HTM209 – Hospitality

Operations Management

Semester Two - 2014

HTM 209 – Hospitality

Operations Management

Tutor : Julian Galt

Room : B2-24

E mail : julianv.galt@sit.ac.nz

HTM209 – Operations Design

Process design…:Operations

strategy

Design Improvement

Planning and

control

Supply network design

Layout

and flow

Process

technology

People, jobs

and

organization

Product/ service

design

Operations

management

Nature and purpose of the

design activity;

• Products, services and the processes which

produce them all have to be designed

• Decisions taken during the design of a

product or service will have an impact on the

decisions taken during the design of the

process which produces those products or

services, and vice versa

What is Process Design?

• With reference to Slack et al.; (pp 96-98)• Record a brief definition of what process design is;

• Note the factors usually used

• When establishing the high level design objectives

• For detail level design...

• Then record an explanation of the concept in

Figure 4.2, page 98...

• Explain the relationship between operations

performance objectives and process design

objectives – (illustrate with an example for each

performance objective)

Define Process Design 1-A• A brief definition of what process design is;

• Shaping / configuring the resources and activities that make

up a product or service; or the transformation process that

produces them

• Factors considered when establishing design objectives:• High level - volume and variety characteristics

• Detail level - an assessment of feasibility, detailed analysis

• The concept in Figure 4.2, page 98...• Design of products and services are interrelated with the

design of the process that produces them – each has an

impact on the other and need to be considered together

• Operations performance objectives translate into process

design objectives – (as per Table 4.1)

Define Process Design 1-B

Products and services should be designed in such a way that they

can be created effectively

Designing the product or service

Processes should be designed so they can

create all products and services which the

operation is likely to introduce

Designing the process

Product / service design has an impact on the

process design and vice versa

Design of products / services and design of

processes are interrelated and should be

treated together

Design of

the Service

Design of

the Process

Design of

the ProductDesign of

the Process

In most service

operations the overlap

between service and

process design is implicit

in the nature of service

In manufacturing

operations overlapping the

activities of product and

process design is beneficial

Design of products / services and design of

processes are interrelated...

The design of products/services and

processes are interrelated

and should be treated together

• Products and services should be designed in such a way that they can be created effectively.

• Product/service design has an impact on the process design and vice versa.

• Processes should be designed so they can create all products and services which the operation is likely to introduce.

Process Design: Fast-food...

Process Design: Fast-food...#1

• With reference to Slack et al., page 97, discuss, note and

prepare to report back on the following

• Explain why take-away restaurants have installed drive

through processes into many of their outlets

• Which of the five performance objectives appears to be

of highest priority for these businesses?

• Note some examples of methods used to increase the

throughput from the process

• With reference to pp 99-100; note a definition of:

•Work in progress

•Utilisation of process resources

•Throughput rate

•Cycle time

Process Design: Fast-food...#2• Throughput rate – flow rate; the rate that units or items

move through a process

• Cycle time – the average time between items emerging

from a process

• Work in progress – the number of items in the

process, on average, over a period of time

• Utilisation of process resources – the proportion of

available time that the resources in a process are

performing useful work

Based on the case information; note how “drive-through”

OM strategies will influence each of the factors above?

How does this impact on productivity? Examples?

Process Design: Fast-food...#3

With reference to Slack et al., pages 99 - 100, discuss and prepare

your response to the following scenario:

• Your country hotel is contracted by a tour company to

provide buffet lunches for their bus tours through the

region. The company has complained recently that the

lunch stops are taking too long, cutting into the afternoon

tour programme... You need to review your processes...

• Tour groups average 30 people; and at present it takes

1.5 minutes per person to queue and file past the buffet to

collect their lunch and a drink...

• Your “throughput” time is therefore_______ minutes?

• What strategies could you use to reduce your...Total throughput time?

Cycle time?

PROCESS TYPES

Volume / Variety Effect:

Designing processes...:

• There are different ‘process types’.

• Process types are defined by the volume

and variety of ‘items’ they process.

• Process types go by different names

depending on whether they produce

products or services

Hig

h

VolumeLow High

Variety

Project

Low

Manufacturing process typesProcess

tasks

Process

flow

Diverse/

complex

Repeated/

divided

Intermittent

Continuous

Jobbing

Batch

Mass

Contin-

uous

One-off, complex, large scale, high work content

‘products’

Specially made, every one customized

Defined start and finish: time, quality and cost objectives

Many different skills have to be coordinated.

Project processes

Very small quantities: ‘one-offs’, or only a few required

Specially made. High variety, low repetition. ‘Strangers’

every one customized

Skill requirements are usually very broad

Skilled jobber, or team, complete whole product.

Jobbing processes

Higher volumes and lower variety than for jobbing

Standard products, repeating demand. But can make

specials

Specialized, narrower skills

Set-ups (changeovers) at each stage of production.

