Operations Flashcards
3 types of decisions
- strategic
- tactical
- operational
4 types of transactions
- B2B
- B2C
- C2B
- C2C
how do ops and processes differ?
through positioning and obj
KPIs
quality - complaints
dependability (due-actual) - lateness
flexibility - product range
speed - lead time
cost - productivity
General benefits of the performance obj
external - value, customers, base, avoid complaints, enhance mkt
internal - costs, time, dependability, errors, throughput, disruption
speed
help overcome internal problems by forcing attention to internal dependability
types of flexibility
ability to change
1. product/service
2. mix
3. volume
4. delivery
models for operations performance
- IP matrix
- polar diagram
Goals and metric of operations performance
- internal
- financial
- learning and growth
- customer
competitive factors with operations performance
- ordering winning (chose you)
- qualifying (threshold to be competitive)
- less important
polar diagram
illustrate multi-dimensional perf (objs)
-relative importance of obj to process
-diff between product/service
-gaps between current & desired
IP matrix
importance performance matrix
performance - better/similar/worse
importance (customer) - critical/qualifier/less important
strategy
LT obj
pattern in decision stream
gain comp adv
resource allocation
operations strategy definition
-total pattern
-LT capabilities
-overall strategy
-fit between mkt req & ops resources
-sustainable fit
-manage and misalignment risks
perspectives on ops strategy
- top down (corp-business-ops)
- bottom up (daily - emerging strategy - consolidated formal)
- mkt req
- operations resources
market requirements
(cust needs, perf obj, PLC)
outside in
PESTLE
positioning
Wants & Needs
operations resources
inside out
Have & Do
capabilities
decision areas for operations strategy
- capacity structure
- supply network
- process technology
- development and organisation (improve strategy & develop product/service)
capacity structure
- infrastructure
- gov
- mkt
- labour (Available & Costs)
outsource drivers
- organisational (knowledge, risk)
- financial (Cash injection, savings)
- service (flexible, value)
- other
supply network
- relationships
- offshore vs outsource
- upstream (suppliers) - downstream (customers)
process technology
- feasibility
- acceptability
- vulnerability
direct & indirect
platts Gregory procedure
-opps & threats (consumer wants & ops performs) = existing ops = what to do to improve
hill methodology
5 step procedure based on top down mkt requirements
operations strategy matrix
-ops strategy defined by intersection of perf obj & ops decisions
tools for operations strategy
- platts-gregory procedure
- operations strategy matrix
- hill methodology
-5 step procedure based on top down mkt requirements
challenges of operations strategy formulation
- identify critical issues
- comprehensive
- coherent
- correspond with strategic obj
design capacity
max output rate achieved by facility under ideal conditions
capacity
max amount produced (output) in certain time period
6 capacity planning obj
- costs
- revenue
- WC
- quality
- speed
- flexibility
factors affecting capacity management
- staff/labour availability
- machine capability
- financial inv
- product complexity
- supply issues
forecasting methods for capacity
- judgement
- MR
- time series (moving av/exponential smoothing)
- causal (multiple independent drive dependent)
forecasting demand
- volatility
- uncertainty
- variation (climate, festive, behaviour, politics, finance, social )
yield management
maximise CU & generate profit
useful: fixed capacity, no store service, service solid advance
chase demand
output = perishable
operations = not capital intensive
customer = limited waiting tolerance
demand management
manage
1. price differentials
2. service differentials
3. flexible staffing
level capacity
plan = absorb demand fluctuations
base level:
increase = low FC, high cust service, high perishability
decrease = high FC, high CU, store output
methods for adjusting capacity
- overtime
- outsource/subcontract
- part time
- skills flexibility
- change output rate
principles of queue design
occupied
pre process
anxiety
uncertain
unexplained
unfair
value
solo
uncomfy
new/infrequent
service types
- professional
- service shops
- mass service
process
arrangement of resources & activities
transform input -> output satisfy customer needs
(various interconnect to form internal network)
building block of ops
obj of process design
appropriate process to achieve
design judged on - perf obj (sustainable)
product process matrix
relationship between volume and variety position and design characteristics
move off the natural line = costs
job design
do what/order/how/when
hard technical factors
soft human issues
division of labour
pros and cons of division of labour
pros:
fast learning, automation, decrease unproductive
cons:
monotony, injury, not robust, flexibility decrease
manufacturing process types
- project (high variety, low vol) - unique, PM coordinate
- jobbing (high variety, few quantities, smaller, wide competence)
- batch (low variety, large vol range increases, standard specialised)
- mass (narrow variety, high vol, repetitive)
- continuous (low variety, high vol, capital intense, inflexible)
layout types
- fixed position (transforming -> transformed, variety, mix flexibility, task variety, high unit cost, scheduling)
- functional (similar located together robust for disruption, easy supervision, low utilisation, high WIP, complex flow)
- product (transform to fit, all products = same flow, low unit cost, specialisation, easy movement, not robust repetitive)
- CELL (resource families transformed in same place, variety, fast throughout, motivation, more equip costly & rearrange)
required cycle time
known as TAKT time
average time elapsed for inputs to move through process
balancing the process
long & short - number of stages
fat & thin - amount of work at each stage
rebalancing = minimise idle time = combine elements
process analysis tools
- why why
- scatter
- cause and effect (Ishikawa diagram)
- SIPOC
- flow process charts
- process maps
- FMEA
- Pareto diagram
inventory management
items/info accumulate at points during flow through process/operations and supply
why have inventory
-uncertainty
-counteract inflexible
-ST opps = adv
-decrease costs
-increase value
-speed up process
-increase process variability
accumulations
result of differences in timing and rate of supply and demand
-bottleneck can be inefficient
volume decision
size of order increases = costs increase
-WC, storage, obsolesce
size of order increases = costs decrease
-price discount, placing order, stockout
EOQ
key decision = how much to order
find best balance between adv and dis of holding stock
timing decision
simple reordering
items used, re order lvl and safety stock (split last 2 for 3 bin)
5 assumptions of EOQ
- constant and known demand
- no constraints on size of each lot
- 2 relevant cost = inventory holding and ordering
- decision for 1 item = made independently of other decision
- constant and known lead time
anticipation inventory
links to smoothing inventory - purchase in anticipation of future need
requires high working capital
cycle inventory
copes with inability to make products simultaneously
bullwhip effect & whiplash
causes of bullwhip
1. imperfect understanding
2. order batching
3. poor communication
4. attempt 100% customer service
solution of bullwhip
1. communication (align channels, share info) = operational efficiency
planning
formalisation of what is intended to happen at some time in future
not always as expected
statement of intention
control
understand what actually happening
sig deviation from what should = change ??
