Ops management - Lecture notes 1-10 PDF

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Summary

The role of operations management is to manage the transformation process of an organisation’s inputs into finished goods and services Process View of Operations 2 types of transforming resources - Facilities, such as building, equipment and process technology. - Staff, all the people involved in th...

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The r ol e ofoper at i onsmanagementi st o manage t he t r ansf or mat i on pr ocess of an or gani sat i on’ s i nput si nt ofini shedgoodsandser vi ces Pr ocessVi ew ofOper at i ons 2t ypesoft r ansf or mi ngr esour ces - Faci l i t i es, such as bui l di ng, equi pmentandpr ocesst echnol ogy . - St aff,al lt hepeopl ei nv ol v edi nt he oper at i onspr ocess .I nser vi cest he cus t omermaywel lbei nv ol vedasa t r ansf or mi ngr esour ce. 3t ypesoft r ansf or medr esour ces Mat er i al s -t hese can be t r ansf or med ei t herphy si cal l y( e. g.manuf act ur i ng) ,by l ocat i on ( e. g. t r anspor t at i on) , by owner shi p ( e. g. r et ai l ) or by st or age ( e. g. war ehousi ng) , - I nf or mat i on-t hi scanbet r ansf or medbypr oper t y( e. g.account ant s) ,byposses si on ( e. g. mar k et r esear ch) , by s t or age ( e. g. l i br ar i es) , or by l ocat i on ( e. g. t el ecommuni cat i ons) , - Cust omer s-t heycanbet r ansf or medei t herphys i cal l y( hai r dr esser ) ,byst or age( e. g. hot el s) ,by l ocat i on ( e. g.ai r l i nes) ,by phy si ol ogi calst at e( e. g.hospi t al s) ,orby ps yc hol ogi cal st at e( e. g.ent er t ai nment ) . Ser vi cesi noper at i onsmanagement Pr oducerser vi ces ar e used i nt he pr oduct i on and del i ver yofgoods and ser vi ces and const i t ut efir mspr ovi di ngs er vi cessuchas; -

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consul t anc yadvi ce l egal advi ce I Tsuppor t Tr anspor t at i on mai nt enancef aci l i t i es

Consumerser vi cesar eser vi cesai medatt hefinalconsumer sandt hesehav er i s eni nl i ne wi t hpeopl e’ si ncr easi ngdi sposabl ei ncomei ndev el opedcount r i es . -

E. g.Hot el s ,r est aur ant s,gyms

TypesofSer vi ceOper at i ons Tangi bi l i t y - Goodsar et angi bl e,t heyar eaphys i cal t hi ngy oucant ouch. - As er vi cei si nt angi bl eandcanbeseenasapr ocesst hati sact i v at edondemand. - Goodsandser vi cescanbebot ht angi bl eandi nt angi bl e - E. g.r est aur ant=ser vi ce+f ood Si mul t anei t y ser vi cesar epr oducedandconsumedsi mul t aneousl y. - cannotst or easer vi cei nant i ci pat i onoff ut ur edemand! - ser vi c epr ov i derandcust omerwi l l i nt er actdur i ngt heser vi cedel i v er ypr ocess Ther ol eofser vi cesi noper at i onsmanagement Thedegr eeofcust omercont acti nser vi ces -

Notal lempl oyeesi naser vi cedealdi r ect l y wi t ht hecust omer ‘ backoffice’ ;t askswhi c haddv al uet ot he

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i nput sofser vi ceoper at i ons ‘ f r ontoffice’ ;whodeal di r ect l ywi t hc ust omer s

Cur r enti ssueswi t hopsmanagement Technol ogy -

Aut omat i on–‘ t her obot sar ecomi ng’ Di gi t i sat i on–i ndust r y4. 0( RFI D,l o T,bi gdat a) Addi t i v emanuf act ur i ng( 3Dpr i nt i ng)

Busi nessEnvi r onment -

Sust ai nabi l i t y–Wast e,car bonEmi ssi ons Ser vi t i sat i on Br ex i t / t r ump

