This work is a theoretical approach to the Operational Management which discusses about the different processes and layouts to meet the organizational requirements. Also, it discusses some of the strategic objectives contributed by the processes and layouts.
What is Operation Management?
“Operation Management is the activity of managing the resources which produce and deliver products and services” (Slack.N et al., 2010, p4). Every organization has an operations function as every organization produces some type of products and/or services. The operations function is the part of the organization that is responsible for the outcome of the product and services. It is vital for every organization.
Fig 1.1: Operations Management workflow
There are three core functions of any organization:
The Marketing and Sales Function: It is responsible for communicating the organization’s products and services to its markets in order to generate customer requests for service.
The Product/Service Development Function: It is responsible for creating new and modified products and services in order to generate future customer requests for service.
The Operations Function: It is responsible for fulfilling customer requests for service through the production and delivery of products and services. (Slack N et al., 2010, p4)
In addition to these, there are support functions which enable the core function to operate effectively. For example:
The accounting and finance function, which provides information to help economic decision-making and manages the financial resources of the organization.
The human resources function, which recruits and develops the organization’s staff as well as looking after their welfare.
The Input-Transformation-Output Process:
All operations in an organization produce products and services by changing inputs into outputs using ‘input-transformation-output processes’. Figure 1.2 shows the general transformation process model. In simple, operations are processes that take a set of input resources which are used to transform themselves, into outputs of products and services. For example, if you stand far away from a car manufacturing company and a software company, they might look similar, but move closer and clear differences start to emerge. One is a manufacturing operation which produces products and the other is a service operation which produces services. The major difference between the two operations is the nature of inputs. (Slack N et al., 2010, p9)
Fig1.2: Input-Transformation-Output Process
Inputs for a process:
The input for a process is a mixture of following:
Materials: The operations which process materials will transform their physical properties, most often their shape or composition. Most of the manufacturing organizations operate in this way. Other operations process materials to change their location (e.g. Parcel delivery companies). Some operations store materials, like warehouses.
Information: This operation will process information which could transform their informational properties. Some market research companies sell information. Some store information like archives and libraries. Few companies like telecommunication firms, change the location of the information.
Customers: These operations will process the physical properties of the customers, for example, hair dresser or cosmetic surgeons. Airlines, mass rapid transport systems and bus companies transform the location of their customers. Few transform the physiological state of the customers like Hospitals, Theme Parks, and Theatres and so on.
The other set of inputs to any operation process are transforming resources. These are the resources which act upon the transformed resources. These are as follows:
Facilities – the buildings, equipment, plant and process technology of the operation.
Staff – the people who operate, maintain, plan and manage the operation. (Slack N et al., 2010,p12)
Outputs from the Process:
The outputs can be either products or the services. The products are tangible, which we can touch and feel, whereas the services are intangible. Some operations produce just products, others just produce services. But most of the operations produce both products and services.
Process or Service Design of the Operations Management:
Process or Service Design is the conceptual development of a good or a product even before it is created. This design is also an activity to approach at different levels of the creation for the details. This process design is as vital as for any manufacturing unit as it helps to understand the design objectives, when overall shape and nature of the product is decided.
Fig 1.3: Design of products/services and processes are interrelated
The design/products and process is one and the same. Small changes in the design of the product/services could heavily affect the way it works. Hence, it would be a huge impact on the process or the way it operates. (Slack N et al., 2010, p87)
Fig 1.4: Different process types
The value of the process is dependent on the position and volume of the product/services. There are a few general approaches to manage and design the processes called Process Types. They can be categorized as Manufacturing Process types and Service Process types. The Manufacturing Process types are as follows:
These processes deal with highly customized products which needs high level of man power. The timescale for manufacturing these products is usually high as the interval between each cycle needs a thorough check before moving to the other sectors or cycles. The project process is certainly complex as it needs to take the responsible decision and it rests with the expert opinion. (Slack N et al., 2010, p91)
Some of the examples defined for this processes are ship building, manufacturing companies like turbo generators.
