IntroductionIn Operations Management, the design activity is much broader than a universally recognized definition of ‘design’. All operations managers are designers. When they purchase or rearrange the position of a machine, or when they change the way of working within an operations process, it is a design decision because it affects the physical shape and nature of their processes. The 'general approaches' to managing processes are called process types. Different terms can be used to identify process types in manufacturing and service industries. In manufacturing, these process types are (in order of increasing volume and decreasing variety) are: project processes jobbing processes batch processes mass processes continuous processes. The layout of an operation is concerned with the physical location of its transforming resources. It decides where to put all the facilities, machines, equipment and staff in the operation. Layout is often the first thing most of us would first notice on entering an operation because it governs its appearance. It also determines the way in which transformed resources the materials, information customers flow through the operation. Relatively small changes in the position of a machine in a factory, or goods in a supermarket, or changing rooms in a sports centre can affect the flow through the operation. 3-1 This, in turn, can affect the costs and general effectiveness of the operation. Refer to the power point slide for this lesson which shows the facilities layout activity in the overall model of design in operations. When looking at capacity, operations managers need to look at both resource inputs and product outputs. The reason is that, for planning purposes, real (or effective) capacity depends on what is to be produced. For example, a firm that makes multiple products inevitably can produce more of one kind than of another with a given level of resource inputs. Your objectives In this chapter you will learn about the following: Understand why design is important in Operations Management. Understand the objectives the design activity should have. Understand how processes are designed. Understand the ‘process types' Understand the basic layout types used in operations. Able to describe the type of layout an operation should choose. Understand what the layout design is trying to achieve. Understand how each basic layout type is designed in detail. Understand how long it will take to bring new capacity on stream. Understand how does this match with the time that it takes to develop a new product. Understand how to manage resources in sync with strategic capacity management 1 Process types in manufacturing Figure 3.1 Types of Process 1.1 Project processes Project processes deal with discrete, usually highly customized products. Often the timescale of making the product or service is relatively long, as is the interval between the completion of each product or service. So low volume and high variety are characteristics of project processes. 3-2 The activities involved in making the product can be ill-defined and uncertain, sometimes changing during the production process itself. Examples of project processes include a. shipbuilding, b. most construction companies, c. movie production companies, d. building the Mass Rapid Transport e. installing a computer system. The essence of project processes is that each has a well-defined start and finish, the time interval between starting different jobs and the transforming resources which make the product. The process map for project processes will almost certainly be complex. The figure below shows various manufacturing process types. 1.2 Jobbing processes Jobbing processes also deal with very high variety and low volumes. Whereas in processes each product has resources devoted more or less exclusively to it, for in job processes each product has to share the operation's resources with many other resources of the operation will process a series of products but, although all the processes will require the same kind of attention, each will differ in its exact needs. Jobbing processes produce more and usually smaller items than project processes but, like project processes, the degree of repetition is low. Many jobs will usually be 'one-offs'. Again, any process map for a jobbing process could be relatively complex for similar reasons to project processes. However, jobbing processes usually produce physically smaller products and, although sometimes involving considerable skill, such processes often involve fewer unpredictable circumstances. Therefore, their process maps are usually less complex than those for project processes. 1.3 Batch processes Batch processes can often look like jobbing processes, but batch does not have quite the degree of variety associated with jobbing. As the name implies, each time batch processes produce a product they produce more than one. So each part of the operation has periods when it is repeating itself, at least while the 'batch' is being processed. Consider a garment manufacturing process. Batches of the various parts that make up the garments move through the work stations, each of which has specialized machinery. 3-3 1.4 Mass processes Mass processes are those which produce goods in high volume but variety is narrow, that is, in terms of the fundamentals of the product design. A mobile plant, for example, might produce several thousand variants of car if the option of engine size, colour, extra equipment, etc. is taken into account. The activities in the automobile plant, like all mass operated plants are essentially repetitive and largely predictable. 1.5 Continuous processes Continuous processes are one step beyond mass processes insomuch as they operate at even higher volume and often have even lower variety. They also usually operate for far longer periods of time. Sometimes they are literally continuous in that their products are inseparable, being produced in an endless flow. They may even be continuous in that the operation must supply the products without a break. Continuous processes are often associated with relatively inflexible, capital-intensive technologies with highly predictable flow. There are often few elements of discretion in this type of process and although products may be stored during the process, the predominant characteristic of most continuous processes is of smooth flow from one part of the process to another. Inspections are likely to form an important part of the design in operations management. 