To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Instructor's Manual Operations Management Fifth edition Nigel Slack Stuart Chambers Robert Johnston For further instructor material please visit: www.pearsoned.co.uk/slack ISBN-13: 978-0-273-70850-6 / ISBN-10: 0-273-70850-3  Pearson Education Limited 2007 Lecturers adopting the main text are permitted to download the manual as required © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies around the world Visit us on the World Wide Web at: www.pearsoned.co.uk -First published 2007 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 The rights of Nigel Slack, Stuart Chambers and Robert Johnston to be identified as the author of this Work have been asserted by her in accordance with the Copyright, Designs and Patents Act 1988 ISBN-13: 978-0-273-70850-6 ISBN-10: 0-273-70850-3 All rights reserved Permission is hereby given for the material in this publication to be reproduced for OHP transparencies and student handouts, without express permission of the Publishers, for educational purposes only In all other cases, no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without either the prior written permission of the Publishers or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd., Saffron House, 6-10 Kirby Street, London EC1N 8TS This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without the prior consent of the Publishers © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Contents Chapters 10 11 12 13 14 15 16 17 18 19 20 21 Pages Operations management The strategic role and objectives of operations Operations strategy Process design The design of products and services Supply network design Layout and flow Process technology Job design and work organization The nature of planning and control Capacity planning and control Inventory planning and control Supply chain planning and control Enterprise resource planning (ERP) Lean operations and JIT Project planning and control Quality planning and control Operations improvement Failure prevention and recovery Total Quality Management The operations challenge © Nigel Slack, Stuart Chambers & Robert Johnston 2007 16 24 32 40 45 53 60 69 78 83 113 124 135 147 155 166 182 190 197 204 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual Supporting resources Visit www.pearsoned.co.uk/slack to find valuable online resources Companion Website with Grade Tracker for students • Multiple choice questions with Grade Tracker function to test your learning and monitor your progress • An interactive Study Guide including audio animations of key diagrams and extra resources linked to specific sections of the book with clearly indicated icons • Case studies with model answers • Excel Worksheets designed to enable you to put into practice important quantitative techniques • Hints on completing study activities found in the book • Links to relevant sites on the web • Flashcards to aid in the revision of key terms and definitions For instructors • Complete, downloadable Instructor’s Manual • Fully customisable, media-rich PowerPoint slides that can be downloaded and used for presentations • A TestGen testbank of hundreds of questions allowing for class assessment both online and by paper tests Also: The Companion Website with Grade Tracker provides the following features: • • Search tool to help locate specific items of content Online help and support to assist with website usage and troubleshooting For more information please contact your local Pearson Education sales representative or visit www.pearsoned.co.uk/slack © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com CHAPTER Operations management Teaching guide Introduction Teaching the material in Chapter of the book is both the most important and the most difficult part of teaching an operations management course It is the most important because it is vital that students develop an enthusiasm for the subject and this is best attempted early in the course It is difficult because one has to establish some key principles before the ‘building blocks’ of the subject have been taught We have found it useful always to work from whatever experience the students have For post-experience students like MBAs this is not difficult One can always ask them to describe the nature of operations in the companies they have worked for One can even explore some of the prejudices they might hold about operations management (dull, obstructive, always screwing things up, etc.) and base the discussions on that Undergraduates are more difficult to teach because they usually have less experience, but even so they have experienced many different operations from a customer’s point of view Therefore, one can ask them about their recent experiences as a customer (both good and bad) and base a discussion on the importance of operations management around those experiences Key teaching objectives • To enthuse students with the ‘hands-on’ excitement that can be gained from an understanding of operations management (‘… I want to prevent you ever enjoying a theatre performance, restaurant meal or shopping experience ever again I want you continually to be looking for the operations implications of every operation you enter You are going to be turned into sad people who cannot go anywhere without thinking of how you could improve the process’) • Convince students that all organizations really have an operations function; therefore operations management is relevant to every organization • Convince students that all managers are operations managers because all managers manage processes to produce outputs (‘Even marketing managers are operations managers What you learn as marketing in business school is really the “technical” side of marketing Of course this is important, but marketing managers also have to produce marketing reports and information, without mistakes in them, on time, relatively quickly, flexibly enough to contain the latest information and without using an army of marketing analysts to so In other words, they are producing services for internal customers’) • To introduce the key ideas in the chapter, namely, • Operations managers manage transformation processes, with inputs and outputs © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual • Operations can be analyzed at three levels, the level of the supply network, the level of the operation itself (sometimes called the level of the organization) and the level of individual processes • Operations differ in terms of their volume, variety, variation and visibility (the four Vs) • Operations managers engage in a set of activities, devising operations strategy, designing operations, planning and controlling operations and improving operations Exercises/discussion points There are many cases and exercises that one could use to introduce operations management The companion volume to this book (Johnston, R et al, 2nd edition, ISBN 273 624962) contains several useful cases In addition, you might like to try some of the ideas given in the subsequent text, all of which we have used • Teaching tip – Use the pie chart that shows the consultancy spend in each functional area (a PowerPoint version is available with the other PowerPoint slides) to prompt a discussion For example, ‘Operations and process management is the biggest single sector of spend in the consultancy market Why you think this is’? Try to guide the discussion to the idea that excellence