Discuss what impact the following factors might have on the OM strategy (the ten

Question

Discuss what impact the following factors might have on the OM strategy (the ten OM decisions) for a company. You don't have to talk about all the 10 OM decisions, but at least 3-4 of the ten decisions. I have provided a sample answer for the first one. You may build on it. Maturing of a product. - The maturing of a product may move the OM function to focus on more standardization, use longer production runs, and institute cost cutting and design compromises. Technology innovation in the manufacturing process. Major decrease in oil prices. (Analyze for a company that is not directly in the oil industry) Water and air quality legislation.

Explanation / Answer

b) Technology innovation in the manufacturing process will impact the OM decision of process and capacity design. With incorporating new technological innovation into the manufacturing process can bring better quality and higher productivity, but the associated cost of capital investment, and HR training for implementation also needs to considered and compared against the benefits received to analyse weather to incorporate the new technology innovation or not.

Also, the layout strategy needs to be thought out, in case the technology innovation included in the manufacturing process, the current layout will change for a more compact layout, decreasing the total material and manpower movement.

The maintenance decisions of the machinery and workstation needed for this technology also need to be considered.

c) Major decrease in oil prices will decrease the transportation costs, eventually decreasing the raw material costs. Hence, supply chain management decisions will be affected, as the raw material prices and suppliers will be reconsidered to make the full benefit out of this situation. This will also affect the location strategy, if the location of the company is kept nearby raw material to have a competitive transportation cost, with substantial decrease in transportation costs the location decision can be based on the other factors that can be of competitive advantage to the company like location nearby markets or potential markets.

d) Water and air quality legislation protects the companies from eliminating their wastage into air and water, to control the pollution,. It is actually a legal framework defining how and what kind of waste the company can eliminate and in what quantity. This affects the company’s OM decision regarding the location strategy of the company. The location of the manufacturing plant and the waste management centres should be as such that they fall under the legislation that is feasible for them to coordinate their practices to. Also this affects their process and capacity design strategies, so as to analyze what all stages of the process are there from which there is waste that has to be discarded and what can be done in the process design to make sure the elimination of the waste is as per the legislature guidelines.

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