An Integrated Decision Methodology for Designing and Operating an Air‐Express Courier's Distribution Network*

DHL, an international air‐express courier, has been operating in Hong Kong for many years. In 1998, the new international airport located at a site considerably distant from the old location opened in Hong Kong (HK). Other airport‐related infrastructure facilities have also been developed or are being developed, resulting in major changes in transport structure as well as a shift in customer demand. In this paper a multiyear distribution network is designed for DHL(HK) using an integrated network design methodology, which consists of a macro model and a micro model. The macro model, a mixed 0–1 LP, determines in an aggregate manner the least‐cost distribution network. The micro model, a simulation, evaluates the operational viability and efficacy of the network according to its service coverage and service reliability. We also illustrate how coverage and reliability can be improved via the integrated use of the two models. Extensive discussion on relevant planning and operational issues of an air‐express courier are included. The methodology has been successfully implemented at DHL(HK). It has been used to design the network, to test strategic decisions, and to update the network.     

Importance of issues related to RFID-enabled healthcare transformation projects: results from a Delphi study

Despite the high operational and strategic potential of Radio frequency identification (RFID) technology in terms of increased healthcare efficiency and effectiveness, and better decision-making, its adoption and use within health care remain fairly low, mainly because of the challenging nature of RFID projects. Further, scholarly research has yet to identify key issues related to RFID projects. The present study intends to fill this knowledge gap in the literature by identifying and rating key issues related to RFID-enabled healthcare transformation projects through a panel of experts using four rounds of the Delphi study. Finally, implications for practice and research are discussed.     

Planning and health care—The approach in a reorganized NHS

From April 1974, National Health Service authorities have been merged to provide integrated and comprehensive services. The reorganization policies place considerable emphasis on the need for management and planning but planning for health services is not well developed. Ambiguous operational objectives and obscured criteria for effectiveness are not the most promising basis for planning. Nevertheless, a commendable beginning is to be made on planning comprehensively through a systematic annual review of Government health service policies and planning and programming procedures for health authorities. The outlines of the system are described and the prospects for success and further development are considered.     

The Effects of Strategic and Structural Supply Chain Orientation on Operational and Customer‐Focused Performance

Supply chain orientation (SCO), or the implementation of a supply chain management philosophy, consists of two distinct, yet interdependent elements, namely strategic SCO and structural SCO. Strategic SCO involves integrating an SCM philosophy into the firm's strategy development, while structural SCO encompasses operational‐level behaviors and actions that reflect such a philosophy. This study extends the research on SCO by developing hypotheses on the contingent effects of strategic SCO and structural SCO on a firm's operational and customer‐focused performance. Drawing on the strategy‐structure‐performance framework, the study proposes that strategic SCO and structural SCO positively affect different dimensions of performance and that structural SCO plays a mediating role in the relationship between strategic SCO and performance. These relationships are tested using primary survey data and archival data from 183 manufacturers in the Midwestern US. Results confirm that strategic SCO is associated with both operational performance and customer‐focused performance, but structural SCO is only related to operational performance. Structural SCO acts as a mediator in linking strategic SCO with operational performance and customer‐focused performance and mediation effects are strengthened at higher levels of environmental dynamism.     

Quality Function Deployment and operational design decisions – a healthcare infrastructure development case study

The purpose of this paper is to demonstrate how QFD can enhance a healthcare organisation’s strategic operational alignment, by synchronising the infrastructure design with the service intention. In this empirical paper, a case study of a £15 million infrastructure development has been used as the unique context to assess and test the experimental findings. QFD was utilised in order to capture and transform the requirements of decision-makers, providers, patients and local communities into both service and building design for Project K, a healthcare infrastructure, in the U.K. Two full iterations of the QFD results are presented. Using QFD generated effectiveness and efficiency by creating an information exchange platform and providing the stakeholders with a framework to optimise the decision-making. This paper makes a practical contribution by empirically testing the QFD modelling and providing evidence of its implementation within the complex, dynamic and evolving nature of the healthcare built environment sector.     

