Bpm lecture 1 students

© Nigel Slack, Stuart Chambers & Robert Johnston, 2004

Where does the business get its competitive advantage?

The way it produces its goods and services?

The way it positions itself in its market?

The “technological”

specification of its product/service?

Product/Service

Technology

Marketing Operations


The output from most operations is a mixture of goods and services

PURE GOODSTangible

Can be stored

Production precedes consumption

Low customer contact

Can be transported

Quality is evident

PURE SERVICES

Quality difficult to judge

Cannot be transported

High customer contact

Production and consumption are simultaneous

Cannot be stored

Intangible


Operations Management – Basic Principles

All types of enterprise have an operations function, even if it isn’t called ‘operations.

Most operations produce both products and services.

Materials

Products and services

Information

Customers

Operations management is concerned with producing and

delivering products and services


All operations are transformation processes

ENVIRONMENT

ENVIRONMENT

INPUT OUTPUTGOODS

AND SERVICES

TRANSFORMED RESOURCES

MATERIALS INFORMATION CUSTOMERS

FACILITIES STAFF

TRANSFORMING RESOURCES

TRANSFORMATION PROCESS


OrganisationWhat are the process inputs?

What resources does this transformation process use?

What are the process outputs?

AIRLINE


A Typology of Operations

Variation in demand

High Low

VisibilityHigh Low

VarietyHigh Low

HighVolumeLow High


A Typology of OperationsImplications Implications

Changing capacityAnticipationFlexibilityIn touch with demandHigh unit costs

StableRoutinePredictableHigh utilizationLow unit costs

Variation in demand

High Low

VisibilityHigh Low

Short waiting toleranceSatisfaction governed by customer perceptionCustomer contact skills neededReceived variety is highHigh unit costs

Time lag between production and consumptionStandardizationLow contact skillsHigh staff utilizationCentralizationLow unit costs

FlexibleComplexMatch customer needsHigh unit costs

Well definedRoutineStandardizedRegularLow unit costs

VarietyHigh Low

High

Low repetitionEach staff member performs more of jobLess systemizationHigh unit costs

High repeatabilitySpecializationCapital intensiveLow unit costs

VolumeLow High


Critical Success Factors

Fast turnaround

Flight Occupancy Loading

Low Cost base

OperationsManagement


The strategic role of operations can be defined by its aspirations (Hayes and Wheelwright)

Give an Operations Advantage

Externally supportive

Internally supportive

Externally neutral

Internally neutral

The ability

to Implement

Link Strategy With

Operations

Adopt best Practice

Correct the Worst

Problems

Increasing contri

bution of o

peratio

ns

STAGE 1 STAGE 2 STAGE 3 STAGE 4The

ability to

Drive strategy

Stop holding the

organization back

Be as good as

competitors

Be clearly the best

in the industry

Redefine the industry’s

expectations

The abilityto

support Strategy


Co

mp

etit

iven

ess

Speed

Flexibility

Cost

Dependability

Quality

The operations function can provide competitive advantage through its five performance

dimensions

Doing things RIGHT

Doing things FAST

Doing things on ON TIME

Being ABLE TO CHANGE

Doing things CHEAPLY


Co

mp

eti

tive

ne

ss

Speed

Flexibility

Cost

Dependability

QualityDoing things RIGHT

Doing things FAST




Co

mp

eti

tive

ne

ss

Speed

Flexibility

Cost

Dependability

Quality

Speed

Flexibility

Cost

Dependability

QualityDoing things RIGHT

Doing things FAST




Doing things RIGHT

Doing things FAST




Polar Diagrams….

Dependability

Flexibility Quality

Speed

Cost

Application…

Compare against competitorsCompare actual vs desiredCompare products or services


54321

54

32

1

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Remember only allowed a maximum Score of 18

Quality

Cost

Speed

54

32

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FlexibilityDependability


These dimensions mean different things in different operations

Hospital

Bus company

Automobileplant

Supermarket


Cost means different things in different operations

Hospital Automobileplant

Supermarket

Staff costs

Technology and facilities costs

Bought-in materials and services


Staff costs

Staff costs





Bus company

Staff costs



Step 2

Relative Priorities


Polar diagrams for a taxi service versus a bus service

Cost

Quality Flexibility

DependabilitySpeed

Taxiservice

Busservice


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Quality

Cost

Speed

54

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FlexibilityDependability


Quality Flexibility

Depend- ability

Speed

Cost

On-specification products and services

Short delivery lead-time

Speed

External and internal benefits

Bpm lecture 1 students

Business

Transcript of Bpm lecture 1 students