Management in Action

Issued November- December 2019



INFORMATION IS THE KEY TOWARDS A SUSTAINABLE MODERNIZATION



N E W Y O R K T I M E S BESTSELLER



INFORMATECH




















WHY “In the face

INFOMATION of technology,
MANAGEMENT Everything becomes

IS THE Atavistic” -Don Delilo

GOD OF ALL

DIRECTED
KEY

TOWARDS

THE SUCCESS

OF MANKIND








KEYS OF INFORMATION


MANAGEMENT


· MARKETING


· PRODUCTION


· PERSONNEL



· FINANCIAL





LIMITED EDITION www.informatech.com.org

UiTM Samarahan 1

Faculty of Business Administration
BA242 4B

IMR 652
Management of Business Records

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E-Magazine

MOHD NAZRULDIN BIN JOHAN 2018401834
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Prepared For


Mohsinin binti Mohsin

Submission Date

6th Disember 2019

Financial Management



Practices




and Farm Profitability




Written by:


Brent A. Gloy and Eddy L. LaDue

Business Name
Financial Management Practices

and Farm Profitability

1 NOVEMBER 2003 VOL. 63 NO. 2




Agriculture Finance Review Journal

Financial management farm profitability.
topics are given considera- While many studies have
ble emphasis in nearly examined the linkage be-
every farm management
course and text. tween technology adop-
tion and profitability, few
Among the most common studies have assessed the
topics are financial control empirical relationship
systems, budgeting, invest- between the adoption of
ment analysis, and secur- financial management
ing credit. practices and farm profita-
bility.
Although these topics are
treated as basic manage- The lack of knowledge
ment skills, relatively little regarding these two basic
is known about the finan- issues is somewhat sur-
cial management practices prising given the amount
actually used by farmers. of time and effort spent
teaching, researching, and
In addition to the lack of extending concepts related
information about farm- to agricultural finance.
ers’ adoption of many
basic financial manage-
ment practices, little is
known regarding the rela-
tionship between adoption
of these practices and






Primary Goals

First, we seek to deter- cial performance. prioritize educational of-
mine the extent to which Both questions are obvi- ferings and research agen-
farmers have adopted ously important to farm das.
various financial manage- management and finance
ment practices.
researchers and educators.
While this is a relatively Results associated with the
simple question, such an second objective are also
assessment is critical in of potential interest to
order to understand how farm managers.
widely the concepts and The findings should help
principles taught in the identify practices that have
classroom and extension been widely adopted, prac-
have been adopted.
tices that have not been
widely adopted, and prac-
tices that have a large im-
Second, we propose to pact on profitability.
examine the relationship
between the adoption of These results can then be
these practices and finan- used to

Page 2 VOL. 63 NO. 2



Financial Management

A variety of definitions have manager can be broken down
been offered to characterize into the investment or capital
financial management. budgeting decision, and the
financing decision.
Barry, Ellinger, Baker, and
Hopkin describe financial man- In other words, the firm has to
agement as “the acquisition and decide what real assets to buy
use of financial resources and and how to raise the necessary
protection of equity capital cash”.
from various sources of risk”.
Lee, Boehlje, Nelson, and Mur-
ray define agricultural finance
as the “economic study of the
acquisition and use of capital in
agriculture”.
Brealey and Myers summarize
the corporate financial man-
ager’s responsibilities by noting,
“the overall task of the financial





These definitions emphasize which both ensure the efficient
the importance of acquiring and operation of the business and
investing resources. support capital acquisition and
investment activities.
Certainly, capital acquisition
and investment are critical fi- These supporting responsibili-
nancial management responsi- ties include activities such as
bilities, and both are examined maintaining financial records,
in this study. implementing control systems,
and analyzing whole-farm prof-
The financial manager also itability.
performs a variety of tasks



Business Analysis/Control

One of the most important The use and impact of business
responsibilities of the farm analysis and control practices
manager is to monitor and en- has not been widely studied.
sure the profitability, liquidity, In their review of farm manage-
and solvency of the business.
ment studies from 1980 to ap-
These activities are crucial for proximately 1993, Fox, Bergen,
the short-term operation of the and Dickson identify no studies
business. examining the relationship be-
tween the use of business analy-
Business analysis and control sis/control practices and farm
functions also support capital profitability
acquisition and investment
analysis decisions. For example,
a financial budget forms the
basis for cash flow projections
and loan requests.

