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Running Head: SUPPLY CHAIN OPERATIONS
MANAGEMENT
Supply Chain Operations Management
Student’s Name: Angeline Hibbert
As a report this needs to have subheadings for each of the
sections; a good approach is to have similar sections to the
assessment brief. Your work requires more in-text citations.
This is good academic practice. Please note that a high product
variety that needs customisation requires a strategy that is
flexible, fast and responsive- take the hint.
A lean supply chain is an older method that greatly focusses on
producing more and in a reduced cost. This therefore adds value
for their customers and eliminates any wastage on valueless
things. Its focus is on forecasting where they pre-plan years or
months before production to reduce on cost especially where a
large amount of goods is produced. Agile supply method on the
other hand gives a high receptiveness to being flexible so as to
adapt quickly to changing circumstances in the society. It
handles market unpredictability by waiting to see how the
market reacts, before they have finished with the production
process therefore responding directly to product demand rather
than depending on a forecast (Limm, n.d.). Company A is suited
to both agile and lean supply strategies. It can be suited to the
agile strategy because different customers have different tastes
and preferences when it comes to product specifications. They
may make more hinges and iron products which may end up not
being bought by their customers. Rethink this argument. See
my comment above. They may require customizing and they
respond quickly to market changes and trends. Through the lean
strategy, they can make the products earlier, taking into
consideration the current trends in the market. This will enable
them to serve customers who may require the products urgently.
These are customers who may not have various specifications
for the products and may take what is readily available in the
market. It will also serve the inconsistent number of orders
which they receive from their customers. For company B, they
have to cut on inventory costs by reducing on what is produced
because they have a consistent order size. To reduce
accumulation of products, they should produce what their
customer demands, rather than forecasting what their customers
will demand but it ends up accumulating in the stores.
Therefore, agile supply chain method will be better suited for
company B.
Some organizations may prefer the lean method because it
highly cuts on the cost of production and minimizes wastage of
the already produced products. It is able to minimize wastage
because it can eliminate outdated inventories and possibly
reduce the operational costs involved I the production process.
It also provides for a timely delivery of products to customers
and at the place where they want them and hence, they are able
to meet customer requirements without having to observe a
strict time limit which leads to an improved customer
relationship. The flow of the products from the manufacturers to
the consumers is made continuous and this ensures that there is
no wastage of operational space which leads to a better
production efficiency. Predicting how the market will be helps
in preparing the processes which will be involved in the
processing stage and they are therefore able to avoid any errors
which may occur in the future (Shpak, 2018). Despite its
advantages, lean method also has shortcomings which may
override the advantages. There may be equipment or labor
failures because change may result to fear and stress leading to
loss of the optimized advantage. Though it delivers products in
the right quantity, sometime there may be an error in deliveries
or missed deliveries which may be caused by traffic congestion
in some areas. The implementation cost involved is very high
because it involves purchasing of the required machinery,
training employees on the use of these machines and employing
managers who are familiar with the method. Is this not the case
for any manufacturing strategy? Agile manufacturing may
currently be the best considered method of production. This is
because it focusses more on customer needs and product design
and thus, it produces goods which take into consideration
changing demands. The manufacturing companies are able to
quickly respond to change since they retain some mass
production features and remain flexible while still doing mass
customization. There is a tendency to accept uncertainty faster
which leads to them solving a problem faster since it gives
priority to experimentation in order to clear the uncertainty
before bringing a strategy to implementation. Please provide a
source for this. It is not academically sound. Also, it can be
operated with a low inventory in that they produce what is
demanded, thus reducing on product spoilage or being outdated.
The method also has various shortcomings like lack of
predictability in its approach because only what is required to
lead into the next level of business is executed. Greater success
in any organization is achievable through beforehand advance
planning. Lack of adoption to change is another shortcoming
where the employees may lack the dedication towards giving the
method priority in the organization and making it work. It may
be difficult to measure difficulties since tracking of progress in
the agile method is difficult because of unclear resource
planning. Also, lack of formal personnel training on processes
involved and tools may lead to overlooking problems and
develop bad habits that may result into a blame game and result
into a poor output since the goods are produced at a much faster
pace and at times with little knowledge. Source?
In implementing lean method of production, the management
should prepare their team for change by making them
understand in details what lean production strategy is and the
benefits which come with implementing it. They should
understand the reason why you are implementing the method as
well as the goals and objectives which they should meet by
using the method. After this is understood, one should identify a
pilot team who should be volunteers and start the change with
them. From here, you choose a department with which you can
start implementing the method, and keep progressing to another
if you have successfully achieved the objectives. By doing this
step by step, then you are able to finally transform the whole
organization. In this section I am looking to see what
techniques of lean are suited to the company according to the
brief you were given; so 5S, Kanban system, JIT, etc- that’s
what we are looking for. Once the organization is familiar with
the concept, identify value-adding activities by involving the
other team players in considering the end product that the
customers get and pay for. Having identified value adding
activities, identify the steps it will pass through before reaching
the customers. Map each process involved and keep correcting it
as you continuously implement the method. Create a flow of
value on which tasks are carried out, how they are carried out
noting the challenges which you may experience. After
identifying challenges, you come up with a way of eliminating
them so that there is a smooth delivery of the product since
receiving the order to delivering the order. Having done this,
establish a pull system where you process items which have a
high priority as they are arranged in the queue. One identifies
the time taken in production and the tasks finished in a given
time. They should choose the shorter time taken with more
production then continuously improve on the methods used to
make production more effective. Implement a shared leadership
model where every team player takes ownership for their tasks
and has a responsibility of explaining what they did the
previous day, the challenges they faced, how they plan to
overcome the challenges as well as what they are going to
execute. In implementing agile production strategy, they should
first of all come up with a vision through calling for a strategy
meeting with all the relevant personnel and stakeholders to
come up with the vision and goals. Having developed the vision,
they should come up with the requirements for the project and
when they are going to be developed. One comes up with a
goal-oriented roadmap where they identify the date to
manufacture a certain product, its name, its goal, feature and
metric and everyone should be informed. You only need either
or. Which means you need to do one strategy for one company
so you can get detail in. The product owner then should come
up with the launching and release dates all the concerned
employees and stakeholders should be involved in the meeting.
They should then come up with short cycles in which certain
goals and tasks will be carried out by the individuals. This is
important since it enables the team to accurately plan on future
activities. The cycle should not go for a long period. Within the
short cycles, they should keep holding regular meetings which
may take less time to discuss on the progress or any challenges
which they are encountering. They then come up with a review
plan where they establish that all the requirements were met and
assessing any adjustments necessary at the end of the cycle.
Finally, they should decide on what to focus on after the cycle
is complete, the lesson learned in the cycle and the changes
which they should make in the next cycle.
Spotify is a company that successfully implemented the agile
strategy. The engineering team came up with rules and created
their own rules in regards to their company culture. The first
thing they did was to replace the terms scrum masters and teams
as used in agile methodology with the terms agile coach and
squads (Eriksson, 2015). Each individual had responsibility for
what they did and had the freedom to decide what they were
going to do and how. The squads were then allowed to work in
an environment which encouraged team work and sharing of
ideas during meetings. These squads were given a say in making
and acting according to the laid down decisions and came up
with a high alignment and autonomy where the different squads
could agree on a common challenge and came up with the best
solutions. The different squads were allowed to experiment with
whichever agile method they wanted and when any squad
identified a properly functioning system, the other squads had
to implement it for a period of time. The employees showed
great level of respect towards each other and praised each other
for the accomplished achievements which maintained a positive
atmosphere and they were constantly pushed towards improving
the work processes and the environment. People in the squads
were allowed to move into other squads with lesser
inconvenience to other squad members. These squads formed a
community which related closely with each other and the
leaders took upon duties such as being coaches and mentors.
Lastly, the organization had a belief that they should keep
coming up with new versions of their product and so the squad
was continuously working to add new features to the already
existing product. From the implementation of agile supply
chain, Spotify has around sixty million users worldwide and
were able to expand to fifty eight different countries and at the
same time, are able to compete favorably with the main
competitors in the music industry. They were able to recruit
talented people who were in turn involved in continuous product
development. The Spotify team is highly motivated to bring new
developments and they are always encouraged ton aim higher.
They also were able to keep up with rising market trends and
this enabled them to get more users. From the squads, Spotify is
able to deliver a working and tested application where they
continuously work on it to ensure that it is convenient to the
user. Through working with the small squads, they realized how
much productive these groups were and they therefore took
advantage of each individual’s skills and ability to mentor
others in the squads. This worked best since unnecessary
competition was reduced and the squads became more cohesive.
There is also a continuous planning which is carried out by the
organization to ensure that the software application is
successful and effective as well as having the appropriate data.
Through the timely planning, they have been able to
continuously test and deliver quality services which they are
testing continuously so as it remains relevant to their customers.
Reference
Limm, M. (n.d.). The Difference Between Agile vs. Lean
Supply Chain Management. Retrieved from:
https://blog.procurify.com/2014/04/22/agile-lean-supply-chain-
management/.
Wood, L.J. (26 September 2017). Disadvantages of Lean
Manufacturing. Retrieved from: https://bizfluent.com/list-
6025715-disadvantages-lean-manufacturing.html.
Shpak, S. (27 June 2018). Advantages & Disadvantages of Lean
Production. Retrieved from:
https://smallbusiness.chron.com/advantages-amp-disadvantages-
lean-production-46696.html
Gilley, C. (12 March 2015). The Pros and Cons of Agile Product
Development. Retrieved from:
https://community.uservoice.com/blog/the-pros-and-cons-of-
agile-product-development/
The Core 5 Principles for Implementing Lean. Retrieved from:
https://kanbanize.com/lean-management/implementing-lean/
MacKay, J. (January 11 2018). The Ultimate Guide to
Implementing Agile Project Management (and Scrum).
Retrieved from: https://plan.io/blog/ultimate-guide-to-
implementing-agile-project-management-and-scrum/
Eriksson, U. (31 March 2015). How Spotify does agile – A look
at the Spotify engineering culture. Retrieved from:
https://reqtest.com/agile-blog/how-spotify-does-agile-a-look-at-
the-spotify-engineering-culture/
Erin Brockovich
https://www.imdb.com/title/tt0195685/
Instructions
Write a 5 page paper (excluding title and reference page) in
APA double spaced paragraph format answering the following
questions. Do not strictly answer the questions in itemized
format, and use citations where references are applicable. The
idea behind the short paper is to watch the film and see what
knowledge you have learned throughout reading the textbook
you see applicable in the film and your own critical
thinking/interpretation of it:
Write a brief summary about the current situation in the movie
and what has transpired throughout the film. During the
summary, reference on some of the key points below. You are
not restricted to these topics only:
a. What is the problem, who are some “parties” that are affected
by the current circumstances, and what is the current impact of
the communities involved?
b. What was the substance that was making people sick? What
did the substance penetrate (air, drinking water, soil)? What was
Erin Brockovich’s motivation for pursuing this issue? What
illnesses did the substance cause?
c. What laws or statues are applicable in the film ? Is there
anything from the textbook that is applicable ?
d. Are there any other environmental situations similar to the
one in the film that have occurred in the past ? If so, which ones
and what were done about them ?
e. What risks did Ed Masry take as a small business owner? Did
Ed Masry take a risk by hiring Erin? Why or why not? Why do
you think that PG&E continued to lie to the residents of Hinkley
about the water conditions? What should PG&E have done
instead of lying? Consider this…is it sometimes harder to make
the right (ethically correct)
f. decision is than the wrong decision (unethical)? Why is this?
Did the case get settle or not ? If not, what was the ultimate
outcome.
g. What should the government do to prevent companies from
making unethical decisions? What should the consequences be?
h. Think of a time in which you had to make an ethically tough
decision…now, write what helped you to make the right or
wrong decision. What are some suggestions for others who will
face tough ethical decisions? What can help them to make the
right decision? Should businesses demonstrate corporate social
responsibility? Do the decisions I make impact others?
Assignment will be graded on content and appropriate
referencing. Any material that is copy and pasted will have
points deducted. Sloppy formatting, excessive paragraph
spacing to meet page requirement, and improper referencing
will also have pointed deducted. Everyone is required to submit
his or her own assignment. Plagiarism will result in a zero. All
papers must be submitted via dropbox in word doc format (no
.pdf)
Essential operations management
· Book by Alex Hill; Terry Hill 2018 Essential
Essential operations management
· Book by Alex Hill; Terry Hill 2011 Essential
Available as an e-book
Global Logistics and Supply Chain Management
Book by John J. Mangan; Chandra C. Lalwani 2015
INDICATIVE CONTENT:
· Globalised Logistics and Supply Chain operations
· The role of supply chain operations in R&D and New Product
Introduction (NPI)
· Channel management including e-business, Outsourcing, Re-
Shoring & In-sourcing
· Ethics, Sustainability and Procurement
· Big Data, Information and Communications
· Reverse Logistics and managing product recalls
· Circular economy and waste reduction
· Risk and resilience mitigation
· Role of consumers in supply chain engagement
LEARNING OUTCOMES:
Module Learning Outcomes
On successful completion of the module with limited guidance,
will be able to:
Subject-Specific Knowledge, Understanding & Application
a) Apply and reflect critically on the Supply Chain Management
Models as a basis for effective resource management.
b) Distinguish between key supply chain concepts and
techniques and apply appropriate ones for controlling and
planning cross functional operations.
c) Evaluate and synthesise the various definitions of quality in
an operational context and identify opportunities for quality
improvement.
d) Analyse the purpose and value of operations management
within the supply chain context.
Employability & Changemaker Skills
e) Develop effective oral and written communication and digital
fluency.
f) Demonstrate an ability for problem-solving in complex
scenarios.
Readers are referred to the Programme Specification document
for the list of PSRB requirements met by this module.
