All entries for Saturday 08 September 2007

September 08, 2007

Operations Management Lesson 1 Exercise

Create a new entry in your Blog using the subject ‘Operations anagement Lesson 1 Exercise’. Take a small process you are familiar with and ask the following questions: 1. What is the strategic role of the process within the organisation? 2.What performance objectives are important? 3.Pick three questions from Table 1.1 about the strategic decisions hat have been taken within this process. Answer them, justifying he decisions in relation to the process role and performance equirements.

1) What is the strategic role of the process within the organization?

The “Workstation fleet management” is the management of a fleet of PC and laptop, using certain
tools, to improve operational efficiency and effectiveness.

In IBM we have more then 300,000 PC and laptop.

Every employee has got one PC that is his/her fundamental work asset: for this reason at IBM it’s required a perfect functionality of these assets. This responsibility is left to the “Workstation fleet management process”

At IBM there is a team of people, the so called “PC support team” whose task is to resolve any issue HW and/or SW related, that could occur to in the employee workstations.

The group is divided into different groups and each group is divided into different levels of

p.e. for the Sw group is divided in:

  • group A for the first level at which calls are diverted to solve the problem
  • group B for the second level at which calls are diverted if the problem persists

2) What performance objectives are important?

There are three main performance objectives that are quality, speed and cost.

Quality: which means doing things right, providing error-free solutions, resolving problems in the right way without adding new ones is a fundamental issue.

Speed: which means doing things fast , minimizing the time between the call for the service and the
delivery of a solution to internal customer. The faster is the service the lower is the working time lost by the employee. He can quickly go back to work and produce revenue and service for the company.

Cost: which means doing things with cost efficiency, one of the latest strategic goals targeted at IBM. Therefore it’s important to deliver every services with the less money impact. The target assigned to “PC support team” is to maintain the internal customer expectation with the lower cost possible.

Another important factor is the flexibility as the group have to work in different language and with
non predictable peaks of work (for example virus).

3) Pick three questions from Table 1.1 about the strategic decisions that have been taken within this process. Answer them, justifying the decisions in relation to the process role and
performance requirements.

What technologies should we use?

In the recent years IBM has taken the decision of using new Assistance Software also for the “Workstation fleet management process”. Since new SW’s have been used, they have improved the service effectiveness and efficiency, allowing a reduction
of feedback times, and consequently costs, while increased the quality of service.

for example, now every technician at PC Support can take the control of the workstation and directly work on it without the interference of the owner: this remote controlling procedure allow to centralize the service and reduce the local support with money saving.

How should we forecast and monitor the demand

On one side the new sw enable the support centre to collect all the information of the internal customers and the history of every workstation issues, on the other hand now it’s also possible to merge this information with the intelligence coming from the workstation suppliers (in case of manufacturing defects) and from public internet libraries (Virus); in this way it’s possible to forecast and monitor the demand.

How do we measure operations performance?

We can do this in three different ways:
Quality: if the ticket (so it’s called the opening of a problem) is closed and not reopened.
Speed: the time in which the support is able to resolve the problem.
Cost: total expenses for “Workstation fleet management process”, calculated with ABC criteria and compared with benchmarks.

Zoe Radnor (2007); «Operation Management»;Warwick Business school

N. Slack, S. Chsmbers, R. Johnston, A. Betts; «Operation and Process Management»; Prentice Hall
F. Favotto; «Economia Aziendale: modelli misure casi»; McGraw-Hill Informatica

Operations Management Lesson 2 Exercise

Take two processes with different volume and variety characteristics. Profile these processes and establish the process choice and layout decision they have taken. Critically appraise the design decisions taken.

The two processes I’ve decided to analyse are both in the food industry: the first one is the “Discovery pizza ( a chain of take away pizza shop) selling process” , and the second one is the “ Skychief on board catering service, for airline CO’s”

The discovery pizza shop is a small open space in which customers could choose two different kind of solutions: for a small order (one/two slice of pizza), they could choose from the exposed pizzas and for big orders (one pizza or more) they could ask for their preferred pizza choosing from a list of ingredients and toppings (obviously in this case there’s a significant waiting time for the customer, who accept it in order to take away his/her preferred pizza).

The Skychief provides the meal on board for several airline Companies; at Skychief they have large laboratories where they pre-cook the food. Once the food is pre-cooked it is then transported to the airports and loaded on every airplane where it will distributed, heated up, to travellers.

Let’s analyses the 4 V’s profile for both these two processes:

Discovery Pizza:

Volume: low-medium volume;

Variety: only pizza, but with hundreds of different toppings and ingredients, well define product;

Variation in demand: medium high variation in demand, it depends a lot from the weather, and the traffic; there is also a seasonality with a decrease of sales during the national holidays and one month in the summer, when the city is empty.

Visibility: High, the process is total exposed to the costumers.


Volume: high, they produce thousand of meals a day

Variety: medium-low since the airline could choose only few different kind of meal with predefined ingredient.

Variation in demand: very low variation in demand

Visibility: low visibility and low contact skill (the personnel never meet the end consumers).


Process choice

For Discovery Pizza, using Slack et al’s process choice model, the process fits into the Jobbing Processes category: high skill employees are used with flexibility to produce one-off item; in my opinion, as the volume of take away pizza is increasing, DP has to move to Batch Process as it could produce more than one product at a time.

For Skychief we could consider the Mass Process Category: they produce high volume with narrow variety. In this industry the main performance objectives can be summarized as follows: good quality, speed, flexibility and of course low cost. In my opinion Skychief is moving in the right way, as in the “Lazy J trend” they stay close to the diagonal.

lesson2 img.2

Zoe Radnor (2007); «Operation Management »;Warwick Business school

N. Slack, S. Chsmbers, R. Johnston, A. Betts; «Operation and Process Management»; Prentice Hall

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