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Summary Chapter 14 Operations Management
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A good summary of chapter 14 based on the book Operations Management by Slack including the supplement of chapter 14.
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Operations Management for IBA
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Samenvatting voor Business Operations and Processes (BOP) UvA
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Samenvatting Operations Management
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Chapter 14 Planning and Control SystemsWhat are planning and control systems?
The activity of planning and control is concerned with managing the ongoing allocation of resources
and activities to ensure that the operation’s processes are both efficient and reflect customer
demand for products and services. Formally, planning determines what is intended to happen at
some time in the future, while control is the process of coping when things do not happen as
intended.
Planning and control systems
Planning and control systems are the information processing, decision support and execution
mechanisms that support the operations planning and control activity. Although planning and
control systems can differ, they tend to have a number of common elements:
- Customer interface that forms a two-way information link between the operation’s activities
and its customers;
- A supply interface that does the same thing for the operation’s suppliers;
- A set of overlapping ‘core’ mechanisms that perform basic tasks such as loading, sequencing,
scheduling, and monitoring and control;
- A decision mechanism involving both operations staff and information systems that makes
or confirms planning and control decisions.
How does the system interface with customers?
The part of the resource planning and control system that manages the way customers interact with
the business on a day-to-day basis is called the ‘customer interface’ or sometimes ‘demand
management’. This is a set of activities that interface with both individual customers and the market
more broadly.
Customer interface defines the customer experience
The customer interface is important because it defines the nature of the customer experience. It is
the public face of the operation. Therefore, it needs to be managed like any other ‘customer
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, processing’ process, where the quality of the service, as the customer sees it, is defined by the gap
between customers’ expectations and their perceptions of the service they receive.
The experience itself will start before any customer contact is initiated. The managing of customer
expectations is particularly important in the early stages of the experience. As the experience
continues, various interactions with the customer interface service to build up customer perceptions
of the level of support and care exhibited by the operation.
The customer interface should reflect the operation’s objectives
In managing a customer’s experience, the customer interface element of the planning and control
system is, in effect, operationalizing the business’s operations objectives. No matter how
sophisticated the customer interface technology, or how skilled the customer interface staff, this
part of the planning and control system cannot operate effectively without clear priorities derived
from the operation’s strategic objectives.
The customer interface acts as a trigger function
Acceptance of an order should prompt the customer interface to trigger the operation’s processes.
Exactly what is triggered will depend on the nature of the business. In a ‘resource-to-order’
operation the customer interface triggers the task of hiring in the relevant equipment and
purchasing the appropriate materials. In a ‘produce-to-order’ operation accepting a job would only
need to trigger the purchase of the materials to be used in the construction. If demand is high,
customers may place requests for products before they are made. In this case, the customer will
form a backlog of demand and must wait. This is called a ‘produce ahead of order’ operation.
How does the system interface with suppliers?
The supplier interface provides the link between the activities of the operation itself and those of its
suppliers. The timing and level of activities within the operation or process will have implications for
the supply of products and services to the operation. Ultimately, customer satisfaction will be
influenced by supply effectiveness because that in turn influences delivery to customers.
The supplier interface has both a long- and short-term function. It must be able to cope with
different types of long-term supplier relationships, and also handle individual transactions with
suppliers. To do the former, it must understand the requirements of all the processes within the
operation and also the capabilities of the suppliers.
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