Chapter 1: intro to OM Things to enhance capacity: customers have to wait, at the same time there will be times when Service quality: convenience, reliability, responsiveness, time,
Production of good VS delivery of services: (1) Design flexibility into systems (2) Take stage of life cycle into the servers have to be idle. assurance, courtesy, tangibles
(1) Degree of customer contact (2) Uniformity of input (3) Labour account (3) Take a ‘big picture’ approach to capacity changes (4) Flow time = waiting time + service time Design quality: intention of designers to include or exclude certain
content of job (4) Uniformity of output (5) Measurement of Prepare to deal with capacity ‘chunks’ (5) Attempt to smooth Inventory = queue length + customers in service features in a product or service
productivity (6) Production and delivery (7) Quality assurance (8) capacity requirements (seasonality) (6) Identify the optimal Flow rate = customer arrival rate (demand controlled) Conformance quality: degree to which goods and services conform
Amount of inventory (9) Evaluation of work (10) Ability to patent operating level (volume vs costs) (7) Choose a strategy if expansion is Mean service time = mean inter-arrival time = to the intent of the designers
design involved Mean service rate = average arrival rate = Random variation: natural variation in the output of a process
Labour (material and asset) = 1/labour productivity Capacity cushion: extra capacity built to offset demand uncertainty S.D of service time = S.D of inter-arrival time = created by countless minor factors (process in control). Day to day
Trade-off is an exchange where you give up 1 thing in order to get Capacity cushion = 100% - process utilisation C.V of service time = C.V of inter-arrival time = variation, typical ‘white noise’, nothing has gone wrong & there is
something else that you also desire. Factors for outsourcing: (1) Available capacity (2) Expertise (3) nothing to fix
Operations has major influence on competitiveness: Quality considerations (4) Nature of demand (5) Cost (6) Risk Process utilisation: p = Assignable variation: a variation whose cause can be identified and
(1) Product and service design (2) Cost (3) Location (4) Quality (5) Challenges of planning service capacity: Customers in service = p eliminated (process out of control) something unusual has happened
Quick response (6) Flexibility (7) Inventory management (8) Supply (1) The need to be near customers (2) The inability to store services Little law: inventory = flow rate x flow time and the process has changed significantly, there is a need for
chain management (9) Service (10) Managers and workers for consumption later (3) The degree of demand volatility is higher Customer in queue: intervention.
Customer in process: Statistical process control (SPC): statistical evaluation of the outputs
Chapter 2: product, process & capacity Chapter 3: process selection, facility layout, line balancing of a process. It involves periodically taking samples out of the
Driving force of product/service re/design: 2 basic layouts: process layout and product layout process output and computing sample statistics (sample mean &
(1) Competitiveness (2) Cost or availability (3) Technology (eg. Process layout are not arranged according to a particular production range)
Patent) (3) Economical (eg, china’s growth) (4) Social and sequence. It can handle varied processing requirements (common in Sample statistics (such as x-bar and sample range R) are used to
demographic (5) Political, liability and legal (6) Sustainability service) and can process jobs of same requirements in batches. judge the randomness of the process variation and it helps to decide
Key design issues: In batch production, setup time: time needed to prepare a process For a system to be stable, the long run/steady state average service if a process is in control or not.
