Arsi University

MA Program
Operations Management
Case Analysis and Practical Activities-PART-I
Due Date- May 20/2020
Individual Assignment 35%
General Instruction:
 Individual effort is highly appreciated
 Copying works of your classmate is strictly forbidden and will
nullify your mark(0/35)
 Be punctual as far as submission date is concerned
Case 1-Oxfam’s Humanitarian Operations
Oxfam is a major international development, relief and campaigning
organization dedicated to finding lasting
solutions to poverty and suffering around the world. It
works closely with the communities it helps through a
network of local partners and volunteers to provide safety,
dignity and opportunity for many disadvantaged people
around the world. Oxfam’s network of charity shops is run
by volunteers and is a key source of income. The shops
sell donated items and handicrafts from around the world,
giving small-scale producers fair prices, training, advice
and funding.

However, Oxfam is perhaps best known for its work in

emergency situations, providing humanitarian aid where it
is needed. It has particular expertise in providing clean
water and sanitation facilities. Around 80 percent of
diseases and over one-third of deaths in the developing
world are caused by contaminated water. Yet much of

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Oxfam’s work continues out of the spotlight of disasters
and the charity provides continuing help, working with
poor communities through a range of programmes.

Whether the disasters are natural (such as earthquakes

and storms) or political (such as riots and wars), they
become emergencies when the people involved can no
longer cope. In poor countries, disasters leave homeless and
hungry people who will become ill or die within days if they
do not get aid. In such situations, Oxfam, through its network
of staff in local offices in 70 countries, is able to advice on
the resources and help that are needed and where they are
needed. Indeed, local teams are often able to provide
warnings of impending disasters, giving more time to assess
need and coordinate a multi-agency response.

The organization’s head quarters in Oxford provides advice, materials

and staff, often deploying emergency support staff on short-term
assignments when and where their skills are required. Shelters, blankets
and clothing can be flown out at short notice from the
Emergencies Warehouse. Engineers and sanitation equipment can also
be provided, including water tanks, latrines, hygiene kits and containers.
When an emergency is over, Oxfam continues to work with the affected
communities through its local offices to help people rebuild their lives
and livelihoods.

Discussion Question

1 What are the main issues facing Oxfam’s operations managers?

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Case Study 2: The role of the CEO in managing operations

The following is adapted from Fortune magazine, 21 June 1999:

What got Eckhard Pfeiffer fired? What fault did in Bob Allen? Or Gil
Amelio, Bob Stempel, John Akers, or any of the dozens of other chief
executives who took public pratfalls in this unforgiving decade?
Suppose what brought down all these powerful and undeniably
talented executives was just one common failing? It’s an intriguing
question and one of deep importance not just to CEOs and their boards,
but also to investors, customers, suppliers, alliance partners,
employees, and the many others who suffer when the top man
stumbles. Consider the Pfeiffer episode. The pundits opined, as they
usually do in these cases, that his problem was with grand-scale vision
and strategy. Compaq’s board removed the CEO for lack of ‘an
Internet vision’, said USA Today. Yep, agreed the New York Times,
Pfeiffer had to go because of ‘a strategy that appeared to pull the
company in opposite directions’.

But was flawed strategy really Pfeiffer’s sin? Not according to the
man who led the coup, Compaq Chairman Benjamin Rosen. ‘The
change [will not be in] our fundamental strategy – we think that
strategy is sound – but in execution’, Rosen said. ‘Our plans are to
speed up decision-making and make the company more efficient.’
You’d never guess it from reading the papers or talking to your
broker or studying most business books, but what’s true at Compaq is
true at most companies where the CEO fails. In the majority of cases
we estimate 70 percent the real problem isn’t the high-concept
boners the boffins love to talk about. It’s bad execution. As simple as
that: not getting things done, being indecisive, not delivering on
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commitments. It’s clear, as well, that getting execution right will only
become more crucial. The world wide revolution of free markets, open
economies, and lowered trade barriers and the advent of e-commerce
has made virtually every business far more brutally competitive. Yet you
needn’t be ruthless to get things done. Ron Allen’s willingness to swing
the ax so antagonized Delta’s work force that the board asked him to
leave.

When Lou Gerstner parachuted in to fix the shambles John Akers had
left of IBM, famously declaring that ‘the last thing IBM needs right now
is a vision’, he focused on execution, decisiveness, simplifying the
organization for speed, and breaking the gridlock. Many expected
heads to roll, yet initially Gerstner changed only the CFO, the HR chief,
and three key line executives – and he has multiplied the stock’s value
tenfold. GE’s Jack Welch loves to spot people early, follow them,
grow them, and stretch them in jobs of increasing complexity. ‘We
spend all our time on people’, he says. ‘The day we screw up the people
thing, this company is over.’ He receives volumes of information – good
and bad, from multiple sources – and he and his senior team track
executives’ progress in detail through a system of regular reviews. His
written feedback to subordinates is legendary: specific, constructive,
to the point. Of course some come up short. When Welch committed the
company to achieving six-sigma quality a few years ago, he
evaluated how the beliefs of high-level executives aligned with six sigma
values. He confronted those who weren’t on board and told
them GE was not the place for them.

