Take Home Exam for Final Assignment 2020-2021/Second B207A: Shaping Business Opportunities I- KSA Cut-Off Date : April 30, 2021 Cut off Time : 10:05 pm Total Marks :100 Contents: Warnings and Declaration…………………………………………………………….…………………………….……………………………….... 1 Case study: Operations Management at Nike ...……………………….……………..……………………….…….…………………..…. 2 Question 1 …...……………………………………………………………………………………………………………………….……………….…..…. 3 Question 2 ………….………...………………………………………………………………………………………………………………………………. 3 Question 3 ………….………...………………………………………………………………………………………………………………………………. 3 Please note that your answers must be on the answers’ form that you can download it from your LMS account for every course Plagiarism Warning: As per AOU rules and regulations, all students are required to submit their own THE-Final work and avoid plagiarism. The AOU has implemented sophisticated techniques for plagiarism detection. You will be penalized for any act of plagiarism as per the AOU's rules and regulations. Declaration of No Plagiarism by Student: I hereby declare that the submitted THE-Final work is a result of my own efforts and I have not plagiarized any other person's work. My submission through the official forms and channels are considered as confirmation and approval on what is mentioned earlier regarding plagiarism. THE-Final 1 of 3 2020-2021/Second Case Study: Operations management at Nike Delivery precision is important for a multi-product and multi-jurisdictional company like Nike. It improves margins, lowers inventories, minimizes price markdowns, and makes sure that the customer receives the right product on time. Nike’s manufacturing network has over 525 factories in 40 countries. Products move from several distribution centers across a network of thousands of retail accounts. Nike owns no factories for manufacturing its footwear and apparel. The company’s footwear and apparel make up about 96% of Nike’s branded revenues. Instead, Nike outsources its manufacturing to third parties. It’s a huge cost advantage. Nike’s supply chain sources most of its raw materials in the manufacturing host country by independent contractors. The strategies of Under Armour, VF Corporation, Lululemon Athletica, and Adidas also include overseas manufacturers. Nike is one of the pioneers of the manufacturing outsourcing strategy. It optimizes the manufacturing and production processes. Plus, continued innovation and product quality are keys to success. The company’s lean manufacturing improves efficiency, optimizes production, and lowers waste. Also, it drives quality and productivity. Material consolidation, manufacturing innovation, and modernization support the manufacturing process. Nike has license agreements that permit unaffiliated parties to manufacture and sell Nike-owned trademarks, apparel, digital devices and applications, and other equipment for sports activities. Nike has six primary distribution centers in the US. Notably, four are located in Memphis, Tennessee. Among those four, two are owned and two are leased. The company had 67 distribution centers outside the US at the end of the fiscal year 2019. Keeping a tight grip on costs is important for any company’s profitability and for shareholder returns. Nike’s gross profit margin is lower than some of its competitors, including VF Corporation and Lululemon. However, Nike, through its Consumer Direct Offense strategy, is growing its digital business. The digital business will speed up revenue growth and supports margin expansion. Plus, the channel mix shift (direct-to-consumer) will support the margins of athletic footwear and apparel companies. NIKE enjoys large pricing power in the marketplace. This is due to its ability to innovate and provide a different product. Also, the company plans to expand its top line. Nike’s also been investing a lot in expanding its Nike Direct operations. This includes Nike-owned retail stores and digital platforms. Currently, revenues through Nike Direct operations make up about 32% of the sales mix. Nike Direct sales have high margins. Additionally, growth in the ratio of Nike Direct sales could positively impact Nike’s gross margin. Nike’s manufacturing operations are concentrated in lower-cost countries such as China, Vietnam, and Indonesia. Since Nike’s manufacturing strategy is based on outsourcing and contract manufacturing, growing protectionist actions could hit its supply-chain process. B207A/ THE-Final 2 of 3 2020-2021/Second QUESTIONS: Answer the below questions based on the text above, the course material, your own experience and information search on the internet and in academic sources from the AOU e-library. (i.e. companies’ webpages, AOU e-library databases…) Question 1: Operations strategy and the five performance objectives (35 marks, 300 words) Discuss the operations strategy and any five of the performance objectives at Nike. Question 2: Nike’s supply chain (35 marks, 300 words) A. Discuss the meaning of supply chain management. (5 marks) B. As completely as possible, discuss the supply chain for Nike from raw materials to consumer purchase. (30 marks) Question 3: Outsourcing (30 marks, 200 words) Discuss the advantages and the disadvantages of outsourcing for Nike. End of Assessment B207A/ THE-Final 3 of 3 2020-2021/Second Shaping Business Opportunities I Session 8: Introduction to operations management Introduction to operations management What is operations management?  