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4V´S
Depending on nature of business differnet operating processes, but Four V´s of operation
management is particularly important to each:
1) Volume dimension: how much of the product is required to satisfy demand, important
when managing lead timesto controland ajust volume,insufficinet canleado wastage of
resoure, inablity to delvierand order, can over or under producre
...
High volume-low cost Systematized and repeated tasksessential
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Cafeteria – lower
volume of output,less labour, less systematization, volume far lower, individual staff
wider range of taks – more rewarding to staff, less open to systemization, not worth to
invest in specialized equipment, staff memberswider range of tasks – higher unit cost
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Bus
relatively low, opposite
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3) Variation: Season demand hotel – holifay, marked variation in demand = organisation
must change capacity in some way (extra staff, high predictability skills required
otherwise could lead to too much or less capacity,rcruitment cost, overtime cost, under
utilization of its rooms = increasng hotel´s costs
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Range of products made by business, large variety of products or services = less HR
specialisation, Large variety = production process more specialised – less efficient
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how much the level of
demand changes over time, low variaton is prefered, some business with high
variation thati spredictable(airconditioner , ice cream) other moredifficult (clothing,
tech company)
4) Visibility: degree to which operation process is seen, track, experiene, manufacturing
rarely show this process, service busines have high degree of visibility, many have
mix of two, some have low
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High visibility difficult to achieve
high productivity of resources – relatively high cost, web based retailer far lower
visibility, relatively high staff utilization, web based loer cost than the shop
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Courier company – track order online
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High volume + low variety,
low variation+ low customer contact =processing cost low
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5 Operation performance objectives
quality, speed, dependability, flexibility, cost
3 bottom line – planet,people, profit
Error free product and services=without any defection
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Quality-do things right, specification-setting your standards : externally (avoid customer
complaints), internally (prevent errors)
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Flexibility-, able to change, frequently come up with new
products, high mix of flex-allows customer to choose
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Polar
diagrams-drive line between who is important in your business-can be operating strategy
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High volume- can use specialized machines
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Q – meet customers expectation, major influence on customer satisfaction, differs according t
natue of bus (hospital, automobile plant, supermarket, bus company), not just external –
custoemrs satisfaction, but inside-processes, producing as well
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main benefit =the
faster they can get it more likely to buy it, = external, internal: speedy decision making helps
speedy respond to customer reques, speedy movement of material inside = lower stockhold
cost, reduces inventories, the longer items take to move through the process more time they
will be wainting and hgher inventory cost will be
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predictability
important role- quantity demanded – determined by forecast
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D- doing things in time for customers to receive goods/service exactly when needed, or when
promised
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– external
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reduce the risk associated with delivery of goods and services
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giving stability to op
F- being able to change the operation in some way (what, how, when), specifically according
to customer need: product/service, range of mix of product, volume- level of output or
activity, produce, delivery flexibility to change the timing of the delivery
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Internal: fast sevice, hospital – sudden influx of patients, emergency situation
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produce new products, services, quantities, volumes
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Productivtiy ratio:
productivity= Output from op/ Input to op
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Cost
effective way: cutting out waste (material, staff, under utilization)
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Benefits: reduce cost, achieve customer satisfaction,reduce risk f operational failure, reduce
amount of investment tat s necessary, provide basis for fture innovation,