in operations management reduces the cost base of the operation and helps to bring in more revenue We call this the ‘double whammy’ effect of operations No wonder it is important when it can both these things ‘Remember the old adage, profit is a very small number, made up of the difference between two very big numbers It only takes a bit to be taken off costs and bit to be added on to revenue to make a big difference to profit’ • Exercise – A useful exercise for demonstrating the ubiquitous nature of operations is to ask the class to identify every service they have encountered from waking up in the morning to going to bed at night The radio alarm which wakes them up depends on the operations of the radio station The water in which they wash (presumably) was delivered by a water utility The public transport operation transported them to college, etc etc., through to the bar, or other place of entertainment that they finish the day with • Teaching tip – Many television programmes can be recorded off-air, which illustrate operations Looking ‘behind the scenes’ of well-known operations such as airports, is a favourite topic for TV producers Any of these could be used to promote group discussions on what operations management might be like in such operations • Exercise – The four Vs dimensions of operations can be used for many types of exercise For example, one could ask different groups to identify different types of restaurant, food retailer, car servicing operation, cinema, club or pub and plot the ‘similar but different’ operations on the four dimensions • Exercise – For residential courses, especially for post-experience students, an evening could be spent ‘on the town’, where syndicates are required to sample the services of a restaurant, a retail operation and an entertainment operation, and report back the following morning This is a great way of giving participants a change of scene on the Thursday of a one-week course • Teaching tip – Remember ‘role-play’ can be used effectively in an introductory session The lecturer can role-play two operations managers managing separate similar but different © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual operations, for example, the chief tailor of a ‘fashion label’ and the production manager at a mass-produced ‘off-the-peg’ garment factory The differences in the types of resource (people and equipment), the operation’s objectives, the four Vs and so on can all be emphasized during the role-play • Teaching tip – ‘Role-play’ can also be used with a standard case study For example, the Concept Design Services case at the end of Chapter lends itself to role-playing the operations manager and marketing director of the company, to illustrate their different perspectives • Exercise – All the chapters start with an example of ‘Operations in practice’ It is often a good idea to ask the students to read through this example and then use it to promote a discussion on the topic In this chapter IKEA is described Questions such as the following could be used to prompt discussion Did the company simply conform to the conventional operations model in its sectors or did it devise something new? What did the company differently from previous furniture retailers? Why you think it decided to be different from other companies in its sector in the way it manages its operations? What advantages did making these changes give it? See later for suggested answers to these questions • Teaching tip – It is always worth illustrating the ideas in operations and process management with reference to not-for-profit organizations Charities, local government organizations and particularly health care services (although some of these are private) provide a wealth of examples For example, try asking the students to contrast an accident and emergency (A&E) department of a hospital with a unit that specializes in cosmetic surgery The former has to cope with very high variety, high variation and high visibility Demand is relatively unpredictable and it must provide fast and responsive service (relatively at least, it would be measured in minutes and hours rather than weeks and months) The cosmetic surgery unit by contrast, may still have high variety but, because patients are able to wait, it is unlikely to have very high variation Because of this, the process can be planned and scheduled in advance so that there will be far higher utilization of the process’s resources Case study teaching notes Design House Partnerships at Concept Design Services This exercise is best used as an introductory exercise towards the beginning of any operations management course It is a 'soft' exercise in that many of the issues are in the form of opinion © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual Some notes on Design House Partnerships at Concept Design Services This is quite a complex case in some ways Its purpose is not to provide students with an opportunity to ‘solve a problem’ Rather, it is an introductory case (in spite of its complexity) that can be used to open up a number of issues for discussion Its overall purpose is to introduce students to the richness and complexity of many problems within operations management Three characters are involved in the case study Linda Fleet is the Head of Marketing, Grant Williams is the Operations Manager, and Jim Thompson is the CEO of the company Once you are familiar with the case it is sometimes effective to role-play one or more of these characters for the benefit of the class, with them asking questions of the characters and the lecturer providing any further detail or clarification through this mechanism Also, it is useful to use props to illustrate the type of products this company designs, makes and distributes For example, bring in a basic plastic bucket to illustrate Focus products, a more expensive ‘upmarket’ item of plastic homeware to illustrate Concept products, and a plastic item from a design house (such as Alessi) to illustrate the Design House Partnership products Why is operations management so important in this company? This is a big question and it is best to tackle it both at a strategic and an operational level At a strategic level, operations management has provided the capability, particularly in the design and manufacturing parts of the organization, that allows the company to compete so effectively Draw the students’ attention to the final part of the case where the CEO expresses the view that the important changes in the company have come because of it being able to deploy operations superiority of some sort At an operational level, one could point out the designs that are cost effective and delivered on time to allow the company to be first into the market with new ideas Products made to high levels of quality, when they are needed, and at reasonable cost, will allow the products to be sold effectively and prevent customers’ complaints as well as saving the company money Distribution processes that provide good customer service without excessive stock levels will maximize sales whilst minimizing costs Early in the class discussion it is useful to make sure that students understand that there are three types of operations represented in this company • A design operation that produces the designs for products, sometimes in cooperation with design house designers • Manufacturing operations that actually produce the products • Distribution operations