John A. Buzacott and His Pioneering Contributions to Manufacturing and Service Systems

John A. Buzacott is a pioneering and premier contributor to the field of production and operations management. He has been a principal architect of the development of a unified framework and a rigorous engineering foundation for many of the major approaches currently used in the design, planning, and control of manufacturing and service systems. His innovative use of stochastic models to explain many phenomena occurring in manufacturing and service organizations has distinguished him not only as a great researcher but also as a great teacher. His contributions have inspired scholars throughout the world. We provide an overview of John's research works and accomplishments.     

An integrated lean and green approach for improving sustainability performance: a case study of a packaging manufacturing SME in the U.K.

Abstract

Competitive landscape, informed consumers and stringent regulations have forced many manufacturing small- and medium-sized enterprises (SMEs) to focus on operational efficiency along with sustainability issues in recent years. While many manufacturing organisations have been taking lean initiatives for the past few years for operational excellence, an impulsive rush to adopt lean without a strategic deployment vision has led to scattered implementation of lean tools and projects without desired success. Many researchers and practitioners prescribe value stream mapping as a foundation for lean transformation initiatives; however, little empirical work is available on the symbiosis of lean and green paradigms to reap maximum benefits. This research, through a systematic methodology and a novel tool called Green Integrated Value Stream Mapping (GIVSM), integrates both paradigms in a case study on a U.K. packaging-manufacturing SME. Applying the GIVSM demonstrates that simultaneous deployment of lean and green paradigms have synergistic effect for improving both operational efficiency and environmental performance. In addition, continuous improvement framework with sustainable procurement is proposed to overcome the lean-green misalignments. This study also provides a guiding reference for practitioners to undertake similar improvement projects and identifies opportunities to expand this academic research on integrated lean-green approach into other industry sectors.     

Decoupling thinking in service operations: a case in healthcare delivery system design

The notion of decoupling thinking has been well established in the manufacturing operations and supply chain management literature. This paper explores how this decoupling thinking can be applied in service operations and in particular in health care. It first reviews the relevant literature on decoupling fundamentals, the front- and back-office distinction, and new emerging decoupling thinking in service operations. Subsequently, a flow-based framework including content and process is developed for decoupling thinking in service operations. The framework provides an integrated perspective on customer contact, flow driver and flow differentiation (level of customisation). The framework hence, through flow differentiation, introduces the concept of standardisation versus customisation in a service context. This is followed by a health care case example to illustrate how the framework can be applied. The managerial implications are primarily in terms of a modularised approach to system design and management. The framework offers potential for benchmarking with other service systems as well as with manufacturing systems based on the shared foundation in decoupling thinking. Finally, suggestions are provided for further research opportunities derived from this research.     

The Contingent-Claims Approach to Investment Decisions*

This paper presents a contingent-claims approach to project valuation when capital expenditures are made sequentially over time. It focuses on an important facet of sequential investment projects that the firm can undertake—or pass up projects—as more information becomes available. The contingent-claims approach takes account of this important feature of firms' investment decision process, whereas the traditional capital budgeting procedure does not. Since the traditional method does not reflect the options nature of investment opportunities, it underestimates the value of sequential investment projects. As a result, a naive implementation of the traditional capital budgeting procedure could result in rejecting profitable projects. The extent of undervaluation associated with the traditional capital budgeting procedure is greater when the correlation between the random component of the future asset value and that of the required capital expenditure is smaller and/or when the growth rate of the required capital expenditure is higher.     

Linking long-term capacity management for manufacturing and service operations

For firms that combine manufacturing and service operations in one system, the task of managing capacity is not straightforward. New goods and services may not have the same set of competitive priorities, and the models and concepts available in the literature for service operations differ from those for manufacturing operations. We address this problem and review the concepts and models for capacity management in the long term in both streams of literature, i.e. manufacturing and services, to develop a unified framework for manufacturing and service operations. The framework creates transparency between new goods manufacturing and service operations, since the same long-term capacity management structure is used for both product types, as well as between capacity strategy and planning strategy, since new goods and services are treated simultaneously. In the framework, the concepts of chase and level strategies are redefined for service operations to allow for integration with manufacturing operations. A case study demonstrates the usefulness of the integrated approach for long-term capacity management.     