TYPICAL LEARNING, TEACHING AND ASSESSMENT
HOURS (for the module as delivered on-site at the University of
Northampton):
View this table on how learning, teaching and assessment hours
map to the KIS Categories.
Learning and teaching information for this module when
delivered off-site by UN partners is available from the partner
institution’s NILE site (or equivalent). Any variation in study
hours must be approved by the University of Northampton
before students are enrolled, ensuring that study hours provision
is always appropriate to support student achievement of the
module learning outcomes.
Learning, Teaching and Assessment activities
Study hours
Contact hours: (total)
Comprising face-to-face and online contact hours as follows:
48
· Face-to-face (total) - this may include the following:
· Face to face interactive large group session (e.g. team-based
learning)
· Face to face interactive small group session (generic space in
groups of approx. 30 e.g. seminars/workshops/tutorials
(directly supervised by employers/tutors)
· Off-site activities (e.g. fieldwork, visits)
· F2F (broadcast) Lectures
(e.g. guest speaker, cohort induction)
24
· Online contact hours(total)
(comprising online activities with mediated tutor input)
24
Guided independent study hours (including hours for assessment
preparation)
152
Module Total
200
Alex Hill and Terry Hill
Learning objectivesUnderstand NATURE of capacity and the
mix of RESOURCES involvedAppreciate the PURPOSE of
managing capacity and the IMPACT of having too little or too
much capacityExplain how to DEFINE and MEASURE capacity
in different organisationsUnderstand the FACTORS involved in
determining the level of capacity requiredExplain the key
STEPS in capacity planningRecognise the key FACTORS in
managing capacity
Lecture outlineINTRODUCTIONAn OVERVIEW of managing
capacityFACTORS affecting capacity managementPLANNING
and MANAGING capacityCritical REFLECTIONSSUMMARY
© Alex Hill and Terry Hill
CAPACITY
Introduction
What is capacity?
RESOURCES needed to:
Serve customers
Process information or
Make products
MIX of people, systems and equipment
Introduction
Purpose of managing capacity
CAPACITY of resources
MATCH
DEMAND for services and products
TO
>KEY IDEAA key BUSINESS STRATEGY decision is whether
capacity should LEAD or FOLLOW demand
>KEY IDEATOO LITTLE capacity leads to DELAYS and
possible LOST SALES
TOO MUCH incurs unnecessary COSTS
An overview of managing capacity
Defining and measuring capacity
TYPE
Reflects
SERVICE or PRODUCT
to be delivered
Reflects volume of DEMAND
AMOUNT
An overview of managing capacity
Defining and measuring capacity
TIME is the common denominator
Some businesses would express as number of SERVICES or
PRODUCTS
e.g. number of people served in a restaurant
An overview of managing capacity
Defining and measuring capacity
An overview of managing capacity
Defining and measuring capacity
>KEY IDEAOperations expresses and measures its activities in
TIME
The rest of the business uses MONEY
An overview of managing capacity
Defining and measuring capacity
STATEMENT and MEASUREMENT of overall capacity will
differ
Overall size = ♯BEDS
Emergency unit = ♯STAFF
Consultant clinic = ♯APPOINTMENTS
HOSPITAL EXAMPLE
An overview of managing capacity
Defining and measuring capacity
An overview of managing capacity
Defining and measuring capacity
PLANNED capacity
ACTUAL capacity
>KEY IDEAUTILISATION compares
ACTUAL hours worked with
PLANNED hours worked
>KEY IDEAEFFICIENCY compares
ACTUAL output with
EXPECTED output for the hours worked
Factor affecting capacity management
Impact of delivery systems and processes on capacity
Use of CUSTOMERS
PERISHABLE nature of service capacity
BACK office vs FRONT office
Use of ADEQUATE CAPACITY at each stage of the delivery
system
>KEY IDEAService capacity is PERISHABLE and cannot be
put into inventory for use or sale in the future
Factor affecting capacity management
Determining the level of capacity
ANTICIPATING END of growth
AVOIDING OVER capacity
LEAD or FOLLOW demand
What to do with OVERCAPACITY
Divest or diversify?
>KEY IDEADeciding on the LEVEL of capacity involves:
ANTICIPATING END of growth
AVOIDING too much
Deciding to LEAD or FOLLOW demand
Deciding what to do with OVER-CAPACITY
Divest or diversify?
Factor affecting capacity management
Demand fluctuations
PREDICTABLE
UNPREDICTABLE
Cyclical
Annual or seasonal
Weekly or daily
Random
Unexpected
Factor affecting capacity management
Capacity fluctuations
PREDICTABLE
UNPREDICTABLE
Planned increase
Planned decrease
Absenteeism
Machine breakdown
>KEY IDEAOrganisations need to SEPARATE the
PREDICTABLE variations from the UNPREDICTABLE
variations in
demand and capacity
Planning and managing capacity
Issues to consider
UNCERTAINTY
Demand is UNCERTAIN
ANTICIPATING THE FUTURE
Forecasts are INACCURATE
TIMESCALES
From LONG-TERM plans to DAY-TO-DAY schedules
ALTERNATIVES
Different WAYS to provide capacity
EXECUTION
FULFILLING the plan
Planning and managing capacity
Resource planning
AMOUNT
How much is required?
TIMING
When is the capacity required?
LOCATION
Where should the capacity be located?
Planning and managing capacity
Resource planning
CONTROL
What ACTIVITIES should take place in the operationLayout
WHEN they should take place
What RESOURCES should be allocated to them
PLANNING
Understand what is actually HAPPENING in the operation
Decide if there is any DEVIATION from what should be
happening
Change RESOURCES to affect the operation
Planning and managing capacity
Resource planning
Planning and managing capacity
Resource planning
Forecasts
Investment
Long Term
Planning
Short Term
Planning / Control
1-year demand forecasts
Capacity requirements
Capacity plan
Medium Term
Planning
Space
Layout
Staff
Equipment
Stock
Process
Time
Outsourcing
RESOURCES
Capacity
Management
CUSTOMERS
Pricing
Advertising
Off-peak offers
Reservations
Complementary services
Alternative attractions
Queuing
Demand
Management
>KEY IDEARESOURCE planning looks
SEVERAL YEARS ahead to provide future capacity
requirements
>KEY IDEAMEDIUM-TERM planning looks up to
TWO YEARS ahead to resolve how to provide capacity to meet
forecast demand
Planning and managing capacity
Resource planning
TYPES OF CAPACITY PLAN
LEVEL capacity
CHASE demand
MIX plan
Planning and managing capacity
Resource planning
Planning and managing capacity
Resource planning
Planning and managing capacity
Resource planning
Planning and managing capacity
Resource planning
Planning and managing capacity
Managing demand
Changing the PATTERN of demand
Alternate PRICING
ADVERTISING
Offering COUNTER seasonal services or products
SCHEDULING
RESERVATIONS or APPOINTMENTS
Fixed SCHEDULES
ADVERTISING
EDUCATING customers
Managing UNCERTAINTY
FORECASTS vs known orders
Planning and managing capacity
Managing capacity
Short-term capacity ADJUSTMENTS
OVERTIME
TEMPORARY staff
FLEXIBLE capacity
FLEXIBLE staff
PART-TIME or TEMPORARY staff
SHIFT patterns
STAGGERED working hours
Changing capacity FORM and NATURE
ANNUALISED hours
SUBSTITUTING capacity by technology/customers
SUBCONTRACTING
>KEY IDEATaking actions to change DEMAND patterns and
change the shape of CAPACITY are key tasks when managing
these resources
Planning and managing capacity
Type of capacity and demandChairsTablesWaiting
staffEquipmentFoodChefsAir spaceAir traffic
controllersEquipmentAssembly workersNumber of
planesNumber of customersNumber of ordersNumber of
widgetsQuestionAir
trafficRestaurantKitchenFactoryCapacityDemand
Planning and managing capacity
Managing capacity and demandPart-time / Temp staffStaggered
workingOvertime / ShiftsFlexible staffOvertimeShift
patternsHigh automationShift patternsAlternate
pricingReservationsFixed schedulesAlternate
pricingReservationsFixed schedulesQuestionAir
trafficRestaurantKitchenFactoryManaging capacityManaging
demand
Managing capacity is COMPLEX and
CHALLENGINGDECISIONS on capacity and location impact
futureMarket POSITIONSMarket OPPORTUNITIESIncreasing
or decreasing capacity is a MAJOR DECISIONTOO LITTLE
capacity leads toDELAYS and possible LOST SALESTOO
MUCH capacity incursUnnecessary COSTS
Critical reflections
SummaryCapacity and demand MEASUREMENT varies
byDelivery system and process typeCapacity and demand
FLUCTUATIONSPredicable and unpredictableResource
PLANNING and CONTROLLong-term, medium-term, short-
termMethods vary by delivery system and process
typeManaging DEMANDChange pattern, schedule, manage
uncertaintyManaging CAPACITYShort-term adjustments,
flexibility, form and nature
© Alex Hill and Terry Hill
Alex Hill and Terry Hill
Learning objectivesRecognise the TECHNICAL and BUSINESS
requirements to be met when delivering servicesUnderstand the
CHARACTERISTICS of service operationsIdentify the
CATEGORIES of service and TYPES of service delivery
systemExplain how to DESIGN service delivery
systemsUnderstand how IT impacts service delivery
Lecture outlineINTRODUCTIONFactors affecting SERVICE
DELIVERY design DESIGNING the service delivery
systemCritical REFLECTIONSSUMMARY
Factors affecting service delivery system design
SERVICE COMPLEXITY
THE
MARKET
NUMBER OF STEPS
Single
Multiple
TECHNICAL requirements
The service itself
BUSINESS requirements
Volumes
Order-winners & qualifiers
Case studies:Great Nuclear FizzleLloyds BankMcDonald’sPrêt a
Manger
Film clips:Breakfast at Tiffany’sFive Easy Pieces
>KEY IDEAAs services differ, so will the DESIGNS of their
delivery systems
Case studies:Great Nuclear FizzleLloyds BankMcDonald’sPrêt a
Manger
Film clips:Breakfast at Tiffany’sFive Easy Pieces
Characteristics of service operations
Factors affecting service delivery system design
MIX of services and products
INTANGIBLE nature
SIMULTANEOUS provision and consumption
TIME-DEPENDENT capacity
CUSTOMERS can help deliver the service
Need to MANAGE CUSTOMERS
No PATENTS
Case studies:Great Nuclear FizzleLloyds BankMcDonald’sPrêt a
Manger
Film clips:Breakfast at Tiffany’sFive Easy Pieces
>KEY IDEAServices are PROVIDED and CONSUMED at the
same time. They CANNOT be stored
Case studies:Great Nuclear FizzleLloyds BankMcDonald’sPrêt a
Manger
Film clips:Breakfast at Tiffany’sFive Easy Pieces
Understanding how services differ
Factors affecting service delivery system design
KEY DIFFERENCES
Level of TECHNOLOGY used
NATURE of service being delivered
Complexity of service
What is being processed
TYPE of service being delivered
Professional, Service shop or Mass service
BUSINESS requirements
Volumes
Order-winners and qualifiers
Understanding how services differ
Factors affecting service delivery system design
Understanding how services differ
Factors affecting service delivery system design
Understanding how services differ
Factors affecting service delivery system design
>KEY IDEAThe delivery system processes
CUSTOMERS, CUSTOMER SURROGATES, PRODUCTS,
INFORMATION
or some COMBINATION of these
Designing the service delivery system
Overall design
Understand MARKET volumes, order-winners and qualifiers
Identify the service ENCOUNTER and EXPERIENCE to be
delivered
Understand how to RETAIN customers
Designing the service delivery system
Overall design
Designing the service delivery system
Overall design
Designing the service delivery system
CUSTOMER INTERFACE
Service delivery
BACK OFFICE activities
FRONT OFFICE activities
Designing the service delivery system
Service delivery
Line of
visibility
FRONT OFFICE
No CUSTOMER CONTACT
Easier SCHEDULING
Higher processing VOLUMES
BACK OFFICE
FACILITIES represent organisation
Easier to manage QUEUE lengths
Involve CUSTOMERS in delivery
Wider STAFF ROLES
Designing the service delivery system
CUSTOMER INTERFACE
Service delivery
BACK OFFICE activities
FRONT OFFICE activities
Number of STEPS
Single vs Multiple
TYPE of delivery system
Non-repeat vs Repeat
Low volume vs high volume
DELIVERY SYSTEM
Designing the service delivery system
Service delivery
Designing the service delivery system
Other factors
ENHANCING services
Use of IT in service delivery
CUSTOMER participation in service delivery
Designing the service delivery system
Other factors
Service DELIVERY SYSTEMS must be:ALIGNED to its market
ORDER-WINNERS and QUALIFIERSREFLECT its internal
BUSINESS requirementsINCORPORATE IT and other
DEVELOPMENT opportunitiesCustomers become MORE
PROFITABLE the longer you RETAIN them
Critical reflections
Critical reflections
Critical reflections
Critical reflections
SummaryServices have distinctive
CHARACTERISTICSIntangible and perishableService delivery
systems must SUPPORTTechnical and business
requirementsTECHNICAL requirementsThe service
specificationBUSINESS requirementsVolumes and market
order-winners and qualifiers
Alex Hill and Terry Hill
Learning objectivesRecognise the levels at which DECISIONS
about location must be madeUnderstand the background ISSUES
that affect the choice of location for an operationDescribe the
TECHNIQUES for choosing a location and explain how they
workOutline the FACTORS that influence the choice of
layoutOutline the FEATURES of each basic type of
layoutExplain the process of layout DESIGN
Lecture outlineChoosing a LOCATIONChoosing a
LAYOUTCritical REFLECTIONSSUMMARY
DECIDING WHERE TO LOCATE
Choosing a location
Size of the INVESTMENT
The FIXED NATURE of the choice
The UNCERTAINTY of the future
>KEY IDEAOnce chosen, many organisations
NEVER CHANGE location
Choosing a location
Levels of decision
CHOOSING THE
CONTINENT or REGION
COUNTRY
AREA or CITY
SITE
>KEY IDEAThe number of LEVELS and FACTORS involved
differ DECISION by DECISION
Choosing a location
Background factors influencing location decisions
The ORIGIN of existing location decisions
POLITICALLY based constraints
TECHNOLOGY developments
NEW COUNTRIES are opening up
Market ACCESS or local PRESENCE in large consumer markets
CURRENCY value fluctuations
Choosing a location
Factors affecting the choice of location
A well developed INFRASTRUCTURE
Proximity to MARKETS
Proximity to SUPPLIERS
Hospitable BUSINESS CLIMATE
Availability of STAFF
Quality of LIFE for employees
VARIABLE COSTS
FIXED COSTS and INVESTMENTS
Favourable GOVERNMENT policies
Proximity to CUSTOMERS
Choosing a location
Factors affecting the choice of site
FACILITIES for staff and customers
Building’s DESIGN
RENTAL costs and local taxes
SPACE
Proximity to SUPPORT SERVICES
Room for EXPANSION
Level of cutsomer TRAFFIC
VISIBILITY to customers
Proximity to CUSTOMERS
Proximity to COMPETITORS
Choosing a location
Factors affecting the choice of site
Choosing a location
Site location techniques
WEIGHTED factor
Centre of GRAVITY
Choosing a location
Site location techniques
Choosing a location
Site location techniques
Chosen a LOCATION
Choosing a layout
Choose a LAYOUT
Choosing a layout
Factors influencing layout
Core TASK
Available SPACE
Making space for future EXPANSION and layout changes
HEALTH and SAFETY
Choosing a layout
Basic types of layout
FIXED position
PROCESS or FUNCTIONAL
SERVICE or PRODUCT
>KEY IDEAThe BASIC TYPES of layout are:
FIXED POSITION,
PROCESS or FUNCTIONAL and
SERVICE or PRODUCT
Choosing a layout
Basic types of layout
Choosing a layout
Basic types of layout
Choosing a layout
Basic types of layout
Choosing a layout
Basic types of layout
Low
VOLUME
High
High
VARIETY
Low
Choosing a layout
Service or product type, process and layout
Ask students to position each service or product from the film
clips on the graph above – see the lecturer zone for printouts.
