Introduction

In Operations Management, the design activity is much broader than a universally

recognized definition of design. All operations managers are designers. When they
purchase or rearrange the position of a machine, or when they change the way of working
within an operations process, it is a design decision because it affects the physical shape
and nature of their processes.
The 'general approaches' to managing processes are called process types. Different terms
can be used to identify process types in manufacturing and service industries.
In manufacturing, these process types are (in order of increasing volume and decreasing
variety) are:

project processes

jobbing processes

batch processes

mass processes

continuous processes.

The layout of an operation is concerned with the physical location of its transforming
resources. It decides where to put all the facilities, machines, equipment and staff in the
operation.
Layout is often the first thing most of us would first notice on entering an operation because
it governs its appearance. It also determines the way in which transformed resources

the materials,
information
customers

flow through the operation. Relatively small changes in the position of a machine in a factory,
or goods in a supermarket, or changing rooms in a sports centre can affect the flow through
the operation.

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This, in turn, can affect the costs and general effectiveness of the operation. Refer to the
power point slide for this lesson which shows the facilities layout activity in the overall model
of design in operations.
When looking at capacity, operations managers need to look at both resource inputs and
product outputs. The reason is that, for planning purposes, real (or effective) capacity
depends on what is to be produced. For example, a firm that makes multiple products
inevitably can produce more of one kind than of another with a given level of resource
inputs.
Your objectives
In this chapter you will learn about the following:

Understand why design is important in Operations Management.

Understand the objectives the design activity should have.
Understand how processes are designed.
Understand the process types'
Understand the basic layout types used in operations.
Able to describe the type of layout an operation should choose.
Understand what the layout design is trying to achieve.
Understand how each basic layout type is designed in detail.
Understand how long it will take to bring new capacity on stream.
Understand how does this match with the time that it takes to develop a new product.
Understand how to manage resources in sync with strategic capacity management

1 Process types in manufacturing

Figure 3.1 Types of Process

1.1 Project processes

Project processes deal with discrete, usually highly customized products.

Often the timescale of making the product or service is relatively long, as
is the interval between the completion of each product or service.
So low volume and high variety are characteristics of project processes.
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The activities involved in making the product can be ill-defined and

uncertain, sometimes changing during the production process itself.
Examples of project processes include
a. shipbuilding,
b. most construction companies,
c. movie production companies,
d. building the Mass Rapid Transport
e. installing a computer system.

The essence of project processes is that each has a well-defined start and
finish, the time interval between starting different jobs and the transforming
resources which make the product.
The process map for project processes will almost certainly be complex. The
figure below shows various manufacturing process types.
1.2 Jobbing processes
Jobbing processes also deal with very high variety and low volumes. Whereas in
processes each product has resources devoted more or less exclusively to it, for in
job processes each product has to share the operation's resources with many other
resources of the operation will process a series of products but, although all the
processes will require the same kind of attention, each will differ in its exact needs.
Jobbing processes produce more and usually smaller items than project processes
but, like project processes, the degree of repetition is low. Many jobs will usually be
'one-offs'.
Again, any process map for a jobbing process could be relatively complex for similar
reasons to project processes. However, jobbing processes usually produce physically
smaller products and, although sometimes involving considerable skill, such
processes often involve fewer unpredictable circumstances.
Therefore, their process maps are usually less complex than those for project
processes.
1.3 Batch processes
Batch processes can often look like jobbing processes, but batch does not have quite
the degree of variety associated with jobbing.
As the name implies, each time batch processes produce a product they produce
more than one. So each part of the operation has periods when it is repeating itself,
at least while the 'batch' is being processed.
Consider a garment manufacturing process. Batches of the various parts that make
up the garments move through the work stations, each of which has specialized
machinery.

