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Understanding Process Variation in Management

1. Variation occurs in all business processes due to variability or deliberate variety offered to customers. There are four basic sources of variation: variety of goods/services, structural demand variations, random variation inherent in all processes, and assignable variations caused by defects. 2. The scope of operations management ranges across the organization and involves activities like product/service design, process selection, technology management, work design, facilities planning, and quality improvement. 3. Operations managers play a key role in planning and making informed decisions between alternatives that can impact costs and profits. Models like physical, schematic, and mathematical representations are used to simplify complex systems and support quantitative decision making.

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242 views3 pages

Understanding Process Variation in Management

1. Variation occurs in all business processes due to variability or deliberate variety offered to customers. There are four basic sources of variation: variety of goods/services, structural demand variations, random variation inherent in all processes, and assignable variations caused by defects. 2. The scope of operations management ranges across the organization and involves activities like product/service design, process selection, technology management, work design, facilities planning, and quality improvement. 3. Operations managers play a key role in planning and making informed decisions between alternatives that can impact costs and profits. Models like physical, schematic, and mathematical representations are used to simplify complex systems and support quantitative decision making.

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kopi komms
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© All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd

Process Variation

Variation occurs in all business processes. It can be due to variety or variability. For example, random


variability is inherent in every process; it is always present. In addition, variation can occur as the result of
deliberate management choices to offer customers variety.
Four Basic Sources of Variation:

[Link] variety of goods or services being offered


. The greater the variety of goods and services, the greater the variation in production or service requirements.
2. Structural variation in demand
. These variations, which include trends and seasonal variations, are generally predictable. They are particularly
important for capacity planning.
3. Random variation
. This natural variability is present to some extent in all processes as well as in demand for services and
products and cannot generally be influenced by managers.
[Link] variation
. These variations are caused by defective inputs, incorrect work methods, out-of-adjustment equipment, and so
on. This type of variation can be reduced or eliminated by analysis and corrective action

THE SCOPE OF OPERATIONS MANAGEMENT


The scope of operations management ranges across the organization. Operations management people are
involved in product and service design, process selection, selection and management of technology, design of
work systems, location planning, facilities planning, and quality improvement of the organization’s product or
services.

We can use an airline company para I illustrate ang service organizations operate system. Ang system naga
consist ug airplanes, airport facilities ug maintenance facilities.
The Scope of Operations Management
Forecasting
such things as weather and landing conditions, seat demand for flights, and the growth in air travel.
Capacity planning,
essential for airlines to maintain cash flow and make a reasonable profit.
Locating facilities
 according to managers‟ decisions on which cities to provide service
for, where to locate maintenance facilities, and where to locate major and minor hubs.
Facilities and layout
, are important in achieving effective use of workers and equipment.
 Scheduling
 of planes for flights and for routine maintenance; scheduling of pilots and flight attendants; and scheduling of
ground and crews, counter staff, and baggage handlers.
Managing inventories
of such items as foods and beverages, first-aid equipment, inflight magazines, pillows and blankets, and life
preservers.
 Assuring quality,
essential in flying and maintenance operations, where the emphasis is on safety, and important in dealing with
customers at ticket counters, check- in, telephone and electronic reservations, and curb service, where the
emphasis is on efficiency and courtesy.
Motivating and training employees in all phases of operations

OPERATIONS MANGEMENT & DECISION MAKING


Ang pinaka una nga role sa operation manager mao ang tigplano ug tighimog desisyon. Kadaghanan sa mga
desisyon Nga involve daghang posible nga alternative nga mahimong lahi-lahi nga impact sa cost or profit.
Maong importante kayo ang informed decisions.
(POWERPOINT)
MODELS
For example, a
child‟s toy car is a model of a real automobile. It has many of the same visual features
makes it suitable for the child’s learning and playing. But the toy does not have a real
engine, it cannot transport people and it does not weigh 2000pounds.

Models are sometimes classified as physical, schematic, or mathematical.


 
Physical models
look like their real-life counterparts. Examples include miniature cars, trucks, airplanes,
toy animals and trains, and scale-model buildings. The advantage of this model these
models is their visual correspondence with reality.
Schematic models
are more abstract than their physical counterparts; that is, they have less resemblance
to physical reality. Examples include graphs and charts, blueprints, pictures, and
drawings. The advantage of schematic models is that they are often relatively simple to
construct and change. Moreover, they have some degree of visual correspondence.
Mathematical models
are the most abstract: they do not look at all like their real-life counterparts. Examples
include numbers, formulas, and symbols. These models are usually the easiest to
manipulate and they are important forms of inputs for computers and calculators
QUANTITATIVE APPROACHES to problem-solving often embody an attempt to obtain
mathematically optimal solutions to managerial problems. Quantitative approaches to
decision making in operations management have been accepted because of calculators
and computers capable of handling the required calculations
Performance Metrics
Managers use metrics to manage and control operations. There are many metrics in use,
including those related to profits, costs, quality, productivity, flexibility, assets,
inventories, schedules, and forecast accuracy.
 Analysis of Trade-offs
 Operations personnel frequently encounter decisions that can be described as
Trade-offs decisions. For example in deciding on the amount of inventory to stock, the
decision maker must take into account the trade-off between the increased level of
customer service that the additional inventory would yield and the increased
costs required to stock that inventory.
Degree of Customization
 A major influence on the entire organization is the degree of customization of products 
or services being offered to its customers. Providing highly customized products or
services such as home remodeling, plastic surgery, and legal counseling tends to be
more labor intensive
than providing standardized products, such as those you would buy “off the shell” at a
mall store or a supermarket.
 A System Approach
 A system can be defined as a set of interrelated parts that must work together. The syst
em approach emphasizes interrelationships among subsystems, but its main theme is
that the whole is greater than the sum of its individual parts. A system approach is
essential whenever something is being designed, redesigned, implemented, improved
otherwise changed.
Establishing Priorities
Recognizing certain issues or items enables managers to direct their efforts to where
they will do their best. Pareto phenomenon is an important and pervasive concept in
one. This