Batch Processes

Higher volumes than batch

Standard, repeat products (‘runners’)

No set-ups, or almost instantaneous ones.

Low and/or narrow skills

Mass (line) processes

Extremely high volumes and low variety: often single

product

Standard, repeat products (‘runners’)

Highly capital-intensive and automated

Few changeovers required

Difficult and expensive to start and stop the process.

Continuous processes

VolumeLow High

Variety

Low

Hig

h

Service process types

Process

tasks

Process

flow

Diverse/

complex

Repeated/

divided

Intermittent

Continuous

Professional

service

Service shop

Mass service

Professional service

High levels of customer (client) contact.

Clients spend a considerable time in the service process.

High levels of customization with service processes being

highly adaptable.

Contact staff are given high levels of discretion in

servicing customers.

People-based rather than equipment-based.

Medium levels of volumes of customers

Medium, or mixed, levels of customer contact

Medium, or mixed, levels of customization

Medium, or mixed, levels of staff discretion.

Service shops

High levels of volumes of customers

Low to medium levels of customer contact

Low, or mixed, levels of customization

Low, or mixed, levels of staff discretion.

Mass service

Design Characteristics:The Product-Process Matrix...#1

• With reference to Slack et al.; (pp 106-109)• Outline why a process that operates close to the

line of fit is likely to have lower operation costs

than one that deviates from the diagonal...

• Explain the effects on costs of:

• Standardisation, and over-standardisation

• Flexibility and inflexibility

• Explain the dynamic illustrated in Figure 4.5, page 108

Variety

Volume

Deviating from ‘natural’ diagonal on the product–processmatrix: consequences for cost and flexibility

None

None

The ‘natural’ line of fit of process to volume/variety characteristics

Project

Jobbing

Batch

Mass

Continuous

Manufacturing operations

process types

Professional

service

Service

shop

Mass

service

Service operations

process types

More process flexibility than is needed so

high cost

Less process flexibility than is needed so

high cost

Deviating from the ‘natural’ diagonal on the product–processmatrix has consequences for cost and flexibility (Continued)

Variety

Volume

None

None

The ‘natural’ line of fit of process to volume/variety characteristics

Old

process

Old process

new product

New process

new product

Processes, Volume and Variety...;

Variety

Volume

Deviating from ‘natural’ diagonal on the product–processmatrix: consequences for cost and flexibility

None

None

The ‘natural’ line of fit of processto volume/variety characteristics

Project

Jobbing

Batch

Mass

Continuous

Manufacturing operations

process types

Professional

service

Service

shop

Mass

service

Service operations

process types

More process flexibility than is needed so

high cost

Less process flexibility than is needed so

high cost

Fle

xib

ilit

yH

igh

Lo

w

Deviating from the ‘natural’ diagonal on the product–processmatrix has consequences for cost and flexibility (Continued)

Variety

Volume

None

None

The ‘natural’ line of fit of process to volume/variety characteristics

Old

process

Old process

new product

New process

new product

Fle

xib

ilit

yH

igh

Lo

wOff the diagonal

high flexibility

excess capability

high costs

Deviating from the ‘natural’ diagonal on the product–processmatrix has consequences for cost and flexibility (Continued)

Variety

Volume

None

None

The ‘natural’ line of fit of process to volume/variety characteristics

Appropriate

process

characteristics

(e.g. Batch

Process)

Old process

new product

New process

new product

Fle

xib

ilit

yH

igh

Lo

wInappropriate process

characteristics…

Too much flexibility

excess capability

high costs

Batch not Mass process

Appropriate process

characteristics -

standardised

(e.g. Mass Process)

Design Characteristics:The Product-Process Matrix...#2

With reference to Slack et al.; (pp 106-108)

• Why do the authors suggest that when examining a

process design, relationship to the natural diagonal

should be considered?• The volume-variety characteristics may have

changed without a corresponding change in design

• Design changes may have been introduced without

considering how suitable they are in regard to

volume-variety positioning

• How has process design enabled Space4 to reduce

house construction time from 12-14 weeks, to 8-10

weeks? (Page 109)

DETAILED PROCESS DESIGN

Operations Management:

Task Flowchart – training:Start

Training manager

provides event details

Administrator completes

facilities request form

Request form signed

by training manager

Form sent to facilities

manager

Facilities manager

checks room availability

Room

available?

Yes No

Booking confirmed by

facilities manager

Administrator notifies

training manager

Facilities manager

notifies administrator

room unavailable

Notify finance dept of

charges

End

Administrator notifies

training manager

Arrange

new date?

Yes No

Process Mapping:Group Exercise...

• Construct a Process Map for an operation which

is familiar to one member of your group.

• Other group members act as consultants in: Deciding which processes you will map

Drawing the process map

Analysing which aspects of the process will

need careful operations management to

ensure success or avoid failure

Assist with the “report-back”!

