Introduction to Operations
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Transcript of Introduction to Operations
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8/10/2019 Introduction to Operations
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Slack, Chambers and Johnston, Operations Management 5 th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Chapter 1
What is operations management?
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Slack, Chambers and Johnston, Operations Management 5 th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Operations management is the activityof managing the resources which aredevoted to the production and delivery of
products and services.
Operations management defined
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Slack, Chambers and Johnston, Operations Management 5 th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
The operations function is fashionable!
The consultancy services market % of worldrevenues of 40 largest consultancy firms
Marketing / sales2
Operations and process
management31
Corporate strategy17
IT strategy17
Benefits / actuarial16
Organizationaldesign
11
Financial6
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Slack, Chambers and Johnston, Operations Management 5 th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
They areall
operations
Back office operationin a bank
Kitchen unitmanufacturing
operation
Retail operation
Take-out / restaurantoperation
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Slack, Chambers and Johnston, Operations Management 5 th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Creating Customer Value
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Slack, Chambers and Johnston, Operations Management 5 th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Design a store layoutwhich gives smooth
and effective flowDesign elegantproducts which can beflat-packed efficiently
Site stores of an
appropriate size inthe most effectivelocations
Maintain cleanlinessand safety of storagearea
Arrange for fastreplenishment ofproducts
Monitor and enhancequality of service to
customers
Continually examine
and improveoperations practice
Ensure that the jobs ofall staff encouragetheir contribution tobusiness success
Operations management at IKEA
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All operations are transformation processes
Transformation processInputs
that transform inputs
Outputs
into outputs
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Transformedresources
Transformingresources
CustomersOutput
productsand
services
Inputresources
Some inputs are transformed resourcesSome inputs are transforming resources
Outputs are products and services that addvalue for customers
Transformation process
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Transformedresources
?Served and
satisfiedcustomers
Inputresources
Transformingresources
?
At Prt a Manger
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The output from most operations is a mixture ofproducts and services
Mixture of productsand services Outputs
that are a mixture ofthe tangible and the
intangible
Prt a Manger
Acme Whistles
Mwagusi Safari Lodge
Crude oil production
Aluminium smelting
Specialist machine toolproduction
Restaurant
Information systems provider
Management consultancy
Psychotherapy clinic
Pure products Outputsthat are exclusively
tangible
Pure services Outputsthat are exclusively
intangible
IKEA
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Characteristics of Goods v Services
ProductInventory
Customer ContactResponse times
Markets
FacilitiesCapitalLabourQuality
Contrast the characteristic differences between Manufacturing andServices over the following factors:-
Manufacturing Service
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Differences within sectors are often greater than thedifferences between sectors
Financial services
An accountmanagement centre ata large retail bank
Financial analystadvising a client at an
investment bank
Furniture manufacturing
Mass production ofkitchen units
Craft production ofreproduction
antique furniture
Hotels
Value-for-moneyhotel
Lobby of aninternationalluxury hotel
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A Typology of Operations
Variation indemand
High Low
VisibilityHigh Low
VarietyHigh Low
HighVolumeLow High
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A Typology of OperationsImplications Implications
Changing capacity AnticipationFlexibilityIn touch with demandHigh unit costs
StableRoutinePredictableHigh utilizationLow unit costs
Variation indemand
High Low
VisibilityHigh Low
Short waiting tolerance
Satisfaction governed bycustomer perceptionCustomer contact skillsneededReceived variety is highHigh unit costs
Time lag betweenproduction andconsumptionStandardizationLow contact skillsHigh staff utilizationCentralizationLow unit costs
FlexibleComplexMatch customer needsHigh unit costs
Well definedRoutineStandardizedRegularLow unit costs
VarietyHigh Low
High
Low repetitionEach staff memberperforms more of jobLess systemization
High unit costs
High repeatabilitySpecializationCapital intensiveLow unit costs
VolumeLow High
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Volume
Important to understand how different operations are positioned
on the 4 Vs. Is their position where they want to be?
Do they understand the strategic implications?
Variety
Variation
Visibility
Low
High
High
High
High
Low
Low
Low
MwagusiSafari Lodge
4 Vs profile of two operations
Formule 1Hotel
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Decisions in Operations
Process
Quality
Work force
Inventory
Capacity
Five major decision areas:
Schr oeder Section 1.6 - page 16
O erations Mana ement R G Schroeder, Operations Management, 4 th edition,1993, McGraw Hill
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Some interfunctional relationships between the operationsfunction and other core and support functions
Engineering/technicalfunction
Accountingand finance
function
Humanresourcesfunction
Informationtechnology
(IT) function
Marketingfunction
Product/service
developmentfunction
Operationsfunction
Micro Environment
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Case : Too Short The DayAnalysis
What is Giles trying to do ?What is Giles actually doing ?
What are the problems within theorganisation ?
RecommendationsWhat should Giles do ?
What changes if any should the organisation make ?
Identify the functions of a managerIdentify the levels of management
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Case : The Glastonbury Festival1 What is the role of an operations manager
such as Michael Eavis in this situation?How does this change at different stagesof the festival organisation?
2 List the different types of transformation processes involved in the festival
activities within the classifications:Materials/Information/Customer
3 Relate the 5 decision areas as outlined inR G Schroeders Operations Management,to the Glastonbury case.