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Page 3 VOLUME 1, ISSUE 1


Capital Acquisition


In addition to debt funds, farm
managers can also use lease
agreements to control assets.

With this in mind, we focus on
responsibilities related to ac-
quiring debt capital and leasing.
Generally, the financial manag-
Capital acquisition refers to the er must identify lenders, evalu-
process of raising debt and ate the cost of credit, determine
equity funds. an appropriate capital structure
for the business, and acquire
In agriculture, and particularly necessary capital
for most farms, the options for
raising equity funds are limited
and debt funds are typically
obtained with standard loan
agreements.


Survey Instrument

FREE
The survey instrument asked farmers to OFFER
respond to a variety of questions regarding
business analysis/control, investment
analysis/decision making, and capital
acquisition practices.
Of the 352 questionnaires mailed, 149
were returned. Twelve of the respondents
returned blank questionnaires or indicated



































Organization

Page 4 VOLUME 1, ISSUE 1



Investment Analysis/Decision making

Much of the attention in an They were then asked to identi- For instance, the farmer might
upper-division agricultural fi- fy the investment analysis tech- examine his or her ability to
nance class is often devoted to niques they used to evaluate make loan payments and also
analysis of capital investments. each type of investment. conduct a net present value
analysis.
Capital assets, such as facilities The sample investment analysis
or equipment, require large techniques listed were the pay- Because conducting a net pre-
initial expenditures and gener- back period, projected cash sent value analysis of equip-
ate cash flows for a considera- flow (or ability to make loan ment replacement is somewhat
ble period of time. payments), and a discounted complicated and generally less
cash flow technique such as net critical than a major facility
There are many methods the present value or internal rate of expansion, few producers were
farm manager might use to return expected to use this method of
evaluate such an investment. analysis for an equipment re-
It was expected that more types
Respondents were presented of analyses and more sophisti- placement decision.
with three possible investments:
cated techniques would be used
a major facility expansion of for the facility expansion, which
more than 25%, an equipment represented the largest invest-
replacement, and an increase in ment.
herd size of 10%.























Financial Management Practices and Profitability

Next, we examine the linkage The rate of return on assets was
between the adoption of finan- modeled as a function of the
cial management practices and adoption of several financial
profitability. management variables and a set
of control variables.
This linkage is likely quite com-
plicated. Because the model suffers
from potential endogenous
While efforts were made to regresses, the results should be
select variables that are less interpreted with caution.
likely to be endogenous with
profitability, the potential for
an endogenous relationship is
quite high, and reasonable in-
struments for the financial
management variables are diffi-
cult to obtain.

Conclusion


The results for the capital acquisition and business analysis areas are somewhat less
definitive. Given that there appear to be such strong relationships between

investment analysis and profitability, it seems likely there are positive returns to

the other financial management areas as well. However, with respect to acquiring

capital, it must be recognized that producers are constrained by their
financial resources and creditworthiness. In addition, competitive markets may

result in similar net rates for individual businesses.













References




Brent A. Gloy, E. L. (2003). Financial management practices and farm profitability. Agricultural Finance Review,
157-174.


https://www.emerald.com/insight/content/doi/10.1108/00215060380001147/full/html


































Organization



Information technology and



marketing performance within



international market-entry


alliances








Written by:

Shasha Zhao

Department of International Management and Innovation, Business School,

Middlesex University, London, UK, and

Constantinos-Vasilios Priporas

Department of Marketing, Branding and Tourism,

Business School, Middlesex University, London, UK

INFORMATION TECHNOLOGY AND MARKETING

PERFORMANCE




9 June 2016 IT and Marketing Performance Journal Vol. 34 No. 1




Information technology (IT)-mediated international market-entry alliances.
During the past two decades, Positive marketing perfor-
the international business mance in the host location
sphere has witnessed dra- is considered crucial for
matically increasing growth foreign investor firms due
in cross-border collabora- to the widely recognised
tions in the forms of strate- contrast between the
amount of capital in-
gic alliances, joint ventures, volved and the high rate
and merger and acquisitions of failure. Marketing Performance


