OPERATIONS

MANAGEMENT
Felipe Martinez

© Felipe Martinez
Course Schedule
Week Session
1 Operations in organisations
2 Understanding Operations
3 Resources Standards
4 Process Standards
5 Test 1
6 Process Design
7 Operations Planning
8 Innovation Week
9 Modern Methods & Support Processes
10 Test 2
11 Internal Logistics
12 Quality Management
13 Final Test © Felipe Martinez
Week Topic Date Lecture Seminar
Process Identification
1 Operations in organisations 18.09.2023 Introduction to Operations Management
Video Fair setup
Process Types, Product Portfolio, Process types for the video.
2 Understanding Operations 25.09.2023
Legislation and Little's Law Exercises of little law.
Exercises of Resources
3 Resources Standards 02.10.2023 Standards. Material Requirements.
Requirements.
4 Process Standards 09.10.2023 Standardization of production activities Exercises of Process standards.
5 Test 1 16.10.2023 Test 1 Answers of the Test 1
Exercises of the economic
6 Process Design 23.10.2023 The five aspects of process design
selection of technologies
The four main activities of operations Exercises of Gradual vs Parallel
7 Operations Planning 30.10.2023
management. planning
8 Innovation Week 06.11.2023 Video Fair Video Fair
Modern Methods &
9 13.11.2023 Modern Methods and Support Processes Industry 4.0 workshop
Support Processes
10 Test 2 20.11.2023 Test 2 Answers of the Test 2
11 Internal Logistics 27.11.2023 Internal logistics and warehousing Warehouse exercises
12 Quality Management 04.12.2023 Quality Management Summary for the final exam
13 Final Test 11.12.2023 Final Test
© Felipe Martinez Answers of the Final Test
 Today
Test 1
• Resources Standards
• Process Standards
• Little’s law 2x
• Theory
• The goal (GOLDRATT, 2004)
• Slides from PPTs at InSIS
Photo by Pheara Prakso on Unsplash © Felipe Martinez
Overall number of students achieving
grade ranges

© Felipe Martinez
The password to enter is: Eliyahu M. Goldratt
For the "Work Standards" exercise, read the problem statement VERY carefully and take into
consideration:
1. Note that all of the activities in the list are related only to the order.
2. Understand very well the difference between Batch and Order.
a. There are batch activities that are done ONCE only during the manufacturing of the order and other
batch activities that are done SEVERAL TIMES during the manufacturing of the order.
b. Thus, the requested batch time IS NOT just the sum of the “B” activities in the list.
c. Check the size of the batch and the size of the order to determine this.

3. Read carefully each activity in the list. There is ONE unit time activity (A) that is different from
the others.
4. For the last question, “What time shall manufacture start?”, I highly suggest you review it hour
by hour in the day as in slide 26 of the file “OP_EM_04_Seminar_Process_Standards.pdf” (Also
in Moodle).
© Felipe Martinez
 Work standards
A manufacture order of 96 pieces must be completed at the end of shift the
Wednesday. The production line works with 3 shifts per day (6 hours per
shift). The production process manufactures from one piece up to 20 units
per batch. Each day general cleaning of the shop floor requires 20 min at the
beginning of the day and 20 min at the end of the day. There is additional
half hour for lunch (noon) and 15 min break per shift 3 hours after the
beginning of the shift.

a) Unit (A), batch (B), shift time (C).

