BUSI4490: Managing

Contemporary Operations:
Fundamentals and Challenges
Module Overview & Fundamentals
of Operations Management
Lecture 5 (1st November 2024)
Dr Murtaza Faruquee
Weekly plan in brief
Uni Week Date Title and Description
2 1 4 Oct 2024 Fundamentals of Operations Management
3 2 11 Oct 2024 Sustainability and OM
4 3 18 Oct 2024 Process Design
5 4 25 Oct 2024 Process Analysis
6 5 28-29 Oct 2024 Seminar 1
6 5 1 Nov 2024 Planning and Control
7 6 8 Nov 2024 Capacity and inventory
8 7 15 Nov 2024 Services Management
9 8 18-19 Nov 2024 Seminar 2
9 8 22 Nov 2024 Resilience
10 9 29 Nov 2024 Technology and data-driven operations management
11 10 6 Dec 2024 Practising operations management tools and techniques
12 11 13 Dec 2024 Revision
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Introduction to planning and control
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 Planning

▪ Planning is a formalisation of what is intended to happen at some time in

the future. It is a statement of intention; during their implementation, things
do not always happen as expected.

• What activities should take place in the operation?

Planning is deciding • When should they take place?
• What resources should be allocated to them?

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 Control

▪ Control is the process of coping with any changes that affect the plan. It may
also mean that and ‘intervention’ will need to be made in the operation to
bring it back ‘on track’

• Understanding what is happening in the operation.

• Deciding whether there is a significant deviation from
Control is what should be happening.
• (if there is deviation) changing resources in order to
affect the operation’s activities.

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Significance of planning and control

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Slack et al. (chapter 10)
 What influences planning and control?

Uncertainty in supply ❑ Supply of inputs for an operation may be uncertain

▪ ‘Planning and and demand ❑ Demand for outputs may be unpredictable
control’ is concerned
with the activities
that attempt to Example Independent demand
reconcile the
demands of the
market and the
ability of the
operation’s
resources to deliver
Dependent demand
(easier to forecast)

© 2016, Pearson Education

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What are the activities of planning and control?

© 2016, Pearson Education

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 Examples

▪ How do planning and control activities differ in these operations?

1. Electricity power station 2. Fast food restaurant

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Scheduling
 Methods for scheduling

▪ Forward scheduling means starting work as soon as it arrives. High labour

utilisation and flexible (unexpected work can be loaded).
▪ Backward scheduling means starting work at the last possible moment to
prevent them from being late. Focus operations on customers due dates. Lower
material costs and less exposed in case customer changes schedule.

A order arrived; it would

take 5 days to finish, due
after 12 days

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Forward scheduling Backward scheduling

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 Methods for scheduling

▪ Gantt charts, Represents time as a bar on a chart. It serves also as visual

representation and can represent alternative schedules for comparison.

▪ Scheduling work patterns. It schedules staff working times to make sure that
there is sufficient people working to provide the necessary capacity for the
operation. Also called staff rostering.

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Sequencing
 Rules for sequencing

▪ Physical constraints. Priority is determined by the physical nature of the

inputs being processed. Example: production of lighter paint shades
sequenced before darker ones.
▪ Customer priority. Customers or items with special priority to be processed
prior to others. Examples: urgent deliveries, customers with special needs,
complaining customers.
▪ Due Date (DD). Work is sequenced according to when it is ‘due’ for delivery.
Not optimal productivity but good flexibility. Example: printing services

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 Rules for sequencing

▪ Last In First Out (LIFO). Normally used for practical reasons. Example:
elevator unloading
▪ First In First Out (FIFO). Using inputs (or serving customers) in the
sequence they arrive in. Also called First Come First Served (FCFS).
Example: counter queue in supermarkets, theme parks entrance
▪ Longest Operation Time (LOT). Performing the longest jobs first. It keeps
utilisation rate high.
▪ Shortest Operation Time (SOT). Performing the shortest jobs first. It
benefits cash constraints operations.

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  Dr Jasson Steffen (astrophysicist at Fermilab) tested a faster method to board airplanes that
could save airlines both time and money.
 Boarding delays are caused by (1) waiting in the aisle for those ahead to store their luggage and
go to their seats; (2) those in aisle or middle seats that need to rise and move to let those on
window seats to sit.

Experiment with 72 passengers with

hand-luggage in a Boeing 757 aircraft.
Five scenarios:
1. Block method
2. One by one from back to front
3. Wilma method
4. Steffen method
5. Random

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Loading
 Approaches for loading

▪ Finite loading is an approach which only allocates work to a work centre (a

person, a machine, or perhaps a group or people or machines) up to a set
limit. This limit is the estimate of capacity for the work centre (based on
resources availability).
▪ Infinite loading is an approach to loading work which does not limit accepting
work, but instead tries to cope with it. For this approach capacity constraints
are not used to limit loading.

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 Exercise

▪ Fill in the blanks with the words 'finite' or 'infinite' as you see fit in the text below:
▪ The [ blank 1 ] loading is adequate for operations where it is possible to limit the load
via an appointment system, while [ blank 2 ] loading is more adequate when limiting
the load is not possible, for example in an emergency unit at a hospital.
▪ In cases in which only a specific number of people or materials are allowed in the
operation for safety reason, the relevant loading approach is [ blank 3 ].
▪ The [ blank 4 ] loading means that customers may need to queue for some time
before being served during busy periods. In this case, the operation needs to have
flexible capacity to cope with varying arrival rates of customers.
▪ The customer perception caused by limiting the load plays also a role when deciding
which approach to use in an operation. If a luxury car manufacturer sets up an order
limit based on [ blank 5 ] loading approach, it may not affect its demand, while a high
street retailer may prefer a [ blank 6 ] loading to avoid customer disappointment.

