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Design for Six-Sigmain the School of Computing, Engineering and Physical
Sciences
Module introductionby Dr J. Whitty
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Lessons structure• The lessons will in general be subdivided
in to eight number of parts, viz.:1) Statement of learning objectives2) Points of orders3) Introductory material (Module aims)4) Concept introduction (Managerial decisions)5) Development of related principles (Product
life cycle)6) Concrete principle examples via –
reinforcement examination type exercises7) Summary and feedback8) Formative assessment, via homework task
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What is Operational Management?
• Initial ten-minute buzz-group discussion here to attempt to address this fundamental question, via categorising the nuclear industry by sector, and
• Hence, describe: why is necessary to study such a module as part of a nuclear decommissioning course
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Module Aims
•Aims– To develop knowledge and
understanding of operational management principles of design foe six-sigma and their relationship with management systems a engineering-design/consultancy type business environment or industry
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Module: Objectives
•Objectives– Describe the principles of six-sigma and
explain relevant theoretical concepts.– Explain the mechanisms of resource
planning and scheduling when applied to a selected industry or site/facility.
– Plan and define site layout with regard to operational needs
– Use relevant software to ensure that operations and products are designed for a six-sigma philosophy.
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Module Overview•Operations management
definitions– Relationships between manufacturing and services– Business organisation and structure– Operations strategy & corporate strategy– Trends in operations management
•Process management and design– Process choice– Economies of scope– Plant design and economics.– CIM ( inc. MRP and JIT type systems)
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Module Overview•Quantitative management
methods– Flow processes work study methods– Line-balancing – Decision theory and decision trees– Basic management statistics
•Quality restrictions – Financial issues and dissimilation – Quality inc. TQM.– Other Aspects e.g. H&S
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Teaching and learning strategies
• Here the aim of Prof Waqar and I is to develop knowledge skills in Operations Management along with personal transferable, teamwork communication and IT skills, via– Formal & guest Lectures – Discussion seminars and presentations– Tutorials, – Student centred learning - individually
and in groups– Case studies and DVD/videos
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Recommended reading• Set Text
– Operations Management – Stratgey and Analysis by Krajewski L J & Ritzman L P Published by Addison-Wesley
• Essential Reading– The Goal by Goldratt E & Cox, Published by Gower
Publishing– Production Management Systems by Browne J,
Shivnan J & Harhen J., Published by Addison-Wesley– Automation, Production systems and Computer
Integrated– Manufacturing by Groover M P., Published by
Longman Higher Education
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Session Learning Objectives
• Describe operations in terms of inputs, processes, outputs, information flows, suppliers and customers.
• Explain the meaning of nested processes• Define & label the product life cycle• Classify products within the product life cycle• Identify the set of decisions that operations.
managers must make• Answer Examination/Assignment type questions
involving product lives and operational business decisions.
By the end of the session, learners will be able to
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What is Operational
Management?• The term operations management refers to direction and control of processes that transform inputs into products and services. It underlies all functional areas because processes are found in all business activities.– A process is any activity or group of activities that take one or more
inputs, transforms and adds value to them, and provides one or more output for its customers.
• In some companies it refers to a particular department. Operations department manages processes that produce products or services for the external customers but in closely involved with other areas
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Historical context• Industrial revolution in particular James Watt
1764, Smith 1776 – division of labour and Whitney 1790 – interchangeable parts.
• Scientific management (Taylor 1850)• Mass-production (Ford 1913)• Quantitative management – Guinness brewery
(Gosset, 1930)• Mega-manufacture Japan & USA (e.g JIT, ERP and CIM) -
1970s• Rise of service industry (TQM & Six-sigma)
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Example process • Sales generating process at a car
manufacturer e.g. BMW• Payment process at a large
computer company e.g. Dell, Microsoft
• Ordering process at a retailer such as TESCO or ASDA
• Patient care in a large hospitalIn your groups try and decide why the management such processes are important?
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Why Operations management important?
• Operations Management is an important competitive weapon across an organization.
• It is crucial because only through management of people, capital, information and materials can a company meet its goals.
• It is important to various departments that exist in an organisation
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Processes & Operations • Inputs include human resources, capital, purchased
materials and services, land and energy. Arrows represent flows and can cross because one job or customer can have different requirements
• Both manufacturing and service organisations now realize each every process and every person has (internal and external) customers.
• Inputs and outputs vary depending on the product or service provided. A jewellery store has different inputs and outputs than a jeans manufacturer.
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The Product Life Cycle
• In your buzz groups (same as earlier) pick a product of your choice and try to identify up to four phases the product will go through before a company may have to withdraw it
• After 10 mins select one member of your group to present your results to the other group.
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The Product Life Cycle
Believe it or not the Product Life Cycle is based upon the biological life cycle. For example, a seed is planted (introduction); it begins to sprout (growth); it shoots out leaves and puts down roots as it becomes an adult (maturity); after a long period as an adult the plant begins to shrink and die out (decline).
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The Product Life CycleThe 5 stages of Product Life Cycle:
•Introduction
•Growth
•Maturity
•Decline
•Withdraw
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Product Life Cycle - StagesIntroduction StageAt the Introduction (or development) Stage market size and growth is slight. it is possible that substantial research and development costs have been incurred in getting the product to this stage. In addition, marketing costs may be high in order to test the market, undergo launch promotion and set up distribution channels. It is highly unlikely that companies will make profits on products at the Introduction Stage. Products at this stage have to be carefully monitored to ensure that they start to grow. Otherwise, the best option may be to withdraw or end the product.