Choosing a layout
Service or product type, process and
layoutQuestionGovernmentAeroplaneCarPit StopService or
productProcessLayout
Ask students to watch the film and fill out the table above.
Low
VOLUME
High
High
VARIETY
Low
Choosing a layout
Service or product type, process and layout
Car
Areoplane
Government
Pit stop
Repeat
high-volume delivery system
Project manufacturing process
Process or functional
Fixed position
Mass product
Product
Service shop
Special product
Made on-site
Line manufacturing process
Repeat
low-volume delivery system
Cell
Service shop
Choosing a layout
Service or product type, process and
layoutQuestionGovernmentAeroplaneCarPit stopService or
productProcessLayout
Choosing a layout
Detailed layout design
Choosing a layout
Detailed layout design
The choice of location and layout significantly impacts COSTS
and SALESTherefore, they must clearly reflect the NEEDS
ofCUSTOMER and MARKET (external)BUSINESS (internal)In
particular, the CHOICE of location is:DIFFICULT to
changeLARGE and FIXED investment
Critical reflections
SummaryTASKS of deciding location and layoutDistinct, but
relatedDecisions need to be made at a number of
LEVELSContinent/region, country, area/city and siteVarious
FACTORS impact the choice of locationExiting sites,
proximity, political, economic, etcThree basic TYPES of
layoutFixed position, process or functional, service or product
Alex Hill and Terry Hill
Learning objectivesRecognise the TECHNICAL and BUSINESS
requirements to be met when making productsDefine the
different TYPES of manufacturing processIdentify the
APPROPRIATE manufacturing process to use for different
production volumesIdentify the CATEGORIES of product and
TYPES of manufacturing processUnderstand the business
IMPLICATIONS of investing in alternative types of
manufacturing processExplain why HYBRID processes may be
introduced
Lecture outlineINTRODUCTIONFactors affecting
MANUFACTURING PROCESS design DESIGNING the
manufacturing processHYBRID processesCritical
REFLECTIONSSUMMARY
© Alex Hill and Terry Hill
Factors affecting manufacturing process design
TECHNICAL
REQUIREMENTS
STEPS required to
Turn INPUTS
Into OUTPUTS
VOLUMES
MARKET
ORDER-WINNERS
QUALIFIERS
BUSINESS
REQUIREMENTS
>KEY IDEAManufacturing processes need to meet both
TECHNICAL and BUSINESS requirements
Factors affecting manufacturing process design
Categories of product
Factors affecting manufacturing process design
Categories of product
Factors affecting manufacturing process design
Types of manufacturing process
Developing a strategy
Understanding customer requirementsMade ON-SITEResources
BOUGHT TO SITESPECIAL, non-repeatONE PERSON or
SMALL GROUPSTANDARD, repeat low to high volumeHas to
be RESET for each batch of products madeMASS, repeat high
volumeDOES NOT have to be reset for different
productsMASS, repeat very high volumeProcess runs
CONTINUOUSLY and never stopsProcess
typeProductProcessProjectJobbingBatchLineContinuous
processing
Designing the manufacturing process
Process choices
Designing the manufacturing process
Process choices
Designing the manufacturing process
Process choices
>KEY IDEAUse the words FLEXIBLE and AGILE with care as
they have many DIFFERENT MEANINGS and, therefore, can
be misleading
Designing the manufacturing process
Implications of process design
Hybrid processes
Cells
Hybrid processes
Cells
Hybrid processes
Cells
Hybrid processes
Cells
Hybrid processes
Cells
ADVANTAGES
DISADVANTAGES
Less WAITING time
Lower INVENTORY
Easier to SCHEDULE
Less FLEXIBLE
Lower equipment UTILISATION
>KEY IDEACELLS are a commonly used
HYBRID PROCESS
Making products
Product category and process type
Made on-site Special Mass StandardProjectResources moved
to site Line High volume Don’t reset Special One-off
Jobbing Small group
Making products
Product category and process
typeQuestionBirdCarRestaurantPRODUCT categoryPROCESS
type
MANUFACTURING PROCESSES must be:ALIGNED to its
market ORDER-WINNERS and QUALIFIERSREFLECT its
internal BUSINESS requirementsEach PROCESS has a different
set of TRADE-OFFSAlthough DEMAND CHANGES over time,
most businesses will NOT RE-INVEST in a different
processChoosing the RIGHT PROCESS for the life of a product
will have a significant impact on its SALES REVENUE and
PROFIT
Critical reflections
SummaryManufacturing processes must SUPPORTTechnical
and business requirementsTECHNICAL requirementsThe
product specificationBUSINESS requirementsVolumes and
market order-winners and qualifiersEach process type has a
different set of TRADE-OFFS
Pull out points above through discussion…
Make MONEY
Produce GOOD FOOD
© Alex Hill and Terry Hill
Case studies:Great Nuclear FizzleLloyds BankMcDonald’sPrêt a
Manger
Film clips:Breakfast at Tiffany’sFive Easy Pieces
Operations Strategy
Alex Hill and Terry Hill
Learning objectivesUnderstand LEVELS of strategy within
businessDistinguish between day-to-day and strategic
ROLESIdentify how different levels of strategy INTERFACE
with each otherAppreciate importance of understanding
MARKETSUnderstand different strategic
APPROACHESDEVELOP and IMPLEMENT an operations
strategy
Lecture outlineINTRODUCTIONWhat is STRATEGY?LEVELS
of strategy within a businessDEVELOPING a
strategyIMPLEMENTING a strategyCritical
REFLECTIONSSUMMARY
What is strategy?
DIRECTION
WHAT to do
What is strategy?
HOW to do it
IMPLEMENTATION
DIRECTION
WHAT to do
>KEY IDEAOperations strategy concerns developing the
CAPABILITIES of an organisation to reflect the NEEDS of its
customers and markets
Levels of strategy
CORPORATE
Levels of strategy
CORPORATE
BUSINESS UNIT
FUNCTIONAL
Levels of strategy
CORPORATE
BUSINESS UNIT
Corporate
DIRECTION OF TOTAL BUSINESS
IMPLEMENTATION
Levels of strategy
Where to INVEST or DIVEST
SALES REVENUE priorities
Allocation of investment FUNDS
DIRECTION OF BUSINESS UNIT
Levels of strategy
Business unit
MARKETS in which it competes
Where to GROW its business
Nature of COMPETITION
Relevant COMPETITIVE CRITERIA
WHICH functional tasks to invest in
HOW to invest in these tasks
IMPLEMENTATION
DIRECTION OF FUNCTION
Levels of strategy
Functional
IMPLEMENTATION
Support COMPETITIVE DIMENSIONS within a market for
which it is solely
or partly RESPONSIBLE
Meeting competitive REQUIREMENTS
Selecting APPROACHES to attain improvement goals
Implement the PLAN
Levels of strategy
Functional
Levels of strategy
Functional
Developing a strategy
Developing a strategy
Developing a strategy
Developing a strategy
>KEY IDEAUnderstanding MARKETS is the FIRST step in
strategy development
Developing a strategy
Understanding customer requirements
>KEY IDEACustomer PURCHASES are not only based on the
service or product specification, but also a wide RANGE of
CRITERIA such as price, delivery speed and quality
conformance
Developing a strategy
Understanding customer requirements
QUALIFIERS
ORDER-WINNERS
WIN you the order once
you are on the shortlist
Get and keep a service or product on
a customer’s SHORTLIST
>KEY IDEAUnderstanding CUSTOMER requirements:
AVOID general descriptions
IDENTIFY and WEIGHT order-winners and qualifiers
>KEY IDEAAll functions must be involved in the discussion on
HOW to GAIN, RETAIN and GROW CUSTOMERS and
MARKETS
A recap of the operations process is valuable at this point
Developing a strategy
Operations processOperations processPit
stopFactoryRestaurantTRANSFORMED resourcesMaterials
Information
CustomersTRANSFORMING resourcesFacilities
StaffOUTPUTSGoods
Services
This table can be used to frame a discussion, or printed for
students to fill in during the clips
Developing a strategy
Understanding customer requirementsKey market
requirementsPit stopFactoryRestaurantORDER-
WINNERSQUALIFIERS
This table can be used to frame a discussion, or printed for
students to fill in during the clips
Developing a strategy
What is the OPERATIONS process?What are the key MARKET
requirements?
[play the clips from Le Mans, Modern Times and Dinner Rush]
While students are watching the clips, ask them to think about
the questions shown above
Developing a strategy
Operations processOperations processPit
stopFactoryRestaurantTRANSFORMED resourcesMaterials
Information
CustomersTRANSFORMING resourcesFacilities
StaffOUTPUTSGoods
Services
Car Rain tyres Raw material Pit stop Mechanics Spanners
Car with rain tyres Factory Production line Operator
Spanner Widget Raw material Order details Customer
Restaurant Kitchen Equipment Chef Waiter Food Drink
Service
Developing a strategy
Operations processOperations processPit
stopFactoryRestaurantTRANSFORMED resourcesMaterials
Information
CustomersTRANSFORMING resourcesFacilities
StaffOUTPUTSGoods
Services
Developing a strategy
Understanding customer requirementsKey market
requirementsPit stopFactoryRestaurantORDER-WINNERS
Delivery speed Price Product design
Service designQUALIFIERS Delivery reliability
Quality conformance
Price Quality conformance Quality conformance
Delivery reliability
Price
Developing a strategy
Understanding customer requirements
>KEY IDEAUnderstanding CUSTOMER requirements:
AVOID general descriptions
IDENTIFY and WEIGHT order-winners and qualifiers
What is strategy?
DIRECTION
WHAT to do
What is strategy?
HOW to do it
IMPLEMENTATION
DIRECTION
WHAT to do
Developing a strategy
The process of strategy development
Developing a strategy
The process of strategy development
Developing a strategy
The process of strategy development
>KEY IDEAUnderstanding MARKETS is DIFFICULT
Identifying SOLUTIONS is EASY
Making it HAPPEN is DIFFICULT
Developing a strategy
The process of strategy development
Developing a strategy
The process of strategy development
Developing a strategy
The process of strategy development
Alternative APPROACHESTOP-DOWN vs BOTTOM-
UPMARKET-DRIVEN vs MARKET-DRIVING
Developing a strategy
Top-down approach
FUNCTIONAL
CORPORATE
BUSINESS UNIT
Day-to-day EXPERIENCES and LEARNING
Consolidated into formal STRATEGY
Developing a strategy
Bottom-up approach
EMERGING sense of what strategy should be
Developing a strategy
Market-led orientation
MARKET DRIVES OPERATIONS
MARKET
OPERATIONS
Developing a strategy
Market-driving orientation
OPERATIONS DRIVES MARKET
MARKET
OPERATIONS
Developing a strategy
Alternative approaches
What are their strategic OBJECTIVES?What is their
STRATEGY to achieve these objectives?What APPROACH has
been used to develop and implement this strategy?
