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The Transformational Process Model
A contrast of the transformational process model as it applies to the manufacturing (car manufacturing) and service (advertising) industries.
Slack et al provide a model which assists in understanding the transformational process. Their model looks at the transformation of inputs into outputs of goods and services and the range of activities and operations that an organisation undertakes as part of this process. Slack et al’s transformational process model is robust enough to apply to both manufacturing and service industries and it is perhaps in contrasting these two areas that one is best able to understand the usefulness of their model.
In simple terms, Slack et al’s the transformational process model deals with the process involved in transforming an input resource into an output good or service (Slack et al, 2001, p.9). A generic transformational process model can be set out as follows (Slack et al, 2001, p.10):
The above generic input-transformation-output model applies to the operations of most organisations. However, as with any generic model, it fails to sufficiently differentiate between subtleties. As such, when considering differences between different types of operations (ie manufacturing and services) and then considering further differences within those different types (ie different types of manufacturing operations), it is necessary to expand on the generic input-transformation-output model set out above.
In terms of the generic transformational process model set out above, it is important to note that inputs to the process will either be “transformed” or “transforming” resources. Slack et al define “transformed” resources as being “the resources that are treated, transformed or converted” (for example, materials, information and customers) and “transforming” resources as being “the resources that act upon the transformed resources” (for example facilities and staff) (Slack et al, 2001, pp.10-11).
Slack et al note that in most cases, one of the transformed resources takes precedence over the other two. So for instance they note that while a bank devotes some of its time to processing materials and customers, its main focus is on processing information (Slack et al, 2001, p.11). However, it should be noted that in a modern, inter-dependant economy, it is unlikely that any organisation is able to operate without touching on each of the transformed resources and as such, the issue becomes one of the extent to which the other transformed resources are touched upon rather than whether or not an organisation’s operations touch on them at all.
With respect to transforming resources, Slack et al refer to two types which form the “building blocks of all operations”. These are “facilities”, “the buildings, equipment, plant and process technology of the operation” and “staff”, “those who operate, maintain, plan and manage the operation” (Slack et al, 2001, p.11). Slack et al note that the transformation process is closely connected to the nature of the input resources which are being transformed. The three predominant types of operation processors are material processors, information processors and customer processors. Material processors predominantly transform the physical properties of the input resources, but may also change their location, their possession or store the materials. Information processors transform the informational properties of the input resources, the possession of the information, store the information or change the location of the information. Customer processing operations may change the physical properties of the input resource, store the resource, change the location, change their physiological state or their psychological state (Slack et al, 2001, pp.12-13).
However, it is important to note that each macro organisational process also consists of numerous micro organisational processes (eg marketing and sales, set and props manufacture, engineering, production units and finance and costing) each of which contribute to what Slack et al (2001, p.19) refer to as the “end to end business process”. The flow of information, materials and/or customers throughout this end to end business process is often extremely complex. In terms of operations management, understanding that the transformational process model applies both at the macro level and at a micro level allows an organisation’s management to ensure that managers at all levels within the organisation understand that to a certain extent they are all involved in ensuring that their operation involves a transformational process and that it is only where the transformational processes of all these micro operations operate smoothly that the macro transformational process can be successful.
It should also be noted that in many cases, organisations seek assistance from external organisations with respect to those micro processes. Thus for instance, an advertising agency provides a service which a large car manufacturing company may process internally. Or for instance Nike, which is thought of as a shoe manufacturer, is in fact a marketing processor specialising in shoes (the manufacturing of the shoes is, while done to Nike’s specifications, performed by external contractors with Nike concentrating on developing and maintaining their brand image).
Slack et al (2001, pp. 18-19) refer to three core functions as transformation process operations. These are “product/services development function”, “operations function” and “marketing function”. The product/services development function involves “designers design software -> producing effective new products and services -> appropriate designs as promised and to budget”. The operations function involves “transformed/transforming resources -> producing service value for customers -> products and services”. The marketing function involves “sales people marketers market information -> producing sales and market plans -> orders marketing plans as promised and to budget”.
As noted above, different types of operations (ie manufacturing and services) will involve different types of inputs, a different transformational process and result in different types of outputs. In order to compare how these differences are covered by Slack et als transformational process model, it is perhaps best to compare and contrast two specific examples. In this case, it is intended to compare and contrast differences between the transformational process of a car manufacturing operation (manufacturing) and an advertising agency (service).
In terms of the basic input-transformation-output process, a car manufacturing and advertising agency’s operations can be described as follows:
Car manufacturing equipment
Machine operating staff
Car manufacturing plant
Design and procurement
Client solicitation and pitching
One of the fundamental differences between the transformational process of a car manufacturing operation and an advertising agency is balance between facilities and staff resources. The car manufacturing operation will have much of its investment in physical facilities with the focus of operations managers in such an organisation being on ensuring that those facilities are operating smoothly. The transformational process for a car manufacturing plant is a technical/mechanical process which should run exactly the same every time. While there is creativity involved in the initial design stage of the vehicles and parts, the fabrication stage should involve no creativity and will essentially follow a set process which is repeated hundreds, if not thousands, of times each week with the purpose being to lower costs by automating the same repeated tasks. While staff in a car manufacturing operation remain important, their importance is secondary to the operation of the facilities themselves (ie should there be a problem with the operation of the facilities, the staff are not in a position to continue assembling the cars on their own – ie their effectiveness is directly linked to the effectiveness of the facilities themselves).
Conversely, the importance of facilities to an advertising agency is entirely secondary to the importance of the staff that it employs. Preparing an advertising campaign is a largely creative process which varies from client to client and which does not therefore lend itself to automation. Due to the creative nature of an advertising agency’s work, should the facilities of an advertising agency for some reason become temporarily unavailable, it should be able to continue its operations using the same staff.