b) Time to manufacture the entire batch.
c) What time do you have to start the production of this order if the 1st
shift starts each day at 6am? © Felipe Martinez
 Work standards
Batch Operations Time (min) Time type
Preparing the workplace for the order 5,0
Studying workflow and drawing of the order 10,0
Adjustment of machine for the order 80
Clamp the work piece in the machine 2,5
Turning one piece 6,5
Drilling each second piece 8
Release work piece 0,5
Check one (each) piece 2,5
Handing over one completed batch 7,0
Cleaning workplace after finishing the order 5,0
© Felipe Martinez
 Work standards
Batch Operations Time (min) Time type
Preparing the workplace for the order 5,0 B
Studying workflow and drawing of the order 10,0 B
Adjustment of machine for the order 80 B
Clamp the work piece in the machine 2,5 U
Turning one piece 6,5 U
Drilling each second piece 8 U
Release work piece 0,5 U
Check one (each) piece 2,5 U
Handing over one completed batch 7,0 B
Cleaning workplace after finishing the order 5,0 B
© Felipe Martinez
 Work standards
Batch Operations Time (min) Time type
Preparing the workplace for the order 5,0 B
Studying workflow and drawing of the order 10,0 B
Adjustment of machine for the order 80 B
Clamp the work piece in the machine 2,5 U
Turning one piece 6,5 U
Drilling each second piece 8 U
Release work piece 0,5 U
Check one (each) piece 2,5 U
Handing over one completed batch 7,0 B
Cleaning workplace after finishing the order 5,0 B
© Felipe Martinez
 Work standards
Batch Operations Time (min) Time type
Preparing the workplace for the order
Studying workflow and drawing of the order
Adjustment of machine for the order
Clamp the work piece in the machine 2,5 U
Turning one piece 6,5 U
Drilling each second piece 4 U
Release work piece 0,5 U
Check one (each) piece 2,5 U
Handing over one completed batch
Cleaning workplace after finishing the order
© Felipe Martinez
 Work standards

Time type Time (min)

A 16
B

C
© Felipe Martinez
 Work standards
Batch Operations Time (min) Time type
Preparing the workplace for the order 5,0 B
Studying workflow and drawing of the order 10,0 B
Adjustment of machine for the order 80 B
Clamp the work piece in the machine 2,5 U
Turning one piece 6,5 U
Drilling each second piece 8 U
Release work piece 0,5 U
Check one (each) piece 2,5 U

Check Batch Size

Handing over one completed batch 7,0 B
Cleaning workplace after finishing the order 5,0 B
© Felipe Martinez
 Work standards
Batch Operations Time (min) Time type
Preparing the workplace for the order 5,0 B
Studying workflow and drawing of the order 10,0 B
Adjustment of machine for the order 80 B
Clamp the work piece in the machine
Turning one piece 7 min each 20 units
Drilling each second piece Order has 96 units
Release work piece
Then, I have to make
this activity 5 times
Check one (each) piece

Check Batch Size

Handing over one completed batch 7,0 B
Cleaning workplace after finishing the order 5,0 B
© Felipe Martinez
 Work standards

Time type Time (min)

A 16
B 107 Batch
135 Order
C
© Felipe Martinez
 Work standards
Each shift uses:
- Each day general cleaning of the shop floor requires 20 min at the
beginning of the day
- and 20 min at the end of the day.
- There is additional half hour for lunch (noon)
- and 15 min break per shift 3 hours after the beginning of the shift.
Tc = 20 + 20 + 30 + (3 x 15) = 115 min during the day!

© Felipe Martinez
 Work standards

Time type Time (min)

A 16
B 107 Batch
135 Order
C 115
© Felipe Martinez
 Work standards
The order = 96 units Time
Ta = 16 min I need
Tb = 135 min/order

(Units x Ta) + Tb = (96 x 16) + 135

= 1671 min
to make the order
© Felipe Martinez
 Work standards
Tc = 115 min during one day!
1 day = 3 shifts x 6 hours – Tc
= (3 x 6 x 60) – 115
= 965 min per day
Time
I have
© Felipe Martinez
 Work standards
Then,
1671 min / 965 min
1,731606218 days
to manufacture the order

