Week 1 Cycle time= throughput time/WIP Effectiveness of layout (where costs are different) =
4 V’s Percentage throughput efficiency= (work Σ𝐹𝑖𝑗𝐷𝑖𝑗𝐶𝑖𝑗.
Volume dimension= # products/services made. content/TPT)*100 Cij – the cost per distance travelled of making a
Variety dimension= # types products/services. TE=Sum PTs/(Sum PTs+Sum WTs) journey between departments i and j.
Variation dimension= level of demand change over Change in the supply network can happen through: Long means the number of stages and fat means the
time. - Disintermediation= bypassing customers or amount of work allocated to each stage.
Visibility dimension= internal work exposed to suppliers to make contact directly with customers’ The advantages of the long thin arrangement:
customers. customers or suppliers’ suppliers. - Controlled flow of materials or customers - Simple
Triple bottom line - Co-opetition= Companies cooperate with each other materials handling - Lower capital requirements -
- Environmental – Social – Economic to reach higher value creation if compared to the More efficient operation – more productive at each
Operations performance measure value created without interaction and struggle to stage since only one type of work
- Quality – Speed – Dependability – Flexibility – Cost. achieve competitive advantage. The advantages of the short fat arrangement:
Sandcone Theory - Outsourcing= deciding to buy in products or services - Higher mix flexibility – If the layout needs to process
- Foundation for 4 dimensions is quality. rather than perform the activities in-house. several types of product or service, each stage or line
- To improve speed, flexibility & cost, you need a - Offshoring= obtaining products or services from could specialize in different types. - Higher volume
stable foundation of dependability. operations that are based outside one’s own country. flexibility - Higher robustness - Less monotonous
- To improve flexibility and cost, you need good speed The location decision for any operation is work
performance. determined by: Week 3
- To improve cost, you need good flexibility - Supply-side influence ERP= Enterprise resource planning= allows
capabilities. *Labor costs *Land costs *Energy costs organization to use a system of integrated
4 stages of operations contribution (hayes & *Transportation costs *Community factors (local tax applications to manage the business and automate
wheelwright) rates, political) many back office functions related to technology,
- Internal/external neutrality - Demand-side influences services, and human resources.
- Internal/external supportive *Labor skills *The suitability of the site itself *Image Benefits:
Polar representation= shows importance of of the location *Convenience for customers - Absolute visibility of what is happening.
performance objectives for product/services. Weighted-score method – evaluates locations - The discipline of forcing business-process-based
Strategic positioning= the overall intended objectives 1. identify the criteria which will be used to evaluate changes is an effective mechanism for making all
and approach to a situation. the various locations. 2. establish the relative parts of the business more efficient.
Competitive Strategy= avoiding commoditization, importance of each criterion & giving weighting - It enables far more sophisticated communication
increasing differentiation, uniqueness, unable to be factors to them. 3. rate each location according to with customers, suppliers, and other business
imitated. each criterion. The scale of the score is arbitrary. partners, often giving more accurate and timely
Operations strategy= strategic focal points. Center-of-gravity method – find a location which information.
Efficiency frontier= strategic position determines minimizes transportation costs. - It is capable of integrating whole supply chains,
which dimension to focus on. Increase technology, Layout= how its transforming resources are including suppliers’ suppliers and customers’
shifting outward of efficiency frontier. positioned relative to each other & how carious tasks customers.
Why? Shows consistent pattern, coordination, are allocated to these transforming resources. - It is based on client-server architecture; that is,
focus/priorities. Fixed-position layout= used for project processes & access to the information systems is open to anyone
Week 2 professional services. whose computer is linked to central computers.
Functional layout= different products or services Problems:
need different resources & therefore take different - Total cost is likely to be underestimated.
links variety. Onder volume routes. diepvriesware in 1 vriesvak. - Time and effort to implement it is likely to be
Project processes – deal with discrete, usually highly 3 traffic patterns. underestimated
customized products; often with long timescale - Browsers= seek useful material - Destination traffic - Changes required to business processes will be more
between the completion of each item, where each - Beeline traffic= goals unconnected with personal than anticipated
job has a well-defined start and finish. use of library. - There will never be enough training
Jobbing processes= deal with high variety and low Servicescape= describes the look and feel of the - Level of outside expertise required will be more
volumes. However, while in project processes each environment within an operation. than anticipated
item has resources devoted more or less exclusively Process Types MRP= Materials requirements planning= dependent
to it, in jobbing processes each product has to share Flow Shops (product/line layout): Limited number of demand system that calculate materials
the operation’s resources with many others. standardized products – jobs & customers follow requirements and production plans to satisfy orders.
