Slack, Chambers and Johnston, Operations Management, 6

th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.1
1.1
Chapter 1
Operations management
Pearson Education Ltd. Arnos Design
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.2
1.2
In Chapter 1 Operations management Slack et. al.
identify the following key questions:

What is operations management?
Why is operations management important in all types
of organization?
What is the inputtransformationoutput process?
What is the process hierarchy?
How do operations processes have different
characteristics?
What are the activities of operations management?
Key operations questions
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.3
1.3
Operations management is the activity of
managing the resources which are devoted
to the production and delivery of products
and services.
Operations management defined
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.4
1.4
Customers
Input
resources
Output
products and
services
Transformed
resources
Materials
Information
Customers
Transforming
resources
Facilities
Staff
Design
Planning and
control
Operations
performance
Operations
strategy
Improvement
Operations
management
Operations
strategy
Slack et al.s model of operations management
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.5
1.5
The consultancy services market % of world
revenues of 40 largest consultancy firms

Marketing/sales
2
Operations and process
management
31
Corporate strategy
17
IT strategy
17
Benefits/Actuarial
16
Organizational
design
11
Financial
6
Operations management is fashionable!
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.6
1.6
Design a store layout
which gives smooth
and effective flow
Design elegant
products which can be
flat-packed efficiently
Site stores of an
appropriate size in
the most effective
locations
Maintain
cleanliness and
safety of storage
area
Arrange for fast
replenishment of
products
Monitor and enhance
quality of service to
customers
Continually examine
and improve
operations practice
Ensure that the jobs
of all staff encourage
their contribution to
business success
Operations management at IKEA
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.7
1.7
Back office
operation in a bank
Kitchen unit
manufacturing
operation
Take-out / restaurant
operation
They are all operations
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.8
1.8
The best way to start understanding the nature of
Operations is to look around you.
Everything you can see around you (except the flesh and
blood) has been produced by an operation.
Every service you consumed today (radio station, bus
service, lecture, etc.) has also been produced by an
operation.
Operations Managers create everything you buy, sit on,
wear, eat, throw at people and throw away.
Operations are everywhere
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.9
1.9
The three basic functions of enterprises
Digital Stock
Ford Motor
Company
Pearson
Education Ltd.
Lord and
Leverett
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.10
1.10
Interfunctional relationships between operations
and other functions
Engineering/
technical
function
Accounting
and finance
function
Human
resources
function
Information
technology
(IT) function
Understanding of
the capabilities and
constraints of the
operations process
New product and
service ideas
Understanding of the
capabilities and
constraints of the
operations process
Market
requirements
Financial analysis
for performance
and decisions
Provision
of relevant
data
Recruitment
development
and training
Understanding of human
resource needs
Analysis of new
technology options
Understanding of
process technology
needs
Provision of systems for
design, planning and
control, and improvement
Understanding
of infrastructural
and system
needs
Marketing
function
Product/service
development
function
Operations
function
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.11
1.11
High-end sandwich and snack retailer
Use only wholesome ingredients
All shops have their own kitchens where fresh sandwiches
are prepared every day
Fresh ingredients are delivered early every morning
Same staff who serve you at lunch made the sandwiches
that morning
We dont work nights, we wear jeans, we party
Prt a Manger
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.12
1.12
Nutritional mechanical
and aesthetic design of
the sandwiches and
snacks
Design, location
and management
of stores and in-
store processes
and the network
that supplies them
The three basic functions at Prt a Manger
Product/
Service
development
Operations Marketing
Promotional
activities,
market
research, etc.
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.13
1.13
Automobile assembly factory Operations
management uses machines to efficiently
assemble products that satisfy current
customer demands
Operations management in all types of organization
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.14
1.14
Physician (General practitioner)
Operations management uses
knowledge to effectively diagnose
conditions in order to treat real
and perceived patient concerns
Operations management in all types of organization (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.15
1.15
Management consultant Operations
management uses people to effectively
create the services that will address
current and potential client needs

Operations management in all types of organization (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.16
1.16
Disaster relief
charity Operations
management uses
ours and our partners
resources to speedily
provide the supplies
and services that
relieve community
suffering
Operations management in all types of organization (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.17
1.17
Advertising agency Operations
management uses our staffs knowledge
and experience to creatively present
ideas that delight clients and address
their real needs

Operations management in all types of organization (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.18
1.18
machines
Operations management uses
to
efficiently assemble products
effectively knowledge
to treat real and
perceived patient
concerns
diagnose
conditions
to
people
create
services that will
address current and
potential client
needs
effectively to
ours and our
partners
resources
speedily provide
supplies and
services that relieve
community suffering
to
our staffs
knowledge and
experience
creatively
ideas that delight
clients and address
their real needs
present to
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.19
1.19
The business environment is
changing, for example:

Prompting operations responses, for
example:
Increased cost-based competition
Higher quality expectations
Demands for better service
More choice and variety
Rapidly developing technologies
Frequent new product/service
introduction
Increased ethical sensitivity
Environmental impacts are more
transparent
More legal regulation
Greater security awareness

Globalization of operations networking
Information-based technologies
Internet-based integration of operations
activities
Supply chain management
Customer relationship management
Flexible working patterns
Mass customization
Fast time-to-market methods
Lean process design
Environmentally sensitive design
Supplier partnership and development
Failure analysis
Business recovery planning