This is 1 day and 706 min

0,731606218 days x 965 min = 706 min

© Felipe Martinez
 Work standards
and 1 day and 706 min

706 min / 60 min = 11,76666 hours

0,766666 hours x 60 min = 46 min

So, 1 day, 11 hours and 46 minutes

© Felipe Martinez
 Work standards
Wednesday
3 shifts // 6 hours each
Hour Action Time
6:00Clean 20
6:20 Work 2:40
9:00 Break 15
9:15 Work 2:45
12:00 Lunch 30
12:30 Work 2:30
15:00 Break 15
15:15 Work 2:45
18:00 Work 3:00
21:00 Break 15
21:15 Work 2:25
© Felipe Martinez
23:40 Clean 20
 Work standards
Tuesday Wednesday
3 shifts // 6 hours each 3 shifts // 6 hours each
Hour Action Time Hour Action Time
6:00Clean 20 6:00Clean 20
6:20 Work 2:40 6:20 Work 2:40
9:00 Break 15 9:00 Break 15
9:15 Work 2:45 9:15 Work 2:45
12:00 Lunch 30 12:00 Lunch 30
12:30 Work 2:30 12:30 Work 2:30
15:00 Break 15 15:00 Break 15
15:15 Work 2:45 15:15 Work 2:45
18:00 Work 3:00 18:00 Work 3:00
21:00 Break 15 21:00 Break 15
21:15 Work 2:25 21:15 Work 2:25
23:40 Clean 20
© Felipe Martinez
23:40 Clean 20
 At last Work standards
Tuesday
Tuesday Wednesday
3 shifts // 6 hours each 3 shifts // 6 hours each
Hour 10:54
Action
6:00Clean
Time
20
Hour Action
6:00Clean
Time
20
6:20 Work 2:40 6:20 Work 2:40
9:00 Break 15 9:00 Break 15
9:15 Work 2:45 9:15 Work 2:45
12:00 Lunch 30 12:00 Lunch 30
12:30 Work 2:30 12:30 Work 2:30
15:00 Break 15 15:00 Break 15
15:15 Work 2:45 15:15 Work 2:45
18:00 Work 3:00 18:00 Work 3:00
21:00 Break 15 21:00 Break 15
21:15 Work 2:25 21:15 Work 2:25
23:40 Clean 20
© Felipe Martinez
23:40 Clean 20
 Resources standards
A construction company has an order to build 5
garages. The structure needs 3 steel profiles (IPE
140) with a length of 5.4 mts and one of a length of
1.2 mts. These steel profiles are sold in bars with a
length of 6 meters or 12 meters. Specific weight per
a linear meter is 12.9 kg. How many steel profiles
(IPE 140) of each length are needed to be ordered?

© Felipe Martinez
 Resources standards
a) Calculate the total demand of steel profiles in meters and the coefficient of material
utilization for both profile lengths. Do not include the material losses due Cold saw.
The material tolerance covers this waste.
b) Decide on the length of the steel profiles. Argue your answer.
c) Next, consider whether it would be beneficial to buy steel profiles on the exact length
required dimensions. The supplier offers this option at 5% extra of the purchase price.
d) d) You have the opportunity to sell the non-required material at 70% of the market
price (19,50EUR/meter). Determine the sales price in CZK (1EUR = 25CZK)
e) The available truck has 10 mts trunk capacity. You have to wait 2 days for the truck
with 14 mts trunk capacity. The extra cost of stopping manufacture is 10% of the
material cost per day. What truck will you use? Why?

© Felipe Martinez
 Resources standards
A construction company has an order to build 5 garages. The structure needs 3 steel
profiles (IPE 140) with a length of 5.4 mts and one of a length of 1.2 mts. These steel
profiles are sold in bars with a length of 6 meters or 12 meters. Specific weight per a
linear meter is 12.9 kg. How many steel profiles (IPE 140) of each length are needed to
be ordered?