Marketing practices and In spite of the risks in- In spite of IT being a neces-
performance in this context volved, cross-border col- sity for today’s business
operations, so far research
have received growing laboration continues to on the role of IT in collabo-
recognition as a key measure grow in popularity. rative entry modes has been
of overall effectiveness of limited and should be given
the collaboration much more recognition.
A major cause of this
trend is globalisation.
Increasing international Limited IT research has
competition requires focussed on the facilitation
firms to seek multiple of cross-border alliances.
channels for market Specifically, it is noted that
growth as heavy reliance IT has contributed to the
on domestic markets establishment and improve-
could no longer be sus- ment of international mar-
tainable ket-entry alliances through
enhancing communication,
information exchange, and
knowledge transfer between
partner firms







Overview of IT in international market-entry alliance and marketing
IT and collaborative entry international business and yond borders, international
modes are two areas of re- strategy fields over a number joint ventures and alliances
search which rarely intersect. of decades. are not the only means of
penetrating global markets;
Specifically, collaborative en- International collaborative however these methods of
try mode is a topic long rooted entry modes are traditionally collaborative market entry are
in international business and known as forms of business often preferred over franchis-
strategy research. whereby a foreign firm intends ing, contracting, or licensing,
to penetrate a host market by
Specifically, our review shows partnering with its indigenous etc.
that topics relating to interna- companies Specifically, international alli-
tional collaborative market ances are widely used as the
entry modes have been exten- Being part of international form of market entry in coun-
sively studied by scholars from trade and doing business be-
tries with high uncertainty or low
experiential knowledge, for exam-
ple, less developed

INFORMATION TECHNOLOGY AND MARKETING

PERFORMANCE




9 June 2016 IT and Marketing Performance Vol. 34 No. 1






In terms of marketing consideration, Fang and Zou (2009) stress the importance of
marketing dynamic capabilities in international joint ventures. They claimed that the
empirical literature on strategy has documented the impact of dynamic capabilities of
firms on their performance, yet literature on the operationalization and conceptualiza-
tion of marketing related dynamic capabilities in the context of international alliances
has been rather limited.
Their data from top managers in China indicates that marketing dynamic capabilities
have a significant impact on the host market performance and competitive advantage
of international joint ventures.



An integrated conceptual framework of IT on marketing performance in

international market-entry alliances



Jean et al. (2008) made an agement information system This is particularly empha-
important assertion about how study by Bhatt and Grover sized by the long unsolved IT
IT contributes to firm perfor- (2005) defined IT capabilities productivity paradox problem.
mance. into IT infrastructure, IT busi-
ness experience, relationship Developed using RBV and
Although it focused on supply infrastructure, and organiza- complemented by TCE, our
chain relationship, their study tional learning which enable proposed conceptual frame-
explicated and reconfirmed IT the creation of competitive work (Figure 1) suggests that
business value in an interna- advantages for firms; while when inter-firm IT capabilities,
tional firm context. Specifical- Bharadwaj (2000) separated which are dynamic and criti-
ly, discussion of applicability IT capabilities into IT infra- cal, are present between for-
of TCE and RBV to IT value structure, human IT resources, eign and local partner firms,
research was provided show- and IT-enabled intangible re- specific inter-firm relational
ing a transition of IS research sources. aspects can be enhanced.
from transaction cost con- Also, we argue that these rela-
cerned to resource-based Clearly, ambiguities and con- tional aspects are important
value creation. fusion in IT value research and inter-firm governance mecha-
theoretical applications re- nisms which IT can facilitate
In particular, their argument main. We agree with Jean et
about the inappropriate out- al. (2008) that conceptualiza- Therefore, it enables the build-
comes about IT and value tion of IT resources and capa- ing of a more efficient inter-
creation in previous research bilities are still inconclusive, firm relationship and therefore
echoes our thoughts and di- leading to development of improved marketing perfor-
rection in this paper. Research different terminologies. mance. Further, IT-enabled
exploring this area is not only governance can help to coun-
limited but ambiguous in con- Furthermore, knowledge gaps teract associated investment
ceptualizing different IT re- remain on how IT resources risks and contextual limita-
source attributes to firm per- and capabilities interact with tions which are potentially
formance. organizational processes to negative.
create value and enhance
For instance, a recent man- performance.