St r at egi cRol eofOper at i ons Oper at i onsst r at egycanbeseenf r om mar ket basedandr esour cebasedper spect i ves. - mar k et based appr oach-t r ansl at es mar ketposi t i on i nt o a numberofper f or mance obj ect i v esf orops - r esour cebas edvi ew-assess eshow t heoper at i onsr esour cesandpr ocessesl eadt oan oper at i onscapabi l i t y Per f or manceobj ect i ves Qual i t y - cov er sbot ht hequal i t yoft hedesi gnofpr oductorser vi cei t sel f&qual i t yoft hepr ocess - Fr om cust omerper spect i vequal i t ychar act er i st i csi nc o r el i abi l i t y o per f or mance o aest het i cs. - Fr om oper at i onsvi ewpoi ntqual i t yi sr el at edt ohow cl osel yt hepr oductorser vi cemeet st he speci ficat i onr equi r edbyt hedesi gn,t er medt hequal i t yofconf or mance. - Adv ant agesofGoodqual i t y o I ncr easeddependabi l i t y o r educedcost s o i mpr ov edcust omerser vi ce Speed - Speed i st he t i me del ay bet ween a cust omerr equestf ora pr oductorser vi ce and t hen r ecei vi ngt hatpr oductors er vi ce. - Theact i vi t i est r i gger edf r om acust omerr equestf orapr oductorser vi cewi l lbedependenton whet heramak et ost ockorcust omer t oor derdel i v er ysy st em i si npl ace. - Adv ant agesofSpeed o l es sant i ci pat i onst ock=r educedcost s, o r educeddel i ver yt i me=bet t erc ust omerser vi ce Dependabi l i t y - consi s t ent l ymeet i ngapr omi seddel i v er yt i mef orapr oductorser vi cet oacust omer . - i ncr easei ndel i v er yspeedmaynotl eadt ocus t omersat i sf act i on i fi ti snotpr oducedi na consi s t entmanner . - Adv ant agesofDependabi l i t y o l eadst obet t ercust omerser vi ce Fl exi bi l i t y - abi l i t yf orcompanyt ochangewhati tdoes. - Typesofflex i bi l i t y-pr oductorser vi ce,mi x ,v ol umeanddel i ver y - measur ed i nt er msofr ange ( t heamountoft he change)andr esponse( t he speed oft he change) . - Adv ant agesofflexi bi l i t y o adaptt oc hangi ngcust omerneeds

Cost - t hefinancer equi r edt oobt ai nt hei nput s( i . e.t r ansf or mi ngandt r ansf or medr esour ces)and managet het r ansf or mat i onpr ocesswhi c hpr oducesfini shedgoodsandser vi ces . - Adv ant agesofCost o compet eonpr i ceandst i l l makeapr ofit o Enabl es fir mswho ar e notcompet i ng on pr i ce t o mak e hi gherpr ofit st han t he ot her wi sewoul d