what does planning and control impact on ?
- volume & variety
- nature of supply and demand (independent/ dependent)
- responding to demand
responding to demand
P:D ratio throughput : demand
vary depending on lvl of work before known demand
- produce to stock
- part produce to order
- produce to order
- resource to order
scales of planning and control
- ST (ad-hoc obj, disaggregated forecast/actual demand)
- MT (obj = financial/ops, determine resource/capabilities)
- LT (obj= largely finance, aggregated resources and demand forecasts)
core mechanisms of planning and control
- loading (finite/infine) - limiting - necessity/possible/cost
- scheduling (gantt/wall)
- sequencing
- monitor and control
sequencing
- FIFO
- LIFO
- LOT SOT
- customer priority
- physical constraint
- due date
monitor and control
push - down to end = inventory and cost
control reduces inventory build up between stages
pull = react to demand = LEAN
Lean levels of analysis
- philosophy
- set of techniques
- method of planning and control
lean as a philosophy
eliminate waste
involve everyone
continuous improvement
process innovation
lean as a method of planning and control
kanban control
pull scheduling
mixed modelling
level scheduling
lean as a set of techniques
layout/flow
visibility
TPM
manufature
set up reduction
forms of waste (muda)
- overproducing
- wait
- transport
- over process
- inventory
- motion
- delays
- talent
elimination of waste
muri (overtime) - abseteeism/ill
muda (non value needed and not)
mura (uneveness held in inventory
5 core principles of lean
- specify value
- value stream
- flow continuous
- pull
- perfection
challenges of lean
- JIT = frequent delivers (low cost global suppliers)
- green issues (CO2 emissions, sustainability)
- vulnerable to disruption
objective of lean
meet demand instantaneously perfect quality no waste
less time space people and inventory
defining quality
- product based
- manufacturing
- value
- user
- transcendent
- gap based
statistical process control
measuring and controlling process variation
types of variations
- random causes (if reduced = improve precision of process)
- assignable causes (affects accuracy of processes)
DMAIC cycle
define - (problem - define req & set goal)
Measure (data, refine problem , measure input and output)
analyse (identify root cause from data)
improve (ideas and establish solutions)
control (perf standards and deal with problems)
FMEA analysis
Failure Modes and Effects Analysis (FMEA)
systematic, proactive method for evaluating a process to identify where and how it might fail and to assess the relative impact of different failures
ServQual model
- customer expectations
- mgt perceptions
- specification
- delivery
- expected service
measure of quality
variable & attribute
attribute can be converted to variable via sampling
1. functionality
2. appearance
3. reliability
4. durability
5. recovery
6. contact
Six Sigma
collection of improvement techniques = approach to organising improvement
includes:
1. customer driven obj
2. structured improvement cycle (DMAIC)
3. process redesign
4. evidence based problem solving
5. structured training and improvement
faces of variation (6 sigma)
-missing functionality/action
-faults
-delivery delays
-lateness
-timetable/schedule errors
-asset reliability
setting quality targets
- historically
- strategically
- external performance based
- absolute performance
quality standards
define boundary between acceptable and unacceptable
costs of quality
- prevention
- appraisal
- failure (internal and external)
service recovery
- pereceived justice
-distributive - procedural -interactional - quality failure
- effective stimulate learning
SIPOC
high level map of process
suppliers
input
process
output
customers
process map
eliminate non value
simplification
improve new process implementation
flow process charts
process expense reports
Pareto curves
inventory management tool expose inventory items with greatest net value
product process matrix
lie close to diagonal = represent fit between process and volume variety position
drum buffer and rope
communication rope controls prior activities
bottleneck drum sets the beat (bottle neck = fixed = more efficient)
service process types
- professional services
- service shops
- mass services
layout
important - spedee system - loss of resources, inefficient, affect flow
arrangement of people, equip, material, method, create products in order of process in continuous flow
