OM-Block-1 - INPUT OUTPUT MODEL AND PERFORMANCE OBJECTIVES PDF

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INPUT OUTPUT MODEL AND PERFORMANCE OBJECTIVES ...

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Seminar 1 Operations are about creating value to the customer. Operations management is about managing the product and services and their value. Transformed resources (material, information, customers) Transforming resources (facilities, staff) 5 performance objectives: cost, speed, quality, flexibility, dependability. -short lead-times -fast volume changes -fast design changes -dependable deliveries -low prices -quality conformance -quality (specification -sales support services

 What is an operation Operations Management is the design, control and coordination of resources and processes to provide customer and stakeholder value. -Resources (tangible/intangible) -Processes -Customers -Stakeholders =>We need to think how we control and coordinate these.

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The input process of operations

 The input-process-output model of operations

It’s about input (materials, information, people)/output (products and services), transforming resources and processes and control and coordination. =>Operations have inputs, processes, resources and outputs. -Ex for coffee: The inputs are the order, materials (water, gears, milk) are the transformed. The transforming resources are the barrister and processes machines. . The output is the cup of coffee. -Ex for car fracturing: The input is information (order, to control parts supply), parts. The control and coordination deals with 5000 parts. The transforming are the plant, processors, The output is the car. -Ex for house building: building materials (transformed), transforming (builders) -Ex for music concert: musician because get paid (transformed), person puts input in the process -Ex for hairdresser: (input) audience is the transformed resource, transforming =>Operations can be considered as having inputs, processes, resources and outputs =>What are the transformed and transforming resources?

 The four Vs of operations What are the characteristics of an operation? Volume, variety, variation -high volume for training shoes. -limited variety at McDonalds, whereas high variety with toppings at 5 Guys. -variation, demand for toothpaste stable, ice-cream consumption depends on the weather and the season., so variation in D. -visibility: amazon no visibility of what’s happening in the warehouse.

The 4V’s:  Volume of output Low volume: low repetition, each member of staff performs more tasks, less systematization, higher unit costs High volume: high repeatability, specialisation, systematization, capital intensive, low unit costs

 Variety (range) of output low: efficiency, well defined, routine, standardised, regular, low unit costs high: need to have more inventory, slow process, flexible, complex, market customer needs, high unit costs

 Variation: how much is demanded Low: stable, routine, predictable, high utilization, low unit costs High: changing capacity, anticipation, flexibility, in touch with demand, high unit costs

 Degree of visibility which customers have of the creation of their output Low: time lag between P and C, standardized, low contact skills, high staff utilization, centralization (limited nb of wharehouse), low unit costs High: short tolerance to waiting, satisfaction governed by customer perception, customer experience management critical, received variety high, high unit costs

High volume, low variety, low variation, pretty high visibility =>Operations are characterized by 4V =>These characteristics affect: cost, efficiency, human resources

Operations performance objectives  Operations performance objectives

How do we determine whether an operation is performing as it should? 5 performance objectives: quality, speed, dependability, flexibility, cost. 5 perf:  Quality (doing it right) : ↓ costs, ↑ dependability, ↑ customer satisfaction, price premium  Speed (fast): ↓ inventory, ↓ risk cause by D variability, competitive advantage  Dependability (on time) security of functionnality: save time, money and gives stability  Flexibility (doing different things) : product/service flex, mix flex, volume flex, delivery flex => speeds up response, saves times, maintains depend  Cost (cheaply): how majority of operations are measured, competition is about price, firms exist to make profits/margin

Quality: -Specification -Conformance Mcdonalds: -> very high conformance, mid specification, high speed, high dependability, low flex, low cost Hotel: low conf, low speed, big flex, high cost =>5 performance objectives =>cost - function of other 4 performance objectives =>internal/external benefits =>trade-offs between them =>level of operation pp.6-12 pp.23-26 p.46-60...