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Monitoring and Control
Defining control

A simple model of control

Control is not always routine; especially when:
 Operation’s objectives are ambiguous, or
there is no consensus
 Effects of interventions are not predictable
 Operation’s activities are not repetitive

Different circumstances require different types

of control.

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Enterprise Resource Planning (ERP)

ERP systems automate and integrate core business processes, i.e.

incorporating information from all parts of the organisation.
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 ERP benefits

▪ The integration of several databases is key for ERP systems and enable
several benefits:
▪ ERP software communicates across business functions; It brings higher
visibility of what is happening in all parts of the business
▪ It can make all parts of the business more efficient
▪ It provides a better sense of control for operations, which can be basis for
continuous improvement
▪ It enables more accurate and timely information sharing with customers,
suppliers and partners
▪ It can help to integrate whole supply chains

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 ERP implementation challenges

▪ The total cost and the time / effort to implement the ERP system are frequently
underestimated
▪ The resources needed from the business and the IT function are likely to be higher
than anticipated
▪ The level of external expertise required and the need of personnel training will be
more than anticipated
▪ The changes to business processes will be greater than expected
▪ The scope of the project will be difficult to control
▪ The need for change management is normally recognised when it is too late, and
the changes required to corporate culture are likely to be much underestimated

ERP systems are only fully effective if the way a business organises its processes is
aligned with the underlying assumptions of the ERP

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 How Samsung Became a Design Powerhouse

▪ Building an In-House Competency

▪ Empathizing with the Whole Organization
▪ Visualizing the Future, Reframing the Problem
▪ Experimenting in the Marketplace
▪ Creating a Sustainable and Flexible Design Organization

▪ How to ensure control over these strategies?

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Lean
 The top 10 most reliable cars for 2024,

1. Toyota RAV4
2. Skoda Kodiaq
3. Toyota Yaris
4. Lexus NX
5. Hyundai Tucson
6. Kia XCeed
7. Skoda Superb
8. Jaguar XF
9. Jaguar F-Pace
10. Toyota Auris

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Let us return briefly to where we started…
Shows the same image of Tokyo in 1945, with a photo of the rebuild metropolis of Tokyo today, in 2017

Tokyo 1945

Tokyo 2017 29
 Lean management
Lean manufacturing
▪ Just in Time (one aspect of the Lean)
▪ Toyota Production System (TPS)
▪ Zero Inventory Systems
▪ Flow production
▪ Lean enterprise

Often, just called Lean!

Short history of Japanese automotive industry

Cusumano, M.A. (1988), ‘Manufacturing Innovation: Lessons from the Japanese Auto Industry’,
Sloan Management Review, Fall, 13, 1, pp.29-39
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 Waste or Muda: The Central Concept

▪ A system that continually searches for and eliminates waste* throughout the
value chain
*Waste – from the customers’ perspective
▪ Eliminate Muda (Japanese word)

▪ “All we are doing is looking at the time-line from the moment the customer
gives us an order to the point when we collect the cash. And we are reducing
that time-line by removing the non-value-added wastes.” Ohno, 1988

• Muda (waste)
• Muri (excessive strain)
• Mura (unevenness or irregularity)
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The 7 + 1 Classic Types of Waste

Excess products Production that is Wasted time Unnecessary

and material not more than needed or waiting for the next movements by
being processed before it is needed step in a process people (e.g.
walking)

Underutilising
Efforts caused by Unnecessary More work or higher people’s talents,
rework, scrap, and movement of quality than is required skills, &
incorrect information products & materials by the customer knowledge
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 ‘Kaizen’ or Continuous Improvement (CI)

▪ Literally ‘Changing something for the better’ by eliminating waste

▪ Long-term activities
▪ Gradual / incremental improvements
▪ No limit in focus, often extends to suppliers and distribution

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5Ss

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5Ss

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 Towards a SYSTEM of continuous improvement

Reduce variability
▪ All process in control and capable
▪ Standardised work / Heijunka / 5S / Total Preventative Maintenance (TPM)
Make problems visible
▪ Exploratory stress
▪ Problems are natural and opportunities to learn, not blame
▪ Fool-proof/Fail-safe design (Poka-Yoke)
▪ Quality at source: Operator & Automated machine (Jidoka)
▪ Line-stopping empowerment (Andon)
▪ Visual management
Targeted improvements: root cause analysis (5 Why’s)
▪ Active worker involvement, Time for experimentation, Supplier involvement

Human interaction with the process

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 Ever Given Container Ship
Photo of Ever Given container ship, taken at sea level, which gives an indication of its size and ability to ship many containers

Ever Given
▪ Launched 2018
▪ 20000 TEU container
ship
TEU Twenty-foot
Ever Given
equivalent unit
Photo of a twenty foot container

▪ One of the largest

container ships in the
world
Twenty-foot container (1TEU)

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 The Suez Canal Crisis

Source: https://www.forbes.com 38
The Suez Canal Crisis

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Thank you
See you next week…