(1) Product or service life cycles (2) Standardisation (3) Mass for it to be ready for the specified tasks, is often required to switch rate (process capacity) must be faster than the arrival rate. 2 types of control charts:
customisation (4) Reliability (5) Robust design (6) Degree of newness between different batches of jobs. How to reduce waiting time? Mean control chart (x bar chart): monitor the central tendency of a
(7) Cultural differences Activity time = setup time + run time 1. Reduce variability as much as possible process
Challenges of service design: Presence of setup time impacts process capacity so choose the right 2. Reduce utilisation: increase mean service rate/ reduce Variation control chart (R chart): sample range = max(X)-min(X)
(1) Barriers are low to enter and exit (2) Focus on more intangible batch size. mean arrival rate Type I error: concluding a process is not in control when it actually is
factor, perceived quality issues are often intangible (3) Design of Product layout are arranged according to a particular production 3. Increase capacity/service rate: add servers Type II error: concluding a process is in control when it is not
service and delivery process cannot be separated (4) Outputs variety sequence. It uses standardised processing operations to achieve How to reduced variability? Process control is to detect whether or not there has been a change
(5) Customers are part of the inputs and processes (6) Cannot be smooth, rapid, high-volume flow. Arrival process: in the underlying process steps:
inventoried (7) Location is very important Cycle time: defined as the flow time of each station, should be 1. Reduce variability: schedule appointments, peak loading 1. Identify whether the process variations are random or
Design for operations: taking into account of capabilities of the synchronised in a highly automated production line. (Product layout) pricing assignable
organisation’s operations function Cycle time = 1/process capacity 2. Eliminate need: renewals by mails, boarding passes online 2. Identify the reasons behind the variability
Concurrent engineering: bringing engineering design and Line balancing: the process of assigning tasks to workstations in such Service process: 3. Reduce process variability, eg do things consistently
manufacturing personnel together early in design phase a way that the workstations have approximately equal time 1. Improving processing rates (bar code scanners, ATM) 4. Take corrective actions if necessary
3DCE (3 dimensional concurrent engineering): simultaneous requirements. 2. Priority rules: dedicated servers for small jobs 5. Ensuring quality requires process to be in control
development of product, process and supply chain Why is line balancing important? 3. Transform customers into servers: self-check-outs, fast food Once the process is in control, it is necessary to determine if the
Computer aided design (CAD), Design for manufacturing (DFM), 1. Allows us to use labour and equipment more efficiently soft drinks self-serving process is capable of producing output that is within specifications:
Design for assembly (DFA): ikea, Design for disassembly (DFD), 2. Avoid fairness issues that arise when 1 workstation must First come first serve (FCFS) range of acceptable values established by engineering design or
Design for recycling (DFR) work harder than another Shortest processing time (SPT) customer requirements ie. LSL & USL.
Flow unit: what is tracked through the process and generally defines Process types: job shop, batch, repetitive Process capacity =
the process output of interest Job shop: operates on a relatively small scale. It is used when a low m = # of servers required If process is centered
Activity time: how long does the worker spend on the task volume of a high-variety goods or services will be needed. Eg: Process utilisation: p =
Resource capacity: # of units the worker can make per unit time emergency room, veterinarian office Customer in queue:
Bottleneck: step with the lowest resource capacity Batch: is used when a moderate volume of goods or services is Customer in process: If process is not centered
Process capacity: # of units a process can produce. It is the resource desired and it can handle a moderate variety in products or services. Customer in service = mp
capacity of the bottleneck Enjoy EOS. Eg: bakeries, movie theatres. Waiting time for m>1:
Flow time: time it takes a unit to get through the whole process (eg Repetitive: when higher volumes of more standardised goods or
13min) services are needed. The standardised output means only slight Industry practice: process is capable if Cp ≥ 1.33
Flow rate/throughput rate/output rate: how much unit flow through flexibility of equipment is needed. Skills of workers are generally low. How to improve process capability: simplify, standardise, mistake-
a process per unit time (eg. 1/13unit/min) AFFECTED BY PROCESS Eg: macs, automatic car wash. proof, upgrade equipment & automate
CAPACITY/SUPPLY/DEMAND Process selection refers to the deciding on the way of production of ISO9000: implemented broadly to certify a firm’s quality
Inventory turns = 1/flow time (fast is good!) = flow rate / inventory (# goods or services will be organised and transformed. It has major management process. Ensures consistency in processes. Based on
of turns per unit time. Eg. 50 turns/year) implications on: Reduced waiting time: psychology procedure to document processes and monitor quality- follows the
Inventory: average # of flow units in the process 1. Facility layout (1) Unoccupied time feels longer (2) Pre-process waits feel longer (3) Plan-Do-Check-Act (PDCA) cycle.
