This document provides an overview of operations management concepts for a course. It outlines 13 topics that will be covered, including forecasting demand, quality management, inventory management, and lean operations. Students are instructed to review the slides and textbook, ask questions if anything is unclear, and complete assignments summarizing theories and analyzing a real-world organization's processes and layout. The goal is for students to demonstrate understanding of key concepts and apply them to improve an existing system.

1. Operations Management
PBSB 813 Contact 3
Johan Jordaan
jordaan.johan@nwu.ac.za

2. Note on the use of these slides
• These slides provide the basic theory that I would like you to know.
There are many more techniques on the slides that came with the
textbook, which are also available on eFundi. As I talk you through
this slide show, please stop where you don't understand, go to either
the textbook (Heizer and Render) or the Heizer & Render slides and
make sure you understand them. If you still do not understand, on
the first page that you have to submit is space for you to tell me what
you do not understand so that I can cover it in class.
• Once you have gone through the slides, go to the template on eFundi
and prepare your submissions for the next contact session.

3. Operations &
productivity (1)
Topics covered: Contact 3
Global envi-
ronment &
strategy (2)
Managing
projects (3)
Forecasting
demand (4)
Product
design (5)
Quality
management
(6)
Process
design (7)
Location
decisions (8)
Layout
decisions(9)
Job design &
work mea-
surement (10)
Supply chain
management
(11)
Inventory
management
(12)
Scheduling
(13 & 15)
MRP & ERP
(14)
JIT & Lean
operations
(16)
Maintenance
& reliability
(17)
Study school
Contact 1
Contact 2
Contact 3
Contact 4
Contact 5
Contact 6
Contact 7

4. Outcomes for today's contact
OUTCOMES OF THEME G
 Interpret the product-process matrix using real-life companies
 Master the theory of the service-process matrix and interpret the matrix using
real-life organisations.
 Use process analysis techniques to critically analyse existing real-life
manufacturing and service processes
 Demonstrate a thorough understanding of the concepts by applying the theory
to a real-life organisation.
OUTCOMES OF THEME H
 Understand the basic layout configurations
 Demonstrate a thorough understanding of the concepts by applying the theory
to a real-life organisation.

5. Chapter 7 Theory
Process strategy

6. Basic work flow structures
• Project layout
• Workcenter
• Manufacturing cell
• Assembly Line
• Continuous process

7. Product-Process Matrix
Source: Chase & Jacobs 2013
Manufacturing
cell
Batch
process
Assembly
line
Continuous
process

8. Process, Volume, and Variety
Process Focus
projects, job shops
(machine, print,
carpentry)
Standard Register
Repetitive
(autos, motorcycles)
Harley-Davidson
Product Focus
(commercial
baked goods,
steel, glass)
Nucor Steel
High Variety
one or few units
per run, high
variety
(allows
customization)
Changes in
Modules
modest runs,
standardized
modules
Changes in
Attributes (such
as grade, quality,
size, thickness,
etc.)
long runs only
Mass Customization
(difficult to achieve,
but huge rewards)
Dell Computer
Poor Strategy
(Both fixed and
variable costs are
high)
Low
Volume
Repetitive
Process
High
Volume
VolumeFigure 7.1

9. p258
Source: Chase & Jacobs

10. Service Factory Service Shop
Degree of Customization
Low High
DegreeofLabor
Low
High
Mass Service Professional Service
Service Process Matrix
Commercial
banking
Private
banking
General-
purpose law firms
Law clinics
Specialized
hospitals
Hospitals
Full-service
stockbroker
Limited-service
stockbroker
Retailing
Boutiques
Warehouse and
catalog stores
Fast-food
restaurants
Fine-dining
restaurants
Airlines
No-frills
airlinesFigure 7.11

11. Process flowcharting
Defined
• Process flow diagrams is the use of a diagram
to represent the main elements of a process
• The basic elements can include operations,
material or customer flow, decision points,
storage areas and queues
• A flow diagram is an ideal method to start
process analysis

12. Goldratt’s Goal of the Firm
The goal of a firm is to make
money

13. Performance Measurement:
Operational
1. Throughput
the rate at which money is generated by the system
through sales
2. Inventory
all the money that the system has invested in purchasing
things it intends to sell
3. Operating expenses
all the money that the system spends to turn inventory
into throughput

14. Goldratt’s Theory of Constraints (TOC)
• Identify the system constraints
• Decide how to exploit the system constraints
• Subordinate everything else to that decision
• Elevate the system constraints
• If, in the previous steps, the constraints have been
broken, go back to Step 1, but do not let inertia
become the system constraint

15. Other Proses Terminology
• Blocking
• Occurs when the activities in a stage must stop because there is no
place to deposit the item just completed
• If there is no room for an employee to place a unit of work down,
the employee will hold on to it not able to continue working on
the next unit
• Starving
• Occurs when the activities in a stage must stop because there is no
work
• If an employee is waiting at a work station and no work is coming
to the employee to proses, the employee will remain idle until the
next unit of work comes

16. Chapter 9 Theory
Layout

17. Innovations at McDonald’s
 Indoor seating (1950s)
 Drive-through window (1970s)
 Adding breakfast to the menu (1980s)
 Adding play areas (late 1980s)
 Redesign of the kitchens (1990s)
 Self-service kiosk (2004)
 Now three separate dining sections
Six out of the
seven are layout
decisions!

18. Types of Layout
1. Office layout
2. Retail layout
3. Warehouse layout
4. Fixed-position layout
5. Process-oriented layout
6. Work-cell layout
7. Product-oriented layout

19. Your assignment
• Step 1: Make sure you understand the concepts that are covered in this slide show. If
necessary, go through it again or study the textbook. The slides by Heizer & Render
(available on eFundi) also give valuable extra information.
• Step 2: Prepare a one-page summary of the theory. Make sure it fits into the template in
the study guide. Remember to make a note of those issues that you want explained in
class.
• Step 3: Find out how processes are managed in your organisation. Give a one-page
summary on the template.
• Step 4: Critique the way processes are designed and managed in your organisation.
Where necessary, suggest improvements. Give a one-page summary on the template. (If
there are diagrams, you are allowed a fourth page for them).
• Step 5: Submit your three-page report on efundi before Thursday night 23:59. This
counts towards your individual assignment and your final pass mark!
• Step 6: For your group assignment, prepare a three-slide PowerPoint show: Slide 1:
Briefly present the essence of processes and layout to your community organisation.
Slide 2: Explain the processes and flow in their business venture. Slide 3: Give them
advice on how to improve their processes. Use the template that is on eFundi. One group
member must submit on efundi before Thursday night 23:59 as well!
• Names of both documents must be as indicated in your study guide.