Oper at i onsSt r at egy St r at egy- ‘ St r at egyi st hedi r ect i onandscopeofanor gani sat i onov ert hel ongt er m:i deal l y , whi ch mat ches i t sr esour ces t oi t s changi ng env i r onment ,and i n par t i cul ari t s mar k et s, cus t omer sorcl i ent ssoast omeetst akehol derexpect at i ons. ’ 3mai nl evel sofcor por at e,busi nessandf unct i onalst r at egy: Cor por at el ev el St r at egy Att he hi ghestorcor por at el evelt he st r at egy pr ov i des l ongr ange gui dance f ort he whol e or gani s at i on Busi nessLev elSt r at egy Her et heconcer ni swi t ht hepr oduct sandser vi cest hatshoul dbeoffer edi nt hemar k etdefined att hecor por at el ev el Funct i onal Lev el St r at egy Thi si s wher et he f unct i ons oft he busi ness( e. g.oper at i ons,mar k et i ng, finance) mak e l ongr ange pl ans whi ch suppor t t he compet i t i ve advant age bei ng pur sued by t he busi nessst r at egy. Hi l l( 2000)oper at i onst r at egyf r amewor k 1. Definecor por at eobj ect i v es - es t abl i shi ngcor por at eobj ect i vest hatpr ov i deadi r ect i onf ort heor gani sat i on - wi l l bedependentont heneedsofex t er nalandi nt er nal st akehol der s - wi l li ncl udefinanci almeasur essuchaspr ofitandgr owt hr at es,empl oy eepr act i ces–i . e. s ki l l sdev el opmentandenvi r onment alpol i c i es. 2. Det er mi nemar k et i ngst r at egi est omeett heseobj ect i v es - dev el opi ngamar ket i ngst r at egyt omeett hecor por at eobj ect i v esdefinedabov e. - i nvol v esi dent i f yi ngt ar getmar k et sanddeci di nghowt ocompet ei nt hesemar k et s. - Wi l lr equi r et he ut i l i sat i on ofpr oduct / ser vi ce char act er i st i cs such as r ange,mi x and v ol umet hatt heoper at i onsact i vi t ywi l l ber equi r edt opr ovi de. 3. Assesshowdi ffer entpr oduct swi nor der sagai nstcompet i t or s - l i nkbet weent hecor por at eobj ect i v es - achi evedbyt r ansl at i ngmar k et i ngst r at egyi nt or angeofcompet i t i vef act or s( e. g.pr i ce, qual i t y ,del i v er yspeed) - i mpor t antt oi dent i f ywhi c hcompet i t i v ef act or sar emosti mpor t anti nwi nni ngor der s. 3appr oachesar e: 1) Measur i ngt her el at i vei mpor t anceoft hecompet i t i vef act or s–Cust omer s( Hi l l ) Hi l l di st i ngui shesbet weent hef ol l owi ngt ypesofcompet i t i v ef act or s qual i f yi ngf act or s–Per f or manceofqual i f yi ngf act or smustbeatacer t ai nl evelt ogai nbusi ness f r om cust omer s,per f or mance abov et hi sl ev elwi l lnotnecessar i l y gai nf ur t her compet i t i ve adv ant age. or der wi nni ngf act or s–Theyar ek eyr easonsf orcus t omer spur c hasi ngt hegoodsorser vi cesand r ai si ngt heper f or manceoft heor der wi nni ngf act ormaysecur emor ebusi ness

-essent i alt omeetbot hqual i f yi ngandor der wi nni ngcr i t er i at obeconsi der edandt henwi ncust omer or der s. Howeveronl yor der wi nni ngcompet i t i vef act or sar econver t edt oper f or manceobj ect i vesas t heyr equi r ebei ng‘ best i ncl ass’ .

2)

Measur i ngt heRel at i veI mpor t anceoft heCompet i t i veFact or s–Cust omer sandCompet i t or s ( Sl ack) hel poper at i onsmanager spr i or i t i seper f or manceobj ect i v es. - The r el at i vei mpor t anceofa compet i t i v ef act ori sasses sed i nt er msofi t si mpor t ancet o i nt er nalorex t er nalcus t omer susi nga9poi ntscal eofdegr eesofor der wi nni ng,qual i f yi ng andl essi mpor t antcust omervi ewedcompet i t i vef act or s . - Ther el at i v eper f or manceofacompet i t i v ef act oragai nstcompet i t orachi ev ement .A 9poi nt per f or mance scal e( r at i ng f r om consi st ent l y bet t er t han t he near estcompet i t or t o consi s t ent l ywor stt hanmostcompet i t or s)i susedf oreachper f or manceobj ect i v e. Pl oteachi mpor t ancer at i ngandper f or mancer at i ngi nani mpor t anceper f or mancemat r i x . I ndi cat eswhatcust omer sfindi mpor t anti nachi ev edper f or mancewhencompar edwi t hcompet i t or per f or mance. Thei mpor t anceper f or mancemat r i xi sdi vi dedi nt o4z ones.Thez onesar edefinedasf ol l ows : Appr opr i at e-Per f or manceobj ect i v esi nt hi sz onear es at i s f act or yi nt heshor tt omedi um t er m,but s houl dbeawi sht oi mpr ov eper f or mancet owar dst heupperboundar yoft hez one. I mpr ov e-Per f or manceobj ect i v esbel ow t hel owerboundoft heappr opr i at ezonewi l lbecandi dat es f ori mpr ov ement . Ur gentAct i on-per f or manceobj ect i v esar ef arbel ow whatt hecus t omerr equi r esandsoshoul dbe i mpr ov edt o‘ sameas ’ or‘ bet t ert hen’ compet i t orper f or mance. Ex cess ?-t oomanyr esour cesmaybebei ngusedt oachi ev et hi sl ev elofper f or mance.Ther ei sa possi bi l i t yt hatt heycoul dber edepl oy edt oal esswel l per f or mi ngar ea. 3) Measur i ng t he Rel at i ve I mpor t anceoft heCompet i t i ve Fact or s–ThePr oduct / Ser vi ce Li f ecycl e  Thepr oduct / s er vi cel i f ec yc l e ( PLC)pr ovi des one way of gener al i s i ng c ust omer and compet i t or behav i our ov er t i me.  I ti sat t emptt o descr i be t he changei nsal esvol umef ora par t i cul arpr oductorser vi ce