Planning for hospitals: No focus, no strategy

This is a study of the role of long-range planning and strategic management in 400 hospitals in the United States. It examines not only the structural aspects of planning but also investigates how the data base generated through the planning process is actually used in making operating decisions. In addition to a questionnaire survey of 400 hospitals on the structural aspects of planning, 78 personal interviews with functional heads and hospital administrators were conducted to analyse the operational part of the study. The major findings are that the possibilities and constraints of planning are remarkably similar to those of industrial corporations. The linkage of planning with operational decisions was found to be lacking. There were wide divergences in views between the functional heads and the hospital administrators in terms of internal and external activities, and also in performance reward relationship. These divergences are thought to be counter- productive in realizing the strategic focus of cost containment. Implications of the findings are also discussed.     

Joint strategic planning between health and local authorities

This paper describes an approach to joint consideration of strategic planning problems between Health Authorities and Local Authorities. It is currently being pilot tested in the UK by two Area Health Authorities and their corresponding County Councils. The approach is most effective in planning the provision of health and social services for periods between three and ten years ahead and has been particularly designed for planning the non-acute services. These are the services for which joint planning between the health and social services is most important. Depending on local needs and planning priorities the approach may be used for one or more ‘client groups’ (the Elderly, Mentally Ill, Mentally Handicapped, Physically Handicapped etc.). In the pilot applications the approach is being used in planning for the Elderly client group only. The model now used relies on very simple assumptions, arithmetic calculations, and a heuristic optimisation algorithm, in place of a previous mathematical programming model originally aimed at national planning needs and then adapted to local planning. The revised model has achieved these simplifications, while extending the power of the model to fit local needs, by separating out different parts of the problem corresponding to different stages in the planning process, and developing techniques appropriate to each. In a companion paper² in this issue authors from the participating Authorities put their views on the pilot applications of the approach.     

Performance Metric Portfolios: A Framework and Empirical Analysis

The widespread adoption of supply chain management principles suggests that managers recognize the importance of evaluating operational decisions holistically. However, it is often difficult to link specific operational practices to strategic level outcomes and in turn to corporate financial results. This presents problems for both managers and academic researchers attempting to justify the often high cost of operational improvement initiatives in terms of objective accounting metrics. This study provides evidence that it is possible to demonstrate linkages between carefully chosen portfolios of tactical, strategic, and financial metrics. Survey data from 118 manufacturers are used to evaluate hypotheses linking multilevel metrics of performance across three well‐established strategic foci. We present portfolios of metrics drawn from the literature and from the Supply Chain Counciľs supply‐chain operations reference model and related design and customer chain models. Our analysis suggests that metric portfolios in which tactical metrics are designed to match strategic‐level metrics, based on alignment with a specific strategic focus, provide clearer mechanisms for understanding performance linkages.     

Realizing Benefits from Enterprise Resource Planning: Does Strategic Focus Matter?

A key driver of the recent wave of enterprise resource planning (ERP) implementations was the assumption that the integration of business information would provide firms with a competitive advantage, yet concrete business benefits have been uneven across adopting firms. A possible explanation is that although the resource‐based view holds that competitive advantage is derived from inimitable resources, ERP software has become a commodity. Socio‐technical theory suggests that internal organizational resources based on a foundation of ERP technology may be the true drivers of ERP benefits. A firm's strategic configuration is posited to influence the portfolio of organizational competencies available to leverage the benefits of integrated business information, and a number of hypotheses are developed based on the notion that firms with different strategic objectives will realize different operational benefits from the adoption of ERP systems. Survey data from North American manufacturing firms that have implemented ERP systems demonstrate that ERP adopters seeking operational performance improvements are likely to realize these benefits. On the other hand, those seeking external market and supply chain performance improvements must first establish a foundation of internal operational performance improvements before customer satisfaction and supply chain benefits can be realized.     

Environmental scanning for Social Services

This article describes the development of a process of systematic regional environmental scanning as part of strategic planning in the Ministry of Social Services (MSS) in British Columbia, over the 1987-1990 period. Social Services, a large regionalized social service organization, adopted a formal strategic planning process in early 1988. Ministry services are delivered in ten regions with widely varying characteristics. To ensure that this diversity is reflected in the planning process, it is essential that regional environmental information receive consideration. A simple format was developed and regional directors asked to consult with their staff and to scan their regions for issues that may impact the ministry over the medium term. The information obtained was presented by regional directors at a Senior Management Committee meeting and included in the ministry's annual Business Plan, a document which informs staff, contractors, stakeholders, and the community at large of the ministry's values, objectives, and operational goals. The inclusion of regional analyses adds useful information to the Plan. A second output of the planning process is the ministry budget. The systematic regional scans were found to be extremely useful to regional staff, other directors, and to the ministry executives while setting priorities.     

