Thought for the day:

1. Thought for the day: “Think ahead. Don't let day-to-day operations drive out planning.”

2. OperationsOperations strategies

3. Get an A A Grade To what extent, Evaluate, discuss, justify, advise, recommend. Band 6 Evaluation Apply, Examine, Analyse, Interpret, Formulate. Band 5 Application & Analysis Compare, Contrast, distinguish,, construct, calculate, explain. Band 4 Understand Define, Clarify, describe, extract, identify, outline, recall, recount, state summarie Band 2/3 Knowledge

4. operations strategies-syllabus • performance objectives – quality, speed, dependability, flexibility, customisation, cost • new product or service design and development • supply chain management – logistics, e-commerce, global sourcing • outsourcing – advantages and disadvantages • technology – leading edge, established • inventory management – advantages and disadvantages of holding stock, LIFO (last-in-first-out), FIFO (first-in-first-out), JIT (just-in-time) • quality management • ControlAssuranceimprovement • overcoming resistance to change – financial costs, purchasing new equipment, redundancy payments, retraining, reorganising plant layout, inertia • global factors – global sourcing, economies of scale, scanning and learning, research and development

5. Operations Strategies • To achieve operations goals and broader business goals, operations managers can apply numerous operations strategies. • Overview of the operations strategies

6. Operations strategies are based around the need to achieve performance objectives. • These performance objectives help define what inputs are required and influence all aspects of the transformation processes.

7. Performance objectives • When dealing with the operations function of business, there are particular performance objectives that are targeted by managers. • Performance objectives are goals that relate to particular aspects of the transformation processes. • These objectives or targets will be set so that the business becomes more efficient, productive and profitable.

8. Performance objectives • The six main performance objectives that can be allocated to particular • key performance indicators (KPIs) are: • • quality • speed • dependability • flexibility • customisation • cost. • KPIs – a specific criteria used to measure the efficiency and effectiveness of the businesses’ performance (pg 46)

9. Performance objectives • – Qualityincluding: • • design — how well a good is made or a service is delivered• conformance—how well the good or service meets a prescribed design with a certain specification• service — how reliable, suitable and timely the service delivery is. • – Speed: the time it takes for the production and the operations processes to respond to changes in market demand.

10. Performance objectives • –  Dependability: how consistent and reliable a business’s goods or services are. • –  Flexibility: how quickly operations processes can adjust to changes in the • market. • –  Customisation: the creation of individualised goods or services to meet the • specific needs of the customers. • –  Cost: the minimisation of expenses so that operations processes are • conducted as cheaply as possible. • • Each of the performance objectives will be allocated targets or goals.

11. ACTIVITY: • #3. (pg 77) • Complete a concept map to summarisethe three quality performance objectives. • ………The concept map has been started for you.

12. Activity: • (pg77) • 4  Demonstrate what is meant by the term ‘speed’ in relation to operations processes. • 5  Recall three goals for speed. • 7  Explain the relationship between dependability and the number of warranty claims or complaints received. • 8  Describe how flexibility of processes is linked to market demand. • 9  Explain why full customisation of products is rare. • 10  Account for why many businesses offer mass customised products. •  Identify three operational strategies a business can use to reduce cost.

13. Extension:

14. ACTIVITY – pg 81 • Class discussion: • Account for why Apple is successful even though it does not base its product design and development on market research.

15. New product or service design and development • An important strategy for the operations processes of business is the creation, or design and development, of new products (goods and services). • The design, development, launch and sale of new products enables a business to grow and to attain a competitive advantage. • Activity: Note key points - Pg 78 –> 80 – 4.2 • New product or service design and development

16. A business needs to design and develop new products and services. • There are two different approaches that determine product design and • development: • –  consumer preferences • –  changes and innovations in technology. • Important factors in new product design and development include: • –  quality • –  supply chain management • –  capacity management • –  cost.

17. Service design and development differs from the design and development of products as services are intangible and ‘consumed’ as they are produced. • A service can be: • –  explicit — the application of time, expertise, skill and effort • –  implicit — the feeling of being looked after.

18. New Product Development Process • Concept development – Many ideas are discussed and assessed and screened to reduce the list to more viable ideas. • Cost benefit analysis – Economic analysis to determine if the product is worth pursuing based on estimated sales and costs. • Production design – Engineers design the product, work through technical difficulties and create features that meet predicted customer wants. Production costs determined. • Product testing – feedback from testing and market research may indicate further changes to design are needed.

19. ACTIVITY – pg 81 • 3 Summarisethe four factors that must be given consideration when undertaking new product design and development. • 4  Explain the role of the customer or client in the design and development of a service. • 5  (a) Compare explicit service with implicit service. • (b) Outline the relationship between explicit service and implicit service. • Extension • 2 We figure out what we want... So you can’t go out and ask people, you know, what’s the next big [thing]. There’s a great quote by Henry Ford, right? He said, ‘If I’d have asked my customers what they wanted, they would have told me “A faster horse”’. • Steve Jobs, Apple CEO. • Assess the accuracy of this statement.