Little law: inventory = flow rate x flow time condition: system must 2. Process flexibility: degree to which the system can be Anxiety makes waits seem longer (4) Uncertain waits are longer (5) Pareto Analysis: 80% of the problems may be attributed to 20% of
be in steady state adjusted to changes in processing requirements due to Unexplained waits feel longer (6) Unfair waits seem longer (7) Solo the causes
Average number of units in the system = arrival rate x average time factors like waits feel longer (8) The more valuable the service, the long the Six sigma: a business process for improving quality, reducing costs
spent by a unit in the system - Product and service design changes customer will wait and increasing customer satisfaction. Having no more than 3.4
Resource utilisation = flow rate / resource capacity (eg 84%) - Product volume changes Waiting time tends to infinity as the utilisation of a process defects per million.
Process utilisation = flow rate / process capacity (eg 67%) - Changes in process technology approaches 100% Total quality management (TQM): a philosophy that involves
Utilisation measures how much the resource/process actually does Pooling multiple queues can reduce time-in-queue with the same everyone in an organisation in a continual effort to improve quality
produce relative to how much it can produce if it were running at full Chapter 4: manage queue and waiting amount of labour and achieve customer satisfaction.
speed. Why does a queue form? TQM approach: find out what the customer wants. Design a product
Determinants of effective capacity: (1) Facilities (2) Product and Variability in inter-arrival and/or service time: short term Chapter 5: quality management or service that meets the wants. Design processes that facilitate
service factors (3) Process factors (4) Human factors (5) Policy factors mismatches in arrival and services time results in time at which Product quality: performance, aesthetics, special features, doing the job right the first time. Keep track of results (process
(6) Operational factors (7) Supply chain factors (8) External factors conformance, reliability, durability, perceived quality, serviceability control). Extend these concepts throughout the supply chain.
Production of good VS delivery of services: (1) Design flexibility into systems (2) Take stage of life cycle into the servers have to be idle. assurance, courtesy, tangibles
(1) Degree of customer contact (2) Uniformity of input (3) Labour account (3) Take a ‘big picture’ approach to capacity changes (4) Flow time = waiting time + service time Design quality: intention of designers to include or exclude certain
content of job (4) Uniformity of output (5) Measurement of Prepare to deal with capacity ‘chunks’ (5) Attempt to smooth Inventory = queue length + customers in service features in a product or service
productivity (6) Production and delivery (7) Quality assurance (8) capacity requirements (seasonality) (6) Identify the optimal Flow rate = customer arrival rate (demand controlled) Conformance quality: degree to which goods and services conform
Amount of inventory (9) Evaluation of work (10) Ability to patent operating level (volume vs costs) (7) Choose a strategy if expansion is Mean service time = mean inter-arrival time = to the intent of the designers
design involved Mean service rate = average arrival rate = Random variation: natural variation in the output of a process
Labour (material and asset) = 1/labour productivity Capacity cushion: extra capacity built to offset demand uncertainty S.D of service time = S.D of inter-arrival time = created by countless minor factors (process in control). Day to day
Trade-off is an exchange where you give up 1 thing in order to get Capacity cushion = 100% - process utilisation C.V of service time = C.V of inter-arrival time = variation, typical ‘white noise’, nothing has gone wrong & there is
something else that you also desire. Factors for outsourcing: (1) Available capacity (2) Expertise (3) nothing to fix
Operations has major influence on competitiveness: Quality considerations (4) Nature of demand (5) Cost (6) Risk Process utilisation: p = Assignable variation: a variation whose cause can be identified and
(1) Product and service design (2) Cost (3) Location (4) Quality (5) Challenges of planning service capacity: Customers in service = p eliminated (process out of control) something unusual has happened
Quick response (6) Flexibility (7) Inventory management (8) Supply (1) The need to be near customers (2) The inability to store services Little law: inventory = flow rate x flow time and the process has changed significantly, there is a need for
chain management (9) Service (10) Managers and workers for consumption later (3) The degree of demand volatility is higher Customer in queue: intervention.
