1. 5.1 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Understanding Organisational Context 2e Slides by Claire Capon Chapter 5 Operations management Manufacturing and service organisations An overview of operations management

2. 5.2 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Manufacturing or service Organisations either make things or do things for people The operations management principles are similar for both manufacturing and service organisations

3. 5.3 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Activity levels One sector, three levels: Primary - drilling for oil Secondary - refining oil Tertiary - selling petrol

4. 5.4 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Manufacturing and service sectors Primary sector organisations produce raw materials, e.g coal mining and farming Secondary sector organisations produce goods, e.g. bread and petrol

5. 5.5 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Manufacturing and service sectors Tertiary sector organisations are retail and service organisations, e.g. petrol stations and banks

6. 5.6 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Manufacturing and service sectors Not-for-profit organisations include charities and religious organisations, e.g Oxfam and Church of England Private sector organisations include companies selling goods & services, e.g. Nissan and KFC

7. 5.7 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Manufacturing and service sectors Public sector organisations include organisations which supply services, e.g. state education, NHS health care and refuse collection.

8. 5.8 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Figure 5.4 Operations management: an overview

9. 5.9 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Location Location strategies: -product-based location -market-based location -vertically-differentiated location

10. 5.10 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Figure 5.5 Product development process

11. 5.11 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Product development Generation of ideas relies on a number of sources of ideas for new products or services Evaluation is needed to filter out ideas with deficiencies and weaknesses

12. 5.12 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Product development Technical evaluation: -can the product be made? -any patent problems? -will competitors or technology render feasible ideas obsolete?

13. 5.13 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Product development Develop a prototype Undertake a market and financial evaluation Will the product make a profit?

14. 5.14 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Product development Use the information from technical, market and financial evaluation to turn the prototype into a final product Launch the product on to the marketplace

15. 5.15 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Forecasting Quantitative forecasting requires access to historical data Qualitative forecasting can be done by: personal insight, panel consensus, market survey, historical analogy, and the Delphi method

16. 5.16 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Layout of facilities Layout resources to ensure smooth and efficient work flow Process layout Product layout Hybrid layout Fixed position layout

17. 5.17 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Process and system performance Performance can be measured by examining: - capacity - utilisation and productivity - efficiency and effectiveness - process flow charts

18. 5.18 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Figure 5.8 Process flow chart symbols

19. 5.19 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Materials requirements planning MRP is a dependent inventory system and relies on production plans to determine and manage stock levels

20. 5.20 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Just in time JIT is a dependent demand system which matches stock available exactly with demand for stock The stock arrives just as it is needed

21. 5.21 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Quality Quality is the ability of a product to meet and, preferably, exceed customer expectations TQM involves the whole organisation working towards zero defects

22. 5.22 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Scheduling Scheduling is used to: -make sure utilisation of labour and equipment is optimal -help achieve low costs and high utilisation

23. 5.23 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Scheduling Schedules: -first come, first served -fixed schedule system -appointment system -delayed delivery

24. 5.24 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Purchasing Purchasing can be: -centralised -decentralised -a combination of centralised and decentralised

25. 5.25 Capon: Understanding Organisational Context 2nd edition © Pearson Education 2004 Maintenance Planned maintenance aims to reduce the frequency and impact of failures Unplanned maintenance deals with breakdowns as they occur