Operations management nigel slack 7th edition

Operation Management

1) Assessment Details

You have the choice of selecting one of the two topics for this assignment. For the organisation which employs you (or your last employer but not the same organisation which features in the group research project below).

Topic 1. Choose a well-known organization (or an organization for which you can easily access relevant information).

a) Identify its business objectives and strategy (perhaps as stated in its mission statement).

b) Identify its operations strategy by analyzing its actions in the key decision areas of structure and infrastructure.

c) Identify its operations performance objectives. (e.g. cost, quality, speed, dependability and flexibility).) What are the organization’s competitive priorities? Assess its internal consistency and its contribution to the organization’s competitive advantage.

d) What are the biggest operations management challenges for the organization? What advice would you give to the organization regarding its operations strategy in the future?

Note: PleaseDO NOTanswer these questions directly. Rather, use these questions to help guide your thinking as to what issues may be relevant in the case.

BUMGT6935 Marking Guide – Assessment Task 1 (Topic 1)

Individual written report (20%)

Student Name:

Marking Criteria

Very Poor

Poor

Satisfactory

Good

Very Good

MARK

Executive Summary

Introduction to the organisation

1 point

1 point

Clear identification of the organization’s business objectives and operations strategy.

Good understanding the relationship between operations and strategy and criteria for evaluating operations strategy

Thorough evaluation and prioritization operations performance objectives

Applied relevant framework/theory in assessing the organization’s internal consistency and its contribution to competitive advantage

Clear identification of the organization’s operations challenges;

Well justified and convincing advice to the organization’s future operations management

2 points

3 points

3points

3 points

4points

Appropriate Academic written skills

Presentation and layout

2 points

1 point

Total mark (20)

Mark attained

Introduction

Chapter 1

Operations management

What is operations management?

Source: Shutterstock.com/toria

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Slack et al’.s model of operations management

Operations performance

Operations strategy

Topic covered in this chapter

Direct

Design

Develop

Deliver

Operations management

What is operations management?

Figure 1.1 This chapter examines operations management

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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In Chapter 1 – Operations management – Slack et al. identify the following key questions…

What is operations management?

Why is operations management important in all types of organization?

What is the input-transformation-output process?

What is the process hierarchy?

How do operations processes have different characteristics?

What do operations managers do?

Key operations questions

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Operations management is the activity of managing the resources which are devoted to the production and delivery of products and services.

Operations management defined

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Kitchen unit manufacturing operation

Retail operation

Take-out/restaurant operation

They are all operations

Back office operation in a bank

Source:Shutterstock/Turner

Source: Nigel Slack

Source: Nigel Slack

Source: Nigel Slack

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Core functional activities

Internet service provider (ISP)

Fast food chain

International aid charity

Furniture manufacturer

Operations

Marketing and sales

Product/service develop-ment

Maintain hardware, software and content

Implement new links and services

Make burgers, etc.

Serve customers

Maintain equipment

Give service to the beneficiaries of the charity

Make components

Assemble furniture

Promote services to users and get registrations

Sell advertising space

Advertise on TV

Devise promotional materials

Develop funding contracts

Mail out appeals for donations

Advertise in magazines

Determine pricing policy

Sell to stores

Devise new services and commission new information content

Design hamburgers, pizzas, etc.

Design decor for restaurants

Develop new appeals campaigns

Design new assistance programmes

Design new furniture

Coordinate with fashionable colours

The activities of core functions in some organizations

Table 1.1 The activities of core functions in some organizations

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Design a store layout which gives smooth and effective flow

Design elegant products which can be flat-packed efficiently

Site stores of an appropriate size in the most effective locations

Maintain cleanliness and safety of storage area

Arrange for fast replenishment of products

Monitor and enhance quality of service to customers

Continually examine and improve operations practice

Ensure that the jobs of all staff encourage their contribution to business success

Operations management at... IKEA

Source: Shutterstock.com/Diego cervo

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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The consultancy services market – % of world revenues of 40 largest consultancy firms

Marketing/sales

2

Operations and process management

31

Corporate strategy

17

IT strategy

17

Benefits/actuarial

16

Organizational design

11

Financial

6

Operations management is fashionable!

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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The best way to start understanding the nature of ‘Operations’ is to look around you.

Everything you can see around you (except the flesh and blood) has been produced by an operation.