Delay (a wait, e.g. for materials)

Operation (an activity

that directly adds

value)

Inspection (a check of

some sort)

Transport (a movement

of something)

Storage (deliberate

storage, as opposed to a

delay)

Process mapping symbols derived from ‘Scientific Management’

Decision (exercising discretion)

Process mapping symbols derived from Systems Analysis

Direction of flow

Input or Output from the

process

Activity

Beginning or end of

process

Process mapping symbols (Refer p110)

Standard sandwich process

Raw

materialsAssembly Stored

sandwiches

Move to

outlets

Stored

sandwiches

Customer

request

SellTake

payment

Customized sandwich – process

Bread and

base filling

Assembly of

‘sandwich

bases’

Assemble from

standard ‘base’

Take

payment

Assemble whole

sandwich

Customer request

Use standard

‘base’?No

Yes

Fillings

Stored ‘bases’

Customized sandwich - new process

Raw

materials

Take

payment

Customer

request

Assembly

Customized sandwich – process (Continued)

The operation of making and selling

customized sandwiches

The outline process of

making and selling

customized sandwiches

PrepareAssemble as

required

Take

payment

Bread and

base filling

Stored

‘bases’

Fillings

Assemble whole

sandwich

Customer request

Use standard

‘base’?

Assemble from

standard ‘base’

No

Yes

The detailed process of

assembling customized

sandwiches

Sandwich

materials and

customers

Customers

‘assembled’ to

sandwiches

Higher level process map

Process Mapping:

• With reference to Slack et al., pages 109-112, in

your groups, discuss, note, and prepare to

report as follows:• Although there are a variety of approaches to

process mapping – what are the key common

elements for all?

• Using the symbols illustrated in Figure 4.6; draw

a process map to describe a process that you are

familiar with in a hospitality operations context...

• Ensure your map includes at least 4 different

symbols from Fig 4.6, page 110

Throughput, cycle-time, & WIP...:

Throughput, cycle-time, and work

in progress:Review Little’s Law; text pp 112 - 115

This approach provides a simple basis for analysis;

Throughput time =

Throughput time =

=

In other words, Little’s law is saying that,

throughput equals work in process multiplied by

the cycle time

Work-in-progress (WIP) * Cycle-time

20 in queue * 0.8 minutes per coffee

16 minutes

Throughput (TH) = Work In Process (WIP) x Cycle Time (CT)

Little’s law…;

Cycle time

= 2 mins

Throughput time = ?

WIP = 10

Throughput time = 10 × 2 mins

Throughput time = 20 mins

Throughput (TH) = Work In Process (WIP) x Cycle Time (CT)

Throughput time = 5 days × 7 hours = 35 hours

Need to mark 500 exam scripts in 5 days (working 7 hours a day). Takes 1 hour

to mark a script. How many markers are needed?

35 hours = 500 scripts × Cycle times

Cycle time = 35 hours500 scripts

= 0.07 hours

Number of markers = Work content = 1 hour = 14.29

Cycle time 0.07

Little’s Law (Continued)

Throughput efficiency = Work content

Throughput time × 100

Throughput efficiency is the work content of whatever is

being processed as a percentage of its throughput time

Throughput efficiency

Throughput, cycle-time, and WIP:With reference to Slack et al.; (pp 114 - 115)

If you were managing a hairdressing and beauty salon,

calculate the number of staff you would need if the

following were applicable...;

(Use the worked example as a template)

WIP =

Time available =

Average service time =

Using the Little’s Law approach, calculate;

how many staff will be required to complete

the days work on time?

16 customers

8 hours; (one working day)

1.5 hours

Throughput, cycle-time, and WIP:Application to your design...#2; With reference to Slack et al.; (pp 114 - 115)

Calculate the number of staff you would need at your salon...;

WIP =

Time available =

Average service time =

Throughput rate =

N =

=

=

16 customers

8 hours; (one working day)

1.5 hours

1/1.5. = 0.67N (N = staff number)

(16)/(8*0.67)

16/5.36 (i.e one staff : 5.36 clients)

2.98; (say 3.0 staff)

Throughput, cycle-time, and work

in progress: SIT Cafe

• Experiment with the parameters in the SIT Cafe.

Discreetly observe these elements from a vantage

point opposite the service area... Record;• Duration from time of entry of a person to the queue, till

their exit from the process.

