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Lesson 2 Facility Management. Operations Management. What you will learn in this unit: Facilities Management Location Decisions Layout Decisions Logistic Decisions Labour Decisions Technology Choice and Selection. Facilities Management.

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Operations Management

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Operations management

Lesson 2

Facility Management

Operations Management

Operations management

What you will learn in this unit:

  • Facilities Management

  • Location Decisions

  • Layout Decisions

  • Logistic Decisions

  • Labour Decisions

  • Technology Choice and Selection

Facilities management

Facilities Management

Facilities management is the process of managing and improving capital investment of the organisation, these involves where to locate the operations, what are the layout to use, what logistic means that best for operations optimisation, who to engage to deliver the goods/services and what technologies to be utilised.

Operations management

Location Decision

Location is the geographical positioning of an operation relative to the input resources, other operations or customers with which it interacts (Slack, 2001).

Importance of location

  • It have significant impact on cost

  • Impact on speed of service

  • Attracting labour

  • Availability of raw materials

Operations management

The location of operations






Labour costs

Labour skills

Land costs

Suitability of


Energy costs





for customers



Site selection factors

Site Selection Factors

  • Historical – corporate towns

  • Inherent Local Conditions

  • Climate

  • Culture

  • Ethics

  • Language

Site selection factors1

Site Selection Factors

  • Staffing

  • Labour Costs

  • Social Laws

  • Labour Competency

  • Productivity

  • Trade Unions

  • Education Level

  • Technological Sophistication

  • Labour Mix

Site selection factors2

Site Selection Factors

  • Infrastructure

  • Family Services

  • Communications

  • Environmental Regulations

  • Legal Framework

  • Transportation

  • Rental costs

  • Living Costs

  • Country Stability

Site selection factors3

Site Selection Factors

  • Construction

  • Land Cost

  • Construction Labour

  • Land Preparation

  • Expansion Possibilities

  • Zoning Regulations

  • Environmental Regulations

  • Materials Availability

Site selection factors4

Site Selection Factors

  • Cash Flow Considerations

  • Exchange Rates

  • Repatriation of Funds

  • Taxes

  • Financial Aid

Site selection factors5

Site Selection Factors

  • Proximity of Resources

  • Raw Materials

  • Process & Utility Water

  • Power Supply

  • Suppliers & Subcontractors

  • Convenience for Customers

Layout decision

Layout – deciding where to put all the facilities, machines, equipment & staff in an operation (Slack, 2001)

Layout Decision

Why is layout design important

Why is layout design important?

  • Require substantial investments of resources

  • Involve long term commitments – not easily changed

  • Impact on the cost & efficiency of short term operations

Operations management

The facilities layout decision procedure

Project process

Decision 1

Volume and

Jobbing process


Batch process

Process type

Mass process

Continuous process

Decision 2



Fixed position layout

Basic layout type


Process layout

Cell layout

Product layout

Decision 3

Detailed design

The physical position of all

of layout

transforming resources

Flow of transformed resources

Operations management

Basic layout types



asic layout


process types


process types


Project processes

Project processes


position layout


Jobbing processes

Process layout

Service shops

Batch pro


Cell layout

Mass services



Product layout





Fixed position layout

Fixed Position Layout

  • Transformed resources remain stationary

  • Transforming resources move as necessary

  • Effectiveness is governed by:-

  • Scheduling of transforming resources

  • Reliability of transforming resources

  • Eg’s – shipbuilding, construction projects, some surgery, restaurant

Process layout

Process Layout

  • Similar processes (or with similar needs) are located together

  • Utilisation of transforming resources is improved

  • Transformed resources move through the operation according to their needs

  • Different products  different needs different routes

  • May be very complex

  • Eg’s – supermarkets, some machine manufacture

Cell layout

Cell Layout

  • Machines or services grouped into cells

  • Cells determined by the process requirements of the family of product/services they transform

  • Could be considered mini product layouts

  • Can simplify a functional/process layout

  • Flexible

  • Duplicates some resources

Product layout

Product Layout

  • Locates the transforming resources entirely for the convenience of the transformed resources

  • Transformed resources follow a specified route

  • Flow is clear, predictable, easy to control

  • Eg’s – car assembly, paper manufacture, self-service cafe

Operations management


olume-variety characteristics






position layout

Process layout


Cell layout

Product layout


What makes a good layout

What makes a good layout

  • Safety

  • Length of flow

  • Clarity of flow

  • Staff comfort

  • Management coordination

  • Accessibility

  • Space utilisation

  • Long term flexibility

Logistic decisions

Logistic Decisions

Logistic decision takes into consideration the flow of goods, information and financial resources therefore firms would have identify the necessary resources to support their operation.

Operations management

  • Public Logistics

  • Internal or Channel (Outbound) Logistics

  • Information Logistics

  • Supplier Logistics

Labour decisions

Labour Decisions

  • Labour decisions that focus on the human resources that help to ensure the operation process are optimise.

Operations management


The process of determining the requirements of the job

Job analysis

Job Analysis

  • The process of developing a detailed description of the tasks and responsibilities involved in a job,

  • determining the relationship of a given job to other jobs, and

  • ascertaining the knowledge, skill and abilities necessary for an employee to perform the job successfully.

Tangible outcomes of job analysis

Tangible outcomes of job analysis

Job description:

A written description of a job, the types of duties performed and the conditions under which these duties are performed

Person specification:

Details the qualifications, experience and personal qualities required of suitable job-holders

Job design:

Concerns the satisfaction

of the job holder’s


Operations management

Human engineering

  • Aims to identify and respond to worker needs in the performance of their jobs

  • Adapts work environment and equipment to the person

  • Can improve efficiency and create a more harmonious work environment

Operations management

Job design strategies

  • Job enlargement

  • Job rotation

  • Job enrichment

  • Self-managing work teams

  • Adjustments in work schedules

Technology decision

Technology Decision

  • IT Technology

  • Manufacturing technology

  • Technology patents and processes

  • R&D technology

  • Material technology

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