f r om bei ngi nt r oducedi nt oamar k etunt i l i t swi t hdr awal . 4. Est abl i sht hemostappr opr i at emodet odel i v ert heseset sofpr oduct s 5. Pr ovi det hei nf r ast r uct ur er equi r edt osuppor toper at i ons St ep 4 Del i ver y Syst em Choi ce ( St r uct ur alDeci si ons)and St ep 5 I nf r ast r uct ur e choi ce ( I nf r ast r uct ur alDeci si ons) St eps4and 5ofHi l l ’ smet hodol ogyi nvol vesput t i ng t hepr ocessesandr esour cesi n pl ace whi chpr ovi det her equi r edper f or manceasdefinedbyt heper f or manceobj ect i ves. Hi l lcat egor i sesoper at i onsdeci si onar easi nt odel i ver ysyst em choi ce,whi chi sof t enr ef er r ed t o as st r uct ur al deci si ons andi nf r ast r uct ur e choi ce, whi ch i s of t en t er med i nf r ast r uct ur aldeci si ons. 

Del i v er ys ys t em choi ce aspect s oft he or gani s at i on’ sphy si calr esour ces such as ser vi c e del i v er ysy st emsandcapaci t ypr ovi s i on

Suppl ychai nmanagement A suppl y chai n can be defined as one of t he ser i es of

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l i nkagesf r om suppl i er st ocust omer swi t hi nt hesuppl ynet wor k Suppl y Chai n Managementi st he managementoft he flow ofmat er i al st hr ough t hesuppl y chai n. Eachpr oductorser vi cewi l lhavei t sownsuppl ychai n SCM wi l lbedi scussedi nt er msof : 1.Suppl yChai nDesi gn 1A.Var i abi l i t yi nt hesuppl ychai n 1B.Agi l eandLeansuppl ychai ns 1C.Suppl yChai nI nt egr at i on 2.Suppl yChai nAct i vi t i es 2A.Pr ocur ement 2B.Phy si cal Di st r i but i onManagement

1A)Var i abi l i t yI nt hesuppl ychai n l ack of s ynchr oni s at i on i s suppl y chai n member s,whenev enasl i ghtchangei nconsumersal eswi l lr i ppl ebackwar dsi nt hef or m ofmagni fied osci l l at i onsi ndemandupst r eam ( • t ol i mi tt hebul l whi peffectact i onscanbet aken.  shar ei nf or mat i onamongstmember soft hesuppl ychai n.  usef ulf ormember st o hav e accesst ot he pr oductdemand t ot he finalsel l er ,so t hatal l member si nt hechai nar eawar eoft het r uecust omerdemand.  Av oi di ngpr i cepr omot i ons 1B)Agi l eandLeansuppl ychai ns Ai mt oembr aceuncer t ai nt yi nmar k et sandachi ev ecompet i t i v eadv ant agebyt heflex i bi l i t yandspeed oft hei rr esponset ot hem. Lean suppl ychai ns emphasi s e effici encybymi ni mi s i ng wast e byf orex ampl er educi ng i nv ent or y l evel sacr osst hesuppl ychai n. Theconceptofl eagi l i t yat t empt st ocombi net heuseofl eanandagi l esuppl ychai nappr oachesusi ng 3met hods : 1. Par et or ul e–80/ 20r ul e–80% v ol umei nsuppl ychai ni sgener at edf r om 20% ofpr oductl i ne. -so,usel eanf or20% ofpr edi ct abl ehi ghvol umepr oductl i nest oseekeconomi esofscal e.

2. Post ponement

3. Bas eandSur ge

1C)Suppl ychai ni nt egr at i on Or gani sat i onsi nasuppl ychai ncanhavevar yi ngdegr eesofcooper at i onandi nt egr at i on.The or gani sat i onmustmakeast r at egi cdeci si onaboutwhati tkeeps‘ i nhouse’andwhati t out sour ces.

