Operation Management

This module is designed to give an introduction to that part of the organization which is responsible for creating and delivering its products and services. Organizations only continue to exist if they meet their customers’ requirements. Whilst “Marketing” has the role of identifying these requirements, “Operations” ensures that the product or service is created and delivered in the most competitive form. With competition becoming increasingly intense on an international scale, the pressures are greater to reduce costs, to improve quality and to respond quickly to the market, and individual customer demands. Companies can only satisfy these needs through their operational activities. The product is the visible manifestation of the organization, by which it is ultimately judged. Operations Management is therefore a core activity of any organization; an understanding of it is of the greatest importance. The intention of the module is to emphasize the strategic importance of Operations Management and how it relates to the other functions of the organization, especially Marketing. Interest in Operations Management has never been greater, as pressure builds on organizations to meet not only rigorous quality standards but also to operate within severe cost constraints. In manufacturing this has been felt for several years as companies fought against international competition. Now the service sector and in particular the public service sector are being subjected to the same rigorous scrutiny.

Even manufacturing companies need to differentiate themselves from their competitors by the service which they associate with their products. It is for this reason that we have developed a Service Operations Management module available as an option in the second semester of the MBA course. There is a tight focus on “value” which can only be achieved in the long-run by close attention to the operating/marketing system, starting with the purchase of resources of the right cost and quality, followed by their conversion into a product acceptable to the customer and, finally, delivery of this product to the customer. Although a thorough study of the module will enable you to recognize and describe different features of many organizations, it is more important that you should be able to analyze these activities and be able to say why organizations do what they do, looking critically at the processes used to create the products and services.

You should be able to recognize why designing the right processes is important in creating the most competitive output. You should be able to understand the strategic importance of an operations function that is closely integrated with the other activities of the organization. This module covers the basic principles of the topic. It is intended to be as practical, and as enjoyable, as possible, with plenty of case studies for discussion. The 10 weeks available is a limited amount of time to cover such a crucial subject area. You are expected to prepare for the workshops by being familiar with the recommended reading for each session. You will need to extend your reading beyond the recommended text in order to do well in the assignments. We are anxious that the material and its delivery are accessible and relevant. All constructive comments are welcome.

Module Leader:
Dr Tie Xu Senior Lecturer in Operations Management 103 E Reg Vardy Building Sunderland Business School Faculty of Business and Law University of Sunderland Sunderland SR6 0DD Tel: 01915152495 Fax: 01915152308 E-mail: [email protected] SBS URL: http://www.sunderland.ac.uk/faculties/bl/staff/tiexu/

How to use this guide
The purpose of this guide is to help you map your way through the Operations Management module. The module is divided into ten sections and for each section you will be required to do a number of things. These will be specified in detail in this guide and will include: • • • • • Reading the notes provided Reading the associated texts Carrying out activities, including preparation of case studies, prior to attending the workshops Attending workshops and contributing your own experiences to the discussions Carrying out the assignment work.

TITLE: OPERATIONS MANAGEMENT CODE: PGBM03 CREDITS: 15 LEVEL: MASTERS SCHOOL: BUSINESS BOARD: Post Graduate Studies Board PRE-REQUISITES: NONE CO-REQUISITES: NONE LEARNING HOURS: 150 HOURS, with 30 contact hours, the exact nature of which is specified in the module guide LEARNING OUTCOMES On completing this module the student will be able to: Knowledge outcomes K1 Explain and interpret the systematic nature of the Operations Management function. K2 Analyze the contribution made by operations management to corporate strategy. K3 Evaluate the interdependence of the operations function and the other key activities of the organization. Skills outcomes S1 The ability to recognize and evaluate the factors involved in the managing and control of projects. S2 The ability to recognize and evaluate the operational processes available to accommodate variations in volume and variety for a range of products and services. S3 Demonstrate effective communication skills using a range of media including the preparation of business reports. S4 Demonstrate problem solving and decision-making skills to provide effective solutions to business problems. CONTENT SYNOPSIS – The central role of operations management in the organization

– Operations strategy: process design and its relevance to meeting market requirements – The management of innovation and new product design – Managing quality, both in services and manufacturing – Managing the supply chain – Introduction to project management TEACHING AND LEARNING METHODS The module is based on a normal total contact time of 30 hours, in workshops or formal lectures, supplemented by 120 hours of directed learning using appropriate texts and a module study guide. In the workshops, case studies drawn from as wide a range of management activities as possible will be used as a basis for class discussion and analysis. Practical evidence of the topics discussed will be provided by video material and wherever possible, by site visits and contact with practitioners. Students will be provided with a range of teaching material and journal articles on Sunspace. ASSESSMENT METHODS: Summative Assessment will consist of one major assignment worth 100%. The task will require students to analyze the operational issues raised in a suitable case study and provide an individual report (3000 words). The case may be provided or originate from the students own experience or investigation and research. Formative feedback will be given through workshop discussions and group working.

AMPLIFIED CONTENT: The role of Operations Management Outlining the systematic nature of Operations Management and the relationship with other functions within the organization. Reviewing the principal features of the operating systems in terms of inputs, transformation process and outputs, with special reference to the particular characteristics of service operations. Service Operations Management Reviewing the intangible nature of the service operation and comparing the essential differences between service and manufacturing operations. Defining the service package and how the features of a successful service operation may be evaluated using the Gaps model. Operations Strategy The strategic role of the Operations function and the contribution made in supporting the achievement of Business Objectives by the design and management of processes to provide the goods and services required to meet the market demand. Process Design Review the nature of the different process designs available to meet the operational objectives and accommodate variations in market requirements for volumes and variety.