Ask students to think about the three points above while
watching the clip from each film
Developing a strategy
Alternative approachesAspectPrison CampRestaurantStrategic
OBJECTIVESSTRATEGY for meeting these
objectivesPROCESS of developing and implementing strategy
Developing a strategy
Alternative approachesAspectPrison CampRestaurantStrategic
OBJECTIVES ESCAPE from the camp
Get 250 men out Make MONEY
Produce GOOD FOODSTRATEGY for meeting these objectives
Create SMOKE SCREEN
DIG 3 TUNNELS PRIMO
Market-driving
Resource-based
CRISTIANO
Market-driven
Market-ledPROCESS of developing and implementing strategy
TOP-DOWN
PLANNED
BOTTOM UP
EMERGENT
Critical reflectionsOperations helps gain FIRST sale whilst also
securing the SECOND saleMARKET or marketing-led?Moving
to a BUSINESS-LEVEL strategic debate
Critical reflections
>KEY IDEAOperations help GAIN first sale
Whilst SECURING second sale
SummaryWhat is STRATEGY?Direction and
ImplementationLEVELS of strategyCorporate - Business -
FunctionalStrategy DEVELOPMENTUnderstand marketDevelop
capability to support or drive marketMarket
REQUIREMENTSOrder-winners and QualifiersAPPROACH to
developing strategyTop down vs Bottom upMarket-led vs
Resource-based
Alex Hill and Terry Hill
Learning objectivesAppreciate the ROLE of new service and
product development as the lifeblood of an organisationIdentify
the alternative STRATEGIES in service and product
innovationDifferentiate between LONG-TERM and TACTICAL
programmesList the STEPS involved in designing and
developing services and productsSelect from and use a range of
TECHNIQUES related to service and product design
Lecture outlineINTRODUCTIONDESIGNING and
DEVELOPING services and products TECHNIQUES for
improving designCritical REFLECTIONSSUMMARY
Designing and developing services and products
Is there DEMAND for the proposed services and products?
Can they be
DESIGNED and DELIVERED?
ALTERNATIVE STRATEGIES
The research and development process
Designing and developing services and products
FIRST-TO-MARKET cutting edge
FAST-FOLLOWER quick response
ME-TOO imitate
LATE-ENTRANT delayed response
The research and development process
LONG-TERM PROGRAMMES
TACTICAL PROGRAMMES
Designing and developing services and products
RESEARCH
Fundamental
Applied
DAY-TO-DAY
Design
Develop
Launch
>KEY IDEAResearch and development combines
LONG-TERM and TACTICAL programmes
The design and development process
Designing and developing services and products
>KEY IDEADuring the design and development process,
organisations need to use both EXTERNAL and INTERNAL
sources to generate ideas
The design and development process
Designing and developing services and products
INTERNAL SOURCES
EMPLOYEES
SERVICE or PRODUCT research and development
MARKET research
SALES force
Reverse ENGINEERING
EXTERNAL SOURCES
The design and development process
Designing and developing services and products
CUSTOMERS
SUPPLIERS
LEGISLATIVE requirements
ENVIRONMENTAL concerns
TECHNOLOGICAL advances
Reviewing the service and product mix
Designing and developing services and products
>KEY IDEAAssessing where services/products are in their LIFE
CYCLE helps when FORECASTING sales revenue
>KEY IDEAService/product PORTFOLIO ANALYSIS helps
pinpoint those services or products with the greatest potential
SALES REVENUE and CASH generation
Developing a specification
Designing and developing services and products
FACTORS TO CONSIDER
The NATURE of services and products
Developing SPECIFICATION to reflect the service/product mix
The EXPLICIT BENEFITS of the offering
The IMPLICIT BENEFITS of the offering
The supporting structural FACILITIES
>KEY IDEAThe service/product SPECIFICATION offered is
made up of explicit and implicit BENEFITS plus supporting
structural FACILITIES
Techniques for improving design
STANDARDISATION
MODULAR design
Mass CUSTOMISATION
TAGUCHI methods
Quality functional deployment (QFD) and the house of quality
VALUE analysis
Simultaneous ENGINEERING
VARIETY reduction
Techniques for improving design
Quality functional deployment (QFD)
Establish CUSTOMERS’ NEEDS and wants
Establish customers’ VIEW OF COMPETITORS
Identify TECHNICAL REQUIREMENTS
Identify LINKS between technical requirements and their effect
on different customers’ need and wants
Complete TECHNICAL COMPARISONS
Evaluate the TRADE-OFFS for different design features
>KEY IDEAQuality functional deployment links CUSTOMER
NEEDS to
OPERATIONS REQUIREMENTS
Techniques for improving design
Quality functional deployment (QFD)
Techniques for improving design
Quality functional deployment (QFD)
Techniques for improving design
Value analysis
Select the SERVICE or PRODUCT
Gather INFORMATION about it
Analyse its FUNCTION and VALUE for money
Identify ALTERNATIVE ways to provide the same function
Assess the WORTH of these ideas
DECIDE what is to be done
IMPLEMENT the decisions
Evaluate the RESULTS
>KEY IDEAValue analysis is a systematic approach to
REDUCING COSTS without reducing the service or product
specification
Should the RANGE be reduced?
Analysis of current SERVICES and PRODUCTS provided
Techniques for improving design
Variety reduction
POTENTIAL ADVANTAGES
Techniques for improving design
Variety reduction
Less DOWNTIME through fewer changeovers
Less INVESTMENT in plant and equipment
Lower INVENTORY
Less SALES EFFORT
Less AFTER-SALES support
Easier PLANNING and SCHEDULING
Better use of RESOURCES
>KEY IDEANew service and products are the LIFEBLOOD of a
business
Innovation starts with understanding the
CUSTOMEREncouraging CREATIVITY is only part of the
solutionNeed to clearly link INNOVATION with corporate
SUCCESSInnovation concerns NOT ONLY R&D, but all
aspects of a businessNeed to CONTINUALLY look to improve
and develop services and productsInnovation involves
EVERYONE and covers EVERYTHING
Critical reflections
SummaryNew service and product INTRODUCTIONLifeblood
of a businessINNOVATION concernsBreakthrough and
incremental developmentsMost companies will sell
TOMORROW what they sold TODAYNeed to rethink what they
do todayIDEAS should come fromInternal and external sources
Managing Operations
Alex Hill and Terry Hill
Learning objectivesExplain ROLE of operations management in
an organisationAppreciate the dimensions that make up the
operations management TASKIdentify where the operations
management FUNCTION fits within an organisationIllustrate
the crucial role of operations management in organiational
SUCCESS
Lecture outlineINTRODUCTIONWhat operations management
DO?Variations in the operations management ROLESERVICES
vs MANUFACTURINGCritical REFLECTIONSSUMMARY
What does Operations Management do?
Manages PEOPLE, MATERIALS, RESOURCES and
DELIVERY SYSTEMS
To deliver SERVICES and PRODUCTS
that have been sold to CUSTOMERS
>KEY IDEAOperations delivers the SERVICES and
PRODUCTS that have been sold to CUSTOMERS
>KEY IDEAOperations delivers services and products to
customers by MANAGING the PEOPLE, MATERIALS,
RESOURCES and DELIVERY SYSTEMS involved
What does Operations Management do?
How operations management fits 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
What does Operations Management do?
How operations management fits 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
What does Operations Management do?
How operations management fits into an organisation
What does Operations Management do?
To deliver SERVICES and PRODUCTS
that have been sold to CUSTOMERS
Manages PEOPLE, MATERIALS, RESOURCES and
DELIVERY SYSTEMS
The role of operations management
What does Operations Management do?
The role of operations management
DAY-TO-DAY role
STRATEGIC role
CONTENT
INTERNAL role
EXTERNAL role
STYLE
>KEY IDEADAY-TO-DAY role of operations include:
Managing within BUDGETS
SCHEDULING
SERVING customers
Meeting OUTPUT targets
Communicating with other FUNCTIONS
>KEY IDEASTRATEGIC role of operations include:
Supporting market ORDER-WINNERS and QUALIFIERS
Making company COMPETITIVE
What does Operations Management do?
The role of operations management
What does Operations Management do?
MANAGE
The role of operations management
Large COST centre
PEOPLE
TECHNOLOGY
SHORT and LONG term
Links THINKING and DOING ends of the business
>KEY IDEAManagers need to THINK and WORK in:
SHORT-TERM
LONG-TERM
What does Operations Management do?
The role of operations management
>KEY IDEAOperations:
CONTRIBUTES to gaining FIRST sale
PROCURES SECOND sale
What does Operations Management do?
Inputs and outputs
What does Operations Management do?
Inputs and outputs
Variations in the operations management role
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
>KEY IDEAOperations may PROCESS:
CUSTOMERS
CUSTOMER SURROGATES
INFORMATION and/or
PRODUCTS
Variations in the operations management role
Variations in complexity
Variations in the operations management role
Variations in output - services versus products
>KEY IDEAThe operations OUTPUT can be:
SERVICES (intangible) and/or
PRODUCTS (tangible)
Variations in the operations management role
Variations in output - services versus products
Variations in the operations management role
Variations in output - services versus products
DEPENDING ON
Nature of the OFFERING
Level of CUSTOMER involvement
Operations CAPACITY
ORGANISATIONAL arrangements
QUALITY control
COMPETITIVE environment
>KEY IDEASERVICES are CONSUMED as they’re provided
whereas most PRODUCTS can be made in advance and
STORED
Operations manager’s ROLE is both:Demanding, challenging,
absorbing and satisfying; andFrustrating and complexDAY-TO-
DAY task requires physical effortDifficult to BALANCE day-
to-day and strategic roleGood management of operations is key
to an organisation’s SUCCESS
Critical reflections
Critical reflections
SummaryDifferent SECTORSServices vs ManufacturingTASK
of operations manager is the sameDifferent focusOperations
TRANSFORMSInputs into outputs that are sold to
customersCritical to overall SUCCESS of an
organisationManages 60-70% of people, assets and costs
Pull out points above through discussion…
Make MONEY
Produce GOOD FOOD
Faculty of Business and Law
MODULE NAME: Supply Chain Operations Management
Module Code
Level
Credit Value
Module Leader
6
20
Assignment Brief
Assignment title:
Assignment 2
Deadline:
Feedback and Grades due:
30/07/19
Resit Date
TBC
Please read this assessment brief in its entirety before
attempting your assignment.
Assessment Breakdown
Company A:
A manufacturing organisation which supplies the construction
industry is currently reviewing its manufacturing processes in
order to improve production, reduce lead-times and increase
customer response. This is an attempt to keep up with demand
and increased customer requirements.
The organisation manufactures Door Hinges from different raw
materials as the main product, as well as other ironmongery
products which are fitted to doors.
The product specification and order sizes can vary from batch to
batch depending on customer requirement. On average 50% of
the product output is made up of standard sizes which can be
stocked and the other 50% are specific sizes and specific raw
materials which are specified at the point of the customer
placing the order. Raw materials have long lead-times but can
be obtained from several different suppliers.
Customers expect the manufacturing company to deliver
products within a short lead-time and this is due to the fact that
doors are fitted at the end of the construction process. An
additional issue is that the purchasing of these products can be
overlooked until a few weeks of the building completion hence
late orders come in all the time.
Company B:
Company B is also looking to improve its manufacturing
process in order to increase competition in the market as well as
reduce inventory costs and have a better managed cash flow
(capital management).
The organisation is currently holding high levels of inventory
and in contrast to organisation A, organisation B has a small
number of variation on the manufactured products as well as a
more consistent order size.
Despite the fact of having a good forecast from its customers,
organisation B still has lead-time issues and parts are
accumulating all around the shop floor due to the high number
of works in progress (WIP).
Your task
Give a brief description of lean versus agile supply chains
identifying which strategy would apply to which organisation
and why (25%)
Identify the benefits and pitfalls of each strategy giving
examples from the real world (25%)
How could these strategies be implemented by either company
A or B and what considerations need to be made in each case
(25%)
Give a real world example of an organisation that has
successfully implemented one (or both) of these strategies and
evaluate the success it has achieved since implementation of the
strategy (25%)
Learning Outcomes
The learning outcomes that are being assessed in this
assignment are:
a. Apply and reflect critically on the Supply Chain Management
Models as a basis for effective resource management.
b. Distinguish between key supply chain concepts and
techniques and apply appropriate ones for controlling and
planning cross functional operations.
c. Evaluate and synthesise the various definitions of quality in
an operational context and identify opportunities for quality
improvement.
d. Demonstrate an ability for problem-solving in complex
scenarios.
Your grade will depend on the extent to which you meet these
learning outcomes in the way relevant for this assignment.
Please see the grading rubric at the end of this assignment brief
for further details of the criteria against which you will be
assessed.
Word Limit
The maximum word limit for this assignment is 2,400 words
In accordance with the, as stated in section 4.40 where a
submission exceeds the stipulated word limit by more than 10%,
the submission will only be marked up to and including the
additional 10%. Anything over this will not be included in the
final grade for the assessment item. Abstracts, bibliographies,
reference lists, appendices and footnotes are excluded from any
word limit requirements.
In line with section 4.41 of the same Policy, where a submission
is notably under the word limit, the full submission will be
marked on the extent to which the learning objectives have been
met.
GRADE CRITERIA:
Rubric Assignment 2:
Learning Outcomes addressed through this assignment
No submission / no evidence
F
D
C
B
A
Work submitted is of no academic value / nothing submitted
Evidence included or provided but missing in some very
important aspects.
Of satisfactory quality, demonstrating evidence of achieving the
requirements of the learning outcomes
Of sound quality, demonstrative which is sufficient and
appropriate to the task or activity
Of high quality, demonstrating evidence which is rigorous and
convincing, appropriate to the task or activity
Of very high quality, demonstrating evidence which is strong,
robust and consistent, appropriate to the task or activity
Distinguish between key supply chain concepts and techniques
and apply appropriate ones for controlling and planning cross
functional operations.
Falls well short of the threshold standards in relation to one or
more area of knowledge, intellectual, subject based or key skills
Knowledge base is coherent and of appropriate depth/detail for
the field of study, including an awareness of current theories
and issues
A firm, detailed/ comprehensive knowledge base for the field of
study and its developing and provisional nature, including a
good grasp of current theories and issues both abstract and
practical
Strong comprehensive/detailed knowledge base for the field of
study, including an assured grasp of concepts, principles and
major theories. Some awareness of the provisional nature of
knowledge
Rigorous, comprehensive and detailed knowledge base,
including awareness of the provisional nature of knowledge.