A pathway towards true sustainability: A recognition foundation of sustainable supply chain management

Sustainable supply chain management has developed at an exponential rate into a distinct research field, but its progress towards sustainability is rather modest, and a coherent theoretical foundation for guiding companies towards a stronger integration of sustainability into their operations and supply chains is still missing. This article outlines how the tradition of critical management studies could foster higher levels of sustainable business and sustainable supply chains. We argue that the underlying instrumental logic of contemporary corporate engagement with sustainability, driven by stakeholder pressures, is a key obstacle when aiming for ‘truly’ sustainable supply chains. Referring to a recognition perspective may dissolve the reified pursuit of profit-seeking and other merely economic performance targets to recall the genuine—and in its essence truly radical—claim that the concept of sustainable development is inherently a normative one imposed on all of us. Recognition may lead the way for companies to adopt a caring stance for people and the surrounding environment and to respond to the legitimate expectations of all groups in society while conceiving themselves as an integral part of such a society. We conclude by discussing how far the theoretical perspective of recognition is enrooted in the European tradition of institutionalised business–society relationships and therefore could be seen as a rediscovery of a genuinely European way of making business and managing supply chains.     

Performance management of suppliers in outsourcing project: case analysis from the financial services industry

This study investigates the characteristics of an effective performance management framework for outsourcing projects in a UK-based financial services organisation and how this may contribute to the success of the outsourcing arrangement. The analysis draws on outsourcing and performance management theory, and uses both primary and secondary data. Valuable information was found on objective setting, performance measurement and performance improvement in the outsourcing project. An adapted version of the Balanced Scorecard, termed a Logic Scorecard, is suggested as a measurement tool; a service credit system and a continuous improvement schedule used to enhance supplier performance. The performance management framework, which is one of the pillars of the supply chain operations reference (SCOR) model, was developed, and provides practitioners with step-by-step guidance for the implementation of performance management in outsourcing projects. This combines both suggestions for performance management before and after the outsourcing decision, thus considering the entire outsourcing lifecycle. The proposed 10-step framework for outsourcing not only incorporates strategic propositions but also shows its implementation at an operational level.     

Shareholders' Wealth‐Maximizing Operating Decisions and Risk Management Practices in a Mixed Contracts Economy

This paper establishes a critically important positive role for operations management practices and financial hedging. We show that operations management decisions and financial hedging are intertwined, and we advance a framework that can identify their combined effects on investors' wealth. We show that: (a) firms (publicly traded corporations) will optimally hold adequate riskless working capital (e.g., cash) to minimize the cost of obtaining non‐financial inputs, and the magnitude of this cash holding depends on operating details, and (b) operations management and financial hedging can lower firms' cash requirements, and boost productivity, defined as the wealth created in the firm per dollar of invested capital. Productivity‐enhancing practices—by “freeing up” some of the firm's cash—can maximize the investors' wealth. We show that these results obtain because firms' contracts with many of the providers of non‐financial inputs are not traded, and because investors can invest not just in public corporations but also in businesses “outside the markets” (e.g., proprietorships, partnerships, and private equity).     

How Provider Selection and Management Contribute to Successful Innovation Outsourcing: An Empirical Study at Siemens

It is becoming increasingly common to involve external technology providers in developing new technologies and new products. Two important phases involved in working with technology vendors are vendor selection and vendor management. Because for both steps theory development of key decision guidelines is still immature, we use detailed case studies of 31 innovation outsourcing projects at Siemens to develop grounded theory on provider selection criteria and on project management success drivers. A selection criterion often associated with successful outsourcing is the provider's “track record” or previous experience. Our cases suggest that there is no standard “track record” for success but that a “match” between the client firm's outsourcing motivation and the provider's strengths appears to be a necessary condition for a successful outsourcing collaboration. As to the second phase—managing the vendor—we identify a number of operational project success drivers. There seems to be no universal checklist, but the most important drivers seem to be contingent on the type of vendor chosen and on the maturity of the technology. We compare five provider types—universities, competitors, customers, start‐up companies, and component suppliers—and find that some success drivers are common to all providers, while others are relevant only for certain types of provider. Moreover, drivers in the case of a mature technology are more focused on successful transfer to manufacturing than on development itself. Our findings offer guidelines for innovation managers on how to select innovation providers and how to manage them during the project.     

