(Mt) – Queens University Belfast Management Transformation Model Question

SOLUTION AT Academic Writers Bay

Tutorial group: __7__; Team number: _3___ Student: ___Jack Smith___________________________ Student Number: ____1256425__________________ Student: ___Anne Peterson______________________ Student Number: ____4586211__________________ Student: ___Alex Johansen_______________________ Student Number: ____6258914__________________ Student: ___Mary Lee_____________________________ Student Number: ____3285964__________________ Student: ___Joe Smyth_____________________________ Student Number: ____7245912__________________ Assignment number: Team leader: Week: __3______ __1___ Alex Johansen Anne Peterson Date of submission: 11/02/2021 Jack Smith Joe Smyth Work-log Question a Alex Johansen Mary Lee 10 20* (max 30 points) Question b 30 (max 30 points) Question c 0 30 (max 30 points) Notes To be updated in week 7 Change of the plan due to team-member sickness Declaration: I, Alex Johansen, team leader for Assignment 1, declare that the work log submitted is accurate and approved by all team members, i.e., I shared with them this work log and they confirmed it is accurate. Also, all team members approved points allocated to their parts of the assignment, as well as plans for future updates. Team leader’s report (from 200 to 500 words): (Please explain how did you organize the work of your team, for example: how did you distribute tasks between team members, when did you meet and how many times, how much time it took to complete the assignment? Was there any challenge in the work of the team and if was, how did you tackle it? How much each team member contributed to the assignment? Are there any postponed assignments and for which week/from which week?) We met on Xth February during the first tutorial to discuss our teamwork and Assignment 1, so that we make sure we all understand what we should do and when. We reviewed models for allocation of work on the assignments and decided to use the model on an equal division of labour. We agreed that I will be the team leader for Assignment 1, and that Anne will work on Question a, Jack on Question 2 and Joe on Question 3. Mary agreed to work on other assignments. We also exchanged contact details (Queen’s email, MS Teams and WhatsApp) and agreed about communication policy: no emails or messaging after 20.00h, nor during the weekend. We also agreed to establish internal deadlines, so that everybody has prepared a piece of answer by Friday, so that on Fridays afternoon we can meet and review the answers (to what extent they are complete), allocate the points to each of team members and prepare drafts for submission. Anne volunteered to complete the answer to question a) and Jack and Joe agreed to do research on the company and answer questions b) and c) respectively. We discussed the choice between product categories and Joe suggested to a bit more research. I proposed that all questions should be answered by XX Feb. 2021, and shared via our internal team page on Canvas. I also suggested to keep the Excel sheet with points allocated to each team member on our Canvas page and update it every week. On X February Joe informed us that he is unwell, and he cannot work on the assignment 1. I asked Mary whether she would be available to take a part in Assignment 1, and she agreed. We met online on XX Feb. As everybody submitted their answers day before, I assembled everything in one file, and marked parts that I thought need to be improved. I noticed that Qa is partially answered and proposed some improvements. Anne agreed, but she was not available to improve answer to Qa before the submission. She proposed to make this update in week 7, and we agreed to allocate Anne 20 points for the work done, and additional 10 points after improvement is completed. Jack and Mary agreed to improve their answers and upload their work by 16.00. on XX Feb. The same day, I proof-read the file, completed the work log and shared both via Canvas. Via email, I asked all team members to confirm that they agree with my record in the work log, and their allocated points. After they confirmed that they are happy with both documents, I uploaded the draft report 1 on Canvas and work log 1. Anne proposed to put all company-related data in one file, keep the file in Canvas so that we all have access to it and add useful data and links we find about the company. We agreed that the team leader on the next assignment will be Jack. Work log instructions and information Students work in teams. Each team consists of four or five students that take different roles in the team each week. The team works together on assignments, and produces a joint report for each assignment. The best practice is that the report is completed in the week when the assignment is issued, and this report is called the draft report. The draft report consists of answers to the assignment questions. This draft is accompanied by the completed team leader’s work-log approved by all team members. Please note that report without completed and approved work logs presented in the appendix will not be considered for marking, as team members did not show how they worked on the project. Participation in the teamwork will be reflected in your mark. For a full mark in continuous assessment, each student must collect at least 100 points over weeks that continuous assessment takes place – some models on workload allocation are presented in Tutorial 1, feel free to choose one of them or devise your own model (just keep in mind that all team members must be involved in all parts of the report: leading the team, analyzing the case and preparing the final report). Each student must take the role of a team leader* at least once. Roles in a team: Responsibilities of a team leader: ▪ To get a very good understanding of the assignment and what needs to be done, and correspondingly plan and propose activities to team members, allocate those activities to team members or ask them to voluntarily select activities (i.e. to define a model of teamwork) ▪ To define time for meetings, by respecting teamwork etiquette (e.g. agreeing to meet or work during working days, working hours if not agreed otherwise); for example, you can use Doodle to ask team members for the most convenient times for a meeting; book the space at the library; arrange online meeting (via MS Teams, WhatsApp or Canvas) ▪ To define what needs to be submitted and in what format (e.g. data collected and copied in a word-document, full answer to the part a) of an assignment and references etc.) ▪ To define the handling of the document and communication about it, e.g. via Canvas (group discussions, conferences) or by using google docs, joint Dropbox or by emailing documents (by using Queen’s email address), with CC to everybody in a team ▪ To perform quality control and ensure the accuracy of the answers in a draft version/final version, ▪ To define, discuss with the team members and manage rules of Behaviour – what behaviours are unacceptable to the team? (e.g. checking in late/missing meetings; not replying to communication; not completing work on time; not listening/being respectful to others). ▪ To prepare work-log which reflects how is work planned, allocated and organized; work log should be between 200 and 500 words. ▪ To ensure that the work log is submitted on Canvas, as well as approved by all team members ▪ Good practice: to submit a draft report on Canvas to ensure continuity and transparency of work on the assignments and reports. Team-members’/analysts’ responsibilities: ▪ work on assigned or agreed task, search for data, prepare theoretical parts, and prepare answers; ▪ improve the answer based on the feedback from the team leader or other team members (if organized that way); ▪ report to the team leader about completed activities and any issue that affect your contribution to the teamwork; ▪ check the team leader’s work log and approve it in a timely fashion, so it represents an accurate description of plans and activities; ▪ ensure completion of postponed activities (if needed). * You can agree in advance who will be the team leader for each assignment or you can define a rule, for example, based on student numbers: for the first assignment, the team leader is the student with the highest or smallest student number Application of a transformation model to the Café Nero Café Nero (https://caffenero.com/uk/) sells three categories of products: coffee, drinks and food. There is an assortment of 19 types of coffee, which can be customized further on by adding extras (e.g. marshmallows, vanilla syrup and whipped cream). The coffee is prepared in the shop (coffee makers and coffee equipment) served in coffee cups or in single-use, disposable cups (nonrecyclable). They sell cold and hot drinks. Cold drinks are sold as a bottled beverage (three types of tea and lemonade bottled in plastic bottles), frappe crème (four types, made at the spot), fruit booster (two types, made at the spot) and frappe milkshakes (three types, made at the spot). The bottled beverage is kept in fridges, as well as ingredients for other cold drinks (observation on 25th January 2019, Appendix 1). Hot drinks are made and served in the café (three types), and they can be further on customised by using extras. There are six types of food served at the cafe or sold as a take-away: deli menu (14 kinds of foods), salads and soups (9 kinds of foods), panini and sandwiches (20 kinds of foods), breakfast (18 kinds of foods, customised by five kinds of extras), cakes and muffins (20 kinds of foods) and snacks (22 kinds of foods). Food can be warmed up and served in the café (plates, utensils), or packed as a take-away. Take-away foods are sold packed in paper, paper bags and plastic boxes (for some foods). Transformation model that represents operations at café Nero is presented in Figure 1. Primary inputs • Materials for packaging (paper, paper boxes, plastic boxes, plastic bottles) • Material for drinks (water, sugar, concentrates, fruits, powders, coffee, milk, tea, cocoa, ice) • Material for food (meat, vegetables, fruits, breads) • Customers Input Resources • Facilities (café kitchen, storage, coffee-makers, oven, sink, garbage bins, fridge, coolers, dish-washer) • Consumables (energy, water, gas + Serving elements: glasses, coffee cups, ceramic plates, metal forks, knifes, spoons, plastic plates) • Staff (café workers) Transformation process: production (coffee, and beverages), warming-up, packing, serving, cleaning Output Figure 1. Transformation model: café Nero Coffee Drinks Food Served customers To present application of this model on one product, we select americano coffee: Coffee is made of ground coffee beans and boiled water, and it can be customized by the customer (e.g. sugar or milk can be added). In the café, coffee is made by using a coffee maker. For this operation, one worker is needed. Coffee is served in the café (in glass coffee cup), or sold as take-away (in disposable cups or as re-fills, in customers cups). Transformation model that represents operation ‘making americano’ at café Nero is presented in Figure 2. Primary inputs • Materials for packaging (coffee cup – disposable+lid or for multiple use) • Material for drinks (water, sugar, coffee ground, milk) • Customers Input Transformation process: production (coffee) + packing, serving, cleaning Output Coffee Served customers Cups to be washed Resources • Facilities (café kitchen, storage, coffee-makers, sink, garbage bins, fridge, dish-washer) • Consumables (energy, water, gas + Serving elements: coffee cups) • Staff (café worker) Figure 2. Transformation model applied on the product: americano coffee, at café Nero References: https://caffenero.com/uk/ Appendix 1 My team visited café Nero, located at 17-21 Lombard St Belfast BT1 1RB, on 25th January 2019. The visit started at 12.00 (noon) and lasted until 13.00. During the visit, we observed customers’ demand, as well as operations at the café. In particular, we made notes on orders of ‘americano coffee’. Notes: 12.14. Customer ordered ‘americano coffee’, she brought her own reusable coffee cup. 12.44. Customer ordered ‘americano coffee’, coffee is served in the café (served in a cup, with the milk). 