IPE 140 – sold in mm

15 units of 5400 mm 5400
1200
5 units of 1200 mm

© Felipe Martinez
 Resources standards
How many needed profiles fit in a 12mts profile? = 12000mm

5400 5400 1200

How many needed profiles fit in a 6mts profile? = 6000mm

5400 600 mm of waste

What is needed? 5400

15 units of 5400 mm 1200

5 units of 1200 mm

© Felipe Martinez
 Resources standards
Solution:
1 5400 5400 1200

2 5400 5400 1200

5400 5400 1200

3
5400 5400 1200

4
5400 5400 1200

5
5400 5400 1200

6 5400 5400 1200

7 5400 600
8

© Felipe Martinez
 Resources standards
Solution:
1 5400 5400 1200
Coefficient of material
2 5400 5400 1200
utilization - Cmu
5400 5400 1200
3
5400 5400 1200 Net (useful) requirement
4 (15 x 5,4) + (5 x 1,2) =
5400 5400 1200

5 87000mm
5400 5400 1200

6 5400 5400 1200

Total lenght:
7 5400 600 (7 x 12)+(1x6) =
8 90000mm

Cmu= 0,96667
© Felipe Martinez
 Resources standards
c) The supplier offers the exact length required
dimensions at 5% extra of the purchase price.

Cmu = 0,96667

Waste = 3,3333 %

It is not good option

© Felipe Martinez
 Resources standards
d) You have the opportunity to sell the non-required material at
70% of the market price (19,50EUR/meter). Determine the sales
price in CZK (1EUR = 25CZK).

1,2m + 1,2m + 0,6m = 3m

3m x 19,50EUR/m = 58,5EUR
58,5EUR x 70% = 40,95EUR
40,95EUR x 25CZK/EUR = 1023,75CZK

© Felipe Martinez
 Resources standards
e) The available truck has 10 mts trunk capacity. You have to wait 2
days for the truck with 14 mts trunk capacity. The extra cost of
stopping manufacture is 10% of the material cost per day. What
truck will you use? Why?

© Felipe Martinez
 Resources standards
Solution:
1 5400 5400 1200

5400 5400
Cmu= 0,96667
2 1200

5400 5400 1200

3
5400 5400 1200 Waste = 3,3333%
4
5400 5400 1200

5
5400 5400 1200 Waiting = 20%
6 5400 5400 1200

7 5400 600 Total = 23,3333%

8

© Felipe Martinez
 Resources standards
Solution: Solution
1 5400 600 9 5400 600

2 5400 600 10 5400 600

5400 600 11 5400 600
3
5400 600 12 5400 600
4
5400 600 13 5400 600
5
5400 600 14 5400 600
6 15
5400 600 5400 600
7 16 1200 1200 1200 1200 1200
5400 600
8
Cmu = (600 x 15)/ (6000 x 16) = 9000/96000 = 90,625
© Felipe Martinez
 Resources standards

Cmu = (600 x 15)/ (6000 x 16) = 9000/96000 = 90,625

Waste = 9,375%

Waiting = 0%

Total = 9,375%
© Felipe Martinez
 Resources standards
Waiting No waiting
14mts truck 10mts truck

Cmu= 0,96667 Cmu = 0,90625

Waste = 3,3333% Waste = 9,375%
Waiting = 20% Waiting = 0%
Total = 23,3333% Total = 9,375%

© Felipe Martinez
 Little’s Law
A product is scheduled to wait for 2 days in finished goods inventory before
shipping to the customer. There are 2 warehouses. Warehouse B has the 20%
of the total storage capacity of the firm. The warehouse management prefers
to fill up this small warehouse up to its percentage of the total warehouse
capacity of the firm before store finished goods in the large warehouse.
Therefore, the differences on the number of units sent by manufacture due
standard deviation are store in the warehouse A. Manufacture sends to the
warehouses an average of 150 finished products per shift in batches of 5
finished products (8 hours per shift. One shift per day). Moreover, the process
capability is +/- one batch per day. How many products in average are stored
on each warehouse? What could be the maximum number of products in the
warehouses? What could be the minimum number of products in the
warehouses?
© Felipe Martinez
 Little’s law
WIP = R x T