Customer in process: Statistical process control (SPC): statistical evaluation of the outputs
Chapter 2: product, process & capacity Chapter 3: process selection, facility layout, line balancing of a process. It involves periodically taking samples out of the
Driving force of product/service re/design: 2 basic layouts: process layout and product layout process output and computing sample statistics (sample mean &
(1) Competitiveness (2) Cost or availability (3) Technology (eg. Process layout are not arranged according to a particular production range)
Patent) (3) Economical (eg, china’s growth) (4) Social and sequence. It can handle varied processing requirements (common in Sample statistics (such as x-bar and sample range R) are used to
demographic (5) Political, liability and legal (6) Sustainability service) and can process jobs of same requirements in batches. judge the randomness of the process variation and it helps to decide
Key design issues: In batch production, setup time: time needed to prepare a process For a system to be stable, the long run/steady state average service if a process is in control or not.
(1) Product or service life cycles (2) Standardisation (3) Mass for it to be ready for the specified tasks, is often required to switch rate (process capacity) must be faster than the arrival rate. 2 types of control charts:
customisation (4) Reliability (5) Robust design (6) Degree of newness between different batches of jobs. How to reduce waiting time? Mean control chart (x bar chart): monitor the central tendency of a
(7) Cultural differences Activity time = setup time + run time 1. Reduce variability as much as possible process
Challenges of service design: Presence of setup time impacts process capacity so choose the right 2. Reduce utilisation: increase mean service rate/ reduce Variation control chart (R chart): sample range = max(X)-min(X)
(1) Barriers are low to enter and exit (2) Focus on more intangible batch size. mean arrival rate Type I error: concluding a process is not in control when it actually is
factor, perceived quality issues are often intangible (3) Design of Product layout are arranged according to a particular production 3. Increase capacity/service rate: add servers Type II error: concluding a process is in control when it is not
service and delivery process cannot be separated (4) Outputs variety sequence. It uses standardised processing operations to achieve How to reduced variability? Process control is to detect whether or not there has been a change
(5) Customers are part of the inputs and processes (6) Cannot be smooth, rapid, high-volume flow. Arrival process: in the underlying process steps:
inventoried (7) Location is very important Cycle time: defined as the flow time of each station, should be 1. Reduce variability: schedule appointments, peak loading 1. Identify whether the process variations are random or
Design for operations: taking into account of capabilities of the synchronised in a highly automated production line. (Product layout) pricing assignable
organisation’s operations function Cycle time = 1/process capacity 2. Eliminate need: renewals by mails, boarding passes online 2. Identify the reasons behind the variability
Concurrent engineering: bringing engineering design and Line balancing: the process of assigning tasks to workstations in such Service process: 3. Reduce process variability, eg do things consistently
manufacturing personnel together early in design phase a way that the workstations have approximately equal time 1. Improving processing rates (bar code scanners, ATM) 4. Take corrective actions if necessary
3DCE (3 dimensional concurrent engineering): simultaneous requirements. 2. Priority rules: dedicated servers for small jobs 5. Ensuring quality requires process to be in control
development of product, process and supply chain Why is line balancing important? 3. Transform customers into servers: self-check-outs, fast food Once the process is in control, it is necessary to determine if the
Computer aided design (CAD), Design for manufacturing (DFM), 1. Allows us to use labour and equipment more efficiently soft drinks self-serving process is capable of producing output that is within specifications:
Design for assembly (DFA): ikea, Design for disassembly (DFD), 2. Avoid fairness issues that arise when 1 workstation must First come first serve (FCFS) range of acceptable values established by engineering design or
Design for recycling (DFR) work harder than another Shortest processing time (SPT) customer requirements ie. LSL & USL.
