Unit 5 Operations - Chapter 1

Question 1

What are value adding activities

Answer 1

Features or specifications added to goods/services that customer willing to pay for.

Focusing on value adding activities by operations department can improve performance and competitive advantage.

Need to eliminate non-value adding activities

Question 2

What are non-value adding activities

Answer 2

Those active that cause waste

Fail to add value to end product

Question 3

According to Porters value chain model, what are the five core primary activities that contribute directly to production & delivery of goods/services to customer

Answer 3

1. In bound logistics
2. Operations
3. Outbound logistics
4. Marketing and Sales
5. Services

Question 4

What are the 4 secondary support activities within porters value chain model

Answer 4

1. Firm Infrastructure
2. HRM
3. Technology development
4. Procurement

Question 5

What are the 5 main decisions that operations managers must make

Answer 5

1. Process by which goods/ services are produced
2. Quality of goods/ services
3. Quantity of goods/services (capacity of operations)
4. Stock of materials (inventory) needed to produce goods/services
5. Mgmt of Human Resources involved with operations activities

Question 6

What are the main elements of the transformation model (Galloway)

Answer 6

Inputs:
Transformed resources (materials, information, customers)

Transforming resources (staff,facilities)

Transformation process

Outputs:goods or services

Question 7

What are some of the transformed resources

Answer 7

Materials :physical change in raw material (clay or food)

Information: transformed (crm information stored, accounts)….selling of info (market research), transport info (telecommunications company), store Information (library)

Customers: hairdressers, entertainment company, transport customers (trains etc), accommodate customers (hotels)

Question 8

What is Neely’s 4 stage model

Answer 8

1. Internally neutral-min negative impact of operations
2. Externally neutral - operations maintain parity with competitors
3. Internally supportive -operations provide credible support to business strategy
4. Externally supportive- operations provide source of competitive advantage

Question 9

Examples of transforming resources are

Answer 9

Facilities/fixed assets: buildings/ machinery, plant & processes

Staff: ppl involved in operations at any level and stage …

Ppl who plan, control, operate or maintain operations

Skills and knowledge crucial for quality of operations

Internal and ster also staff ( Labour), machinery is capital

Question 10

Transformation process can include

Answer 10

Change in physical state of materials/ customers

Changes in location of materials, info,customers

Changes to ownership of material/ info

Storage or accommodation of materials, info, customers

Change in purpose of info…

Change in physiological/ psychological state of customers

Question 11

What are some outputs in Galloway’s transformation process model

Answer 11

Tangible ( products) and intangible outputs ( services)

Question 12

What undesirable outputs could result from the transformation process

Answer 12

Waste elements include:

1. Minimizing environmental impact caused by waste products
2. Preservation of health/ safety of employees, local communities etc
3. Ethical behavior and decision making locally/ globally

Question 13

Why is feedback crucial throughout transformation process

Answer 13

Used to control operations system by adjusting inputs & transformation process to achieve desired outputs

Adverse and positive feedback should be obtained

Essential to come from internal sources ( performance monitoring & quality control of staff/systems)

External sources ( surveys etc from customers)

Question 14

How does operations management fit in with how it supports the functional, business and corporate strategy?

Answer 14

Operational strategy sets the general principle that will support decision making process. It also provides basis for defining operations role in Organisation

Operations contributes towards and supports the organizations business strategy…link btw business and operations strategy

Question 15

What is the first of the 4 stage Hayes and wheelwright model

Answer 15

Internally Neutral:

• role of operations is to minimize negative impact of operations
• operations function does not perform as well as other functional areas
• aware they are not competitive
• don’t understand how operations can provide competitive advantage

Question 16

What is the 2nd stag in Hayes and wheelwrights 4 stage model of operations

Answer 16

Externally neutral

• operations help business maintain parity with competitors
• operate as well as other functions
• but does not provide a competitive advantage
• aware that operations can provide competitive advantage but is not at the stage yet to improve operations

Or

• have tried to improve but were unsuccessful

Question 17

What is the 3rd in Hayes and wheelwrights 4 stage model

Answer 17

Internally Supportive

• Operation provide credible support to the business strategy
• provides competitive edge
• perform as well as the best org in the sector
• aware of role of operations in contributing to strategic advantage
• is not exploiting it as a source or persistent competitive advantage

Question 18

What is the 4the stage in Hayes and wheelwrights 4 stage model

Answer 18

Externally supportive

• opera provides a source of competitive advantage
• source of persistent competitive advantage currently & a Basisvorlesung future activities in new areas
• Operations described as world class

Question 19

What does it mean to be efficient and effective

Answer 19

Overall performance of an organization crucial for success

Main objective is to arrange companies productivity resources & activities in as effective and efficient way as possible.

Effective: producing goods & services a customer really wants

Efficient: producing them with little effort or cost as possible

Question 20

How does the company know whether Thierry operafunction is succeeding

Answer 20

1. need to first determine specific performance objectives against which success is measured
2. the objectives are strategically important
3. objectives are also considered strategic goals
4. operations must develop appropriate operations resources to support the achievement of goals
5. objectives are usually related to customer satisfaction

Question 21

What are the 5 key performance indicators

Answer 21

1. Quality - be Right
2. Speed - be Fast
3. Cost- be cost effective
4. Dependability - being on time
5. Flexibility - being able to change/ adapt

Question 22

Explain the Quality key performance objective

Answer 22

1. Being RIGHT
   * producing products or providing services that are consistently meeting customer expectations

• error free products
• need skilled work force
• adequate job specifications
• proper technologies
• effective communication

Examples:

• quality of bus company translate to

1. Staff are courteous & helpful
2. Drivers drive safely
3. Buses are clean & quite
4. Timetable is easy to read

Question 23

Explain Speed key performance objective

Answer 23

1. Doing things quickly

• make quick decisions
• deliver goods and services as fast as possible
• rapidly moving materials & info inside operations

Example - news wants to be first to report breaking news

Emergency services want to arrive at a scene as fast as possible

Question 24

Explain dependability key performance objective

Answer 24

Being on time and delivering promises made to customers

1. Trustworthiness
2. Achieved through reliable equipment, effective communications, efficient scheduling systems, a motivated workforce

Examples

• Supermarkt keeping to reasonable queuing times
• keeping proportions of goods out of stock to a min

Question 25

Explain the cost key performance objective

Answer 25

“doing things economically. Low cost is a universally attractive objective (Slack et al., 2007).

Lower cost of producing goods and services is reflected to the customer in the form of lower price.

Cost reduction can be achieved by developing good relationships with suppliers, by good negotiation of supplying contracts, by getting the right mix of resources and facilities as inputs, etc

Question 26

Explain the flexibility key performance objective

Answer 26

“being able to change the operation to fulfil new customer requirements. As different customers have different requirements and these requirements can change over time, organisations need to develop their operations ability to introduce new or modified goods and services (good/service flexibility), as well as to produce a wide range or mix of goods and services (mix flexibility).

Flexibility also involves volume flexibility – the ability to change volume of output over time – and delivery flexibility – the ability to change delivery time.

Flexibility can be achieved by the use of more versatile equipment, suppliers with good flexibility performance, a multi-skilled workforce, etc. For example, a retailer with the ability to introduce new goods or promotions and the ability to provide a wide range of goods is performing well in terms of both good/service flexibility and mix flexibility.”