to be followed:

i. Specify each activity.

ii. Sequence the activities.

iii. Draw the network diagram.

iv. Estimate activity durations.

v. Identify Critical Path.

vi. Update the project progress.

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For CPM example1 (fig.4)

A contractor building a house, he would have several task sequences as follows:

Fig.4

The total time taken to complete the sequence along this critical path would give him an idea

of the project’s minimum duration. In this example, the critical path takes 40 days.

The contractor might undertake several task sequences simultaneously, but if there are any

delays in the critical path sequence, the project will suffer delays as well.

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For CPM example2 (fig.5)

Activities for project X as below:

Activity Time (Days) Immediate Predecessor

A 4 -
B 3 -
C 5 -
D 3 A,B
E 6 B
F 4 D,C
G 8 E,C
H 12 F,G

Fig.5

Fig.6

The critical path in the network diagram has been shown.

The critical path of the project is: 1-3-6-7-8 and critical activities are B, E, G, H.

The total project time is 29 days.

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 b. Program Evaluation and Review Technique (PERT)

The acronym PERT stands for Technique for Program Assessment Analysis. It is a key

project management method used within a project to plan, arrange, and coordinate activities.

Project division, time allocation, and start and end dates can be seen on the PERT Table.

The PERT chart shows data as a network model that uses boxes to represent tasks and

arrows to present dependencies between tasks, unlike the Gantt chart that uses bars to

represent tasks.

Fig.7

In this example (Fig.7), different legends make it possible to categorize tasks

effectively. The tasks are categorized based on their owners, which include the programming

team (yellow), the design team (blue), or both (green).

The layout of a PERT Chart makes it easier to see the relationships between different

activities. On the downside, however, this chart can become quite confusing with complex

projects that feature many dependencies and tasks. (ibm-institute.com, 2018)

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 References
Florian Winterstein . (2019, January 9). https://www.spotlightmetal.com/what-is-supply-

chain-management-definition-example-objectives-a-785111/. Retrieved from

www.spotlightmetal.com: https://www.spotlightmetal.com/what-is-supply-chain-

management-definition-example-objectives-a-785111/

3M; Three Ms. (n.d.). https://www.lean.org/lexicon/muda-mura-muri. Retrieved from

https://www.lean.org/lexicon/muda-mura-muri: https://www.lean.org/lexicon/muda-

mura-muri

Avery Walts . (n.d.). https://www.bigcommerce.com/blog/inventory-management/. Retrieved

from https://www.bigcommerce.com/blog/inventory-management/:

https://www.bigcommerce.com/blog/inventory-management/

Farzad Behrouzi, K. Y. (2016). https://www.researchgate.net/figure/Lean-supply-chain-

performance-categories-and-measures_fig1_254015432. A Study on Lean Supply

Chain Performance Measures of SMEs in the Automotive, 238. Retrieved from

https://www.researchgate.net/figure/Lean-supply-chain-performance-categories-and-

measures_fig1_254015432.

ibm-institute.com. (2018). https://www.ibm-institute.com/topic/pert-chart/. Retrieved from

https://www.ibm-institute.com/topic/pert-chart/: https://www.ibm-

institute.com/topic/pert-chart/

Jason Fernando. (2020, December 28). www.investopedia.com. Retrieved from

https://www.investopedia.com/terms/s/scm.asp:

https://www.investopedia.com/terms/s/scm.asp

Sidney S. (n.d.). https://study.com/academy/lesson/lean-supply-chain-management.html.

Retrieved from https://study.com/academy/lesson/lean-supply-chain-

management.html: https://study.com/academy/lesson/lean-supply-chain-

management.html
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www.tradegecko.com. (2020). https://www.tradegecko.com/supply-chain-

management/future-trends. Retrieved from https://www.tradegecko.com/supply-

chain-management/future-trends: https://www.tradegecko.com/supply-chain-

management/future-trends

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