1. Operations and process management Flashcards
What is a process?
- An arrangement of resources that transforms inputs into outputs => satisfying customers (internal/external
- Banking operations: account management process
- Hotel operations: room cleaning process
What is the difference between operations and processes?
- A process is a subset of the operation
- Total operation: individual processes (approx)
- Scale and complexity
- What does it mean to take a process perspective?
- What is the benefit for the company?
1) Looking at the organisation as collection of interrelated processes
2)
- A company that takes a process perspective
- Can see how well processes are serving to fulfil the customer needs
- Better understanding of these processes => higher customer satisfaction
What are the inputs and putputs within The input-transformation-output model
- Inputs
- Will be transformed within operation/process
- Material, information, customers
- Do the transforming within operation/process
- People
- Facilities (technology, building etc.)
- Will be transformed within operation/process
- Outputs
- Products
- Services
Use the The input-transformation-output model to briefly analyse Cass
Operations and process management requires analysis at three levels, what are these?
1) supply network level
2) the operation level, and
3) the process level
What is the relationship between the three levels of Operations and process management (OPM)?
Use Hyundai as an example for analysing on the three levels of OPM
Explain the level of the supply network,
the level of the Operation and the level of the individual process
- At the level of the Supply network
- Flow between operations
- Your suppliers and customers
- Managing operations in this level is strategic and important
- At the level of the Supply network
- At the level of the Operation
- Input-transformation-output system
- Examples, airlines, retailers
- At the level of the individual process
- Process => smaller version of operations, there are customers and suppliers (sometimes internal)
- Examples
- Marketing and sales function
- HR functions
Should all processes be managed in the same way?
- What are the 4 Characteristics of outputs that influence how processes need to be managed
No!
–Volume
–Variety
–Variation in demand
–Visibility
Explain volume, variety, variation and visibility
And what are their relationship with unit costs?
Volume: Volume (/number) of output
- Processes with a high volume of output will have a high degree og repeatability, and because tasks are repeated frequently it often makes sense for staff to specialise. –> Systematisation of activities –> standard procedures may be codified.
Variety: variety of products and services
- Processes that produce a high variety of products and services must engage in a wide range of different activities, changing relatively frequently between each acitivity.
it must also contain a wide range of skills and technology to cope with the range of activities.
(processes with high variety are more complex and demand more flexibility)
Variation: Variation in demand
- Processes are generally easier to manage when they oly have to cope with predictably constant demand. Resources can be geared to a level that is just capable of meeting demand (No storing).
Visibility: How much of the processes are experienced directly by customers or how much the process is exposed to its customers.
The less visibility the more factory-like the production can be (processes can be performed when it is convenient to the company + they don’t need comprehensive customer management skills)
High cost when: low volume, high variety, high variation and high visibility
How does the PLC (Product Life Cycle) relate to OPM?
•Product life cycle
–Can be used to generalise market requirements
–Different performance objectives required at different stages
Eg.:
Introduction
- New products and services
- Few competitors
- Innovators
- Customer need is not certain
OPS’s focus should be
- Flexibility
- Quality
Decline
OPS’s focus should be
- Cost
- Cost
- Cost!!!
How we measure performance of OPM?
- Meaning, what is the five aspects of operations/process performance
- Quality
- Doing things right, goods and services fit for purpose
- What is quality for my company?
- Speed:
- Leadtime
- Dependability:
- Doing things on time
- Flexibility
- The ability to modify operations activities to cope with unexpected events
- The ability to accommodate different customer requirements
- Cost
- More of doing things at a appropriate cost than just cheap!
Are all the five performance aspects equally important all the time?
- Different operations => different performance objectives
- Quality:
- Insurance company: Friendliness of staff
- Steel plants: Absolute specification of products
- Quality:
- Priority of performance differs between business
- Argos and Harrods
What is the Two different views on operations improvements
- Trade-offs view
- Speed of response is more important than cost efficiency
- Variety is more important that cost efficiency
- Trade-offs view
- Trade-offs view itself is an enemy of operations improvements
- The goal is to improve all aspects of operations performance
- To do so, need to overcome the trade-offs itself!!!
- Draw the trade-off relationship and how it can be overcome
- Explain the drawing
- What is the name of the line of trade-off?
- What example did we use in class?
1) see picture
2)
- The line on picture 1 is the efficient frontier. The best anyone can do under the current situation such as technology
- The Companies on A, B, C and D are the best in the industry
- If you overcome the trade-offs and leap to the efficient frontier, your company’s operation can be among the best.
- With a ground breaking new manufacturing technology, for example, you push your company to B1
- This is what do we mean by “redefining Industry expectations”
3) The efficient frontier
4) Hyundai and Bentley