2 Purpose of Design Design is the activity which shapes the physical form and purpose of both product and services and the processes which produce them. . The overall purpose of the design activity is to meet the needs of customers. 2.1 What objectives should the design activity have? The design activity can be viewed as a transformation process in the same way as other operations. It can therefore be judged in terms of: its quality, speed, dependability, flexibility cost. 3-4 Product or service design and process design are coordinated in some way. The design activity must also take into account some environmental issues. These include 3 examination of the source and suitability of materials, the sources and quantity of energy consumed, the amount and type of waste material, the life of the product itself, and the end-of-life state of the product. How are processes designed? Processes are designed initially by breaking them down into their individual activities. Often common symbols are used to represent types of activity. The sequence of activities in a process is then indicated by the sequence of symbols representing the activity. This is called 'process mapping'. Alternative process designs can be compared using process maps. 4 What are 'process types'? Process types are general approaches to managing the transformation process. They depend on the volume and variety of an operation's output. In manufacturing, these process types are (in order of increasing volume and decreasing variety) project, jobbing, batch, mass and continuous processes. In service operations, although there is less consensus on the terminology, the terms often used (again in order of increasing volume and decreasing variety) are professional services, service shops and mass services. 5 Case Study – Verenigde Bloemenveiling Aalsmeer (VBA) (United Flower Auctions), Aalsmeer, Holland VBA is the largest flower auction operation in the world. It comprises two main parts. The first is the sellers' area known as the 'auction section' where flowers are received, held in cooled storage areas and auctioned. The second is the 'buyers' section' where around 300 buyers, exporters and wholesalers rent space to pre pare flowers for shipment. Trucks leave Aalsmeer every working day with destinations (including airports) throughout Europe. On a typical day there are about 10,000 people working at the centre (1800 of whom work directly for VBA), together handling 17 million cut flowers and two million plants. This large and complex operation is held together by its information processing technology. Flowers are extremely perishable, so dealing with them in such large quantities makes the speed, accuracy and dependability of the operation critical. During the evening and overnight, flowers are brought into the operation in standard containers which are subsequently handled in standard wheeled cages (there are over 124,000 of these 'trolleys' in circulation. Each lot of flowers is assigned a reference number, a quality inspection is made by VBA staff, and a description is entered on the 'delivery forms' attached to each trolley. The trolleys 3-5 are Standard 'trolleys' wait then held in cold storage until they are collected for the auctioning process the following morning areas. For each buyer, the VBA computer prints an invoice for all the purchases made, which must be settled daily by bank letter of credit or by cash drawn at one of the four banks adjacent to the cashier's office. The high levels of computerization and automation of material flow allow VBA to operate with very low costs (about 5 per cent of turnover), at high speed and dependability. Each of the 13 clocks handles about 1000 transactions per hour. Almost all business takes place between 7.00 am and 10.00 am so that fresh flowers can be in the shops as early as possible -by lunchtime in Holland, by early afternoon in London, Paris and Berlin, and by early morning the next day in New York. ACTIVITY 1 (30 MINS) Your task is to study the case below and answer these question: 1 Which of the five operations performance objectives (quality, speed, dependability, flexibility and cost) are the most important to build into the design of VBA's process, and why? 2 How does process technology help this operation to achieve its objectives? 3 Sketch the flow of flowers in the VBA operation. What do you think are the critical points in this flow? 6 Case Study 2 - Retail banking Retail banking has become a much more competitive business in most markets. Basic banking products, such as current accounts and credit cards, are also now provided by many different financial service companies, insurers and even supermarkets. This has led to a significant insurers, and even supermarkets. This has lead to a significant increase in competition between the providers of such services. Increasingly, these companies are having to design operations processes that provide a significantly enhanced service, preferably at lower cost. This is why simulation, once the preserve of expensive and high-tech operational research departments, is rapidly becoming a significant aid to process design in banking operations. It is particularly suited to use in environments where the operational design is complex and therefore expensive to ‘try out’ for real and also where there is a significant degree of randomness, such as the arrival patterns of customers or the varying designers to ask ‘whatif’ questions for a new design. Alternative designs can be explored at relatively low-cost and low-risk. The advantage of simulation became clear to Lloyds TSB, one of the UK’s most prominent financial services groups, when they used it to help design a new Operational Service 3-6 Centre. A new centralized operation was created by merging a number of smaller centers. Process design decisions included the number and skills of the people needed to staff the