Evaluate and synthesise the various definitions of quality in an
operational context and identify opportunities for quality
improvement.
Insufficient evidence of the ability to sustain valid argument,
critically evaluate evidence from a range of sources, transfer or
apply skills to solve problems in relation to threshold standards
of competence.
Primarily derivative, with limited evidence of
autonomous/creative analysis, synthesis, and evaluation or
application.
Some evidence of the ability to analyse new or abstract,
synthesise data/concepts, critically evaluate and apply
appropriate methods/techniques
Evidence of considered and confident analysis of new/abstract
data/situations, synthesis of data/concepts, critical evaluation of
evidence and effective application of knowledge skills to
address complex problems
Sustained ability to engage in analysis of new/abstract data and
situations, with confidence and authority in application.
Demonstrate an ability for problem-solving in complex
scenarios.
Major deficiencies in knowledge of wider context and
implications.
Limited knowledge of wider context and implications.
Some understanding of wider context and implications
Good understanding of wider context and implications
Detailed understanding of wider context and implications
2

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Running Head SUPPLY CHAIN OPERATIONS MANAGEMENTSupply .docx

  • 1. Running Head: SUPPLY CHAIN OPERATIONS MANAGEMENT Supply Chain Operations Management Student’s Name: Angeline Hibbert As a report this needs to have subheadings for each of the sections; a good approach is to have similar sections to the assessment brief. Your work requires more in-text citations. This is good academic practice. Please note that a high product variety that needs customisation requires a strategy that is flexible, fast and responsive- take the hint. A lean supply chain is an older method that greatly focusses on producing more and in a reduced cost. This therefore adds value for their customers and eliminates any wastage on valueless things. Its focus is on forecasting where they pre-plan years or months before production to reduce on cost especially where a large amount of goods is produced. Agile supply method on the other hand gives a high receptiveness to being flexible so as to adapt quickly to changing circumstances in the society. It handles market unpredictability by waiting to see how the market reacts, before they have finished with the production process therefore responding directly to product demand rather
  • 2. than depending on a forecast (Limm, n.d.). Company A is suited to both agile and lean supply strategies. It can be suited to the agile strategy because different customers have different tastes and preferences when it comes to product specifications. They may make more hinges and iron products which may end up not being bought by their customers. Rethink this argument. See my comment above. They may require customizing and they respond quickly to market changes and trends. Through the lean strategy, they can make the products earlier, taking into consideration the current trends in the market. This will enable them to serve customers who may require the products urgently. These are customers who may not have various specifications for the products and may take what is readily available in the market. It will also serve the inconsistent number of orders which they receive from their customers. For company B, they have to cut on inventory costs by reducing on what is produced because they have a consistent order size. To reduce accumulation of products, they should produce what their customer demands, rather than forecasting what their customers will demand but it ends up accumulating in the stores. Therefore, agile supply chain method will be better suited for company B. Some organizations may prefer the lean method because it highly cuts on the cost of production and minimizes wastage of the already produced products. It is able to minimize wastage because it can eliminate outdated inventories and possibly reduce the operational costs involved I the production process. It also provides for a timely delivery of products to customers and at the place where they want them and hence, they are able to meet customer requirements without having to observe a strict time limit which leads to an improved customer relationship. The flow of the products from the manufacturers to the consumers is made continuous and this ensures that there is no wastage of operational space which leads to a better production efficiency. Predicting how the market will be helps in preparing the processes which will be involved in the
  • 3. processing stage and they are therefore able to avoid any errors which may occur in the future (Shpak, 2018). Despite its advantages, lean method also has shortcomings which may override the advantages. There may be equipment or labor failures because change may result to fear and stress leading to loss of the optimized advantage. Though it delivers products in the right quantity, sometime there may be an error in deliveries or missed deliveries which may be caused by traffic congestion in some areas. The implementation cost involved is very high because it involves purchasing of the required machinery, training employees on the use of these machines and employing managers who are familiar with the method. Is this not the case for any manufacturing strategy? Agile manufacturing may currently be the best considered method of production. This is because it focusses more on customer needs and product design and thus, it produces goods which take into consideration changing demands. The manufacturing companies are able to quickly respond to change since they retain some mass production features and remain flexible while still doing mass customization. There is a tendency to accept uncertainty faster which leads to them solving a problem faster since it gives priority to experimentation in order to clear the uncertainty before bringing a strategy to implementation. Please provide a source for this. It is not academically sound. Also, it can be operated with a low inventory in that they produce what is demanded, thus reducing on product spoilage or being outdated. The method also has various shortcomings like lack of predictability in its approach because only what is required to lead into the next level of business is executed. Greater success in any organization is achievable through beforehand advance planning. Lack of adoption to change is another shortcoming where the employees may lack the dedication towards giving the method priority in the organization and making it work. It may be difficult to measure difficulties since tracking of progress in the agile method is difficult because of unclear resource planning. Also, lack of formal personnel training on processes
  • 4. involved and tools may lead to overlooking problems and develop bad habits that may result into a blame game and result into a poor output since the goods are produced at a much faster pace and at times with little knowledge. Source? In implementing lean method of production, the management should prepare their team for change by making them understand in details what lean production strategy is and the benefits which come with implementing it. They should understand the reason why you are implementing the method as well as the goals and objectives which they should meet by using the method. After this is understood, one should identify a pilot team who should be volunteers and start the change with them. From here, you choose a department with which you can start implementing the method, and keep progressing to another if you have successfully achieved the objectives. By doing this step by step, then you are able to finally transform the whole organization. In this section I am looking to see what techniques of lean are suited to the company according to the brief you were given; so 5S, Kanban system, JIT, etc- that’s what we are looking for. Once the organization is familiar with the concept, identify value-adding activities by involving the other team players in considering the end product that the customers get and pay for. Having identified value adding activities, identify the steps it will pass through before reaching the customers. Map each process involved and keep correcting it as you continuously implement the method. Create a flow of value on which tasks are carried out, how they are carried out noting the challenges which you may experience. After identifying challenges, you come up with a way of eliminating them so that there is a smooth delivery of the product since receiving the order to delivering the order. Having done this, establish a pull system where you process items which have a high priority as they are arranged in the queue. One identifies the time taken in production and the tasks finished in a given time. They should choose the shorter time taken with more production then continuously improve on the methods used to
  • 5. make production more effective. Implement a shared leadership model where every team player takes ownership for their tasks and has a responsibility of explaining what they did the previous day, the challenges they faced, how they plan to overcome the challenges as well as what they are going to execute. In implementing agile production strategy, they should first of all come up with a vision through calling for a strategy meeting with all the relevant personnel and stakeholders to come up with the vision and goals. Having developed the vision, they should come up with the requirements for the project and when they are going to be developed. One comes up with a goal-oriented roadmap where they identify the date to manufacture a certain product, its name, its goal, feature and metric and everyone should be informed. You only need either or. Which means you need to do one strategy for one company so you can get detail in. The product owner then should come up with the launching and release dates all the concerned employees and stakeholders should be involved in the meeting. They should then come up with short cycles in which certain goals and tasks will be carried out by the individuals. This is important since it enables the team to accurately plan on future activities. The cycle should not go for a long period. Within the short cycles, they should keep holding regular meetings which may take less time to discuss on the progress or any challenges which they are encountering. They then come up with a review plan where they establish that all the requirements were met and assessing any adjustments necessary at the end of the cycle. Finally, they should decide on what to focus on after the cycle is complete, the lesson learned in the cycle and the changes which they should make in the next cycle. Spotify is a company that successfully implemented the agile strategy. The engineering team came up with rules and created their own rules in regards to their company culture. The first thing they did was to replace the terms scrum masters and teams as used in agile methodology with the terms agile coach and squads (Eriksson, 2015). Each individual had responsibility for
  • 6. what they did and had the freedom to decide what they were going to do and how. The squads were then allowed to work in an environment which encouraged team work and sharing of ideas during meetings. These squads were given a say in making and acting according to the laid down decisions and came up with a high alignment and autonomy where the different squads could agree on a common challenge and came up with the best solutions. The different squads were allowed to experiment with whichever agile method they wanted and when any squad identified a properly functioning system, the other squads had to implement it for a period of time. The employees showed great level of respect towards each other and praised each other for the accomplished achievements which maintained a positive atmosphere and they were constantly pushed towards improving the work processes and the environment. People in the squads were allowed to move into other squads with lesser inconvenience to other squad members. These squads formed a community which related closely with each other and the leaders took upon duties such as being coaches and mentors. Lastly, the organization had a belief that they should keep coming up with new versions of their product and so the squad was continuously working to add new features to the already existing product. From the implementation of agile supply chain, Spotify has around sixty million users worldwide and were able to expand to fifty eight different countries and at the same time, are able to compete favorably with the main competitors in the music industry. They were able to recruit talented people who were in turn involved in continuous product development. The Spotify team is highly motivated to bring new developments and they are always encouraged ton aim higher. They also were able to keep up with rising market trends and this enabled them to get more users. From the squads, Spotify is able to deliver a working and tested application where they continuously work on it to ensure that it is convenient to the user. Through working with the small squads, they realized how much productive these groups were and they therefore took
  • 7. advantage of each individual’s skills and ability to mentor others in the squads. This worked best since unnecessary competition was reduced and the squads became more cohesive. There is also a continuous planning which is carried out by the organization to ensure that the software application is successful and effective as well as having the appropriate data. Through the timely planning, they have been able to continuously test and deliver quality services which they are testing continuously so as it remains relevant to their customers. Reference Limm, M. (n.d.). The Difference Between Agile vs. Lean Supply Chain Management. Retrieved from: https://blog.procurify.com/2014/04/22/agile-lean-supply-chain- management/. Wood, L.J. (26 September 2017). Disadvantages of Lean Manufacturing. Retrieved from: https://bizfluent.com/list- 6025715-disadvantages-lean-manufacturing.html. Shpak, S. (27 June 2018). Advantages & Disadvantages of Lean Production. Retrieved from: https://smallbusiness.chron.com/advantages-amp-disadvantages- lean-production-46696.html Gilley, C. (12 March 2015). The Pros and Cons of Agile Product Development. Retrieved from: https://community.uservoice.com/blog/the-pros-and-cons-of- agile-product-development/ The Core 5 Principles for Implementing Lean. Retrieved from:
  • 8. https://kanbanize.com/lean-management/implementing-lean/ MacKay, J. (January 11 2018). The Ultimate Guide to Implementing Agile Project Management (and Scrum). Retrieved from: https://plan.io/blog/ultimate-guide-to- implementing-agile-project-management-and-scrum/ Eriksson, U. (31 March 2015). How Spotify does agile – A look at the Spotify engineering culture. Retrieved from: https://reqtest.com/agile-blog/how-spotify-does-agile-a-look-at- the-spotify-engineering-culture/ Erin Brockovich https://www.imdb.com/title/tt0195685/ Instructions Write a 5 page paper (excluding title and reference page) in APA double spaced paragraph format answering the following questions. Do not strictly answer the questions in itemized format, and use citations where references are applicable. The idea behind the short paper is to watch the film and see what knowledge you have learned throughout reading the textbook you see applicable in the film and your own critical thinking/interpretation of it: Write a brief summary about the current situation in the movie and what has transpired throughout the film. During the summary, reference on some of the key points below. You are
