Essex College1 Essex College Operation Management ( British Aerospace ) Submitted By: Muhammad Umar Butt Student ID No: EC-PGDBA-MUB160985 Submitted To : Dr. Zachariah M MulengaCourse Title : Post Graduate Diploma In Business Administration (PGDBA) Course Session : January (2010–2011)
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Quality is placed first in our list of performance objectives because many authorities
believe it to be the most important. There are two important points to remember while
reading quality as a performance objective.
The external affect of good quality within in operations is that the customers who
‘consume’ the operations products and services will have less (or nothing) to
complain about. And if they have nothing to complain about they will (presumably)
be happy with their products and services and are more likely to consume them again.
This brings in more revenue for the company (or clients satisfaction in a not-for-profit
organizations).
Inside the operation quality has a different affect. If conformance quality is high in all
the operations processes and activities very few mistakes will be being made. This
generally means that cost is saved, dependability increases and (although it is notmentioned explicitly in the chapter) speed of response increases. This is because, if an
operation is continually correcting mistakes, it finds it difficult to respond quickly to
customers requests. See the figure below.
Speed:-
Speed is a shorthand way of saying ‘Speed of response’. It means the time between an
external or internal customer requesting a product or service, and them getting it. Again, there
are internal and external affects.
Externally speed is important because it helps to respond quickly to customers. Again,
this is usually viewed positively by customers who will be more likely to return with
more business.
The internal affects of speed have much to do with cost reduction. The two areas
where speed reduces cost (reducing inventories and reducing risks).
Is it when the customer needed delivery of the product or service? Is it when they
expected delivery? Is it when they were promised delivery? Is it when they were promised
delivery the second time after it failed to be delivered the first time? Again, it has external
and internal affects.
Externally (no matter how it is defined) dependability is generally regarded by
customers as a good thing. Certainly being late with delivery of goods and services
can be a considerable irritation to customers. Especially with business customers,
dependability is a particularly important criterion used to determine whether suppliers
have their contracts renewed. So, again, the external affects of this performance
objective are to increase the chances of customers returning with more business.
Internally dependability has an effect on cost. The three ways in which costs are
affected – by saving time (and therefore money), by saving money directly, and by
giving an organization the stability which allows it to improve its efficiencies. What
the chapter does not stress is that highly dependable systems can help increase speed
performance.
Flexibility:-
This is a more complex objective because we use the word ‘flexibility’ to mean so many
different things. Flexibility always means ‘being able to change the operation in some way’.
There are different types of flexibility (product/service flexibility, mix flexibility, volume
flexibility, and delivery flexibility). It is important to understand the difference between these
different types of flexibility, but it is more important to understand the affect flexibility can
have on the operation.
Externally the different types of flexibility allow an operation to fit its products andservices to its customers in some way. Mix flexibility allows an operation to produce
a wide variety of products and services for its customers to choose from.
Product/service flexibility allows it develops new products and services incorporating
new ideas which customers may find attractive. Volume and delivery flexibility allow
the operation to adjust its output levels and its delivery procedures in order to cope
with unexpected changes in how many products and services customers want, or
Volume - how many products or services are made by the operation?
Variety - how many different types of products or services are made by the operation?
Variation - how much does the level of demand change over time?
Visibility - how much of the operation's internal working are 'exposed' to its
customers?
Volume dimension:-
The volume dimension has different implications whether it is in a high level or low.
In the low levels of volume, the company's operations have specific characteristics such as
having low repetition in the everyday procedures, each staff member performs more than one
job in other words they are multifunctional, less systemization and high unit costs. In the high
levels of volume, the company's operations have its own specific characteristics such having
high repeatability in the everyday procedures, there will be specialization, systemization, and
more capital intensive and low unit costs.
Variety dimension:
The variety dimension has its own implication as well whether it is high or low. In the
high side of the scale there will be more flexibility in the procedure, complex, the company
will make sure to match customer needs and of course the unit cost will be high. In the other
hand, when the company is in the low side of the scale the procedures will be well defined,
there will be routine, standardization, and of course low unit cost.
Variation in Demand dimension:
The variation in demand has many implications that can be seen from the company's
characteristics. If the company is in the high levels of demand variation then it has changing
capacity, anticipation for what the customer might demand, flexibility, in touch with demandand high unit cost. While in the other side of the scale, the company would have a stable and
predictable demand, routine, high utilization of resources and low unit cost.
Visibility dimension:
The visibility dimension which is the customer ability to track his or her order through
its different stages has its implications whether it is high or low. When it is high the
customers have short waiting tolerance, satisfaction governed by customer perception,
customer contact skills are needed and very important and the receive variety is definitely
high. And when it is low, the time lag between production and consumption, there will be
Stage III companies have a manufacturing organizations that is internally supportive
of other parts of the company, with a co-ordinate set of manufacturing structural and
infrastructural decisions tailored to their specific competitive strategy.
Stage IV:-
Stage IV companies regard their manufacturing organizations as externally
supportive, that is, playing a key role in helping the whole company achieve an edge over its
competitors. Such companies are not content simply to copy their competitors, or even to be
the "toughest kid on the block" in their own neighborhood. They seek to be as good as
anybody in the world at the things they have chosen to be good at - that is, world-class.
Understanding the operations contribution:
The model can be used to describe the contribution of operations. Competitiveness is one
which has been well known for many years and was originally devised by Professor Hayes
and Wheelwright at Harvard University. It is useful here because it can be adapted to
incorporate the three roles of the operations function. Moving from Stage 1 to Stage 2
requires the ability to implement strategy. Moving from Stage 2 to Stage 3 requires the ability
to support strategy. Moving from Stage 3 to Stage 4 requires the operation to drive strategy
through its unique capabilities. A number of points may be thought when using this model.
It is a conceptual model which allows organizations to think about how good their
operations are. It is not a precise instrument for measuring operations excellence.
Some parts of the business could be at different stages to other parts. So for example,
an airport could have Stage 4 check-in facilities which use the most advancedinformation systems and have the most dedicated staff, while its baggage handling
system is at Stage 2. The overall customer experience therefore might be very mixed
(depending on whether their bags were lost or not).
The real objective of this model is to show operations managers that they can be
better (very few operations are at Stage 4) and to go some way in defining what really