12.46. Customer ordered two ‘americano coffees’, take-away (single use coffee cups with plastic lids). Application of a transformation model to the Café Nero Café Nero (https://caffenero.com/uk/) sells three categories of products: coffee, drinks and food. There is an assortment of 19 types of coffee, which can be customized further on by adding extras (e.g. marshmallows, vanilla syrup and whipped cream). The coffee is prepared in the shop (coffee makers and coffee equipment) served in coffee cups or in single-use, disposable cups (nonrecyclable). They sell cold and hot drinks. Cold drinks are sold as a bottled beverage (three types of tea and lemonade bottled in plastic bottles), frappe crème (four types, made at the spot), fruit booster (two types, made at the spot) and frappe milkshakes (three types, made at the spot). The bottled beverage is kept in fridges, as well as ingredients for other cold drinks (observation on 25th January 2019, Appendix 1). Hot drinks are made and served in the café (three types), and they can be further on customised by using extras. There are six types of food served at the cafe or sold as a take-away: deli menu (14 kinds of foods), salads and soups (9 kinds of foods), panini and sandwiches (20 kinds of foods), breakfast (18 kinds of foods, customised by five kinds of extras), cakes and muffins (20 kinds of foods) and snacks (22 kinds of foods). Food can be warmed up and served in the café (plates, utensils), or packed as a take-away. Take-away foods are sold packed in paper, paper bags and plastic boxes (for some foods). Transformation model that represents operations at café Nero is presented in Figure 1. Primary inputs • Materials for packaging (paper, paper boxes, plastic boxes, plastic bottles) • Material for drinks (water, sugar, concentrates, fruits, powders, coffee, milk, tea, cocoa, ice) • Material for food (meat, vegetables, fruits, breads) • Customers Input Resources • Facilities (café kitchen, storage, coffee-makers, oven, sink, garbage bins, fridge, coolers, dish-washer) • Consumables (energy, water, gas + Serving elements: glasses, coffee cups, ceramic plates, metal forks, knifes, spoons, plastic plates) • Staff (café workers) Transformation process: production (coffee, and beverages), warming-up, packing, serving, cleaning Output Figure 1. Transformation model: café Nero Coffee Drinks Food Served customers To present application of this model on one product, we select americano coffee: Coffee is made of ground coffee beans and boiled water, and it can be customized by the customer (e.g. sugar or milk can be added). In the café, coffee is made by using a coffee maker. For this operation, one worker is needed. Coffee is served in the café (in glass coffee cup), or sold as take-away (in disposable cups or as re-fills, in customers cups). Transformation model that represents operation ‘making americano’ at café Nero is presented in Figure 2. Primary inputs • Materials for packaging (coffee cup – disposable+lid or for multiple use) • Material for drinks (water, sugar, coffee ground, milk) • Customers Input Transformation process: production (coffee) + packing, serving, cleaning Output Coffee Served customers Cups to be washed Resources • Facilities (café kitchen, storage, coffee-makers, sink, garbage bins, fridge, dish-washer) • Consumables (energy, water, gas + Serving elements: coffee cups) • Staff (café worker) Figure 2. Transformation model applied on the product: americano coffee, at café Nero References: https://caffenero.com/uk/ Appendix 1 My team visited café Nero, located at 17-21 Lombard St Belfast BT1 1RB, on 25th January 2019. The visit started at 12.00 (noon) and lasted until 13.00. During the visit, we observed customers’ demand, as well as operations at the café. In particular, we made notes on orders of ‘americano coffee’. Notes: 12.14. Customer ordered ‘americano coffee’, she brought her own reusable coffee cup. 12.44. Customer ordered ‘americano coffee’, coffee is served in the café (served in a cup, with the milk). 12.46. Customer ordered two ‘americano coffees’, take-away (single use coffee cups with plastic lids). Tutorial group: __7__; Team number: _3___ Student: ___Jack Smith___________________________ Student Number: ____1256425__________________ Student: ___Anne Peterson______________________ Student Number: ____4586211__________________ Student: ___Alex Johansen_______________________ Student Number: ____6258914__________________ Student: ___Mary Lee_____________________________ Student Number: ____3285964__________________ Student: ___Joe Smyth_____________________________ Student Number: ____7245912__________________ Assignment number: Team leader: Week: __3______ __1___ Alex Johansen Anne Peterson Date of submission: 11/02/2021 Jack Smith Joe Smyth Work-log Question a Alex Johansen Mary Lee 10 20* (max 30 points) Question b 30 (max 30 points) Question c 0 30 (max 30 points) Notes To be updated in week 7 Change of the plan due to team-member sickness Declaration: I, Alex Johansen, team leader for Assignment 1, declare that the work log submitted is accurate and approved by all team members, i.e., I shared with them this work log and they confirmed it is accurate. Also, all team members approved points allocated to their parts of the assignment, as well as plans for future updates. Team leader’s report (from 200 to 500 words): (Please explain how did you organize the work of your team, for example: how did you distribute tasks between team members, when did you meet and how many times, how much time it took to complete the assignment? Was there any challenge in the work of the team and if was, how did you tackle it? How much each team member contributed to the assignment? Are there any postponed assignments and for which week/from which week?) We met on Xth February during the first tutorial to discuss our teamwork and Assignment 1, so that we make sure we all understand what we should do and when. We reviewed models for allocation of work on the assignments and decided to use the model on an equal division of labour. We agreed that I will be the team leader for Assignment 1, and that Anne will work on Question a, Jack on Question 2 and Joe on Question 3. Mary agreed to work on other assignments. We also exchanged contact details (Queen’s email, MS Teams and WhatsApp) and agreed about communication policy: no emails or messaging after 20.00h, nor during the weekend. We also agreed to establish internal deadlines, so that everybody has prepared a piece of answer by Friday, so that on Fridays afternoon we can meet and review the answers (to what extent they are complete), allocate the points to each of team members and prepare drafts for submission. Anne volunteered to complete the answer to question a) and Jack and Joe agreed to do research on the company and answer questions b) and c) respectively. We discussed the choice between product categories and Joe suggested to a bit more research. I proposed that all questions should be answered by XX Feb. 2021, and shared via our internal team page on Canvas. I also suggested to keep the Excel sheet with points allocated to each team member on our Canvas page and update it every week. On X February Joe informed us that he is unwell, and he cannot work on the assignment 1. I asked Mary whether she would be available to take a part in Assignment 1, and she agreed. We met online on XX Feb. As everybody submitted their answers day before, I assembled everything in one file, and marked parts that I thought need to be improved. I noticed that Qa is partially answered and proposed some improvements. Anne agreed, but she was not available to improve answer to Qa before the submission. She proposed to make this update in week 7, and we agreed to allocate Anne 20 points for the work done, and additional 10 points after improvement is completed. Jack and Mary agreed to improve their answers and upload their work by 16.00. on XX Feb. The same day, I proof-read the file, completed the work log and shared both via Canvas. Via email, I asked all team members to confirm that they agree with my record in the work log, and their allocated points. After they confirmed that they are happy with both documents, I uploaded the draft report 1 on Canvas and work log 1. Anne proposed to put all company-related data in one file, keep the file in Canvas so that we all have access to it and add useful data and links we find about the company. We agreed that the team leader on the next assignment will be Jack. Work log instructions and information Students work in teams. Each team consists of four or five students that take different roles in the team each week. The team works together on assignments, and produces a joint report for each assignment. The best practice is that the report is completed in the week when the assignment is issued, and this report is called the draft report. The draft report consists of answers to the assignment questions. This draft is accompanied by the completed team leader’s work-log approved by all team members. Please note that report without completed and approved work logs presented in the appendix will not be considered for marking, as team members did not show how they worked on the project. Participation in the teamwork will be reflected in your mark. For a full mark in continuous assessment, each student must collect at least 100 points over weeks that continuous assessment takes place – some models on workload allocation are presented in Tutorial 1, feel free to choose one of them or devise your own model (just keep in mind that all team members must be involved in all parts of the report: leading the team, analyzing the case and preparing the final report). Each student must take the role of a team leader* at least once. Roles in a team: Responsibilities of a team leader: ▪ To get a very good understanding of the assignment and what needs to be done, and correspondingly plan and propose activities to team members, allocate those activities to team members or ask them to voluntarily select activities (i.e. to define a model of teamwork) ▪ To define time for meetings, by respecting teamwork etiquette (e.g. agreeing to meet or work during working days, working hours if not agreed otherwise); for example, you can use Doodle to ask team members for the most convenient times for a meeting; book the space at the library; arrange online meeting (via MS Teams, WhatsApp or Canvas) ▪ To define what needs to be submitted and in what format (e.g. data collected and copied in a word-document, full answer to the part a) of an assignment and references etc.) ▪ To define the handling of the document and communication about it, e.g. via Canvas (group discussions, conferences) or by using google docs, joint Dropbox or by emailing documents (by using Queen’s email address), with CC to everybody in a team ▪ To perform quality control and ensure the accuracy of the answers in a draft version/final version, ▪ To define, discuss with the team members and manage rules of Behaviour – what behaviours are unacceptable to the team? (e.g. checking in late/missing meetings; not replying to communication; not completing work on time; not listening/being respectful to others). ▪ To prepare work-log which reflects how is work planned, allocated and organized; work log should be between 200 and 500 words. ▪ To ensure that the work log is submitted on Canvas, as well