Operations management and business optimization
Week 1:
OM
Principles
- Relation to an organization’s
strategy
- Customers
- Stakeholders
- Control of daily operations
All operations are input-transformation
output processes
Four V’s in operations
- Volume (of the output)
- Variety (of the output)
- Variation (in the demand
for their output)
- Visibility (degree of which
customers have of the
creation of their output)
Goal of 4V
- A tool to understand how
operations are positioned
- Gain insight how to
manage an operation
based on the 4V
- By meaning of a line displaying each high low V, it can be visualized
what the distribution in the company is like
Performance objectives (CDFSQ)
1. Quality (be right)
- Specification of a product or service (eg; organic exclusively
meat)
- The consistent conformance to customers’ expectations (quick
service Mcdonalds)
2. Speed (being fast)
- Elapsed time between a customer asking for a product or
service and getting it
3. Dependability (trustworthy and reliable; being on time)
- Doing things in time for customers to receive product or
services exactly when they are needed or promised. (Flight
arrives on time)
4. Flexibility (ability to change)
, - Increased ability of operations to do different things for
different customers
5. Cost (being productive)
BO
Business planning
+ avoid competitors
- Enter attractive industry – then build entry barriers
- Find attractive niche – develop isolating mechanisms
- Join attractive strategist group – build barriers against similar
new entrants
+ better than competitors
- Cost advantage
- Differentiation advantage
Type of risk
- Operational risk
- Input risk
- Tax risk
- Regulatory risk
- Legal risk
- Financial risk
- Product market risk
3-flow model (A/D/T)
Arriving, departing, and transferring flow
Predictable flow.
- Baggage; linear process and
automated
- Aircraft: complex interchange
but planned
- Passengers; self-propelled
towards and from aircraft
Unpredictable flow
- Passengers: intermediate processes (security, immigration)
are not in control
- Aircraft; partly linear/in control and partly parallel/in control
System diagram
Problem owner objectives criteria
, - What instruments do I have to change the system? (denk aan
de workshop)
- What sort of KPI’s can be set up?
- External factors influences instruments (weather, oil price eg.)
- Stakeholders
Systems (f) = ae +Bi + o + inst
- e = external factors
- i = internal influences
- o = objectives
- Inst = instruments
VOC = voice of the customer
- Improve customer satisfaction
with the process
VOB = voice of the business
- Improve the satisfaction of the internal customer
- Cost reduction and investor value
- Dashboards, balanced score cards, company goals
SIPOC - a tool used for six sigma - diagram is a visual tool for documenting a
business process from beginning to end prior to implementation
- Suppliers
Provider of inputs to your
process
- Input
Materials, resources or data
required to execute your
process
- Process
Structured set of activities that transform a set of inputs
into specified outputs, providing value to customers and
stakeholders
- Outputs
The products or services that result from the process
- Customers
The recipient of the process output
Goal organization
- Shareholder value
o Quantitively estimation of a strategy by discounting the
investment itself, the cash flows and expected scrap
value at the right cost of capital
Week 1:
OM
Principles
- Relation to an organization’s
strategy
- Customers
- Stakeholders
- Control of daily operations
All operations are input-transformation
output processes
Four V’s in operations
- Volume (of the output)
- Variety (of the output)
- Variation (in the demand
for their output)
- Visibility (degree of which
customers have of the
creation of their output)
Goal of 4V
- A tool to understand how
operations are positioned
- Gain insight how to
manage an operation
based on the 4V
- By meaning of a line displaying each high low V, it can be visualized
what the distribution in the company is like
Performance objectives (CDFSQ)
1. Quality (be right)
- Specification of a product or service (eg; organic exclusively
meat)
- The consistent conformance to customers’ expectations (quick
service Mcdonalds)
2. Speed (being fast)
- Elapsed time between a customer asking for a product or
service and getting it
3. Dependability (trustworthy and reliable; being on time)
- Doing things in time for customers to receive product or
services exactly when they are needed or promised. (Flight
arrives on time)
4. Flexibility (ability to change)
, - Increased ability of operations to do different things for
different customers
5. Cost (being productive)
BO
Business planning
+ avoid competitors
- Enter attractive industry – then build entry barriers
- Find attractive niche – develop isolating mechanisms
- Join attractive strategist group – build barriers against similar
new entrants
+ better than competitors
- Cost advantage
- Differentiation advantage
Type of risk
- Operational risk
- Input risk
- Tax risk
- Regulatory risk
- Legal risk
- Financial risk
- Product market risk
3-flow model (A/D/T)
Arriving, departing, and transferring flow
Predictable flow.
- Baggage; linear process and
automated
- Aircraft: complex interchange
but planned
- Passengers; self-propelled
towards and from aircraft
Unpredictable flow
- Passengers: intermediate processes (security, immigration)
are not in control
- Aircraft; partly linear/in control and partly parallel/in control
System diagram
Problem owner objectives criteria
, - What instruments do I have to change the system? (denk aan
de workshop)
- What sort of KPI’s can be set up?
- External factors influences instruments (weather, oil price eg.)
- Stakeholders
Systems (f) = ae +Bi + o + inst
- e = external factors
- i = internal influences
- o = objectives
- Inst = instruments
VOC = voice of the customer
- Improve customer satisfaction
with the process
VOB = voice of the business
- Improve the satisfaction of the internal customer
- Cost reduction and investor value
- Dashboards, balanced score cards, company goals
SIPOC - a tool used for six sigma - diagram is a visual tool for documenting a
business process from beginning to end prior to implementation
- Suppliers
Provider of inputs to your
process
- Input
Materials, resources or data
required to execute your
process
- Process
Structured set of activities that transform a set of inputs
into specified outputs, providing value to customers and
stakeholders
- Outputs
The products or services that result from the process
- Customers
The recipient of the process output
Goal organization
- Shareholder value
o Quantitively estimation of a strategy by discounting the
investment itself, the cash flows and expected scrap
value at the right cost of capital