Business Continuity Management: Time for a Strategic Role?

Against a background of increasing threats, business continuity management (BCM) has emerged in many industries as a systematic process to counter the effects of crises and interruptions, although its potential to play a more strategic role is still largely under-explored. This article examines the organisational antecedents of BCM and develops a conceptual approach to posit that BCM, in actively ensuring operational continuity, has a role in preserving competitive advantage. Such value preservation is central to the business continuity/business strategy relationship, and gives rise to the central purpose of the paper; to discuss whether firms’ BCM can be seen as strategic rather than purely functional.If so, what form does such provision take in terms of planning, organisation and culture? Evidence from six UK-based financial services firms illustrates differing approaches to business continuity, with two firms showing BCM provision more clearly aligned towards a mission-critical strategic role. Practical precepts for implementation are presented, together with a diagnostic drawing attention to the key determinants of enhanced value preservation.     

Capacity Planning with Financial and Operational Hedging in Low‐Cost Countries

The authors of this article outline a capacity planning problem in which a risk‐averse firm reserves capacities with potential suppliers that are located in multiple low‐cost countries. While demand is uncertain, the firm also faces multi‐country foreign currency exposures. This study develops a mean‐variance model that maximizes the firm's optimal utility and derives optimal utility and optimal decisions in capacity and financial hedging size. The authors show that when demand and exchange rate risks are perfectly correlated, a risk‐averse firm, by using financial hedging, will achieve the same optimal utility as a risk‐neutral firm. In this study as well, a special case is examined regarding two suppliers in China and Vietnam. The results show that if a single supplier is contracted, financial hedging most benefits the highly risk‐averse firm when the demand and exchange rate are highly negatively related. When only one hedge is used, financial hedging dominates operational hedging only when the firm is very risk averse and the correlation between the two exchange rates have become positive. With both theoretical and numerical results, this study concludes that the two hedges are strategic tools and interact each other to maximize the optimal utility.     

Trust‐Level Risk Evaluation and Risk Control Guidance in the NHS East of England

In recent years, the healthcare sector has adopted the use of operational risk assessment tools to help understand the systems issues that lead to patient safety incidents. But although these problem‐focused tools have improved the ability of healthcare organizations to identify hazards, they have not translated into measurable improvements in patient safety. One possible reason for this is a lack of support for the solution‐focused process of risk control. This article describes a content analysis of the risk management strategies, policies, and procedures at all acute (i.e., hospital), mental health, and ambulance trusts (health service organizations) in the East of England area of the British National Health Service. The primary goal was to determine what organizational‐level guidance exists to support risk control practice. A secondary goal was to examine the risk evaluation guidance provided by these trusts. With regard to risk control, we found an almost complete lack of useful guidance to promote good practice. With regard to risk evaluation, the trusts relied exclusively on risk matrices. A number of weaknesses were found in the use of this tool, especially related to the guidance for scoring an event's likelihood. We make a number of recommendations to address these concerns. The guidance assessed provides insufficient support for risk control and risk evaluation. This may present a significant barrier to the success of risk management approaches in improving patient safety.     

A Hierarchical Product Development Planning Framework

Uncertainty in new product development (NPD) planning embraces market, creative, technological, and process dimensions to a much greater extent than in non‐NPD project planning. Yet, NPD management is becoming increasingly decentralized, both within the firm and across the supply chain. Hence, planning for NPD uncertainty often results in path‐dependent scenarios cutting across the strategic, tactical, and operational levels of planning. To coordinate this resulting complexity, we propose a stochastic hierarchical product development planning framework with multiple recourses, i. e., corrective actions, to maximize performance across a firm's entire NPD program. We also argue the necessity for a fourth planning level, the infrastructural, that reestablishes norms for market projections, technological forecasts, scheduling, and requirements as latent uncertainty in the environment is continually revealed. An illustration from the automotive industry is presented to demonstrate a deployment of our framework. We additionally discuss the applicability of this framework for managing NPD capabilities over time.     