as approved by all team members ▪ Good practice: to submit a draft report on Canvas to ensure continuity and transparency of work on the assignments and reports. Team-members’/analysts’ responsibilities: ▪ work on assigned or agreed task, search for data, prepare theoretical parts, and prepare answers; ▪ improve the answer based on the feedback from the team leader or other team members (if organized that way); ▪ report to the team leader about completed activities and any issue that affect your contribution to the teamwork; ▪ check the team leader’s work log and approve it in a timely fashion, so it represents an accurate description of plans and activities; ▪ ensure completion of postponed activities (if needed). * You can agree in advance who will be the team leader for each assignment or you can define a rule, for example, based on student numbers: for the first assignment, the team leader is the student with the highest or smallest student number 1 Operations management intrODuCtiOn 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 and processes differ? ❯ What do operations managers do? operations management is about how organizations create and deliver services and products. everything you wear, eat, sit on, use, read or knock about on the sports field comes to you courtesy of the operations managers who organized its creation and delivery. every book you borrow from the library, every treatment you receive at the hospital, every service you expect in the shops and every lecture you attend at university – all have been created by operations. While the people who supervised their creation and delivery may not always be called operations managers, that is what they really are. and that is what this book is concerned with – the tasks, issues and decisions of those operations managers who have made the services and products on which we all depend. this is an introductory chapter, so we will examine what we mean by ‘operations management’, how operations processes can be found everywhere, how they are all similar yet different, and what it is that operations managers do (see Fig. 1.1). Topic covered in this chapter Copyright © 2016. Pearson Education, Limited. All rights reserved. Direct Operations management Operations performance Operations strategy Direct The Product structure and service and scope of innovation operations Design Operations management Develop Deliver Figure 1.1 this chapter examines operations management Slack, N, Brandon-Jones, A, & Johnston, R 2016, Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. What iS OPeratiOnS ManaGeMent? Operations management is the activity of managing the resources that create and deliver services and products. The operations function is the part of the organization that is responsible for this activity. Every organization has an operations function because every organization creates some types of services and/or products. However, not all types of organization will necessarily call the operations function by this ✽ Operations principle name. (Note in addition that we also use the shorter terms ‘the operation’ or ‘operations’ interchangeably with the ‘operations function’.) Operations managers are the people who have particular responsibility for managing some, or all, of the resources that make up the operations function. Again in some organizations, the operations manager could be called by some other name. For example, he or she might be called the ‘fleet manager’ in a distribution company, the ‘administrative manager’ in a hospital, or the ‘store manager’ in a supermarket. ‘We want any child playing with LEGO® bricks to have a high quality play experience, and in addition we also want to make a positive impact through the way we operate – from our focus on business ethics to reducing our impact on the environment,’ says Jørgen Vig Knudstorp, ceo of the Lego group. of all businesses, the toy business is one of the world’s trickiest. Difficult to forecast, unfailingly subject to fickle kids’ latest fads and subject to constant technological innovation. Yet the Lego group, a privately held, family-owned company with headquarters in Billund, Denmark, has, in recent years, thrived in the business, becoming one of the most reputable companies in the world, according to the reputation institute, and one of the leading manufacturers of play materials. it is a success founded on a deceptively simple idea. one Lego brick is unremarkable, but put one or two together and possibilities start to emerge. With another few bricks the number of things you can create rises exponentially. For example, there are more than 915 million possible ways of arranging six standard four-by-two bricks, and with the approximately 4,200 different elements in the Lego range and 58 different colours together with various decorations, the total number of active combinations is many more. and, however many bricks you assemble, irrespective of what colour or set they are from, your pieces will always fit together perfectly. all of the basic Lego elements use the same method to stick together. they have studs on top that are slightly bigger than and tubes on the inside. pressing the bricks together produces an ‘interference fit’ that provides a temporary joint without the use of an additional fastener. But this source: shutterstock.com: t p Feller Lego: building a creative experience1 principle does depend on the elements being made to very high levels of precision and quality, which explains the company’s motto, ‘only the best is good enough’. ole Kirk Kristiansen, a Danish carpenter, who started selling wooden toys as a way of earning extra money, founded the company in 1932. these included wooden toy bricks, the forerunners of the plastic bricks, which are now so successful that it is estimated that there are now 86 bits of Lego for every person on the planet. Bricks, and other Lego ‘elements’, are manufactured at the group’s factories in Denmark, hungary, the czech republic and mexico, locations that have been chosen to be near their key markets in europe and the Usa. these sites have been expanded to cope with increased demand, together with new factories built in nyiregyhaza in hungary and Jiaxing in china. products made in these factories serve a global market. the aim, according to Bali padda, executive Vice president and ▼ Copyright © 2016. Pearson Education, Limited. All rights reserved. OPeratiOnS in PraCtiCe 5 1 operations Slack, N, Brandon-Jones, A, & Johnston, R 2016, Operations Management, Pearson Education, Limited, Harlow, United Kingdom.ChaPter Available from: ProQuest Ebook management Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. Copyright © 2016. Pearson Education, Limited. All rights reserved. chief operations officer of the Lego group, is to ‘build a stable manufacturing base around the world, ultimately making sure that LEGO products are available to children and their parents when and where they want them’. and it is the company’s operations processes that are central to maintaining its reputation for quality, and its ability to produce millions of elements profitably and sustainably. the process starts at the main warehouse that contains the silos holding raw plastic granulates. at the Billund operation, 60 tonnes of plastic is processed every 24 hours. the silos are linked to the moulding machines by a complex arrangement of tubes. the moulding stage is particularly important, because every Lego piece must be made to a demanding level of precision, with tolerances as small as 10 micrometres. at each machine, the plastic is heated and pumped into the mould through a main channel, which divides into a number of narrower channels, each corresponding to a single brick. Water is used to cool the moulds, which can produce up to 32 bricks, and, when the plastic has solidified (only a couple of seconds), they release the bricks into containers. these moulds are expensive, and each element requires its own mould. the average cost of a mould is around €80,000 with some costing more than €360,000. a sensor detects when a container is full and a robot trolley is automatically sent. the robots travel between the machines, picking up boxes and leaving empty ones so production can be continued. the automation means that few people are required for the process. the robots transport the boxes to conveyors, which move them into the storage area where robotic cranes stack them until they are needed. From there some pieces go to the ‘decoration’ stage where they are individually painted. Decoration is the most expensive part of the Lego process. other pieces go straight to packing, where the Lego sets take their final form. in the packaging process the pieces go into a machine that separates them individually, counts them using optical sensors, and places them in their box. the automatic movement system knows exactly how much a box should weigh at any stage and as the packing process continues, high-precision scales monitor the weight of the box. any deviation, even of a few micrograms, sets off an alarm. at the end of the process the boxes are sealed shut, automatically weighed to ensure there are no missing components, checked by a worker trained to look for things like plastic bags sticking out of the box, packed by a robot six to a case, and finally sent off for distribution. Quality assurance staff perform frequent inspections and tests on the various Lego elements, such as drop, torque, tension, compression, bite and impact tests to make sure the toys are robust and safe. only about 18 of every million Lego elements produced, (that is 0.00002 per cent) fail to pass the tests. in addition, throughout the process, the company tries to achieve high levels of environmental sustainability. plastic is extensively recycled in the factory. all scrap, for example the plastic that fills the channels that take the hot plastic into moulds, or faulty pieces that escape from automated handling, are ground up and used back into the production process. similarly, the transparent plastic that is used to clean the channels when the production colour is changed in a moulding machine are also ground up and sold to other companies that produce other plastic products. The LEGO example illustrates how important the operations function is for any company whose reputation depends on producing safe, high-quality, sustainable and profitable products or services. Its operations, like its market, are globally located, it is meticulous about ensuring that its processes operate to precise quality standards, and it has invested heavily in process technology that reduces the environmental impact of its operations and the cost of its products. Of course, exactly what is involved in producing products and services will depend to some extent on the type of organization of which the operations function is a part. Table 1.1 shows some of the activities of the operations function for various types of organization. Operations in the organization The operations function is central to the organization because it creates and delivers services and products, which is its reason for existing. The operations function is one of the three core functions of any organization. These are: 6 Part One Directing the operation Slack, N, Brandon-Jones, A, & Johnston, R 2016, Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. table 1.1 Some activities of the operations function in various organizations ● ● Copyright © 2016. Pearson Education, Limited. All rights reserved. ● internet service provider Fast food chain international aid charity Furniture manufacturer maintain and update hardware Update software and content respond to customer queries implement new services ensure security of customer data Locate potential sites for restaurants provide processes and equipment to produce burgers