• Count and average numbers in progress; WIP

• Calculate cycle-time: = Throughput time / WIP

• Then observe a few participants to establish actual time

engaged in the process (serving time)

• Calculate the throughput efficiency (TE)

• TE = (Work-content/throughput-time) *100

(Refer text page 115)

0 20% 40% 60% 80% 100%

Capacity utilization

Low

X

X

X

High utilization but long

throughput times

Low utilization but short

throughput timesReduce process

variability

High

10

mins

30

mins

Arrival frequency (demand)

Processing time

Utilization = 33.33 % Q = 0

A

vera

ge length

of queue

X

Utilization = 50 % Q = 0

20

mins

X

10

mins

Utilization = 100 % Q = 0X

Utilization = 100 % Q = infinity

9

mins

X

5–15

mins

5–15

mins

Arrival frequency (demand)

Processing time

Utilization = <100% % Q = >0

Pro

cess t

hro

ughput

tim

e

(or

invento

ry)

Throughput time

and capacity

utilisation

10 20 30 40 50 60 70 80 90 1000Utilization

Avera

ge n

um

ber

of

units

waitin

g to b

e p

rocessed

Decreasing

variability

10 20 30 40 50 60 70 80 90 1000

UtilizationA

vera

ge n

um

ber

of

units

waitin

g to b

e p

rocessed

X

YZ

High utilization but long waiting

time

Reduction in process

variabilityShort waiting time but low

utilization

(a) Decreasing variability allows higher

utilization without long waiting times.(b) Managing process capacity

and/or variability.

Process utilization, waiting time and variability

Throughput, cycle-time, and work

in progress

• With reference to pages 118 – 119 of

Slack et al.:• Explain the dynamics that are illustrated in:

• Figure 4.10

• Figure 4.11

• Note the three options available to process

designers as a result of this inter-relationship

Innovation and Design

Innovation – creates a novel idea

Design – makes it work in practice

Good Design...;

• Starts and ends with the customer...

• Design therefore aims to provide...; • products

• services

• processes

....that satisfy customer expectations

• Products and services contain;• A concept – nature, use, and value

• A package of elements – core, actual, augmented

• A process – for creation and delivery

What is designed in a

product or service?

A concept or understanding of the

nature, use and value (benefits) of

the service or product

The group of ‘component’ products

and services that provide those

benefits defined in the concept

The way in which the component

products and services will be

created and delivered

Operations Design Model...;

Product / service design

process:

Performance measured by

Quality

Speed

Dependability

Flexibility

Cost

Inputs Outputs

The stages of product /

service design

Concept

generation

Concept

screening

Preliminary

design

Evaluation

and

improvement

Prototyping

and final

design

Choice and evaluation ‘screens’

Uncertainty regarding thefinal design

Certainty regarding the

final design

TIM

E

Design involves progressively reducing the number of possibilities until the final design is reached

CONCEPT

FINAL DESIGN

SPECIFICATON

Large number of

design options

One design

Innovation: Radical or Incremental

• May be frequent and or significant• Breakthrough change

• Technological advancements

• New knowledge, new materials

• Existing products become obsolete

• Or slow, and incremental...• Based on existing pool of knowledge

• Minor changes in technology

• Build on existing capabilities

• Services / products do not change significantly

Henderson Clark Model: There is more

than one way to innovate... (Refer Slack et al., p128)

Architectural

Innovation

(Impact on linkages,

but knowledge need

is unchanged)

Incremental

Innovation

(Built on existing

knowledge &

component links)

Radical Innovation

(Built on new

knowledge and

component linkages)

Modular

Innovation

(Requires new

knowledge, links

are the same)

Low impact of component links:

(Architectural Knowledge)

High impact of component links:

(Architectural Knowledge)

Component KnowledgeHigh

Impact

Low

Impact

Henderson Clark Model: ...application to SIT’s BHM degree...

Architectural

Innovation

Provide tutorial

support for self-

paced student work

Incremental

Innovation

Add a paper

elective option

Radical Innovation

Deliver all degree

papers by distance

learning

Modular Innovation

Add new software

to assist student

research projects

Low impact of component links:

(Architectural Knowledge)

High impact of component links:

(Architectural Knowledge)

Component KnowledgeHigh

Impact

Low

Impact

Henderson Clark Model: Ref Slack et al., pages 127 - 129

Innovation

Type

Characteristics Example from Hospitality

Sector

Incremental

Architectural

Modular

Radical

Henderson Clark Model: Ref Slack et al., pages 127 - 129

Innovation

Type

Characteristics Example from Hospitality

Sector

Incremental Elements of the service and the

relationship between these are

known and are unchanged

Restaurant business adds new

items to menu

Architectural Same service, and so knowledge of

components is unchanged. Changes

occur to linkage of components

Restaurant introduces a take-

away meals option to services

provided

Modular An element of the service is changed

but with the same architecture.

However new component knowledge

is needed

Restaurant installs new

automated equipment into

kitchen to increase efficiency

Radical Changes occur to the service

components, and to the overall

architecture of the service

Restaurant introduces a “theatre

restaurant” dining and

entertainment experience on

selected evenings

Good Design...;

• Starts and ends with the customer...