Every service you consumed today (radio station, bus service, lecture, etc.) has also been produced by an operation.

Operations managers create everything you buy, sit on, wear, eat, throw at people and throw away.

Operations are everywhere

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Interfunctional relationships

Engineering/ technical function

Accounting and finance function

Human resources function

Information technology (IT) function

Understanding of the capabilities and constraints of the operations process

New product and service ideas

Understanding of the capabilities and constraints of the operations process

Market requirements

Financial analysis for performance and decisions

Provision of relevant data

Recruitment development and training

Understanding of human resource needs

Analysis of new technology options

Understanding of process technology needs

Provision of systems for design, planning and control and improvement

Understanding of infrastructural and system needs

Marketing function

Product/service development function

Operations function

Figure 1.2 The relationship between the operations function and other core and support functions of the organization

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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The three basic functions of enterprises

Marketing

Operations

Product/service development

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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‘High-end’ sandwich and snack retailer.

Use only ‘wholesome’ ingredients.

All shops have own kitchens which makes fresh sandwiches every day.

Fresh ingredients delivered early every morning.

Same staff who serve you at lunch made the sandwiches that morning.

‘We don’t work nights, we wear jeans, we party…’

Example – Prêt a Manger

Source: Shutterstock.com/Food Pics

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Nutritional ‘mechanical’ and aesthetic design of the sandwiches and snacks

Design, location and management of stores and in-store processes and the network that supplies them

The three basic functions at Prêt a Manger

Promotional activities, market research, etc.

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Product/ Service Development

Operations

Marketing

Automobile assembly factory – operations management uses machines to efficiently assemble products that satisfy current customer demands

Operations management in all types of organization

Source: Nataliya Hora /Shutterstock.com

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Operations management in all types of organization (Continued)

Physician (General practitioner) – operations management uses knowledge to effectively diagnose conditions in order to treat real and perceived patient concerns

Source: Shutterstock/PT Images

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Management consultant – operations management uses people to effectively create the services that will address current and potential client needs

Operations management in all types of organization (Continued)

Source: Shutterstock/Diego cervo

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Disaster relief charity – operations management uses ours and our partners’ resources to speedily provide the supplies and services that relieve community suffering

Operations management in all types of organization (Continued)

Source: Shutterstock/Zurijeta

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Advertising agency – operations management uses our staff’s knowledge and experience to creatively present ideas that delight clients and address their real needs

Operations management in all types of organization (Continued)

Source: Shutterstock/Luciano Mortula

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Operations management uses…

machines

to

efficiently

assemble

products

effectively

knowledge

to treat real and perceived patient concerns

diagnose conditions

to

people

create

services that will address current and potential client needs

effectively

to

ours and our partners’ resources

speedily

provide

supplies and services that relieve community suffering

to

our staff’s knowledge and experience

creatively

ideas that delight clients and address their real needs

present

to

Figure 1.3 Operations management uses resources to appropriately create outputs that fulfil defined market

requirements

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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The business environment is changing, for example… Prompting operations responses, for example…
Increased cost-based competition Higher quality expectations Demands for better service More choice and variety Rapidly developing technologies Frequent new product/service introduction Increased ethical sensitivity Environmental impacts are more transparent More legal regulation Greater security awareness Globalization of operations networking Information-based technologies Co-creation of service Internet-based integration of operations activities Supply chain management Customer relationship management Flexible working patterns Mass customization Fast time-to-market methods Lean process design Environmentally sensitive design Supplier ‘partnership’ and development Failure analysis Business recovery planning
Operations management is changing

Table 1.2 Changes in the business environment are shaping a new operations agenda

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All operations are input-transformation-output processes

Inputs

Outputs

Transformation process

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Customers

Transformed resources

Materials

Information

Customers

Transforming resources

Facilities

Staff

Operations input resources and outputs

Input resources

Output products and services

Transformation process

Outputs are products and services that add value for customers

Figure 1.4 All operations are input–transformation–output processes

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Customers

Transformed resources

Ingredients

Packaging

Customers

Transforming resources

Equipment

Fittings

Staff

Inputs and outputs at Prêt a Manger

Input resources

Served and satisfied customers

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Predominantly processing inputs of materials Predominantly processing inputs of information Predominantly processing inputs of customers
All manufacturing operations Mining companies Retail operations Warehouses Postal services Container shipping line Trucking companies Accountants Bank headquarters Market research company Financial analysts News service University research unit Telecoms company Hairdressers Hotels Hospitals Mass rapid transports Theatres Theme parks Dentists
Examples of dominant transformed resource inputs