WIP = Work in process / Inventory

R = throughput
R
T = Flow Time
T

©© Felipe
Felipe Martinez
Martinez 39
 Little’s law

R
T
WIP = R x T
©© Felipe
Felipe Martinez
Martinez 40
 Little’s law

150 p/d

2 days
WIP = R x T
©© Felipe
Felipe Martinez
Martinez 41
 Little’s law

150 p/d

2 days
WIP = R x T
©© Felipe
Felipe Martinez
Martinez 42
 Little’s Law

Ra

Rb

WIP = R x T T
© Felipe Martinez
 Little’s Law

Ra
150
p/d

Rb

WIP = R x T 2 days
© Felipe Martinez
 Little’s Law

30 p/d
150
p/d

120 p/d

WIP = R x T 2 days
© Felipe Martinez
 Little’s Law

30 p/d
150
p/d

120 p/d

WIP = R x T 2 days
© Felipe Martinez
 Little’s Law

? p/d

? p/d

WIP = R x T 2 days
© Felipe Martinez
 Little’s Law

30 p/d
150
p/d

120 p/d

WIP = R x T 2 days
© Felipe Martinez
 Process Capability
150 p/d

- 1 batch + 1 batch

© Felipe Martinez
+ 1 batch
Little’s Law

30 p/d
155
p/d

125 p/d

WIP = R x T 2 days
© Felipe Martinez
- 1 batch
Little’s Law

30 p/d
145
p/d

115 p/d

WIP = R x T 2 days
© Felipe Martinez
 Little’s Law
80% 20% MIN MAX
Warehouse A B A B A B
WIP 300 240 60 230 60 250 60 P
R 150 120 30 115 30 125 30 p/d
T 2 2 2 2 2 2 2 D
Total
Cap. 5 p/d 300 290 310 P
WIP

© Felipe Martinez
 Little’s Law
The local coffee shop has 2 parallel queues. There are 6
customers in the queues waiting to be served. You
arrive as the 7th customer. In average, the Barista at
each queue is able to process the order of one customer
in about 75 seconds. The process capability is +/- 15
seconds per customer. How many minutes in average
you have to wait to get your order? What could be your
shortest waiting time? What could be your longest
waiting time?

© Felipe Martinez
 Little’s law

T
WIP = R x T
©© Felipe
Felipe Martinez
Martinez 54
One queue Little’s law

1c / 75s

?
WIP = R x T
©© Felipe
Felipe Martinez
Martinez 55
 One queue Little’s law

1c / 75s

525sec = 8,8 min

WIP = R x T
©© Felipe
Felipe Martinez
Martinez 56
 225sec = 3.75min
Little’s law

1c / 75s

300sec = 5 min
WIP = R x T
©© Felipe
Felipe Martinez
Martinez 57
 Process Capability
75s/c

- 15 s/c +15 s/c

© Felipe Martinez
 270sec = 4.5min
Little’s law

1c / 90s

360sec = 6 min
WIP = R x T
©© Felipe
Felipe Martinez
Martinez 59
 180sec = 3min
Little’s law

1c / 60s

240sec = 4 min
WIP = R x T
©© Felipe
Felipe Martinez
Martinez 60
 Little’s Law
MIN MAX
Barista
A B A B A B
WIP 7 3 4 3 4 3 4 C
R 0,8 0,8 0,8 1 1 0,67 0,67 c/min
T 8,75 3,75 5 3 4 4,5 6 Min
Cap. 0,25 1,25 1 1,5 min/c

© Felipe Martinez
 Capacity
It is the maximum number of products (outputs)
that a operation (line, workshop, office, etc.)
produced in a specific time period (year, month,
shift) under the specific conditions (technological,
organizational).