Flow unit: what is tracked through the process and generally defines Process types: job shop, batch, repetitive Process capacity =
the process output of interest Job shop: operates on a relatively small scale. It is used when a low m = # of servers required If process is centered
Activity time: how long does the worker spend on the task volume of a high-variety goods or services will be needed. Eg: Process utilisation: p =
Resource capacity: # of units the worker can make per unit time emergency room, veterinarian office Customer in queue:
Bottleneck: step with the lowest resource capacity Batch: is used when a moderate volume of goods or services is Customer in process: If process is not centered
Process capacity: # of units a process can produce. It is the resource desired and it can handle a moderate variety in products or services. Customer in service = mp
capacity of the bottleneck Enjoy EOS. Eg: bakeries, movie theatres. Waiting time for m>1:
Flow time: time it takes a unit to get through the whole process (eg Repetitive: when higher volumes of more standardised goods or
13min) services are needed. The standardised output means only slight Industry practice: process is capable if Cp ≥ 1.33
Flow rate/throughput rate/output rate: how much unit flow through flexibility of equipment is needed. Skills of workers are generally low. How to improve process capability: simplify, standardise, mistake-
a process per unit time (eg. 1/13unit/min) AFFECTED BY PROCESS Eg: macs, automatic car wash. proof, upgrade equipment & automate
CAPACITY/SUPPLY/DEMAND Process selection refers to the deciding on the way of production of ISO9000: implemented broadly to certify a firm’s quality
Inventory turns = 1/flow time (fast is good!) = flow rate / inventory (# goods or services will be organised and transformed. It has major management process. Ensures consistency in processes. Based on
of turns per unit time. Eg. 50 turns/year) implications on: Reduced waiting time: psychology procedure to document processes and monitor quality- follows the
Inventory: average # of flow units in the process 1. Facility layout (1) Unoccupied time feels longer (2) Pre-process waits feel longer (3) Plan-Do-Check-Act (PDCA) cycle.
Little law: inventory = flow rate x flow time condition: system must 2. Process flexibility: degree to which the system can be Anxiety makes waits seem longer (4) Uncertain waits are longer (5) Pareto Analysis: 80% of the problems may be attributed to 20% of
be in steady state adjusted to changes in processing requirements due to Unexplained waits feel longer (6) Unfair waits seem longer (7) Solo the causes
Average number of units in the system = arrival rate x average time factors like waits feel longer (8) The more valuable the service, the long the Six sigma: a business process for improving quality, reducing costs
spent by a unit in the system - Product and service design changes customer will wait and increasing customer satisfaction. Having no more than 3.4
Resource utilisation = flow rate / resource capacity (eg 84%) - Product volume changes Waiting time tends to infinity as the utilisation of a process defects per million.
Process utilisation = flow rate / process capacity (eg 67%) - Changes in process technology approaches 100% Total quality management (TQM): a philosophy that involves
Utilisation measures how much the resource/process actually does Pooling multiple queues can reduce time-in-queue with the same everyone in an organisation in a continual effort to improve quality
produce relative to how much it can produce if it were running at full Chapter 4: manage queue and waiting amount of labour and achieve customer satisfaction.
speed. Why does a queue form? TQM approach: find out what the customer wants. Design a product
Determinants of effective capacity: (1) Facilities (2) Product and Variability in inter-arrival and/or service time: short term Chapter 5: quality management or service that meets the wants. Design processes that facilitate
service factors (3) Process factors (4) Human factors (5) Policy factors mismatches in arrival and services time results in time at which Product quality: performance, aesthetics, special features, doing the job right the first time. Keep track of results (process
(6) Operational factors (7) Supply chain factors (8) External factors conformance, reliability, durability, perceived quality, serviceability control). Extend these concepts throughout the supply chain.