  • 9. not restricted to these topics only: a. What is the problem, who are some “parties” that are affected by the current circumstances, and what is the current impact of the communities involved? b. What was the substance that was making people sick? What did the substance penetrate (air, drinking water, soil)? What was Erin Brockovich’s motivation for pursuing this issue? What illnesses did the substance cause? c. What laws or statues are applicable in the film ? Is there anything from the textbook that is applicable ? d. Are there any other environmental situations similar to the one in the film that have occurred in the past ? If so, which ones and what were done about them ? e. What risks did Ed Masry take as a small business owner? Did Ed Masry take a risk by hiring Erin? Why or why not? Why do you think that PG&E continued to lie to the residents of Hinkley about the water conditions? What should PG&E have done instead of lying? Consider this…is it sometimes harder to make the right (ethically correct) f. decision is than the wrong decision (unethical)? Why is this? Did the case get settle or not ? If not, what was the ultimate outcome. g. What should the government do to prevent companies from making unethical decisions? What should the consequences be? h. Think of a time in which you had to make an ethically tough decision…now, write what helped you to make the right or wrong decision. What are some suggestions for others who will face tough ethical decisions? What can help them to make the right decision? Should businesses demonstrate corporate social responsibility? Do the decisions I make impact others? Assignment will be graded on content and appropriate referencing. Any material that is copy and pasted will have points deducted. Sloppy formatting, excessive paragraph spacing to meet page requirement, and improper referencing
  • 10. will also have pointed deducted. Everyone is required to submit his or her own assignment. Plagiarism will result in a zero. All papers must be submitted via dropbox in word doc format (no .pdf) Essential operations management · Book by Alex Hill; Terry Hill 2018 Essential Essential operations management · Book by Alex Hill; Terry Hill 2011 Essential Available as an e-book Global Logistics and Supply Chain Management Book by John J. Mangan; Chandra C. Lalwani 2015 INDICATIVE CONTENT: · Globalised Logistics and Supply Chain operations · The role of supply chain operations in R&D and New Product Introduction (NPI) · Channel management including e-business, Outsourcing, Re- Shoring & In-sourcing · Ethics, Sustainability and Procurement · Big Data, Information and Communications · Reverse Logistics and managing product recalls · Circular economy and waste reduction · Risk and resilience mitigation · Role of consumers in supply chain engagement LEARNING OUTCOMES:
  • 11. Module Learning Outcomes On successful completion of the module with limited guidance, will be able to: Subject-Specific Knowledge, Understanding & Application a) Apply and reflect critically on the Supply Chain Management Models as a basis for effective resource management. b) Distinguish between key supply chain concepts and techniques and apply appropriate ones for controlling and planning cross functional operations. c) Evaluate and synthesise the various definitions of quality in an operational context and identify opportunities for quality improvement. d) Analyse the purpose and value of operations management within the supply chain context. Employability & Changemaker Skills e) Develop effective oral and written communication and digital fluency. f) Demonstrate an ability for problem-solving in complex scenarios. Readers are referred to the Programme Specification document for the list of PSRB requirements met by this module. TYPICAL LEARNING, TEACHING AND ASSESSMENT HOURS (for the module as delivered on-site at the University of Northampton): View this table on how learning, teaching and assessment hours map to the KIS Categories. Learning and teaching information for this module when delivered off-site by UN partners is available from the partner institution’s NILE site (or equivalent). Any variation in study hours must be approved by the University of Northampton before students are enrolled, ensuring that study hours provision is always appropriate to support student achievement of the module learning outcomes. Learning, Teaching and Assessment activities Study hours
  • 12. Contact hours: (total) Comprising face-to-face and online contact hours as follows: 48 · Face-to-face (total) - this may include the following: · Face to face interactive large group session (e.g. team-based learning) · Face to face interactive small group session (generic space in groups of approx. 30 e.g. seminars/workshops/tutorials (directly supervised by employers/tutors) · Off-site activities (e.g. fieldwork, visits) · F2F (broadcast) Lectures (e.g. guest speaker, cohort induction) 24 · Online contact hours(total) (comprising online activities with mediated tutor input) 24 Guided independent study hours (including hours for assessment preparation) 152 Module Total 200 Alex Hill and Terry Hill Learning objectivesUnderstand NATURE of capacity and the mix of RESOURCES involvedAppreciate the PURPOSE of
  • 13. managing capacity and the IMPACT of having too little or too much capacityExplain how to DEFINE and MEASURE capacity in different organisationsUnderstand the FACTORS involved in determining the level of capacity requiredExplain the key STEPS in capacity planningRecognise the key FACTORS in managing capacity Lecture outlineINTRODUCTIONAn OVERVIEW of managing capacityFACTORS affecting capacity managementPLANNING and MANAGING capacityCritical REFLECTIONSSUMMARY © Alex Hill and Terry Hill CAPACITY Introduction What is capacity? RESOURCES needed to: Serve customers Process information or Make products MIX of people, systems and equipment
  • 14. Introduction Purpose of managing capacity CAPACITY of resources MATCH DEMAND for services and products TO >KEY IDEAA key BUSINESS STRATEGY decision is whether capacity should LEAD or FOLLOW demand >KEY IDEATOO LITTLE capacity leads to DELAYS and possible LOST SALES TOO MUCH incurs unnecessary COSTS An overview of managing capacity Defining and measuring capacity
  • 15. TYPE Reflects SERVICE or PRODUCT to be delivered Reflects volume of DEMAND AMOUNT An overview of managing capacity Defining and measuring capacity TIME is the common denominator Some businesses would express as number of SERVICES or PRODUCTS e.g. number of people served in a restaurant An overview of managing capacity Defining and measuring capacity
  • 16. An overview of managing capacity Defining and measuring capacity >KEY IDEAOperations expresses and measures its activities in TIME The rest of the business uses MONEY An overview of managing capacity Defining and measuring capacity STATEMENT and MEASUREMENT of overall capacity will differ Overall size = ♯BEDS Emergency unit = ♯STAFF Consultant clinic = ♯APPOINTMENTS HOSPITAL EXAMPLE An overview of managing capacity Defining and measuring capacity
  • 17. An overview of managing capacity Defining and measuring capacity PLANNED capacity ACTUAL capacity >KEY IDEAUTILISATION compares ACTUAL hours worked with PLANNED hours worked
  • 18. >KEY IDEAEFFICIENCY compares ACTUAL output with EXPECTED output for the hours worked Factor affecting capacity management Impact of delivery systems and processes on capacity Use of CUSTOMERS PERISHABLE nature of service capacity BACK office vs FRONT office Use of ADEQUATE CAPACITY at each stage of the delivery system >KEY IDEAService capacity is PERISHABLE and cannot be put into inventory for use or sale in the future Factor affecting capacity management
  • 19. Determining the level of capacity ANTICIPATING END of growth AVOIDING OVER capacity LEAD or FOLLOW demand What to do with OVERCAPACITY Divest or diversify? >KEY IDEADeciding on the LEVEL of capacity involves: ANTICIPATING END of growth AVOIDING too much Deciding to LEAD or FOLLOW demand Deciding what to do with OVER-CAPACITY Divest or diversify? Factor affecting capacity management Demand fluctuations PREDICTABLE UNPREDICTABLE Cyclical Annual or seasonal Weekly or daily Random
  • 20. Unexpected Factor affecting capacity management Capacity fluctuations PREDICTABLE UNPREDICTABLE Planned increase Planned decrease Absenteeism Machine breakdown >KEY IDEAOrganisations need to SEPARATE the PREDICTABLE variations from the UNPREDICTABLE variations in demand and capacity Planning and managing capacity Issues to consider
  • 21. UNCERTAINTY Demand is UNCERTAIN ANTICIPATING THE FUTURE Forecasts are INACCURATE TIMESCALES From LONG-TERM plans to DAY-TO-DAY schedules ALTERNATIVES Different WAYS to provide capacity EXECUTION FULFILLING the plan Planning and managing capacity Resource planning AMOUNT How much is required? TIMING When is the capacity required? LOCATION Where should the capacity be located? Planning and managing capacity Resource planning CONTROL
  • 22. What ACTIVITIES should take place in the operationLayout WHEN they should take place What RESOURCES should be allocated to them PLANNING Understand what is actually HAPPENING in the operation Decide if there is any DEVIATION from what should be happening Change RESOURCES to affect the operation Planning and managing capacity Resource planning Planning and managing capacity Resource planning Forecasts Investment Long Term Planning Short Term Planning / Control 1-year demand forecasts Capacity requirements Capacity plan Medium Term
  • 23. Planning Space Layout Staff Equipment Stock Process Time Outsourcing RESOURCES Capacity Management CUSTOMERS Pricing Advertising Off-peak offers Reservations Complementary services Alternative attractions Queuing Demand Management >KEY IDEARESOURCE planning looks SEVERAL YEARS ahead to provide future capacity requirements
  • 24. >KEY IDEAMEDIUM-TERM planning looks up to TWO YEARS ahead to resolve how to provide capacity to meet forecast demand Planning and managing capacity Resource planning TYPES OF CAPACITY PLAN LEVEL capacity CHASE demand MIX plan Planning and managing capacity Resource planning
  • 25. Planning and managing capacity Resource planning Planning and managing capacity Resource planning Planning and managing capacity Resource planning Planning and managing capacity Managing demand Changing the PATTERN of demand Alternate PRICING ADVERTISING Offering COUNTER seasonal services or products SCHEDULING RESERVATIONS or APPOINTMENTS Fixed SCHEDULES
  • 26. ADVERTISING EDUCATING customers Managing UNCERTAINTY FORECASTS vs known orders Planning and managing capacity Managing capacity Short-term capacity ADJUSTMENTS OVERTIME TEMPORARY staff FLEXIBLE capacity FLEXIBLE staff PART-TIME or TEMPORARY staff SHIFT patterns STAGGERED working hours Changing capacity FORM and NATURE ANNUALISED hours SUBSTITUTING capacity by technology/customers SUBCONTRACTING >KEY IDEATaking actions to change DEMAND patterns and change the shape of CAPACITY are key tasks when managing these resources
  • 27. Planning and managing capacity Type of capacity and demandChairsTablesWaiting staffEquipmentFoodChefsAir spaceAir traffic controllersEquipmentAssembly workersNumber of planesNumber of customersNumber of ordersNumber of widgetsQuestionAir trafficRestaurantKitchenFactoryCapacityDemand Planning and managing capacity Managing capacity and demandPart-time / Temp staffStaggered workingOvertime / ShiftsFlexible staffOvertimeShift patternsHigh automationShift patternsAlternate pricingReservationsFixed schedulesAlternate pricingReservationsFixed schedulesQuestionAir trafficRestaurantKitchenFactoryManaging capacityManaging demand
  • 28. Managing capacity is COMPLEX and CHALLENGINGDECISIONS on capacity and location impact futureMarket POSITIONSMarket OPPORTUNITIESIncreasing or decreasing capacity is a MAJOR DECISIONTOO LITTLE capacity leads toDELAYS and possible LOST SALESTOO MUCH capacity incursUnnecessary COSTS Critical reflections SummaryCapacity and demand MEASUREMENT varies byDelivery system and process typeCapacity and demand FLUCTUATIONSPredicable and unpredictableResource PLANNING and CONTROLLong-term, medium-term, short- termMethods vary by delivery system and process typeManaging DEMANDChange pattern, schedule, manage uncertaintyManaging CAPACITYShort-term adjustments, flexibility, form and nature © Alex Hill and Terry Hill
  • 29. Alex Hill and Terry Hill Learning objectivesRecognise the TECHNICAL and BUSINESS requirements to be met when delivering servicesUnderstand the CHARACTERISTICS of service operationsIdentify the CATEGORIES of service and TYPES of service delivery systemExplain how to DESIGN service delivery systemsUnderstand how IT impacts service delivery Lecture outlineINTRODUCTIONFactors affecting SERVICE DELIVERY design DESIGNING the service delivery systemCritical REFLECTIONSSUMMARY Factors affecting service delivery system design SERVICE COMPLEXITY THE
  • 30. MARKET NUMBER OF STEPS Single Multiple TECHNICAL requirements The service itself BUSINESS requirements Volumes Order-winners & qualifiers Case studies:Great Nuclear FizzleLloyds BankMcDonald’sPrêt a Manger Film clips:Breakfast at Tiffany’sFive Easy Pieces >KEY IDEAAs services differ, so will the DESIGNS of their delivery systems Case studies:Great Nuclear FizzleLloyds BankMcDonald’sPrêt a Manger Film clips:Breakfast at Tiffany’sFive Easy Pieces Characteristics of service operations Factors affecting service delivery system design MIX of services and products
  • 31. INTANGIBLE nature SIMULTANEOUS provision and consumption TIME-DEPENDENT capacity CUSTOMERS can help deliver the service Need to MANAGE CUSTOMERS No PATENTS Case studies:Great Nuclear FizzleLloyds BankMcDonald’sPrêt a Manger Film clips:Breakfast at Tiffany’sFive Easy Pieces >KEY IDEAServices are PROVIDED and CONSUMED at the same time. They CANNOT be stored Case studies:Great Nuclear FizzleLloyds BankMcDonald’sPrêt a Manger Film clips:Breakfast at Tiffany’sFive Easy Pieces Understanding how services differ Factors affecting service delivery system design KEY DIFFERENCES Level of TECHNOLOGY used NATURE of service being delivered Complexity of service What is being processed TYPE of service being delivered
  • 32. Professional, Service shop or Mass service BUSINESS requirements Volumes Order-winners and qualifiers Understanding how services differ Factors affecting service delivery system design Understanding how services differ Factors affecting service delivery system design Understanding how services differ Factors affecting service delivery system design >KEY IDEAThe delivery system processes CUSTOMERS, CUSTOMER SURROGATES, PRODUCTS, INFORMATION
  • 33. or some COMBINATION of these Designing the service delivery system Overall design Understand MARKET volumes, order-winners and qualifiers Identify the service ENCOUNTER and EXPERIENCE to be delivered Understand how to RETAIN customers Designing the service delivery system Overall design Designing the service delivery system Overall design
  • 34. Designing the service delivery system CUSTOMER INTERFACE Service delivery BACK OFFICE activities FRONT OFFICE activities Designing the service delivery system Service delivery Line of visibility FRONT OFFICE No CUSTOMER CONTACT Easier SCHEDULING Higher processing VOLUMES BACK OFFICE FACILITIES represent organisation Easier to manage QUEUE lengths Involve CUSTOMERS in delivery Wider STAFF ROLES Designing the service delivery system
  • 35. CUSTOMER INTERFACE Service delivery BACK OFFICE activities FRONT OFFICE activities Number of STEPS Single vs Multiple TYPE of delivery system Non-repeat vs Repeat Low volume vs high volume DELIVERY SYSTEM Designing the service delivery system Service delivery Designing the service delivery system Other factors ENHANCING services