Batch processes= each time batch processes produce same route Closed-loop systems (MRP) use three planning
more than one item at a time. So each part of the - Mass/continuous production/assembly line - routines to check production plans against the
process has periods when it is repeating itself, at least Minimal WIP buffer (highly sensitive) - Short TT, high operation’s resources at three levels:
while the ‘batch’ is being processed. volume, low customization - Resource requirements plans (RRPs) involve looking
Mass processes= those which produce items in high Job Shops (functional layout): fixed # resources, but forward in the long term to predict the requirements
volume and relatively narrow variety. Repetitive and non-standard steps for large structural parts of the operation, such as the
largely predictable. - Typically functional layout, transformed resources numbers, locations and size of new plants.
Continuous processes= even higher volume and move – more robust against disruptions - eg) clinical - Rough-cut capacity plans (RCCPs) are used in the
usually lower variety than mass processes. They pathway, customized product, groceries medium to short term, to check the master
usually operate for longer periods of time. Projects (fixed): process and resources built for a production schedules against known capacity
Professional services= high-contact processes where specific job bottlenecks
customers spend a considerable time in the service - Typically fixed position (clients/material) layout - - Capacity requirements plans (CRPs) look at the day-
process. They can provide high levels of Long TT, low volume, high customization. to-day effect of the works orders issued from the
customization. Trade-off: Waiting time vs. High utilization MRP on the loading individual process stages.
Service shops= levels of volume and variety between Detailed design in functional layout – For N centers Week 4
the extremes of professional and mass services. there are N! different ways of arranging the centers: Dependent demand= Demand for the product in
Service is provided via mixes of front- and back-office N! = N* (N-1) * (N-2) * … * (1). question is influenced by the demand for some other
activities. (high street shops, car rental companies, Effectiveness of layout (where costs of operations are product (car tires in a car plant).
schools) the same) = Σ𝐹𝑖𝑗𝐷𝑖𝑗 >> the lower the number the Independent demand= Influenced by economic
Mass services= Staff are likely to have a relatively better it is. factors external to the demand-supply model such as
defined division of labor and have to follow set Fij= the flow in loads or journeys per period of time general consumer sentiment and consumers’
procedures. (Supermarkets, an airport, from work center I to work center j. available disposal income.
telecommunications service) Dij – the distance between work center I and work The P:D ratio of an operation indicates how long the
Throughput time= work in progress * cycle time. center j. customer has to wait for the service or product as
4 V’s Percentage throughput efficiency= (work Σ𝐹𝑖𝑗𝐷𝑖𝑗𝐶𝑖𝑗.
Volume dimension= # products/services made. content/TPT)*100 Cij – the cost per distance travelled of making a
Variety dimension= # types products/services. TE=Sum PTs/(Sum PTs+Sum WTs) journey between departments i and j.
Variation dimension= level of demand change over Change in the supply network can happen through: Long means the number of stages and fat means the
time. - Disintermediation= bypassing customers or amount of work allocated to each stage.
Visibility dimension= internal work exposed to suppliers to make contact directly with customers’ The advantages of the long thin arrangement:
customers. customers or suppliers’ suppliers. - Controlled flow of materials or customers - Simple
Triple bottom line - Co-opetition= Companies cooperate with each other materials handling - Lower capital requirements -
- Environmental – Social – Economic to reach higher value creation if compared to the More efficient operation – more productive at each
Operations performance measure value created without interaction and struggle to stage since only one type of work
- Quality – Speed – Dependability – Flexibility – Cost. achieve competitive advantage. The advantages of the short fat arrangement:
Sandcone Theory - Outsourcing= deciding to buy in products or services - Higher mix flexibility – If the layout needs to process
- Foundation for 4 dimensions is quality. rather than perform the activities in-house. several types of product or service, each stage or line
- To improve speed, flexibility & cost, you need a - Offshoring= obtaining products or services from could specialize in different types. - Higher volume
stable foundation of dependability. operations that are based outside one’s own country. flexibility - Higher robustness - Less monotonous
- To improve flexibility and cost, you need good speed The location decision for any operation is work
performance. determined by: Week 3
- To improve cost, you need good flexibility - Supply-side influence ERP= Enterprise resource planning= allows
capabilities. *Labor costs *Land costs *Energy costs organization to use a system of integrated
4 stages of operations contribution (hayes & *Transportation costs *Community factors (local tax applications to manage the business and automate
wheelwright) rates, political) many back office functions related to technology,
- Internal/external neutrality - Demand-side influences services, and human resources.