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1.4 Mass processes

Mass processes are those which produce goods in high volume but variety is narrow,
that is, in terms of the fundamentals of the product design.
A mobile plant, for example, might produce several thousand variants of car if the
option of engine size, colour, extra equipment, etc. is taken into account.
The activities in the automobile plant, like all mass operated plants are essentially
repetitive and largely predictable.
1.5 Continuous processes
Continuous processes are one step beyond mass processes insomuch as they
operate at even higher volume and often have even lower variety. They also usually
operate for far longer periods of time.
Sometimes they are literally continuous in that their products are inseparable, being
produced in an endless flow. They may even be continuous in that the operation
must supply the products without a break.
Continuous processes are often associated with relatively inflexible, capital-intensive
technologies with highly predictable flow.
There are often few elements of discretion in this type of process and although
products may be stored during the process, the predominant characteristic of most
continuous processes is of smooth flow from one part of the process to another.
Inspections are likely to form an important part of the design in operations
management.
2

Purpose of Design
Design is the activity which shapes the physical form and purpose of both product and
services and the processes which produce them. .
The overall purpose of the design activity is to meet the needs of customers.
2.1 What objectives should the design activity have?
The design activity can be viewed as a transformation process in the same way as other
operations. It can therefore be judged in terms of:

its quality,
speed,
dependability,
flexibility
cost.

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Product or service design and process design are coordinated in some way.
The design activity must also take into account some environmental issues. These
include

examination of the source and suitability of materials,

the sources and quantity of energy consumed,
the amount and type of waste material,
the life of the product itself, and the end-of-life state of the product.

How are processes designed?

Processes are designed initially by breaking them down into their individual activities.
Often common symbols are used to represent types of activity. The sequence of
activities in a process is then indicated by the sequence of symbols representing the
activity. This is called 'process mapping'.
Alternative process designs can be compared using process maps.

What are 'process types'?

Process types are general approaches to managing the transformation process. They
depend on the volume and variety of an operation's output.
In manufacturing, these process types are (in order of increasing volume and decreasing
variety) project, jobbing, batch, mass and continuous processes.
In service operations, although there is less consensus on the terminology, the terms
often used (again in order of increasing volume and decreasing variety) are professional
services, service shops and mass services.

Case Study Verenigde Bloemenveiling Aalsmeer (VBA) (United Flower

Auctions), Aalsmeer, Holland

VBA is the largest flower auction operation in the world. It comprises two main parts. The
first is the sellers' area known as the 'auction section' where flowers are received, held in
cooled storage areas and auctioned.
The second is the 'buyers' section' where around 300 buyers, exporters and wholesalers
rent space to pre pare flowers for shipment. Trucks leave Aalsmeer every working day with
destinations (including airports) throughout Europe.
On a typical day there are about 10,000 people working at the centre (1800 of whom work
directly for VBA), together handling 17 million cut flowers and two million plants. This large
and complex operation is held together by its information processing technology.
Flowers are extremely perishable, so dealing with them in such large quantities makes the
speed, accuracy and dependability of the operation critical. During the evening and
overnight, flowers are brought into the operation in standard containers which are
subsequently handled in standard wheeled cages (there are over 124,000 of these 'trolleys'
in circulation.
Each lot of flowers is assigned a reference number, a quality inspection is made by VBA
staff, and a description is entered on the 'delivery forms' attached to each trolley. The trolleys
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are Standard 'trolleys' wait then held in cold storage until they are collected for the auctioning
process the following morning areas.
For each buyer, the VBA computer prints an invoice for all the purchases made, which must
be settled daily by bank letter of credit or by cash drawn at one of the four banks adjacent to
the cashier's office.
The high levels of computerization and automation of material flow allow VBA to operate with
very low costs (about 5 per cent of turnover), at high speed and dependability. Each of the
13 clocks handles about 1000 transactions per hour. Almost all business takes place
between 7.00 am and 10.00 am so that fresh flowers can be in the shops as early as
possible -by lunchtime in Holland, by early afternoon in London, Paris and Berlin, and by
early morning the next day in New York.

ACTIVITY 1
(30 MINS)
Your task is to study the case below and answer these question:
1

Which of the five operations performance objectives (quality, speed, dependability,

flexibility and cost) are the most important to build into the design of VBA's process, and
why?