Growth StageThe Growth Stage is characterised by rapid growth in sales and profits. Profits arise due to an increase in output (economies of scale)and possibly better prices. At this stage, it is cheaper for businesses to invest in increasing their market share as well as enjoying the overall growth of the market. Accordingly, significant promotional resources are traditionally invested in products that are firmly in the Growth Stage
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Product Life Cycle - StagesMaturity Stage
The Maturity Stage is, perhaps, the most common stage for all markets. it is in this stage that competition is most intense as companies fight to maintain their market share. Here, both marketing and finance become key activities. Marketing spend has to be monitored carefully, since any significant moves are likely to be copied by competitors. The Maturity Stage is the time when most profit is earned by the market as a whole. Any expenditure on research and development is likely to be restricted to product modification and improvement and perhaps to improve production efficiency and quality.
Decline Stage
In the Decline Stage, the market is shrinking, reducing the overall amount of profit that can be shared amongst the remaining competitors. At this stage, great care has to be taken to manage the product carefully. It may be possible to take out some production cost, to transfer production to a cheaper facility, sell the product into other, cheaper markets.
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Product ExamplesLet us discuss where the following products fit on the product life cycle and try to identify a sector of business associated with four of them.
Third generation mobile phones E-
conferencing
Handwritten lettersShell Suits
Personal Computers
Faxes
Cotton t-shirts
Credit cards
Portable DVD Players
Breathable synthetic fabrics
Typewriters
Cheque books
Smart cards
All-in-one racing skin-suits
iris-based personal identity cards
Composite Materials
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Product Examples SolutionIntroduction
Decline Growth Maturity
Third generation mobile phones
E-conferencing
All-in-one racing skin-suits
iris-based personal identity cards
Typewriters
Handwritten letters
Shell Suits
Cheque books
Portable DVD Players
Breathable synthetic fabrics
Smart cards
Composite Materials
Personal Computers
Faxes
Cotton t-shirts
Credit cards
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Processes and operations
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Nested processes• Processes can be broken down into sub-processes which can
in turn be broken down to even more sub-processes.
• The concept of processes within processes is called Nested Process.
• One part of a process can be separated from another part several reasons, since person or department may not be able to do all parts of the process.
• Some parts of the process may be standardised for high volume and some parts may be customised to be flexible and for low volume operations.
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Example: A bank• A bank may have thousands of nested processes.
• Retail represent one of several parts of its business.
• Others include operations (cash management, loan operations, and trading operations), products (auto finance, cards and mortgages) and wholesale (trading, loan administration, and leasing).
• There are four basic groupings of processes, i.e. distribution, compliance, finance and HR.
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Nested processing examples• Distribution for example can be broken down into 15
nested processes including counter transactions, tracking and managing branch sales activity and providing cash machine and telephone hot lines for telephone banking.
• Nested processes are sometime performed in a sequence.
• Often they are performed independently with other activities within a nested process must be performed to provide a full set of services.
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Bank example summary
Note: Each part of an organisation not just the operations department must design and operate processes and deal with quality, technology and staffing issues. Each part has its own identity and yet connected with operations
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Operational managerial decisions
• Decisions making is central to all management activities.
• The difference for Operations Manager is the types of decisions they have to make or get involved in making.
• The decisions that operations managers have to make define the scope and content of Operations Management
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Types of OM decisions• Strategic choices
• Process
• Quality
• Capacity,
• Location,
• Layout
• Operating Decisions
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Strategic or Tactical• Strategic decisions are less structured and developed into
the future and long term consequences. They tend to focus on the entire organisation and cuts across departments.
• Strategic Choices – effect company’s future directions, help determine company’s global strategies and competitive priorities and how best to design processes that fit in with its competitive priorities.
• Tactical decisions are more structured, routine and repetitive and have short term consequences. They tend to focus on departments, teams and tasks.
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Process & Quality• Process – are fundamental to all activities that
produce goods and services. E.g. type of work done in house or subcontracted; amount of automation; methods of improving processes; processes for one time projects;
• Quality – underlines all processes and work activity. OM helps to establish quality objectives and seek ways to improve the company’s products and services. OM determines the use of total quality management and statistical process control
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Capacity• Capacity, location and layout – these decisions
require long term commitments. OM help determine systems capacity; location of new facilities including global operations and physical layout.
• Operating Decisions – deals with operating the facility after its built. OM helps coordinate various internal and external supply chains; manage inventory; forecast demand; control output and staffing levels; resource planning and which customers or jobs get top priority and implantation of JIT (lean systems
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Breaking Down Barriers
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Rational Decision-Making Process1. Recognize a decision
problem2. Define the goals or
objectives3. Collect all the relevant
information4. Identify a set of feasible
decision alternatives5. Select the decision
criterion to use6. Select the best
alternative
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Aids: SWOT• Organizations,
companies and working groups can be analyzed using what is known as SWOT, this meaning – Strengths– Weaknesses – Opportunities – Threats
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Related to SWOT is PEST• Political
– Tax– Regulations & legislation – Stability
• Economical– Growth/Decline– Rates (e.g. interest)
• Social– Demographics– Safety
• Technological– R&D– automation level
Can be modified to Can be modified to SLEPT if legal matters are SLEPT if legal matters are
importantimportant
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Examination type question
• Operations Management is fundamental in the nuclear power industry
a. Briefly (in less than 50 words) explain the term manufacturing operations management [4]
b. State six types of operational decisions that must be frequency addressed by managers [6]
c. With reference to these decisions describe
market-based and resource-based strategies[5] b. Describe a methodology used in order to aid
such strategies and/or decisions processes [6].
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Summary and feedback
• Describe operations in terms of inputs, processes, outputs, information flows, suppliers and customers.
• Explain the meaning of nested processes• Define & label the product life cycle• Classify products within the product life cycle• Identify the set of decisions that operations.
managers must make• Answer Examination/Assignment type
questions involving product lives and operational business decisions.
Have we met our learning objectives, if so when/where did we do it:
