BM5723 - Creating & Delivering operational plans

BM5723
Process Design

Session 2
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Learning agenda

• Learning recap
• Process design as a concept and the stages of design
• Process design and competitive strategy
• Process design types
• Process mapping
• Application of learning to case study scenario

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Learning Recap – introduction to operational planning

1. What is an operational plan and which departments of an organisation should

have one?

2. What is the ‘Golden Thread’?

3. List 3 key components of an operational plan

4. List 4 different operations processes that each McDonalds outlet has to manage

5. List as many of the 7 typical operations objectives as you can

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Learning Recap

1. What is an operational plan and which departments of an organisation should

have one?

‘Operational’ plans lay out in detail how a team or department will contribute to
the success of the organisation

All departments should have an operational plan

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Learning Recap

2. What is the ‘Golden Thread’?

A line of planning and review that links

an organisation’s vision (mission) to
how each part of the organisation will
contribute

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Learning Recap

3. List 3 key Our business as usual activities

components of
an operational Which strategic
plan goals we
contribute to

What resources
How we’ll we have to use
measure our
performance

How we aim to get better at what we do 7

Learning Recap

4. List 4 different operations processes that each McDonalds outlet has to

manage

• Food preparation
• Processing customer orders
• Inventory control
• Cleaning
• Waste disposal
…..and more

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Learning Recap
5. List as many of the 7 core operations objectives as you can

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Why consider operations process design?
Rationale:
• Operational plans state what core activities a function undertakes on a day to day basis
• Remember…..the operations function is the ‘context’ for this module
• Business strategy determines the relative importance of the 7 common operations
objectives
• This determines the subsequent design of underlying operations processes, e.g:
• Customer processes – how operations will be set up to supply customers
• Capacity management – how operations will handle volumes of customer demand
• Inventory management – how operations will ensure they have the necessary
resources to supply customers when required
• Supply-chain management – how operations will work with suppliers to maintain a
consistent and ethical supply of resources

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What is ‘design’?

• To design is to conceive the looks, arrangements, and workings

of something before it is created.
• It’s a conceptual exercise.
• A solution must be delivered that works in practice.
• Design is an activity that can be approached in different stages.

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What is design?

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What is design?

https://www.youtube.com/watch?v=hp5gTE9ZScw
(12:15, but watch to 3:07

Relate these design stages to

this short excerpt from
Dragon’s Den:

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Getting your own head round design
Consider the following well-known product
Put yourself in the place of a designer. What is the nature of this product in
terms of these design stages?:

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 Process design

Process design needs to reflect the

organisation’s competitive strategy. How will it
help attract customer demand?

Low cost competitive strategies typically

require processes that deliver high volumes
of sales because of low margins.

Differentiation strategies typically require

processes that accommodate variety to meet
quality expectations

Porter’s model of generic competitive strategies 15

 Volume-variety trade off

• The higher the volume that the process is expected to deliver, the lower the
variety is likely to be, because……
• Process designs accommodating variety when little is required, lead to
higher unit costs than necessary because their volume of output is lower.
• Process designs delivering volume when variety is more important, tend to
be inflexible. This adds to unit costs if they need to be tweaked for more
customisation.

• Process design is therefore important to meet both service and cost objectives.
Suggest some real business process examples of:
• High Volume
• High Variety 16
Manufacturing process types
Each product requires specialist attention but within the
operation a variety of products are being produced. Read the description for each
Jobbing
E.g. Be-spoke tailors manufacturing process type and
then ‘place them on the diagram
Mass production but on a constantly rolling basis...an
endless flow
Continuous
E.g. Petrochemical refineries

Processes for producing highly customised outputs

Process is typically long with room for high variety.
Output is typically low. Clear start and finish Project
E.g. Film production company

High volumes of products that vary very little, but different

products may be produced at different times
E.g. Car manufacturing Mass

Similar to jobbing, but more than one of the tailored

products are produced for the batch order Batch
E.g. Vegetarian airline meals

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Manufacturing process types ANSWERS
Each product requires specialist attention but within the
operation a variety of products are being produced. Read the description for each
Jobbing
E.g. Be-spoke tailors manufacturing process type and
then ‘place them on the diagram
Mass production but on a constantly rolling basis...an
endless flow
Continuous
E.g. Petrochemical refineries

Processes for producing highly customised outputs

Process is typically long with room for high variety. Project
Output is typically low. Clear start and finish Project
Jobbing
E.g. Film production company
Batch
High volumes of products that vary very little, but different
products may be produced at different times Mass
E.g. Car manufacturing Mass
Continuous

Similar to jobbing, but more than one of the tailored

products are produced for the batch order Batch
E.g. Vegetarian airline meals

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Service process types
Read the description for each
manufacturing process type and
then ‘place them on the diagram
High volumes of services with minimal
differences in the service offered to different Mass
customers services
E.g. Passenger trains

High volumes of services but with degrees of

customisation Service
E.g. Mortgage advisers Shops

Highly customised knowledge-based or

advice-based services designed for particular Professional
clients Services
E.g. Management consultants

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Service process types ANSWERS
High volumes of services with minimal
differences in the service offered to different
customers
E.g. Passenger trains
Read the description for each
manufacturing process type and
then ‘place them on the diagram
Mass
services

High volumes of services but with degrees of Professional

customisation Service services
E.g. Mortgage advisers Shops
Service shops

Highly customised knowledge-based or

advice-based services designed for particular Professional Mass services
clients Services
E.g. Management consultants

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Process mapping
• Designing processes often involves
process mapping
• Envisages the stages in fulfilling
customer requirements and how
operations should handle these
• E.g.