How does process technology help this operation to achieve its objectives?

Sketch the flow of flowers in the VBA operation. What do you think are the critical points
in this flow?

6 Case Study 2 - Retail banking

Retail banking has become a much more competitive business in most markets. Basic
banking products, such as current accounts and credit cards, are also now provided by
many different financial service companies, insurers and even supermarkets. This has led to
a significant insurers, and even supermarkets. This has lead to a significant increase in
competition between the providers of such services. Increasingly, these companies are
having to design operations processes that provide a significantly enhanced service,
preferably at lower cost.
This is why simulation, once the preserve of expensive and high-tech operational research
departments, is rapidly becoming a significant aid to process design in banking operations. It
is particularly suited to use in environments where the operational design is complex and
therefore expensive to try out for real and also where there is a significant degree of
randomness, such as the arrival patterns of customers or the varying designers to ask whatif questions for a new design. Alternative designs can be explored at relatively low-cost and
low-risk.
The advantage of simulation became clear to Lloyds TSB, one of the UKs most prominent
financial services groups, when they used it to help design a new Operational Service
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Centre. A new centralized operation was created by merging a number of smaller centers.
Process design decisions included the number and skills of the people needed to staff the
process, activities, how teams should be organized, and so on. The company knew that all
these variables were important in determining how the new process would operate, but
some variables were likely to have a much more dramatic impact than others. The key
question was, which ones?
The computer simulation used by the bank exposed the likely impact of each of these
variables in a way that was almost impossible to demonstrate by any other method. In
addition, once the model of the new operation had been built, a whole range of processing
scenarios could be tried out and their impact assessed in terms of cost, service level and
utilization. Modelling our new operations, particularly with dynamic simulation, has helped us
visualize and test a range of design choices, in a way that we never could before, says John
Tyler of Lloyds TSB, In particular, it has helped us to deploy process design strategies that
have significantly improved the level of service that we provide to our customers.
It also gave us a degree of operational transparency before we actually built the new
operation. Simulation has been very useful in allowing us to anticipate and reduce
operational risk whilst improving our service level to customers.

ACTIVITY 2
(30 MINS)
Your task is to study the case below and answer these question:
1

List the range of variables that you might want to simulate in an operation that

processes a car insurance business.

How would you justify spending large amounts of money on building a computer
simulation model for a new car assembly plant?

7 Select the basic layout

After the process type has been selected, the basic layout type needs to be selected.
The basic layout type is the general form of the arrangement of the facilities in the operation.
Most practical layouts are derived from only four basic layout types:

fixed-position layout
process layout
cell layout
product layout.

One process type does not necessarily imply one particular basic layout. Each process type
could adopt a different basic layout type.

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ACTIVITY 3
(10 MINS)
It has been suggested that operations managers cannot avoid involvement with process
technologies that they need to be able to manage them on a day to day basis. They also
need to articulate how process technology can improve operational effectiveness.
Discuss this point of view, illustrating your answer with examples where appropriate.

DEFINITIONS
a. Process : a group of related tasks with specific inputs and outputs.
b. Process planning: the conversion of designs into workable instructions for
manufacture, along with associated decisions on component purchase or fabrication,
and process and equipment selection.
c. Process plans: a set of documents that detail manufacturing or service delivery
specifications.
d. Process strategy: an organizations overall approach for physically producing goods
and services.
e. Project: the one-of-a-kind production of a product to customer order that requires a
long time to complete and a large investment of funds and resources.
7.1 The basic layout types
a. Fixed-position layout
Fixed-position layout is in some ways a contradiction in terms, since the
transformed resources do not move between the transforming resources. Instead
of materials, information or customers flowing through an operation, the recipient
of the processing is stationary and the equipment, machinery, plant and people
who do the processing move as necessary.
This could be because the product or the recipient of the service is too large to be
moved conveniently, or it might be too delicate to move, or perhaps it could object
to being moved; for example:
A construction site is typical of a fixed-position layout in that there is a limited
amount of space, which must allocated to the various transforming resources.
The main problem in designing this layout will be to allocate areas of the site to
the various contractors so that:

they have adequate space for their needs;

they can receive and store their deliveries of materials;

all contractors can have access to the part of the project on which they
are working , without interfering with each other's movements;
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the total movement of contractors and their vehicles and materials is

minimized far as possible.