Risk,Process Maturity,and Project Performance: An Empirical Analysis of US Federal Government Technology Projects

In recent years, there has been increasing pressure on the US federal government to reduce spending and improve the management of its technology projects. Mitigating the adverse impact of risks on the performance of these projects presents a significant challenge for its stakeholders. Our research examines this challenge in two steps. First, we identify and define a set of salient risks in federal technology projects—specifically, complexity risk and contracting risk in the planning process, and execution risk in the execution process. Next, we investigate whether higher levels of process maturity, assessed by the Capability Maturity Model Integration (CMMI) framework, mitigate the negative effect of project risks on project performance. The analysis of time‐series data collected from 82 federal technology projects across 519 quarterly time periods indicates that each of the three types of risks has a significant negative effect on project performance. This finding highlights the practical significance of managing these risks in the federal technology project context. Further, we find that increasing levels of process maturity attenuate the negative effect of project risks on the performance of federal technology projects. However, the attenuation effects are consequential only at high levels of project risks; at low levels of project risk, increasing levels of process maturity can adversely affect project performance. To demonstrate the financial implications of increasing process maturity levels in federal technology projects, we examine the magnitude of project cost savings (and overruns) across different levels of CMMI and project risks. In summary, our study contributes to the sparse literature on public sector operations by addressing the understudied context of federal technology projects, and provides a nuanced examination of the implications of process maturity in managing the risk to performance relationship in such projects.     

Operational Risk in Financial Services: A Review and New Research Opportunities

We present a framework to describe and analyze operational risk in financial services from an operations management perspective, focusing in particular on process design, process management, and human behavior aspects. The financial services industry differs from other service industries in ways that affect the nature of the operational risks it is subject to. In recent decades, many books and papers have focused on operational risk in financial services; however, this literature has focused mainly on the conceptual and statistical aspects of operational risk management and not on its operational aspects. Operational risk in financial services has not received much attention from the operations management community. The framework presented here is based on the premise that operational risk in financial services can reap significant benefits from research done in the theory and practice of operations management in manufacturing industries as well as in other services industries. The objective of this study is to propose particular challenges and questions raised in the practice of operational risk management that may stimulate future research in this particular area of operations management.     

The Role of Operational Capabilities in Enhancing New Venture Survival: A Longitudinal Study

We investigate relationships between operational capabilities and new venture survival. On the basis of operations management and entrepreneurship literature, we develop a contingency framework of operational capabilities especially appropriate at different life phases of a new venture's evolution. We expect that in the first years of a new venture's life, entrepreneurs should emphasize high inventory turnover to preserve working capital, support customer responsiveness, and aid firm adaptability. As new ventures grow, entrepreneurs should emphasize internal working capital generation via larger gross margins to support production ramp‐up. Later, new venture entrepreneurs should emphasize employee productivity to buttress sustainable volume production. We analyze a 6‐year longitudinal sample of 812 Swedish manufacturing new ventures using a gamma frailty‐based Cox regression. The findings show that specific operational capabilities, while always supporting new venture survival, have exceptional influence in specific new venture life phases. The three hypotheses are confirmed, suggesting that higher inventory turnover, gross margin, and employee productivity further increase new venture survival likelihoods, respectively, in the venture's start‐up, growth, and stability phases. This suggests a phased‐capabilities approach to new venture survival. This study contributes to operations management and entrepreneurship theory and practice, and sets a foundation for future research on operations strategy for new ventures.     

Multilevel Social Dynamics Considerations for Project Management Decision Makers: Antecedents and Implications of Group Member Tie Development

Successful projects represent the effective culmination of management skills, planning, and individual project member strengths. In operations management, such strengths are often viewed predominantly from the perspective of skill base. However, it has become increasingly evident that behavioral traits associated with individuals play a very significant, if not ultimately dominating, role in the effectiveness of certain group projects. Our aim in this study is to look into how certain individual attributes viewed as relevant to these project contexts may lead to social networking decisions that have impacts spanning multiple levels of analysis. Such insights are likely to prove valuable to decision makers managing project teams as well. We employ a controlled 4‐month investigation of multiple projects, for which we are able to consider both objective, and subjective pre‐, in situ, and postproject data. Our results demonstrate that the issues of perceived control, confidence, and conscientiousness are relevant not only in driving individual perceptions of the value of within‐group interactions, and hence the development of associated ties, but are also ultimately relevant in helping to drive higher levels of group performance.     

Project risk management using multiple criteria decision-making technique and decision tree analysis: a case study of Indian oil refinery

This study proposes an integrated analytical framework for effective management of project risks using combined multiple criteria decision-making technique and decision tree analysis. First, a conceptual risk management model was developed through thorough literature review. The model was then applied through action research on a petroleum oil refinery construction project in the Central part of India in order to demonstrate its effectiveness. Oil refinery construction projects are risky because of technical complexity, resource unavailability, involvement of many stakeholders and strict environmental requirements. Although project risk management has been researched extensively, practical and easily adoptable framework is missing. In the proposed framework, risks are identified using cause and effect diagram, analysed using the analytic hierarchy process and responses are developed using the risk map. Additionally, decision tree analysis allows modelling various options for risk response development and optimises selection of risk mitigating strategy. The proposed risk management framework could be easily adopted and applied in any project and integrated with other project management knowledge areas.     

