Table of Contents
Title Page
Copyright Page
Acknowledgements
Foreword
BIOGRAPHICAL DETAILS
Introduction
CHAPTER 1 - STRATEGIC MANAGEMENT
INTRODUCTION
STRATEGY AND PERFORMANCE DRIVERS
STRATEGIC PERFORMANCE TOOLS
CHAPTER 2 - BUSINESS PLANNING
INTRODUCTION
BUSINESS PLANNING
EXAMPLE BUSINESS PLANS
BUSINESS PLAN FEASIBILITY
CHAPTER 3 - PRODUCT DEVELOPMENT
INTRODUCTION
UNDERSTANDING PRODUCTION
CONSIDERATIONS ON “VALUE FOR MONEY”
EXISTING PRODUCT DEVELOPMENT
NEW PRODUCT DEVELOPMENT
CHAPTER 4 - SUPPLY CHAIN MANAGEMENT
INTRODUCTION
THE DEVELOPMENT OF SUPPLY CHAIN MANAGEMENT
SUPPLIER-BUYER RELATIONSHIPS
INVENTORY MANAGEMENT
CHAPTER 5 - PEOPLE MANAGEMENT
INTRODUCTION
MANAGING INDIVIDUALS
MANAGING TEAMS
MANAGING TASKS
MANAGING TEAM CONFLICT
REFERENCES
INDEX
This edition first published 2010
© 2010 Simon Burtonshaw-Gunn
Registered office
John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom
For details of our global editorial offices, for customer services and for information about how to apply for permission to reuse the copyright material in this book please see our website at www.wiley.com.
The right of the author to be identified as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without the prior permission of the publisher.
Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books.
Designations used by companies to distinguish their products are often claimed as trademarks. All brand names and product names used in this book are trade names, service marks, trademarks or registered trademarks of their respective owners. The publisher is not associated with any product or vendor mentioned in this book. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold on the understanding that the publisher is not engaged in rendering professional services. If professional advice or other expert assistance is required, the services of a competent professional should be sought.
A catalogue record for this book is available from the British Library.
eISBN : 978-0-470-66185-7
Set in 11.5/15pt Bembo by Toppan Best-set Premedia Limited
ACKNOWLEDGEMENTS
From the feedback since the publication of my book The Essential Management Toolbox I have been asked to expand on the models and tools in a practical way; for me the value of the Toolbox book is to have a collection of tools which may be used for a variety of management assignments. Again in compiling this book I have to say that this would not have been possible without the fine efforts from all those management authors, research publications and course notes, etc. that I have collected over the years. As such I am greatly indebted to all whose work appears in the book, and also to my own teachers and mentors who have aided my own journey through many management topics.
I am very grateful to the publishers, individuals and copyright holders who gave their permission to allow previously published work to be used in this book and whilst every effort has been made to ascertain copyright and seek permission I apologize in advance for any omissions and would be pleased to correct these in any future edition.
Once again I am indebted to my friends at John Wiley and Sons for their support and encouragement. My sincere thanks also go to my friend, former colleague and regular academic writing partner, Dr Malik Salameh, for his significant input and support in this project, in providing constructive comments on my draft manuscripts and his willingness to pen a few words to set the scene for the reader.
FOREWORD
By Dr Malik Salameh
The importance of operations management as a core business discipline as addressed by Professor Simon Burtonshaw-Gunn, in this, his third book in the series of Essential Management publications, will be familiar to experienced leaders and managers - yet still succeeds in contributing more value by helping identify potential gaps in the operational delivery of prospective and established enterprises.
Once again the same effective formula has been maintained by providing a specialist focus on the area of business operations management; whilst recognizing the importance of sharing this knowledge in a flexible format - to satisfy the full range of business stakeholder needs; and ensuring direct relevance to any size of business and at any point in the business, product or service lifecycle.
A regular feature of the Essential Tool series is the way they strike a subtle balance in reinforcing the essential hard points for an established business, its employees and strategic management - whilst offering the opportunity to ensure hidden norms are challenged appropriately and informed business improvement options are developed. A key feature of this book is the range of example business plan formats included, enabling the reader to tailor them easily to suit their specific environment - either as an “acid test” in the realization of innovative ideas or in supporting projects to secure the necessary funding.