etc. maintain service quality Develop, install and maintain equipment reduce impact on local area, and packaging waste provide aid and development projects for recipients provide fast emergency response when needed procure and store emergency supplies Be sensitive to local cultural norms procure appropriate raw materials and components make sub-assemblies assemble finished products Deliver products to customers reduce environmental impact of products and processes the marketing (including sales) function – which is responsible for communicating the organization’s services and products to its markets in order to generate customer requests; the product/service development function – which is responsible for coming up with new and modified services and products in order to generate future customer requests; the operations function – which is responsible for the creation and delivery of services and products based on customer requests. In addition, there are the support functions which enable the core functions to operate effectively. These include, for example, the accounting and finance function, the technical function, the human resources function and the information systems function. Remember that different organizations will call their various functions by different names and will have a different set of support functions. Almost all organizations, however, will have the three core functions, because all organizations have a ✽ Operations principle fundamental need to sell their products and services, meet customer requests for services and products, and come up with new services and products to satisfy customers in the future. In practice, there is not always a clear division between the three core functions or between core and support functions. This leads to some confusion over where the boundaries of the operations function should be drawn. In this book we use a relatively broad definition of operations. We treat much of the product/service development, technical and information systems activities and some of the human resources, marketing, and accounting and finance activities as coming within the sphere of operations management. We view the operations function as comprising all the activities necessary for the day-to-day fulfilment of customer requests within the constraints of environmental and social sustainability. This includes sourcing services and products from suppliers and delivering services and products to customers. It is fundamental to modern management that functional boundaries should not hinder efficient internal processes. Figure 1.2 illustrates some of the relationships between operations and other functions in terms of the flow of information between them. Although it is not comprehensive, it gives an idea of the nature of each relationship. However, note that the support functions have a different relationship with operations than the other core functions. Operations management’s responsibility to support functions is primarily to make sure that they understand operations’ needs and help them to satisfy these needs. The relationship with the other two core functions is more equal – less of ‘this is what we want’ and more ‘this is what we can do currently – how do we reconcile this with broader business needs?’ 7 1 operations Slack, N, Brandon-Jones, A, & Johnston, R 2016, Operations Management, Pearson Education, Limited, Harlow, United Kingdom.ChaPter Available from: ProQuest Ebook management Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. The broad scope of operations management’s responsibilities Technical function Process technology needs Accounting and finance function Financial analysis for performance measurement and decision making Process technology options Provision of relevant data Communicating the capabilities and constraints of operations processes Operations function Communicate human resource needs Human resources (HR) function Recruitment, development and training Core functions Product/service development function Communicating information system needs New product/ service ideas Communicating the capabilities and constraints of operations processes Market requirements Systems for design, planning and control and improvement Marketing function Information systems (IS) function Support functions Copyright © 2016. Pearson Education, Limited. All rights reserved. Figure 1.2 the relationship between the operations function and other core and support functions of the organization WhY iS OPeratiOnS ManaGeMent iMPOrtant in ALL tYPeS OF OrGaniZatiOn? In some types of organization it is relatively easy to visualize the operations function and what it does, even if we have never seen it. For example, most people have seen images of an automobile assembly. But what about an advertising agency? We know vaguely what these agencies do – they create the advertisements that ✽ Operations principle we see in magazines and on television – but what is their operations function? The clue lies in the word ‘create’. Any business that creates something must use resources to do so, and so must have an operations activity. Also the automobile plant and the advertising agency do have one important element in common: both have a higher objective – to make a profit from creating and delivering their products or services. Yet not-for-profit organizations also use their resources to create and deliver services, not to make a profit, but to serve society in some way. Look at the following examples of what operations management does in five very different organizations and some common themes emerge. 8 Part One Directing the operation Slack, N, Brandon-Jones, A, & Johnston, R 2016, Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. source: shutterstock.com: supergenijalac source: shutterstock.com: stuart Jenner Physician (general practitioner) – Operations management uses knowledge to effectively diagnose conditions in order to treat real and perceived patient concerns source: getty images: aFp / romeo gacad Management consultant – Operations management uses people to effectively create the services that will address current and potential client needs Disaster relief charity – Operations management uses ours and our partners’ resources to speedily provide the supplies and services that relieve community suffering source: alamy images: adrian sherratt Copyright © 2016. Pearson Education, Limited. All rights reserved. source: shutterstock.com: indianstockimages Automobile assembly factory – Operations management uses machines to efficiently assemble products that satisfy current customer demands Advertising agency – Operations management uses our staff ’s knowledge and experience to creatively present ideas that delight clients and address their real needs Start with the statement from the ‘easy to visualize’ automobile plant. Its summary of what operations management does is: ‘Operations management uses machines to efficiently assemble products that satisfy current customer demands.’ The statements from the other 9 1 operations Slack, N, Brandon-Jones, A, & Johnston, R 2016, Operations Management, Pearson Education, Limited, Harlow, United Kingdom.ChaPter Available from: ProQuest Ebook management Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. organizations were similar, but used slightly different language. Operations management used not just machines but also ‘knowledge, people, our and our partners’ resources’, and ‘our staffs’ experience and knowledge’, to ‘efficiently (or effectively, or creatively) assemble (or produce, change, sell, move, cure, shape, etc.) products (or services or ideas) that satisfy (or match or exceed or delight) customer (or client or citizens’ or society) demands (or needs or concerns or even dreams).’ So whatever terminology is used there is a common theme and a common purpose to how we can visualize the operations activity in any type of organization – small or large, service or manufacturing, public or private, profit or not-for-profit. Operations management uses ‘resources to appropriately create outputs that fulfil defined market requirements’ (see Fig. 1.3). However, although the essential nature and purpose of operations management is the same in any type of organization, there are some special issues to consider, particularly in smaller organizations and those whose purpose is to maximize something other than profit. Operations management in the smaller organization Operations management is just as important in small organizations as it is in large ones. Irrespective of their size, all companies need to create and deliver their service and products efficiently and effectively. However, in practice, managing operations in a small or medium-size organization has its own set of problems. Large companies may have the resources to dedicate individuals to specialized tasks but smaller companies often cannot, so people may have to do different jobs as the need arises. Such an informal structure can allow the company to respond quickly as opportunities or problems present themselves. But decision making can also become confused as individuals’ roles overlap. Small companies may have exactly the same operations management issues as large ones but they can be more difficult to separate from the mass of other issues in the organization. However, small operations can also have significant advantages; the short case on Torchbox illustrates this. Operations management uses… Copyright © 2016. Pearson Education, Limited. All rights reserved. Resources to Appropriately Create Outputs that Fulfil Defined Market Requirements People Effectively Produce Services Meet Current Customer Demands Technology Efficiently Assemble Products Satisfy Potential Citizens’ Needs Knowledge Creatively Sell Ideas Exceed Perceived Clients’ Concerns Information Reliably Move Solutions Delight Emerging Society’s Dreams Partners Accurately Cure Knowledge etc. Real etc. Etc. etc. etc. Diagnose etc. etc. Shape Fabricate etc. Transforming resources Nature of the transformation Transformation objectives Performance standard Nature of the product/service The operation’s customers Nature of the objectives Customers’ objectives Figure 1.3 Operations management uses resources to appropriately create outputs that fulfil defined market requirements. 10 PartA,One Directing operation Slack, N, Brandon-Jones, & Johnston, R 2016, the Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. Copyright © 2016. Pearson Education, Limited. All rights reserved. torchbox: award-winning web designers2 We may take it for granted, yet browsing websites, as part of your studies, your job, or your leisure, is an activity that we all do – probably every day, probably many times each day. so it is important. all organizations need to have a web presence if they want to sell products and services, interact with their customers, or promote their cause. and, not surprisingly, there is a whole industry devoted to designing websites so that they have the right type of impact. in fact, taken over the years, web development has been one of the fastest growing industries in the world. But it is also a tough industry. not every web design company thrives, or even survives beyond a couple of years. to succeed, web designers need technology skills, design capabilities, business awareness and operational professionalism. one that has succeeded is torchbox, an independently owned web design and development company based in oxfordshire. Founded back in 2000, it now employs 30 people, providing ‘high-quality, cost-effective, and ethical solutions for clients who come primarily, but not exclusively, from the charity, non-governmental organisations and public sectors’. co-founder and technical Director tom Dyson has been responsible for the technical direction of all major developments. ‘There are a number of advantages about being a relatively small operation’, he says. ‘We can be hugely flexible and agile, in what is still a dynamic market. But at the same time we have the resources and skills to provide a creative and professional service. Any senior manager in a firm of our size cannot afford to be too specialised. All of us here have their own specific responsibilities; however, every one of us shares the overall responsibility for the firm’s general development. We can also be clear and focused on what type of work we want to do. Our ethos is important to us. We set out to work with clients who share our commitment to environmental sustainability and responsible, ethical business practice; we take our work, and that of our clients, seriously. If you’re an source: shutterstock.com: toria OPeratiOnS in PraCtiCe arms dealer, you can safely assume that we’re not going to be interested.’ nevertheless, straightforward operational effectiveness is also essential to torchbox’s business. ‘We know how to make sure that our projects run not only on time and to budget’, says olly Willans, also a co-founder and the firm’s creative Director, ‘but we also like to think that we provide an enjoyable and stimulating experience – both for our customers’ development teams and for our staff too. High standards of product and service are important to us: our clients want accessibility, usability, performance and security embedded in their web designs, and of course, they want things delivered on-time and on-budget. We are in a creative industry that depends on fast-moving technologies, but that doesn’t mean that we can’t also be efficient. We back everything we do with a robust feature-driven development process using a kanban project management methodology which helps us manage our obligations to our clients.’ the ‘kanban’ approach used by the torchbox web development teams originated from car manufacturers like toyota (it is fully explained in chapter 15). ‘Using sound operations management techniques helps us constantly to deliver value to our clients’, says tom Dyson. ‘We like to think that our measured and controlled approach to handling and controlling work helps ensure that every hour we work produces an hour’s worth of value for our clients and for us.’ Operations management in not-for-profit organizations Terms such as ‘competitive advantage’, ‘markets’ and ‘business’, which are used in this book, are usually associated with companies in the for-profit sector. Yet operations management is also relevant to organizations whose purpose is not primarily to earn profits. Managing 11 ChaPter 1 operations management Slack, N, Brandon-Jones, A, & Johnston, R 2016, Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. the operations in an animal welfare charity, hospital, research organization or government department is essentially the same as in commercial organizations. Operations have to take the same decisions – how to create and deliver service and products, invest in technology, contract out some of their activities, devise performance measures, improve their operations performance, and so on. However, the strategic objectives of not-for-profit organizations may be more complex and involve a mixture of political, economic, social or environmental objectives. Because of this there may be a greater chance of operations decisions being made under conditions of conflicting objectives. So, for example, it is the operations staff in a children’s welfare department who have to face the conflict between the cost of providing extra social workers and the risk of a child not receiving adequate protection. Nevertheless the vast majority of the topics covered in this book have relevance to all types of organization, including non-profit ones, even if the context is different and some terms may have to be adapted. MSF operations provide medical aid to people in danger3 12 United nations, financial bodies such as the humanitarian aid Department of the european commission (echo), or msF teams already present in the region. once the information has been checked and validated, msF sends a team of medical and logistics experts to the crisis area to carry out a quick evaluation. the team assesses the situation, the number of people affected, and the current and future needs, and sends a proposal back to the msF office. When the proposal is approved, msF staff start the process of selecting personnel, organizing materials and resources, and securing project funds. initiating a project involves sending technical equipment and resources to the area. in large crises, aircraft fly in all the necessary materials so that the work can begin immediately. thanks to its preplanned processes, specialized kits and the emergency stores, msF can distribute material and equipment within 48 hours, ready for the response teams to start work as soon as they arrive. most msF projects generally run for ▼ Copyright © 2016. Pearson Education, Limited. All rights reserved. médecins sans Frontières (msF; also called Doctors Without Borders) is an independent humanitarian organization providing medical aid where it is most needed, regardless of race, religion, politics or gender, and raising awareness of the plight of the people it helps in countries around the world. its core work takes place in crisis situations – armed conflicts, epidemics, famines and natural disasters such as floods and earthquakes. the teams deliver both medical aid (including consultations with a doctor, hospital care, nutritional care, vaccinations, surgery, obstetrics and psychological care) and material aid (including food, shelter, blankets, etc.). each year, msF sends around 3,000 doctors, nurses, logisticians, water and sanitation experts, administrators and other professionals to work alongside around 25,000 locally hired staff. it is one of the most admired and effective relief organizations in the world. But no amount of fine intentions can translate into effective action without superior operations management. as msF says, it must be able to react to any crisis with ‘fast response, efficient logistics systems, and efficient project management’. msF makes every effort to respond quickly and efficiently to crises around the world. its response procedures are continuously being developed to ensure that it reaches those most in need as quickly as possible. the process has five phases: proposal, assessment, initiation, running the project, and closing. the information that prompts a possible mission can come from governments, the international community, humanitarian organizations such as the source: getty images: aFp / Lee celano OPeratiOnS in PraCtiCe PartA,One Directing operation Slack, N, Brandon-Jones, & Johnston, R 2016, the Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. somewhere between 18 months and three and a half years. Whether an emergency response or a long-term healthcare project, the closing process is roughly similar. once the critical medical needs have been met (which could be after weeks, months or years depending on the situation), msF begins to close the project with a gradual withdrawal of staff and equipment. at this stage, the project closes or is passed on to an appropriate organization. msF will also close a project if risks in the area become too great to ensure staff safety. Whether it is dealing with urgent emergencies, when material might need to be on an aircraft within 24 hours, or a long-running programme where a steady supply of equipment and drugs is vital, everything msF does on the ground depends on an efficient logistics system. it is based on the principle that msF staff should always have exactly the right materials for the job at hand. so msF has developed and produced pre-packaged disaster kits ready for transport within hours, including a complete surgical theatre the size of a small conference table and an obstetrics kit the size of a two-drawer file. there is an ongoing process of revising the kits every time a new drug or medical tool becomes available. to make sure it is reacting as quickly as possible, msF has four logistical centres based in europe and east africa plus stores of emergency materials in central america and east asia. these purchase, test and store equipment so that aircraft can be loaded and flown into crisis areas within 24 hours. the pre-packaged disaster kits are custom-cleared within the logistics centres, ready for flight. But not all supplies are needed quickly. if it is not a dire emergency, msF reduces its costs by shipping the majority of material and drugs by sea. Because of this, it is vital to monitor stock levels and anticipate future needs so that orders can be placed up to three months in advance of expected requirements. Copyright © 2016. Pearson Education, Limited. All rights reserved. the new operations agenda Over the last few years, changes in the business environment have had a significant impact on the challenges faced by operations managers. Some of them are in response to changes in the nature of the demand side. Many (although not all) industries have experienced increasing cost-based competition while simultaneously their customers’ expectations of quality and variety have increased. Markets have become more global, sometimes meaning a demand for a higher variety, or even totally customized products and services. Rapidly developing (often digital) technologies are leading to more frequent, new product/service introductions. Customers have increased ethical and environmental sensitivity. Also, the impact of new process technologies, in both manufacturing and service, is having a dramatic effect, radically altering the operating practices of almost every industry. This leads to operations having to change the way they create their products and services, serve their customers, relate to stakeholders and involve their workforce. Just as importantly, globalized supply markets are opening new options in how operations source input goods and services. Very few businesses have not at least considered purchasing from out✽ Operations principle side their own geographic area. But while bringing opportunities for cost savings, a bigger supply market also brings new problems of long supply chains, supply vulnerability and reputational risk. All this has led to new pressures for which the operations function has needed to develop responses. Figure 1.4 identifies just some of the operations responses to these business pressures. (If you do not recognize some of the terms in Figure 1.4, do not worry – we will explain them throughout the book.) These responses form a major part of a new agenda for operations. Parts of this agenda are trends which have always existed but have accelerated, such as globalization and increased cost pressures. Part of the agenda involves seeking way to exploit new technologies, most notably the Internet. Of course, the items in Figure 1.4 are not comprehensive, nor are they universal. But very few operations functions will be unaffected by at least some of these issues. What iS the inPut–tranSFOrMatiOn–OutPut PrOCeSS? All operations create and deliver service and products by changing inputs into outputs using an ‘input–transformation–output’ process. Figure 1.5 shows this general transformation process model that is the basis of all operations. Put simply, operations are processes that take 13 ChaPter 1 operations management Slack, N, Brandon-Jones, A, & Johnston, R 2016, Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. Supplier partnership Sustainability and development Business recovery planning Flexible working patterns Global operations networks Enterprise resource management Fast time to market Environmentally sensitive design Developments in the business, technical, social, regulatory and political environment Customer relationship