Operations Management Lesson 7 (Chap 10 + 15)

planning

deciding what needs to be done, how and when — before the action takes place

control

process of monitoring and evaluating the actual performance to ensure everything is going according to the plan

high variety, low volume operations

require short-term, detailed planning

• services are customized; work starts only after customer input

• control is job-specific; small delays can impact the whole project

• robust operation — delays in one task don’t halt everything

low variety, high volume operations

allow for long-term, routine planning

• demand is predictable; production is continuous and standardized

• control focuses on volume, not timing

• low robustness - failure in one area can cause major disruption

long-term planning

• focus is on planning, not control

• based on forecasted, aggregated demand

• sets broad objectives like volume and financial targets

medium-term planning

• more detailed; demand is partially disaggregated

• staff roles and levels are defined

• contingencies are planned to handle variability

short-term planning and control

• most resources are already allocated

• demand is fully disaggregated (e.g., named patients, scheduled surgeries)

• managers make real-time decisions to balance performance objectives like speed, cost and quality

planning and control activities include

loading, sequencing, schedule, and monitoring and control

loading

the amount of work that’s allocated to a work center. for any given level of demand, a planning and control system should be able to indicate the implications for the loading on any part of the operation

finite loading

only allocates work to a work cetner up to a set limit. relevant for operations where

• possible to limit the load

• necessary to limit the load

• cost of limiting the load isn’t prohibitive

infinite loading

doesn’t limit accepting work, but instead tries to cope with it. relevant for operations where

• isn’t possible to limit the load

• isn’t necessary to limit the load

• cost of limiting the load is prohibitive

sequencing

take decisions on the order in which the work will be tackled

• physical constraints

• customer prioirty

• due date

• LIFO

• FIFO

• longest operation time (LOT): sequence longest jobs first

• shortest operation time (SOT): sequence shortest jobs first

scheduling

detailed timetable showing at what time or date jobs should start and when they should end

• forward scheduling (starting work as soon as it arrives)

• backward scheduling (starting jobs at the last possible moment to prevent them from being late)

staff rostering

make sure that sufficient numbers of people are working at any point in time to provide a capacity appropriate for the level of demand at that point in time

theory of constraints

identifying constraints within the system and iteratively finding bottleneck

key assumption of TOC is that organizations can be measured and controlled by variation on three measures

• throughput

• operational expense

• inventory

monitoring and control

a planning and control system should be able to detect deviations from plans within a timescale that allows an appropriate response

push system of control

items are moved onto the next stage as soon as they have been processed

pull system of control

items are moved only when the next stage wants themto minimize excess inventory and improve efficiency

constraint

anything that prevents the system from achieving its goal

• internal to the system when market demand exceeds what system can deliver

• external to the system when system can produce more than market demand

drum, buffer, rope

helps to decide exactly where in a process control should occur

drum - setting the rhythm of the operation

the ‘drum’ is the constraint. the speed at which the constraint runs sets the ‘beat’ for the process and determines total throughput

buffer - mitigating demand

• constraint buffer: immediately before the constraint; protects the constraint

  • customer buffer: at the very end of the process; protects the shipping schedule

rope - pulling inventory

signal generated by the constraint indicating that some amount of inventory has been used —> maintain throughput without creating an accumulation of excess inventory

dependent vs independent demand

dependent demand is derived from the demand for something else; independent demand is more random

root cause analysis (RCA)

• what happened

• how it happened

• why it happened

5 Whys method

asking why 5 times

five focusing steps (based on theory of constraints to eliminate bottlenecks)

identify

exploit

subordinate

elevate

repeat

organizational ambidexterity

the ability to both exploit existing capabilities and explore new ones as they seek to improve

4 aspects of improvement

• approaches

• elements

• techniques

• managing improvement

approaches to improvement

• total quality management

• lean: no waste

• business process engineering

• six sigma