process, activities, how teams should be organized, and so on. The company knew that all these variables were important in determining how the new process would operate, but some variables were likely to have a much more dramatic impact than others. The key question was, which ones? The computer simulation used by the bank exposed the likely impact of each of these variables in a way that was almost impossible to demonstrate by any other method. In addition, once the model of the new operation had been built, a whole range of processing scenarios could be tried out and their impact assessed in terms of cost, service level and utilization. ‘Modelling our new operations, particularly with dynamic simulation, has helped us visualize and test a range of design choices, in a way that we never could before, ‘says John Tyler of Lloyds TSB, ‘In particular, it has helped us to deploy process design strategies that have significantly improved the level of service that we provide to our customers. It also gave us a degree of operational transparency before we actually built the new operation. Simulation has been very useful in allowing us to anticipate and reduce operational risk whilst improving our service level to customers. ACTIVITY 2 (30 MINS) Your task is to study the case below and answer these question: 1 List the range of variables that you might want to simulate in an operation that 2 processes a car insurance business. How would you justify spending large amounts of money on building a computer simulation model for a new car assembly plant? 7 Select the basic layout After the process type has been selected, the basic layout type needs to be selected. The basic layout type is the general form of the arrangement of the facilities in the operation. Most practical layouts are derived from only four basic layout types: fixed-position layout process layout cell layout product layout. One process type does not necessarily imply one particular basic layout. Each process type could adopt a different basic layout type. 3-7 ACTIVITY 3 (10 MINS) It has been suggested that operations managers cannot avoid involvement with process technologies that they need to be able to manage them on a day to day basis. They also need to articulate how process technology can improve operational effectiveness. Discuss this point of view, illustrating your answer with examples where appropriate. DEFINITIONS a. Process : a group of related tasks with specific inputs and outputs. b. Process planning: the conversion of designs into workable instructions for manufacture, along with associated decisions on component purchase or fabrication, and process and equipment selection. c. Process plans: a set of documents that detail manufacturing or service delivery specifications. d. Process strategy: an organization’s overall approach for physically producing goods and services. e. Project: the one-of-a-kind production of a product to customer order that requires a long time to complete and a large investment of funds and resources. 7.1 The basic layout types a. Fixed-position layout Fixed-position layout is in some ways a contradiction in terms, since the transformed resources do not move between the transforming resources. Instead of materials, information or customers flowing through an operation, the recipient of the processing is stationary and the equipment, machinery, plant and people who do the processing move as necessary. This could be because the product or the recipient of the service is too large to be moved conveniently, or it might be too delicate to move, or perhaps it could object to being moved; for example: A construction site is typical of a fixed-position layout in that there is a limited amount of space, which must allocated to the various transforming resources. The main problem in designing this layout will be to allocate areas of the site to the various contractors so that: they have adequate space for their needs; they can receive and store their deliveries of materials; all contractors can have access to the part of the project on which they are working , without interfering with each other's movements; 3-8 the total movement of contractors and their vehicles and materials is minimized far as possible. In practice, the effectiveness of a fixed-position layout such as this will be tied up with the scheduling of access to the site and the reliability of deliveries. On most sites there is not room to allocate permanent space to every contractor who will, at some time need access. Only the larger, more important or longer-term contractors are likely warrant permanent space. Other contractors will take up space on a temporary basis. This leaves the layout vulnerable to any disruptions to the planning and control of project. b. Process layout Process layout is so called because the needs and convenience of the transforming resources, which constitute the processes, dominate the layout decision. In process layout, similar processes (or processes with similar needs) are located together. This may be because it is convenient to group them together, or that the utilization or transforming resources is improved. It means that when products, information or customers flow through the operation, they will take a route from activity to activity according to their needs. Different products or customers will have different needs and therefore take different routes. Usually this makes the flow pattern in the operation is very complex. c. Cell layout A cell layout is one where the transformed resources entering the operation are pre-selected to move to one part of the operation (or cell) in which all the transforming resources, to meet their immediate processing needs, are located. The cell itself may be arranged in either a process or product layout. After being processed in the cell, the transformed resources may go on to another cell. In effect, cell layout is an attempt to bring some order to the complexity of flow which characterizes process layout. d. Product layout Product layout involves locating the transforming resources entirely for the convenience of the transformed resources. Each product, piece of information or customer follows a prearranged route in which the sequence of activities that are required matches the sequence in which the processes have been located. The transformed resources flow along a 'line' of processes. This is why this type of layout is sometimes called flow or line layout. 