collaboration – The OM Blog by Heizer, Render, & Munson

Guest Post: Building Resilient Supply Chains Through Sourcing Risk Management

Temple U. Prof. Misty Blessley shares her insights with our readers monthly.

In Ch 11 of your Heizer/Render/Munson textbook, the importance of buyer-supplier collaboration is discussed. In collaborative relationships, firms manage risk by working jointly to anticipate and address sourcing challenges, thereby fostering resilient supply chains.

Hershey, the iconic American confectionary company, offers a compelling example of collaboration in action. Confronted with unprecedented cocoa market volatility, Hershey strengthened its partnerships with farmers, NGOs, and governments. Through its Cocoa For Good initiative, the company committed $500 million to improving sustainability and stability in the cocoa supply chain. This includes investments in farmer livelihoods, agronomic training, and expanded market access. Hershey’s desire to collaborate is rooted in the belief that a resilient supply chain starts with a resilient farming community.

Global coffeehouse chain, Starbucks, employs a similar collaborative model in the coffee industry. It’s Coffee and Farmer Equity practices enable direct engagement with producers across Latin America, Africa, and Asia to improve sustainability, productivity, and income generation. Starbucks operates regional farmer support centers, provides pre-harvest financing, and integrates ethical sourcing into its procurement decisions. These long-term collaborations help Starbucks secure a dependable supply while positively impacting over 400,000 farming families.

In contrast, Taylor Farms, a major North American producer of fresh-cut fruits and vegetables, exemplifies a different risk management strategy– backward vertical integration. Rather than relying on external suppliers, Taylor Farms owns and operates its farms in addition to its processing, packaging, and distribution facilities. By controlling the key upstream stages from seed selection to harvest, the company reduces dependency on independent growers. Its farm-to-shelf model demonstrates how owning the supply base can offer long-term resilience.

Transactional buyer–supplier relationships often reflect a zero-sum mindset, where one party’s gain comes at the other’s expense. In contrast, the strategies employed by Hershey, Starbucks, and Taylor Farms showcase the value of moving beyond transactional interactions in pursuit of win-win partnerships/ownership to manage sourcing risk and assure resilient supply chains.

Classroom discussion questions:

Hershey and Starbucks manage upstream risk through collaboration, while Taylor Farms does so through backward vertical integration. Both strategies aim to strengthen supply chain resilience. What unique challenges do the two approaches pose for supply chain managers?
Transactional supplier relationships often focus on short-term cost savings rather than long-term stability. Based on the strategies used by Hershey, Starbucks, and Taylor Farms, what specific risks do transactional relationships present in building resilient supply chains?

OM in the News: The Office of the Future

“The office used to be a place people went because they had to,” writes The Economist (Dec. 4, 2021). Meetings happened in conference rooms and in person. Desks took up the bulk of the space. The pandemic, however, has exposed the office to competition from remote working, and brought up a host of questions about how it should be designed in the future. In Chapter 9 we discuss this evolution of office layouts, including the need for offices that accommodate Proximity, Privacy and Permission.

In the past the office was a place for employees to get their work done. Now some think of the office as the new offsite. Its purpose is to get people together in person so they can do the things that remote working makes harder: forging relationships or collaborating in real time on specific projects. Others talk of the office as a place that makes the idea of mingling with people attractive.

But a layout that is largely devoted to people working at desks alongside the same colleagues each day is very 2019. With fewer people coming in and more emphasis on collaboration, fewer desks will be assigned to individuals. Instead, there will be more shared areas, or “neighborhoods”, where people in a team can work together flexibly.

Designs for the post-Covid office must also allow for hybrid work. Meetings have to work for virtual participants as well as for in-person contributors: cameras, screens and microphones will proliferate. All of which implies the need for flexibility. Laptop docking stations are simple additions, but other bits of office furniture are harder to overhaul. Desks themselves tend to be tethered to the floor through bundles of cables and plugs. Will the office of the future feature desks with wheels? With flexible meeting rooms whose walls that lift and slide?

Optimists think the office of the future will be a spacious, collaborative environment that makes the commute worth it. But in reality, pragmatic considerations—how much time is left on the lease, the physical constraints of a building’s layout, uncertainty about the path of the pandemic—will determine the physical look. Whatever happens, the office won’t be what it was.

Classroom discussion questions:

Discuss the history of office layout. (Hint: see pages 371-3 in your Heizer/Render/Munson text).
Why is this an important OM issue?

OM in the News: Office Layout in Silicon Valley

Throughout Silicon Valley, cash-rich technology firms are building bold, futuristic headquarters that convey their brands to employees and customers. Uber, for example, is designing an entirely see-through HQ. It is expected to have some interior areas, as well as a park, that will be open to the public. The very newest buildings, such as Apple’s, are highly innovative in their internal layout. Some of that is because of fierce competition within the tech industry for the best talent: firms are particularly keen to come up with attractive, productive environments. “But these new office spaces will also signal how work is likely to evolve,” writes The Economist (April 29, 2017).

The big idea championed by the industry is the concept of working in various spaces around an office rather than at a fixed workstation. Employees may still have an assigned desk but they are not expected to be there, and they routinely go to different places to do various tasks. There are “libraries” where they can work quietly, as well as cafés and outdoor spaces for meetings and phone calls. The top floors of Salesforce Tower, for example, will be used not as executive corner offices but as an airy lounge for employees where they can work communally.

A fluid working environment is meant to allow for more chance encounters, which could spur new ideas and spark unexpected collaborations. Facebook has the world’s largest open-plan office, designed to encourage employees to bump into one another in its common spaces and garden. Amazon aims to make communal areas into “living-room-like spaces.” The lack of fixed workstations shrinks the amount of expensive real estate given to employees without leaving them feeling too squeezed. Tech firms devote around 15 square yards to each employee, 1/4 less than other industries.

Young workers are thought to be more productive in these varied environments, which are reminiscent of the way people study and live at university. One drawback, however, is that finding colleagues can be difficult.

Classroom discussion questions:

Are these layouts likely to permeate other industries?
Will everyone be pleased with the new designs?

OM in the News: Collaboration as an Operations Tool

We discuss the importance of collaboration in Chapters 3 (Project Management), 5 (Product Design), 10 (Human Resources), and 11 (Supply Chain Management). Is collaboration at work all it’s cracked up to be? Recent research by profs at BU, Harvard, and Northeastern concludes that collaboration sometimes hinders problem solving because individuals in big groups tend to parrot one another, resulting in a narrow set of solutions. “We just get caught up in our own gospel around collaboration,” says one author in The Wall Street Journal (May 20, 2015).

The researchers broke down problem solving into 2 parts—gathering facts about a situation and devising solutions—and divided study participants into groups of 16. Some of those groups were connected to each other in a clear team structure. Other groups were less connected, and information wasn’t shared among the entire group. The highly clustered groups were better than the loosely connected ones at gathering facts about a problem. Yet those collaborative groups came up with fewer solutions than the more isolated groups did. People tend to copy each other and agree more when they are trying to come up with solutions together. The phenomenon is similar to “group think,” although the authors said it could also be described as “cognitive laziness,” since members seem to lack the will to argue with the group.

The trick for companies is to figure out how to divide problem solving into two parts: fact gathering and generating solutions.That isn’t always intuitive or easy to do, especially under tight time constraints. Consulting firms such as McKinsey and Boston Consulting Group tend to remix team structures at various points in a project. Larger teams are good at the start of brainstorming sessions, where workers can share widely what they know. When it comes time to refine those ideas employees could do well to break into smaller groups.

Classroom discussion questions:

1. Why do the consulting firms reconfigure their teams during a project?

2. Make the case for more collaboration. Against it.

Good OM Reading: What Successful Project Managers Do

In today’s dynamic and competitive world, a project manager’s key challenge is coping with frequent unexpected events. Despite meticulous planning, the manager may daily encounter such events as the failure of workers to show up at a site, the bankruptcy of a key vendor, a contradiction in engineering guidelines, or changes in customers’ requirements. Some of these events were anticipated but whose impacts were much stronger than expected, some could not have been predicted, and others could have been predicted but were not. All three types of events can become problems. A new research article in MIT Sloan Management Review (Spring, 2015) describes how successful project managers cope with these challenges with 4 approaches.

1. Since project progress depends on individuals who represent different disciplines and parties, collaboration is crucial for the early detection of problems as well as the quick implementation of solutions. But the various parties to the project are loosely coupled, whereas the tasks themselves are tightly coupled. When unexpected events affect one task, many other interdependent tasks are quickly affected. Thus, project success requires both interdependence and trust among the various parties.

2. Project managers faced with unexpected events employ a “rolling wave” approach to integrate planning/reviewing with learning. Recognizing that firm commitments cannot be made on the basis of volatile information, they develop plans in waves as the project unfolds and information becomes more reliable. They develop detailed short-term plans with firm commitments, while also preparing tentative long-term plans (that include redundancies, such as backup systems or human resources).

3. Successful project managers never stop expecting surprises, even though they may effect major remedial changes only a few times during a project. They’re constantly anticipating disruptions and maintaining the flexibility to respond proactively. The book Great by Choice describes one of the core behaviors of great leaders as “productive paranoia.”

4. When unexpected events affect one task, many other interdependent tasks may also be quickly impacted. Thus, solving problems as soon as they emerge is vital. Corrective action is possible only during a brief window. One study of construction project managers found that they addressed 95% of the problems during the first 7 minutes following problem detection.

Guest Post: Creating Collaborative Opportunities in Large OM Classes

Phillip Flamm teaches in the ISQS Department at Texas Tech University. This is his 4th Guest Post on tools for teaching OM. His 1st post was on how he handles large sections, 2nd on the use of “clickers”, and most recent on lab components.

Studies suggest that students can comprehend and retain information more quickly when studying in a group environment (collaborative learning). In large class sections (>100) a collaborative learning environment is difficult to create. I have added voluntary “focus groups” to my large sections of Introduction to Operations Management in an effort to create a supplemental collaborative learning environment. Students attend these “focus groups” regularly at a scheduled time after each lecture. Exam grades for members of these groups run 10 to 15 points higher than the average exam score.

At the first of the semester I ask for volunteers to lead the groups. I meet with these students directly after each class and spend 10 to 15 minutes summarizing lecture concepts. Then the group leaders meet later with the members of their respective “focus groups” and guide them through the material (usually one hour). Members are encouraged to ask questions and add comments as needed. This collaborative learning environment allows group leaders as well as group members to increase comprehension of lecture material in a very time effective manner.

I believe in an effort-based grading system and I try to reward students who give extra effort. Students who are willing to put forth extra effort by attending “focus group” meetings are rewarded with a better understanding of course material and ultimately higher grades. Students that don’t attend meetings generally are pushed farther down the grade pecking order. The lesson here for the group leaders is that teaching a topic is the best way to learn that topic. For students in general the lesson is that the effort required to take advantage of collaborative learning pays off both in comprehension and grade performance.

OM in the News: Layout and the Shrinking Office

Office layout may not be the most exciting topic we teach in Chapter 9, but an article in The New York Times (Jan.19,2011) will definitely catch your students’ attention. Titled “Office Work Space is Shrinking”, students will discover that their future office may be a lot smaller than they anticipated, but that’s not all bad. As employees become more mobile and less tied to their desks, the work space per employee nationwide (across all industries) has dropped from 400 sq. ft. in 1985 to 250 sq. ft. today. And it’s heading towards 150 sq. ft. within 10 years.

“A lot of thinking about the office has changed”, says the president of Steelcase, which is the leading office furniture maker. “The work setting was a reflection of your status. A job focuses more on collaboration than on the individual now”.

Intel, featured in the Times article, was known for decades for its endless rows of gray cubicles, low ceilings, and flourescent lighting. Intel was never one of those tech companies to offer beanbag chairs, designer desks, or pinball machines. But in the last 2 years, the company has completed a major relayout of over one million sq. ft. of office space. Gray walls are now yellow, purple, and white, cubicle walls are low enough to see other employees, and lounges have been equipped with flat-screen TVs, comfy chairs, and sleek kitchens. The whole idea was to get people to work more in groups, rather than be isolated at their desks.

This also saves money. With less space needed per person, one newly layed-out floor at Intel holds 1,000 employees, up from 600. In some departments where employees are on the road a lot, two people may be assigned to one desk. Even tradition-bound firms in accounting and banking are embracing the open-floor layouts. The thinking is that downsizing makes people interact more and become more productive.

Discussion questions:

1. What are the plusses and minuses of the new office layout concept.?

2. Which system do students prefer–private offices(or cubicles) vs. open floor plans?

OM in the News: Caterpillar’s New Approach to the Supply Chain

In the past, equipment giant Caterpillar did not have to focus on collaborating with suppliers. Along with Komatsu, it was dominant in its field. But Caterpillar is starting to recognize what Honda and Toyota have long known, namely that competition is based on the supply chain, not individual companies.The company’s attitude in the past was one of servant-master with suppliers, according to Businessweek (Oct.21,2010).

So Caterpillar decided to partner with supplier Tenneco to design new emission cutting components, rather than set specs and pick the cheapest vendor, as it had done in the past. The joint effort cut costs on the part by 20%. The firm’s CEO expects the Tenneco relation to be the new benchmark and will work more closely with 200 companies it believes are critical to its growth.

Caterpillar was not prepared for the global growth spurt of 2006-2008 and saw flat profits even with a 24% sales increase. This was because it paid more for raw materials and faster parts deliveries.

Discussion questions:

1. Compare Caterpillar to Boeing (see Ch. 2’s Global Company Profile) in terms of partnering.

2. How did Caterpillar move to change its corporate supply chain culture?