Operations Management

What does operations management use?

resources to appropriately create outputs that fulfil defined market requirements

What is operations management?

The activity of managing the resources which are devoted to the production and delivery of products and services

The people who are responsible for managing some or all resources that comprise the operations function

Who are operations managers?

Inputs are used to transform something or themselves into outputs of services and products.

What is the transformation process model?

Resources that are treated transformed or converted in the process to produce goods or services

What are transformed resources?

What are the 4 types of operations and processes?

Volume

Variety

Variation in demand

Visibility

Can you describe what it’s like to have low volume?

The product or service is tailored to customer needs. Low repetition, each staff member performs more of each task, less systemisation and high unit costs.

Describe having a high volume?

High repeatability, specialisation, capital intensive and low unit costs

What are some examples of low volume operations?

 Food chains and car manufacturing assembly lines

Explain operations that offer a low variety of products/services.

Offers a limited range of products, focuses on efficiency and standardisation, predictability and has routine tasks

Explain operations that offer a high variety of products/services.

Allows customisation and differentiation. Flexible, matches customer needs and has high unit costs.

Explain operations that have low variation in demand.

Demand is stable and there are low unit costs. It is easier to plan capacity, workforce and inventory.

Explain operations that have high variation in demand.

Changing capacity,anticipation, flexibility, in touch with demand, high unit costs.

What are examples of operations with high variation in demand?

Hotels

Ski resorts

Hospitals

Explain low visibility within an organisation.

Customers have little or no direct contact with the production process. They only see the output

Explain high visibility within an organisation.

Customers are directly involved. Satisfaction is governed by customer perception and there are high unit costs.

Examples of high-visibility operations.

Restaurants- customers expect quick service

Call centers- Customers hang up if waiting for too long

Retail checkouts- long lines reduce customer satisfaction

What are the key features of high visibility operations?

• Customers experience the process in real time

• Customer satisfaction depends on both service quality and interaction quality

• Operations must handle short waiting tolerance

What are the key features of low visibility operations?

• Customers don’t see how the work is done so efficiency and consistency matter the most

• Easier to standardise processes and focus on cost reduction

• Lower pressure from customers during the process itself

What are the key features of low variety operations?

• Processes are routine, repetitive and standardised

• Easier to forecast demand and plan resources

• Operations achieve efficiency and lower costs

• Limited ability to customise for individual customers

What are the key features of high variety operations?

• Processes must be flexible and adaptable

• More complex scheduling, planning and inventory management

• Unit costs are higher (less repetition, smaller batch sizes)

• Greater opportunities for customisation and differentiation

What are the examples of transformed resources?

Materials

Information

Customers

What are transforming resources?

The resources that convert the transformed resources into outputs

What is the operations function?

The part of an organisation responsible for producing the goods or providing the services a company sells in its markets.

Explain why it is important when a product is designed how choices made shape it?

Choices made at the stage of design shape how it is produced and in turn the design of the production process influences what is feasible in the product or service itself.

Should the design of products/services and the design of processes be interrelated and treated together?

Yes

What are project processes?

• One-off, complex, large scale, high work content ‘products’

• high variety

• Defined start and finish : time, quality and cost objectives

• Many different skills have to be coordinated

What is a jobbing process?

• products are made in small quantities often as one-off items or in very low volumes

• they are tailored to meet specific customer requirements. 

What are some examples of jobbing processes?

• Custom furniture

• producing specialist machinery

• tailoring clothing

In jobbing processes the focus is on what?

Customisation and quality rather than speed or low cost.

What is a batch process?

• Higher volumes and lower variety than for jobbing

What is an example of a batch process?

A bakery might bake 200 loaves of bread in one batch, then clean and adjust equipment to bake 100 cakes in the next batch.

Explain a mass (line) process?

A type of production method where standardised products are made in very large volumes but with a low variety.

What are some examples of mass production processes?

• Car assembly lines

• electronics manufacturing

Explain a continuous process.

• Extremely high volume and low variety where production is never stopped

• High volume allows them to reduce production costs which reduces the cost of the goods

What are the manufacturing process types?

• Project

• Jobbing

• Batch

• Mass

• Continuous

What is professional service?

• High levels of customer contact

• Clients spend a considerable time in the service process

• High levels of customisation with service processes being highly adaptable.

• People-based rather than equipment-based

What are service shops?

Medium levels of volumes of customers, customer contact, customisation and staff discretion

What are mass services?

High levels of volumes of customers and low to medium levels of customer contact, customisation and staff discretion.

e.g. supermarkets and theme parks

What are the five performance objectives ?

• Quality

• Speed

• Dependability

• Flexibility

• Cost

What are the two important things you must remember for manufacturing businesses?

1. Volume

2. Variety

What happens to variety when we have a high volume and vice versa?

High volume- low variety

High variety- low volume

What are the 3 service process types?

1. Professional service

2. Service shop

3. Mass service

What is process mapping?

• Understanding the journey of those goods and services

• What can be done to improve that (reflecting upon the five performance objectives)

What are the seven types of waste that exist?

1. Transportation

2. Inventory

3. Motion

4. Waiting

5. Overproduction

6. Overprocessing

7. Defects

What are the 3 ways of categorising waste?

1. Value add (VA) activities

2. Non-value add (NVA) activities

3. Necessary NVA (NNVA) activities

What are value add activities (waste)?

• Anything a customer is willing to pay for

• Must be done right, the first time

• Must change the product or service

What are non value add activities (waste)?

• Costs money but does not add value

• Something a customer is not willing to pay

What are necessary NVA activities (waste)?

• Essential for us to pay

What are the primary examinations of each activity?

1. Purpose- What is achieved

2. Place- Where is it done

3. Sequence- When is it done

4. Person - Who does it

5. Means- How is it done

What are the secondary examinations of each activity?

1. Purpose- What else could/should be done

2. Place- Where else could/should it be done

3. Sequence - When else could/should it be done

4. Person - Who else could/should do it

5. Means - How else could/should it be done

What are the ways in which operations differ?

• The volume of their output

• The variety of their output

• The variation in demand of their output

• The degree of visibility which customers have of the production of the product or service