The operations management function is responsible for the efficient delivery of goods and services to customers through effective management of the organization's resources to meet their customers’ needs.  Efficiency is achieved through good process design, effective planning and control systems and an entire workforce that is involved in continuously improving processes and systems. Reading 11: Introduction to operations management Input-process-output model Reading 11: Introduction to operations management Input-process-output model The diagram shows the types of resources that operations managers have to collect and use efficiently and effectively:  Fixed assets of facilities and equipment  Materials  Information used during the process.  The operations function is actually responsible for the output of goods and services that the customer pays for. Reading 11: Introduction to operations management Three types of transformation processes 1. Material processing – Manufacturing operations, mining operations and logistics operations such as shipping, trucking, warehousing and postal services all predominantly transform materials within their processes. 2. Information processing – Banking, accounting, news services, telecommunications and research organizations all predominantly process information as a core part of their business. 3. Customer processing – Some of you may dislike the idea that operations process customers, and most people do not like to think of themselves as being ‘processed’ when they visit somewhere, such as a hotel, hairdresser, hospital or theme park. Reading 11: Introduction to operations management Types of transformational change 1. Physical transformation – Activities such as;  The preparation of food in a restaurant kitchen  The machining of metal in an engineering workshop  The mixing of chemicals in a laboratory create a physical transformation of the resources involved 2. Informational transformation – All operations involve some sort of informational transformation, including transforming data in company reports or research projects through to simpler data processing such as recording booking information for a customer’s stay in a hotel. Reading 11: Introduction to operations management Types of transformational change 3. Possession transformation:   Most retail operations involve the change in possession of goods. Data sharing may also be considered as a change in possession. 4. Location transformation:  examples logistics processes of getting material to suppliers or any customer transport service. Reading 11: Introduction to operations management Types of transformational change 5. Storage transformation:  All types of resources can be stored in some way. o Inventory is stored in warehouses o People are stored in waiting rooms o Data are stored on servers 6. Physiological or psychological transformation: Many types of services involve physiological/psychological transformation of the customer (medical treatments). Reading 11: Introduction to operations management Reading 11: Introduction to operations management Transformation process at a bakery  Table 1 is a worked example that shows the transformation processes you would be likely to see in a typical bakery.  The dominant transformation here is in material processing because the core activity is manufacturing. Reading 11: Introduction to operations management Transformation process at a library  Table 2 shows examples of the transformation processes at a library.  The emphasis is what types of resources are being transformed and the nature of the transformation processes.  The library is an example of an operation where all types of resources are being processed. The dominant resource being utilized is information but the customer engagement activities or the material processing that occurs must not be overlooked. Reading 11: Introduction to operations management Answer Booklet B207A: Shaping Business Opportunities I Personal Information Student Name Student ID Registration Information Branch Section Number Academic Year Earned Grade Assessment type Semester out of 50 marks 2020/2021 General Note Below, you can start your answer… 1 of 1 Final-THE Second B207A: Shaping Business Opportunities I Frequently asked questions (FAQ) - THE FINAL 1- Should I include an introduction and a conclusion for each question? A short introductory sentence and conclusion sentence are sufficient. 2- Should I write reference and bibliography? Yes. If outside resources are used, then students should reference them. There is no need to reference B207B course material. 3- What is the preferred font and size? Times New Roman font size 12 is preferred. 4- If a question has 300 words limit, and has two parts part A and part B, does it mean that each part has a 300 words limit? No. The word limit is for the whole question. The sum of the words for both parts should be 300 words. The same 10% rule of the TMA will be applied for the final THE. 5- Can the time of the THE be extended? The time will be extended by 6 hours. However, try your best to finish before the extension. The reason for the extension is to take into consideration any technical difficulties that students may face. 6- I am an incomplete student from last semester, I can’t remember my section number. For IC students, there is no need to write your section number. Just write the word “IC” next to the section name on the answer booklet. 
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