Table 1.3 Dominant transformed resource inputs of various operations

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Mixture of products and services – outputs that are a mixture of the tangible and intangible

Prèt a manger

Acme whistles

Mwagusi Safari Lodge

Crude oil production

Aluminium smelting

Specialist machine tool production

Restaurant

Information systems provider

Management consultancy

Psychotherapy clinic

Pure products –outputs that are exclusively tangible

Pure services – outputs that are exclusively intangible

IKEA

Most operations produce products and services

Figure 1.5 The output from most operations is a mixture of products and services. Some general examples are shown here together with some of the operations featured as examples in this chapter

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Operation Some of the operation’s inputs Some of the operation’s processes Some of the operation’s outputs
Airline Aircraft Pilots and air crew Ground crew Passengers and freight Check passengers in Board passengers Fly passengers and freight around the world Care for passengers Transported passengers and freight
Department store Products for sale Sales staff Information systems Customers Source and store products Display products Give sales advice Sell products Customers and products ‘assembled’ together
Police Police officers Computer systems Information systems Public (law-abiding and criminals) Crime prevention Crime detection Information gathering Detaining suspects Lawful society, public with a feeling of security
Frozen food manufacturer Fresh food Operators Processing technology Cold storage facilities Source raw materials Prepare food Freeze food Pack and freeze food Frozen food
Some operations described in terms of their processes

Table 1.4 Some operations described in terms of their processes

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Flow between operations

The level of the supply network

The level of the operation

Flow between processes

The level of the process

Flow between resources

Operations can be analyzed at three levels

Figure 1.6 Operations and process management requires analysis at three levels: the supply network, the operation and the process

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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The supply network – flow between operations

Broadcasting company

Promotion agency

Studios

Casting agency

Creative agency

A programme and video supply network

Programme/video maker

The programme and video operation

The operation – flow between processes

Example of analysis at three levels

Figure 1.6 Operations and process management requires analysis at three levels: the supply network, the operation and the process

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Example of analysis at three levels (Continued)

The supply network – flow between operations

Programme and video operation

The operation – flow between processes

Production unit

Set and props manufacture

Engineer-ing

Marketing and sales

Finance and accounting

Post production

The programme and video operation

Figure 1.6 Operations and process management requires analysis at three levels: the supply network, the operation and the process

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Example of analysis at three levels (Continued)

The supply network – flow between operations

Programme and video maker

The operation – flow between processes

Set and props manufacture

Set design

Props acquisition

Set construction

Set finishing

The ‘Set and props manufacturing’ process

Figure 1.6 Operations and process management requires analysis at three levels: the supply network, the operation and the process

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Organizational function Some of its processes Outputs from its process Customer(s) for its outputs
Marketing and sales Planning process Forecasting process Order taking process Marketing plans Sales forecasts Confirmed orders Senior management Sales staff, planners, operations Operations, finance
Finance and accounting Budgeting process Capital approval processes Invoicing processes Budgets Capital request evaluations Invoices Everyone Senior management, requesters External customers
Human resources management Payroll processes Recruitment processes Training processes Salary statements New hires Trained employees Employees All other processes All other processes
Information technology Systems review process Help desk process System implementation project processes System evaluation Advice Implemented working systems and aftercare All other processes All other processes All other processes
Some examples of processes in non-ops functions

Table 1.5 Some examples of processes in non-operations functions

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Programme and video maker

End-to-end process for programme production

Programme set and props manufacture

Engineering

Programme marketing and sales

Programme production unit

Programme finance and accounting

Programme post production

End-to-end process for music video production

Music video set and props manufacture

Music video marketing and sales

Music video production unit

Music video finance and accounting

Music video post production

Two ‘end-to-end’ business processes

Figure 1.7 The television and video company divided into two ‘end-to-end’ business processes, one dedicated to creating programmes and the other dedicated to creating music videos

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Variation in demand

High

Low

Visibility

High

Low

Variety

High

Low

High

Volume

Low

High

A typology of operations and processes

The four Vs...

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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High

Implications

Low repetition

Each staff member performs more of each task

Less systemization

High unit costs

Implications

High repeatability

Specialization

Capital intensive

Low unit costs

Volume

Low

High

A typology of operations and processes (Continued)

The implications of high and low Volume in operations and processes...