that take customer orders at its call centre, assemble the order from the products it keeps in store, and physically distribute the products to the customer All of these operations are important to the company because: • they all contribute to the company’s ability to serve its customers and therefore retain old customers and gain new customers • all contribute to the company’s costs and therefore, if managed efficiently, can reduce the costs for the whole business • all, if not managed well, can disrupt the flow of products to customers and negatively impact on the company’s reputation © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual Another way of answering this question is to look at the contribution of operations management as it is described in Chapter of the book In the chapter, four contributions of the operations function were identified These are as follows: • Minimizing cost • Maximizing revenue • Avoiding excess investment • Developing capabilities for future innovation Ask the class how different parts of the company contribute to each of these objectives Draw a 4Vs profile for the company’s products/services A four Vs analysis Although there is not enough information in the case to perform a rigorous four Vs analysis there is enough to make an informed approximation of what the four Vs profiles of the different product group would look like Start by establishing that the students understand the nature of volume, variety, variability and visibility Then ask them to describe the company’s three main product groups, Focus products, Concept products and Design House Partnership products After that, it could be useful to make a matrix and hold a discussion about what the four Vs mean for each of these product groups The most difficult is variation because little information is given on this in the case However, with a little discussion, it becomes clear to students that the basic stable products that represent the Focus group will be less prone to seasonality or sudden fashion changes than either Concept products or Design House Partnership products For the latter, the fashion element will introduce a degree of risk and uncertainty as to how sales may develop The nature of visibility is also a little unclear Broadly, the company’s operations are low or fairly low visibility operations Yet there are comments in the case that indicate that Design House Partnership requires a higher degree of contact with the customer, who in this case is Design House itself The company’s designers must collaborate with the design houses’ designers Also, Grant comments that the Villessi designers frequently visit Grant’s factory Vs analysis for Concept Design Services Low Volume High High Variety Low High Variation ? High ? Low Visibility Partnership products Concept products Low Focus products © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual What would you recommend to the company if they asked you to advise them in improving their operations? This is an opportunity for a general discussion based on the analysis of the first two questions One way of approaching this question is to ask the class to identify the challenges or problems that are identified in the case These may include the following • The move from a company that sells directly to retailers (Focus and Concept products) to one that sells predominantly to design houses (Design House Partnership products) • The emerging differences between product groups The four Vs analysis indicated that Focus has a very different four Vs profile when compared with both Concept and Design House Partnership products What are the implications for this in how the company processes these three product groups? • Are the resources in the company’s operations appropriate for these product groups? The main point here is that the type of machines and people necessary to make Focus products (high volume/low variety) may be very different from the kind of machines and people required to process Concept and Design House Partnership products For example, the large machines that the company has recently bought, together with multiple impression moulds, seem to be ideal for Focus products that are high volume, low margin, low variety After all, the disadvantage of these large machines and moulds is that they take a long time to change over between products Yet there would be relatively few changeovers when making Focus products By contrast, both Concept and Design House Partnership products are low volume, high variety products that need a far more flexible set of processes to produce them It is unlikely that the large machines and multiple impression moulds used by the company are ideal for this Therefore, there is some evidence that, in trying to use the same resources to make all its products, it is making life difficult for itself This is possibly the reason why its schedules need to change so frequently • The manufacturing operation seems to be in conflict with the design operation • The manufacturing operation seems to be in conflict with the marketing function over the accuracy of its forecasts Discuss with the class why manufacturing needs better forecasts and why marketing may genuinely find it difficult to give them in these circumstances • The company admits that it is having some problems in subcontracting Focus products Discuss with the class why this might be and why subcontracting is such a popular option currently Model answers to suggested questions on IKEA How is the IKEA operations design different from that of most furniture retail operations? Although some furniture retailers have large ‘out of town’ operations, many use premises within town or shopping malls IKEA’s operations are very large and purpose-built They feature very large car parks and are located close to major motorway intersections In fact, everything about the design of IKEA’s operations encourages high volume of throughput This high volume means that many of the fixed costs of running the IKEA operation such as local taxes, administrative costs and some energy costs are spread over a high volume of individual sales transactions This reduces the overall cost of making a sale, a part of IKEA's strategy of offering good value for money The variety of products sold in IKEA stores is relatively large compared with many furniture retail operations For example, it includes small items such as glassware and kitchenware as well as very large items such as sofas, tables and shelving systems Modular design of some products such as shelving systems allows variety to be extended even 10 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual to check on altitude (although that could have significant knock-on effects) Perhaps the most obvious issue is to overcome the biggest probability, that the pilot ignores the proximity alarm This must be a factor of the likelihood that the alarm goes off when it should not Therefore, increasing the reliability of this piece of equipment could have a major impact on the likelihood of this type of crash occurring If the probability of each failure occurring could be reduced by half, what would be the effect on the likelihood of this type of crash occurring? Because there were four probabilities being multiplied by each other, if each were halved the chances of the crash occurring would reduce to ½ × ½ × ½ × ½, that is, /16 of the original probability Leading light Does this