  • 36. Use of IT in service delivery CUSTOMER participation in service delivery Designing the service delivery system Other factors Service DELIVERY SYSTEMS must be:ALIGNED to its market ORDER-WINNERS and QUALIFIERSREFLECT its internal BUSINESS requirementsINCORPORATE IT and other DEVELOPMENT opportunitiesCustomers become MORE PROFITABLE the longer you RETAIN them Critical reflections Critical reflections Critical reflections
  • 37. Critical reflections SummaryServices have distinctive CHARACTERISTICSIntangible and perishableService delivery systems must SUPPORTTechnical and business requirementsTECHNICAL requirementsThe service specificationBUSINESS requirementsVolumes and market order-winners and qualifiers Alex Hill and Terry Hill Learning objectivesRecognise the levels at which DECISIONS about location must be madeUnderstand the background ISSUES that affect the choice of location for an operationDescribe the TECHNIQUES for choosing a location and explain how they workOutline the FACTORS that influence the choice of layoutOutline the FEATURES of each basic type of
  • 38. layoutExplain the process of layout DESIGN Lecture outlineChoosing a LOCATIONChoosing a LAYOUTCritical REFLECTIONSSUMMARY DECIDING WHERE TO LOCATE Choosing a location Size of the INVESTMENT The FIXED NATURE of the choice The UNCERTAINTY of the future >KEY IDEAOnce chosen, many organisations NEVER CHANGE location
  • 39. Choosing a location Levels of decision CHOOSING THE CONTINENT or REGION COUNTRY AREA or CITY SITE >KEY IDEAThe number of LEVELS and FACTORS involved differ DECISION by DECISION Choosing a location Background factors influencing location decisions The ORIGIN of existing location decisions POLITICALLY based constraints TECHNOLOGY developments NEW COUNTRIES are opening up Market ACCESS or local PRESENCE in large consumer markets CURRENCY value fluctuations
  • 40. Choosing a location Factors affecting the choice of location A well developed INFRASTRUCTURE Proximity to MARKETS Proximity to SUPPLIERS Hospitable BUSINESS CLIMATE Availability of STAFF Quality of LIFE for employees VARIABLE COSTS FIXED COSTS and INVESTMENTS Favourable GOVERNMENT policies Proximity to CUSTOMERS Choosing a location Factors affecting the choice of site FACILITIES for staff and customers Building’s DESIGN RENTAL costs and local taxes SPACE Proximity to SUPPORT SERVICES Room for EXPANSION Level of cutsomer TRAFFIC VISIBILITY to customers Proximity to CUSTOMERS Proximity to COMPETITORS
  • 41. Choosing a location Factors affecting the choice of site Choosing a location Site location techniques WEIGHTED factor Centre of GRAVITY Choosing a location Site location techniques Choosing a location Site location techniques
  • 42. Chosen a LOCATION Choosing a layout Choose a LAYOUT Choosing a layout Factors influencing layout Core TASK Available SPACE Making space for future EXPANSION and layout changes HEALTH and SAFETY Choosing a layout Basic types of layout FIXED position PROCESS or FUNCTIONAL SERVICE or PRODUCT
  • 43. >KEY IDEAThe BASIC TYPES of layout are: FIXED POSITION, PROCESS or FUNCTIONAL and SERVICE or PRODUCT Choosing a layout Basic types of layout Choosing a layout Basic types of layout Choosing a layout
  • 44. Basic types of layout Choosing a layout Basic types of layout Low VOLUME High High VARIETY Low Choosing a layout Service or product type, process and layout Ask students to position each service or product from the film clips on the graph above – see the lecturer zone for printouts. Choosing a layout Service or product type, process and layoutQuestionGovernmentAeroplaneCarPit StopService or productProcessLayout
  • 45. Ask students to watch the film and fill out the table above. Low VOLUME High High VARIETY Low Choosing a layout Service or product type, process and layout Car Areoplane Government Pit stop Repeat high-volume delivery system Project manufacturing process Process or functional Fixed position Mass product
  • 46. Product Service shop Special product Made on-site Line manufacturing process Repeat low-volume delivery system Cell Service shop Choosing a layout Service or product type, process and layoutQuestionGovernmentAeroplaneCarPit stopService or productProcessLayout Choosing a layout Detailed layout design Choosing a layout
  • 47. Detailed layout design The choice of location and layout significantly impacts COSTS and SALESTherefore, they must clearly reflect the NEEDS ofCUSTOMER and MARKET (external)BUSINESS (internal)In particular, the CHOICE of location is:DIFFICULT to changeLARGE and FIXED investment Critical reflections SummaryTASKS of deciding location and layoutDistinct, but relatedDecisions need to be made at a number of LEVELSContinent/region, country, area/city and siteVarious FACTORS impact the choice of locationExiting sites, proximity, political, economic, etcThree basic TYPES of layoutFixed position, process or functional, service or product
  • 48. Alex Hill and Terry Hill Learning objectivesRecognise the TECHNICAL and BUSINESS requirements to be met when making productsDefine the different TYPES of manufacturing processIdentify the APPROPRIATE manufacturing process to use for different production volumesIdentify the CATEGORIES of product and TYPES of manufacturing processUnderstand the business IMPLICATIONS of investing in alternative types of manufacturing processExplain why HYBRID processes may be introduced Lecture outlineINTRODUCTIONFactors affecting MANUFACTURING PROCESS design DESIGNING the manufacturing processHYBRID processesCritical REFLECTIONSSUMMARY © Alex Hill and Terry Hill Factors affecting manufacturing process design TECHNICAL REQUIREMENTS
  • 49. STEPS required to Turn INPUTS Into OUTPUTS VOLUMES MARKET ORDER-WINNERS QUALIFIERS BUSINESS REQUIREMENTS >KEY IDEAManufacturing processes need to meet both TECHNICAL and BUSINESS requirements Factors affecting manufacturing process design Categories of product
  • 50. Factors affecting manufacturing process design Categories of product Factors affecting manufacturing process design Types of manufacturing process Developing a strategy Understanding customer requirementsMade ON-SITEResources BOUGHT TO SITESPECIAL, non-repeatONE PERSON or SMALL GROUPSTANDARD, repeat low to high volumeHas to be RESET for each batch of products madeMASS, repeat high volumeDOES NOT have to be reset for different productsMASS, repeat very high volumeProcess runs CONTINUOUSLY and never stopsProcess typeProductProcessProjectJobbingBatchLineContinuous processing
  • 51. Designing the manufacturing process Process choices Designing the manufacturing process Process choices Designing the manufacturing process Process choices
  • 52. >KEY IDEAUse the words FLEXIBLE and AGILE with care as they have many DIFFERENT MEANINGS and, therefore, can be misleading Designing the manufacturing process Implications of process design Hybrid processes Cells
  • 53. Hybrid processes Cells Hybrid processes Cells Hybrid processes Cells Hybrid processes Cells ADVANTAGES DISADVANTAGES Less WAITING time Lower INVENTORY Easier to SCHEDULE
  • 54. Less FLEXIBLE Lower equipment UTILISATION >KEY IDEACELLS are a commonly used HYBRID PROCESS Making products Product category and process type Made on-site Special Mass StandardProjectResources moved to site Line High volume Don’t reset Special One-off Jobbing Small group Making products Product category and process typeQuestionBirdCarRestaurantPRODUCT categoryPROCESS type
  • 55. MANUFACTURING PROCESSES must be:ALIGNED to its market ORDER-WINNERS and QUALIFIERSREFLECT its internal BUSINESS requirementsEach PROCESS has a different set of TRADE-OFFSAlthough DEMAND CHANGES over time, most businesses will NOT RE-INVEST in a different processChoosing the RIGHT PROCESS for the life of a product will have a significant impact on its SALES REVENUE and PROFIT Critical reflections SummaryManufacturing processes must SUPPORTTechnical and business requirementsTECHNICAL requirementsThe product specificationBUSINESS requirementsVolumes and market order-winners and qualifiersEach process type has a different set of TRADE-OFFS Pull out points above through discussion… Make MONEY Produce GOOD FOOD © Alex Hill and Terry Hill
  • 56. Case studies:Great Nuclear FizzleLloyds BankMcDonald’sPrêt a Manger Film clips:Breakfast at Tiffany’sFive Easy Pieces Operations Strategy Alex Hill and Terry Hill Learning objectivesUnderstand LEVELS of strategy within businessDistinguish between day-to-day and strategic ROLESIdentify how different levels of strategy INTERFACE with each otherAppreciate importance of understanding MARKETSUnderstand different strategic APPROACHESDEVELOP and IMPLEMENT an operations strategy Lecture outlineINTRODUCTIONWhat is STRATEGY?LEVELS of strategy within a businessDEVELOPING a strategyIMPLEMENTING a strategyCritical REFLECTIONSSUMMARY
  • 57. What is strategy? DIRECTION WHAT to do What is strategy? HOW to do it IMPLEMENTATION DIRECTION WHAT to do >KEY IDEAOperations strategy concerns developing the CAPABILITIES of an organisation to reflect the NEEDS of its customers and markets Levels of strategy
  • 58. CORPORATE Levels of strategy CORPORATE BUSINESS UNIT FUNCTIONAL Levels of strategy CORPORATE BUSINESS UNIT Corporate DIRECTION OF TOTAL BUSINESS IMPLEMENTATION Levels of strategy Where to INVEST or DIVEST SALES REVENUE priorities
  • 59. Allocation of investment FUNDS DIRECTION OF BUSINESS UNIT Levels of strategy Business unit MARKETS in which it competes Where to GROW its business Nature of COMPETITION Relevant COMPETITIVE CRITERIA WHICH functional tasks to invest in HOW to invest in these tasks IMPLEMENTATION DIRECTION OF FUNCTION Levels of strategy Functional IMPLEMENTATION Support COMPETITIVE DIMENSIONS within a market for which it is solely or partly RESPONSIBLE
  • 60. Meeting competitive REQUIREMENTS Selecting APPROACHES to attain improvement goals Implement the PLAN Levels of strategy Functional Levels of strategy Functional Developing a strategy
  • 61. Developing a strategy Developing a strategy Developing a strategy >KEY IDEAUnderstanding MARKETS is the FIRST step in strategy development Developing a strategy Understanding customer requirements
  • 62. >KEY IDEACustomer PURCHASES are not only based on the service or product specification, but also a wide RANGE of CRITERIA such as price, delivery speed and quality conformance Developing a strategy Understanding customer requirements QUALIFIERS ORDER-WINNERS WIN you the order once you are on the shortlist Get and keep a service or product on a customer’s SHORTLIST >KEY IDEAUnderstanding CUSTOMER requirements: AVOID general descriptions IDENTIFY and WEIGHT order-winners and qualifiers
  • 63. >KEY IDEAAll functions must be involved in the discussion on HOW to GAIN, RETAIN and GROW CUSTOMERS and MARKETS A recap of the operations process is valuable at this point Developing a strategy Operations processOperations processPit stopFactoryRestaurantTRANSFORMED resourcesMaterials Information CustomersTRANSFORMING resourcesFacilities StaffOUTPUTSGoods Services
  • 64. This table can be used to frame a discussion, or printed for students to fill in during the clips Developing a strategy Understanding customer requirementsKey market requirementsPit stopFactoryRestaurantORDER- WINNERSQUALIFIERS This table can be used to frame a discussion, or printed for students to fill in during the clips Developing a strategy What is the OPERATIONS process?What are the key MARKET requirements? [play the clips from Le Mans, Modern Times and Dinner Rush] While students are watching the clips, ask them to think about
  • 65. the questions shown above Developing a strategy Operations processOperations processPit stopFactoryRestaurantTRANSFORMED resourcesMaterials Information CustomersTRANSFORMING resourcesFacilities StaffOUTPUTSGoods Services Car Rain tyres Raw material Pit stop Mechanics Spanners Car with rain tyres Factory Production line Operator Spanner Widget Raw material Order details Customer Restaurant Kitchen Equipment Chef Waiter Food Drink Service Developing a strategy Operations processOperations processPit stopFactoryRestaurantTRANSFORMED resourcesMaterials Information CustomersTRANSFORMING resourcesFacilities StaffOUTPUTSGoods
  • 66. Services Developing a strategy Understanding customer requirementsKey market requirementsPit stopFactoryRestaurantORDER-WINNERS Delivery speed Price Product design Service designQUALIFIERS Delivery reliability Quality conformance Price Quality conformance Quality conformance Delivery reliability Price
  • 67. Developing a strategy Understanding customer requirements >KEY IDEAUnderstanding CUSTOMER requirements: AVOID general descriptions IDENTIFY and WEIGHT order-winners and qualifiers What is strategy? DIRECTION WHAT to do What is strategy? HOW to do it IMPLEMENTATION DIRECTION
  • 68. WHAT to do Developing a strategy The process of strategy development Developing a strategy The process of strategy development Developing a strategy The process of strategy development
  • 69. >KEY IDEAUnderstanding MARKETS is DIFFICULT Identifying SOLUTIONS is EASY Making it HAPPEN is DIFFICULT Developing a strategy The process of strategy development Developing a strategy The process of strategy development Developing a strategy The process of strategy development Alternative APPROACHESTOP-DOWN vs BOTTOM- UPMARKET-DRIVEN vs MARKET-DRIVING Developing a strategy Top-down approach
  • 70. FUNCTIONAL CORPORATE BUSINESS UNIT Day-to-day EXPERIENCES and LEARNING Consolidated into formal STRATEGY Developing a strategy Bottom-up approach EMERGING sense of what strategy should be Developing a strategy Market-led orientation MARKET DRIVES OPERATIONS MARKET OPERATIONS Developing a strategy Market-driving orientation OPERATIONS DRIVES MARKET
  • 71. MARKET OPERATIONS Developing a strategy Alternative approaches What are their strategic OBJECTIVES?What is their STRATEGY to achieve these objectives?What APPROACH has been used to develop and implement this strategy? Ask students to think about the three points above while watching the clip from each film Developing a strategy Alternative approachesAspectPrison CampRestaurantStrategic OBJECTIVESSTRATEGY for meeting these objectivesPROCESS of developing and implementing strategy Developing a strategy
  • 72. Alternative approachesAspectPrison CampRestaurantStrategic OBJECTIVES ESCAPE from the camp Get 250 men out Make MONEY Produce GOOD FOODSTRATEGY for meeting these objectives Create SMOKE SCREEN DIG 3 TUNNELS PRIMO Market-driving Resource-based CRISTIANO Market-driven Market-ledPROCESS of developing and implementing strategy TOP-DOWN PLANNED BOTTOM UP EMERGENT Critical reflectionsOperations helps gain FIRST sale whilst also securing the SECOND saleMARKET or marketing-led?Moving to a BUSINESS-LEVEL strategic debate
  • 73. Critical reflections >KEY IDEAOperations help GAIN first sale Whilst SECURING second sale SummaryWhat is STRATEGY?Direction and ImplementationLEVELS of strategyCorporate - Business - FunctionalStrategy DEVELOPMENTUnderstand marketDevelop capability to support or drive marketMarket REQUIREMENTSOrder-winners and QualifiersAPPROACH to developing strategyTop down vs Bottom upMarket-led vs Resource-based Alex Hill and Terry Hill
  • 74. Learning objectivesAppreciate the ROLE of new service and product development as the lifeblood of an organisationIdentify the alternative STRATEGIES in service and product innovationDifferentiate between LONG-TERM and TACTICAL programmesList the STEPS involved in designing and developing services and productsSelect from and use a range of TECHNIQUES related to service and product design Lecture outlineINTRODUCTIONDESIGNING and DEVELOPING services and products TECHNIQUES for improving designCritical REFLECTIONSSUMMARY Designing and developing services and products Is there DEMAND for the proposed services and products? Can they be DESIGNED and DELIVERED?