Naturally, the importance of the less important transforming resource should not be underestimated and it is not the case that either of these two operations can continue without both transforming resources. Rather, it is that one of these transforming resources is more fundamentally important than the other. For instance, while an advertising agency’s staff should be able to continue with their transformational work even where the facilities they have been using are temporarily unavailable, it is highly likely that their transformational work will be less effective especially where the unavailability of facilities involves not only office space, but more importantly, informational resources such as computer systems, market research information, etc. Likewise, while a car manufacturing operation can replace staff that for instance, go on strike, the efficiency and effectiveness of newly employed staff will be lower than those who have experience working with the machinery and the organisation’s operational process. The point is that the balance for a car manufacturing and an advertising agency are different between facilities and staff and so too are therefore each organisation’s operations management concerns (Slack et al, 2001, p.12).
With respect to the transformational process, a car manufacturing operation is predominantly a materials processor while an advertising agency is predominantly an information processor. A car manufacturing operation transforms the physical properties of the input resources involving the input of steel, plastic, and other materials the nature or which are then physically transformed into cars. An advertising agency on the other hand deals with information as its input resource (for instance, market research, demographic data, previous advertising campaign effectiveness, customer aims, etc) and transforms these into advertising campaigns the goal of which is to increase its customers’ sales.
The operational outputs also differ substantially as between a car manufacturing operation and an advertising agency. Perhaps the most profound difference is that the outputs of a car manufacturing operation are an actual tangible product while for the advertising agency it is an intangible service. The difference between these two types of outputs affects such considerations such as storability, transportability, simultaneity, customer contact and quality (Slack et al, 2001, pp.13-14).
Clearly a car has a degree of tangibility that an advertising campaign does not. This means that a car is able to be stored and transported. Likewise, the car manufacturing process involves production well before the customer ever sees it while with an advertising campaign, the psychological aspects occur simultaneously with its execution. As most customers will purchase a new car from a manufacturer’s own branded car yard, there is some contact between customer and manufacturer (more so than with other types of manufacturers such as for example household appliances where the manufactured good is sold via a third party retailer with no relationship with the manufacturer). The integrated supply chain for car manufacturers also affects the quality in that whereas with other manufactured products, the relationship between manufacturer and customer is more distant, the integrated supply chain for car manufacturers means that the customer is more likely to judge the quality of the operation from the quality of the product (although still not to the same extent that they would for a pure service such as a hair cut).
Slack et al (2001, p.15-16) note that all operations fall somewhere within the spectrum between pure goods producers and pure service producers, with most operations producing a mixture of both products and services. They propose that each producer has a predominant type of output and that any peripheral output for that producer is referred to as a “facilitating” output. That is, for a goods producer, any services produced shall be “facilitating services” (eg technical advice) while for a services producer which produces peripheral goods (eg report and documents) these represent “facilitating goods”. This is perhaps a dated view of such operations which Slack et al acknowledge when noting that the distinction between services and products is becoming increasingly difficult to define. Perhaps a more accurate distinction is between the types of processors (ie materials, information and customer) rather than simply between goods and services.
In reality, many service operations (especially information processors) do produce a tangible output which can be stored (for instance a travel agency will produce a booking which is reflected in a physical itinerary, a law firm will produce legal documents, a bank will produce bank statements, etc). It is generally customer processors (such as theme parks, theatres, public transport, airlines and hotels) which do not produce a tangible output which can be stored. In many ways, with the advent of the information revolution, the outputs of information operations have come to more closely resemble to outputs of traditional manufacturing operations more than traditional service operations.
In general, a distinction needs to be made between services which produce a tangible output and those services which are consumed at the same time as they are produced. While both these operations fall within the overall heading of “services”, their natures are entirely different. The main difference between an information processor service and both material processors and customer processors are that an information processor’s output is not unique. That is, an information processor’s output is generally able to be copied at no additional cost. This can be contrasted to a material processor’s output such as a car or a customer processor’s output such as a haircut. Neither a car nor a haircut can be reproduced without additional inputs being used and the transformational process starting again at substantial cost. An informational output on the other hand, such as a legal document or a song can be reproduced an unlimited number of times at minimal cost and without the need for the original transformational process to be repeated (although large scale copying may require an additional transformational process eg producing CDs and DVDs).
With respect to a car manufacturing operation and an advertising agency, both produce an output which is (arguably in the case of the advertising agency) tangible (ie cars and an advertising campaign respectively) although one is clearly much more tangible than the other. However, both the manufactured car and the advertising campaign loose relevance as time progresses and as such, the intention for both operations is to transfer the finalised output from the organisation responsible for processing the input onto the customer. The longer this transfer from processing operation to ultimate customer takes, the less relevant within the marketplace their outputs become (this statement will clearly not apply in certain cases for instance prestige cars which may increase in value the longer they are stored).
The fundamental differences between a car manufacturing operation and an advertising agency have important implications on an organisation’s operations management. Both the advertising agency and car manufacturing consist of transforming resources facilities and staff. The difference is in the input of transformed resources as the car manufacturing is predominantly a material process and the advertising agency an information processor. The transformation process in operations is closely connected with the nature of its transformed input resources. Outputs from the transformation process are goods and services with the main difference being that an advertising agency provides a service while a car manufacturer produces a good. The difference in tangibility of the outputs also has an affect on storability, transportability, simultaneity, customer contact and quality.
- Slack, N., Chambers, S. & Johnston, R. (2001), Operations Management, 3rd ed., Prentice Hall, Harlow, England
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