OMA1 - Exam Preperation
Presentation Summary:.............................................................................................................. 6
Chapter 1 Summary: Operations and Processes..................................................................... 8
Executive Summary.................................................................................................................8
Behavioral operations management considers non-rational behavior in operations
decision-making.......................................................................................................................8
Introduction.............................................................................................................................. 8
Does the organization understand the potential of operations and process management?....9
Example 1: LEGO............................................................................................................ 10
Example 2: Torchbox....................................................................................................... 10
Does the business take a process perspective?....................................................................11
Example 3: The programme and video division (PVD).................................................... 11
Does operations and process management have a strategic impact?.................................. 13
Example 4: The programme and video division (PVD) continued................................... 13
Are processes managed to reflect their operating circumstances?....................................... 14
Are operations and process decision-making appropriate?...................................................15
Critical Commentary.............................................................................................................. 15
Chapter 1 Summary...............................................................................................................16
Chapter 2 Summary: Operations and Strategic Impact......................................................... 17
Executive Summary...............................................................................................................17
Introduction............................................................................................................................ 17
Does the operation have a strategy?.....................................................................................18
Example 1: Amazon.........................................................................................................19
Example 2: Surrey Satellite Technology Ltd (SSTL)........................................................ 20
What do they have in common?...................................................................................... 20
Does operations strategy reflect business strategy (top-down)?...........................................21
Example 3: Innovation at Micraytech #1 (top-down)........................................................21
Does operations strategy align with market requirements (outside-in)?................................22
Example 3: Innovation at Micraytech #2 (outside-in)....................................................... 23
Does operations strategy learn from operational experience (bottom-up)?...........................23
Example 3: Innovation at Micraytech #3 (bottom-up)...................................................... 23
Does operations strategy develop the capability of its resources and processes (inside-out)?
24
Example 3: Innovation at Micraytech #4 (inside-out)....................................................... 24
Are the four perspectives of operations strategy reconciled?................................................25
Example 4: Nokia.............................................................................................................25
Does operations strategy set an improvement path?............................................................ 26
Critical Commentary.............................................................................................................. 26
Chapter 2 Summary...............................................................................................................28
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,Chapter 6: Process Design 2 – Analysis................................................................................. 29
Executive Summary...............................................................................................................29
Introduction............................................................................................................................ 29
Is the importance of detailed process design understood?................................................... 29
Example 1: Changi Airport............................................................................................... 30
Example 2: Fast Food......................................................................................................30
What do they have in common?...................................................................................... 31
Are process performance objectives clear?...........................................................................31
Example 3: Ecover...........................................................................................................32
How are processes currently designed?................................................................................32
Are process tasks and capacity configured appropriately?................................................... 33
Example 4: Computer Repair Center...............................................................................33
Example 5: Passport Office............................................................................................. 33
Is process variability recognised?..........................................................................................34
Critical Commentary.............................................................................................................. 35
Chapter 6 Summary...............................................................................................................36
Chapter 7: Supply Chain Management.................................................................................... 37
Executive Summary...............................................................................................................37
Introduction............................................................................................................................ 37
Is the importance of supply chain management understood?............................................... 37
Example 1: Ocado........................................................................................................... 38
Example 2: Apple.............................................................................................................38
What do they have in common?...................................................................................... 39
Are supply chain objectives clear?........................................................................................ 39
Example 3: North Face.................................................................................................... 40
How should supply chain relationships be managed?...........................................................40
How is the supply side managed?......................................................................................... 41
How is the demand side managed?...................................................................................... 42
Example 4: Slazinger - Wimbledon Tennis Balls..............................................................42
Are supply chain dynamics under control?............................................................................ 43
Critical Commentary.............................................................................................................. 44
Chapter 7 Summary...............................................................................................................45
Chapter 11: Lean Synchronization...........................................................................................46
Executive Summary...............................................................................................................46
Introduction............................................................................................................................ 46
What are the benefits of lean synchronisation?.....................................................................46
Example 1: Toyota........................................................................................................... 47
Example 2: Torchbox....................................................................................................... 47
What are the barriers to ‘lean synchronisation’?....................................................................48
Is flow streamlined?............................................................................................................... 49
Example 3: Amazon.........................................................................................................49
2
, Are processes flexible?..........................................................................................................50
Is variability minimised?.........................................................................................................50
Is lean synchronisation applied throughout the supply network?.......................................... 51
Critical Commentary.............................................................................................................. 51
Chapter 11 Summary............................................................................................................. 53
Chapter 12: Improvement......................................................................................................... 54
Executive Summary...............................................................................................................54
Introduction............................................................................................................................ 54
Why is improvement so important?....................................................................................... 54
Example 1: Prêt A Manger...............................................................................................55
Example 2: Sonae Corporation........................................................................................55
What do they have in common?...................................................................................... 56