20. Guess Who • Pick a definition • Group asks questions – can only answer yes or no. Work around the circle.

21. One of these things is not like the others... Play Write which you think is the odd one out and why…..

22. One of these things is not like the others... Play Key Outsourcing Performance Indicators

23. One of these things is not like the others... Play –Key Performaceobjective (KPIs) Key Outsourcing Performance Indicators

24. One of these things is not like the others... Play Design Conformance Service Transformation

25. One of these things is not like the others... Play –Performance objective of quality Design Conformance Service Transformation

26. One of these things is not like the others... Play Quality Technology Flexibility Speed

27. One of these things is not like the others... Play –Performace objective KPIs Quality Technology Flexibility Speed

28. Supply chain management • Supply chain management (SCM) involves integratingand managing the flow of supplies throughout the inputs, transformation processes (throughput and value adding) and outputs in order to best meet the needs of customers.

29. Supply chain management • Note 4.3 - Pg 81 – 87 ‘4 – 5 key words under each heading’ • Sourcing • -supplier rationalization • -Backwards vertical integration • -cost minimization • Global Sourcing • Ecommerce • -Business sourcing & ecommerce • - Ecommerce & the consumer • Logistics • -distribution • -transportation & distribution • -storage, warehousing & distribution centers • -Materials handling and packaging

30. Pictionary • – Operation Business words

31. write down everything you ‘know/ can think of’ about outsourcing

32. Read: • http://www.wisegeek.org/what-is-outsourcing.htm • (google ‘wise geek outsourcing’ first hit)

33. Outsourcing • Outsourcing involves the use of external providers to perform business activities. • The theory behind outsourcing is that when a service is performed by an external provider that specialises in a particular business function, it will do so at a lower cost and with a greater effectiveness than the same task done within the business hierarchy. • The term ‘outsourcing’ is often called business process outsourcing (BPO).

34. Outsourcing • Business process outsourcing is a term that captures a range of outsourced business processes including: • operations such as manufacturing, value-adding manufactures, design, merchandising, sourcing, distribution and logistics • human resources including employee remuneration, employee counselling, pensions, data management, training and development, and travel and expenses management • administrative work including data entry and ‘back office’ work • information technology (IT) including data work, desktop outsourcing and network outsourcing (remotely hosted software applications)

35. Outsourcing • Other types of outsourcing include: • Finance and accounting outsourcing (FAO)including preparation of financial accounts and reports, analytics, and taxation compliance • Knowledge process outsourcing (KPO) including the outsourcing of managerial work such as marketing strategy, public relations and management decision making • Legal process outsourcing (LPO) including paralegal support, legal support (including drafting, research and counsel) and other legal services (such as patents and trademarks).

36. The outsourcing decision • Before a business decides to use outsourcing as an operations strategy, • operations managers need to assess whether the use of outsourcing is viable.

37. The outsourcing decision • What are the factors that must be considered when assessing whether and when to use outsourcing (pg 89 – 90) – next slide…

38. The outsourcing decision • The factors that must be considered when assessing whether and when to use outsourcing are: • Whether to outsource or not: this requires assessing whether the use of outsourcing is cheaper and more efficient that performing the work in-house. • If deciding to outsource, the managers must decide which geographical location is favoured. • The managers must also decide which vendors to use. • If the decision is to outsource then details such as the management of the outsourcing contract, the length of contract, the KPIs and service levels are required.

39. There are four different outsourcing options that can be used:

40. Outsourcing Options… questions… • Which outsourcing service can then outsource the service? • Which is offshore and uses external organisations? • Which is a short term stratagey? • Which is in-house? • Which is the lowest risk? • Which involves re-locating services? • Which is best if you want to ‘test the water?” of outsourcing?

41. Outsourcing Options… answers… • Which outsourcing service can then outsource the service? (Joint venture) • Which is offshore and uses external organisations? (Build-operate-transfer) • Which is a short term stratgey? (Fee-for service) • Which is in-house? (Creation of shared Centers) • Which is the lowest risk? (Fee-for service) • Which involves re-locating services? (Build-operate-transfer) • Which is best if you want to ‘test the water?” of outsourcing? (Fee-for service)

42. The incidence of outsourcing, either domestically or globally, is increasing worldwide, with business structures changing to benefit from lower cost and greater efficiency. • Outsourcing can be highly beneficial for businesses, but it also can present a number of significant challenges or issues.

43. Outsourcing: the advantages and disadvantages Play(7mins 30 sec)

44. Outsourcing: the advantages and disadvantages advantages disadvantages –  the cost and uncertainty associated with payback –  issues with communication and language –  loss of control of standards and information security –  loss of corporate memory and costs associated with IT, organisational change, redesign and management of hierarchies. • –  simplification • –  efficiency and cost savings • –  increased process capability • –  increased accountability • –  access to skill/resources lacking within the business • –  provides a capacity to focus on core competencies thus improvingin-house • performance and several strategic benefits.

45. Class E/B

46. Class B

47. Technology — leading edge, established • Outcome: You can explain the difference betweenleading edge and established technology .

48. Technology — leading edge, established • External influence: Technological change. • Technology – the equipment and knowledge that are available to help the business perform certain functions or make products. • Technology can result in: • The development of new methods of production • Allows the business perform tasks quicker & lower cost!

49. Technology — leading edge, established • The OperMgr needs to be aware of technology and assess its application in the business. • Mgr must weigh up the costs (upgrade vs long term benefit). • These notes come from: Pg 71 Cambridge

50. Technology — leading edge, established • When making the decision – must take into consideration: • The speed of change taking place in that area of technology • The technology that competitors are using • The finance available for change in technology • How long it will take to introduce the technology • Whether staff need to be retrained or made redundant.