Process Planning and Design

It is a reflective essay about the topic stated above. additional document about the in" rel="nofollow">instruction is provided Operations Management Module 01: Developin" rel="nofollow">ing customer value through ‘operations’ 1 Module Learnin" rel="nofollow">ing Outcomes After completin" rel="nofollow">ing the readin" rel="nofollow">ings and activities associated with this module, you should be able to: • Defin" rel="nofollow">ine and explain" rel="nofollow">in ‘operations management’ • Explain" rel="nofollow">in how the systems perspective relates to operational activities • Explain" rel="nofollow">in why customer value is a cost/benefit judgement • Explain" rel="nofollow">in the various factors that contribute to customer value • Relate operational activities to customer value. 2 Busin" rel="nofollow">iness Strategy Why do organisations exist? In other words what is the purpose of organisations? 3 Busin" rel="nofollow">iness Strategy • If organisations exist for some purpose, • how do they achieve that purpose? 4 Busin" rel="nofollow">iness Strategy Influential people within" rel="nofollow">in the organisation make decisions about how the organisation will go about achievin" rel="nofollow">ing its purpose. This is the essence of strategy. 5 Kmart Versus Wal-Mart • Both chain" rel="nofollow">ins started in" rel="nofollow">in 1962 • In 1987, Kmart had 2,223 stores to Wal- Mart’s 1,198. • Kmart’s sales were $25.63 billion to Wal- Mart’s $15.96 billion • By 1991, Wal-Mart’s sales exceeded Kmarts • Kmart still had more stores Kmart Versus Wal-Mart contin" rel="nofollow">inue • In year endin" rel="nofollow">ing January 1996, Wal-Mart’s sales were $93.6 billion to Kmart’s $34.6 billion. • Durin" rel="nofollow">ing this time Kmart emphasised marketin" rel="nofollow">ing and merchandisin" rel="nofollow">ing (such as national TV ad campaigns). • Wal-Mart was in" rel="nofollow">investin" rel="nofollow">ing millions in" rel="nofollow">in its operations to lower cost. 7 Kmart Versus Wal-Mart contin" rel="nofollow">inue • Wal-Mart developed sophisticated distribution system that in" rel="nofollow">integrated its computer system with its distribution system. • Kmart’s employees lacked skills needed to plan and control in" rel="nofollow">inventory. • Period from 1987 to 1995 Kmart's market share declin" rel="nofollow">ined from 34.5 percent to 22.7 percent. • Wal-Mart's in" rel="nofollow">increased from 20.1 percent to 41.6 percent 8 Operations strategy and operations management • “Operations strategy is the pattern of decisions and actions that shape the long-term vision, objectives and capabilities of the operation and its contribution to the overall strategy.” (Slack, Chambers, Johnston and Betts 2006, cited in" rel="nofollow">in Gardin" rel="nofollow">iner 2010 p. 13) • Barnes defin" rel="nofollow">ines ‘operations management’ as “…the management of the resources and processes required by an organization to produce goods or services for customers.” (Barnes, D 2008, Operations Management, Thompson, London, p. 461.) 9 Operations • Heart of every organisation • Operations are the tasks that create value 10 Competencies, capabilities and competition • Competence is about the activities of an organisation and the processes that lin" rel="nofollow">ink activities together… (Johnson & Scholes, 2002, p. 149) • Capabilities are the processes, systems or organisational routin" rel="nofollow">ines that the organisation uses to coordin" rel="nofollow">inate its resources for productive use. (Hubbard, 2008, p. 111) • Competitive advantage is the ability of a firm to win" rel="nofollow">in consistently over the long term in" rel="nofollow">in a competitive situation (Hitt, Black, Porter & Hanson, 2007, p. 189) 11 Resources, capabilities and the creation of value Capabilities Resources Better than Competitors? Rare? Difficult to imitate? Organised to deliver? Strategic capabilities Competitive advantage Customer value (Adapted from Hubbard, 2008, p. 112) 12 Diversity and Importance of Operations • Improvements in" rel="nofollow">in operations can simultaneously lower costs and improve customer satisfaction. • Improvin" rel="nofollow">ing operations often dependent on advances in" rel="nofollow">in technology. • Can obtain" rel="nofollow">in competitive advantage by improvin" rel="nofollow">ing operations. • Diversity of Operations 13 14 The Production System • A simple model Strategy • Customer value • Vision/Mission • Strategic Frameworks • Core capabilities Transformation System • Alteration • Transportation • Storage • Inspection Inputs • Capital •Materials • Equipment • Facilities • Suppliers • Labour • Knowledge • Time Outputs • Facilitatin" rel="nofollow">ing goods • Services 15 The Production System • A more complex version of the model Systems Perspective • Inputs • Transformation System – Alter – Transport – Store – Inspect • Outputs • Environment 16 Inputs • Inputs in" rel="nofollow">include facilities, labour, capital, equipment, raw materials, and supplies. • A less obvious in" rel="nofollow">input is knowledge of how to transform the in" rel="nofollow">inputs in" rel="nofollow">into outputs. • The operations function quite frequently fails in" rel="nofollow">in its task because it cannot complete the transformation activities within" rel="nofollow">in the required time limit. 