Product and Service design
concept, package, process
Why needed? customer connection
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skimming strategy in market (apple) services- see the whole
process- process - very high visibility - link between the two
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Package: without core concept can be coped easily by
competitors, group of products
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Incremental - new generation of
products
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Design and innovation are a process
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Screening - is it good enough?
Preliminary design: design according to screening results
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Protocopy more and more mass production
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Acceptability -worth it? Velnerability - what risk is there?Preliminary design - determin the
components +then linking together
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Idea, Key idea -DESIgN - solve the problem as soon as possible, spend, put
most effort in possible first stage
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Stages in service and product design
1) Concept generation: transform and indea for a service or product into a concept that
captures the nature of p or s + overall specification for its design
2) Screening the concept: examining its feasibility, acceptability + vulnerability in broad
terms to ensure that it is a sensible addition to the company´s service or product
portfolio
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5) Prototyping and final design: providing final details that allow the s or p to be
produced, outcome is fully developed specification for the package or services and
products, specification for processes as well that make and deliver them to customer
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S: can meansynchronized schedules which speed throughput of materials and
information, but if the operation has external customers, internal cusoemrs may be lw
priority
D: easier communications ca help D, but if the operation also has external cus, intern
cust may receive low priority
F: closeness o the real needs of a business cna alert the in house operation to reuired
changes, but the ability to respond may be limited by the scale and scope of internal
operations
C: in house operatonons donot have to make the marginreuired by outside suppliers so
the business can capture the profits which would otherwise be given to the supplier but
relatively low volulmes may mean that it is difficult to gain economies of scale or the
benefits ot process innovation
...
S of response can be built into the supply contractwhere commercial pressures will
encourage good performance, bu there may be significant transport/ delivery delays
D: late delivery penalties in the supply contract can encourage good delivery
performance, bu organizational barriers may inhibit in communication
F: outsource suppliers may be larger with wider capabilities than in house suppliers
and more ability to respond to changes, but mayhave to balance conflicting needs of
different customers
C: probably the main reasonwhy outsourcing (activities, cash, personnel, activities,
equipment) is so popular, outsourced companies can achieve econoies of scale and
they are motivated to reduce their own costs because it directly impacts on their
profits, but costs of communication and coordination with supplier need to be taken
into account
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–very high unit coss,scheduling spae and activites can
be difficult
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Everything moving around it
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Very high customization, designed for specific
transformed resources, high flexibility, can change the whole process according to
customers requirement, high unit cost, scheduling can be difficult
2) Functional: + high product and mix flexibility, relatively robust int he caseof
disruptions, easy to supervise
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In which equipment is grouped according to the function it performs (such
as machining department, welding department, finishing department) and not on in the
sequence of operations performed, transforming resources based on what they do,
robust, (one printer breaks down in a room, you can still use the other one , easy to
supervise), WIP/ working process, can be very high, divided into departments,
according to firm resources
3) Cell: + can give good compromise, fast throughput,group work can rsult ingood
motivation
...
different
ones together, Grouping together of related operations according to the product flow
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Also called cell layout, it
contrasts with functional layout
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Part of the manufacturing process which allows for the
repetitive assembly of
highly standardized products
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Many organizations are a mixure of both
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concerned with activities that attempt to reconcile the demands of the market
and the ability of the opreationś resource to deliver
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Planning and control are separate but closely related
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Control – adjustments which allow the operation to achieve the
objectives that the plan has set even when the assumptions on which the plans was based do
not hold true
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Long term – plans concering what they intend to do,
what resources they need,what objectives hope to achieve, emphasis on planning rather than