  • 75. ALTERNATIVE STRATEGIES The research and development process Designing and developing services and products FIRST-TO-MARKET cutting edge FAST-FOLLOWER quick response ME-TOO imitate LATE-ENTRANT delayed response The research and development process LONG-TERM PROGRAMMES TACTICAL PROGRAMMES Designing and developing services and products RESEARCH Fundamental Applied DAY-TO-DAY Design Develop Launch >KEY IDEAResearch and development combines LONG-TERM and TACTICAL programmes
  • 76. The design and development process Designing and developing services and products >KEY IDEADuring the design and development process, organisations need to use both EXTERNAL and INTERNAL sources to generate ideas The design and development process Designing and developing services and products INTERNAL SOURCES EMPLOYEES SERVICE or PRODUCT research and development MARKET research SALES force Reverse ENGINEERING
  • 77. EXTERNAL SOURCES The design and development process Designing and developing services and products CUSTOMERS SUPPLIERS LEGISLATIVE requirements ENVIRONMENTAL concerns TECHNOLOGICAL advances Reviewing the service and product mix Designing and developing services and products >KEY IDEAAssessing where services/products are in their LIFE CYCLE helps when FORECASTING sales revenue >KEY IDEAService/product PORTFOLIO ANALYSIS helps
  • 78. pinpoint those services or products with the greatest potential SALES REVENUE and CASH generation Developing a specification Designing and developing services and products FACTORS TO CONSIDER The NATURE of services and products Developing SPECIFICATION to reflect the service/product mix The EXPLICIT BENEFITS of the offering The IMPLICIT BENEFITS of the offering The supporting structural FACILITIES >KEY IDEAThe service/product SPECIFICATION offered is made up of explicit and implicit BENEFITS plus supporting structural FACILITIES
  • 79. Techniques for improving design STANDARDISATION MODULAR design Mass CUSTOMISATION TAGUCHI methods Quality functional deployment (QFD) and the house of quality VALUE analysis Simultaneous ENGINEERING VARIETY reduction Techniques for improving design Quality functional deployment (QFD) Establish CUSTOMERS’ NEEDS and wants Establish customers’ VIEW OF COMPETITORS Identify TECHNICAL REQUIREMENTS Identify LINKS between technical requirements and their effect on different customers’ need and wants Complete TECHNICAL COMPARISONS Evaluate the TRADE-OFFS for different design features >KEY IDEAQuality functional deployment links CUSTOMER
  • 80. NEEDS to OPERATIONS REQUIREMENTS Techniques for improving design Quality functional deployment (QFD) Techniques for improving design Quality functional deployment (QFD) Techniques for improving design Value analysis Select the SERVICE or PRODUCT Gather INFORMATION about it Analyse its FUNCTION and VALUE for money Identify ALTERNATIVE ways to provide the same function Assess the WORTH of these ideas DECIDE what is to be done IMPLEMENT the decisions
  • 81. Evaluate the RESULTS >KEY IDEAValue analysis is a systematic approach to REDUCING COSTS without reducing the service or product specification Should the RANGE be reduced? Analysis of current SERVICES and PRODUCTS provided Techniques for improving design Variety reduction POTENTIAL ADVANTAGES Techniques for improving design Variety reduction Less DOWNTIME through fewer changeovers Less INVESTMENT in plant and equipment Lower INVENTORY Less SALES EFFORT
  • 82. Less AFTER-SALES support Easier PLANNING and SCHEDULING Better use of RESOURCES >KEY IDEANew service and products are the LIFEBLOOD of a business Innovation starts with understanding the CUSTOMEREncouraging CREATIVITY is only part of the solutionNeed to clearly link INNOVATION with corporate SUCCESSInnovation concerns NOT ONLY R&D, but all aspects of a businessNeed to CONTINUALLY look to improve and develop services and productsInnovation involves EVERYONE and covers EVERYTHING Critical reflections SummaryNew service and product INTRODUCTIONLifeblood of a businessINNOVATION concernsBreakthrough and incremental developmentsMost companies will sell TOMORROW what they sold TODAYNeed to rethink what they do todayIDEAS should come fromInternal and external sources
  • 83. Managing Operations Alex Hill and Terry Hill Learning objectivesExplain ROLE of operations management in an organisationAppreciate the dimensions that make up the operations management TASKIdentify where the operations management FUNCTION fits within an organisationIllustrate the crucial role of operations management in organiational SUCCESS Lecture outlineINTRODUCTIONWhat operations management DO?Variations in the operations management ROLESERVICES vs MANUFACTURINGCritical REFLECTIONSSUMMARY
  • 84. What does Operations Management do? Manages PEOPLE, MATERIALS, RESOURCES and DELIVERY SYSTEMS To deliver SERVICES and PRODUCTS that have been sold to CUSTOMERS >KEY IDEAOperations delivers the SERVICES and PRODUCTS that have been sold to CUSTOMERS >KEY IDEAOperations delivers services and products to customers by MANAGING the PEOPLE, MATERIALS, RESOURCES and DELIVERY SYSTEMS involved What does Operations Management do? How operations management fits into an organisation ORGANISATIONS NEED TO SELL services or products to customers
  • 85. 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 What does Operations Management do? How operations management fits 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 What does Operations Management do? How operations management fits into an organisation What does Operations Management do?
  • 86. To deliver SERVICES and PRODUCTS that have been sold to CUSTOMERS Manages PEOPLE, MATERIALS, RESOURCES and DELIVERY SYSTEMS The role of operations management What does Operations Management do? The role of operations management DAY-TO-DAY role STRATEGIC role CONTENT INTERNAL role EXTERNAL role STYLE >KEY IDEADAY-TO-DAY role of operations include: Managing within BUDGETS SCHEDULING SERVING customers Meeting OUTPUT targets Communicating with other FUNCTIONS
  • 87. >KEY IDEASTRATEGIC role of operations include: Supporting market ORDER-WINNERS and QUALIFIERS Making company COMPETITIVE What does Operations Management do? The role of operations management What does Operations Management do? MANAGE The role of operations management Large COST centre PEOPLE TECHNOLOGY SHORT and LONG term Links THINKING and DOING ends of the business
  • 88. >KEY IDEAManagers need to THINK and WORK in: SHORT-TERM LONG-TERM What does Operations Management do? The role of operations management >KEY IDEAOperations: CONTRIBUTES to gaining FIRST sale PROCURES SECOND sale
  • 89. What does Operations Management do? Inputs and outputs What does Operations Management do? Inputs and outputs Variations in the operations management role 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
  • 90. >KEY IDEAOperations may PROCESS: CUSTOMERS CUSTOMER SURROGATES INFORMATION and/or PRODUCTS Variations in the operations management role Variations in complexity Variations in the operations management role Variations in output - services versus products >KEY IDEAThe operations OUTPUT can be: SERVICES (intangible) and/or PRODUCTS (tangible)
  • 91. Variations in the operations management role Variations in output - services versus products Variations in the operations management role Variations in output - services versus products DEPENDING ON Nature of the OFFERING Level of CUSTOMER involvement Operations CAPACITY ORGANISATIONAL arrangements QUALITY control COMPETITIVE environment >KEY IDEASERVICES are CONSUMED as they’re provided whereas most PRODUCTS can be made in advance and STORED
  • 92. Operations manager’s ROLE is both:Demanding, challenging, absorbing and satisfying; andFrustrating and complexDAY-TO- DAY task requires physical effortDifficult to BALANCE day- to-day and strategic roleGood management of operations is key to an organisation’s SUCCESS Critical reflections Critical reflections SummaryDifferent SECTORSServices vs ManufacturingTASK of operations manager is the sameDifferent focusOperations TRANSFORMSInputs into outputs that are sold to customersCritical to overall SUCCESS of an organisationManages 60-70% of people, assets and costs Pull out points above through discussion… Make MONEY Produce GOOD FOOD Faculty of Business and Law MODULE NAME: Supply Chain Operations Management
  • 93. Module Code Level Credit Value Module Leader 6 20 Assignment Brief Assignment title: Assignment 2 Deadline: Feedback and Grades due: 30/07/19 Resit Date TBC Please read this assessment brief in its entirety before attempting your assignment.
  • 94. Assessment Breakdown Company A: A manufacturing organisation which supplies the construction industry is currently reviewing its manufacturing processes in order to improve production, reduce lead-times and increase customer response. This is an attempt to keep up with demand and increased customer requirements. The organisation manufactures Door Hinges from different raw materials as the main product, as well as other ironmongery products which are fitted to doors. The product specification and order sizes can vary from batch to batch depending on customer requirement. On average 50% of the product output is made up of standard sizes which can be stocked and the other 50% are specific sizes and specific raw materials which are specified at the point of the customer placing the order. Raw materials have long lead-times but can be obtained from several different suppliers. Customers expect the manufacturing company to deliver products within a short lead-time and this is due to the fact that doors are fitted at the end of the construction process. An additional issue is that the purchasing of these products can be overlooked until a few weeks of the building completion hence late orders come in all the time. Company B: Company B is also looking to improve its manufacturing process in order to increase competition in the market as well as reduce inventory costs and have a better managed cash flow (capital management). The organisation is currently holding high levels of inventory
  • 95. and in contrast to organisation A, organisation B has a small number of variation on the manufactured products as well as a more consistent order size. Despite the fact of having a good forecast from its customers, organisation B still has lead-time issues and parts are accumulating all around the shop floor due to the high number of works in progress (WIP). Your task Give a brief description of lean versus agile supply chains identifying which strategy would apply to which organisation and why (25%) Identify the benefits and pitfalls of each strategy giving examples from the real world (25%) How could these strategies be implemented by either company A or B and what considerations need to be made in each case (25%) Give a real world example of an organisation that has successfully implemented one (or both) of these strategies and evaluate the success it has achieved since implementation of the strategy (25%) Learning Outcomes The learning outcomes that are being assessed in this assignment are: a. Apply and reflect critically on the Supply Chain Management Models as a basis for effective resource management. b. Distinguish between key supply chain concepts and
  • 96. techniques and apply appropriate ones for controlling and planning cross functional operations. c. Evaluate and synthesise the various definitions of quality in an operational context and identify opportunities for quality improvement. d. Demonstrate an ability for problem-solving in complex scenarios. Your grade will depend on the extent to which you meet these learning outcomes in the way relevant for this assignment. Please see the grading rubric at the end of this assignment brief for further details of the criteria against which you will be assessed. Word Limit The maximum word limit for this assignment is 2,400 words In accordance with the, as stated in section 4.40 where a submission exceeds the stipulated word limit by more than 10%, the submission will only be marked up to and including the additional 10%. Anything over this will not be included in the final grade for the assessment item. Abstracts, bibliographies, reference lists, appendices and footnotes are excluded from any word limit requirements. In line with section 4.41 of the same Policy, where a submission is notably under the word limit, the full submission will be marked on the extent to which the learning objectives have been met.
  • 97. GRADE CRITERIA: Rubric Assignment 2: Learning Outcomes addressed through this assignment No submission / no evidence F D C B A Work submitted is of no academic value / nothing submitted Evidence included or provided but missing in some very important aspects. Of satisfactory quality, demonstrating evidence of achieving the requirements of the learning outcomes Of sound quality, demonstrative which is sufficient and appropriate to the task or activity Of high quality, demonstrating evidence which is rigorous and convincing, appropriate to the task or activity Of very high quality, demonstrating evidence which is strong, robust and consistent, appropriate to the task or activity Distinguish between key supply chain concepts and techniques and apply appropriate ones for controlling and planning cross functional operations. Falls well short of the threshold standards in relation to one or more area of knowledge, intellectual, subject based or key skills Knowledge base is coherent and of appropriate depth/detail for the field of study, including an awareness of current theories and issues A firm, detailed/ comprehensive knowledge base for the field of
  • 98. study and its developing and provisional nature, including a good grasp of current theories and issues both abstract and practical Strong comprehensive/detailed knowledge base for the field of study, including an assured grasp of concepts, principles and major theories. Some awareness of the provisional nature of knowledge Rigorous, comprehensive and detailed knowledge base, including awareness of the provisional nature of knowledge. Evaluate and synthesise the various definitions of quality in an operational context and identify opportunities for quality improvement. Insufficient evidence of the ability to sustain valid argument, critically evaluate evidence from a range of sources, transfer or apply skills to solve problems in relation to threshold standards of competence. Primarily derivative, with limited evidence of autonomous/creative analysis, synthesis, and evaluation or application. Some evidence of the ability to analyse new or abstract, synthesise data/concepts, critically evaluate and apply appropriate methods/techniques Evidence of considered and confident analysis of new/abstract data/situations, synthesis of data/concepts, critical evaluation of evidence and effective application of knowledge skills to address complex problems Sustained ability to engage in analysis of new/abstract data and situations, with confidence and authority in application. Demonstrate an ability for problem-solving in complex scenarios. Major deficiencies in knowledge of wider context and implications. Limited knowledge of wider context and implications. Some understanding of wider context and implications
  • 99. Good understanding of wider context and implications Detailed understanding of wider context and implications 2