INFORMATION TECHNOLOGY AND MARKETING

PERFORMANCE




9 June 2016 IT and Marketing Performance Vol. 34 No. 1


Additionally, we adapt the
contingency theory perspective
(Donaldson, 2001; Luo and
Bu, 2016) to argue that IT and
inter-firm performance are

likely to be moderated by pro-
cess-based factors.


Figure 1: An integrated
conceptual framework









Contribution and implications for future research

Echoing a recent study by research question.
Jean et al. (2008) on IT-
mediated international supply
chain relationships, our paper
has provided a holistic re-
search framework and a num-
ber of propositions.
RESEARCH QUESTION:


Specifically, we provide a Whether and how inter-firm
more complete and detailed
conceptualization of the im- IT affects international
pact of IT on inter-firm govern- marketing performance in the
ance mechanisms in the spe-
cific context of cross-border way of improving
market-entry alliances.
collaborative relationships?
Our paper therefore contrib-
utes to the international mar-
keting, international business resources, or IT integration,
and strategy, and IS literature. Several conclusions can be
drawn from our conceptualiza-
tion. First, inter-firm IT capabil- alone could not create maxi-
mum value.
ities
Specifically, we reviewed di-
verse views and provided an are not an effort of any one
integrated perspective of RBV firm but the outcome of effec-
and TCE into the framework. tive alliance between partner
We believe this view under- firms.
pins our answer to the follow- Any one set of IT resources,
ing
e.g. IT systems, related human

INFORMATION TECHNOLOGY AND MARKETING

PERFORMANCE




9 June 2016 IT and Marketing Performance Vol. 34 No. 1


Instead, appropriate alignment sary and critical for foreign
among the three partner firms.
brings IT capabilities, which are
dynamic and idiosyncratic to the Lastly, the establishment of inter-
specific alliance. firm IT capabilities is further em-
phasised as they help firms to
Second, IT capabilities do not nec- counteract associated risks and
essarily have a direct effect on in- contextual limitations.
ternational marketing performance;
instead, it is most effective in en- Subsequently, our proposed
hancing the inter-firm relationship framework and propositions de-
which subsequently leads to posi- veloped in this paper open up
tive performance. several avenues for
future empirical research.
Third, the marketing performance
implications of IT in the context of
cross-border alliances is an im-
portant managerial consideration
and therefore successful implemen-
tation of IT is particularly neces-




Conclusion

Consequently, a number of discussed in our paper, ena- also to reveal any potential
research directions can be ble researchers to empirically gaps or conflicts between
pursued to enhance current test against each form of col- foreign and local partners so
knowledge and understanding laboration. to further enhance perfor-
of IT value in international mance.
market-entry alliances. A third possibility is to conduct
longitudinal study of the ef-
One of them is empirical test- fects of IT in the processes of
ing of the propositions and the international alliances, though
related framework in future the procedure involved is like-
studies. ly to be cumbersome.

Another direction may be to However, it would shed light
specifically examine other on the “IT productivity para-
types of international collabo- dox”.
rations, such as joint venture,
mergers, and acquisition to Future research can also take
identify any potentially differ- the direction of exploring the
ences in terms of IT value. view of host market partner
firms and comparing it against
The availability of IT capability, foreign partners to not only
governance, and marketing identify the value of the IT
performance measures, as from a new perspective, but

References:





References (Shasha Zhao, 2016)

Shasha Zhao, C.-V. P. (2016). Information technology and marketing performance
within international market-entry alliances. IT and marketing performance,
5-28.



Personnel Management:





A Framework for





Analysis








Written by:



John Henstridge

VOL. 4 NO. 1
Personnel Management:

A Framework for Analysis
1 JANUARY 1975






Personnel Review Journal










Personnel Management

The paper suggests that eral books on Personnel accepted, and these are
Special points of interest: traditional descriptive ap- Management and also in distilled and offered as a
 Personnel Management proaches to Personnel texts on particular tech- consensus view and defini-
Management do not suc- niques. Some writers ap- tion of Personnel Manage-
 Emergence of Personnel cessfully answer the ques- proach Personnel Manage- ment.
management tion 'what is Personnel ment from a particular per- The other main approach is
spective, such as the histor-
Management?', nor do they
explain the way in which it ical or contextual. One can, the attempt to treat the Per-
 Element in emergence of actually exists in work or- however, identify two main sonnel Management func-
personnel management ganizations. approaches to Personnel tion as a system within the
Management. work organization, with all
 Function of personnel A framework for analysis the implications of a logi-
is proposed, looking at cally constructed, interre-
management work organizations from lated set of procedures of a
the perspective of the Per-
permanent or semi-
sonnel Manager; it is sug- permanent nature.
gested that this framework
may help to answer some The implication of most of
of these questions, provide the literature is that there is
a means of exploring the only one kind of Personnel
phenomenon of Personnel Management, and that it is
Management and also of
studying it as a subject and
a meeting point of disci-
plines. The one, adopted by most
writers since Moxon in
Exhaustive descriptions of 1943, is a 'listing' ap-
the procedures and tech- proach; that is lists are
niques employed by prac- made of practices com-
tising Personnel Managers; monly found in Personnel
these appear both in gen- Management and generally







The Emergence of Personnel Management

The emergence and growth pressures for change, eg recent years, a considerable
of Personnel Management from Trade Unions, interest increase in government
as a specialist function in groups, governments etc; legislation in the employ-
work organizations can be the development and appli- ment field.
attributed to a variety of cation of the social scienc-
factors —the growth in size es, allied to the fact that
and sophistication of work people rather than machin-
organizations; changing ery have become the
values in society and most valuable asset of most
the related demands and work organizations and, in

Page 2





Personnel Review

It is worth noting, in the use of more and more ment
passing, that the emergence machinery may require a officers (the title varies
of mechanic to service the considerably) to look after
Personnel Management in machines, records,
the USA is remarkably leaving the operatives free wages, etc. They were also
similar to merely to operate them. involved in 'screening' new

that in Great Britain[7].The This is employees and, increasing-
sheer number of employees in fact an apt parallel, for ly, in solving and settling
in the growing firm during the Victorian entrepreneur industrial
the early years of this cen- regarded his labour largely disputes[9]'.
tury led to the need for in economic and mechani-
owners cal
and managers to appoint terms merely as a 'factor of
someone who could take production', a 'breathing
care of machine'[8]. So men pro-
wages, records, employ- moted from the shop floor,
ment etc in much the same or
way as clerks, were employed as
increasing production with labour officers or employ-




“Human resources
Isn’t a thing we do. Element in emergence of personnel management
It’s the thing that The first element in the The second aspect is a The normal approaches to
the study of Personnel
marked growth in profes-
emergence of Personnel
Runs our business” Management is a devolu- sionalism and Management
tion of the owner's or man- professionalization — best fail to provide explana-
exemplified by the raising
tions, and in order to
ager's responsibility and
- Steve Wynn- need to recruit and pay the of the standards of the In- Understand the role of Per-
workers to do the tasks of stitute of Personnel Man- sonnel Management, we
the organization. The rea- agement's graduate exami- need to undertake an analy-
son for this devolution is to nations. This aspect of sis of the function, and the
do with the size of the growth is undoubtedly one way it fits into the work
work organization, and not of the factors which ac- organization.
with management's values. count for the other, and is
an interesting phenomenon
in itself.

VOLUME 1, ISSUE 1 Page 3





The Function of Personnel Management

In the simplest possible This function, which de- to the best advantage.
terms the people in a work rives from the devolution
organization may be re- of aspects of management,
garded as one of the can be described by a sim-
economist's 'factors of pro- ple model (Figure 1).
duction' (along with capi-
tal, land, etc). Management defines what
tasks the organization is to
Taking this simplistic view, undertake.
one might say that the
function of Personnel Man- These tasks are then
agement is to ensure that grouped together, or
the human 'factor of pro- divided into, jobs.
duction' is available in the
right quantity, at the right The function of Personnel
place and time, in order to Management is to recruit
fulfil management's suitable people to do these
objectives. jobs, and to see that
they are paid and deployed




“YOU CANNOT PUSHANYONE
UP THE LADDER UNLESS HE IS
WILLING TO CLIMB”

-ANDREW CARNEGIE-


Figure 1


















If Personnel Management Administration' or simply 'Establishments' function
were limited to the scope 'Administration' (it should of the Figure 2 type in the
represented in Figure 2, be remembered that in in- Public Services.
then it would be a compar- dustry, as compared with
atively simple and mechan- the Public Services, admin-
ical matter, depending up- istration is often regarded
on the operation of as a very inferior
straightforward procedures. undertaking).

