STRATEGIC OPERATIONS MANAGEMENT LSM575

[Audio] STRATEGIC OPERATIONS MANAGEMENT LSM575 Dr. Okyere Anim Barima Supply Chain & Information Systems Department [email protected] MKOBIO/LSM575.

[Audio] INTRODUCTION TO OPERATIONS MANAGEMENT UNIT 1.

[Audio] UNIT OUTCOME Operations management Definitions and underpinning concepts Operations management terminologies Insight into the scope of management activities involved in strategic operations management Understand the concept of the 4Vs; Understand the contribution made by operations to organizational performance. MKOBIO/LSM575.

[Audio] INTRODUCTION Operations Management is about how organizations produce goods and services. Every product you buy from the supermarket, every treatment you receive at the hospital, every service you expect in the shops and every lecture you attend at the university have all been produced..

[Audio] INTRODUCTION Everything you can see around you (except the flesh and blood) has been produced by an operation. Every service you consumed today (radio station, bus service, lecture, etc.) has also been produced by an operation..

[Audio] INTRODUCTION cont’d….. All organizations make products or provide services. Most products include a service package that contains a mixture of both goods and services. Most organizations fit into this spectrum (Tangibility spectrum) Extreme end left, are purely manufacturers, middle are mixed, and extreme right are purely service providers..

[Audio] . MKOBIO/LSM575. 7. Timeline Description automatically generated.

[Audio] OPERATIONS At the heart of every organization are the activities that make its products or services. These activities are OPERATIONS. In simple terms, the Operations describe what the organization does and stands for. For example, operations at HP makes computers, operations at Emirates fly airplanes, at CNN, they make television programs, at KNUST, they educate students and at Man City, they play football..

[Audio] OPERATIONS MANAGEMENT DEFINED Operations management is concerned with those activities that enable an organization (and not just one part of it) to transform a range of basic inputs (materials, energy, customers’ requirements, information, skills, finance, etc.) into outputs for the end customer. Operations Management is a critical field of study and practice that deals with the design, execution, and improvement of the systems that create and deliver an organization's primary products and services. It encompasses a wide range of activities and processes that organizations use to efficiently transform inputs (such as materials, labor, and energy) into outputs (products and services) that meet customer needs and preferences..

[Audio] Operations Management Defined …cont’d Operations management is concerned with the management of the resources and processes required by an organization to produce goods or services for customers. Operations management is how resources are turned into goods and services in the most efficient way possible to fulfill the demand of consumers or clients. David Barnes (2008),.

[Audio] WHAT IS OPERATIONS MANAGEMENT? Production/Operations Management ensures that resources: Materials, labour, capital, equipment, energy, information and money/finances are used efficiently and effectively to produce goods and services to enhance the profitability of individual enterprises and the welfare of the society. Efficiency is defined as the ability to accomplish something with the least amount of wasted time, money, and effort or competency in performance. Effectiveness is defined as the degree to which something is successful in producing a desired result.

[Audio] IMPORTANCE OF OPERATIONS MANAGEMENT The statement you've shared, "An organization is judged by how its operations perform and not what the organization says it is going to do!" is a powerful reminder of the importance of execution in the business world. It emphasizes that the true measure of an organization's capabilities lies in its operational performance rather than its intentions or plans. This statement is particularly relevant in the context of Operations Management. It underscores the principle that the value of an organization is realized through its ability to execute and deliver products and services effectively and efficiently. Operations Management is at the heart of this execution, as it focuses on the processes that produce and deliver goods and services in alignment with the organization's strategic objectives. It suggests that while strategic planning and goal setting are important, they must be matched by an equivalent, if not greater, focus on operational effectiveness. The quality of operations can serve as a barometer for the health of the organization, reflecting its competence in meeting customer needs, adapting to changes, and driving sustainable growth. It reinforces the idea that actions speak louder than words in the business arena..

[Audio] MODERN OPERATIONS MANAGEMENT Includes the following Key Areas: Sustainability Ethical Issues Capacity management Location decisions - the range and locations of facilities Process management Managing technology Formation of strategic buyer-supplier relationships Innovation - new product or service introduction Human resources management.

[Audio] THE OPERATIONS SYSTEM A system is a combination of elements or parts that work together in order to achieve a common objective or goal. The operational system integrates various inputs or resources within a structured framework through a series of transformation processes to achieve the desired output...