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Mar ketr el at i onshi ps o eachpur chasei st r eat edasasepar at et r ansact i onandt her el at i onshi pbet weent he buy erandsel l erl ast sasl ongast hi st r ansact i ont akes . o addi t i onalar r angement sar oundt hi sr el at i onshi psuchast heuseofel ect r oni cdat a i nt er change( EDI )f aci l i t i est oshar ei nf or mat i on,combi ni ngor der si nasi ngl edel i v er y t or educe t r anspor t at i on cost s,agr eement s on packagi ng st andar ds t oi mpr ov e

o o

mat er i al shandl i ngandot herf act or s. advant ages- per mi t sflex i bi l i t yi nt hatsuppl i er scanbechangedordi scont i nuedi f demanddr opsoras uppl i eri nt r oducesanewpr oduct . di sadv ant ages-ei t hersi decanendt her el at i onshi patanyt i me.

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St r at egi cPar t ner shi psandal l i ances •l ongt er mr el at i onshi pwher eor gani sat i onswor kt oget herands har ei nf or mat i onr egar di ng aspect ssuchaspl anni ngs ys t ems&dev el opmentofpr oduct sandpr ocess es. • The i dea i st o combi ne t he adv ant agesofa mar k et pl ace r el at i ons hi p whi c h encour ages flexi bi l i t yandi nnov at i onwi t ht headv ant agesofv er t i cali nt egr at i onal l owscl osecoor di nat i on andcont r ol ofqual i t yet c. • Fr om s uppl i er v i ewpoi nt - l ongt er m st r at egi c par t ner shi pmaygi v econfidencet oi nv esti nr esour ces and f ocus on a pr oductl i ne t os er v e a par t i c ul ar cus t omer .

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Thevi r t ualor gani sat i on The f or m ofan or gani s at i on’ sr el at i onshi p wi t hi ni t s suppl y c hai n i s i ncr easi ngl y bei ng affect ed by dev el opment si nebusi nesss ys t ems. Ebusi ness i nv ol v es el ect r oni cal l y medi at ed i nf or mat i on ex changes ,bot h wi t hi n an or gani s at i on andbet weenor gani sat i ons. • Ebusi nesscanal t ert hesuppl ychai nst r uct ur ebyby passi ngsomeoft het i er susi ngapr ocessknownas di si nt er medi at i on( r emov ei nt er medi ar i es) . • usedf ort hecr eat i onofnew i nt er medi ar i esbet ween cus t omer sandsuppl i er si nt hesuppl ychai n. • Rei nt er medi at i on r emov es t he i neffici ency of checki ngal l t hesuppl i er sbypl aci ngani nt er medi ar ybet weenpur chaserandsel l er .

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Ver t i calI nt egr at i on Compl et ei nt egr at i oni sachi ev edbyanor gani sat i on whent heyt ak eowner shi pofot heror gani sat i onsi n t hesuppl ychai n.Theamountofowner s hi poft he suppl ychai nbyanor gani sat i oni st er medi t sl ev elof v er t i cal i nt egr at i on. Backwar d i nt egr at i on, i mpl ement ed by owni ng suppl i er s, can sec ur e suppl i es of component s whos e av ai l abi l i t yandpr i cet o compet i t or scanbe cont r ol l ed.

2A)pr ocur ement The r ol e ofpr ocur ementi st o acqui r e al lt he mat er i al s neededbyanor gani s at i oni nt hef or m ofpur chases, r ent al s ,cont r act s and ot heracqui si t i on met hods. The pr ocur ementpr ocess al so i ncl udes act i vi t i es s uch assel ect i ng suppl i er s,appr ov i ng or der sand r ecei vi nggoodsf r om suppl i er s . Choosi ngSuppl i er s Bef or e choosi ng a suppl i er ,t he or gani sat i on mustdeci de whet heri ti sf easi bl e and desi r abl et o