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Process design
Process mapping – some common symbols (there are others)

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 Application of process design principles
A5 paper
Task 1
In pairs or as an individual:
• Think about the last time you went into a supermarket
• Flow chart your ‘customer journey’ through the store

Task 2
• Where in this customer journey did the supermarket ‘add value’ to your visit?

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‘Added value’ in the customer process

Might include:
• Service options (e.g. self-scanning, manned or self-service tills)
• Additional services (e.g. bread slicing, fish gutting, bag-packing)
• Personal interaction (e.g. advice on product location or availability)
• Clear signposting (e.g. labelling of aisles)
• Additional information (e.g. store announcements)
• Opportunity to ‘interact’ with products (e.g. fresh fruit & vegetables)
• Hygiene (e.g. hand sanitiser)

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Process design – sub-conscious ‘value’ being added in
Store layout
1. Shoppers need to ‘orientate’ themselves – like a “transition
zone” to see which way to go. Often a ‘meeter-greeter’, welcome
signs, shopping baskets or trolleys in this area, but not much else.
Not yet ready to focus on the shopping experience.
2. Shoppers naturally walk anti-clockwise - veer right more often
than left. Shop design & signage takes advantage of this.
3. Shoppers avoid upper and lower floors - prefer staying on the
same floor they started on
4. Shoppers hate narrow aisles - in most cultures. Avoid narrow
spaces and contact with others
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Process design – sub-conscious ‘value’ being added in

Store colour schemes

Colours influence emotions and underpin the retailing experience intended:
1. ______ is calming
Blue, grey & black
2. ______ conveys freshness and peace Pink
3. ______ conveys cleanliness Green
4. ______ is a happy colour Yellow
Orange White
5. ______ stimulates appetite
6. ______ is an energetic colour Red Blue
Purple
7. ______ is a creative colour
8. ______ also romantic, commonly used to target women Pink & purple
9. ______ are functional colours often used to target men
10. ______ can make shoppers anxious because it’s a very powerful colour

Have a go at matching the colour choices (some appear more than once)
Process design – sub-conscious ‘value’ being added in

Store colour schemes

Colours influence emotions and underpin the retailing experience intended:
1. ______ is calming Blue
2. ______ conveys freshness and peace Green
3. ______ conveys cleanliness White
4. ______ is a happy colour Yellow
5. ______ stimulates appetite Orange
6. ______ is an energetic colour Pink
7. ______ is a creative colour Purple
8. ______ also romantic, commonly used to target women Pink & purple
9. ______ are functional colours often used to target men Blue, grey & black
10. ______ can make shoppers anxious because it’s a very powerful colour Red
N.B. Young people prefer bright tones and older people more muted tones.
Also some colours have cultural interpretations
Order qualifying & order winning features

A good way of thinking about how well processes support competitive strategy

Order qualifiers = features that customers take for granted. Important

because without them customers will look elsewhere.

Order winners = features that will ‘delight’ customers and encourage them to
buy from this organisation

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 Application of process design principles

Task 2
In pairs or as an individual:
• Re-familiarise yourself with the ‘Aspire’ gym business scenario
• Choose one of the following customer service processes and flow chart the customer
process the business could use for one of these services (AKA the ‘customer journey’).
Use Powerpoint template on Moodle
SEE EXAMPLE
1. Member booking and participating in a class
2. Member having a physical assessment
3. Member using the Refreshment lounge
4. New member being ‘inducted’ into the gym
5. Prospective new member wishing to join the gym
6. Member wishing to renew membership
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Process: Member accessing and using the gym
____________________________________________________________________________

Start Equipment of Alternative Member waits

No No
choice equipment in relaxation
Member
available? available? area
arrives at gym
premises Yes
Yes Member End
chooses
Car,
alternative
Yes motorbike or
Member equipment
cycle to Member
Member exercises leaves gym
park?
parks car, Member returns premises
motorbike or No
to car, motorbike
cycle Member Member or cycle No
enters foyer leaves gym
Yes Arrived by
car,
Betwee Member
No Member motorbike or
n 10am walks to
showers & cycle??
& 6pm? gym area
changes
Yes
Member Stay for Member
Member Yes
swipes refreshments leaves foyer
greeted by Member
card to &
Receptionist Member goes swipes Member
enter socialising?
to card to exit ‘goodbyed’
Member Refreshments No
by
changes & Lounge Member Receptionist
No
uses locker walks to
Foyer Betwee Yes
n 10am
& 6pm?
Application of process design principles

Task 3
As a group:
• Consider the market proposition of the ‘Aspire’ business (mission/vision) & its
competitive strategy.
• Reflect on the process you’ve designed.
1. How well does it reflect the mission and strategy of this business?
2. At what points in the process could the business build in ‘order-winning’
features?

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Learning agenda

• Learning recap
• Process design as a concept and the stages of design
• Process design and competitive strategy
• Process design types
• Process mapping
• Application of learning to case study scenario

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