3-9 Flow is clear, predictable and therefore relatively easy to control. Usually it is the standardized requirements of the product or service which lead to operations choosing product layouts. e. Mixed Layouts Many operations either design themselves hybrid layouts which combine elements of some or all of the basic layout types, or use the 'pure' basic layout types in different parts of the operation. For example, a hospital would normally be arranged on process-layout principleseach department representing a particular type of process (the X-ray department, the surgical theatres, the blood-processing laboratory, and so on). Yet within each department, quite different layouts are used. The X-ray department is probably arranged in a process layout, the surgical theatres in a fixed-position layout, and the blood processing laboratory in a product layout. 8 What makes a good layout? Before considering the various methods used in the detailed design of layouts, it is useful to consider the objective of the activity. To a certain extent the objectives will depend on circumstances, but there are some general objectives which are relevant to all operations: Inherent safety -. All processes which might constitute a danger to either staff or customers should not be accessible to the unauthorized. Fire exits should be clearly marked with uninhibited access. Pathways should be clearly defined and not cluttered. Length of flow - The flow of materials, information or customers should be channelled by the layout so as to be appropriate for the objectives of the operation. In many operations this means minimizing the distance traveled by transformed resources. However, this is not always the case, as we saw in the supermarket, for example Clarity of flow - All flow of materials and customers should be well signposted , clear and evident to staff and customers alike. For example, manufacturing operations unusually have clearly marked gangways. Service operations often rely on signposted, such as in hospitals which often have different colour lines painted on the floor indicate the routes to various departments. Staff conditions – Staff should be located away from noisy or unpleasant parts operation. The layout should provide for a well-ventilated, well-lit and, where possible, pleasant working environment. Management coordination - Supervision and communication should be assisted location of staff and communication devices Accessibility – All machines, plant or equipment should be accessible to a degree is sufficient for proper cleaning and maintenance. 3-10 Use of space – All layouts should achieve an appropriate use of the total space a, in the operation (including height as well as floor space). This usually means minimizing the space used for a particular purpose, but sometimes can mean achieving an impression of spacious luxury, as in the entrance lobby of a high-class hotel. Long-term flexibility – Layouts need to be changed periodically as the needs of the operation change. A good layout will have been devised with the possible future of the operation in mind. For example, if demand is likely to increase for a product or service, has the layout been designed to accommodate any future expansion? 9 Detailed design in product layout Although the requirements of the product or service dominate product layout design, there are still many detailed design decisions to be taken. The nature of the design decision also changes a little. Rather than 'where to place what', product layout is concerned more with 'what to place where'. Locations are frequently decided upon and then work tasks are allocated to each location. For example, it may have been decided that four stations are needed to make computer cases. The decision is then which of the tasks that go into making the cases should be allocated to each of the four stations. This decision is called the line-balancing decision. Other product layout decisions are as follows: What cycle time is needed? How many stages are needed? How should the task-time variation be dealt with? How should the layout be balanced? How should the stages be arranged? 10 Capacity Management in Operations When looking at capacity, operations managers need to look at both resource inputs and product outputs. The reason is that, for planning purposes, real (or effective) capacity depends cii what is to he produced. For example, a firm that makes multiple products inevitably can produce more of one kind than of another with a given level of resource inputs. Thus, while the managers of an automobile factory may state that their facility has 10,000 labour hours available per year. they are also thinking that these labour hours can he used to make either 50,000 two-door models or 40,000 four-door models (or some mix of the two and tour-door models). This reflects their knowledge of what their current technology and labour force inputs can produce and the product Mix that is to be demanded front these resources. 3-11 ACTIVITY 4 (10 MINS) Evaluate the contemporary operations themes in detail with relevant examples. DEFINITIONS a. Aggregate planning: the process of determining the quantity and timing of production over an intermediate time frame. b. Level production: an aggregate planning strategy that produces units at a constant rate and uses inventory to absorb variations in demand. c. Chase demand: an aggregate planning strategy that schedules production to match demand and absorbs variations in demand by adjusting the size of the workforce. 10 Strategies for managing demand Aggregate planning can also involve proactive demand management. Strategies for managing demand include: Shifting demand into other time periods with incentives, sales promotions, and advertising campaigns; Offering products or services with countercyclical demand patterns; and Partnering with suppliers to reduce information distortion along the supply chain. 