[Audio] THE OPERATIONS SYSTEM For services, operations takes place is in the moment of direct contact and interaction between the service provider on the one hand, and the recipient of the service, on the other, in a series of touch points. These points of contact are sometimes called the ‘moment of truth’. Behind the scenes in services this is often called ‘back-office’ operations.

[Audio] THE OPERATIONS SYSTEM It consists of Input, the transformation process, transformation resources and output. Input: Includes raw materials (manufacturing) and information (service) that are yet to be transformed into output. The transformation process is the system by which inputs of resources are converted into outputs of goods and services..

[Audio] THE OPERATIONS SYSTEM Transforming resources refer to those assets that act upon and are used to convert 'input' resources into 'outputs' in the production of goods or services. Facilities land, buildings, plant, equipment and vehicles Consumables energy and materials necessary to maintain, repair and operate Human resource (People) Transforming resources are vital as they directly interact with 'transformed resources' (materials, information, and customers) to create the final product or service. Their effective management is crucial for achieving efficiency, quality, and competitive advantage in an organization's operations..

[Audio] THE OPERATIONS SYSTEM Outputs: They are the processed/finished goods and services that have undergone a transformation process. The output of a production system is a; Good if it is tangible; Service if it is intangible and it is work that is performed for the benefit of others..

[Audio] THE BASIC OPERATIONS SYSTEM. [image] 1 N T s Manufacturing operations Service operations c s o The combined manufacturing and service operations provide an overall offer to the customer.

[Audio] Physiological effects refer to the changes or responses that occur in the body's physical systems as a result of various stimuli or influences..

[Audio] EXAMPLES Organisation Input Transformation Output BANK Customers Cancelled cheques Deposit slips, etc. Cash, cheques, make deposits Adjust balance of customers' accounts Serviced Customers Status of account, report HOSPITAL Patients Examinations, Injection, test, operations, etc. Serviced/Healthy patients Add more examples for each organization.

[Audio] EXAMPLES SECTOR OR ORGANIZATION INPUT TRANSFORMATION TRANSFORMATION DETAILS OUTPUT Automotive Manufacturer Raw materials, components, labor, machinery Manufacturing and assembly process This involves assembling the car parts, painting, testing, and ensuring quality control before the final vehicle is ready for sale. Cars, trucks, motorcycles Software Development Firm Software requirements, developer expertise, coding tools Software design and coding process Developers write code to create software products based on specified requirements, which are then tested and debugged before release. Software applications, systems Hospital Patients, medical staff, medical equipment Medical diagnosis and treatment process Patients are diagnosed and treated using medical protocols, which may involve surgery, medication, and other therapies to restore health. Healthy patients, medical reports University Students, faculty, curriculum, infrastructure Teaching and learning process Students are educated through lectures, discussions, and exams; faculty engage in research to produce scholarly works. Educated graduates, research publications Restaurant Raw food materials, culinary staff, kitchen equipment Cooking and service process Ingredients are transformed into dishes through various cooking techniques and are then served to customers in a dining setting. Prepared meals, dining experience Online Retailer Inventory, order management system, customer orders Order processing and logistics Goods are sorted, packaged, and shipped according to customer orders using a combination of automated systems and manual handling. Delivered customer purchases.

[Audio] CHARACTERISTICS OF OPERATIONS PROCESSES Operations are similar in their transformation processes but there are distinctions which are referred to as the 4 V’s. The VOLUME of output The VARIETY of their output The VARIATION in demand for their output The degree of VISIBILITY which customers have of the production of their output. Processes: a series of actions or steps taken in order to achieve a particular end. By considering these 4V's, operations managers can better understand the nature of their processes and operations, and develop strategies to optimize their performance and improve their competitive advantage..

[Audio] A TYPOLOGY OF OPERATIONS AND PROCESSES CHARACTERISTICS THE FOUR V’S High Volume Low High Variety High Low Variation in demand High Low Visibility High Low.