- Internal/external supportive *Labor skills *The suitability of the site itself *Image Benefits:
Polar representation= shows importance of of the location *Convenience for customers - Absolute visibility of what is happening.
performance objectives for product/services. Weighted-score method – evaluates locations - The discipline of forcing business-process-based
Strategic positioning= the overall intended objectives 1. identify the criteria which will be used to evaluate changes is an effective mechanism for making all
and approach to a situation. the various locations. 2. establish the relative parts of the business more efficient.
Competitive Strategy= avoiding commoditization, importance of each criterion & giving weighting - It enables far more sophisticated communication
increasing differentiation, uniqueness, unable to be factors to them. 3. rate each location according to with customers, suppliers, and other business
imitated. each criterion. The scale of the score is arbitrary. partners, often giving more accurate and timely
Operations strategy= strategic focal points. Center-of-gravity method – find a location which information.
Efficiency frontier= strategic position determines minimizes transportation costs. - It is capable of integrating whole supply chains,
which dimension to focus on. Increase technology, Layout= how its transforming resources are including suppliers’ suppliers and customers’
shifting outward of efficiency frontier. positioned relative to each other & how carious tasks customers.
Why? Shows consistent pattern, coordination, are allocated to these transforming resources. - It is based on client-server architecture; that is,
focus/priorities. Fixed-position layout= used for project processes & access to the information systems is open to anyone
Week 2 professional services. whose computer is linked to central computers.
Functional layout= different products or services Problems:
need different resources & therefore take different - Total cost is likely to be underestimated.
links variety. Onder volume routes. diepvriesware in 1 vriesvak. - Time and effort to implement it is likely to be
Project processes – deal with discrete, usually highly 3 traffic patterns. underestimated
customized products; often with long timescale - Browsers= seek useful material - Destination traffic - Changes required to business processes will be more
between the completion of each item, where each - Beeline traffic= goals unconnected with personal than anticipated
job has a well-defined start and finish. use of library. - There will never be enough training
Jobbing processes= deal with high variety and low Servicescape= describes the look and feel of the - Level of outside expertise required will be more
volumes. However, while in project processes each environment within an operation. than anticipated
item has resources devoted more or less exclusively Process Types MRP= Materials requirements planning= dependent
to it, in jobbing processes each product has to share Flow Shops (product/line layout): Limited number of demand system that calculate materials
the operation’s resources with many others. standardized products – jobs & customers follow requirements and production plans to satisfy orders.
Batch processes= each time batch processes produce same route Closed-loop systems (MRP) use three planning
more than one item at a time. So each part of the - Mass/continuous production/assembly line - routines to check production plans against the
process has periods when it is repeating itself, at least Minimal WIP buffer (highly sensitive) - Short TT, high operation’s resources at three levels:
while the ‘batch’ is being processed. volume, low customization - Resource requirements plans (RRPs) involve looking
Mass processes= those which produce items in high Job Shops (functional layout): fixed # resources, but forward in the long term to predict the requirements
volume and relatively narrow variety. Repetitive and non-standard steps for large structural parts of the operation, such as the
largely predictable. - Typically functional layout, transformed resources numbers, locations and size of new plants.
Continuous processes= even higher volume and move – more robust against disruptions - eg) clinical - Rough-cut capacity plans (RCCPs) are used in the
usually lower variety than mass processes. They pathway, customized product, groceries medium to short term, to check the master
usually operate for longer periods of time. Projects (fixed): process and resources built for a production schedules against known capacity
Professional services= high-contact processes where specific job bottlenecks
customers spend a considerable time in the service - Typically fixed position (clients/material) layout - - Capacity requirements plans (CRPs) look at the day-
process. They can provide high levels of Long TT, low volume, high customization. to-day effect of the works orders issued from the
customization. Trade-off: Waiting time vs. High utilization MRP on the loading individual process stages.
Service shops= levels of volume and variety between Detailed design in functional layout – For N centers Week 4
the extremes of professional and mass services. there are N! different ways of arranging the centers: Dependent demand= Demand for the product in
Service is provided via mixes of front- and back-office N! = N* (N-1) * (N-2) * … * (1). question is influenced by the demand for some other
activities. (high street shops, car rental companies, Effectiveness of layout (where costs of operations are product (car tires in a car plant).
schools) the same) = Σ𝐹𝑖𝑗𝐷𝑖𝑗 >> the lower the number the Independent demand= Influenced by economic
Mass services= Staff are likely to have a relatively better it is. factors external to the demand-supply model such as
defined division of labor and have to follow set Fij= the flow in loads or journeys per period of time general consumer sentiment and consumers’
procedures. (Supermarkets, an airport, from work center I to work center j. available disposal income.
telecommunications service) Dij – the distance between work center I and work The P:D ratio of an operation indicates how long the
Throughput time= work in progress * cycle time. center j. customer has to wait for the service or product as