What is the gap between current and required performance?...............................................56
Example 3: Triumph......................................................................................................... 57
Example 4: Formula 1......................................................................................................57
Example 5: EXL Laboratories.......................................................................................... 58
What is the most appropriate improvement path?................................................................. 58
What techniques should be used to facilitate improvement?.................................................59
Example 6: Kaston Pyral Services Ltd.............................................................................60
How can improvement be made to stick?..............................................................................61
Example 7: Checklist Manifesto.......................................................................................61
Critical Commentary.............................................................................................................. 62
Chapter 12 Summary.............................................................................................................63
Chapter 13: Quality Management.............................................................................................64
Executive Summary...............................................................................................................64
Introduction............................................................................................................................ 64
Is the importance of quality management universally understood and applied?................... 64
Example 1: Victorinox - Swiss Army Knife....................................................................... 65
Example 2: Four Seasons Hotel - Canary Ward.............................................................. 65
What do they have in Common?......................................................................................66
Example 3: Fat Fingers Syndrome.................................................................................. 66
Is quality adequately defined?............................................................................................... 67
Example 4: Tea and Sympathy........................................................................................ 67
Is quality adequately measured?........................................................................................... 68
Is quality adequately controlled?........................................................................................... 68
Example 5: What a Giveaway..........................................................................................68
Does quality management always lead to improvement?..................................................... 69
Critical Commentary.............................................................................................................. 70
Chapter 13 Summary.............................................................................................................71
Chapter 15: Project Management.............................................................................................72
Executive Summary...............................................................................................................72
3
, Introduction............................................................................................................................ 72
Is the applicability of project management understood?........................................................72
Example 1: Disney........................................................................................................... 73
Example 2: Crossrail........................................................................................................74
What do they have in common?...................................................................................... 74
Is the nature of the project and its stakeholders understood?............................................... 75
Example 3: World Health Organization (WHO)................................................................76
Is the project well defined?.................................................................................................... 76
Is project management adequate.......................................................................................... 77
Example 4: Project Failure...............................................................................................77
Has the project been adequately planned?........................................................................... 78
Example 5: British Broadcasting Corporation (BBC)....................................................... 78
Is the project adequately controlled?..................................................................................... 79
Critical Commentary.............................................................................................................. 79
Chapter 15 Summary.............................................................................................................81
4 V’s of Operation Management............................................................................................... 83
Four Stages of Operations Contribution................................................................................. 85
Four Perspectives on Operations Strategy.............................................................................86
Business Model and Operating Model.....................................................................................88
Business Model..................................................................................................................... 88
Operating Model.................................................................................................................... 88
Process Mapping Process........................................................................................................ 90
Bottlenecks................................................................................................................................ 92
Adequate Project Management................................................................................................ 94
Project Planning Process......................................................................................................... 96
Gap Analysis.............................................................................................................................. 98
2 Improvement Paths.............................................................................................................. 100
Continuous Improvement.....................................................................................................100
Breakthrough Improvement................................................................................................. 101
The Balanced Score Card (BSC)............................................................................................ 102
Supply Chain Management - Lean or Agile...........................................................................104
Lean Supply Chain Management........................................................................................ 104
Agile Supply Chain Management........................................................................................ 105
Six Sigma..................................................................................................................................106
Total Quality Management...................................................................................................... 108
European Foundation for Quality Management (EFQM)...................................................... 110
Differences between TQM and EFQM.................................................................................... 112
Toyota Production System (TPS)........................................................................................... 114
One Piece Flow........................................................................................................................ 116
4
,Presentation Summary:
OMA1 Learning Goals:
- Analyze and apply operations management concepts and practices in a complex
economic context, with a focus on European economies.
- Conduct process design and analysis for service and manufacturing companies.
- Recommend appropriate actions for process rollout programs based on success factors
and best practices.
- Compare process key performance indicators (KPIs) and audit results, and advise on
process controlling activities.
- Identify and understand ethical implications of operations management decisions.
- Operations and process management involve managing resources and processes that
produce products and services. It includes purchasing, production, logistics, marketing,
sales, and service.
Understanding processes is important because it provides insight into the core of a company.
Thorough analysis allows for making processes more efficient, effective, and manageable.
Operations and process management have strategic importance as they can reduce costs,
increase customer satisfaction and revenue, mitigate operational risks, ensure effective
investments, and build capabilities for innovation.
Not all processes should be managed in the same way. Characteristics of demand such as
volume, variety, variation, and customer visibility influence how processes need to be managed.
Operations strategy refers to the long-term vision, objectives, and capabilities of the operation
and its contribution to the overall strategy. It involves making decisions and trade-offs between
performance indicators (KPIs) to improve operations over time.
Process design or mapping helps employees understand their operations management
activities and standardizes processes for stability while allowing for necessary changes and
improvements over time.
A project definition includes objectives, scope, and overall strategy. Adequate project
management requires understanding constraints, critical paths, and interpersonal skills.
Supply chain encompasses the process from raw materials to consumption, linking suppliers
and user companies. Supply chain management involves planning, organizing, and controlling
the flow of materials and services to optimize the entire supply chain as a unit.
Quality refers to conformance to specifications, fitness for use, meeting customer requirements,
and achieving appropriate specifications. It involves measuring and aiming for first-time right
and consistent conformance to customer expectations.