pr oducet hegoodorser vi cei nhouse. Buy er si npur c hasi ngdepar t ment s,wi t hass i st ancef r om oper at i ons ,wi l lr egul ar l yper f or m amak eor buyanal ys i st odet er mi net hesour ceofsuppl y . I fa deci si on i smade t o use an ext er nals uppl i er ,t he nextdeci si on r el at est ot he choi ce oft hat s uppl i er . Cr i t er i af orchoosi ngsuppl i er sf orquot at i onandappr ov al i ncl udet hef ol l owi ng: Pr i ce Qual i t y Del i ver y 2b)Physi calDi st r i but i onManagement Physi cal Di st r i but i on Management , somet i mes cal l ed busi ness l ogi st i cs, r ef er st o t he movementofmat er i al sf r om t heoper at i ont ot hecust omer . Fourmai nar easofphysi caldi st r i but i onmanagementar e: mat er i al shandl i ng war ehousi ng -

One oft he maj ori ssuesi n war ehousi ng/ di s t r i but i on i st he l ev elofdecent r al i sat i on oft he war ehousi ngf aci l i t y packagi ng t r anspor t at i on

Pr oductSer vi ceandDesi gn Thedesi gnpr ocessi nvol vest hef ol l owi ngst eps: 1.I deaGener at i on 2.Feasi bi l i t ySt udy 3.Pr el i mi nar yDesi gn 4.Fi nal Desi gn

Pr ocessdesi gn • Pr ocessesex i sti nal l par t soft heor gani sat i onandacr ossor gani s at i onsi nt hesuppl ychai n. • Wel l desi gnedpr ocessest hatmeett heneedsoft hecust omerar eess ent i ali fanor gani sat i oni st o r emai ncompet i t i v e. • To desi gn and measur et he per f or mance ofa pr ocessy ou need an under st andi ng oft he whol e pr ocessacr osst hesuppl ychai n

St epsi npr ocessdesi gn 1. I dent i f yi ngoppor t uni t i esf orpr ocessi mpr ov ement • Thei dent i ficat i onofact i vi t i esi nacur r entpr ocessdesi gn • Pr ocesses wi t h gr eat esti mpactand gr eat estpot ent i alf or i nnov at i on ar e pr i or i t i sed ( Gr easl ey) 2. Documentt hepr ocessdesi gn • Once oppor t uni t i es f orpr ocess i mpr ov ementhav e been i dent i fied i ti s necess ar yt o documentt hecur r entpr ocessdesi gns • Thi si sadat acol l ect i onex er ci s eusi ngmet hodssuchasi nt er vi ewsandobser vat i on. • t opr ov i deaf r amewor kf ort her edesi gn-t hedocument at i ont echni quesofpr ocessmappi ng andser vi cebl uepr i nt i ngcanbeused. 3. Redesi gnt hepr ocess - Manyway sapr ocesscanbedesi gnedt omeetpar t i cul arobj ect i v es. - So,necess ar yt ogener at ear angeofi nnov at i v esol ut i onsf orev al uat i on. Thr eeappr oacheswhi c hcanbeusedt ogener at enewi deasar e - Gener at i ngnewdesi gnst hr oughbr ai nst or mi ng o Thi sappr oach offer st he gr eat estscope f orr adi c ali mpr ov ement st ot he pr ocess desi gnbutr epr esent sar i s ki nt hei mpl ement at i onofat ot al l ynewappr oach. - Modi f yi ngEx i st i ngDesi gns o Thi sappr oachi sl essr i skyt hanabl ueski esappr oachbutmaymeant heoppor t uni t y f orar adi cal i mpr ov ementi npr ocessdesi gni smi ssed - Usi nganest abl i shed‘ benchmar k’ desi gn o Thi s appr oach appl i es t he i dea ofi dent i f yi ng t he best i ncl ass per f or merf ort he par t i cul arpr ocessi nquest i onandadopt i ngt hatdesi gn.

At oolf orpr ocessr edesi gn:Busi nessPr ocesssi mul at i on Thi si suseofcomput ersof t war e,i nt hecont extofapr ocessbasedchange-al l owsoper at i onofa busi nesst obesi mul at ed. BPSi susedduei t sabi l i t yt oi ncor por at et hedy nami c( i . e.t i medependent )behavi ourofoper at i ons s y st ems .Ther ear et woas pect sofdynami csy st emswhi chneedt obeaddr essed: Var i abi l i t y Mostbusi nesss ys t emscont ai nvar i abi l i t yi nbot ht hedemandont hes ys t em ( e. g.cus t omer ar ...