In practice, the effectiveness of a fixed-position layout such as this will be tied up

with the scheduling of access to the site and the reliability of deliveries. On most
sites there is not room to allocate permanent space to every contractor who will,
at some time need access.
Only the larger, more important or longer-term contractors are likely warrant
permanent space. Other contractors will take up space on a temporary basis.
This leaves the layout vulnerable to any disruptions to the planning and control of
project.

b. Process layout
Process layout is so called because the needs and convenience of the
transforming resources, which constitute the processes, dominate the layout
decision.
In process layout, similar processes (or processes with similar needs) are located
together. This may be because it is convenient to group them together, or that the
utilization or transforming resources is improved.
It means that when products, information or customers flow through the
operation, they will take a route from activity to activity according to their needs.
Different products or customers will have different needs and therefore take
different routes. Usually this makes the flow pattern in the operation is very
complex.
c. Cell layout
A cell layout is one where the transformed resources entering the operation are
pre-selected to move to one part of the operation (or cell) in which all the
transforming resources, to meet their immediate processing needs, are located.
The cell itself may be arranged in either a process or product layout. After being
processed in the cell, the transformed resources may go on to another cell.
In effect, cell layout is an attempt to bring some order to the complexity of flow
which characterizes process layout.
d. Product layout
Product layout involves locating the transforming resources entirely for the
convenience of the transformed resources. Each product, piece of information or
customer follows a prearranged route in which the sequence of activities that are
required matches the sequence in which the processes have been located.
The transformed resources flow along a 'line' of processes. This is why this type
of layout is sometimes called flow or line layout.

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Flow is clear, predictable and therefore relatively easy to control. Usually it is the
standardized requirements of the product or service which lead to operations
choosing product layouts.
e. Mixed Layouts
Many operations either design themselves hybrid layouts which combine
elements of some or all of the basic layout types, or use the 'pure' basic layout
types in different parts of the operation.
For example, a hospital would normally be arranged on process-layout principleseach department representing a particular type of process (the X-ray department,
the surgical theatres, the blood-processing laboratory, and so on).
Yet within each department, quite different layouts are used. The X-ray
department is probably arranged in a process layout, the surgical theatres in a
fixed-position layout, and the blood processing laboratory in a product layout.
8 What makes a good layout?
Before considering the various methods used in the detailed design of layouts, it is useful to
consider the objective of the activity. To a certain extent the objectives will depend on
circumstances, but there are some general objectives which are relevant to all operations:

Inherent safety -. All processes which might constitute a danger to either staff or
customers should not be accessible to the unauthorized. Fire exits should be clearly
marked with uninhibited access. Pathways should be clearly defined and not
cluttered.

Length of flow - The flow of materials, information or customers should be channelled

by the layout so as to be appropriate for the objectives of the operation. In many
operations this means minimizing the distance traveled by transformed resources.
However, this is not always the case, as we saw in the supermarket, for example

Clarity of flow - All flow of materials and customers should be well signposted , clear
and evident to staff and customers alike. For example, manufacturing operations
unusually have clearly marked gangways. Service operations often rely on
signposted, such as in hospitals which often have different colour lines painted on the
floor indicate the routes to various departments.

Staff conditions Staff should be located away from noisy or unpleasant parts
operation. The layout should provide for a well-ventilated, well-lit and, where
possible, pleasant working environment.

Management coordination - Supervision and communication should be assisted

location of staff and communication devices

Accessibility All machines, plant or equipment should be accessible to a degree is

sufficient for proper cleaning and maintenance.
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Use of space All layouts should achieve an appropriate use of the total space a, in
the operation (including height as well as floor space). This usually means minimizing
the space used for a particular purpose, but sometimes can mean achieving an
impression of spacious luxury, as in the entrance lobby of a high-class hotel.