Figure 1.8 A typology of operations

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High

Implications

Flexible

Complex

Match customer needs

High unit costs

Implications

Well defined

Routine

Standardized

Regular

Low unit costs

Variety

High

Low

A typology of operations and processes (Continued)

The implications of high and low Variety in operations and processes...

Figure 1.8 A typology of operations

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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High

Implications

Changing capacity

Anticipation

Flexibility

In touch with demand

High unit costs

Implications

Stable

Routine

Predictable

High utilization

Low unit costs

Variation in demand

High

Low

A typology of operations and processes (Continued)

The implications of high and low Variation in operations and processes...

Figure 1.8 A typology of operations

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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High

Implications

Short waiting tolerance

Satisfaction governed by customer perception

Customer contact skills needed

Received variety is high

High unit costs

Implications

Time lag between production and consumption

Standardization

Low contact skills

High staff utilization

Centralization

Low unit costs

Visibility

High

Low

A typology of operations and processes (Continued)

The implications of high and low Visibility in operations and processes...

Figure 1.8 A typology of operations

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Volume

It is important to understand how different operations are positioned on the 4 V’s.

Is their position where they want to be?

Do they understand the strategic implications of their position?

Variety

Variation

Visibility

Low

High

High

High

High

Low

Low

Low

Anatara Bangkok Riverside Resort and Spa

Formule 1 Hotel

A four Vs analysis of two hotel operations

Figure 1.9 The four Vs profiles of two very different hotel operations

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Input resources

Output products and services

Value-added for customers

Transformed resources

Materials

Information

Customers

Transforming resources

Facilities

Staff

Direct Steering operations and processes

Design Shaping processes, products and services

Deliver Planning and controlling ongoing operations

Develop Improving the operation’s capabilities

Operations management

Slack et al.’s general model of operations management

Figure 1.10 A general model of operations management

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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To be a great operations manager you need to...

Enjoy getting things done – operations management is about doing things.

Understand customer needs – operations management is about understanding what ‘value’ means for customers.

Communicate and motivate – operations managers must be ‘people people’.

Learn all the time – operations management is about learning, because without learning there can be no improvement.

Commit to innovation – operations management is about being creative, imaginative, and (sometimes) unconventional.

Know your contribution – operations management is about contributing to the effective working of other functions.

Be capable of analysing – operations management is about evaluating decisions.

Keep cool under pressure – operations managers need to be able to remain calm no matter what problems occur.

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Design house partnerships at Concept Design Services

Chapter 1 ‘end-of-chapter’ case

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Questions

The ‘design house partnerships at Concept Design Services’ case study

Why is operations management important in CDS?

How do the company’s products differ?

What would you recommend to the company if they asked you to advise them in improving their operations?

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Why is operations management important in CDS?

What is important for each type of product/service?

Appearance

Quality conformance

Customer relationship

Speed of service

On-time delivery

Wide range of products/services

Frequent new products/services

Price/cost

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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How do operations and processes differ?

By what they are trying to do…

Market/customer/client positioning?

Operations/process performance objectives

How can operations/processes contribute to achieving positioning?

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Sales support services

Dependable deliveries

Quality (specification)

Short lead-times

Fast volume changes

Quality conformance

Low prices

Fast design changes

The Concept Design Services – Polar diagram

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How do operations and processes differ?

By whether they produce products or services…

But what is the difference between products and services?

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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The Concept Design Services – Products or Services?

Does CDS produce products or services?

Pure products – little/no service element

Pure services – little/no tangible element

Focus

Concept

Joint ventures

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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How do operations and processes differ?

By their operating characteristics…

What is the intrinsic nature of the conditions that the operation/process has to operate under?

How do these conditions affect the performance of operations/processes

How do we characterize these conditions?

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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Variation in demand

High

Low

Visibility

High

Low

Variety

High

Low

High

Volume

Low

High

The four Vs typology of operations and processes

The four Vs...

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Variation in demand

High

Low

Visibility

High

Low

Variety

High

Low

High

Volume

Low

High

A typology of operations and processes

The four Vs...

Focus

Concept

Joint ventures

Slack, Brandon-Jones and Johnston, Operations Management PowerPoints on the Web, 7th edition © Nigel Slack, Alistair Brandon-Jones and Robert Johnston 2014

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