In some work organiza- There is also in large bu-
tions, this is in fact what reaucracies, by their
Personnel Management very nature, a strong incli-
looks like; in this nation towards clear cut
case it is more likely to be rules and procedures -
referred to as 'Personnel hence the traditional

Page 4





































“RECRUIT FOR ATTITUDE
AND TRAIN FOR SKILL”
However, there is no doubt work . . . ' ; 'we had to
that it is almost impossible
think of something to deal
-ATUL GAWANDE- to operate a purely me- with t h a t . . . ' ; 'we do it
chanical system of Person- this way here because ...';
nel Management in work 'we had trouble with the
organizations. When we unions, so . . . ' . A
turn to the actual experi- multiplicity of factors af-
ence of Personnel Manag- fects the Personnel Manag-
ers, we find a whole range er both in the creation
of reasons why procedures of policy and in the day to
and policies have been day work in which he
initiated, altered, adjusted, engages.
dropped, made more flexi-
ble.
'We tried this, but it didn't








Neither the 'listing' ap- his particular patch; even
proach — the given, com- the 'outstation' Personnel
prehensive, Officer who administers an
package — nor the imposed central personnel
'systems' approach explains policy finds himself
his experience in the real adapting procedures,
life situation. smoothing the way with
pitying remarks about the
Every Personnel Manager ivory tower nature of head-
finds himself 'forced', quarters personnel manage-
'pressured' into developing ment.
a unique, contingent ap-
proach to the problems of

VOLUME 1, ISSUE 1 Page 5





Factors affect Personnel Management

The factors which affect Such an analysis will ena- Occupational Psychology).
the Personnel Manager so ble us to study
fundamentally in policy Personnel Management as
and practice consist of a a phenomenon — to an-
complex web of influences swer the 'why' questions;
and pressures on the why Personnel Manage-
behaviour and relationships ment has grown, why it
of individuals and groups undertakes the functions it
of people. These influences does, why the personnel
and pressures affect the set-up is unique in each
functioning of work organ- organization, why
izations in many ways and personnel policies are
at all levels. sometimes disastrous.

The analysis of this It will also help us to study
'complex web' is funda- Personnel Management as
mental to an explanation of a subject and a meeting
the function and purpose of point of various disciplines,
Personnel Management. (eg Industrial Sociology,




“Unleash the potential that
is in another and you
Countless social scientists
have studied aspects of the unleash the potential that is
complex web of factors in you”
influencing behaviour in
work organizations, usually
from a particular perspec- -Matshona Dhliwayo-
tive eg human relations,
organization theory. Few,
if any, have made such a
study from the perspective
of the Personnel Manager,
indeed Personnel Manage-
ment tends to be one of
the 'Baddies' in the case
study scene.

Summary



The role of the Personnel aspect of the role in rela-
Manager is seen as being tion to the conflicts implicit primary attention to surface
contingent upon the state of in the framework. factors, which is character-
the factors in our frame- ized in the prescriptive but
work. Integration into the organi- inadequate approach of
The requirement for atten- zation could be achieved human relations and organ-
tion to the factors in vary- through viewing Personnel izational psychology.
ing depths and timescales Management as an exten-
gives rise to some internal sion of the skills of groups It becomes apparent that
differentiation of function, and individuals. the perceptions of the fac-
which in turn requires pow- tors in the framework by
erful integration of the This view implies a consid- the Personnel Manager
Personnel Management erable range and depth of play an important part in
group. skills, not always apparent determining Personnel
This becomes important in Personnel Managers, Management policies and
because of the synthesizing who have tended to give procedures.

