REVIEWER IN OPERATIONS
MANAGEMENT
Facility Layout-specific arrangement of
physical facilities
Four Major Layout Patterns
1. Product Layout- sequence of
operations
Advantages:
1. Lower work-in-process inventories
2. Shorter processing times
3. Less material handling
4. Lower labor skills
5. Simple planning and control systems
Disadvantages:
1. A breakdown of one piece of equipment
can cause the entire process to shut
down
2. A change in product design or the
introduction of new products may require
major changes in the layout
3. Flexibility can be limited
2. Process Layout- functional grouping of
equipment or activities
Advantages:
1. Generally require a lower investment in
equipment
2. Equipment is normally more general
purpose
3. The diversity of jobs inherent in a process
layout can lead to increased worker
satisfaction
Disadvantages:
1. High movement and transportation costs
2. More complicated planning and control
systems
3. Longer total processing time and higher
worker-skill requirements
3. Cellular Layout- design is not according
to the functional characteristics of
equipment
4. Fixed-Position Layout- consolidates the
resources necessary to manufacture a good
or deliver a service, such as people,
materials, and equipment, in one physical
location.
Facility Layout in Service Organizations
1. volume of demand;
2. range of the types of services offered;
3. degree of personalization of the service;
4. skills of employees; and
5. cost
Location Strategy- Once management is
committed to a specific location, many costs
are firmly in place and difficult to reduce.
Factors that Affect Location Decisions
1. Labor productivity
2. Exchange rate and currency risk –
wage rates and productivity
3. Costs
a. Tangible costs- readily identifiable and
precisely measured.
b. Intangible costs- location costs that
cannot be easily quantified such as quality of
life and government.
4. Attitudes- attitudes of national, state and
local governments
5. Proximity to markets- many firms it is
extremely important to locate near
customers.
6. Proximity to suppliers- Firms locate near
their raw materials and suppliers
7. Proximity to competitors- Clustering:
the location of competing companies near
each other, often because of a critical mass
of information, talent, venture capital or
natural resources.
Factors affecting country decision
 Government rules, attitudes, stability,
incentives
 Labor availability, attitudes,
productivity, cost
 Availability of suppliers,
communications, energy
 Culture and economy
 Location of markets
 Exchange rate
Factors affecting region/community
decision
  Attractiveness of region (culture,
taxes, climate, etc.)
 Labor availability, costs, attitudes
towards unions
 Environmental regulations of state
and town
 Proximity to customers and suppliers
 Corporate desires/costs and
availability of utilities
 Government incentives
 Land/construction costs
Factors affecting site decision
 Access to air, rail, highway and
waterway systems
 Proximity to needed
services/suppliers
 Site size and cost
 Zoning restrictions
 Environmental impact issues
The Value of Location
 Growing popularity of mapping web
sites and handled GPS (Global
Positioning Satellite)
What is Location Intelligence?
 Location intelligence blends the
analysis of objects (such as people,
business, points of interest, or
geographic regions)
Types of Locations
1. Home-based- trendiest location for a
business
2. Retail- retail space comes in a
variety of shapes and sizes
3. Mobile- selling to the general public
or other businesses
4. Commercial- commercial space
includes even more options than
retail.
5. Industrial- manufacturing or heavy
distribution
Design of Work Systems
Work Systems Design
The work system includes :job design, work
measurement, and worker compensation
 consider models for analyzing work
to eliminate unnecessary tasks and
regulate the duration of each stage in
a production line.
Job Design
specifying the content and methods of job.
Job Design Success
Successful Job Design must be:
 Carried out by experienced personnel
with the necessary training and
background
 Consistent with the goals of the
organization
 Understood and agreed to by both
management and employees
Techniques of Job design
Job Enlargement
Giving a worker a larger portion of the total
task by horizontal loading
Job Rotation
Workers periodically exchange jobs
Job Enrichment
Increasing responsibility for planning and
coordination tasks, by vertical loading
Motivational Work Design
Motivational Factor by Herzberg
Hygiene Factor- Prevent dissatisfaction of
employees
Motivators- helps motivating employees in
the job
According to Hackman and Oldham- man
work hard when they are rewarded for their
work
Motivational Work Design
Motivation
 Influences quality and productivity
 Contributes to work environment
Trust
 Influences productivity and
 employee-management relations
Analyzing the Job
Flow process chart
 Chart used to examine the overall
sequence of an operation by focusing
on movements of the operator or
flow of materials
Worker-machine chart
  Chart used to determine portions of a
work cycle during which an operator
and equipment are busy or idle.
Time and Motion Study
Motion study
is the systematic study of the human motions
used to perform an operation.