Product Design and Development The role of Operations and Marketing in the design and development of new products and services and the systematic approach to innovation required to respond to new market requirements. Managing the Supply Chain The design of the supply chain network and the relationship with internal and external suppliers providing inputs to the operation. Reviewing the three interrelated activities, shaping the network, influencing the locations of operations in the network and planning the long-term capacity strategy for each part of the supply chain. Quality Assurance and Service Quality This session will look at definitions of Quality Management and the requirements from a customers point of view using the quality gap model to evaluate the fundamental gap between customer expectations and perceptions of service quality. Project Management This session will focus on the concepts of Project Management and provide an introduction to the planning managing and control of projects and the importance of defining objectives, its scope, and overall strategy and significant milestones.

Dr Tie Xu Room 103e, Extension: 2495 e-mail: [email protected] INDICATIVE READING: Slack,N., Chambers,S. ,and Johnston,R.J.(2010) Operations Management(6th Edition) Published by Pearson This book is supported by an excellent website, with additional material and case studies, as well as further links and aids to study. Hill,T.(2005) Operations Management(2nd Edition) Published by Macmillan Business Waters,D.(2002) Operations Management (2nd Edition) Published by Addison-Wesley Chase,R.B., Jacobs,F.R., Aquilano,N.J (2006) Operations Management for Competitive Advantage with Global Cases (11th Edition) Published by McGraw-Hill Fitzsimmons,J.A., Fitzsimmons,M.J. (2008) Service Management: Operations ,Strategy and Information Technology (6th Edition) Published by McGraw-Hill Later editions of some of these books may now be available.

Journals International Journal of Operations & Production Management Journal of Operations Management The following are excellent articles: Bessant, J. and Caffyn, S. and Gallagher, M. (2000) ‘An evolutionary model of continuous improvement behaviour’ Technovation, 21, pp. 67-69 Bessant, J. and Caffyn, S. and Gilbert, J. (1996) ‘Learning to manage innovation’ Technology Analysis & Strategic Management, Vol 8, No 1, pp. 59-70. Lovelock, Christopher H., Classifying Services to gain Strategic Marketing Insights, Journal of Marketing, 47, (Summer 1983), 9-20. Shostack, G. Lynn, Breaking Free from Product Marketing, Journal of Marketing, 41, (April. 1977), 73-80.

Introduction If Marketing’s function is to identify the needs of customers, then Operations Management has the role of providing the required products or services in a way that satisfies the criteria imposed by the market. Efficient operation of this function is therefore important if the organization is to be successful. An understanding of the main operational tasks is an essential starting point in this process. Assignment Looking at your company at organizational level, or department level critically assess the operational methods and strategies adopted to provide the product(s) in a way that give(s) maximum satisfaction to the customers or clients. A good answer will identify the criteria applied by the customer in assessing satisfaction i.e. the order-winning and order-qualifying criteria. You should a) define the principal operations tasks to satisfy these criteria b) analyze the process strategies and procedures employed to ensure that these tasks are carried out as effectively as possible. The organization may not have an operations/production department defined in such terms, but it will still produce something for the use of somebody.

The report, excluding appendices, should be not more than 3000 words in length. For your guidance, it will consist of: a) An introduction in which you describe your organization and what you and your department’s contribution is to the organization. b) An accurate description of who the customers are – they may be external or internal and what they expect from the output in terms of the broad market criteria discussed in the recommended text (Slack). From this, using the models in the text, you should be able to identify what the operations objectives are. This should then suggest the sort of process that ought to be operating. (The different process types and their ability to meet the range of operations objectives are explained at length in the module material). c) You should then describe the process in these terms and explain how and why it helps or hinders in the achievement of the operations objectives i.e. its ability to supply a product which meets the customer’s needs. This is the essential analysis that shows your ability to apply the module content to your experience. d) Having analyzed the process, describe what changes you feel ought to be made – if any – and explain why these are necessary in terms of improving the ability to meet the operations objectives. You may like to give some guidance on the feasibility of the changes, how they ought to be implemented, a cost benefit etc., etc., where these are possible.

Assessment Your work will be assessed against the following criteria: 1. Knowledge – Your work should show knowledge of the module content.

2. Understanding – Your report should demonstrate an understanding of operations management. 3. Insight – Your report should show an ability to analyze the operation in the light of the module content and your own reading. 4. Clarity – Your report should be well structured and clearly presented. You should include a short list of references to support your observations and assertions. This assignment is intended to give you an opportunity to show that you are capable of applying your knowledge of operations management, not only in describing the issues faced by the organization, but also in explaining them and justifying your proposed actions to improve them. You are invited to review all the models and concepts that we have discussed. Moderated by Tom Cuthbertson

Assignment Guidance Notes: Business Report Structure – 3000 words +/- 10% Size 12 font, spacing 1.5, include word count. Report Presentation • Front Sheet – Name / Student Number / Programme / Module / Date • Table of Contents • Introduction • Main Body of Report – Analysis of theory and practice related to this organisation or company • Conclusion and Recommendations • References – 10 to 20 • Appendix – not included in word count Use Turnitin and submit Turnitin report with your hard copy of assignment. Typical distribution of word count would be; 500 words Introduction 2000 Main body analysis 500 Conclusion and Recommendations