Summary Operations and Process
Management – Principles and Practice for
Strategic Impact – 6e
Chapter 1 – Operations and Processes
Operations function: part of organisation that produces products or services. All
organisations have ‘operations’ that produce some mix of products and services.
Process perspective: understanding businesses in terms of all their individual
processes. Used to analyse businesses at levels:
- Operations function of the business
- Higher and more strategic level of the supply network
- A lower, more operational level of individual processes
Operations and processes contributing to strategic impact of business in ways:
- Cost
- Revenue
- Investment
- Capabilities
Generally, high volume with low variety, variation and visibility facilitate low-cost
processes, while low volume together with high levels of variety, variation and
visibility all increase process costs.
Operations managers use common set of decisions and activities; activities can
be clustered:
- Directing the overall strategy of the operation
- Designing the operation’s products, services and processes
, - Planning and controlling process delivery
- Developing process performance
The economic sector of an operation is less important in determining how it
should be managed than its intrinsic characteristics.
All operations are composed of processes. A process is an arrangement of
resources and activities that transform inputs into outputs that satisfy (internal or
external) customer needs.
There are many valid approaches to describing organisations. The process
perspective is a particularly valuable one.
All parts of the business manage process so all parts of business have an
operations role and need to understand operations management.
All process have inputs of transforming and transformed resources that they use
to create products and services.
Transformed resource inputs to a process are materials, information or
customers.
,All processes have transforming resources of facilities (equipment, technology,
etc.) and people.
Two types of transforming resource that form the ‘building blocks’ of all
processes:
- Facilities: buildings, equipment, plant and process technology of the
operation
- People: who operate, maintain, plan and manage the operation
SIPOC (suppliers, inputs, process, outputs, customers) analysis: method of
formalising what a process requires for its inputs, where those inputs come from,
what the process entails (at a general level), what the process produces as
outputs and for whom the outputs are intended.
, For many years the accepted distinction between products and services was not
confined to intangibility, but included other characteristics of services
abbreviated to ‘IHIP’ standing for:
- Intangibility: in that services are not physical items.
- Heterogeneity: in that they are difficult to standardise because each time a
service is delivered, it will be different because the needs and behaviour of
customers will, to some extend, vary.
- Inseparability: in that their production and consumption are simultaneous.
The service provider (who ‘produces’ the service) is often physically
present when its consumption by a customer takes place.
- Perishability: in that they cannot be stored because they have a very short
‘shelf life’. They may even perish in the very instant of their creation, such
as in the case of a theatre performance.
Most operations produce a blend of tangible products and intangible services.
Servitisation: generic term that has come to mean any strategy that seeks to
change the way in which product functionality is delivered to its markets. It
means changing the focus of what an operation produces from its products to
those services that the product enables.
Issues to understand about supply networks:
- They can be complex.
- Theoretically the boundaries of any operation’s supply network can be very
wide indeed.
- Supply networks are always changing.
Whole businesses, and even whole supply networks, can be viewed as networks
of processes.
Management – Principles and Practice for
Strategic Impact – 6e
Chapter 1 – Operations and Processes
Operations function: part of organisation that produces products or services. All
organisations have ‘operations’ that produce some mix of products and services.
Process perspective: understanding businesses in terms of all their individual
processes. Used to analyse businesses at levels:
- Operations function of the business
- Higher and more strategic level of the supply network
- A lower, more operational level of individual processes
Operations and processes contributing to strategic impact of business in ways:
- Cost
- Revenue
- Investment
- Capabilities
Generally, high volume with low variety, variation and visibility facilitate low-cost
processes, while low volume together with high levels of variety, variation and
visibility all increase process costs.
Operations managers use common set of decisions and activities; activities can
be clustered:
- Directing the overall strategy of the operation
- Designing the operation’s products, services and processes
, - Planning and controlling process delivery
- Developing process performance
The economic sector of an operation is less important in determining how it
should be managed than its intrinsic characteristics.
All operations are composed of processes. A process is an arrangement of
resources and activities that transform inputs into outputs that satisfy (internal or
external) customer needs.
There are many valid approaches to describing organisations. The process
perspective is a particularly valuable one.
All parts of the business manage process so all parts of business have an
operations role and need to understand operations management.
All process have inputs of transforming and transformed resources that they use
to create products and services.
Transformed resource inputs to a process are materials, information or
customers.
,All processes have transforming resources of facilities (equipment, technology,
etc.) and people.
Two types of transforming resource that form the ‘building blocks’ of all
processes:
- Facilities: buildings, equipment, plant and process technology of the
operation
- People: who operate, maintain, plan and manage the operation
SIPOC (suppliers, inputs, process, outputs, customers) analysis: method of
formalising what a process requires for its inputs, where those inputs come from,
what the process entails (at a general level), what the process produces as
outputs and for whom the outputs are intended.
, For many years the accepted distinction between products and services was not
confined to intangibility, but included other characteristics of services
abbreviated to ‘IHIP’ standing for:
- Intangibility: in that services are not physical items.
- Heterogeneity: in that they are difficult to standardise because each time a
service is delivered, it will be different because the needs and behaviour of
customers will, to some extend, vary.
- Inseparability: in that their production and consumption are simultaneous.
The service provider (who ‘produces’ the service) is often physically
present when its consumption by a customer takes place.
- Perishability: in that they cannot be stored because they have a very short
‘shelf life’. They may even perish in the very instant of their creation, such
as in the case of a theatre performance.
Most operations produce a blend of tangible products and intangible services.
Servitisation: generic term that has come to mean any strategy that seeks to
change the way in which product functionality is delivered to its markets. It
means changing the focus of what an operation produces from its products to
those services that the product enables.
Issues to understand about supply networks:
- They can be complex.
- Theoretically the boundaries of any operation’s supply network can be very
wide indeed.
- Supply networks are always changing.
Whole businesses, and even whole supply networks, can be viewed as networks
of processes.