incident invalidate the use of failure data in estimating component life? No, this incident does not invalidate the use of failure data in estimating component life All failure data is probabilistic In other words, it indicates the chance that something will fail rather than the certainty that something will fail Most failure probability distributions have an upper ‘tail’ that approaches zero asymptotically In other words, there is a very small but finite likelihood that a product will last for very long periods indeed This was such a bulb! Keep left Why should fly-by-wire aircraft pose a more complex maintenance problem than conventional aircraft, which have a physical link between the control and the flaps? The advent of fly-by-wire controls allows for more sophisticated linkages between the aircraft’s control panel and the physical moving parts of the aircraft So, for example, the engineers who put the spoilers into ‘maintenance mode’ probably could not have done the same thing if the controls had been physically connected Or, if they could disconnect the two, it would have been obvious what they had done As the accident report stated ‘It is no longer possible for maintenance staff to have enough information about the aircraft and its systems’ Increasing sophistication means greater potential for mistakes to happen However, it also means a greater potential for the type of error monitoring and diagnosis, which can prevent catastrophic errors occurring If you were the accident investigator, what questions would you want to ask in order to understand why this failure occurred? Probably three sets of issue are worth questioning more closely This first involves the training of maintenance engineers and the checklists they need to go through The intention would be to prevent maintenance engineers making any mistakes Simple failure prevention or fail-safe mechanisms may be appropriate here The second set of questions would concentrate on the automatic computer-based checks, which the system itself could after any maintenance intervention Presumably the fly-by-wire systems greatly increase the ability of systems to check themselves whether everything is in correct working order The third set of questions could involve making sure that the pilots and other air crew fully check systems before they take off 194 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual Lifting maintenance performance What could be the effects of failure in elevator systems? How does this explain the maintenance service that Otis offers its customers? Elevators, or lifts, are one of the many products and service integral in our everyday lives whose smooth performance we take for granted Yet their efficient operation really does depend on the type of maintenance services offered by Otis The ability to keep its elevators working smoothly depends on a detailed understanding of how and when they might fail The constant monitoring and updating of failure data provides input to their maintenance programmes What approach(es) to maintenance are implied by the services that Otis offers? Because failure is both irritating and potentially dangerous, the objective of any maintenance must be to prevent failures from occurring Not all maintenance programmes for every product or service has this objective Sometimes, it is best to run things until they fail and then repair them Not so for elevators However, on the rare occasions that an elevator does fail, Otis helps their customers to recover by providing telephone links to Otis staff trained to respond appropriately It is this combination of an understanding of failure, the development of maintenance processes and the ability to recover should failure occur, which is important to Otis How would you convince potential customers for these services that they are worthwhile? Most of Otis’ services are aimed at detecting potential failures before they occur and in minimizing disruption if they occur This is because elevator services are generally noticed only when they are not working, or working in such a way as to cause uncertainty regarding their safety Especially in tall buildings, the possibility of disrupted service or service that is perceived as dangerous is far more important than trying to minimize cost Of course, cost is not unimportant; services must be delivered at a price that is acceptable Also, some of Otis’ services, such as their preventive and predictive maintenance procedures, could both increase reliability and reduce costs Carlsberg Tetley’s product recall What seem to be the essential elements of this successful recovery from failure? First the company had a pre-planned sequence of steps ready to be put into action as soon as the crisis occurred The crisis control group included experts with all the relevant skills to cope with problems of this kind They could also communicate easily because they had each other’s telephone numbers From the moment the problem was reported, the team worked full time on it They understood the importance of communication to journalists and more directly by advertising in the national press The company did not attempt to economise in their reaction They made sure that the problem would be solved by recalling all of their brands, not just the one affected Finally, and most important, the company was honest and truthful at all points How the advantages and disadvantages of deciding whether or not to recall products in a case such as this depend on the likelihood of another potential failure being out there in the market? In this case the company recalled all drinks If they were absolutely convinced that the one incident recorded was the only defective product and, likewise, if they were convinced that no harm or damage could come to customers from the failure, they may have been justified in not recalling the products Clearly the recall was a hugely expensive operation However, the really important factor is likely to be the risk to the company’s reputation Even with a small chance of 195 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual such a problem occurring again most companies see the advantages of recall as protecting their brand from a major public outcry Relate this issue to the concept of type I and type II errors dealt with in Chapter 17 See Table 17.5 on page 558 to answer this The decisions in this table are to ‘stop process’ or ‘leave alone’ The equivalent in the Carlsberg Tetley example is to ‘recall products’ or ‘not recall products’ Table 17.5 indicates two states ‘in control’ and ‘out of control’ The equivalent here is ‘no further problems in the market’ and ‘other defective products in the market’ Thus, recalling products when there were in fact no defective products left in the market is a type I error, whereas deciding not to recall products when there are in reality still defective products in the market place is a type II error Slamming the door What general lessons can be drawn from the SQL Slammer episode that could be applied to all operations processes? The simple lesson from this incident is that it is vitally important to learn from failure Only a small (though increasing) proportion of operations failures are hostile in the sense that they are deliberately provoked by some outside agency (such as terrorists) However, it is a useful thought process for any operation to go through and ask itself, 'If someone was really trying to disrupt this