management Risk management Internet of things Mass customization ‘Big data’ analysis Internet-based integration of operations activities 3D printing Co-creation of service Operating models Algorithmic decision making Figure 1.4 Changes in the business environment are shaping a new operations agenda Copyright © 2016. Pearson Education, Limited. All rights reserved. in a set of input resources which are used to transform something, or are transformed themselves, into outputs of services and products. And although all operations conform to this general input–transformation–output model, they differ in the nature of their specific inputs and outputs. For example, if you stand far enough away from a hospital or a car plant, they might look very similar, but move closer and clear differences do start to emerge. One is a service Transformed resources • Materials • Information • Customers Input resources THE TRANSFORMATION PROCESS Output products and services Valueadded for customers Transforming resources • Facilities • Staff Figure 1.5 All operations are input–transformation–output processes 14 PartA,One Directing operation Slack, N, Brandon-Jones, & Johnston, R 2016, the Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. operation delivering ‘services’ that change the physiological or psychological condition of patients, the other is a manufacturing operation creating and delivering ‘products’. What is inside each operation will also be different. The hospital contains diagnostic, care and therapeutic processes whereas the motor vehi✽ Operations principle cle plant contains metal forming machinery and assembly processes. Perhaps the most important difference between the two operations, however, is the nature of their inputs. The hospital transforms the customers themselves. The patients form part of the input to, and the output from, the operation. The vehicle plant transforms steel, plastic, cloth, tyres and other materials into vehicles. inputs to the process One set of inputs to any operation’s processes is transformed resources. These are the resources that are treated, transformed or converted in the process. They are usually a mixture of the following: ● ● Copyright © 2016. Pearson Education, Limited. All rights reserved. ● Materials – operations which process materials could do so to transform their physical properties (shape or composition, for example). Most manufacturing operations are like this. Other operations process materials to change their location (parcel delivery companies, for example). Some, like retail operations, do so to change the possession of the materials. Finally, some operations store materials, such as warehouses. Information – operations which process information could do so to transform their informational properties (that is, the purpose or form of the information); accountants do this. Some change the possession of the information, for example market research companies sell information. Some store the information, for example archives and libraries. Finally, some operations, such as telecommunication companies, change the location of the information. Customers – operations which process customers might change their physical properties in a similar way to materials processors: for example, hairdressers or cosmetic surgeons. Some store (or more politely accommodate) ✽ Operations principle customers: hotels, for example. Airlines, mass rapid transport systems and bus companies transform the location of their customers, while hospitals transform their physiological state. Some are concerned with transforming their psychological state, for example most entertainment services such as music, theatre, television, radio and theme parks. But customers are not always simple ‘passive’ items to be processed. They can also play a more active part in many operations and processes. For example, they create the atmosphere in a restaurant; they provide the stimulating environment in learning groups in education; they provide information at check-in desks; and so on. When customers play this role it is usually referred to as ‘co-production’ because the customer plays a vital part in the provision of the product/service offering. Some operations have inputs of materials and information and customers, but usually one of these is dominant. For example, a bank devotes part of its energies to producing printed statements by processing inputs of material, but no one would claim that a bank is a printer. The bank also is concerned with processing inputs of customers at its branches and contact centres. However, most of the bank’s activities are concerned with processing inputs of information about its customers’ financial affairs. As customers, we may be unhappy with badly printed statements and we may be unhappy if we are not treated appropriately in the bank. But if the bank makes errors in our financial transactions, we suffer in a far more fundamental way. Table 1.2 gives examples of operations with their dominant transformed resources. The other set of inputs to any operations process is transforming resources. These are the resources which act upon the transformed resources. There are two types which form the ‘building blocks’ of all operations: 15 ChaPter 1 operations management Slack, N, Brandon-Jones, A, & Johnston, R 2016, Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. table 1.2 Dominant transformed resource inputs of various operations ● ● Predominantly processing inputs of materials Predominantly processing inputs of information Predominantly processing inputs of customer 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 facilities – the buildings, equipment, plant and process technology of the operation; staff – the people who operate, maintain, plan and manage the operation. (Note that we use the term ‘staff’ to describe all the people in the operation, at any level.) Copyright © 2016. Pearson Education, Limited. All rights reserved. The exact nature of both facilities and staff will differ between operations. To a five-star hotel, its facilities consist mainly of ‘low-tech’ buildings, furniture and fittings. To a nuclearpowered aircraft carrier, its facilities are ‘high-tech’ nuclear generators and sophisticated electronic equipment. Staff will also differ between operations. Most staff employed in a factory assembling domestic refrigerators may not need a very high level of technical skill. In contrast, most staff employed by an accounting company are, hopefully, highly skilled in their own particular ‘technical’ skill (accounting). Yet although skills vary, all staff can make a contribution. An assembly worker who con✽ Operations principle sistently misassembles refrigerators will dissatisfy customers and increase costs just as surely as an accountant who cannot add up. The balance between facilities and staff also varies. A computer chip manufacturing company, such as Intel, will have significant investment in physical facilities. A single chip fabrication plant can cost in excess of $5 billion, so operations managers will spend a lot of their time managing their facilities. Conversely, a management consultancy firm depends largely on the quality of its staff. Here operations management is largely concerned with the development and deployment of consultant skills and knowledge. Outputs from the process Products and services are different. Products are usually tangible things whereas services are activities or processes. A car or a newspaper or a restaurant meal is a product, whereas a service is the activity of the customer using or consuming that product. Some services do not involve products. Consultancy advice or a haircut is a processes (though some products may be supplied in support of the service, such as a report or a hair gel). Also, while most products can be stored, at least for a short time, service only happens when it is consumed or used. So accommodation in an hotel room for example will perish if it is not sold that night, a restaurant table will remain empty unless someone uses it that evening. Most operations produce both products and services Some operations create and deliver just services and others just products, but most operations combine both elements. Figure 1.6 shows a number of operations (including some described as examples in this chapter) positioned in a spectrum from ‘pure’ products to ‘pure’ service. Crude oil producers are concerned almost exclusively with the product which comes from their oil wells. So are aluminium smelters, but they might also deliver some services such as technical 16 PartA,One Directing operation Slack, N, Brandon-Jones, & Johnston, R 2016, the Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. Pure products Examples Operations in practice examples from this chapter Crude oil production Aluminium smelting LEGO Specialist machine tool production Restaurant Pret A Manger Information systems provider Médecins Sans Frontières Management consultancy Torchbox Psychotherapy clinic Formule 1 / Ski Verbier Pure services Copyright © 2016. Pearson Education, Limited. All rights reserved. Figure 1.6 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 ‘operations in practice’ examples in this chapter advice. Services in these circumstances are called facilitating services. To an even greater extent, machine tool manufacturers deliver facilitating services such as technical advice and applications engineering. The services delivered by a restaurant are an essential part of what the customer is paying for. It is both a manufacturing operation which creates and delivers meals and a provider of service in the advice, ✽ Operations principle ambience and service of the food. An information systems provider may create software ‘products’, but primarily it is providing a service to its customers, with facilitating products. Certainly, a management consultancy, although it produces reports and documents, would see itself primarily as a service provider. Finally, pure services solely create and deliver services, a psychotherapy clinic, for example. Of the ‘Operations in practice’ examples in this chapter, LEGO (or at least the part of the LEGO Group we described in this chapter) produces tangible products, and Pret A Manger both creates and ‘serves’ its products. It therefore has substantial service content. Médecins Sans Frontières supplies physical aid in emergencies, but also intangible advice and medical help. Torchbox’s customers receive no physical product but are paying for the design and functionality of the website designs. Likewise, hotels such as Formule 1 are close to being pure services, although they both have some tangible elements such as food. Increasingly the distinction between services and products is difficult to define and not particularly useful. Software has moved from ✽ Operations principle being primarily a product (sold on a disk) to an intangible download when sold over the Internet to an even less tangible rental or subscription service based ‘in the cloud’. A restaurant meal is both a product and also a service as it is delivered and consumed. Indeed we would argue that all operations are service providers which may create and deliver products as part of the offering to their customers. This is why 17 ChaPter 1 operations management Slack, N, Brandon-Jones, A, & Johnston, R 2016, Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. operations management is important to all organizations. Whether they see themselves as manufacturers or service providers is very much a secondary issue. Customers Customers may be an input to many operations (see earlier) but they are also the reason for their existence. If there are no customers (whether business customers, users or consumers), there will be no operation. So it is critical that operations managers are aware of customers’ needs, both current and potential. This information will determine what the operation has to do and how it has to do it (the operation’s strategic performance objectives) which in turn defines the service/product offering to be designed, created and delivered. Customer service at Pret a Manger4 Copyright © 2016. Pearson Education, Limited. All rights reserved. pret a manger is proud of its customer service. ‘We’d like to think we react to our customers’ feelings (the good, the bad, the ugly) with haste and absolute sincerity’, it says. ‘Pret customers have the right to be heard. Do call or email. Our UK Managing Director is available if you would like to discuss Pret with him. Alternatively, our CEO hasn’t got much to do; hassle him!’ it is a bold approach to customer service, but pret has always been innovative. Described by the press as having ‘revolutionized the concept of sandwich making and eating’, pret a manger opened its first shop in London and now has over 260 shops in the UK, new York, hong Kong and tokyo. it says that its secret is to focus continually on the quality of its food and of its service. pret avoids the chemicals and preservatives common in most ‘fast’ food. ‘Many food retailers focus on extending the shelf life of their food, but that’s of no interest to us. We sell food that can’t be beaten for freshness. At the end of the day, we give whatever we haven’t sold to charity to help feed those who would otherwise go hungry.’ pret a manger shops have their own kitchen where fresh ingredients are delivered every morning, with food prepared throughout the day. the team members serving on the tills at lunchtime will have been making sandwiches in the kitchen that morning. ‘We are determined never to forget that our hardworking people make all the difference. They are our heart and soul. When they care, our business is sound. If they cease to care, our business goes down the drain. In a retail sector where high staff turnover is normal, we’re pleased to say our people are much more likely to stay around! We work hard at building great teams. We take our reward schemes and career opportunities very seriously. We don’t work nights (generally), we wear jeans, we party!’ customer feedback is regarded as being particularly important at pret. examining customers’ comments for improvement ideas is a key part of weekly management meetings, and of the daily team briefs in each shop. 18 source: getty images: Bloomberg / chris ratcliffe OPeratiOnS in PraCtiCe moreover, staff at pret are rewarded in cash for being nice to customers. they collect bonuses for delivering outstanding customer service. every week, each pret outlet is visited by a secret shopper who scores the shop on such performance measures as speed of service, product availability and cleanliness. in addition the mystery shopper rates the ‘engagement level’ of the staff; questions include, ‘Did servers connect with eye contact, a smile and some polite remarks?’ assessors score out of 50. if the store gets 43 points or more every team member receives an extra payment for every hour worked; and if an individual is mentioned by the mystery shopper for providing outstanding service, he or she gets an extra payment. ‘The emphasis on jollity and friendliness has been a winner’, said James murphy of the Future Foundation, a management consultant. ‘In the highly competitive sandwich market, that’s been a big contributor to their success.’ But not everyone agrees with using mystery shoppers. ‘It is the equivalent of asking one customer in a shop what they thought at that exact moment, and then planning an entire store-improvement strategy around the one piece of feedback’, says Jeremy michael of the service management group, another consultancy. PartA,One Directing operation Slack, N, Brandon-Jones, & Johnston, R 2016, the Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. What iS the PrOCeSS hierarChY? So far we have discussed operations management, and the input–transformation–output model, at the level of ‘the operation’. For example, we have described ‘the web designer’, ‘the bank’, ‘the sandwich shop’, ‘the disaster relief operation’, and so on. But look inside any of these operations. One will see that all operations consist of a collection of processes (though these processes may be called ‘units’ or ‘departments’) interconnecting with each other to form a network. Each process acts as a smaller version of the whole operation of which they form a part, and transformed resources flow in between them. In fact, within any operation the mechanisms that actually transform inputs into outputs are these processes. A ‘process’ is an arrangement of resources and activities that transform inputs into outputs that satisfy (internal or external) customer needs. They are the ‘building blocks’ of all operations, and they form an ‘internal network’ within an operation. Each process is, at the same time, an internal supplier and an internal customer for other processes. This ‘internal customer’ concept provides a model to analyse the internal activities of an operation. It is also a useful reminder that, by treating internal customers with the same degree of care as external customers, the effectiveness of the whole operation can be improved. Table 1.3 illustrates how a wide range of operations can be described in this way. Within each of these processes is another network of individual ✽ Operations principle units of resource such as individual people and individual items of process technology (machines, computers, storage facilities, etc.). Again transformed resources flow between each unit of transforming resource. So any business, or operation, is made up of a network of processes and any process is made up of a network of resources. But also any business or operation can itself be viewed as part of a greater network of businesses or operations. It will have operations that supply it with the services and products it needs and unless it deals directly with the end consumer, it will supply customers who themselves may go on to supply their own customers. Moreover, any operation could have several suppliers, several customers and may be in competition with Copyright © 2016. Pearson Education, Limited. All rights reserved. table 1.3 Some operations described in terms of their processes Operation Some of the operation’s processes airline passenger check-in assistance, baggage drop, security/seat check, board passengers, fly passengers and freight around the world, flight scheduling, in-flight passenger care, transfer assistance, baggage reclaim, etc. Department store source merchandise, manage inventory, display products, give sales advice, sales, aftercare, complaint handling, delivery service, etc. police service crime prevention, crime detection, information gathering/ collating, victim support, formally charging/detaining suspects, managing custody suites, liaising with court/justice system, etc. ice cream manufacturer source raw materials, input quality checks, prepare ingredients, assemble products, pack products, fast-freeze products, quality checks, finished goods inventory, etc. 19 ChaPter 1 operations management Slack, N, Brandon-Jones, A, & Johnston, R 2016, Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. other operations creating similar services or products to itself. This network of operations is called the supply network. In this way the input–transformation–output model can be used at a number of different ‘levels of analysis’. Here we have used the idea to analyse businesses at three levels: the process, the operation and the supply network. But one could define many different ‘levels of analysis’, moving upwards from small to larger processes, right up to the huge supply network that describes a whole industry. This idea is called the hierarchy of operations and is illustrated for a business that makes television programmes and videos in Figure 1.7. It will have inputs of production, technical and administrative staff, cameras, lighting, sound and recording equipment, and so on. It transforms these into finished programmes, music videos, etc. At a more macro level, the business itself is part of a whole supply network, acquiring services from creative agencies, casting agencies and studios, liaising with promotion agencies, and serving its broadcasting company customers. At a more micro level within this overall operation there are many The supply network-flow between operations Studios Casting agency Creative agency Promotion agency Program/ video maker Broadcasting company The programme and video supply network The operation-flow between processess The programme and video operation Engineering Marketing and sales Finance and accounting Production unit Post production Copyright © 2016. Pearson Education, Limited. All rights reserved. Set and props manufacture Processes-flow between resources (people and facilities) The ‘Set and props manufacturing’ process Set construction Set design Set finishing Props acquisition Figure 1.7 Operations and process management requires analysis at three levels: the supply network, the operation and the process 20 PartA,One Directing operation Slack, N, Brandon-Jones, & Johnston, R 2016, the Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. Critical commentary the idea of the internal network of processes is seen by some as being over-simplistic. in reality the relationship between groups and individuals is significantly more complex than that between commercial entities. one cannot treat internal customers and suppliers exactly as one does external customers and suppliers. external customers and suppliers usually operate in a free market. if an organization believes that in the long run it can get a better deal by purchasing services and products from another supplier, it will do so. But internal customers and suppliers are not in a ‘free market’. they cannot usually look outside either to purchase input resources or to sell their output services and products (although some organizations are moving this way). rather than take the ‘economic’ perspective of external commercial relationships, models from organizational behaviour, it is argued, are more appropriate. individual processes: workshops manufacturing the sets; marketing processes that liaise with potential customers; maintenance and repair processes that care for, modify and design technical equipment; production units that shoot the programmes and videos; and so on. Each of these individual processes can be represented as a network of yet smaller processes, or even individual units of resource. So, for example, the set manufacturing process could comprise four smaller processes: one that designs the sets, one that constructs them, one that acquires the props, and one that finishes (paints) the set. Copyright © 2016. Pearson Education, Limited. All rights reserved. Operations management is relevant to all parts of the business The example in Figure 1.7 demonstrates that it is not just the operations function that manages processes; all functions manage processes. For example, the marketing function will have processes that create demand forecasts, processes that create advertising campaigns and processes that create marketing plans. These processes in the other functions also need managing using similar principles to those within the operations ✽ Operations principle function. Each function will have its ‘technical’ knowledge. In marketing, this is the expertise in designing and shaping marketing plans; in finance, it is the technical knowledge of financial reporting. Yet each will also have a ‘process management’ role of producing plans, policies, reports and services. The implications of this are very important. Because all managers have some responsibility for managing processes, they are, to some extent, operations