This process deals with high varieties and low volume products. Unlike Project Processes, Jobbing Processes has to share the resources with others. The Jobbing Processes will produce more and smaller products than Project Processes, but the repetitions are low. Also, the process map for the jobbing processes is more or less complex than project processes.
Some of the examples for the Jobbing Processes may include Precision Engineers such as Specialist Tool Makers, Furniture Restorers, and printers which issue tickets for the local social events. (Slack N et al., 2010, p92)
Batch Processes look like the Jobbing Processes but it does not have many varieties like jobbing. The batch processes will produce a product for more than one time and the same process will repeat itself until the batch process is complete. Also, the staff in the batch process is very limited. This process is known for producing wide ranges of varieties and volumes.
Examples of the batch processes include machine tool manufacturing, special varieties in the restaurants, component alignment in mass-production facilities such as automobiles. (Slack N et al., 2010, p93)
Mass Processes are those who produce goods in high volumes with narrow varieties in product design. Mass Processes are involved and implemented in many industries like automobile plant, a television factory, food processes and DVD production unit.
If we take the case of Automobile Industry, it may produce different cars based on the engines, colour, accessories, etc., the different variations in the products does not affect the basic process of the production. The products may be produced on a high volume such as assembly line, but the process is not affected. (Slack N et al., 2010, p93)
This process is operates way beyond the Mass Process as they have higher volume and lower varieties. This process operation time is very long comparative to the other processes. It works with the capital intensive technologies with high work flow. The main characteristic of this continuous process is the smooth flow of the product from one part of the process to the other. The process will be halted at the times of maintenance. Most of the operations are automatic and does not need any human involvement.
Some of the examples of these processes are petrochemical refineries, steel making industries and paper industries. (Slack N et al., 2010, p93)
So far, we have discussed about the manufacturing process designs. Now, let us discuss about the service process design.
Professional Services are defined as high-contact organizations where customers spend a considerable time in the service process. This process is highly adaptable and customized to meet the customer or client needs. It needs a large size of the staff and will be getting instructions for the fulfilment of the job imposed on them. This service will emphasize on how the service is delivered to the customer rather than what service is delivered.
Some of the examples for the Professional Services include Management Consultants, Lawyers, Auditors, Health and Safety Inspectors and so on. (Slack N et al., 2010, p94)
These are categorized with different contents like customer volume, customer contact and staff operations. This service is provided in many ways through front-end and back-end office operations.
Few of the examples of these service shops include banks, high-street shops, car rental companies, hotel and travel agents. If any service or a product is purchased or hired from the front-end display, the purchase and other administration work will be handled by the back-end office. Also, training will be given to the customers during the purchase or the product and will be customized based on the customer’s needs if needed. ((Slack N et al., 2010, p94)
These services are equipment based or product oriented whereas there will be a little involvement of the front-end office executives and most value added in the back-end office operations. The staff has to follow a set of rules and instruction to get the job done.
Mass services involve in the operations of supermarkets, Telecommunication Company, national rail services, airport operations, libraries, television stations and police services. (Slack N et al., 2010, p95)
Basic Types of Layouts:
As we are discussing about the manufacturing sector, there are majorly 4 layouts to discuss based on the individual characteristics and appropriate form of manufacture, depending on the output rate and the range of products involved.
Process Layout (or) Functional Layout:
In a Process or Functional Layout, similar operations are grouped together in a department or in an organization. This process is appropriate where small quantities of a large range of products are to be manufactured. This layout has got a few disadvantages, as it operates with high level of work force and the period required for the material pass through the manufacturing process is high. (Ray Wild, 2006, p81)
This layout is appropriate for producing the small range of products in large quantities. Only one standard product is involved and it is processes continuously. This layout is inflexible as there is a continuous utilization of the equipment and it demands the regular supply of right quantities of materials and components.
This Process Layout is often used in Service Operations like grocery stores, self-servicing restaurants, university offices and amusement parks. (Ray Wild, 2006, p82)
In the Fixed-Position Layout, instead of the 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 will move as needed. The reason could be the product or the recipient of the service is too large or delicate to move conveniently.