[Audio] 1. The VOLUME of output. The main feature here is the repeatability of the task performed and systematization of procedures. High volumes leads to low unit costs. Eg Fast food restaurants, water packaging plant and High-end restaurants, sculpture/jewellery shop. The implications of high and low Volume in operations and processes Implications Low repetition Each staff member performs more of each task Less systemization High unit costs Implications High repeatability Specialization Capital intensive Low unit costs Implications High repeatability Specialization Capital intensive Low unit costs Volume produced High Low High a high-volume business will have a high product and process repeatability and will have specialised labour, processes, and equipment. Therefore, the business is likely to be capital-intensive, because of the large amount of expensive equipment and buildings, which are optimised for such high-volume production and can provide the low unit costs that are typically essential to compete for high-volume operations. Low-volume business operations, making a small number of things or providing a small number of services each year will rarely have such expensive or specialised equipment, buildings, processes, or skills as it cannot be justified for such low-volume output and they must instead compete on other factors than costs such as customisation or short lead times..

[Audio] 2.The VARIETY of their output The feature is flexibility and is based on the level of standardization. Eg Taxi and buses on same routes. The implications of high and low Variety in operations and processes Implications Well defined Routine Standardized Regular Low unit costs Implications Flexible Complex Match customer needs High unit costs High Variety High Low this refers to the number of different "types" of products or services produced and how different they are from each other. High variation in products or services pushes the system away from specific purpose resources to general purpose ones, leading to slower throughput and higher cost. Such as Taxies offer near unlimited combination of pickups and drops whereas buses run on fixed routes, although we might undertake the same length of journey, the cost per KM charged by TAXI will be higher than that of the bus..

[Audio] 3.The VARIATION in demand for their output The feature here is routine based on predictability of demand. Eg Known demand levels means that there is higher predictability and better planning control The implications of high and low Variation in operations and processes Implications Changing capacity Anticipation Flexibility In touch with demand High unit costs Implications Stable Routine Predictable High utilization Low unit costs Variation in demand High High Low Variation refers to the degree of uncertainty or unpredictability in the demand for a product or service. High-variation operations may need to adjust production capacity and resources more frequently to meet changing demand, while low-variation operations may be able to maintain more stable and predictable production levels. Some operations will experience very high demand variation, for example due to seasons, days of the week or customer unpredictability. For example, ice cream vans will always sell more ice cream during the summer months but they know this and can plan, but an emergency hospital department may have similar large swings in demand but cannot predict if or when this might happen..

[Audio] 4. The degree of VISIBILITY which customers have of the production of their output. This refers to how much of an organization’s operational activities its customers experience. Its is therefore characterized by high or low visibility operations. Eg Online Businesses and Traditional physical shops or offices (brick and mortar). The implications of high and low Visibility in operations and processes Implications Short waiting tolerance Satisfaction governed by customer perception Customer contact skills needed Received variety is high High unit costs Implications Time lag between production and consumption Standardization Low contact skills High staff utilization Centralization Low unit costs High High Visibility Low Visibility refers to the degree of customer interaction and involvement in the production or delivery process. how much customer interacts with the product/information and in what degree of effectiveness. Such as a customer going into high visibility environment (physical store) vs browsing store webpage online. In the store, customer will experience more value adding services such as house keeping, decoration, interaction with staff etc. Where as no such engagement is done in webpage. Customers of high-visibility businesses will have a lower tolerance for waiting, and customer satisfaction is more based upon perception of the quality and the attention to detail. High-visibility businesses need to have a more client-oriented service or process, resulting in a higher unit cost. Organizations with "high visibility" operations, need to be much more apt at dealing with customers, giving more attention to customer contact skills and presentation where as those with low "visibility" others can focus more on their processes in privacy and are judged on the end results of cost, quality, output, delivery etc..

[Audio] A TYPOLOGY OF OPERATIONS AND PROCESSES CHARACTERISTICS THE FOUR V’S https://drive.google.com/file/d/1S5_TwCnkeBgXWhW_zo5J02Uo9hD5ltOm/view?usp=drive_link.

[Audio] CLASSIFICATION OF OPERATIONS (PRODUCTION) SYSTEM Job Shop Production Batch production Continuous Production.