• Design therefore aims to provide...; • products

• services

• processes

....that satisfy customer expectations

• Products and services contain;• A concept – nature, use, and value

• A package of elements – core, actual, augmented

• A process – for creation and delivery

Good Design: application of concepts...#1;

In groups of 2 – 3 members, discuss, prepare,

and hand in a report on the following process

design scenario (next slide)...;• You will have 30 minutes in class on Friday 12th to

start the project, and up to 45 minutes of class

time on Tuesday 16th...

• The completed work must be submitted at start of

class on Friday September 19th

• This is a “double-points” assignment...

• All group members will share the grade achieved

(– unless the group submits a negative peer

assessment rating... (See Course Outline))

Good Design: application of concepts...#2;

• You are members of a development project group that has

been tasked by your employer with re-design of a

product/service process that has become inefficient. 1. Identify the business context, and the specific process...

2. Outline the process design objectives

3. Explain the current and proposed process type, including

volume & variety characteristics (product-process matrix)

4. Categorise and explain the innovation type: (incremental,

modular, architectural, radical...)

5. Create outline or detailed process maps showing current and

proposed processes applicable for the development

6. Present a brief summation of how you will quantify changes

in throughput and efficiency as a result of your innovation

7. Assess how process capacity will be managed

Design Stages...#1;

1 • Concept generation...;

2 • Concept screening...;

3 • Preliminary design...;

4 • Evaluation – improvement...;

5 • Prototyping and final design...;

Design Stages...#2;

With reference to Slack et al. pp131-140; note

objectives, focus, and issues for each stage...• Concept generation:

• Main sources for product/service ideas?

• Concept screening:

• Feasibility; Acceptability; Vulnerability?

• Preliminary design:

• Components; Reduction of complexity;

• Evaluation and improvement:

• Quality; meeting customer needs; Managing cost;

• Prototyping and final design

• Reason for prototyping; Methods, for products, services?

Design Stages...#3;

• Explain the concept illustrated in Figure 5.9,

on page 142 of the text…

• Note the differences between; (Slack et al.142-144)

• Sequential development;

• Plus inherent disadvantages

• Simultaneous development;

• Plus potential advantages

Sequential and simultaneous arrangement of

the stages in the design activity

Third stage in the

design activity

Second stage in the

design activity

First stage in the

design activity

etc.

First stage in the

design activity

Second stage in the

design activity

Third stage in the

design activity

etc.

Communication between stages

(a) Sequential

arrangement of stages

(b) Simultaneous

arrangement of stages

Figure 5.10 (a) Sequential arrangement of the stages in the design activity; (b) simultaneous arrangement

of the stages in the design activity

Functional to Project Organisation:Review Fig 5.12, and pages 145 - 147...;

• Design and development may occur within

organisation structures that are;• Functional

• Matrix

• Project based

Note...;

• Differences between these structures; and

advantages and disadvantages of each

• Provide an explanation of Figure 5.12, p146

Increasing project

orientation

P.M.

F.M. = Functional manager

= Project manager

Organization structures for the

design activity:P.M.

P.M.

P.M.

F.M. F.M. F.M. F.M.

Pure functional

organization

F.M. F.M. F.M. F.M.

P.M.

P.M.

P.M.

F.M. F.M. F.M. F.M.

F.M. F.M. F.M. F.M.

P.M.

P.M.

P.M.

Pure project

organization

P.M.

P.M.

P.M.

F.M. F.M. F.M. F.M.

P.M.

P.M.

P.M.

Figure 5.12 Organization structures for the design activity

Project Organisation Challenges:Review pages 145 - 147...;

• What may be learnt about the difficulties of

managing major design and development

projects from the A380 experience (pages 144-

145)?• Note the key design and development challenges

that occurred during the project

• Outline the main factors that contributed to delays

• What were the main consequences of the

difficulties encountered?

Functional to Project Organisation:Pages 145 - 147...;

• Design and development structures that are;• Functional – project input controlled/communicated by functional

managers; no project group established

• Matrix – combinations that may emphasise project or functional

control

• Project based – task force led by project manager, who has

operational and budgetary control. Dedicated resources. Usually

more effective than other approaches.

• Difficulties - the A380 experience (pages 144-145).

• Timeline delays and cost over-runs, plus delayed revenue

• Project complexity and size: greater risk levels

• Rivalry and infighting, and frequent management changes

• Lack of integration: design to manufacturing

LAYOUT AND FLOW

The first thing we notice in an operation..;

Supply network design

Layout

and Flow

Process

technology

People, jobs

and

organization

Product/service

design

Design

Planning and

control

Operations

strategy

Improvement

Layout and flow

Layout

and flow

The relative positioning

of transforming

resources

Layout involves relative positioning of transformedresources within operations and allocation of tasks, which together dictate flow of transformed resources

The allocation of tasks

to transforming

resources

The flow of

transformed

resources

Layout and flow in practice…:

In your groups, discuss, note, and prepare

to report as follows:

• If you were making a sandwich for a friend how

would you do it?

