Understanding OPS -

Discussion Notes

1/15/2024

Presentation Dr. Frank Ojadi

by:
Operations Unit

Email: fojadi@lbs.edu.ng
08022238481

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 Approaches to facilitation
• Facilitating approaches to operations
• Professional advise:
• Take view points of people responsible for
carrying out operations at different levels –
workers, supervisors, managers.
• For each level review actions that worked
well and the factors that enhanced
success.
• Leads to guidelines, recipe for success.
• If the environments are dissimilar, it may
not work well.

Approaches to facilitation
• Create and increase knowledge structure:
• Every subject has its peculiar knowledge.
• Increasing the knowledge helps professionals
understand the relationships between the variables
and the domain elements of which operations are
composed.
• In a fast-changing environment, imitating successful
actions is a slow way to improve.
• Domain elements are required to develop solutions
specifically targeting the problems.

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 Approaches to facilitation
• What are the trending issues in the economy,
social life and environment?
• How can operations impact on the life of people
in an economy?
• The thinking process is more important than the
answers.
• Integrate across facts, issues, and cases.
• Take a constructive approach and tone.
• Participants’ everyday life activities include:
• Teaching styles versus Learning styles

The Goal of Operations Management

Promise/Value
Mission/Strategy Proposition

Operations Management
Customers

Sequence of processes

Competitive Advantage

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 Structure of an operations system

• Sequence of activities (value chain)

Processes Capacities

Products
Sales
R&D Buying IBLog Prodn OBLog /after-
sales

Services Recovery/
Needs Concept Service Service Measure/
Analy Dev sales delvy monitor adjust

Flows
People and organization

Fundamental management variables of Operations system

• Management variables
• Systems Processes:
• Means of transforming inputs to outputs
• Systems Capacities: configuration of types and
quantities of resources available
• Systems Flows: how items flow in time, how long they
take and how they accumulate, where they wait, etc.
and the management systems available for planning
and control.
• People & Organisation: people and structure define the
system in both the short and long term, etc.

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 Main variables of Operations system

• Making the promise operative – Key Performance

indicators
• Breadth of offering – variety of products or services as
well as flexibility in volumes and requirements that the
system can satisfy
• Response capacity – speed with which it deals with
response to customers request in a consistent way
• Cost
• Quality or consistency
• Adaptability – innovation capacity, ability of system to
change its value proposition over time

Management levels: Design, Operational Management and

Improvements
• Level 1 – OPM sessions in year 1 – assume that
the design of the operations system is given

• Level 2 – Operations strategy and design – focus

on systems design and

• Level 3 – Operations improvement and

innovation

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 Management levels: Design, Operational Management and
Improvements
• Level 1 – OPM sessions in year 1.
• The goal at this stage is to fulfil customer promise
with special emphasis on the short term
(efficiency & productivity).
• We assume that the design of the operations
system is a given.
• In the table next are a series of key questions this
level of operational management attempts to
answer

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Level 1 – operational management - questions

• Management Variables • Key questions e.g.
• How inputs are transformed through
• Processes the process; what types of items we
have to transform

• Capacities • How many units we can process per

unit of time. What resources we have
and to what extent they are used
efficiently

• Flows • How long it takes the items to be

processed or how many products are
in the system. How the orders and
stocks are planned?

• People & organisation • Which activities are done by people

and which by technology?
• Incentive applications and impact on
productivity. Measuring performance.

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 Management levels: Design, Operational Management and
Improvements
• Level 2 – Operations strategy and design – focus
on systems design and
• In level 1, it was with a given operations system.
• This second level focuses primarily on the
system’s design.
• The design is linked to operations strategy, since
the latter sets out the guidelines for the design.
• Through a good OPS, a firm can make its own
operations management into a source of
competitive advantage (e.g shorter process times
or better quality of service than its competitors).

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Level 2 – operations strategy and design - questions

Management Variables Key questions
• What sequence and structure of activities
• Processes seems the most appropriate (e.g. parallelizing
activities, where to use technology)? Which
moments are key to customers and how we
want to design the interaction.