Organization




Personnel Review Journal

























WE’RE ON THE WEB!
EXAMPLE.COM













References


Henstridge, J. (1975). Personnel Management: A Framework for Analysis. Personnel
Review, 47-53.


https://www.emerald.com/insight/content/doi/10.1108/eb055275/full/html



Hybrid production system:



perspectives in supply



chain



risk management




Written by:

Diego

Aparecido Wolfshorndl, Mauro Vivaldi

ni, João Batista de Camargo Junior

Vol. 26 No. 3 15 July 2019
Hybrid production system:




perspectives in supply chain risk



management





H Y B R I D P R O D U C T I O N S Y S T E M J O U R N A L

S P E C I A L
P O I N T S O F
I N T E R E S T : P r o d u c t i o n
 Production The management of suppli- such as natural calamities, is, make-to-order (MTO)
er companies as part of the terrorist attacks and labor and make-to-stock2016), a
 Risk manage- same customer’s business, strikes and the latter caused key point in the planning of
ment in SC
coordinated and aligned to by high uncertainty and lack hybrid
 Risk affecting SC make products more com- of coordination between production systems is to
petitive, to improve the ser- supply and demand define what should be met
 Hybrid produc- vice for stock and what is in-
tion systems provided and to increase the tended for the
(MTS–MTO) customer’s loyalty, is a con- orders. These same authors
solidated concept as compe- state that this type of plan-
 Advantages & tition ning is a challenge because
Disadvantages no longer occurs only be- the
tween competing compa- decisions being made re-
nies, but between supply garding MTO and MTS
chains (SC). systems are different.
On the other hand, the mag- Furthermore, these
nitude generated by such decisions may affect suppli-
management makes opera- ers, customers and other
tions supplier chain members.
more vulnerable to the ex-
ternal environment, thus
exposing the organization to The possibility of opera-
a greater tional risks can be manifest-
number of risks ed in the so-called hybrid
The SC risk can be catego- production
rized as rupture and opera- systems, in which produc-
tional ones, with the former tion is focused to meet con-
being firmed orders and stock
related to circumstances formation, that






R i s k m a n a g e m e n t i n s u p p l y
c h a i n
Uncertain environments frequent introduction of tration, global supply, focus
lead to a high risk in SC, new items and low stand- on cost and
and the more complex the ardization of products and lack of coordination among
chain, the services are the main driv- partners.
ers of SC complexity. The
higher the risk. Constant
changes in product supply argument is that the SC’s
and manufacturing require- susceptibility to risk is
ments, increased by supplier de-
pendence, supplier concen-

P a g e 2 H y b r i d p r o d u c t i o n








The production process SC. Another important as-
management involves the pect directly
organization’s ability to per- linked to these activities is
form and
the chain’s ability to with-
coordinate various tasks stand turbulence, interrup-
related to operational activi- tions and
ties (e.g. logistics and opera- unforeseen events.
tion

planning) linked directly to
the organizational
knowledge (the so-called
skills routines) and

used to respond to unpre-
dictable events affecting the






R i s k a f f e c t i n g s u p p l y c h a i n
“To catch the Rezapour et al. (2018) in the performance of an organizational robustness

reader's broaden this discussion on installation, which reduces and resilience are aimed to
resilience by stating that SC the efficiency of the supply mitigate disruptions at a
attention, place performance network flow strategic level,

an interesting is affected by two types of aimed to meet the demands. whereas reliability is aimed
risk: risk of disruptions, But the mitigations of strate- to mitigate the variations at
sentence or quote which distort and affect the gic and operational risks to an operational level.
from the story supply neutralize
network by inactivating cer- the impacts of ruptures and
here.” tain production facilities or variations, respectively, are
transport routes, and risk of correlated. Within this con-
variations text,







I n s i d e S t o r y H e a d l i n e
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V o l . 2 6 N o . 3 P a g e 3



Reflecting the previously mentioned
concepts, SCRM can be understood
as being the
identification and management of SC
risks through a coordinated action
among chain
members to reduce vulnerability.
Several risk management structures
were proposed by
using different terminologies. Howev-
er, there is a consensus that SCRM
involves five

sequential stages, namely: risk iden-
tification, evaluation, analysis, treat-
ment and Monitoring


“Productivity is

Sreedevi and Saranga (2017) combining supply resources the company’s ability to con- never an accident.
point out that timely mitiga- with a company’s operating trol production resources and It is always the
tion of the adverse effects of environment in order to keep to manage uncertainty in
up order result of a
uncertainty is crucial for an
effective SC operation. For with the changing business to meet the customer’s commitment to
these authors, companies requirements. In this context, needs. excellence,
should they include chain flexibility intelligent
as
consider investing in the SC planning, and
agility and responsiveness in one of the main levers to
order to quickly respond to reduce such risks, especially focused effort”
in the industry. In the
market fluctuations and man- -Paul J. Meyer
age the risk of disruption. manufacturing process, one
They also report the im- of the most important compo-
portance of nents of SC flexibility is