• If you were making sandwiches for a whole group

of friends who were due to arrive in an hour’s time,

how would your process change?

• If you were making 5,000 sandwiches a day for a

supermarket, how would you organize production?

Layout and flow in practice…:• ‘If you were making a sandwich for a friend how would

you do it?’ • Discussion may centre around the kind of sandwich wanted,

limited only by the availability of ingredients in the kitchen, when

they wanted it, (it could be made to order); and how much it could

be customized (more salt and pepper). Then:

• If you were making sandwiches for a whole group of

friends who were due to arrive in an hour’s time, how

would your process change? • You would butter all the bread together, standardize the products

to some extent and so on. Then:

• If you were making 5,000 sandwiches a day for a

supermarket, how would you wish to organize the

production system?

• Assembly line process..., etc.

Most practical layouts are derived from only four basic

layout types. These are:

• Fixed-position layout

• Functional layout

• Cell layout

• Product layout.

These layout types are loosely related to the process

types described in Chapter 4 of Slack et al.

Layout types

Service functional

types

Mass services

Service shops

Manufacturing

functional types

Continuous processes

Mass processes

Batch processes

Basic layout

types

Fixed-position layout

Functional layout

Cell layout

Product layout

The relationship between functional and

layout types;

Jobbing processes

Professional services

Project processes

Consider Store Flow at Tesco...;

• With reference to Slack et al., page 192, discuss, note

and prepare to report on how operations managers at

Tesco have configured the following elements to ensure

efficient flows are achieved...• Positioning of transforming resources

• Allocation of tasks to transforming resources

• Flow of transformed resources

• What layout type is used in a conventional supermarket

and how does it differ from a manufacturing operation

using the same layout type?

• What are the benefits of supermarkets using customer

tracking technology?

Consider Store Flow at Tesco #2-1;

• What layout type is a conventional supermarket

and how does it differ from a manufacturing

operation using same layout type?• Essentially, a supermarket uses a functional

layout. Each area of the supermarket can be seen

as being equivalent to a workstation or machine

in a manufacturing operation.

• The transformed resource (customers) flows

between various areas depending on their

individual needs.

• So each customer will take a (sometimes

marginally) different route through the operation.

Consider Store Flow at Tesco #2-2;

• The biggest difference between the supermarket

and an equivalent manufacturing operation

concerns the objectives of the layout. • In conventional manufacturing operations, the objective is

usually to minimize the distance travelled in (or time

taken to get through) the operation.

• By contrast, a supermarket’s layout is intended to

maximize sales. This is not always the same as

maximizing the distance travelled (or time taken to get

through) the operation, but it will certainly involve a greater

time spent looking at, and hopefully buying products.

Consider Store Flow at Tesco...#3;

• What are the benefits of supermarkets using

customer tracking technology? • The information generated can be used to:

Predict and publish wait times to reduce queue

abandonments.

Receive real-time alerts when pre-set targets and volumes

are reached.

Plan marketing strategies that are firmly based on shopping

habits.

Improve decision-making in the near- and long-term.

Identify gaps in staffing and in scheduling.

Identify training opportunities.

Evaluate the effect of layout changes.

An innovative layout in a surgery

improves its efficiency

Consider Layout and Surgery...;

• With reference to Slack et al., page 195, discuss,

and then note the following:

• Outline the traditional flow of work in a hospital surgery

• Explain the approach to managing surgery taken by

John Petri, and how this has improved productivity

• What type of layouts do the traditional, and innovative

approach represent?

• What do you think are the advantages and

disadvantages of the new arrangement when

compared with the conventional layout of one surgeon

remaining in one operating theatre?

Consider Layout and Surgery...#2;Advantages and disadvantages of this arrangement when

compared with the conventional layout of one surgeon

remaining in one operating theatre?

• Essentially, the layout has not changed as such. Both a

conventional operating theatre and the arrangement described in

the short case are ‘fixed position’ layouts.

• What has changed is that two patients are moved in and out of

their operating theatres (the fixed positions) in order for

preparation work that does not involve the surgeon to be carried

out while the surgeon is operating on the other patient.

• This has the advantage of utilizing what presumably is the scarce

resource (the surgeon) even though two operating theatres are

now needed. To some extent it is moving towards the

principles of flow processes because, although the patient

does not move as such, they do move relative to the surgeon.

