chapter 03 essentials final
Post on 16-Feb-2017
29 Views
Preview:
TRANSCRIPT
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Chapter 3
Social, environmental and economic performance
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Design
Deliver
Direct
Develop
Operations Management
Slack et al’s model of operations management
Operations strategy
Social, environmental and economic performance
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
In Chapter 3 - Social, environmental and economic performance – Slack et. al. identify the following key questions
Why is operations performance important in any organization?
How should the operations function judge itself?What does top management expect from the operations
function?What are the performance objectives of operations and what
are the internal and external benefits which derive from excelling in each of them?
How do operations performance objectives trade off against each other?
Key operations questions
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
The opening day at Terminal 5 at Heathrow Airport London
Unfamiliarity with security
log-inUnfamiliarity
with new process
Unfamiliarity with baggage
system
Loaders can’t find new parking
spaces
Loaders late in arriving Aircraft loading
under-capacity
Baggage handling
system slows
Baggage backs-up in system
New signage confusing
Poor communication
Passenger queues
backing-upRelatively fast
ramp-upPassengers
can’t drop bags
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
The triple bottom line
People – The social account, measured by the impact of the
operation on the quality of people’s
lives
Planet – The environmental account, measured by
environmental impact of the operation
Profit – The economic account, measured by profitability, return on
assets, etc of the operation.
Sustainability
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
People
Planet
Profit
Some ways in which operations can impact each element of the triple bottom line - Planet
• Recyclability of materials, energy consumption, waste material generation
• Reducing transport-related energy• Noise pollution, fume and
emission pollution
• Obsolescence and wastage• Environmental impact of
process failures• Recovery to minimize impact
of failures
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
People
Planet
Profit
Some ways in which operations can impact each element of the triple bottom line – People
• Customer safety from products and services• Employment impact of an operation’s location• Employment implications of outsourcing• Repetitive or alienating work• Staff safety and workplace stress• Non-exploitation of developing country suppliers
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
People
Planet
Profit
Some ways in which operations can impact each element of the triple bottom line - Profit
• Cost of producing products and services• Revenue from the effects of quality, speed, dependability, and
flexibility• Effectiveness of investment in operations resources• Risk and resilience of supply• Building capabilities for the future
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Operations and processes excellence
Operations and process management contribution to strategy
Enhanced service
Secure revenue
Lower costs Process
efficiency
Reduced errors, better resilience
Lower ‘operational’ risk
Higher capacity utilisation
Lower capital requirements
Capabilities for future innovation
Opportunities for process learning
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Com
petit
iven
ess
The five competitive objectives
Quality Being RIGHT
Speed Being FAST
Dependability Being ON TIME
Cost Being PRODUCTIVE
Being ABLE TO CHANGEFlexibility
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Minimum cost, maximum value
Minimum price, highest value
Fast throughput
Quick delivery
Reliable operation
Dependable delivery
Error-free processes
Error-free products and
services
Ability to change
Frequent new products, maximum
choice
The benefits of excelling at the five objectives
Dependability
Cost
Speed
Quality Flexibility
Internal benefits
External benefits
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
What does Quality mean in………
Patients receive the most appropriate treatment
…. a Hospital ?
Treatment is carried out in the correct manner
Patients are consulted and kept informed
Staff are courteous, friendly and helpful
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
…. an automobile plant?
All assembly is to specification
Product is reliable
All parts are made to specification
The product is attractive and blemish-free
What does Quality mean in………
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
…. a bus company?
The buses are clean and tidy
The buses are quiet and fume-free
The timetable is accurate and user-friendly
Staff are courteous, friendly and helpful
What does Quality mean in………
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
…. a supermarket?
The store is clean and tidy
Décor is appropriate and attractive
Goods are in good condition
Staff are courteous, friendly and helpful
What does Quality mean in………
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Two common meanings of “Quality”
Quality as the specification of a product or service
e.g. Lower Hurst Farm produces organic meat raised exclusively on its own farm
Quality as the conformance with which the product or service is produced
e.g. Quick service restaurants like McDonalds may buy less expensive meat, but its conformance must be high
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Irrespective of a product or service’s specification quality, producing it so it conforms to its specification consistently brings benefits to any operation
Externally -- it enhances the product or service in the market, or at least avoids customer complaints
Internally -- it brings other benefits to the operation
It prevents errors slowing down throughput speed
It prevents errors causing internal unreliability and low dependability
It prevents errors causing wasted time and effort, therefore saving cost
External and internal benefits of conformance quality
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
External and internal benefits of conformance quality
On-specification products and services
Internal benefits
External benefits
Dependability
Cost
Speed
Quality Flexibility
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
The time between requiring treatment and receiving treatment is kept to a minimum
…. a Hospital ?
What does Speed mean in………
The time for test results, X-rays, etc. to be returned is kept to a minimum
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
What does Speed mean in………
…. an automobile plant?
Time between dealers requesting a vehicle of a particular specification and receiving it is minimized
Time to deliver spares to service centres minimized
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
…. a bus company?
The time between customer setting out on the journey and reaching his or her destination is kept to a minimum
What does Speed mean in………
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
…. a supermarket?
The time for the total transaction of going to the supermarket, making the purchases and returning minimized
The immediate availability of goods
What does Speed mean in………
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Speed again has different interpretations externally and internally
Externally – it means the elapsed time between a customer asking for a product or service and getting it (in a satisfactory condition)
It often enhances the value of the product or service to customers
Internally -- it brings other benefits to the operation
It helps to overcome internal problems by maintaining dependability
It reduces the need to manage transformed resources as they pass through the operation, therefore saving cost
External and internal benefits of speed
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
External and internal benefits of speed
Internal benefits
External benefits
Dependability
Cost
Speed
Quality Flexibility
Quick delivery
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
What does Dependability mean in………
Proportion of appointments that are cancelled kept to a minimum
…. a Hospital ?