H y b r i d p r o d u c t i o n
s y s t e m s ( M T S – M T O )
Several strategies have been MTO systems
proposed to solve the prob-
lems that permeate hybrid
systems,
such as focused, spackling
and layered-spackling strate-
gies
The hybrid system is classi-
fied as a productive system,
which corresponds to the
junction between MTS and

P a g e 4 H y b r i d p r o d u c t i o n



A d v a n t a g e s & d i s a d v a n t a g e s

F o r t h e p r o d u c e r

the MTS system’s main ad- costs to maintain raw mate-
vantage is the greater po- rial and finished product
tential for stocks,

standardization and ration- which demands much more
alization of production pro- working capital.
grams and production
processes, with a further
reduction of costs and pro-
duction cycles. However, in

this system there is no cer-
tainty about the actual de-
mand in terms of mix and
volume, including higher





F o r t h e c u s t o m e r
“To catch the the MTS system’s advantage

reader's is linked to the availability of
attention, place delivery, lower price and
standardization of the prod-
an interesting uct. It should be noted that
this
sentence or quote
latter advantage can also be
from the story interpreted as a disad-
vantage since the customer
here.” needs

to adapt to the standardized
product.






I n t h e M T O s y s t e m
The producer is assured difficulties to standardize of
about the demand and will and rationalize programs personalizing the product
produce and production, thus in- being requested, which
creasing
based on incoming orders, brings disadvantages such
thus leading to a greater the costs of the products in as
rationalization of working the process inventory and longer waiting time and
capital making it difficult to reduce
higher prices.
through advance payments production costs and cycles.
of products. However, in this The MTO system’s main
system the producer faces advantage is the possibility

V o l . 2 6 N o . 3 P a g e 5





T h e a u t o m a k e r

The focus company for this study is a of 160,000 vehicles for the Brazilian order. If there is no stock available, a
vehicle automaker which adopts a market and product order is entered in the pro-
hybrid duction planning and sequenced for
some countries of South America.
MTS–MTO production system for All sales made from dealers and final production. This order has produc-
production planning. This form of consumers are informed to the au- tion priority regarding vehicles
production is destined to fulfill the stock, which is
tomaker so that
supported by an APS system devel- these data can be used for the de- based on the demand planning. The
oped by the company’s own IT area. mand planning. When a dealer does same is true for
The company is confirmed export orders.
not have a given model
located in the State of São Paulo and of vehicle in its stock, then a request
has a network of local and interna- is sent to the company’s sales portal
tional suppliers,
to generate a sales
with an estimated annual production



“when you
S u m m a r y
It should be brought to atten- risk of possible biases or instance, the study might be know better
tion that the use of case trends. Moreover, although expanded to other companies
study method is one of the the data obtained are reason- that adopt or even may adopt You do
limitations of able for a
better”
our work. The other limitation statistical analysis as they hybrid production system.
is related to the data ob- provide correlations accord- This would provide a more -Mara
tained as they were restricted ing to the method adopted, complete picture and better
to a single they are point out Angelow
area of the company and to a limited. However, the present the trends by means of fur-
small group. Despite the care study provides insights for ther analysis. Studies might
taken by the authors, there future research on this also explore functional risks
was a theme. For arising











from the management itself, how organizations strive to
or risks restricted to SCRM, control risks unnecessarily
including their relevance. The might also be studied.

suggestion is that open stud-
ies investigating the organiza-
tion as a whole or even func-
tional
areas on a restrictive basis
should be conducted, as in
the present case study. Final-
ly, the way

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Organization














H Y B R I D P R O D U C T I O N S Y S T E M



























R e f e r e n c e s
Diego Aparecido Wolfshorndl, M. V. (2019). Hybrid production system: perspectives in supply chain risk man-
agement. Hybrid Production System, 313-334.

https://www.emerald.com/insight/content/doi/10.1108/REGE-01-2019-0005/full/html