operation management

1. OPERATIONS
MANAGEMENT
PRESENTED BY GROUP 7
SAYANTAN KUMAR 23020841101
ROHAN SAREEN 23020841201
GULZAR AHMAD 23020841117
RAGINEE SINGH 23020841089
HANU WARWADE 23020841124
PANKAJ MADHWANI 23020841104
Efficiency is doing better what is already being done." -
Peter Drucker

2. SIX SOURCING STRATEGY
FEW SUPPLIER MANY SUPPLIER
VERTICAL
INTEGRATION
VIRTUAL
COMPANIES
KEIRETSU
NETWORK
JOINT VENTURE
Sourcing strategy in operational management is crucial for
organizations to ensure they acquire the necessary goods and
services efficiently and effectively.

3. FEW SUPPLIERS
BENEFITS EXAMPLE CHALLENGES
A strategy of few suppliers implies that rather than looking for short-term attributes, such as
low cost, a buyer is better off forming a long-term relationship with a few dedicated suppliers.
• Long-term suppliers are more likely to
understand the broad objectives of the
procuring firm and the end customer.
• Few suppliers can create value by
allowing suppliers to have economies of
scale which provides both lower
transaction costs and lower production
costs.
• Ford selects few suppliers before part
design.
• Marks & Spencer's cooperation with
suppliers leads to customer-winning
products.
• Cost of changing partner is huge.
Hence, both buyer and supplier
dependent on each other
• Purchasers concern about their
trade secrets, as supplier may
reveal trade secret with competitors
or start producing on their own.

4. RISK
DIVERSIFICATION
1 2 3 4
LOW BIDDER
RATE
PRICE BASED
MANY SUPPLIERS
• A multi-sourcing strategy or multi-sourcing approach, involves an organization
engaging with multiple suppliers or vendors to ful-fill its procurement needs.
• This strategy can offer several benefits and is commonly used in various
industries.
By having multiple
suppliers, an
organization can
diversify its supply
sources, reducing the
risk of disruptions due to
factors such as natural
disasters, economic
crises, or supplier-
specific issues
If one supplier
encounters a problem,
others can still provide
necessary goods or
services.
LOW INTERACTION
WITH SUPLIER
Suppliers may offer
better terms, lower
prices, or added value
to secure or maintain
contracts.
When an organization
has multiple suppliers
for the same goods or
services, it often has
more negotiation
power, as suppliers are
aware that they must
compete for the
organization's
business.

5. VIRTUAL COMPANIES
Virtual companies are those companies that rely on variety of supplier relationships to
provide services on demand. Also known as hollow corporation or network companies.
1 2
3 4
Supplier may provide variety of services that
include doing the payroll, hiring personnel,
designing products, providing consulting services,
manufacturing components, conducting test or
distributing products.
The relationship may be short or long term and
may include true partners, collaborators or simply
able suppliers or contractors.
Some of the advantages of virtual companies
include specialized management expertise, low
capital investment, flexibility and speed. the
result is efficiency.
One of the example of virtual company is apparel
business. designer of cloth seldom manufacture
the cloth they rather license it to the
manufacturer who may then rent space, lease
sewing machine and contract for labor.

6. DE
VERTICAL INTEGRATION
COST REDUCTION HIGHER QUALITY
TIMELY DELIVERY INVENTORY REDUCTION
• Developing the ability to provide goods and services previously purchased or actually buying from a supplier.
• Starting from raw material till the end product all the processes are done by the firm itself.

7. SKILLS
JOINT VENTURE
COST
SUPPLY
RESOURCE
PRODUCT
Sometimes firms engage in collaboration to enhance their new
products’ effectiveness or their technical skills.
They also engage in such collaborations to secure supply and
reduce costs.
Hence, a Joint venture sourcing strategy can be described as the
agreement between two or more parties to combine their
existing or available resources and capabilities with those of the
other party to meet a particular objective.
Eg: Dailmer-BMW's effort to develop and produce standard
automobile components.

8. KEIRETSU NETWORK
HORIZONTAL KEIRETSU VERTICAL KEIRETSU
• In a horizontal keiretsu, companies from various
industries come together to form business
relationships with access to a wide range of
products, services, and resources, fostering
cooperation and mutual support.
• Mitsubishi and Sumitomo are examples of
Japanese conglomerates that have historically
operated as horizontal keiretsu.
• Vertical keiretsu, they involve companies along a
supply chain or distribution channel & large
manufacturer often maintains close relationships
with its suppliers, distributors, and even
retailers.
• The Toyota Group is a famous example of a
vertical keiretsu, with Toyota Motor Corporation
at its centre and various suppliers and affiliated
companies supporting its operations.

9. THANK YOU!
The key to the Toyota Way and what makes
Toyota stand out is not any of the individual
elements...
But what is important is having all the elements
together as a system." - Taiichi Ohno.