A restaurant complex with all four basic layout types

Fixed-position layout service restaurant

Cell layout buffet

Line layout

cafeteria

Cool room

Freezer Vegetable prepGrill

Preparation

Ove

n

Functional layout kitchen

Main course buffet

Sta

rte

r b

uff

et

Desse

rt

bu

ffet

Service line

Regular flow more

important

Re

gu

lar

flo

w m

ore

fea

sib

le

Volume & variety characteristics of layout types

Low Volume High

High Variety Low

Fixed-position

layout

Functional

layout

Cell layout

Product

layout

Flow becomes

continuous

Flow is

intermittent

Consider Layout Types...;

• With reference to Slack et al., page 194 - 202,

discuss, and record as follows:

Layout Type Purpose and Key

Processes

Volume – Variety

Characteristics

Examples

Fixed Position

Functional

Layout

Cell Layout

Product line

Layout

Mixed Layout

Advantages and disadvantages of fixed

position layout

Fixed-position layout

Disadvantages

Advantages

Very high product and mix

flexibility

Product/customer not moved

High variety of tasks for staff

Very high unit costs

Scheduling space and activities

can be difficult

Functional layout

Disadvantages

Advantages

High product and mix flexibility

Relatively robust in the case of

disruptions

Easy to supervise

Low utilization

Can have very high WIP

Complex flow

Advantages and disadvantages of

functional layout

Computer

learning lab

Terminal

room

Re

se

rve

co

llectio

n

Catalogue

stationDisplay

area

Circulation

desk

Main

entrance

Re

fere

nce

To study

areaB

ooks

Books

Books Work

room

Books

Bo

oks

BooksCopy

room A/V

room

Director’s

office

Work

room

Periodicals

Library: example of a functional layout:

Figure 7.4 An example of a functional layout in a library

Cell layout

Disadvantages

Advantages

Can give good compromise

Fast throughput

Group work can result in good

motivation

Can be costly to rearrange

existing layout

Can need more plant

Advantages and disadvantages of

cell layout

Sports shop

Men's clothes

Luggage and gifts

Magazines and

stationery

Books and DVDs

Perfume

& jewelleryEscalators

Footwear

Women’s clothes

Entrance

‘Shop-within-a-shop’ (cell) in a department store

Figure 7.5 The ground floor plan of a department store showing the sports goods shop-within-a-shop retail

‘cell’

Product layout

Disadvantages

Advantages

Low unit costs for high volume

Opportunities for specialization

of equipment

Can have low mix flexibility

Not very robust in the case of

disruptions

Work can be very repetitive

Advantages and disadvantages of

product layout

Conventional lengthways assembly line

New Toyota sideways line

Contrasting arrangements in product (line) layout

Figure 7.6 Contrasting arrangements in product (line) layout for automobile assembly plants

PEOPLE, JOBS, & ORGANISATION

HR management has a major impact on operations..;

Design

Planning and

control

Operations

strategy

Improvement

People, jobs, and

organisation

Supply network design

Layout

and flow

Process

technology

People, jobs

and

organization

Product/service

design

Operations in practice – W. L. Gore

• How does W.L. Gore’s approach to managing its human resources

seem to differ from more conventional companies?

• What do you think are the advantages and disadvantages of W.L.

Gore’s approach?

Refer Slack et al.,

pages 252-253

• Culture – The four basic guiding principles are: • fairness to each other,

• freedom to encourage,

• help and allow other associates to grow,

• the ability to make one’s own commitments, and consultation with other

associates before undertaking actions that could impact the company.

• Structure; • Gore believes that the best way of organizing themselves is the absence of

external rules, they rely on highly motivated people, not afraid of challenging

leaders to justify decisions. Leaders know they can’t rely on power or status

to justify their actions.

• Few people have formal titles or job descriptions - the company is not the

place for people driven by status or career path.They need associates who

buy in to this philosophy and into a flat structure based on respect and

valuing individual skills...

• Innovation – Every associate is allowed to innovate, providing the effects of a

potential failure do not harm the long-term success or reputation of the company.

Operations in practice – W. L. Gore

Understand

organization

design

People in operations

Contribute to

human resource

strategy

People, jobs

and

organization

Design individuals’

and groups’ jobs

Design the

working

environment

Allocate work

times

People in operations...#1

In groups of six members, discuss, note, and prepare to report

as follows:

• Two members of your team are managers, the remaining four are

process workers...

• Your team is to perform a repetitive job, and assemble a

“product”... Details will be provided by the managers:• Key operations objectives are speed and quality

• Time how long each ‘product’ takes to complete.

• The product production requirements are as follows:• The managers will have 2 minutes to plan the process. brief staff

• Production of the first unit may then begin – one manager provides

guidance the other is the time keeper

• The cycle is not complete till the finished item has been quality

inspected by the 2 managers and approved.

• Production of second unit then begins – process repeated, & timed…

People in operations...#2In groups of six members, assemble a product:

• Two members of your team are managers, the remaining four

are process workers...

• The product is as follows:• Four paper cups standing on a paper plate

• Each cup has a name label attached on one side

• Each name label bears the name of one group member

• Inside each cup is a teaspoon

• Each cup has a paper napkin attached to it by a rubber band

• Time the assembly from start to finish.