control, forecasts used of likely demand, focus mainly on volume and financial targets
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Short term: manyof the resources willhavebeenset, difficult to
make large changes, short term interventions possible, ad hoc basisof operations objective(5
objectives)
Push and Pull control: push -
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push- work
thorugh processes within the operation,activities are scheduled bycentral system, comlited in
lien with central instructions and those which pull work only when it is required: the pace
andspecification oswhat is dne are set by customer workstation, customer act is only trigger
for movement
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TOC theory, OPT theory
Quality management –total quality management, gap model of quality, perceptionexpectation gap
consistent conformance to customers expectations, significant impact on profitability
...
philosphy: quality at the heart of
everything that is done by an operation, meeting the needs and exceptations of customers,
covering all aprts of the organization including every person in the org, examining alll costs
which are related to qulity and getting things right first time, developing systems and
proccedure which support qualiy and improvement, develiping continuous process of
imrpovement
...
saves working capital through reducing
inventory levels, significant impact on the ability of an operation to improve its intrinsic
efficiency
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most focus on eliminating waste,
Muda, Muri,Muri-Japanseerms, three causes of wwaste that should be reduced or eliminated
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Mura – lack of consistency, result periodic overloading of staff
at diffeent times, perform a task differently, result of activity might be different than excepted
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7 types of waste: Over production – producing more than immediately needed – greatest
sourceo of waste according to Toyota
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Transport – moving
items around the operation, layout changes- bring processes closer, improvement in transport
methods= can reduce waste, Process – process itself, some operations may only exit becaouse
of poor componenet design, maintenance, could be eliminated, Iventory – should become
a target for elimination, tackling the causes of inventory that can be reduced, Motion –
operator may look busy but sometimes no value is being added by thework, simplification of
work – rich source of reduction of waste, Defectives – quality waste –often very significant in
operations
5 ´s - keep things simpe, Japan terminology, represent: Sort (seiri) – eliminate what is not
needed – keep what is needed, Straighten (seiton)- position things insuch a way that they
canbe easily reached whenever they are needed, Shine (seiso)-keep things clean and tidy, no
refuse or dirt in the work area, Standardize (seiketsu) – maintain cleanliness and order –
perpetual neatness, Sustain (shitsuke)- develpoa commitment and pride in keeping to
standards
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Types of supply chain relationship, elements of partnership relationship, matching
supply chain with amrket requirement
Supply chain management – management of entire supply chain from supplier of raw material
to the end customer
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Types of supply relationship: by who is supplying
whom – internet supply chain, 4 types: 1) business to business – most common, business
trading products (components), 2) business to customer – end of supply chain, selling to final

consumers, 3) consumer to business-consumers informing businesses of their opinions, ideas,
needs, creating value to business, consumers posting their needso n net, consumer reviews on
products, 4) customer to customer – bid/ purchase, online exchanges, auction services, file
sharing services, furthermore other types: Virtual spot trading: a firm has arm’s length with
many suppliers and it outsources everything
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Vertical integration: a firm has close relationships with few suppliers and outsources
nothing
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online auction, ebay
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elements: Sharing success: both partners working together in order to increase the total
amount of joint benefit received, Long term expectations: partnership relationships imply
relatively long term commitments, Multiple points of contact: not just formal channel
communication but between indivdiuals too, Joint learning: learn from each others experience
and perceptions of others, Few relationships: limit the numb of customers and suppliers with
whom they do business, difficult to maintain many strong close relationship with trading
partners
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Joint problemsolving: can increase closeness over time
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Upstream-product os service moving into
operations Downstream- product or service opting out from operation
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Informtion must fow quickly up and down th chain from retail outletsto
manufacturer = schedules can be given the maximum amount of time to adjust efficiently,
Chain is managed to make sure products flow as quick as possible, down the chain to
replenishwhat few stocks are kept downstream,Inventory in network deplyoed as closely as
possible to the customer so that chain can still supply even when dramatic change ouccure in
custoemr demand,Fast througput from upstream parts = replenish downstream stoks = needed
to ensure high levels of availability to end customers
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‘consider
the full scope of their impact on communities’

The economic
dimension

Socio-economic or financial
aspects, including describing
CSR in terms of its impact on
the business operation

‘preserving the profitability’ …‘contribute to economic
development’

The stakeholder
dimension

Considering all stakeholders or
stakeholder groups

‘interaction with their stakeholders’
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‘treating the
stakeholders of the firm’

The voluntariness
dimension

Actions not prescribed by law
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‘based on ethical values’ …‘beyond legal obligations’
…‘voluntary’

Environmental dimensions of CSR
World Bank: „ensuring that the overall productivity of accumulated humand and psychical
capital resulting grom development actions more than comensates for the direct or indicet loss
or degradation of the environment, the extent to which busines activity negatively impacts
ont he natural environment, important issue, obvious impacto n immedaite environment ,
hazardouswaste, air, noise, pollution, global warming, green issues, achieving sustainability:
reducing or stailiting the envirnmental burden, decreasing the human population, changing the
technlogy used to create product and services
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Cannot be avoided by any organisation, often operation failrures at the root of
pollution – impact on logn term environemntal issues, oil tankers , nuclear waste, chemicals
leak into river gas clouds pp 680 table



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