Operations Management and Flexibility

Operations Management deals with the design, planning and management of supply chains, products, processes, services. It considers the acquisition, development and utilization of resources that companies need to deliver the goods and services customers want. Largely deals with dealing with uncertainty: Short-term uncertainty in weather, wave heights, demand, price, transit times and long-term uncertainty from regulation, competition and other external or internal factors. Without uncertainty planning and managing operations would be less demanding. The focus of this course is on how to deal with uncertainty and create flexibility to enable rapid and effective adaptation to changes in operational issues. With reference to MIT professor David Simchi-Levi "Flexibility is the single most important capability that allows firms to innovate in their operations and supply chain strategies." The course is divided into two parts: The first part deals with an introduction to theories and principles behind creating flexibility (eg decision models, decision trees, real options, what-if / scenario analysis, the value of information, reactive versus proactive decisions). The second part deals with flexibility in various operational problems, such as planning in shipbuilding, and the link between design and planning. The relationship between strategic, tactical and operational decisions, and what this means when something is uncertain or changes, will be discussed.

The course will provide students with knowledge of how to deal with operational uncertainty, and develop an understanding of the consequences if uncertainty is not handled appropriately. Knowledge: After completing the course the student should have an understanding of how decisions under uncertainty are made when quantitative tools are not used; understand how operational decisions are made in many industrial environments and how uncertainty is handled in these; understand the structure of flexible solution to operational problems. Skills: When the student has finished, he / she should be able to handle uncertainty in operations by understanding the connection between the operational, tactical and strategic decisions, and be able to discuss and develop different solutions for operational flexibility. Competences: After completing the course, the student should be able to reflect critically on theories, methods and tools within operational risk management, as well as read relevant literature.

The course will be a mixture of lectures and work with specific cases. There will be 1 to 2 guest lectures focusing on operational problems in the maritime industry.