[Audio] 1. JOB SHOP In this system products are manufactured to meet the requirements of a specific order. The quantity involved is small and the manufacturing of the product will take place as per the specifications given by the customer. This system may be further classified as: The Job produced only once The Job produced at irregular intervals The Job produced periodically at regular intervals Here are two examples for each classification within a job shop system: The Job Produced Only Once Custom Sculpture for a Public Park : An artist is commissioned to create a unique sculpture. The job requires special materials and is specific to the client's requirements, with no repetition anticipated. Prototype Development for a New Invention : An engineering firm develops a prototype for a new product. It's a one-off project to create an initial model before mass production or further development. The Job Produced at Irregular Intervals Ship Repair : A ship repair yard may handle jobs such as refurbishing or repairing ships, which occur only when a ship is damaged or due for maintenance, with no set schedule for these occurrences. Customized IT Solutions : An IT firm may develop customized software solutions for clients. These projects occur as clients request updates or new features, which do not follow a regular pattern. The Job Produced Periodically at Regular Intervals Maintenance of Industrial Equipment : A company that specializes in the maintenance of heavy machinery may perform scheduled maintenance checks and services for industrial clients at fixed intervals, like bi-annually or annually. Accounting Audit Services : An accounting firm provides audit services to its clients at the end of every fiscal year, which is a regular and recurring job shop operation scheduled annually..

[Audio] EXAMPLES OF JOB SHOP Examples of job shops include a wide range of businesses; A machine tool shop, a paint shop, a commercial printing shop, jewelry shop and other manufacturers that make custom products in small lot sizes. These businesses deal in customization and relatively small production runs, not volume and standardization..

[Audio] 2.BATCH MANUFACTURING Batch Production is the manufacture of a number of identical products either to meet the specific order or to satisfy the demand. When the Production of plant and equipment is terminated, the plant and equipment can be used for producing similar products. This system also can be classified under three categories: A batch produced only once A Batch produced at irregular intervals as per Customer order or when the need arises A Batch produced periodically at known Intervals Eg bakery, shoe factories, inks, paints, etc A Batch Produced Only Once Limited Edition Toys : A toy manufacturer might produce a limited edition run of a particular action figure to commemorate an event. Once the batch is sold out, the design is retired and not produced again. Commemorative Coins : A mint might produce a special batch of coins to celebrate a significant national event. These coins are produced just once, and the equipment is then repurposed for regular currency production. Batch Produced at Irregular Intervals as per Customer Order or When the Need Arises Customized T-shirt Printing : A printing company might produce batches of t-shirts for events like reunions or conferences. They make these batches whenever orders are placed, which could be at any time and often without a regular schedule. Specialty Chemicals : A chemical manufacturer might produce a specific compound or reagent in response to sporadic orders from research institutions or industry clients. The production is based on demand and does not follow a fixed schedule. A Batch Produced Periodically at Known Intervals Seasonal Confectionery : A confectionery company might produce batches of candy canes or chocolate eggs for the Christmas and Easter seasons, respectively. The production is scheduled annually and aligned with the seasonal demand. Flu Vaccines : Pharmaceutical companies produce flu vaccines in batches in preparation for the annual flu season. These vaccines are produced based on the predicted strains of the virus and are typically manufactured several months before the start of the flu season..

[Audio] 3. FLOW/CONTINUOUS MANUFACTURING Continuous Production system is the specialized manufacture of identical products in which the machinery and equipment are fully engaged. The continuous production is normally associated with large quantities and with high rate of demand. This system is classified as: Mass Production Flow Production Eg Coca cola Bottling, oil refineries, chemical plants. Also the blood circulation system of the human body (circulatory system).

[Audio] Feature Mass Production Flow Production Definition Producing large quantities of standardized products using assembly lines and automation. A continuous, non-stop production process where materials move through different stages without interruption. Process Type Batch-based, with stages working on multiple units at once. Continuous, with products moving from one stage to the next in a constant flow. Flexibility Less flexible; changes in design require reconfiguring machinery. Very rigid; designed for efficiency, not customization. Examples Car manufacturing (Toyota, Ford), smartphones, packaged foods. Oil refining, electricity generation, steel production, bottled water production. Inventory Levels Can have work-in-progress (WIP) inventory between stages. Minimal WIP inventory; products continuously move through the system. Cost Efficiency Lower costs due to economies of scale but requires large initial investment. Very cost-efficient for high-demand products but expensive to set up and maintain..

[Audio] . MKOBIO/LSM575. 36.

[Audio] End of Lecture. MKOBIO/LSM575. 37. End of Lecture.