11 Strategies for adjusting capacity If demand for a company’s products or services is stable over time, then the resources necessary to meet demand are acquired and maintained over the time horizon of the plan, and minor variations in demand are handled with overtime or under time. Aggregate planning becomes more of a challenge when demand fluctuates over the planning horizon. For example, seasonal demand patterns can be met by: Producing at a constant rate and using inventory to absorb fluctuations in demand (level production) Hiring and firing workers to match demand (chase demand) Maintaining resources for high-demand levels Increasing or decreasing working hours (overtime and undertime) Subcontracting work to other firms Using part-time workers Providing the service or product at a later time period (backordering) 3-12 12 Level Position and Chase Demand The level production strategy, shown in Figure 3.2a, sets production at a fixed rate (usually to meet average demand) and uses inventory to absorb variations in demand. During periods of low demand, overproduction is stored as inventory, to be depleted in periods of high demand. The cost of this strategy is the cost of holding inventory, including the cost of obsolete or perishable items that may have to be discarded. The chase demand strategy, shown in Figure 3.2b, matches the production plan to the demand pattern and absorbs variations in demand by hiring and firing workers. During periods of low demand, production is cut back and workers are laid off. During periods of high demand, production is increased and additional workers are hired. The cost of this strategy is the cost of hiring and firing workers. This approach would not work for industries in which worker skills are scarce or competition for labour is intense, but it can be quite cost-effective during periods of high unemployment or for industries with low-skilled workers. Figure 3.2 Level production Vs Case demand 3-13 ACTIVITY 5 (30 MINS) Your task is to study the case below and answer these question (a) and (b) by: Hand calculation Excel spreadsheet 13 Quantitative Techniques for aggregate planning One aggregate planning strategy is not always preferable to another. The most effective strategy depends on the demand distribution, competitive position, and cost structure of a firm or product line. Several quantitative techniques are available to help with the aggregate planning decision. In the sections that follow, we discuss pure and mixed strategies. 3-14 QUICK QUIZ 1. Highly decoupled services have no line of visibility, since the customer cannot see much of the operation. True or False? 2. Process designs vary by: A. potential volume of production B. investment in technology C. type of job D. a and b 3. Which of the following perspectives applies to individual performance? A. Systems thinking B. Resource-based view C. Environmental analysis D. All of the above 4. As a Operations Manager, how would you improve the reliability of the process you are handling. 5. Why do operations fail and how can failure be measured? 6. Explain the main process types found in manufacturing and service organisations. ANSWERS TO QUICK QUIZ 1. 2. 3. 4. False D D Process Reliability Improvement a. Component design b. Production/assembly techniques c. Testing d. Redundancy/backups e. Preventive maintenance procedures f. User education g. System design 5. A brief discussion of the nature of failure the reasons why systems fail could be given, i.e., because of failures in design, people, equipment, suppliers or customers The importance of measuring failure in terms of failure rate (including bathtub curve), mean time between failures, reliability and availability could then be discussed. 6. Main process types found in manufacturing and service organisations. a. To explain the five generic process types are project, jobbing, batch, mass (line) and continuous. A summary of the characteristics of each type should be given along with specific examples. Similarly, the characteristics of the four process types found in service organisations should be described i.e professional, mass, service shops and service factories. b. To provide an overview of process types in both manufacturing and services with limited examples. c. To discuss how service providers can be differentiated according to labour intensity and customisation. d. To discuss how process types vary with respect to repeatability and standardisation,flexibility and planning/control complexity, lead time and inventory, technology and capital investment. e. To provide detailed array of examples linking either manufacturing or services and organisational objectives. 3-15 ANSWERS TO ACTIVITIES Activity 1: 1. Which of the five operations performance objectives (quality, speed, dependability, flexibility and cost) are the most important to build into the design of VBA's process, and why? Quality -The company itself would place quality very much at the top of the list and flexibility towards the bottom. Quality – VBA’s service is based on the trust which it has established both with growers and buyers. This involves an implicit guarantee of the quality and freshness of the flowers. Cost – Cost is an important objective primarily to the company itself. The whole company’s operations are based on high volume. It is, after all, the largest operation of its type in the world. Also, the company have invested in the information technology and materials handling technology which standardizes the service, thus reducing costs further. However, cost is also important to the buyers. If the operation were not efficient, then the buyers may find it cheaper to buy directly from the growers. The transaction costs of VBA must be sufficiently low to prevent this happening. Dependability – In this case, dependability means that a range and quantity of flowers are available for buyers to purchase if they wish and also, that the company are able to guarantee to the growers that flowers will be available for sale at the time promised. Lack of dependability in terms of interruption to the supply of flowers would destroy the trust of both buyers and growers. Speed – Speed is only important up to a point. Obviously, the flowers cannot be kept within the total supply chain for too long, otherwise it would reduce their ‘shelf life’ when they eventually reached the shop. Flexibility – The flexibility of this operation is not high. If it was, they could not achieve the economies of scale and efficiencies of standardization. 