• You must start and finish at your table; assembly must include • The “print” area at the front of the room (pens and labels), and

• The “attachments” area at the rear (the rubber bands and

serviettes).

People in operations...#3In groups of six members, discuss, note, and prepare to

report as follows:

• Your team is to perform a repetitive job, and assemble a

“product”...

• Key operations objectives are speed and quality

• Time how long each ‘product’ takes to complete.

• Then devise the following; • Work standards for the production process

• A suitable payment system for staff involved

• Suggest improvements to process efficiency, and;

• Improvements to design of the required production

tasks.

The operation

Alignment with business strategy (Strategic partner)

Assisting in

resolving operating

issues (Employee

champion)

Managing

transformation and

change (Change

agent)

HR processes and procedures (Administrative expert)

Recruit Develop Deploy

Human resource strategy…;

Using text information on pages 254-255, explain the

components and concepts illustrated in the model above…

Human

resources

(HR) role

What it involves Relevance to operations management (OM)

Strategic

partner

Aligning HR and business strategy:

‘organizational diagnosis’, manpower

planning, environmental monitoring,

etc.

OM integrates Operations and HR strategy. OM

specifies skills requirements and relies on HR

to develop them informed by labour market

forecasts, succession planning, etc.

Admin.

expert

Running the organization’s HR

processes and ‘shared services’:

payroll, appraisal, selection and

recruitment, communication, etc.

OM is largely an ‘internal customer’ for HR’s

processes. OM must be clear in its

requirements with agreed service levels

mutually negotiated.

Employee

champion

Listening and responding to

employees: ‘providing resources to

employees’, conciliation, career

advice, grievance procedures, etc.

OM and HR must develop a good working

relationship and clear procedures to deal with

any ‘emergency’ issues that arise. Also OM

must be sensitive to feedback from HR on how

it manages day-to-day operations.

Change

agent

Managing transformation and

change: ‘ensuring capacity for

change’, management development,

performance appraisal, organization

development, etc.

OM and HR are jointly responsible for

operations improvement activities. HR has a

vital role in all the cultural, developmental, and

evaluation activities associated with

improvement.

Human resource strategy (Continued)

The objectives of job

design

Jobdesign

impacts on

quality of working life

quality

speed

dependability

flexibility

cost

health and safety

Design

individuals’ and

groups’ jobs

Design the

working

environment

Allocate

work times

Ergonomics‘Scientific’

management

‘Behavioural’

approaches

Flexible

working

Division of

labour

Team working

The main influences on job design, work time

allocation and the design of the working environment

Consider Job Design Influences ...;With reference to Slack et al., page 260 - 270, discuss,

and record as follows:

Influences on Job

Design

Purpose/ Influence and

Issues

Example identified from

Hospitality Sector

Division of Labour

Scientific

Management

Ergonomics

Behavioural

Approaches:

• Empowerment

• Flexible Working

• Team-working

Dividing the total task down into smaller parts, each of

which is accomplished by a single person or team.

Promotes faster learning.

Makes automation easier.

Ensures non-productive work reduced.

Advantages

Leads to monotony.

Can result in physical injury.

Is not particularly robust.

Can reduce flexibility.

Disadvantages

Division of Labour

Ergonomics

How the person

interfaces with the

physical aspects of

his or her

workplace

How the person

interfaces with the

environmental conditions

prevalent in his or her

immediate working area

Ergonomics is concerned primarily with the physiological

aspects of job design – that is, with the human body and how

it fits into its surroundings.

Ergonomics

Forearms

approximately

horizontal

Seat back

adjustability

Good

lumbar

support

Seat height

adjustability

No excess pressure on underside of thighs and backs of knees

Foot

support

if needed

Space for

postural change,

no obstacles

under desk

Leg room and

clearance to allow

postural changes

Ergonomics in the office environment

Figure 9.9 Ergonomics in the office environment

Ergonomics (Continued)

Ergonomics in the office environment

Keyboard usable,

adjustable,

detachable,

legible

Adequate

lighting

Distracting noise

minimized

Software appropriate to task, adapted to user, no undisclosed monitoring

Screen: stable image,

adjustable, readable

glare/reflection free

Window

covering

Adequate contrast,

no glare or distracting

reflections

Work surfaces: allow flexible

arrangements, spacious, glare free

Ergonomics (Continued)

Figure 9.9 Ergonomics in the office environment (Continued)

More tasks

which give

increased

responsibility

autonomy or

decision making Original

job tasksJob

enlargement

Job

enrichment

More tasks of the

same typeFigure 9.8 Job enlargement and job enrichment

Behavioural Approaches...;Job enlargement and enrichment

Division of labour

Ergonomics

Behavioural approaches

Empowerment

Team working

Flexible workingStaff

treated as a resource

Staff treated as

a cost

Emphasis on

managerial control

Emphasis on

commitment and

engagement of staff

Scientific management

Self-managed

method study

Control versus commitment