• Capacities • What level of resource utilization we want to

achieve and how much capacity we need for
the future? What level of resource
specialization we want and where to locate the
capacity geographically?

• What planning logic we want to apply (produce

• Flows (in the supply & to order, or to stock, working in batches). What
our supply chain model is. What kind of
service chain) relationship we want with suppliers/customers.

• What org. structure best fits the production

• People & organization (and
management system)
process – work cells vs departments
• How can we design tasks that will be more
motivating for the people who carry them out.
What Incentive systems and performance
indicators are appropriate?

Moscoso & Lago, 2017

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 Management levels: Design, Operational Management and
Improvements
Level 3 – Operations improvement and innovation
• At this final level, the aim is to establish a mechanism that
will ensure that the operations system is able to improve
itself continually over time, in line with the changes to the
internal and external requirements that need to be met.
• This is the sustainability requirement on a long term basis.
• If an incremental improvement is not sufficient to ensure
competitiveness, then you must innovate by rethinking the
operations model.
• Key questions with respect to be management variables

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Operations improvement and innovation -

Management Variables Key questions
• How to eliminate tasks that are of no
• Processes value. how to adapt process structure to
the changing requirements.

• What kind of resources we need for the

• Capacities future – new tech, specialization, how
can we generate economies of scale.

• How to improve the system’s agility and

adaptability. What the customer values
• Flows (in the supply & about the provision and how we can do
it.
service chain)

• How to manage the knowledge acquired

in order to identify opportunities for
improvement and innovation.
• People & organisation • What competencies need to be
developed in the future to maintain
competitivesness
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 Process Typologies

• Selection of process typologies has to be in line

with the way a company wants to compete.
• When selecting a process type, the following
would be taken into account:
• Variety of products /services being offered.
• Process response capacity that you wish to have
(response time).
• Flexibility in order to accommodate changeable
volumes and delivery requirements
• Process efficiency

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Process Typologies

• Process typologies are defined depending on the

type of flow and the way it is organized.
• Continuous flow – very large volumes and arranged
according to products
• Assembly lines, cells or processes that are less and
less continuous – organized by functions, in
departments where same work unit can process very
different products.
• Projects.
Implications of the three major process
typologies?

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 Process Architecture

• Most of the products/services delivered to

customers require to combine many processes
that when joined together, constitute the value
chain.
• Manufacturing
• Hospitals
• Banks
• Services received by customers depend on the
correct execution and the integration of the
different processes into the value chain.
• Textile industry – a. threading b. fabric making c. dyeing d. cutting &
tailoring.

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Segmenting operations based on customer typology

• Customer typology can vary.

• Key issue is whether your product-service offer
and your operations must be segmented by type
of customer or not – operate with a single
operations tube for all customers or you need
general different ones.
• Two opposing criteria:
• Whether the different types of customers have different
needs and different willingness to pay.
• Whether there is a high percent of shared costs and
large economies of scale in processes serving different
customers.

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 Design of integrated or modular products and processes

• A key decision in process architecture is to what

extent should products (and services) as well as
their corresponding production processes
(service delivery), be more or less integrated or
should they rather follow a modular or task
design?
• Ways of organizing a value chain:
• V shape
• A shape
• T or X shape
• I shape

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From business strategy to capacity strategy

• Generally, from standpoint of operations strategy,
companies usually have to give priority to one of
the following options when competing:
• Be responsive or fast, in other words, give a high level
of service and short waiting times to customers.
• Provide volume flexibility, or flexibility in the variety of
products, and this implies accommodating high
variability in demand or in service offerings.
• Offer low costs, which forces to have an efficient
utilization of resources.
• The competitive priority chosen will imply some
key trade-offs and requirements for capacity
design.

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 Linking operations and business strategy

I
D Q
What is our
What business are
competitive Operating system?
we in? F
strategy?
C
S

What do customers What must Operations What are the strategic choices?
Want? do well?