Barriers and drivers for process innovation in the petrochemical industry: A case study

Process innovation and energy efficiency improvement are among the key options to reduce greenhouse gas emissions in petrochemicals production. This case study presents some of the main drivers and barriers to activities aimed at improving existing processes and developing new processes in the petrochemical industry. Interviews, statistics and related literature were used. The results suggest that as far as strategic scenario planning is concerned, feedstock economics of new processes is of strategic importance, while energy efficiency is much less important. This explains why firms see new processes as strategic innovations, although they are often less energy efficient than existing processes.     

Humanitarian Funding in a Multi‐Donor Market with Donation Uncertainty

This study analyzes the trade‐off between funding strategies and operational performance in humanitarian operations. If a Humanitarian Organization (HO) offers donors the option of earmarking their donations, HO should expect an increase in total donations. However, earmarking creates constraints in resource allocation that negatively affect HO's operational performance. We study this trade‐off from the perspective of a single HO that maximizes its expected utility as a function of total donations and operational performance. HO implements disaster response and development programs and it operates in a multi‐donor market with donation uncertainty. Using a model inspired by Scarf's minimax approach and the newsvendor framework, we analyze the strategic interaction between HO and its donors. The numerical section is based on real data from 15 disasters during the period 2012–2013. We find that poor operational performance has a larger effect on HO's utility function when donors are more uncertain about HO's expected needs for disaster response. Interestingly, increasing the public awareness of development programs helps HO to get more non‐earmarked donations for disaster response. Increasing non‐earmarked donations improves HO's operational efficiency, which mitigates the impact of donation uncertainty on HO's utility function.     

A new value stream mapping approach for healthcare environments

Hospitals worldwide are giving a growing emphasis to the application of lean concepts in the healthcare sector, commonly known as ‘lean healthcare’. A fundamental tool that allows such implementations is the value stream mapping (VSM). The problem is that VSM models used in implementations of lean healthcare are simple adaptations of the original VSM model, which was initially directed towards manufacturing and may not always represent important support activities for the patient flow that directly impact treatment time. Within this context, this paper presents a new VSM approach for healthcare environments. This new VSM model, specifically designed for healthcare environments, contemplates all activities that directly affect the treatment time. In addition, the present paper also presents an action research in a Brazilian hospital where the proposed VSM model is compared to other VSM models found in the literature. The results shown that the proposed VSM model was able to identify some operational bottlenecks and wastes that interfere in the patient’s treatment that could not be identified by other mapping models studied.     

A framework for production control in health care organizations

The paper presents a hierarchical framework for production control of hospitals which deals with the balance between service and efficiency, at all levels of planning and control. The framework is based on an analysis of the design requirements for hospital production control systems. These design requirements are translated into the control functions at different levels of planning required for hospital production control. The framework consists of five levels of planning and control: patient planning and control, patient group planning and control, resources planning and control, patient volumes planning and control and strategic planning, though this last level does not make part of production control as such. Each of the levels of the framework is further elaborated in terms of the decisions made regarding patient flows and resources, and the co-ordination of the different planning levels. Implications of the framework are discussed by describing some points where current practice deviates from assumptions made in our approach. Recommendations for future research and development of the planning framework are formulated.     

Strategic Manufacturing Planning Systems and Their Linkage to Planning System Success

Academics and practitioners alike are focusing more attention on manufacturing strategy after having recognized the important role it plays in shaping the success of industrial firms. Even though research in this area has increased in the last decade, the focus of much of that work has been on the content rather than the process of the manufacturing strategy. Consequently, this study attempts to understand the important elements of the strategic manufacturing planning process and its effectiveness. Borrowing from the extant literature in the fields of strategic management and information systems, we propose a research model that relates strategic manufacturing planning system design to planning system success. Using structured questionnaires, empirical data is collected from over 200 manufacturing executives to test the model hypotheses. Planning process in manufacturing was found to be a bottom‐up approach from a corporate or business perspective, which differs from the top‐down planning process prevalent in strategic information systems planning process. Findings also indicate that greater planning system success in manufacturing is associated with a planning system that combines some “rational” elements (formality, comprehensiveness, control focus, longer horizon) with others that lend adaptability (wider participation and more intense interaction). But the strategic manufacturing planning system is more than just a collection of independent planning characteristics. Instead, it can be viewed as a gestalt planning system whereby planning characteristics move together in affecting overall planning system success.