Explain which Operations Management practice this article is most closely associated with
1. Find a recent article in the Wall Street Journal (or other reputable news source) that discusses an operational win or challenge that a company has gone through which has had a significant impact on its business. Focus on one of the topics we are covering that week. In selecting your article:
1. Do not limit your search to organizations in any particular sector. Remember that best practices are everywhere if you are willing to look for them.
2. Identify the wins/challenges that connect to one of the topics we are covering in the upcoming week.
3. You may select the same organization for your submissions or you may select a different organization for your submissions.
2. In the Forum for the week, write a brief introductory executive summary identifying the organization, the challenge and the current state of affairs. Remember to include a link to the article for easy reference.
1. Explain which Operations Management practice this article is most closely associated with
2. Summarize the problem and the impact that the tools had (or could have had) in addressing it
3. Explain how this example can be used as a lesson in your own organization to either point to an area of opportunity for a similar win, or to warn of a potential risk that could have significant impact on your business, if left unaddressed
The article I have chosen closely relates to a lot of the material in the chapters this week, specifically operations strategy, gaining a competitive advantage, and measuring performance (Collier, D. A., & Evans, J. R., 2021).
IT manufacturer Huawei (Links to an external site.) makes consumer products like PCs, Laptops, and wearables and is #2 overall in the world in smartphone sales. In 2019, the US placed restrictions on exporting chips to the Chinese-based company due to failures to adhere to US national security and policy. Huawei spends about $11-billion a year in the US on semiconductors and software (Strumpf, D, et al, 2019). To combat this issue, Huawei has invested in 56 companies through the fund Hubble Technology Investment Co. These companies are vying to produce semiconductors in response to the global chip shortage. Since the export restrictions, Huaweis revenue has been reduced by a third, so diversifying their supply chain is necessary (Strumpf, D, 2022).
Huawei has to reevaluate its supply and value chains due to these restrictions. Since its revenue and performance are down, investing in companies producing chips may set them up with a competitive advantage in the long run. Another tool Huawei is implementing to evaluate its operations is optimization. Optimization in regards to OM is when a company identifies the best way to maximize or minimize goals while meeting requirements and constraints (Collier, D. A., & Evans, J. R., 2021).
Since I am in IT distribution and have felt the long-lasting and, sadly, continuing impacts of the chip shortages, Huaweis efforts pose a competitive risk to vendors we source, affecting our supply. We distribute direct-competitors of Huawei, like Apple, Samsung, and LG, and our vendors could lose market share if they do not adopt similar practices of sourcing semiconductors for their devices. As a distributor, we cannot influence a vendors manufacturing process but we can have open dialogue about their initiatives and adjust and forecast accordingly.
The New York Times ran an article on December 30, 2021, titled Can a Tiny Territory in the South Pacific Power Teslas Ambitions? The article reported Tesla Inc.s operations supply chain strategy to directly procure nickel, critical to the production of its lithium electric car batteries, directly from a mine in Goro, New Caledonia, a French territory located in the South Pacific near Fiji. The action represents the companys intent to minimize the risk of disruption in its supply chain, preventing it from obtaining the mineral. China dominates the production of electric car batteries. Tesla is planning to manufacture batteries in the U.S. and Germany. A South American company previously operated the mine. It grossly mismanaged it from an economic and environmental standpoint. Workers at the mine and residents and activists forced the owner to leave.
Critical mineral mining operations typically exemplify environmental destruction and abuse of local populations, e.g., cobalt in Congo and nickel in the Philippines. Tesla strenuously reports it is committed to achieving benchmarks in environmental preservation and Indigenous peoples rights. Many interest groups will closely watch Tesla’s Goro mining operation. Tesla’s action exhibits risk mitigation of supply chain disruption and commitment to the long-term sustainability of its operations.