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Role of operations, objectives of operations
 

Role of operations, objectives of operations

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Role of operations, objectives of operations Role of operations, objectives of operations Presentation Transcript

  • Chapter 2The strategic role and objectivesof operations Source: Honda Motor Company Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What is the role of the Operations function? Operations as Operations strategy Operations supports implementer as driver Operations Operations Strategy Strategy Operations supporter as Strategy Operations Operations Operations implements strategy drives strategy Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • The strategic role of the Operations functionThe 3 key attributes Operations contribution of Operations Implementing Be dependable Operationalize strategy Explain practicalities Supporting Be appropriate Understand strategy Contribute to decisions Driving Be innovative Provide foundation of strategy Develop long-term capabilities Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • The four-stage model of Operations contribution ons ti Redefining industry STAGE 4 era expectations Give an p operations of o advantageIncreasing strategic impact tion STAGE 3 Clearly the best in Link strategy ing ribu with operations riv egy D at the industry str ont c STAGE 2 ng rt i y ng As good as the Adopt best o pp t eg si competitors practice Su tra rea Inc s g STAGE 1 t in Holding the Correct the en m gy organization back worst ple te Im stra problems Internally Externally Internally Externally neutral neutral supportive supportive Increasing operations capabilities Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • Broad strategic objectives for an operation applied to stakeholder groups Society Increase employment Enhance community well-being Produce sustainable products Ensure clean environment Suppliers CustomersContinue business Appropriate product orDevelop supplier service specification capability Consistent qualityProvide transparent Fast delivery information Dependable delivery Acceptable price Shareholders Employees Economic value from Continuous employment investment Fair pay Ethical value from Good working conditions investment Personal development Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • The Operations function can provide a competitive advantagethrough its performance at the five competitive objectives Quality Being RIGHT Speed Being FAST Competitiveness Dependability Being ON TIME Flexibility Being ABLE TO CHANGE Cost Being PRODUCTIVE Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What do the terms quality, speed, dependability, flexibility and cost mean in the context of operations? Which enables you to do things cheaply (cost advantage)? Which enables you to change what you do (flexibility advantage)? Which enables you to do things quickly (speed advantage)? Which enables you to do things on time (dependability advantage)? Which enables you to do things right (quality advantage)? Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • The benefits of excelling Minimum price, highest value Cost Quick Dependabledelivery delivery Minimum cost, Speed maximum value Dependability Fast Reliable throughput operation Error-free Ability to processes change Quality Flexibility Error-free Frequent newproducts and products, maximum services choice Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Quality mean in …… a hospital? Patients receive the most appropriate treatment Treatment is carried out in the correct manner Patients are consulted and kept informed Staff are courteous, friendly and helpful Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Quality mean in …… an automobile plant? All assembly is to specification Product is reliable All parts are made to specification The product is attractive and blemish-free Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Quality mean in …… a bus company? The buses are clean and tidy The buses are quiet and fume-free The timetable is accurate and user-friendly Staff are courteous, friendly and helpful Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Quality mean in …… a supermarket? The store is clean and tidy Décor is appropriate and attractive Goods are in good condition Staff are courteous, friendly and helpful Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • Quality ‘Quality’ has several meanings. The two most common are …Quality as the specification ofa product or service e.g. Lower Hurst Farm produces organic meat raised exclusively on its own farmQuality as the conformancewith which the product orservice is produced e.g. Quick-service restaurants like McDonald’s may buy less expensive meat, but its conformance must be high Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • QualityIrrespective of a product or service’s specification quality, producing it soit conforms to its specification consistently brings benefits to any operationExternally – it enhances the product or service in the market, or at leastavoids customer complaintsInternally – it brings other benefits to the operation: It prevents errors slowing down throughput speed It prevents errors causing internal unreliability and low dependability It prevents errors causing wasted time and effort, therefore saving cost Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • QualityExternal andinternal benefits Cost Speed Depend- ability Quality Flexibility On-specification products and services Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Speed mean in …… a hospital? The time between requiring treatment and receiving treatment is kept to a minimum The time for test results, X-rays, etc. to be returned is kept to a minimum Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Speed mean in …… an automobile plant? The time between dealers requesting a vehicle of a particular specification and receiving it is minimized The time to deliver spares to service centres is minimized Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Speed mean in …… a bus company? The time between a customer setting out on the journey and reaching his or her destination is kept to a minimum Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Speed mean in …… a supermarket? The time for the total transaction of going to the supermarket, making the purchases and returning is minimized Goods are immediately available Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • SpeedSpeed again has different interpretations, externally and internallyExternally – it means the elapsed time between a customer asking for aproduct or service and getting it (in a satisfactory condition)It often enhances the value of the product or service to customersInternally – it brings other benefits to the operation: It helps to overcome internal problems by maintaining dependability It reduces the need to manage transformed resources as they pass through the operation, therefore saving cost Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • SpeedExternal andinternal benefits CostShort deliverylead-time Speed Depend- ability Quality Flexibility On-specification products and services Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Dependability