17 Transformation System • The part of the system that adds value to the in" rel="nofollow">inputs. • Four major ways – Alter – Transport – Store – Inspect Outputs • Two types of outputs commonly result from a production system – Services (abstract or nonphysical) – Products (physical goods) – Sometimes referred to as facilitatin" rel="nofollow">ing goods 19 20 Facilitatin" rel="nofollow">ing Good Concept • Often confusion in" rel="nofollow">in tryin" rel="nofollow">ing to classify organisation as manufacturer or service • Facilitatin" rel="nofollow">ing good concept avoids this ambiguity • All organisations defin" rel="nofollow">ined as service • The tangible part of the service is defin" rel="nofollow">ined as facilitatin" rel="nofollow">ing good • Pure Services 21 22 The Range From Services to Products 23 Operations Activities • Strategy • Output Plannin" rel="nofollow">ing • Capacity Plannin" rel="nofollow">ing • Facility Location • Facility Layout • Aggregate Plannin" rel="nofollow">ing 24 • Inventory Management • Materials Requirements Plannin" rel="nofollow">ing • Schedulin" rel="nofollow">ing • Quality Control Defin" rel="nofollow">inin" rel="nofollow">ing and Measurin" rel="nofollow">ing Quality • Conformance to specifications • Performance • Quick response • Quick-change expertise • Features • Reliability • Durability • Serviceability • Aesthetics • Perceived quality • Humanity • Value Mass Customisation • Seek to produce low-cost, high-quality outputs in" rel="nofollow">in high variety. • Not all products lend themselves to bein" rel="nofollow">ing customised (e.g. Sugar, gas, electricity, and flour). • Is applicable to products characterised by short life cycles, rapidly advancin" rel="nofollow">ing technology, or changin" rel="nofollow">ing customer requirements. 26 27 Four Mass Customisation Strategies • Collaborative customisers • Adaptive customisers • Cosmetic customisers • Transparent customisers 28 Collaborative Customisers • These organisations establish a dialogue to help customers articulate their needs and then develop customised outputs to meet these needs. For example, one Japanese eyewear retailer developed a computerised system to help customers select eyewear. The system combin" rel="nofollow">ines a digital image of the customer's face and then various styles of eye-ware are displayed on the digital image. Once the customer is satisfied, the customised glasses are produced at the retail store within" rel="nofollow">in an hour. Adaptive Customisers • These organisations offer a standard product that customers can modify themselves such as closet organisers. Each closet-organiser package is the same, but in" rel="nofollow">includes in" rel="nofollow">instructions and tools to cut the shelvin" rel="nofollow">ing and clothes rods so that the unit can fit a wide variety of closet sizes. Cosmetic Customisers • These organisations produce a standard product but present it differently to different customers. For example, Planters packages its peanuts and mixed nuts in" rel="nofollow">in a variety of contain" rel="nofollow">iners on the basis of specific needs of its retailin" rel="nofollow">ing customers such as Wal-Mart, 7-Eleven, and Safeway. 31 Transparent Customisers • These organisations provide custom products without the customers’ knowin" rel="nofollow">ing that a product has been customised for them. For example, Amazon.com provides book recommendations based on in" rel="nofollow">information about past purchases. 32 Dependability and Speed • The competitive advantages of faster, dependable response to new markets or to the in" rel="nofollow">individual customer's needs have only recently been noted in" rel="nofollow">in the busin" rel="nofollow">iness media. • Americans spend more time and money on marketin" rel="nofollow">ing, whereas the Japanese spend five times more than the Americans on developin" rel="nofollow">ing more efficient production methods. 33 34 Relationship Between Response Time and Unit Cost Summary • Openin" rel="nofollow">ing examples demonstrate how ‘operations’ can create strategic advantage • Operations as a ‘system’ – in" rel="nofollow">inputs, process, outputs • Addin" rel="nofollow">ing ‘value’ within" rel="nofollow">in the system • Outputs of a production system – goods and services • Operational activities and ways of measurin" rel="nofollow">ing them • Designin" rel="nofollow">ing the transformation system to create customer value 35