Some of the examples for the Fixed-Position Layout are open heart surgery, ship building, motorway construction and mainframe computer maintenance. (Ray Wild, 2006, p82)
Group or Cell Layout:
Recently, Group Layout, also known as configurations has emerged with distinctive arrangements. This group layout facilitates the manufacturing units to produce similar items through a process configuration. This approach is quite useful for the batch manufacture of the products. In general, the item passed through the group layout will not require the use of all facilities, because the similar item usage is high. The most advanced application of group layouts can be found in computer controlled flexible manufacturing systems.
The perfect example for the group layout is the batch production of components for a variety of products in the manufacturing systems.
Some of the computer components manufacturing units follow this group layout as the processing and assembly of some types of computer parts may need a dedicated space for manufacturing the parts as per the customers’ requirement, which can be of high quality levels. (Ray Wild, 2006, p82)
Hybrids and Mixed Layout:
Most of the manufacturing layouts are mixtures of process and product layouts. A common mixed layout in manufacture would involve an arrangement by the process layout with subsidiary areas arranged by product layout. This kind of arrangement might exist in engineering production where, although the products differ by their purpose, they are identified as a group of similar components which takes a specialized layout. (Ray Wild, 2006, p82)
The strategic objective is the reconciliation of what is required from the operations function (performance objectives) and how the operation tries to achieve this through the set of choices made in each decision area. (Slack N et al, 2010).
Fig 1.5: Different levels of strategic and performance objectives
The five generic performance objectives like quality, speed, dependability, flexibility and cost can be aggregated into financial objectives, operations objectives and overall strategic objectives. These will help an organization to improve the operation performance.
(Slack N et al., 2010)
These are some of the typical measures of the performance objectives which underpin the production improvement of an organization.
Let us discuss about the different processes and layouts which contribute to the strategic objective for a particular organization.
The process layout contributes the organization with high quality and more flexibility in terms of production for the manufacturing units. The cost handling for the materials to process is low.
The product layouts are not flexible enough as relative to the other layouts. The dependability of the other equipment is high; hence the speed of the layout is relatively slow. The cost is low.
In the fixed position layout, the production is not so high and hence the speed is low, the cost of manufacture and the quality is high.
For the group layout, the production rate is high as it may not need to go through all the processes. The cost of manufacture is low and it is very much flexible.
For the mixed layouts, the quality and the speed are high. But the cost for the production is high as it is using the robust equipment for the production.
For the project process, the time taken for the production is long and hence the speed of production is low. There is no dependability about the products it produces as they may change during the production process itself.
For the jobbing process, the production time is high and the dependability is high as it shares the resources. The cost for the manufacturing is a bit high as it produces the product in lower volumes.
For the batch process, the quality is high, the speed is high, and the cost is also high. It is an inflexible process.
As the batch process is a repetitive process, the handling costs are low and speed is high. The dependability is high and quite flexible.
For the continuous process, the operation time is high and hence the speed is high. This is an inflexible process.
In general, the time taken by the professional services is high and hence the speed is low, quality is high, much more dependable and flexible. The cost is also high.
For the service shops, the flexibility quality and cost are high as it will be customized according to the customer’s needs.
For the mass service, the speed and quality are high. Generally, those are not so flexible and costs may be low.
The overall work speaks about the different processes and layouts which are involved in the operation of an organization. It clearly defines the different sectors of the manufacturing and servicing companies operations based on the strategic objectives. Based on the size of the organization, the generalized characteristics of the various strategic objectives but it may vary upon the customer’s need and requirement. The processes and layouts which has the flexibility has an advantage over the other as it speeds up the response, saves time and most importantly it maintain dependability. Some of the advantages with the processes and layouts are it helps the organizations to focus on the long term issues. There will be some disadvantages when the operation is changed to match the changing demand.
Slack N, Chambers S and Johnston R., 2010. Operations Management. 6th Edition. New York: FT Prentice Hall.
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