Long-term flexibility Layouts need to be changed periodically as the needs of the

operation change. A good layout will have been devised with the possible future of
the operation in mind. For example, if demand is likely to increase for a product or
service, has the layout been designed to accommodate any future expansion?

9 Detailed design in product layout

Although the requirements of the product or service dominate product layout design, there
are still many detailed design decisions to be taken. The nature of the design decision also
changes a little. Rather than 'where to place what', product layout is concerned more with
'what to place where'.
Locations are frequently decided upon and then work tasks are allocated to each location.
For example, it may have been decided that four stations are needed to make computer
cases. The decision is then which of the tasks that go into making the cases should be
allocated to each of the four stations. This decision is called the line-balancing decision.
Other product layout decisions are as follows:

What cycle time is needed?

How many stages are needed?

How should the task-time variation be dealt with?

How should the layout be balanced?

How should the stages be arranged?

10 Capacity Management in Operations

When looking at capacity, operations managers need to look at both resource inputs and
product outputs. The reason is that, for planning purposes, real (or effective) capacity
depends cii what is to he produced. For example, a firm that makes multiple products
inevitably can produce more of one kind than of another with a given level of resource
inputs. Thus, while the managers of an automobile factory may state that their facility has
10,000 labour hours available per year. they are also thinking that these labour hours can he
used to make either 50,000 two-door models or 40,000 four-door models (or some mix of the
two and tour-door models). This reflects their knowledge of what their current technology
and labour force inputs can produce and the product Mix that is to be demanded front these
resources.

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ACTIVITY 4
(10 MINS)
Evaluate the contemporary operations themes in detail with relevant examples.

DEFINITIONS
a. Aggregate planning: the process of determining the quantity and timing of production
over an intermediate time frame.
b. Level production: an aggregate planning strategy that produces units at a constant
rate and uses inventory to absorb variations in demand.
c. Chase demand: an aggregate planning strategy that schedules production to match
demand and absorbs variations in demand by adjusting the size of the workforce.

10 Strategies for managing demand

Aggregate planning can also involve proactive demand management. Strategies for
managing demand include:
Shifting demand into other time periods with incentives, sales promotions, and
advertising campaigns;
Offering products or services with countercyclical demand patterns; and
Partnering with suppliers to reduce information distortion along the supply chain.
11 Strategies for adjusting capacity
If demand for a companys products or services is stable over time, then the resources
necessary to meet demand are acquired and maintained over the time horizon of the plan,
and minor variations in demand are handled with overtime or under time. Aggregate
planning becomes more of a challenge when demand fluctuates over the planning horizon.
For example, seasonal demand patterns can be met by:
Producing at a constant rate and using inventory to absorb fluctuations in demand
(level
production)
Hiring and firing workers to match demand (chase demand)
Maintaining resources for high-demand levels
Increasing or decreasing working hours (overtime and undertime)
Subcontracting work to other firms
Using part-time workers
Providing the service or product at a later time period (backordering)

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12 Level Position and Chase Demand

The level production strategy, shown in Figure 3.2a, sets production at a fixed rate
(usually to meet average demand) and uses inventory to absorb variations in
demand. During periods of low demand, overproduction is stored as inventory, to be
depleted in periods of high demand. The cost of this strategy is the cost of holding
inventory, including the cost of obsolete or perishable items that may have to be
discarded.
The chase demand strategy, shown in Figure 3.2b, matches the production plan to
the demand pattern and absorbs variations in demand by hiring and firing workers.
During periods of low demand, production is cut back and workers are laid off. During
periods of high demand, production is increased and additional workers are hired.
The cost of this strategy is the cost of hiring and firing workers. This approach would
not work for industries in which worker skills are scarce or competition for labour is
intense, but it can be quite cost-effective during periods of high unemployment or for
industries with low-skilled workers.

