Lecture 1: Intro Flashcards
What is Operations Management?
Operations management is the field concerned with the
efficient and effective
planning, scheduling, and control of
manufacturing and service entities
it is concerned with managing the process that converts inputs into outputs
What is a process? How does this allow for process thinking and improvement?
A process is the sequence of operations and events, taking up time, space, expertise or other resources, which lead to the production of some outcome
Anything which repeats in the operation can be seen as a process.
The repetitive nature of processes allows for improvement!
What does the management in operations management entail?
- Design
- Planning (provision of resources)
- Scheduling (allocation of resources to tasks)
- Control and improvement
What factors influence process performance?
Internal objectives: “shareholder value”
- 100% effective use of resources
- Minimal operating expenses: zero defects, zero stock
External objectives
- Quality
- Speed
- Dependability
- Flexibility
- Cost
What are the various cost implications of OM decisions?
Cost of :
- inventory: cost of capital, handling, obsolescence
- production: batch size, labour, set ups
- logistics and distribution: transportation
- sales: opportunity cost of lost sales
What are the qualities of a company competing on cost?
- low price
- high volume
- limited product range, little customisation
- automation to reduce costs
- low skill labour
- not necessarily low quality
What are the qualities of a company competing on quality?
- Quality is often subjective
- Service quality is meeting/exceeding customer requirements
- High quality services demonstrate:
- superior product features
- excellent customer service
- consistent delivery
- process quality
Competing on speed?
- rapid delivery
- on time delivery
- availability
competing on flexibility
- easily customise product/service to meet requirements
- ability to ramp capacity up and down to match market demands
What are the different meanings of flexibility?
Operation’s ability to change
- product
- mix
- volume
- delivery
Describe the order of the ‘Sandcone’ cumulative capabilities model
Quality
Delivery
Flexibility
Cost
Whats the difference between structural and infrastructural operations decisions?
Structural: LONG TERM decisions related to the delivery process, flow of goods and services
e.g. Location, capacity, technology, vertical integration
Infrastructural: SHORT TERM decisions relating to the planning and control of the systems of operation
e.g. Workforce, QC, organisation structure
What are the 4Vs that affect different types of operations?
Volume
Variety
Variation in demand
Visibility
The single most important feature of a process in a business operation is the trade off between production volume and product variety. What does it define?
- Types of job design required
- Necessary tools and technology
- Define cost structure
- Defines relationship with suppliers
- Establishes customer expectations: cheap or customised
Name the different manufacturer-service combinations
- Service-led producers – Rolls-Royce
revenues in non production costs in production
- Service manufacturers – IBM (consultant)
revenues in non production
costs in non production
- System integrators – Innomech
revenues in production
costs in non production
- Product manufacturers – P&G
revenues in production
costs in production
Describe Schmenner’s Service process matrix
Schmenner’s Service Process Matrix (Degree of customisation vs Labour intensity)
- Service Factory [L,L] – costs from equipment – airlines, hotels
- Service Shop [H,L] – Customised mass services – car repair, ‘Routine hospitals’
- Mass Service [L,H] – Customers treated as similar – Retailing, banking
- Professional Service [H,H] – Costs principally for ‘elite’ labour – Lawyers, accountants
