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Operation Management chapter 1
- 1. Chapter 1 BBT2435|TOUR OPERATION MANAGEMENT Prepared by KAMELIA CHAICHI
- 2. Learning objectives •Explain ROLE of operations management in an organisation • Appreciate the dimensions that make up the operations management TASK • Identify where the operations management FUNCTION fits within an organisation • Illustrate the crucial role of operations management in organizational SUCCESS
- 3. Lecture outline •INTRODUCTION • What operations management DO? • Variations in the operations management ROLE • SERVICES vs MANUFACTURING • Critical REFLECTIONS • SUMMARY
- 4. OPERATIONS FUNCTION/ Value-AddedProcess Inputs Transformation/ Conversion process Outputs Feedback
- 5. What does OperationsManagement do? Manages PEOPLE, MATERIALS, RESOURCES and DELIVERY SYSTEMS Operations management is set of activities that creates value in the form of goods and services by transforming inputs into outputs. To deliver SERVICES and PRODUCTS that have been sold to CUSTOMERS
- 6. > KEY IDEA Operations delivers the SERVICES and PRODUCTS that have been sold to CUSTOMERS > KEY IDEA Operations delivers services and products to customers by MANAGING the PEOPLE, MATERIALS, RESOURCES and DELIVERY SYSTEMS involved
- 7. CASE 1.1 KEYOPERATIONS TASKS
- 8. Cafe Garment manufacturer CASE 1.1 KEY OPERATIONS TASKS • DESIGNING products • Making PRODUCTS • Delivering SERVICES • SCHEDULING operations • Managing INVENTORY • Managing QUALITY • Managing SUPPLY CHAIN • IMPROVING operations • SAME
- 9. How operations managementfits into an organisation ORGANISATIONS NEED TO • SELL services or products to customers • DESIGN services or products • PURCHASE materials and/or services • DELIVER the services or products to meet customer needs • ACCOUNT for the cash or credit transactions involved in the above
- 10. How operations managementfits into an organisation OPERATIONS IS RESPONSIBLE FOR • SELLING services or products to customers • DESIGNING services or products • PURCHASING materials and/or services • DELIVERING the services or products to meet customer needs • ACCOUNTING for the cash or credit transactions involved in the above
- 11. • Manufacturing andservice organizations differ chiefly because manufacturing is goods-oriented and service is act-oriented. • The differences involve the following: - Degree of customer contact - Uniformity of input - Labor content of jobs - Uniformity of outputs - Measurement of productivity - Production and delivery - Quality assurance - Amount of inventory - Evaluation of work - Ability to patent design
- 12. Characteristics Goods Services Customer contact Low High Uniformity of inputs High Low Uniformity of outputs High Low Output Tangible Intangible Measurement of productivity Easy Difficult Opportunity to correct quality problems before delivery High Low to customer Inventory Much Little Evaluation Easier More difficult Patentable Usually Not usually
- 14. The role ofoperations management CONTENT STYLE • DAY-TO-DAY role • STRATEGIC role • INTERNAL role • EXTERNAL role
- 15. > KEY IDEA DAY-TO-DAY role of operations include: • Managing within BUDGETS • SCHEDULING • SERVING customers • Meeting OUTPUT targets • Communicating with other FUNCTIONS > KEY IDEA STRATEGIC role of operations include: • Supporting market ORDER-WINNERS and QUALIFIERS • Making company COMPETITIVE
- 16. Order Winners andOrder Qualifiers • Order Qualifier: The level of a product characteristic(s) that allow a product to be considered for selection . in other words • Order qualifiers are the basic criteria that permit the firm’s products to be considered as candidates for purchase by customers • Order Winner: The level of a product characteristic(s) that drive the customer decision to select a product . in other words Order winners are the criteria that differentiate the products and services of one firm from another
- 17. CASE 1.2 OPERATIONSTASKS AT PORTIOLI’S SANDWICH AND COFFEE BAR 1.What are its MARKET order-winners and qualifiers? 2.How must it manage OPERATIONS to support its market?
- 18. CASE 1.2 QuestionAnswer ORDER-WINNERS QUALIFIERS • Product DESIGN • Product RANGE • QUALITY • Delivery SPEED • PRICE Manage operations Manage SUPPLY CHAIN Manage QUALITY Manage CAPACITY Manage INVENTORY DELIVER services and products
- 19. The role ofoperations management
- 20. The role ofoperations management > KEY IDEA Operations: • CONTRIBUTES to gaining FIRST sale • PROCURES SECOND sale
- 21. MANAGE • LargeCOST centre • PEOPLE • TECHNOLOGY • SHORT and LONG term Links THINKING and DOING ends of the business > KEY IDEA Managers need to THINK and WORK in: • SHORT-TERM • LONG-TERM
- 23.
- 26. CASE 1.3 OPERATIONS- A KEY ROLE IN THE RETAIL CHAIN 1.What makes the STORE MANAGER a classic operations manager? 2.Assess the size of the OPERATIONS TASK and its financial impact 3.How is the store a key LINK in the supply chain?