Figure 3.2 Level production Vs Case demand

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ACTIVITY 5
(30 MINS)
Your task is to study the case below and answer these question (a) and (b) by:

Hand calculation
Excel spreadsheet

13 Quantitative Techniques for aggregate planning

One aggregate planning strategy is not always preferable to another. The most effective
strategy depends on the demand distribution, competitive position, and cost structure of a
firm or product line. Several quantitative techniques are available to help with the aggregate
planning decision. In the sections that follow, we discuss pure and mixed strategies.

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QUICK QUIZ
1. Highly decoupled services have no line of visibility, since the customer cannot see
much of the operation. True or False?
2. Process designs vary by:
A. potential volume of production
B. investment in technology
C. type of job
D. a and b
3. Which of the following perspectives applies to individual performance?
A. Systems thinking
B. Resource-based view
C. Environmental analysis
D. All of the above
4. As a Operations Manager, how would you improve the reliability of the process
you are handling.
5. Why do operations fail and how can failure be measured?
6. Explain the main process types found in manufacturing and service organisations.
ANSWERS TO QUICK QUIZ
1.
2.
3.
4.

False
D
D
Process Reliability Improvement
a. Component design
b. Production/assembly techniques
c. Testing
d. Redundancy/backups
e. Preventive maintenance procedures
f. User education
g. System design
5. A brief discussion of the nature of failure the reasons why systems fail could be
given, i.e., because of failures in design, people, equipment, suppliers or customers
The importance of measuring failure in terms of failure rate (including bathtub curve),
mean time between failures, reliability and availability could then be discussed.
6. Main process types found in manufacturing and service organisations.
a. To explain the five generic process types are project, jobbing, batch, mass
(line) and continuous. A summary of the characteristics of each type should
be given along with specific examples. Similarly, the characteristics of the four
process types found in service organisations should be described i.e
professional, mass, service shops and service factories.
b. To provide an overview of process types in both manufacturing and services
with limited examples.
c. To discuss how service providers can be differentiated according to labour
intensity and customisation.
d. To discuss how process types vary with respect to repeatability and
standardisation,flexibility and planning/control complexity, lead time and
inventory, technology and capital investment.
e. To provide detailed array of examples linking either manufacturing or services
and organisational objectives.
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ANSWERS TO ACTIVITIES
Activity 1:
1. Which of the five operations performance objectives (quality, speed, dependability,
flexibility and cost) are the most important to build into the design of VBA's process,
and why?
Quality -The company itself would place quality very much at the top of the list
and flexibility towards the bottom. Quality VBAs service is based on the
trust which it has established both with growers and buyers. This involves an
implicit guarantee of the quality and freshness of the flowers.
Cost Cost is an important objective primarily to the company itself. The
whole companys operations are based on high volume. It is, after all, the
largest operation of its type in the world. Also, the company have invested in
the information technology and materials handling technology which
standardizes the service, thus reducing costs further. However, cost is also
important to the buyers. If the operation were not efficient, then the buyers
may find it cheaper to buy directly from the growers. The transaction costs of
VBA must be sufficiently low to prevent this happening.
Dependability In this case, dependability means that a range and quantity of
flowers are available for buyers to purchase if they wish and also, that the
company are able to guarantee to the growers that flowers will be available
for sale at the time promised. Lack of dependability in terms of interruption to
the supply of flowers would destroy the trust of both buyers and growers.
Speed Speed is only important up to a point. Obviously, the flowers cannot
be kept within the total supply chain for too long, otherwise it would reduce
their shelf life when they eventually reached the shop.
Flexibility The flexibility of this operation is not high. If it was, they could not
achieve the economies of scale and efficiencies of standardization.
2. How does process technology help this operation to achieve its objectives?
In two main ways. First, the information technology acts as an interface
between the buyers and the operation itself. So, while sitting in the auction
hall, buyers can indicate (to a fraction of a second) when the price is at a level
where they wish to purchase. They are able to do this because, information
about the flowers has already been conveyed to them electronically and the
purchase is able to be recorded because the information system detects their
bid and immediately allocates those flowers to their account. This efficient
process substitutes for the verbal exchanges and communications which
normally take place at an auction. The second way in which technology helps
the process is, by transporting the flowers from the loading bays through the
warehouse to the auction hall and eventually, to the trucks which will ship
them to their destination. This technology uses standardized trolleys for ease
of handling and, again, is integrated with the information technology in order
to keep track of which flowers are where.
3. Sketch the flow of flowers in the VBA operation. What do you think are the critical
points in this flow?
In fact, there is not sufficient information in the case to draw a definitive flow
chart. That is not the point of the question. This question is best used to get
students to debate what the flow might be and distinguish between the nature
of the activities at different stages. So, some stages will be critical. For
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example, the check-in recording of the flowers as they enter the warehouse
and are loaded onto the trolleys is the basis for inspection, acceptance and
the documentation of the characteristics of the flowers. It is a point at which,
failure would have a profound impact on the integrity of the whole system.
Activity 2:
1. List the range of variables that you might want to simulate in an operation that
processes a car insurance business.
Variables would include the following:
Number and size of individual call centres
Different degrees of ability to switch calls between call centres in response to
demand variation
Average level of demand
Different demand patterns
Different degrees of unpredictability (short term) of demand
Average call time
Distribution of call times around the average
Change in average and distribution of call times
Level and variation in absenteeism amongst call centre staff
Likelihood of disruption to incoming calls
Ability of operators to satisfactorily answer customer queries
Different levels of staff IT support (to help them answer customer queries)
2. How would you justify spending a large amount of money on building a computer
simulation model for a new car assembly plant?
Any justification would have to be based on the computer simulations ability to:
Explore options for the design of the assembly plant
Highlight potential design flaws that could reduce the efficiency and
effectiveness of the plant
Predict the assembly plants response to variation in demand and/or the
activities it is asked to perform
The justification must demonstrate that the money spent on the simulation
itself will be less than the money saved by improving the design of the plant
plus the money saved by the plant being able to change its way of operating
in the future.
Activity 3
A starting point could be to give a definition and overview of process technology explaining
what it is and how it relates to operations management. The three most significant types of
process technology need to be explained in some detail i.e. a) materials processing
technology e.g. computer numerically controlled machine tools, robotics, automatic guided
vehicles, flexible manufacturing systems and computer integrated manufacturing. b)
information processing technology processing technology e.g. centralised and de-centralised
(including LANS), telecoms and information technology (including www), management
information system of various kinds. c) customer processing technology, e.g. involving
customer interactions and interactions via an intermediary. A discussion of implementation
and evaluation of technology strategies in organisation are required.