© Felipe Martinez
 Standard
“It is a document that provides
requirements, specifications,
guidelines or characteristics that
can be used consistently to
ensure that materials, products,
processes and services are fit for
their purpose.”
ISO (2015)
© Felipe Martinez
 Standard

© Felipe Martinez
Mapping processes
Process Process layout Process
diagram flowchart
•Activity types •Distances •Flow
•Time •Area •Decision
•Length •Space making points
•Team •Spaghetti •Parallel
diagram processes
© Felipe Martinez
 Define the following terms
•Outsourcing
•Insourcing
•Off-shore
•Re-shore
•Next-Shore

© Felipe Martinez
 Define the following terms
•Outsourcing
•Insourcing
•Off-shore
•Re-shore
•Next-Shore

© Felipe Martinez
GOLDRATT, ELIYAHU M AND COX , JEFF. 2004. THE
GOAL: A PROCESS OF ONGOING IMPROVEMENT. .
GREAT BARRINGTON : NORTH RIVER PRESS, 2004. ISBN
0-88427-178-1.

© Felipe Martinez
 Bottle neck
• Factor that limits its ability to
achieve its goal.
• Herbie -the bottleneck and the
solution
• It is a stage in a process that
causes the entire process to
slow down or stop .

© Felipe Martinez
 Robots

© Felipe Martinez
Course Schedule
Week Session
1 Operations in organisations
2 Understanding Operations
3 Resources Standards
4 Process Standards
5 Test 1
6 Process Design
7 Operations Planning
8 Innovation Week
9 Modern Methods & Support Processes
10 Test 2
11 Internal Logistics
12 Quality Management
13 Final Test © Felipe Martinez
Week Topic Date Lecture Seminar
Process Identification
1 Operations in organisations 18.09.2023 Introduction to Operations Management
Video Fair setup
Process Types, Product Portfolio, Process types for the video.
2 Understanding Operations 25.09.2023
Legislation and Little's Law Exercises of little law.
Exercises of Resources
3 Resources Standards 02.10.2023 Standards. Material Requirements.
Requirements.
4 Process Standards 09.10.2023 Standardization of production activities Exercises of Process standards.
5 Test 1 16.10.2023 Test 1 Answers of the Test 1
Exercises of the economic
6 Process Design 23.10.2023 The five aspects of process design
selection of technologies
The four main activities of operations Exercises of Gradual vs Parallel
7 Operations Planning 30.10.2023
management. planning
8 Innovation Week 06.11.2023 Video Fair Video Fair
Modern Methods &
9 13.11.2023 Modern Methods and Support Processes Industry 4.0 workshop
Support Processes
10 Test 2 20.11.2023 Test 2 Answers of the Test 2
11 Internal Logistics 27.11.2023 Internal logistics and warehousing Warehouse exercises
12 Quality Management 04.12.2023 Quality Management Summary for the final exam
13 Final Test 11.12.2023 Final Test
© Felipe Martinez Answers of the Final Test
 Video Fair

Deadline of the
output Sunday
05. 11. 2023 23:59

© Felipe Martinez
 Video Fair
THIS IS AN INDIVIDUAL TASK
Each student watch all the videos and assess all of them. If you
assess ALL videos, you will get 100% of your team's video grade.
But if you don't, for every video that you don't assess, your
individual assessment drops 3.57% of your team's video grade.
Remember that your classmates are also evaluating your video,
so be kind in your comments.
Deadline for the assessment, 12.11.2023, before midnight.

© Felipe Martinez
 Video Fair
360 assessment
Send an email with this information!
Example of not ideal
Ideal Contribution
Contribution
Student A 20,00% 5%
Student B 20,00% 25%
Student C 20,00% 60%
Student D 20,00% 10%
Student E 20,00% 0%
Total 100% 100%
© Felipe Martinez

Photo by Don Stone on Unsplash

 Next

•Process Design

•Selection of the best

technology for the
design.
Photo by Alvaro Reyes on Unsplash © Felipe Martinez
OPERATIONS
MANAGEMENT
Felipe Martinez

© Felipe Martinez