Keeping appointment times
Test results, X-rays, etc. returned as promised
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
…. an automobile plant?
On-time delivery of vehicles to dealers
On-time delivery of spares to service centres
What does Dependability mean in………
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
…. a bus company?
Keeping to the published timetable at all points on the route
Constant availability of seats for passengers
What does Dependability mean in………
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
…. a supermarket?
Predictable opening hours
Proportion of goods out of stock kept to a minimum
Keeping to reasonable queuing times
Constant availability of parking
What does Dependability mean in………
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Externally -- it enhances the product or service in the market, or at least avoids customer complaints
Internally -- it brings other benefits to the operation
It prevents late delivery slowing down throughput speed
It prevents lateness causing disruption and wasted time and effort, therefore saving cost
External and internal benefits of Dependability
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
External and internal benefits of dependability
Internal benefits
External benefits
Dependability
Cost
Speed
Quality Flexibility
Dependable delivery
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Flexibility has several distinct meanings but is always associated with an operation’s ability it change
Change what ?
The products and services it brings to the market –Product/service flexibility
The mix of products and services it produces at any one time – Mix flexibility
The volume of products and services it produces – Volume flexibility
The delivery time of its products and services – Delivery flexibility
Flexibility – What does it mean?
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
What does Flexibility mean in………
Introducing new treatments
…. a Hospital ?
A wide range of treatments
The ability to adjust the number of patients treated
The ability to reschedule appointments
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
…. an automobile plant?
The introduction of new models
A wide range of options
The ability to adjust the number of vehicles manufactured
The ability to reschedule manufacturing priorities
What does Flexibility mean in………
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
…. a bus company?
The introduction of new routes and excursions
A large number of locations served
The ability to adjust the frequency of services
The ability to reschedule trips
What does Flexibility mean in………
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
…. a supermarket?
The introduction of new goods
A wide range of goods stocked
The ability to adjust the number of customers served
The ability to get out-of-stock items
What does Flexibility mean in………
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Depend-ability
FlexibilityQuality
Speed
Cost
External and internal benefitsExternal and internal benefits
Depend-ability
FlexibilityQuality
Cost
On-specification products and services
Short delivery lead-time Reliable
deliverySpeed
Frequent new products/servicesWide rangeVolume and delivery changes
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
External and internal benefits of flexibility
Internal benefits
External benefits
Dependability
Cost
Speed
Quality Flexibility
Frequent new products/servicesWide rangeVolume and delivery changes
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
…. a Hospital ?
Staff costs
Technology and facilities costs
Bought-in materials and services
What does Cost mean in………
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
…. an automobile plant?
Technology and facilities costs
Staff costs
Bought-in materials and services
What does Cost mean in………
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
…. a bus company?
Staff costs
Technology and facilities costs
Bought-in materials and services
What does Cost mean in………
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
…. a supermarket?
What does Cost mean in………
Staff costs
Technology and facilities costs
Bought-in materials and services
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
The cost of producing products and services is obviously influenced by many factors such as input costs, but two important sets are…..
The 4 V’s volume variety variation visibility The internal performance of the operation at quality speed dependability flexibility
Cost
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
External and internal benefits of performance objectives
Dependability
Cost
Speed
Quality Flexibility
External benefits
On-specification products and services
Short delivery lead-time Reliable
delivery
Frequent new products/servicesWide rangeVolume and delivery changes
Low price, high margin, or both
Internal benefits
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Polar diagrams
Polar diagrams are used to indicate the relative importance of each performance objective to an operation or process
They can also be used to indicate the difference between different products and services produced by an operation or process
Cost
Quality Flexibility
Dependability
Speed
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Polar diagrams for a taxi service versus a bus service
Cost
Quality Flexibility
DependabilitySpeed
Taxiservice
Busservice
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Reassurance
Crimereduction
CrimedetectionWorking with
Criminal justiceagencies
Efficiency
Actualperformance
Required performance
Polar diagrams for a proposed police performance method
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Cost
Quality Flexibility
Speed
Newspaper Collectionservice
General Recyclingservice
Dependability
Polar diagrams for Newspaper Collection and General Recycling services
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Trade-offs
“Do you want it good, or do you want it Tuesday?”
“No such thing as a free lunch.”
“You can’t have an aircraft which flies at the speed of sound, carries 400 passengers and lands on an aircraft carrier. Operations are just the same.” (Skinner)
“Trade-offs in operations are the way we are willing to sacrifice one performance objective to achieve excellence in another.”
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
A
X C
D
Cost efficiency
Varie
ty
B
The new ‘efficient frontier’B1
X
Varie
ty
A
C
D
B
The ‘efficient frontier’
Cost efficiency
The ‘efficient frontier’ view of trade-offs
All performance objectives, to some extent,
trade-off against each other
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Cost efficiency
Varie
ty
Improvement through increasing ‘focus’ on
cost efficiencyQ
Q1
Improvement through increasing ‘focus’ on variety
P
P1 Improvement through overcoming the trade-
off between variety and cost efficiency
Improvement through focus… …or improvement through overcoming trade-offs
Process principle –
Focusing on one (or a
narrow set of)
performance
objective(s) can enable
superior performance in
that/those objectives
The ‘efficient frontier’ view of trade-offs
Slack, Brandon-Jones and Johnston, Essentials of Operations Management, 1st Edition, © Slack, Brandon-Jones and Johnston, 2011
Cost efficiency
Varie
ty
Focus strategies can change the trade-off curve from convex to concave
Process principle –
Highly focused
operations can be
especially sensitive to
any changes in
requirements
The ‘efficient frontier’ view of trade-offs
top related