1. 1. Strategic Operations Management

2. Introduction Production and service operations have a central role in most firms (services and manufacturing). They typically account for 70 - 80% of a firm’s assets, expenditure and people. The nature of operations differs widely between industries and organisations

3. Evolution of Operations Socially, production - though important - is often undervalued; Seen as a career for male, engineer-types who enjoy getting their hands dirty! Are views changing? The growth of services encourages rethinking the production concept Technological innovation is raising the status of manufacturing. In the UK people employed in 'operations' are far fewer today Yet employment here is greater still than other functions. A major part of total revenue and capital investment expenditure is spent on production operations.

4. Operations as Transformation: Four Types: builders, gardeners and manufacturers transform raw materials & components suppliers, wholesales, retailers change the nature of "ownership" hauliers, postal/courier and telephone services transform "place" insurance provides people with security, building societies lend for housing, physios improve physical well-being

5. The boundary concerns of operations management include discussion of :  Innovation  Purchasing  Marketing  Finance/Accounting  Personnel (HR)  Product/Service Design  CAD  Standardization  Location Decisions  The State & Manufacturing  Ops Management & Technology  Flexible Manufacturing Systems  Signs of De- Industrialization in UK  Design of Operations Environment  Production Technology & Job Issues

6. 1) Innovation New product development - What the design is and how it can be produced are important development decisions. Innovative designs have to be made within cost and skill parameters.

7. 2) Purchasing Procuring and storing raw materials, components & equipment is a key role.

8. 3) Marketing Production staffs need marketing and sales information: total demand for the product, when is it required? Customer feedback helps R&D design and create future products.

9. 4) Accounting & Finance Production department must budget. The cost of each element of expenditure/ activity must be known for price and wage determination and profit/loss identification. Capital equipment has to be replaced, maintained and disposed

10. 5) Personnel Recruitment, training, the design of reward systems, health and safety and industrial relations

11. 6) Product & Service Design Products must be designed to function well. The range of products or degree of standardisation must be decided. Materials for the product must be chosen

12. 7) CAD CAD (computer aided design) evaluates designs with fast computer graphics offering 3-D perspectives. Specifications are more accurate. CAD can store standard designs, names and dimensions of components (information needed for purchasing specifications, machine and tools set-up).

13. 8) Standardization/Modularization Modular systems are a form of standardisation - a means of cost reduction. A college with many under-subscribed evening courses - may rationalise its "product mix" around the most popular courses reducing staff costs and overheads. Standardisation means longer production runs (economies of scale), discounts on bulk supplies. The consumer however may have less choice.

14. 9) Location A department store groups similar products to maximise staff product knowledge and satisfy customer expectations. Fast-moving goods and those bought on impulse are located on the ground floor. Furniture can be located on upper floors Where production is located depends on factors ranging from raw material and power supply to transport and labour availability.

15. 10) The State & Manufacturing Government encouragement of manufacturing, attempts to regenerate industries/firms and evidence for deindustrialisation? Does manufacturing drive economic growth? What are the links between manufacturing output & GDP?

16. 11) Technology Technology has developed exponentially, and this has a bearing on Ops management:  Computerised Numerical Control (CNC).  CAD  Robotics

17. 12) Flexible Manufacturing Systems FMS involves advanced manufacturing engineering directed towards better consumer choice & a quicker response to customer demand using less working capital. It embraces:  CNC based equipment  automated transport systems for moving tools & work pieces at exactly the moment they are needed  the whole system is computer-controlled with software for scheduling, tool/part selection, fault finding, machine breakdown detection, etc.

18. 13) Signs of Deindustrialization in the UK? There are signs Other countries?

19. 14) Design of the Operations Environment The production function – is influenced by business and technological environments: Equipment has to be selected. How much product should we make ourselves? How much to we buy in? Product design, capacity planning, employee skills and accounting procedures all have a bearing. Decisions extend to automation and computerisation, job security and employee stress. The type of equipment used influences work design.

20. 15) Production technology & Job/Employment Issues Issues include attitudes/alienation, training, industrial relations, redundancy and job loss, the quality of working life and payment systems, social responsibility to the community. Changes: From Talyor to Herzberg: Scientific Management  Job Enrichment

21. The Japs Japanese economic and export success stems from well-planned and executed methods of production management in manufacture attention to detail and importance given to quality control (JIT & TQM/QCCs) total integrated production systems from delivery of materials/parts to final distribution Supported by cultural aspects of labour

22. More… The discussion of boundary concerns of operation management leads us to conclude that operations is tied up with all aspects of the organization Hence, operations is tied up with overall corporate/business strategy of the organization With globalization and the speed of change, and the increased intensity of competition, overall strategy (and hence, operations) need to be flexible