Furthermore, for the start-up business or those new to the corporate arena, it offers a comprehensive review of the fundamentals of operations management and an expert accompanying narrative, which constructively scrutinizes business propositions. It carefully marries a range of management tools and techniques to provide a comprehensive response to the key organizational and environmental scenarios likely to be faced by any business or individual.
A differentiating value of this publication lies in its ability to help fulfil the often unforeseen requirements to conduct urgent functional or organizational audits in response to changes in external or internal market or regulatory dynamics. Therefore building on the theme of self-managed learning, the operations management content is presented in such away as to enable any user to take the frameworks and associated guidance to conduct an intermediate level audit in a confident and informed manner, and within a fairly short lead time.
I strongly recommend this book as an invaluable source of such transferable knowledge and for the clarity it provides in the field of operations management.
BIOGRAPHICAL DETAILS
Professor Simon A. Burtonshaw-Gunn has over 30 years’ working experience with a technical background in mechanical and nuclear engineering, research and development and on-site major plant commissioning followed by over 12 years in project management in both technical consultancy and hardware projects for the UK Ministry of Defence. He joined British Aerospace in 1994 (now BAE Systems) undertaking project management of specialist consultancy work within Russia, Ukraine and Belarus. He has held the post of Head of Project Management before being appointed as a managing consultant leading a consultancy team undertaking assignments including business strategy planning, change management, organizational development and management training covering a range of organizations and industries. As a practising management consultant he has undertaken assignments in over 20 countries in Asia, North Africa, the Middle and Far East and Eastern Europe and currently is a principal management consultant for an international management consultancy company based in the UK working in both the public and private sectors. To complement this experience he holds two Master’s degrees and a PhD in various strategic management topics together with fellowship of four professional bodies including the Chartered Management Institute (FCMI) and the Institute of Business Consulting (FIBC). In 2009 he was appointed as one of the first Goodwill Ambassadors for the Chartered Management Institute.
He was a post-doctoral research fellow for four years at the Manchester Metropolitan University before relinquishing this at the beginning of 2005 to take up the role of a visiting professor at the University of Salford in Greater Manchester. Here he served for three years in the six-star research rated School of the Built Environment before being appointed as the first visiting professor to the Salford Business School in 2007. In addition, he held a two-year appointment as a member of the Court at the University of Leeds - a member of the Russell Group association of the top 20 UK research-intensive universities - until mid 2009.
Professor Burtonshaw-Gunn has been a research examiner for the UK’s Chartered Institute of Purchasing and Supply (CIPS) since 2002 and is one of the founding members of an international academic research group (ISCRiM) with a focus on supply chain risk management. In connection with this group he has presented conference papers in Sweden, the USA, UK and Hungary together with a number of refereed publications, professional journal articles and chapters in four collaborative management textbooks. On the subject of risk management, last year he published a book covering “Risk and Financial Management in Construction” aimed at industry practitioners and post-graduate students. His popular book The Essential Management Toolbox covering management tools, models and notes aimed at students, managers and consultants was published by John Wiley and Sons in 2008.
INTRODUCTION
This book has been driven from an interest in the use of management tools and models published in January 2008 in The Essential Management Toolbox: Tools, Models and Notes for Managers and Consultants. This supplementary book describes a number of examples and shares the author’s practical experience in deploying appropriate management tools and models taken from the Toolbox with a focus on operational management and its activities including related consultancy activities.
As an introduction this book comprises five broad and inter-related chapters to the extent that each is a natural progression from the subsequent chapter and yet these too influence the earlier steps. It commences with an examination of the major management topics of strategy, quality and business continuity; all necessary for business performance. The second chapter on business planning reflects company capabilities, vision and strategic objectives; and whilst there will be some specific features to each organization, a number of example business plans are presented to assist in this process. This leads to Chapter 3 which explores the topic of product development although this should also be influenced by market research and an understanding of customer requirements. Chapter 4 looks at supply chain management which is a growing feature of business as witnessed by the increasing use of global suppliers and the use of collaborative working. The final chapter, Chapter 5, concentrates on the role of people management as both individuals and in managing teamwork.