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Activity 4
1. Services and manufacturing merging.
2. Customer directed operations
3. Lean activities
4. Integration of operations with other functions
5. Environmental concerns and sustainability
6, Supply Chain Management initiatives
7. Globalization of operations.
Activity 5
By Hand calculation:

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By Excel spreadsheet

CHAPTER ROUNDUP

The idea of process types and the various designs helps to reinforce the distinction
between the different types of processes used in the field of operations management,
both for products and services.
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Operation managers use process design and strategy to encourage the development
of efficient equipment and processes.
They design their equipment and processes to have capabilities that will satisfy the
customers.
The different concepts and diagrams on the layout and flow is critical for any
organization to use it's resources effectively and efficiently, with the objective of
eliminating waste.
Layouts make a substantial difference in operating efficiency. For this reason layout
decisions is sometimes considered something of an art.
Aggregate planning is critical for companies with seasonal demand patterns and for
services. Variations in demand can be met by adjusting capacity or managing
demand.

REFERENCES
1. Operations Management by Nigel Slack, Publisher : Prentice Hall
2. Operations Management by Schroeder, Contemporary Concepts and Cases
Publisher : McGraw Hill
3. Operations Management by Russell,& Benard W. Taylor, Crating Value Along the
Supply Chain 7th edition , John Wiley and Sons
4. Operations Management by Chase. Richard B. & Nicholas J. Aquilano., Operations
Management for competitive advantage, 11th edition, McGraw Hill

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