process, what would they and how could we prevent them?' But it is the lesson of learning from failure that is the most important issue here It is unfortunate when any system or process fails It is far more serious if a process fails again for exactly the same reason 196 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com CHAPTER 20 Total Quality Management Teaching guide Introduction Total Quality Management (TQM) can be very difficult to teach especially to undergraduates who may have limited work experience It can seem both dull (such as the material on quality gurus and the definition of TQM) and stunningly obvious (the principles of TQM) The best way to deal with this topic is through cases and illustrations to get students to realize that: a) all is not well in most organizations (even good ones), and b) quality problems are very difficult to fix This is also a point in a course to use a visiting speaker who can provide real life problems and difficulties faced when trying to improve quality in an organization Key teaching objectives • To provide students with an understanding of the TQM philosophy • To demonstrate the real difficulties in achieving a TQM approach in organizations • To introduce the key ideas in the chapter: • The definition and origins of TQM • The role of quality systems and procedures • The problems and difficulties of TQM implementation • The role of quality awards Exercises/discussion points • Exercise – The Eurocamp Travel case (included in the ‘Short cases with answers’ section of this website) is a good place to start A more detailed version of this illustration can be found in Johnston et al., Cases in Operations Management, 3rd edn, FT/Prentice Hall, 2003 This case can lead to a discussion of the TQM approach • Exercise – Also use the Deliberate Defectives box as a humorous lead to the important issue of cost of quality 197 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual • Teaching tip – Students should be aware of the advantages and problems of ISO 9000 and the existence and benefits of quality award schemes and frameworks Again use the illustrations in the chapter (for example, Xchanging) to promote discussion of these issues • Teaching tip – The final case, The Waterlander Hotel can be used to reinforce the idea that the obviously sensible TQM philosophy is quite difficult to achieve in practice! Case study teaching notes The Waterlander Hotel This case illustrates a disastrous banquet held for a big commercial client It is a classic example of departments and individuals acting on their own, and blaming others It illustrates what can go wrong when such a project is left up to individuals, without an overall plan and a responsible person The case allows students to examine the underlying causes of the many quality failures, and also allows them to consider the aspects of quality management, which would ensure improvement in future banquets Some notes on The Waterlander Hotel case Why did things go wrong at the banquet? Before addressing this question, it is useful to ask the students to list the actual things that went wrong with the banquet and afterwards These can simply be written on a whiteboard to emphasize the large numbers of problems that occurred These would include: • Faulty video projection • Incorrect flowers • Shortages of cups • No non-alcoholic cocktails available • Slow service • Problems with the food • No photographer at the required time • Generally poor cleaning You could also consider some definitions of quality at this stage It is apparent that not only was there no complete specification prepared with the end customer, but the service failed to meet almost all the customer’s needs and expectations The banquet was not really ‘fit for purpose’ Such gross failure must lead to deterioration in the reputation of the hotel, and if not addressed, will damage its volume base and profitability in the long term 198 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual The main issue, of course, is the need to define the underlying reasons for this large number of problems happening at one event It is useful to debrief the class by preparing a cause–effect diagram on a whiteboard The effect is an unsatisfactory service to the banquet customer, and the causes can be categorized under the headings systems, people, materials and processes Systems • Lack of adequate project management • Failure to create a clear quality specification with the client • No pre-determined sequence and timing of activities (scheduling) • Lack of standards and specifications for each operation • No contingency planning • Inadequate system to deal with analyzing problems that arise, and changing the process accordingly People Lack of project management skills Blame culture Rigid demarcation of tasks Inadequately briefed sub-contractors Lack of involvement of everyone in overall process Most staff only interested in their own part of the task Materials Choice of dessert (too sensitive to timing) Wrong flowers Processes No maintenance procedures for critical equipment …etc It is not always easy to precisely categorize the root causes as above, but it should be possible to identify linkages between some of the elements How could a TQM approach to the hotel’s operations help to prevent such disasters occurring in the future? The first aspect of TQM that should be discussed is the importance of identifying the needs and expectations of the customer Clearly, the system at this hotel does not adequately capture this 199 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual information in a standard format, and this procedure must be introduced as an early aspect of quality improvement It is important for everyone to appreciate the concept of the internal customer too Many of the problems described in the case are to with the inadequately defined relationship between activities carried out by different people Following from this, it is clear that every person in the hotel must be able to make a contribution to the quality of every banquet This would not only include the catering and hospitality staff, but also everyone in support services such as cleaners and sub-contractors In order for this to be possible, training will be required to re-emphasize the importance of both the internal customer and the external customer, and it will be necessary to introduce everyone to some of the ideas of quality management In this way, the staff will take responsibility for the overall satisfaction of the customers There is an underlying need for a quality system at the hotel, designed to ensure that customer needs are understood and communicated via a plan to every employee involved in each banquet project In discussing this with a class, it might be helpful if you have already introduced some of the principles and tools of project management Successful implementation of a TQM will require: A quality strategy Management must re-emphasize the importance of quality in this business and explain how the TQM programme will contribute to achieving increased competitiveness Top management support Some aspects of project management and TQM cannot go ahead until management have clearly defined what is to be done, and have demonstrated that they too can carry out quality improvement practices Group-based improvement Teams could be set up to identify underlying causes of quality failure, and to create processes which reduce the risk of such problems These teams could be cross-functional, or based around some special departments such as reservations or catering Recognition of success If a banquet goes particularly well, it seems reasonable that management should at the very least gather everyone involved together to thank them for a job well done Individuals and teams that came up with better ways of managing banquets should also be recognized in some way; perhaps a bonus, or a token such as extra time off, or a gift item Training In order to carry out quality improvement projects in teams, individuals will have to understand and be able to apply some of the quality management tools available for this work (see Chapter 18: Techniques of improvement, p 663.) 