Operations management is changing
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.20
1.20
All operations are inputtransformationoutput processes
Inputs
Outputs
Transformation process
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.21
1.21
Customers
Transformed
resources
Materials
Information
Customers
Transforming
resources
Facilities
Staff
Operations input resources and outputs
Input
resources
Output
products and
services
Transformation process
Outputs are products and services
that add value for customers
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.22
1.22
Customers
Transformed
resources

Ingredients
Packaging
Customers
Transforming
resources

Equipment
Fittings
Staff
Inputs and outputs at Prt a Manger
Input
resources
Served and
satisfied
customers
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.23
1.23
Mixture of products and
services Outputs that
are a mixture of the
tangible and intangible
Prt a Manger
Acme Whistles
Mwagusi Safari
Lodge
Crude oil production
Aluminium smelting
Specialist machine tool
production
Restaurant
Information systems
provider
Management consultancy
Psychotherapy clinic
Pure products
Outputs that are
exclusively tangible
Pure services
Outputs that are
exclusively intangible
IKEA
Most operations produce products and services
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.24
1.24
Flow between operations
The level of the supply network
The level of the operation
Flow between processes
The level of the process
Flow between resources
Operations can be analyzed at three levels
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.25
1.25
Operations management is
concerned with the flow of
transformed resources
between operations,
processes, where
Processes form an internal
supply network and
become each others
customers and suppliers
External operations interact
with internal processes to form
the external supply network
Operations can be analyzed at three levels (Continued)
Flow between operations
Flow between processes
Flow between resources
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.26
1.26
The supply network Flow between operations
Broadcasting
company
Promotion
agency
Studios
Casting
agency
Creative
agency
A programme
and video
supply network
Programme/
video
maker
The
programme
and video
operation
The operation Flow between processes
Example of analysis at three levels
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.27
1.27
The supply network Flow between operations
Programme
and video
maker
Example of analysis at three levels (Continued)
The programme and video operation
The operation Flow between processes
Production
unit
Set and props
manufacture
Engineer
-ing
Marketing
and sales
Finance and
accounting
Post
production
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.28
1.28
The supply network Flow between operations
Programme
and video
maker
Example of analysis at three levels (Continued)
The operation Flow between processes
Set and props
manufacture
Set
design
Props
acquisition
Set
construction
Set
finishing
The Set and
props
manufacturing
process
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.29
1.29
Programme and
video maker
End-to-end process for programme production
Programme set and
props manufacture
Engineering
Programme
marketing and
sales
Programme
production unit
Programme finance
and accounting
Programme
post
production
End-to-end process for music video production
Music video set
and props
manufacture
Music video
marketing and
sales
Music video
production
unit
Music video
finance and
accounting
Music video
post
production
The television and video company divided into
two end-to-end business processes
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.30
1.30
Any organization
Operations
Marketing
Sales
Finance
Human
resources
Information
systems
All functions use processes to provide service
Pearson Education Ltd. Naki Kouyioumtzis
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.31
1.31
Financial services
An account
management centre at
a large retail bank
Financial analyst
advising a client at an
investment bank
Furniture manufacturing
Mass production of
kitchen units
Craft production of
reproduction
antique furniture
Hotels
Value-for-money
hotel
Lobby of an
international
luxury hotel
Differences within sectors are often greater than the
differences between sectors
Photodisc. Photolink. Jack Star
Pearson Education Ltd. MindStudio
Pearson Education Ltd. Rob Judges
Photodisc. Life File. Emma Lee
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.32
1.32
Variation in demand
High Low
Visibility High Low
Variety High Low
High Volume Low
High
A typology of operations and processes
The 4 Vs
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.33
1.33
High
Implications
Low repetition
Each staff member
performs more
of each task
Less systemization
High unit costs
Implications

High repeatability
Specialization
Capital intensive
Low unit costs
Volume Low
High
A typology of operations and processes (Continued)
The implications of high and low Volume in operations and
processes
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.34
1.34
High
Implications
Flexible
Complex
Match customer
needs
High unit costs
Implications
Well defined
Routine
Standardized
Regular
Low unit costs
Variety High
Low
The implications of high and low Variety in operations and
processes
A typology of operations and processes (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.35
1.35
High
Implications
Changing
capacity
Anticipation
Flexibility
In touch with
demand
High unit costs
Implications
Stable
Routine
Predictable
High utilization
Low unit costs
Variation in
demand
High
Low
The implications of high and low Variation in operations and
processes
A typology of operations and processes (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.36
1.36
High
Implications
Short waiting
tolerance
Satisfaction
governed by
customer
perception
Customer contact
skills needed
Received variety
is high
High unit costs
Implications
Time lag between
production and
consumption
Standardization
Low contact skills
High staff
utilization
Centralization
Low unit costs

Visibility High
Low
The implications of high and low Visibility in operations and
processes
A typology of operations and processes (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.37
1.37
Volume
Important to understand how different operations are
positioned on the 4 Vs.
Is their position where they want to be?
Do they understand the strategic implications?
Variety
Variation
Visibility
Low
High
High
High
High
Low
Low
Low
Mwagusi
Safari Lodge
Formule 1
Hotel
A 4 Vs profile of two operations
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
1.38
1.38
Questions
The Concept Design Services Case Study
1. Why is operations management important in
CDS?

2. Draw a 4 Vs profile for the companys products
and services

3. What would you recommend to the company if
they asked you to advise them in improving their
operations?