Common questions

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In airline operations management, forecasting involves predicting variables such as weather conditions, seat demand, and overall air travel growth. This is critical for scheduling flights, pilots, and crews, determining aircraft capacity requirements, managing resources efficiently, and mitigating risks associated with unforeseen changes. Accurate forecasting ensures optimal utilization of assets, enhances customer satisfaction by matching supply with demand, and helps maintain profitability by allowing precise planning and adjustment of services offered .

A system approach in operations management is essential because it emphasizes the interdependence of various subsystems within an organization, ensuring that changes in one area are harmonized with others for overall efficacy. By understanding how different parts of the system interact, managers can make more informed decisions that consider the broader organizational impact, rather than isolated benefits. This holistic perspective aids in identifying bottlenecks, optimizing resource use, and fostering continuous improvement across the organization. It ensures the collective synergy of all subsystems contributes to organizational goals .

Operations management teams can address assignable variation by identifying and analyzing the root causes of variations, such as defective inputs or improper work methods. Implementing corrective actions like equipment adjustments, process redesigns, or employee retraining can significantly reduce or eliminate these variations. Continuous monitoring and feedback mechanisms are essential to ensure that any process changes are effective and sustainable, leading to improved product or service quality and operational consistency .

Performance metrics provide quantitative measures of various operational aspects, guiding managers in aligning processes with organizational goals. In a service industry, metrics related to quality, customer satisfaction, productivity, and cost efficiency inform decision-making. They highlight areas needing improvement, guide resource allocation, and track the effectiveness of implemented strategies. By consistently monitoring these metrics, operations managers can make data-driven decisions that improve service delivery and competitive positioning .

The degree of customization significantly influences operations management strategies and structures. High customization requires more labor-intensive processes, greater flexibility, and close customer interaction, resulting in increased complexity and cost in operations. It involves designing unique processes and workforce training to tailor products or services to individual customer needs. On the other hand, standardized offerings allow for more streamlined, automated, and cost-effective operations, with economies of scale. Thus, the degree of customization dictates the technology, skills, and processes employed in operations .

The Pareto phenomenon, or the 80/20 rule, can be applied in operations management to prioritize efforts that will yield the most significant impact. By targeting the small fraction of inputs that cause the majority of inefficiencies or problems (for example, 20% of causes responsible for 80% of issues), managers can focus resources on resolving these critical areas. This approach aids in strategic decision-making, enabling more effective resource allocation and quicker resolution of pivotal issues, thus enhancing overall operational efficiency and effectiveness .

Physical models in operations management visually resemble the real objects they represent, making them useful for design and educational purposes, as they offer tangible insights. Schematic models, such as graphs and blueprints, provide a more abstract representation, allowing for easy adjustments and conveying complex information simply. Mathematical models use numbers and formulas to represent processes, offering high precision and are easily manipulated by computers, facilitating quantitative problem-solving and optimization of operations .

In a service organization like an airline, operations management extends beyond production activities to include service design, process selection, and technology management. It involves planning and forecasting, such as predicting seat demand and weather conditions, which are critical for scheduling and capacity planning. Furthermore, it encompasses the strategic location of facilities and hubs, the management of inventories for services, and the assurance of quality in both operational and customer-facing aspects. Employee motivation and training across various operations also fall under its scope, highlighting the role of operations management in ensuring efficiency, safety, and customer satisfaction .

Trade-offs in operations management are crucial, as they involve balancing conflicting objectives to optimize performance. In inventory management, a major trade-off is between the level of customer service and the costs of stocking inventory. Higher inventories improve service levels by meeting customer demand promptly but increase holding costs and risk of obsolescence. Conversely, lower inventories reduce costs but risk stockouts and customer dissatisfaction. Operations managers must analyze these trade-offs to achieve an optimal balance that aligns with strategic business goals .

There are four primary types of variation in business processes: variety of goods or services, structural variation in demand, random variation, and assignable variation. The variety of goods and services directly increases the complexity and variability of production or service requirements, impacting operational strategies such as product customization and service differentiation. Structural variations in demand, like trends and seasonal variations, affect capacity planning and require forecasting to adjust resources accordingly. Random variation, inherently present in all processes, challenges process control and prediction, necessitating flexible operational strategies to accommodate unexpected changes. Assignable variation, caused by specific defects or procedural errors, allows for targeted analysis and corrective actions to improve process quality and efficiency .

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