Why? What? How?

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Operations strategy – Choices (Content?)

Operations decision areas

1. Capacity design & management
– speculative vs reactive capacity
D
2. Process Technology – labor vs
Q automation, Industry 4.0
F S 3. Process design – product-process
match, customer journey, innovative
C
I implications
4. Value chain management e.g.
sourcing, make vs buy, distribution
models & platform dynamics.
5. Capability management – lean, agile
digital operations.
6. Workforce
7. Quality
8. Planning and Control
9. Organization

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 Operations Strategy Matrix

Resource usage

Market competitiveness
Quality
Performance objectives

Speed

Dependability Operations strategy

Flexibility

Cost
Capacity Supply Process Tech Development & Org.
network
Decision Areas

Source: Slack & Lewis (2011)

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Operations strategic choices

Structural Infrastructural
1. Capacity 5. Workforce
2. Facilities 6. Quality
3. Technology 7. Production planning
4. Sourcing and work control
8. Organization

Source: Hayes et al. (1996)

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 Operations strategy - Process:
Top down, bottom up, market requirements and operations
resources
Top down –
interpret high
level strategy

Operations-led: Operations Market-led

resources-based – Strategy requirements –
build operations should satisfy
capabilities organization’s
market

Bottom up – learn
from day-to-day
experience -
Emergent Strategy

Each perspective places a different emphasis on the nature

of operations strategy process
Source: Slack and Lewis (2011)

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Market-led process - Order qualifiers and Winners

• Order winners are the criteria that differentiates the
products and services of one firm from another.
• Contribute directly to winning business
• key reasons for purchase
• Sometimes called competitive factors

• Order qualifiers are the basic criteria that permit the firms
services and products to be considered as candidates for
purchase by customers
• Factors needed just to compete
• poor performance on these criteria may lose customers
• Sometimes called ‘Hygiene factors’

Source: Hill (1993)

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 Some key questions with which operations strategy is concerned

• How should the organisation satisfy the requirements

of its customers?
• What intrinsic capabilities should the organisation try
to develop as the foundation for its long-term
success?
• How specialized should the organisation’s activities
become?
• Where should the organisation locate its resources?
• What type of technology should it invest in?
• What should it do itself and what should it
contract out?

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Competing Through Operations

• What does it involve?

• Being explicit……
• …….. within each separable business
• Configure the systems to develop operations capabilities that
provide a competitive advantage in the market
place

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 Competing Through Operations

• What does it involve?

• A clear understanding of how a firm chooses to differentiate its
products or services from those of its major competitors.
• From the operations perspective, the relevant features are cost,
quality, availability, personalization/innovativeness and
environmental performance.

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What Competitive Advantage Are You Seeking?

• Lowest price/cost
• Highest quality
• Customer service
• Product/service performances
• Most dependable
• Product or service
• Delivery or availability
• Field service/repair

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 What Competitive Advantage Are You Seeking?

• Most flexible
• Broad product Line
• Customized Products
• Fast response/delivery times

• Most innovative
• New product
• Latest technologies

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Framework for reflecting operations strategy issues in

corporate decisions

Corporate Marketing strategy How do products Operations strategy

objectives qualify and win
orders in the
market-place? Process choice Infrastructure

Growth Product markets Price Choice of process Function support

Survival and segments Conformance to Trade-offs in Planning &
Profit Range, quality process choice Control
Other measures Mix, Delivery Make or buy Quality assurance
ROI Volumes Speed Capacity Work structure
Standardization Reliability Size Compensation
vs Customisation Demand Timing
increases Location
Colour range
Design
Tech support

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 Definition of an Operations system

• An operations system is a set of resources and

flows managed for transforming inputs, through a
series of activities (processes) into outputs of
greater value to a customer in accordance with
performance targets.

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Evolution of Industrial Revolutions

New Business
Model

V
olatility

U
ncertainty

C
omplexity

A
mbiguity

Degree of Complexity
1800 1900 2000 2000 onwards...

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