managers. They all should want to give good service to their (often internal) customers, and they all will want to do this efficiently. So, operations management is relevant for all functions, and all managers should have something to learn from the principles, concepts, approaches and techniques of operations management. It also means that we must distinguish between two meanings of ‘operations’: ● ● ‘Operations’ as a function, meaning the part of the organization which creates and delivers services and products for the organization’s external customers. ‘Operations’ as an activity, meaning the management of the processes within any of the organization’s functions. Table 1.4 illustrates just some of the processes that are contained within some of the more common non-operations functions, the outputs from these processes and their ‘customers’. Business processes Whenever a business attempts to satisfy its customers’ needs it will use many processes, both in its operations and in its other functions. Each of these processes will contribute some part to fulfilling customer needs. For example, the television programme and video 21 ChaPter 1 operations management Slack, N, Brandon-Jones, A, & Johnston, R 2016, Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. table 1.4 Some examples of processes in non-operations functions Organizational function Some of its processes Outputs from its processes 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 systems advice implemented working systems and aftercare all other processes in the business production company, described previously, creates and delivers two types of ‘product’. Both of these involve a slightly different mix of processes within the company. The company decides to reorganize its operations so that each product is created from start to finish by a dedicated process that contains all the elements necessary for its production, as in Figure 1.8. So customer needs for each product are entirely fulfilled from within what is called an ‘end-to-end’ business process. These often cut across conventional organizational boundaries. Reorganizing (or ‘re-engineering’) process boundaries and organizational responsibilities around these business processes is the philosophy behind business process re-engineering (BPR) which is discussed further in Chapter 16. Copyright © 2016. Pearson Education, Limited. All rights reserved. ✽ Operations principle hOW DO OPeratiOnS anD PrOCeSSeS DiFFer? Although all operations processes are similar in that they all transform inputs, they do differ in a number of ways, four of which, known as the four Vs, are particularly important: ● ● ● ● The volume of their output. The variety of their output. The variation in the demand for their output. The degree of visibility which customers have of the creation of their output. the volume dimension Let us take a familiar example. The epitome of high-volume hamburger production is McDonald’s, which serves millions of burgers around the world every day. Volume has important implications for the way McDonald’s operations are organized. The first thing you notice is the repeatability of the tasks people are doing and the systemization of the work where 22 PartA,One Directing operation Slack, N, Brandon-Jones, & Johnston, R 2016, the Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. End-to-end process for programme production Engineering Programme marketing and sales Programme finance and accounting Programme production unit Programme post production Programme set and props manufactur End-to-end process for music video production Music video marketing and sales Music video finance and accounting Music video production unit Music video post production Music video set and props manufacture Figure 1.8 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 Copyright © 2016. Pearson Education, Limited. All rights reserved. standard procedures are set down specifying how each part of the job should be carried out. Also, because tasks are systematized and repeated, it is worthwhile developing specialized fryers and ovens. All this gives low unit costs. Now consider a small local cafeteria serving a few ‘short-order’ dishes. The range of items on the menu may be similar to the larger operation, but the volume will be far lower, so the repetition will also be far lower and the number of staff will be lower (possibly only one person) and therefore individual staff are likely to perform a wider range of tasks. This may be more rewarding for the staff, but less open to systemization. Also, it is less feasible to invest in specialized equipment. So the cost per burger served is likely to be higher (even if the price is comparable). The variety dimension A taxi company offers a relatively high-variety service. It is prepared to pick you up from almost anywhere and drop you off almost anywhere. To offer this variety it must be relatively flexible. Drivers must have a good knowledge of the area, and communication between the base and the taxis must be effective. However, the cost per kilometre travelled will be higher for a taxi than for a less customized form of transport such as a bus service. Although both provide the same basic service (transportation), the taxi service has a higher variety of routes and times to offer its customers, while the bus service has a few well-defined routes, with a set schedule. If all goes to schedule, little, if any, flexibility is required from the bus operation. All is standardized and regular, which results in relatively low costs compared with using a taxi for the same journey. The variation dimension Consider the demand pattern for a successful summer holiday resort hotel. Not surprisingly, more customers want to stay in summer vacation times than in the middle of winter. At the height of ‘the season’ the hotel could be full to its capacity. Off-season demand, however, 23 Chapter 1 Operations management Slack, N, Brandon-Jones, A, & Johnston, R 2016, Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. could be a small fraction of its capacity. Such a marked variation in demand means that the operation must change its capacity in some way, for example by hiring extra staff for the summer. The hotel must try to predict the likely level of demand. If it gets this wrong, it could result in too much or too little capacity. Also, recruitment costs, overtime costs and under-utilization of its rooms all have the effect of increasing the hotel’s costs operation compared with a hotel of a similar standard with level demand. A hotel which has relatively level demand can plan its activities well in advance. Staff can be scheduled, food can be bought and rooms can be cleaned in a routine and predictable manner. This results in a high utilization of resources and unit costs which are likely to be lower than those hotels with a highly variable demand pattern. Copyright © 2016. Pearson Education, Limited. All rights reserved. the visibility dimension Visibility is a slightly more difficult dimension of operations to envisage. It means how much of the operation’s activities its customers experience, or how much the operation is exposed to its customers. Generally, customer-processing operations are more exposed to their customers than material- or information-processing operations. But even customer-processing operations have some choice as to how visible they wish their operations to be. For example, a retailer could operate as a high-visibility ‘bricks and mortar’, or a lower visibility webbased, operation. In the ‘bricks and mortar’, high-visibility operation, customers will directly experience most of its ‘value-adding’ activities. Customers will have a relatively short waiting tolerance, and may walk out if not served in a reasonable time. Customers’ perceptions, rather than objective criteria, will also be important. If they perceive that a member of the operation’s staff is discourteous to them, they are likely to be dissatisfied (even if the staff member meant no discourtesy), so high-visibility operations require staff with good customer contact skills. Customers could also request services or products which clearly would not be sold in such a shop, but because the customers are actually in the operation they can ask what they like! This is called high received variety. This makes it difficult for high-visibility operations to achieve high productivity of resources, so they tend to be relatively high-cost operations. Conversely, a web-based retailer, while not a pure low-contact operation, has far lower visibility. Behind its website, it can be more ‘factory-like’. The time lag between the order being placed and the items ordered by the customer being retrieved and dispatched does not have to be minutes, ✽ Operations principle as in the shop, but can be hours or even days. This allows the tasks of finding the items, packing and dispatching them to be standardized by staff who need few customer contact skills. Also, there can be relatively high staff utilization. The web-based organization can also centralize its operation on one (physical) site, whereas the ‘bricks and mortar’ operation needs many shops close to centres of demand. Therefore, the low-visibility web-based operation will have lower costs than the shop. Mixed high- and low-visibility processes Some operations have both high- and low-visibility processes within the same operation. In an airport, for example, some activities are totally ‘visible’ to its customers such as information desks answering people’s queries. These staff operate in what is termed a front-office environment. Other parts of the airport have little, if any, customer ‘visibility’, such as the baggage handlers. These rarely seen staff perform the vital but low-contact tasks, in the back-office part of the operation. the implications of the four Vs of operations processes All four dimensions have implications for the cost of creating and delivering services and products. Put simply, high volume, low variety, low variation and low customer contact all help to keep processing costs down. Conversely, low volume, high variety, high variation and high customer contact generally carry some kind of cost penalty for the operation. This is why 24 PartA,One Directing operation Slack, N, Brandon-Jones, & Johnston, R 2016, the Operations Management, Pearson Education, Limited, Harlow, United Kingdom. Available from: ProQuest Ebook Central. [10 February 2021]. Created from qub on 2021-02-10 15:15:48. OPeratiOnS in PraCtiCe two very different hospitality operations source: alamy images: Bstar images but the company does offer bespoke summer vacations in some of its properties. these can be either selfcatering, or with the full concierge service that clients get in the ski season. ‘We adapt to clients’ requirements’, says tom. ‘That is why the quality of our staff is so important. They have to be good at working with clients, be able to judge the type of relationship that is appropriate, and be committed to providing what makes a great holiday. That’s why we put so much effort into recruiting, training and retaining our staff.’ Formule 1 hotels are high-contact operations – they are staffintensive and have to cope with a range of customers, each with a variety of needs and expectations. so, how ▼ it is the name of the company that gives it away: ski Verbier exclusive Ltd is a provider of ‘upmarket’ ski holidays in the swiss winter sports resort of Verbier. With 23 years’ experience of organizing holidays, ski Verbier exclusive looks after luxury properties in the resort that are rented from their owners for letting to ski Verbier exclusive’s clients. the properties vary in size and the configuration of their rooms, but the flexibility to reconfigure the rooms to cater for …

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