Each of the topics of these chapters has been chosen to provide a logical framework to these inter-related management topics within operations management commencing at the strategic level of the organization and moving through to present a tactical focus from managing suppliers and the organization’s own staff, as shown in Figure I.1.
Whilst the intent has been to provide an opportunity to discuss some new models, the majority of the figures and models are taken from The Essential Management Toolbox: Tools, Models and Notes for Managers and Consultants published by John Wiley and Sons in 2008. Where the original source is not the author’s then the source is shown with each model discussed.
The book is designed to be one of a series of sibling publications intended to group enabling management tools, techniques and models into related clusters giving students and practitioners a highly effective means of developing both at an individual level and organization-ally. The intent of writing this title has been to provide a suitable platform to understand and undertake practical performance improvements with an equal relevance whether within the public or private sectors. Previous titles in the series are Essential Tools for Organizational Performance applicable across a range of businesses and users and Essential Tools for Management Consulting with a focus more on providing suitable management tools to practising consultants and their clients.
Figure I.1 Framework for the book rationale.
The structure follows the successful “The Essential Management Toolbox” formula of integrating contemporary management tools, techniques and models with those developed from practical experience of addressing the challenges of management consulting across multiple industries. As with The Essential Management Toolbox and the other books in this series the references provided guide the reader to where further information may be found. In addition, each chapter is punctuated by key theme subheadings to aid navigation and provide a logical approach to each topic area.
CHAPTER 1
STRATEGIC MANAGEMENT
INTRODUCTION
Many works on strategic management treat the subject as consisting of several component parts such as goal formulation, strategic evaluation, strategy implementation and strategic control, but advise that these are components of a framework and may not exist as discrete orderly steps in a strategic management decision-making process. It is further suggested that there are a number of characteristics of strategic decision making concerned with the scope of an organization’s activities, the matching of the organization to the environment and then matching the organization’s activities to its resource capability.
Figure 1.1 Hierarchy of strategies.
From The Essential Management Toolbox: Tools, Models and Notes for Managers and Consultants, S.A. Burtonshaw-Gunn, 2008. Reproduced with permission.
Within this first chapter there are a number of well - known business models, many of which help to achieve a comprehensive analysis of the business in order to determine its future direction, or at least make decisions based on informed choice and then plan how this can be best deployed or realized. In addition, the words “strategy” and “strategic management” relate to a number of levels within an organization and a hierarchy of these together with inter-related strategies is shown in this section (see Figure 1.1). The lowest level of strategy is often referred to as “Functional strategy” which focuses on the day-to-day operational activities that the organization is involved in. Within a business there are often a number of functional strategies which take their lead from the next level of “Business strategy”. This intermediate level business strategy covers the aggregation of the functional strategies for a single business unit or organization with a concentration on the tactics that the business will use to address its threats from competitors and market opportunities with present or targeted customers. The business strategy should reflect the higher level “Corporate strategy”. This highest strategy level needs to consider the overarching strategy of the business to address questions concerning the arena in which the business should compete and how the organization’s activities contribute to its competitive advantage and longer-term sustainability. It should also reflect the organization’s mission, vision and objectives seen in its business plan and covered in detail in Chapter 2.
Whilst there are many books on strategic or corporate management with a natural focus on long-term organizational development, this chapter examines strategic management from the context of operations management and how these two topics can coexist. The strategic “big picture” decisions should not just be about the commercial performance of the business, as they should also include the commitment and development of its operational performance; none more so than with quality, environmental and business continuity management - as these three become more closely aligned through common external standards and interoperability of customer requirements. This first chapter, then, examines how corporate strategy is established, its role and benefits as a prelude to the other chapters and then explores the areas of business operations management.
STRATEGY AND PERFORMANCE DRIVERS
It is useful to remember that within both commerce and industry the raison d’être