2. How does process technology help this operation to achieve its objectives? In two main ways. First, the information technology acts as an interface between the buyers and the operation itself. So, while sitting in the auction hall, buyers can indicate (to a fraction of a second) when the price is at a level where they wish to purchase. They are able to do this because, information about the flowers has already been conveyed to them electronically and the purchase is able to be recorded because the information system detects their bid and immediately allocates those flowers to their account. This efficient process substitutes for the verbal exchanges and communications which normally take place at an auction. The second way in which technology helps the process is, by transporting the flowers from the loading bays through the warehouse to the auction hall and eventually, to the trucks which will ship them to their destination. This technology uses standardized trolleys for ease of handling and, again, is integrated with the information technology in order to keep track of which flowers are where. 3. Sketch the flow of flowers in the VBA operation. What do you think are the critical points in this flow? In fact, there is not sufficient information in the case to draw a definitive flow chart. That is not the point of the question. This question is best used to get students to debate what the flow might be and distinguish between the nature of the activities at different stages. So, some stages will be critical. For 3-16 example, the check-in recording of the flowers as they enter the warehouse and are loaded onto the trolleys is the basis for inspection, acceptance and the documentation of the characteristics of the flowers. It is a point at which, failure would have a profound impact on the integrity of the whole system. Activity 2: 1. List the range of variables that you might want to simulate in an operation that processes a car insurance business. Variables would include the following: Number and size of individual call centres Different degrees of ability to switch calls between call centres in response to demand variation Average level of demand Different demand patterns Different degrees of unpredictability (short term) of demand Average call time Distribution of call times around the average Change in average and distribution of call times Level and variation in absenteeism amongst call centre staff Likelihood of disruption to incoming calls Ability of operators to satisfactorily answer customer queries Different levels of staff IT support (to help them answer customer queries) 2. How would you justify spending a large amount of money on building a computer simulation model for a new car assembly plant? Any justification would have to be based on the computer simulation’s ability to: Explore options for the design of the assembly plant Highlight potential design flaws that could reduce the efficiency and effectiveness of the plant Predict the assembly plant’s response to variation in demand and/or the activities it is asked to perform The justification must demonstrate that the money spent on the simulation itself will be less than the money saved by improving the design of the plant plus the money saved by the plant being able to change its way of operating in the future. Activity 3 A starting point could be to give a definition and overview of process technology explaining what it is and how it relates to operations management. The three most significant types of process technology need to be explained in some detail i.e. a) materials processing technology e.g. computer numerically controlled machine tools, robotics, automatic guided vehicles, flexible manufacturing systems and computer integrated manufacturing. b) information processing technology processing technology e.g. centralised and de-centralised (including LANS), telecoms and information technology (including www), management information system of various kinds. c) customer processing technology, e.g. involving customer interactions and interactions via an intermediary. A discussion of implementation and evaluation of technology strategies in organisation are required. 3-17 Activity 4 1. Services and manufacturing merging. 2. Customer directed operations 3. Lean activities 4. Integration of operations with other functions 5. Environmental concerns and sustainability 6, Supply Chain Management initiatives 7. Globalization of operations. Activity 5 By Hand calculation: 3-18 By Excel spreadsheet CHAPTER ROUNDUP The idea of process types and the various designs helps to reinforce the distinction between the different types of processes used in the field of operations management, both for products and services. 3-19 Operation managers use process design and strategy to encourage the development of efficient equipment and processes. They design their equipment and processes to have capabilities that will satisfy the customers. The different concepts and diagrams on the layout and flow is critical for any organization to use it's resources effectively and efficiently, with the objective of eliminating waste. Layouts make a substantial difference in operating efficiency. For this reason layout decisions is sometimes considered something of an art. Aggregate planning is critical for companies with seasonal demand patterns and for services. Variations in demand can be met by adjusting capacity or managing demand. REFERENCES 1. Operations Management by Nigel Slack, Publisher : Prentice Hall 2. Operations Management by Schroeder, Contemporary Concepts and Cases Publisher : McGraw Hill 3. Operations Management by Russell,& Benard W. Taylor, Crating Value Along the Supply Chain 7th edition , John Wiley and Sons 4. Operations Management by Chase. Richard B. & Nicholas J. Aquilano., Operations Management for competitive advantage, 11th edition, McGraw Hill 3-20
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