- 27. CASE 1.3 OPERATIONS- A KEY ROLE IN THE RETAIL SUPPLY CHAIN Question Answer STORE MANAGER is a classic operations manager OPERATIONS TASK size and financial impact Key LINK in supply chain • Manages large COST centre • Manages large number of PEOPLE • Manages SHORT-TERM and LONG-TERM • Manages TECHNOLOGY • Manages COMPLEXITY • SALES REVENUE - $ per week • COSTS - $ part and full-time staff • PROFITS - meet sales and cost budgets • Links hundreds of SUPPLIERS to hundreds of CUSTOMERS
- 28. Task of theoperations manager Restaurant Modern Times (1936) Factory Dinner Rush (2000) •What is the ROLE of the operations function? •What is the TASK of the operations manager?
- 29. Task of theoperations manager Film clip Factory Fil m Title Director (year) Modern Times Charles Chaplin (1936) Cli p Start Finish 00:01:53 00:06:03 What clip shows Charlie Chaplin working on a production line within a factory Key learning objective How an operation transforms inputs into outputs The order-winners and qualifiers for a high volume factory producing a narrow range of standard products Film clip Restaurant Fil m Title Director (year) Dinner Rush Bob Giraldi (2000) Clip Start Finish 00:58:58 01:02:44 What clip shows The chef producing a special one-off dish for a restaurant critic who is having dinner in the restaurant Key learning objective How an operation transforms inputs into outputs (and the difference between services and manufacturing) The order-winners and qualifiers for a low volume, design-led restaurant offering high levels of service
- 30. For each film: • What type of ORGANISATION is represented? • What is the ROLE of the operations function? • What is the TASK of the operations manager? Operations process Factory Restaurant Type of ORGANISATION ROLE of the operations function TASK of the operations manager
- 31. Operations process FactoryRestaurant Type of ORGANISATION ROLE of the operations function TASK of the operations manager • MANUFACTURING • HIERARCHICAL • CENTRALISED • LOW empowerment • MAKE products • DELIVER products • Manage SUPPLIERS • Manage PROCESS • Manage COST • Manage TECHNOLOGY • Manage PEOPLE • Co-ordinate ACTIVITIES • SERVICE • TEAM based • DECENTRALISED • HIGH empowerment • MAKE food • SERVE customers • Manage SUPPLIERS • Manage PROCESS • Manage COST • Manage TECHNOLOGY • Manage PEOPLE • Co-ordinate ACTIVITIES
- 32. Variations in complexity DEPENDING ON • SIZE of organisation • Service or product VOLUMES • RANGE of services or products sold • TECHNOLOGY required to deliver them • Number of operations IN-HOUSE • What is being PROCESSED
- 33. > KEY IDEA Operations may PROCESS: • CUSTOMERS • CUSTOMER SURROGATES • INFORMATION and/or • PRODUCTS
- 34. Variations in output- services versus products
- 35. > KEY IDEA The operations OUTPUT can be: •SERVICES (intangible) and/or •PRODUCTS (tangible) Variations in output - services versus products
- 36. CASE 1.4 ACUP OF COFFEE - PRODUCT OR SERVICE? 1.Why is HOTEL COFFEE more expensive? 2.How does your LAST CUP of coffee compare with a hotel cup?
- 37. A CUP OFCOFFEE - PRODUCT OR SERVICE? Question Answer Why is HOTEL COFFEE more expensive? How does your LAST CUP of coffee compare with a hotel cup? • Product DESIGN • Service DESIGN • Product RANGE • Able to CUSTOMISE Product • Hotel ENVIRONMENT • LOWER specification
- 38. Variations in output- services versus products DEPENDING ON • Nature of the OFFERING • Level of CUSTOMER involvement • Operations CAPACITY • ORGANISATIONAL arrangements • QUALITY control • COMPETITIVE environment
- 39. > KEY IDEA SERVICES are CONSUMED as they’re provided whereas most PRODUCTS can be made in advance and STORED • Class Activity • Choose any business • Identify the business operation (use the add value perspective) • Identify the characteristics
- 40. Critical reflections •Operations manager’s ROLE is both: - Demanding, challenging, absorbing and satisfying; and - Frustrating and complex • DAY-TO-DAY task requires physical effort • Difficult to BALANCE day-to-day and strategic role • Good management of operations is key to an organization's SUCCESS
- 41. Summary • DifferentSECTORS - Services vs Manufacturing • TASK of operations manager is the same - Different focus • Operations TRANSFORMS - Inputs into outputs that are sold to customers • Critical to overall SUCCESS of an organisation - Manages 60-70% of people, assets and costs
- 42. > REFRENCE BOOK -Tourism: Operations and Management, 1/e Sunetra Roday, Archana Biwal & Vandana Joshi 25 Mar 2009 -Essential Operations Management ,Alex Hill and Terry Hill
Editor's Notes
- #29 At this point you could illustrate the role of operations management using clips from two classic films: Modern Times (1936) directed by and starring Charlie Chaplin – factory setting Dinner rush (2000) directed by Bob Giraldi, starring Danny Aiello - restaurant setting See the ‘Teaching OM through film’ lecturer notes and student handouts available on the website at www.palgrave.com
- #31 Pull out points above through discussion…
- #32 Pull out points above through discussion…
- #39 Case studies: Great Nuclear Fizzle Lloyds Bank McDonald’s Prêt a Manger Film clips: Breakfast at Tiffany’s Five Easy Pieces
- #40 Case studies: Great Nuclear Fizzle Lloyds Bank McDonald’s Prêt a Manger Film clips: Breakfast at Tiffany’s Five Easy Pieces
- #42 Pull out points above through discussion… Make MONEY Produce GOOD FOOD
- #43 See the lecturer zone for case study teaching notes and outlines.