200 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual How could ISO 9000 help the hotel? ISO 9000 quality systems standards provide some assurance to customers that an organization has carried out a thorough review of its processes, and that there is a working control system in operation However, it is not necessary to have ISO 9000 in order to practise good process management; it merely satisfies customers that this work has been carried out and good process management is being practised The hotel must set about establishing standard procedures for selling, administering, and delivering banquets A standardization of the process is essential to ensure that nothing is forgotten, so that the customers’ requirements are conveyed to every member of the staff responsible for these requirements Standard project plans could be developed by management and working teams to ensure that procedures are practical and understood by everyone ISO 9000 accreditation would simply provide evidence to customers that such work has been carried out and is being maintained Model answers to short cases Hewlett-Packard’s internal customer checklist What you see as the limitations of the set of questions, which comprises HewlettPackard’s internal customer checklist? The strong point of the list is in getting individuals to focus on their own ‘customer’, internal or external It does not, however, ask individuals to also consider their ‘suppliers’ to ensure ‘total’ quality management Further, as can be seen from the chart below, it does not give attention to quality systems and procedures Do you think anything is missing from the problem-solving methodology described above? It is helpful to compare and contrast the key tenets of TQM as found in Chapter 20 with the list used by Hewlett-Packard (start with the HP list and ask your students to complete it by adding the TQM tenets and then look for the links): HPs Internal Customer Checklist TQM Tenets (from chapter 20) Who are my customers? Meeting all needs and expectations of customers Covering all parts of the organization Including every person in the organization Examining all the costs related to quality Getting things ‘right first time’ What they need? What is my product or service? What are my customers’ expectations and measures? Does my product or service meet their expectations? What is the process for providing my product or service? What action is required to improve the process? Developing systems and procedures Developing a continuous process of improvement 201 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual We can immediately see that the focus of HPs checklist is about meeting customer needs and expectations, i.e understanding those needs and the process by which they are met There is also some consideration given to process improvement Since the pocket guides are distributed to everyone, the second tenet, covering all parts of the organization, is possibly fulfilled, and the issue of getting people to work together, along the whole of the supply chain (internal and external) is covered by asking each person to consider their own customer What is not explicitly covered is the examination of costs, the ‘right-first-time’ principle, and the development of quality systems and procedures What seems to be the implied problem-solving methodology described above? How does it compare with the Plan-Do-Check-Act (PDCA) process described in Chapter 18? The problem-solving methodology behind HPs approach appears to be based on a cause-effect approach (see Chapter 18) You can see that it compares well with the PDCA cycle: The PDCA Cycle HPs Problem-Solving Methodology Select the quality issue Write and issue statement Identify the process PLAN – an examination of the current method and problems Draw the flow chart Select a process performance measure Conduct a cause-effect analysis Collect and analyse the data Identify the major causes of the quality issue Plan for improvements Take corrective action DO – make the changes Collect and analyse the data again CHECK – evaluate the implemented solution to ensure it has resulted in the expected improvements Are the objectives met? IF yes, document and standardize the change ACT – standardize the successful changes Improvement at Heineken Part II What might explain the ‘slump’ in motivation for improvement during periods of low demand, and after the consultants stepped back from the initiative? There may be different reasons behind these two slumps in motivation The lack of motivation when demand was low is something of a paradox On one hand, one would think that there was more time to effect improvement when the plant was not working to its full capacity On the other hand, there is less need to increase the efficiency of the plant when it is easy to produce the required output within the plant’s capacity “Why improve performance anyway when we have enough capacity to produce what we need?” may be the attitude here The slump when the consultants phase themselves out is more common It is also partly a failure on the consultants’ part They were obviously fulfilling a role (monitoring and recording improvement, 202 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual for example) that was not catered for within the organization’s regular staff Only after these responsibilities were allocated internally, did the improvement initiative regain its momentum Deliberate Defectives How does this short story illustrate the essence of TQM? This story typifies the difference between the ‘inspect-in’ approach and the preventative approach IBM, at that time, had systems, which implied that some amount of defectives were normal and acceptable and set an AQL level to recognize this (see critical commentary box at the end of Chapter 17) The Japanese manufacturer had a TQM-based right-first-time approach and had developed his processes to prevent defectives The company was also customerfocused as can be seen by its willingness to abide by the customer’s request and happily send (tongue-in-cheek) the ‘requested’ number of defectives Six Sigma at Xchanging Part II What are the benefits and problems of training Black Belts and taking them off their present job to run the improvement projects rather than a member of the team, which has responsibility for actually operating the process, running the project? This issue centres around balancing experience and technical expertise on one hand against process ownership on the other Some organizations disagree with the Six Sigma approach of having dedicated improvement practitioners They prefer improvement to be organized by the people who will be responsible for running the improved