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This continual pruning and nurturing gives GE a powerful competitive
advantage few companies understand and even fewer achieve
. . . Decision gridlock can happen to anyone, but it happens most often
to CEOs who’ve spent a career with one company, especially a
successful one. The processes have worked, they’re part of the
company’s day-to-day life – so it takes real courage to blow them up.
Listen to Elmer Johnson, a top GM executive, describe this problem to
the executive committee: ‘The meetings of our many committees and
policy groups have become little more than time-consuming formalities.
The outcomes are almost never in doubt . . . There is a dearth of
discussion, and almost never anything amounting to lively
consideration . . . It is a system that results in lengthy delays and faulty
decisions
by paralyzing the operating people . . .’. That was in 1988, during Roger
Smith’s troubled tenure, and the problem persisted through Stempel’s
brief reign. Neither man could break the process machine, and both
must be considered failed CEOs . . . Keeping track of all critical
assignments, following up on them, evaluating them – isn’t that kind of
. . . boring? We may as well say it: Yes. It’s boring. It’s a grind. At least,
plenty of really intelligent, accomplished, failed CEOs have found it so,
and you can’t blame them. They just shouldn’t have been CEOs.
The big problem for them is not brains or even ability to identify the
key problems or objectives of the company. When Kodak ousted Kay
Whitmore, conventional wisdom said it was because he hadn’t
answered the big strategic questions about Kodak’s role in a digital
world. In fact, Kodak had created, though not publicized, a remarkably
aggressive plan to remake itself as a digital imaging company. Whitmore

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reportedly embraced it. But he couldn’t even begin to make it happen.
Same story with William Agee at Morrison Knudsen – plausible
strategy, no execution.

The problem for these CEOs is in the psyche. They find no reward
in continually improving operations . . . Any way you look at it,
mastering execution turns out to be the odds-on best way for a CEO
to keep his job. So what’s the right way to think about that sexier
obsession, strategy? It’s vitally important – obviously. The problem is
that our age’s fascination with strategy and vision feeds the mistaken
belief that developing exactly the right strategy will enable a company
to rocket past competitors. In reality, that’s less than half the battle.

This shouldn’t be surprising. Strategies quickly become public

property. Ask Michael Dell the source of his competitive advantage,
and he replies, ‘Our direct business model’. Okay, Michael, but that’s
not exactly a secret. Everyone has known about it for years. How can
it be a competitive advantage? His answer: ‘We execute it. It’s all about
knowledge and execution’. Toyota offers anyone, including competitors,
free, in-depth tours of its main US operations – including
product development and distributor relations. Why? The company
knows visitors will never figure out its real advantage, the way it
executes. Southwest Airlines is the only airline that has made money
every year for the past 27 years. Everyone knows its strategy, yet no
company has successfully copied its execution.

Discussion Questions

1 From the above case, why is it so important that the Chief Executive
Officer really understands operations management?

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2 Why is it vital for operations and marketing to understand each other’s
roles within the firm?
3 Why is there still conflict between business and operations strategies?

Case Study 3: Flextronics and its Excellent Operational Services

Behind every well-known brand name in consumer

electronics, much of the high-tech manufacturing which
forms the heart of the product is probably done by
companies few of us have heard of. Companies such as
Ericsson and IBM are increasingly using electronic
manufacturing services (EMS) companies which specialize
in providing the outsourced design, engineering,
manufacturing and logistics operations for big brand
names. Flextronics is one of the leading EMS providers of
‘operational services’ to technology companies. With
over 70,000 employees spread throughout its facilities in
28 countries, it has a global presence which allows it the
flexibility to serve customers in all the key markets
throughout the world.

From a market requirements perspective, Flextronics

manufacturing locations have to balance their customers’
need for low costs (electronic goods are often sold in a
fiercely competitive market) with their need for responsive
and flexible service (electronics markets can also be
volatile). From an operations resource perspective,
Flextronics could have set up manufacturing plants close
to its main customers in North America and Western

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Europe. This would certainly facilitate fast response and
great service to customers; unfortunately these markets
also tend to have high manufacturing costs. Flextronics’
operations strategy must therefore achieve a balance
between low costs and high levels of service in its
strategic location and supply network decisions.

One way Flextronics achieves this through its

operations strategy is by adopting what it calls its
‘industrial park strategy’. This involves finding locations
which have relatively low manufacturing costs but are
close to its major markets. It has established industrial
parks in places such as Hungary, Poland, Brazil and
Mexico. Flextronics’ own suppliers also are
encouraged to locate within the park to provide stability
and further reduce response times.

Discussion Questions

1 How does Flextronics’ operations strategy help the company to satisfy

itscustomers?
2 What specific operations competences must Flextronics’ have in order
to make a success of its strategy?

3.Compare the operations strategies of Flextronics and a full-service

airline such as Ethiopian Airlines.

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 Practical Study Activities

1.Write down five services that you have ‘consumed’ in the last week.
Try to make these as varied as possible. Examples could include public
transport, a bank, any shop or supermarket, attendance at an education
course, a cinema, a restaurant, etc.
For each of these services, ask yourself the following questions:
● Did the service meet your expectations? If so, what did the
management of the service have to do well in order to satisfy your
expectations? If not, where did they fail? Why might they have failed?
● If you were in charge of managing the delivery of these services, what
would you do to improve the service?
● If they wanted to, how could the service be delivered at a lower cost
so that the service could reduce its prices?
● How do you think that the service copes when something goes wrong
(such as a piece of technology breaking down)?
● How do you think the service copes with fluctuation of demand over
the day, week, month or year?

These questions are just some of the issues which the operations
managers in these services have to deal with. Think about the other issues
they will have to manage in order to deliver the service effectively.