mean in …… a hospital? The proportion of appointments that are cancelled is kept to a minimum Keeping appointment times Test results, X-rays, etc. are returned as promised Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Dependability mean in …… an automobile plant? On-time delivery of vehicles to dealers On-time delivery of spares to service centres Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Dependability mean in …… a bus company? Keeping to the published timetable at all points on the route Constant availability of seats for passengers Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Dependability mean in …… a supermarket? Predictable opening hours Proportion of goods out of stock kept to a minimum Keeping to reasonable queuing times Constant availability of parking Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • DependabilityExternally – it enhances the product or service in the market, or at leastavoids customer complaintsInternally – it brings other benefits to the operation: It prevents late delivery slowing down throughput speed It prevents lateness causing disruption and wasted time and effort, therefore saving cost Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • DependabilityExternal andinternal benefits CostShort delivery Reliablelead-time delivery Speed Depend- ability Quality Flexibility On-specification products and services Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • FlexibilityFlexibility has several distinct meanings but is always associated with anoperation’s ability to changeChange what ?The products and services it brings to the market – Product/serviceflexibilityThe mix of products and services it produces at any one time – MixflexibilityThe volume of products and services it produces – Volume flexibilityThe delivery time of its products and services – Delivery flexibility Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Flexibility mean in …… a hospital? Introducing new treatments Providing a wide range of treatments The ability to adjust the number of patients treated The ability to reschedule appointments Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Flexibility mean in …… an automobile plant? The introduction of new models A wide range of options The ability to adjust the number of vehicles manufactured The ability to reschedule manufacturing priorities Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Flexibility mean in …… a bus company? The introduction of new routes and excursions A large number of locations served The ability to adjust the frequency of services The ability to reschedule trips Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Flexibility mean in …… a supermarket? The introduction of new lines A wide range of goods stocked The ability to adjust the number of customers served The ability to get out-of-stock items Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • FlexibilityExternal andinternal benefits CostShort delivery Reliablelead-time delivery Speed Depend- ability Quality Flexibility Frequent new products/services On-specification Wide range products and Volume and delivery services changes Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Cost mean in …… a hospital? TechnologyBought-in and facilitiesmaterials costsandservices Staff costs Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Cost mean in …… an automobile plant?Bought-in Technologymaterials and facilitiesand costsservices Staff costs Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Cost mean in … … a bus company?Bought-inmaterials Technologyand and facilitiesservices costs Staff costs Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • What does Cost mean in …… a supermarket? TechnologyBought-in and facilitiesmaterials costsandservices Staff costs Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • CostThe cost of producing products and services is obviouslyinfluenced by many factors such as input costs, but twoimportant sets are … The 4 V’s: volume variety variation visibility The internal performance of the operation in terms of quality speed dependability flexibility Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • CostExternal and Low price, highinternal benefits margin, or both CostShort delivery Reliablelead-time delivery Speed Depend- ability Quality Flexibility Frequent new products/services On-specification Wide range products and Volume and delivery services changes Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • Polar diagramsPolar diagrams are used to indicate the relativeimportance of each performance objective to anoperation or processThey can also be used to indicate the differencebetween different products and services produced by anoperation or process Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • Polar diagrams for a taxi service versus a bus service Taxi Bus service service Cost Speed Dependability Quality Flexibility Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • Polar diagrams for a proposed police performance methodRequired performance Actual performance Reassurance Efficiency Crime reduction Crime Working with detection criminal justice agencies Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • Polar diagrams for newspaper collection and general recycling services General recycling Newspaper collection service service Cost Speed Dependability Quality Flexibility Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • Key Terms TestThe four-stage model of operations contributionA model devised by Hayes and Wheelwright that categorizes the degree to which operations management has a positive influence on overall strategy.QualityThere are many different approaches to defining this. We define it as consistent conformance to customers’ expectations.SpeedThe elapsed time between customers requesting products or services and receiving them. Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • Key Terms TestDependabilityDelivering, or making available, products or services when they were promised to the customer.FlexibilityThe degree to which an operation’s process can change what it does, how it is doing it, or when it is doing it.Product/service flexibilityThe operation’s ability to introduce new or modified products and services. Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • Key Terms TestMix flexibilityThe operation’s ability to produce a wide range of products and services.Volume flexibilityThe operation’s ability to change its level of output or activity to produce different quantities or volumes of products and services over time.Delivery flexibilityThe operation’s ability to change the timing of the delivery of its services or products. Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
  • Key Terms TestMass customizationThe ability to produce products or services in high volume, yet vary their specification to the needs of individual customers or types of customer.AgilityThe ability of an operation to respond quickly and at low cost as market requirements change.ProductivityThe ratio of what is produced by an operation or process to what is required to produce it, that is, the output from the operation divided by the input to the operation. Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007