process Six Sigma proponents, however, argue that the accumulated expertise and training of Black Belts is what really counts As quoted in the box, it is important to gain the trust and understanding of the staff who will operate the process after the improvement project, and this can be done by an experienced Black Belt with good interpersonal skills 203 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com CHAPTER 21 The operations challenge Teaching guide Introduction In some ways this chapter is not really meant to be taught as such It is there as a rounding off point for those students who wish to connect some of their learning on operations management courses to the more important of the wider issues facing business As such it is a vehicle to encourage reflection The material in the chapter can be treated in one of two ways Either parts of it can be taken out and expanded into a whole lesson, or alternatively, the various parts of the chapter can be incorporated into other lessons If the former approach is taken, the most likely candidates for becoming the centre of a whole lesson are the sections on environmental responsibility, social responsibility and globalization Using the tables that identify the operations management issues in each of these areas is a useful starting point for planning a lesson Exercises/discussion points • Exercise – Ask the class to relate some of the topics covered on the course to the five themes covered in this chapter If some of the material in the chapter is incorporated in the previous lesson then the most obvious connections are as follows Globalization • • • Network design Supply chain planning and control Failure prevention and recovery Social responsibility • • • • • • • Product service design Network design Process technology Capacity Product service design Process technology Quality planning and control and TQM Environmental responsibility • Failure prevention and recovery Technology • • • Product and service design Process technology Supply chain planning and control Knowledge management • Product service design • Process technology • Planning and control 204 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual • Exercise – Revisit the Oxfam case mentioned in Chapter Pose the following question to the class This is one of those cases that can be used either at the beginning or at the end of a course in operations management If used at the beginning, its purpose would be to demonstrate how operations management is relevant to not-for-profit organizations as well as commercial companies It could also be used to prompt a discussion of the differences between providing ongoing assistance and development in different parts of the world and the shorter, more dramatic ‘projects’ associated with emergency relief Both aspects of operations are important to Oxfam If used at the end of the course, its purpose could be to look at some of the more difficult aspects of how operations practice impacts on the social concerns of a business Indeed, the question at the end of the case is focused in this direction What are the main issues facing Oxfam’s operations managers in terms of • globalization and international management? • environmental management? • social responsibility? • technology? • knowledge management? Globalization and international management – By definition, Oxfam’s scope of operations is global Anywhere, a disaster is likely to strike could receive the attention of the charity However, much of Oxfam’s work is not concerned with the high-profile disaster relief side of its business, but rather the ongoing community development projects it undertakes Most of these projects will be in the poorer, less-developed parts of the world The implication of this is that, from an operations point of view, services must be delivered without an assumed level of infrastructural support The ability to adapt development methodologies to such circumstances would be a key operations task Another aspect of globalization for Oxfam concerns the coordination of expertise Experts, either in development or disaster relief, may be located anywhere in the world The task of understanding and coordinating this pool of potential help must be a major operations task It will rely on maintaining a database of expertise and on the ability to deploy it, sometimes at short notice Environmental management – To Oxfam, the concept of environmental management must be tackled at two levels The most obvious one is that environmental awareness is an ‘output’ from the charity’s operations In other words, environmental management, to some extent, is one of the operation’s ‘products’ It will engage in lobbying governments and non-governmental agencies to achieve its aims of greater environmental sustainability However, there is also another, related, issue Oxfam’s operations themselves must also be environmentally sound Agricultural projects, for example, must be managed to ensure that there is no inappropriate use of fertilizers and pesticides locally, even when there may be local pressures to so Social responsibility – Again, this is one of those issues that is both an output from the operation and an objective for the way it runs its own operations A key issue here must be the way in which the ‘on the ground’ managers of development projects tackle some of the particularly sensitive cultural issues For example, ‘gender issues’ are one of Oxfam’s campaigning points; however, appropriate gender roles are seen in very different ways in different parts of the world Pursuing its own ends in terms of, say girls’ education, must be 205 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual balanced against traditional ideas of women’s role Whereas this difficulty may be relatively straightforward to reconcile at a strategic level back in the charity’s Oxford headquarters, its success depends on how local operations managers deal with the issue at a day-to-day level Technology – Again, this has elements of both output and process Developing appropriate technologies for use in developing countries is both an output in terms of the charity wishing to influence technology usage, but also an issue which it must demonstrate itself Also, although we are used to thinking of ‘good’ technology as being ‘high’ technology, in many cases ‘good’ technology for Oxfam means ‘appropriate’ technology Thus, technology that is sustainable, capable of being made and/or adapted locally and maintainable under normal conditions of use, is just as challenging a task as developing high-tech solutions to operations problems Knowledge management – The work of charities such as Oxfam is extremely practical It cannot rely on a theoretical knowledge base (although obviously it makes use of many branches of science and economics) The knowledge embedded within Oxfam’s operations is the result of many years of attempting difficult tasks in very difficult conditions It is vital for operations such as Oxfam that this knowledge is captured and deployed Reinventing the wheel, or learning from scratch, on every project is a waste of the charity’s resources and a failure in its responsibility to the people it is trying to help The capture and development of knowledge through manuals, databases and (even more important) discussions and on-the-job training must be a key issue for charities such as Oxfam Case study teaching notes Corporate social responsibility as it