Operations Management (Total 6.
Production and delivery
Quality Management) 7. Quality assurance
Terms and meanings: 8. Amount of inventory
Operations Management 9. Evaluation of work
- It is the process of managing productive 10. Ability to patent design
systems that transform resources into
finished products. Scope of Operations Management
Total Quality Management 1. Forecasting – things as weather and
landing conditions, seat demand for flights,
- It is managing with an organization-wide and the growth of air travel
commitment to continuous improvement,
product quality, and customer needs 2. Capacity planning – essential for the
airline to maintain cash flow and make a
Productivity reasonable profit
- it is the efficiency with which inputs are 3. Scheduling – of planes for flights and for
transformed into outputs. routine maintenance, scheduling of pilots
Competitive Advantage and flight attendants, ground crews, counter
staff, and baggage handlers.
- the ability to outperform one’s
competitors. 4. Managing inventories – items needed in
the flight (food, pillows, blankets, etc.)
The Three Basic Functions of Bus. Orgs:
Finance, Operations, and Marketing 5. Assuring quality – emphasizes on
efficiency and courtesy (service business)
Production of Goods versus Delivery of
Services 6. Motivating employees – all phases of
operations
Manufacturing (goods-oriented) and Service
(act-oriented) Organizations, their 7. Locating facilities
difference Examples of Types of Operations
involve the following: Goods producing: farming, mining,
1. Degree of customer contact. construction, manufacturing, power
generating
2. Uniformity of input.
Storage/transportation: warehousing,
3. Labor content of jobs. trucking, mail service, moving, taxis, buses,
4. Uniformity of output. hotels, airlines
5. Measurement of productivity
Exchange: retailing, wholesaling, financial - This includes accounting and information
advising, renting or leasing, library loans, systems, human resource management, and
stock exchange marketing
Entertainment: film, radio and television, What is a customer benefit package (CBP)?
plays, concerts, recording
II. Process Classification (Types of
Communication: newspapers, radio and TV Process)
newscasts, telephone, satellites, internet
1. Projects
The Competitive Challenge
2. Job shop processes
Competitive Challenges (for business
organizations): 3. Flow-shop processes
Sustainability 4. Continuous flow processes
The challenge is on the capabilities of the Read about Process design
organization to survive and stay strong in Process design
the industry.
The goal of process design is to create the
Global right combination of equipment, work
Global challenges can be more understood methods, and environment to produce and
with the analysis of the general deliver goods and services that satisfy both
environment. (Like using PESTEL – Political, internal and external customer
Economic, Social, Technological, requirements.
Environmental, Legal) Four levels of work:
Technology – tools and methodologies 1. Task
I. Key Business Processes 2. Activity
1. Value-creation processes 3. Process
- Focused on primary goods or services such 4. Value chain
as assembling a car or providing home
financing III. Measuring Process Performance
2. Support processes Measurement – it is the act of quantifying
the performance criteria (metrics) of
- Examples are purchasing materials and organizational units, processes, goods and
supplies, managing inventory, installation, services, people and other business
customer support, technology acquisition, activities. It provides an objective basis for
and research and development making decisions.
3. General management processes
Good measures provide a “scorecard” for Peripheral goods or services – are those
performance, help identify performance that are not essential to the primary good
gaps and make accomplishments visible to or service, but enhance it.
the workforce, the stock market and other
stakeholders.
Performance measures can be classified into
several key categories:
- Financial
Lesson 3 – WORK PROCESSES
- Safety
Terms and meanings:
- Quality
Process reengineering – it is the systematic
- Time and complete analysis of work processes
and the design of new and better ones.
- Flexibility
Work process – a related group of tasks that
- Innovation and Learning
together create a result of value for the
Introduction: customer.
“A process is a sequence of activities that is Workflow – it is the way work moves from
intended to create a certain result, such as a one point to another in manufacturing or
physical good, a service or information service delivery.
(Collier, Evans). It is how work creates value
Process value analysis – it is a technique
for customers (AT&T).”
where core processes are identified
“A work process is a related group of tasks carefully evaluated for their performance
that together create a result of value for the contributions,
customer. These tasks are what people do
Work Process Analysis
to turn resource inputs into goods or
services for customers – the tasks are The tasks in a work process are performed
viewed as part of a group rather than in to turn resource inputs to goods or services
isolation; everyone must share a common for customers.
goal; the focus is what is accomplished, not
These are the keywords that are noted in
on activities; processes serve customers,
the definition of work process:
and their perspectives are what really
count.” (Michael Hammer) 1. Group – tasks are viewed as part of a
group rather than in isolation.
Primary good or service – it is the “core”
offering that attracts customers and 2. Together – everyone must share a
responds to their basic needs. common goal.
3. Result – the focus is on what is 5. Search for ways to eliminate delays,
accomplished, not on activities. errors and misunderstandings.
4. Customer – processes serve customers, 6. Search for efficiencies in how work is
and their perspectives are the one that shared and transferred among
really count.
The concept of workflow is central to the
understanding of processes. The various
parts of a work process must all be
completed to achieve the desired results,
and they must be typically be completed in
a given order. An important starting point
for a reengineering effort is to diagram or
map these workflows as they actually take
place. Then each step can be systematically
analyzed to determine whether it is adding
value, to consider ways of eliminating or
combining steps, and to find ways to use
technology to improve efficiency.
Process Reengineering
With the mission, objectives and strategies
of the organization, business process
reengineering can be used to regularly
assess and fine-tune work processes to
ensure that they directly add value to
operations. Core processes are identified
and carefully evaluated for their
performance contributions and this is called
process value analysis.
Steps of Process Value Analysis:
1. Identify the core processes.
2. Map the core processes with respect to
workflows.
3. Evaluate all core process tasks.
4. Search for ways to eliminate unnecessary
tasks or work.