Time study
Time study is a direct and continuous
observation of a task, using a timekeeping
device
 Time and Motion study: History
 Frederick W Taylor and his followers
develop and refined the Time Study.
 Frank B Gilbreth and his wife Lilian
develop refined the Motion study
 T&M studies were used in the
manufacturing industry to evolve pay
scales with the thought that money
was the only motivation for work
Developing Work Methods
1. Eliminate unnecessary motions
2. Combine activities
3. Reduce fatigue
4. Improve the arrangement of the
workplace
5. Improve the design of tools and
equipment
Time study
Time study is a direct and continuous
observation of a task, using a timekeeping
device
 Standard time
 Stopwatch time study
 Historical times
 Predetermined data
 Work Sampling
Time study
 there are repetitive work cycles of
short to long duration,
 wide variety of dissimilar work is
performed, or
 process control elements constitute a
part of the cycle.
Time-based system
Compensation based on time an employee
has worked during a pay
period
Output-based (incentive) system
Compensation based on the amount of
output an employee produces during a pay
period
 Individual Incentive Plans
 Group Incentive Plans
 Knowledge-Based Pay System
 Management Compensation
Work Measurement
Balanced Scorecard helps managers define
the performance categories that relate to the
company’s strategy.
Work Measurement
According to Huselid, the Workforce
Scorecard identifies and measures the
behaviors, skills, mind-sets, and results
required for the workforce to contribute to
the company’s
OPERATION STRATEGY
management to make design of work
systems a key element of its operations
strategy
SERVICE DESIGN
Service design- human-centered approach
Five Principles
User-Centered- People are at the center of
the service design.
Co-Creative- Service design should involve
other people, especially those who are part
of a system or a service.
Sequencing- Services should be visualized
by sequences, or key moments in a
customer’s journey.
Evidencing- Customers need to be aware of
elements of a service. Evidencing creates
loyalty and helps customers understand the
entire service experience.
Holistic- A holistic design takes into account
the entire experience of a service.
SERVICE DESIGN – A STEP-WISE
PROCESS
Four P’s of Service Design
People: This refers to the people, skills and
competencies involved in the
provision of services
Products: This refers to the technology and
management systems used in service
delivery
Processes: This refers to the processes, roles
and activities involved in the provision of
services
Partners: This refers to the vendors,
manufacturers and suppliers that are used to
assist and support service provision
Top 10 Characteristics of Services
1. Intangible nature
2. Simultaneous production and distribution
3. Loss due to lack of sales cannot be
recovered
4. Fluctuating demand
5. Lack of uniform performance standards
6. Irrelevance of certain marketing
functions/activities
7. Direct distribution
8. Heterogeneous nature of service
9. Personal relationship between the service
provider and the client
10. Skill orientation
Customer Satisfaction - indicates the
fulfillment that customers derive
from doing business with a firm.
Service Quality- RESULTS GENERATED,
BY ACTIVITIES AT THE INTERFACE
BETWEEN THE ORGANIZATION
AND THE CUSTOMER AND BY
THE ORGANIZATION’S INTERNAL
ACTIVITIES, TO MEET CUSTOMER
NEEDS.”
Features of services
1. SPEED- Service Providers Offer Service
As Fast As Possible Without Compromising
On Quality
2. Delivery Schedule- -every delivery is
associated with a delivery schedule.
3. Care in Handling- deliverables and
customers have to be handled carefully
4. Each Service Offering is Different-
procure two orders of service
5. Customer Requirements are Difficult to
Comprehend- service provider has to make
efforts to understand the requirements of
each customer correctly
6. Difficulty in Estimating Cost- Varied
requirements, materials, time and manpower
make it harder to determine costs and
charges.
Difficulty in Marketing Services
Two ways of marketing services
1. Personal Contact with personal buyers
2. Building credibility of organization by
good services consistently
Customer delight- favorable experience of
the client
The Kano Model
THE KANO MODEL
Evolved by Dr. Noriaki Kano of Tokyo Rika
University, in the late 1970’s.
The Kano model- must have, expected and
excitement
COMPLAINTS RESOLUTION
1. ALLOW CUSTOMER TO TALK-
Allow angry customers to talk and
express their feelings until they
release their frustration and calm
down.
2. APOLOGIZE- Ask for forgiveness
for the mistake and inconvenience.
3. USE THE CORRECT TONE-
Don’t smile, laugh or mock upset
customers.
4. BE NEUTRAL- Do not offer your
opinion
5. DON’T REACT- Never respond to
angry comments.
6. FOCUS- When a customer is
already calm, redirect the
Conversation
7. AGREE- Find something to agree
with the customer