is presented What are the similarities and differences between these statements? They are all similar in so much as they all try to give a sense of a far broader set of stakeholders than a purely economic model would imply All of them mention the benefits to stakeholders that come from the company’s activities Also, they all use the type of language that reflects positive values, for example, ‘respect’, ‘commitment to community’, ‘responsibility’ and so on None of them mentions making profits Why large companies like these go to so much trouble to invest in CSR? Companies go to so much trouble to invest in CSR partly for ethical reasons, and also because it provides a positive image that reflects their customers’ values and aspirations In this sense it is like any other form of promotional activity There is also an issue of risk mitigation Should a public relations disaster affect the company, it can always point to its core principles In other words, the company may have made a mistake, but it is not fundamentally negligent This is not to try and sound cynical In many areas (e.g treating staff with respect) the aims of the company and its stakeholders are more or less identical Of these companies, two, HSBC and Starbucks, have been the target of anti-globalization violence Why these two? Simple They have been the target of anti-globalization violence because they are among the most well known companies in their businesses with a global brand awareness Antiglobalization protesters are often trying to achieve maximum publicity for their views This is best served by attacking well-known brands No news channel is going to broadcast a story around the world about some protesters demonstrating outside a small local and unimportant 206 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual organization Also, by definition, global brands represent the type of organizations and views that anti-globalization protesters are opposed to Short case model answers HP’s Recycling Program HP (Hewlett Packard) provides technology solutions to consumers and businesses all over the world Its recycling program seeks to reduce the environmental impact of its products, minimize waste going to landfills by helping customers discard products conveniently in an environmentally sound manner Recovered materials, after recycling, have been used to make products, including auto body parts, clothes hangers, plastic toys, fence posts and roof tiles In 2005 it proudly announced that it had boosted its recycling rate by 17 % in 2005, to a total of 63.5 million kilograms globally, the equivalent weight of 280 jumbo airliners 'HP's commitment to environmental responsibility includes our efforts to limit the environmental impact of products throughout their life cycles,' said David Lear, vice president, Corporate, Social and Environmental Responsibility, HP 'One way we achieve this is through developing and investing in product return and recycling programs and technologies globally, giving our customers choices and control over how their products are managed at end of life.' But HP’s interest in environmental issues goes back some way It opened its first recycling facility in Roseville, California, in 1997, when it was the only major computer manufacturer to operate its own recycling facility Now the company’s recycling program goal is to expand its product return and recycling program and create new ways for customers to return and recycle their electronic equipment and print cartridges As well as being environmentally responsible, all initiatives have to be convenient for customers if they are to be effective For example, HP began a free hardware recycling service for commercial customers in EU countries who purchase replacement HP products, in advance Partly, this reflects the EU Waste Electrical and Electronic Equipment Directive A similar offer exists for HP commercial customers in the Asia Pacific region In some parts of the world, HP has developed partnerships with retailers to offer free recycling at drop-off events Why companies like HP go to so much effort to promote recycling schemes such as this one? As usual, it is a mixture of corporate responsibility and self-interest It also seems that many parts of the world will introduce legislation that requires companies to take responsibility for the end-of-life reuse and disposal of their products While this is most prevalent in Europe, it could spread to other parts of the world Therefore, HP is, in effect, investing in developing capabilities that it will have to deploy elsewhere in the world sooner or later Of course, there are other advantages Carefully reused materials can help reduce costs But, possibly the most important advantage is that it allows the company to examine how its products perform in use Careful examination of recycled cartridges can give an indication of potential failure points and/or aspects of the product design that could be improved HP has been engaged in environmental matters for some years, how might this help them to be more effective at it? HP opened its first recycling facility in Roseville, California, in 1997 Then it was the only major computer manufacturer to operate its own recycling facility This has both advantages and disadvantages The disadvantage is that it had to ‘make up the rules as it went along’ After all, there was no one else to learn from The major advantage is that, in doing so, it acquired 207 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual significant knowledge about how to collect and recycle its products This means that it will always be further down the learning curve than its competitors While they are struggling to install similar systems and processes, HP will already have significant accumulated experience In addition, bringing product back for recycling is, in many ways, simply the reverse of its normal logistics chain Many issues concerned with the recycling processes could promote learning that is useful in more conventional distribution processes Ecological footprints To supply the average person’s basic needs in the United States, it takes 12.2 acres of land In the Netherlands it takes acres, and in India it takes acre Calculated this way, the Dutch ecological footprint covers 15 times the area of the Netherlands India’s ecological footprint is 1.35 of its area Most dramatically, if the entire world lived like North Americans, it would take three planet earths to support the present world population So, why is this relevant to operations management? A simple answer; because operations management is the function that, directly and indirectly, is responsible for most energy usage By their nature, transformation processes consume energy If operations managers managed to reduce consumption by just a few per cent a year it would allow the economic growth that most people seem to want, while at the same time reducing global energy consumption 208 © Nigel Slack, Stuart Chambers & Robert Johnston 2007 ... operations management and operations strategy as we sometimes imply In the operations area especially, we need to include the accumulated learning, which comes from day-to-day management of operations. .. slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual Supporting... www.pearsoned.co.uk /slack © Nigel Slack, Stuart Chambers & Robert Johnston 2007 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com CHAPTER Operations management