Fostering Risk Taking in Research and Development: The Importance of a Project's Terminal Value

Large firms face a conflict in managing a portfolio of high-risk projects. When an ongoing project is thought to have a low likelihood of success, project team members take risks to improve its chances of success. However, upper-level managers who allocate resources tend to withhold resources from a project with a low likelihood of success in favor of others in the portfolio that look more promising. Because this paucity of resources influences project team members to avoid risk, the total effect of success likelihood on risk taking is conflicted. The influence on risk taking of a project's terminal value—defined as the value that remains in the firm in the event of project failure—is unequivocally positive, because both senior management resource allocation and project team risk-taking propensity are encouraged by terminal value. Thus, firms can override the ambivalent effect of likelihood of success on project decision making by focusing attention on a project's terminal value.     

A hierarchical approach to multi-project planning under uncertainty

We survey several viewpoints on the management of the planning complexity of multi-project organisations under uncertainty. Based on these viewpoints we propose a positioning framework to distinguish between different types of project-driven organisations. This framework is meant to aid project management in the choice between the various existing planning approaches. We also discuss the current state of the art of hierarchical planning approaches both for traditional manufacturing and for project environments. Next, we introduce a generic hierarchical project planning-and-control framework that serves to position planning methods for multi-project planning under uncertainty. We discuss various techniques for dealing with the uncertainty inherent to the different hierarchical stages in a multi-project organisation. In the last part of this paper we discuss two cases from practice and relate these to the positioning framework that is put forward in the paper.     

Project Scheduling—Theory and Practice

The project scheduling problem involves the scheduling of project activities subject to precedence and/or resource constraints. Of obvious practical importance, it has been the subject of intensive research since the late fifties. A wide variety of commercialized project management software packages have been put to practical use. Despite all these efforts, numerous reports reveal that many projects escalate in time and budget and that many project scheduling procedures have not yet found their way to practical use. The objective of this paper is to confront project scheduling theory with project scheduling practice. We provide a generic hierarchical project planning and control framework that serves to position the various project planning procedures and discuss important research opportunities, the exploration of which may help to close the theory‐practice gap.     

Concise or comprehensive? Predictors of impact assessment choices for electric transmission line projects

Environmental impact assessment (EIA) procedures required in the United States and many other countries are often highlighted as a major hindrance to timely and efficient deployment of critical infrastructure projects. Under the U.S. National Environmental Policy Act, a more extensive environmental impact statement (EIS) review can take several more years and cost much more than a succinct environmental assessment (EA). This not only affects the project in question, but also likely informs how—or whether—additional projects are pursued. Thus, understanding key predictors of the EA versus EIS choice sheds light on supply-side considerations affecting infrastructure deficits. Using the case of NEPA reviews conducted for 244 transmission line projects between 2005 and 2018 by two U.S. federal agencies in the western United States, the Bureau of Land Management (BLM) and Department of Energy (DOE), this addresses the following question: What project features most predict whether EA or an EIS is used to assess a transmission line project? Drawing upon NEPA assessment guidance and agency NEPA records, we use a regression classification tree to analyze how protocols and project attributes relate to assessment choice. The result is essentially a null finding: transmission line length is by far the most important predictor of whether a project receives an extensive EIS or a shorter EA, with little predictive value provided by other attributes. While absolute project size undoubtedly influences impacts, the lack of further differentiation in what predicts use of EISs versus EAs suggests assessment does not simply respond to project details but also shapes proposal and design choices beforehand.     

Operational Entrepreneurship: How Operations Management Research Can Advance Entrepreneurship

In this article, we introduce the notion of operational entrepreneurship—the selection and management of transformation processes for recognizing, evaluating, and exploiting opportunities for potential value creation—to offer examples of research opportunities at the interface of entrepreneurship and operations management. Specifically, we believe that operations management has been under‐utilized for gaining a deeper understanding of (i) the knowledge and motivation required for opportunity recognition, (ii) evaluations of a recognized opportunity to determine if it represents an opportunity for the specific entrepreneur, and (iii) the role that feedback from an exploitation of a current opportunity plays in the recognition and evaluation of subsequent opportunities. We also introduce (but not develop) the notion of entrepreneurial operations.