5
,Lean management aims to deliver value from the customer's perspective, while waste refers to
anything that does not add value to the customer.
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,Chapter 1 Summary: Operations and Processes
Executive Summary
● Operations and process management play a crucial role in organizations.
● The operations function is responsible for producing products and services in every
organization.
● All parts of a business involve managing processes, not just operations.
● Understanding businesses from a process perspective is valuable for analysis.
● Operations and process management impact the strategic aspects of a business,
including cost, revenue, investment, and capabilities.
● Processes should be managed differently based on their volume, variety, variation, and
visibility characteristics.
● Operations managers use a common set of decisions and activities to manage
processes.
● Operations decisions cover four broad areas: directing overall strategy, designing
processes, planning and controlling process delivery, and developing process
performance.
● Operations managers use models, both quantitative and qualitative, to aid in
decision-making.
Behavioral operations management considers non-rational behavior in operations
decision-making.
Introduction
● Operations management is concerned with how organizations produce goods and
services.
● Operations managers design, run, and improve processes that produce products and
services.
● Operations management extends beyond operations managers and includes managers
in other functions like marketing, sales, and finance.
● Processes exist in all parts of organizations, making operations and process
management relevant to all managers.
● The book covers tasks, issues, and decisions necessary for effective process
management in both the operations function and other areas of the business.
● The chapter provides an introduction to the basic principles of operations and process
management.
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,Does the organization understand the potential of operations and process
management?
● Operations and process management involve the coordination and control of resources,
such as materials, equipment, and people, along with the activities and processes that
transform these resources into products and services.
● The operations function is a central and critical activity within any organization. It is
responsible for producing the goods and services that the organization offers to its
customers.
● Operations managers, sometimes referred to by different titles depending on the industry
or specific role, are responsible for designing, running, and improving the processes that
produce the organization's products and services.
● While operations management is primarily associated with the operations function, other
functions within an organization, such as marketing, sales, and finance, also manage
processes that support the overall operation.
● All parts of an organization are composed of processes, making operations and process
management relevant and important for all managers, regardless of their specific roles or
functions.
● The book aims to explore the tasks, issues, and decisions involved in effectively
managing processes within the operations function and in other areas of the business
where process management is equally significant.
● The concept of a "process perspective" is introduced, which involves understanding
organizations in terms of their individual processes. This perspective is useful for
analyzing businesses at different levels, including the operations function, the strategic
level of the supply network, and the operational level of individual processes.
● Well-managed operations and processes can have a strategic impact on a business in
terms of cost control, revenue generation, investment optimization, and capability
development, while poorly managed operations can hinder the achievement of
organizational objectives.
● Not all processes are managed in the same way, as they can differ in terms of volume
(amount produced), variety (product/service range), variation (demand fluctuations), and
visibility (customer interaction). Different process characteristics require different
management approaches.
● Operations managers make a wide range of decisions, which can be categorized into
four areas: directing the overall operation strategy, designing products, services, and
processes, planning and controlling process delivery, and developing process
performance.
● Models and frameworks are often used to aid operations decision-making, combining
qualitative and quantitative approaches. However, it's important to recognize that models
are simplifications of complex reality, and behavioral operations management explores
incorporating non-rational behavior into decision-making processes.
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, Example 1: LEGO
● The LEGO Group, a privately held toy company based in Denmark, has become highly
reputable and is a leading manufacturer of play materials.
● LEGO bricks are based on a simple idea where individual bricks can be combined in
countless ways, allowing for creative possibilities.
● The bricks have studs on top and tubes on the inside, allowing for an "interference fit"
without the need for additional fasteners.
● The company's motto, "Only the best is good enough," reflects its commitment to
precision and quality in manufacturing.
● LEGO bricks are produced in factories located in Denmark, Hungary, the Czech
Republic, and Mexico, strategically positioned near key markets.
● The manufacturing process begins at the main warehouse, where raw plastic granulates
are stored in silos and transported to moulding machines through a system of tubes.
● The moulding stage is critical for achieving high precision, with tolerances as small as 10
micrometres, and the bricks solidify within seconds.
● Automated processes, including robots and conveyors, handle the sorting, packaging,
and distribution of LEGO bricks.
● Some pieces go through a decoration stage involving individual painting, while others
are directly packed into boxes.
● Packaging machines separate and count the bricks using optical sensors, ensuring
accuracy, and weight consistency.
● Quality assurance staff conduct frequent inspections and tests, such as drop, torque,
tension, compression, bite, and impact tests, to ensure the robustness and safety of the
toys.
● The company emphasizes environmental sustainability by extensively recycling plastic
waste generated during production.
● Scrap plastic, including faulty pieces and cleaning residue, is ground up and
reintroduced into the production process.
● Only a minute fraction of LEGO elements (0.00002%) fail to pass quality tests.
● The meticulous manufacturing processes, quality control, and sustainability efforts
contribute to the company's success and reputation.
Example 2: Torchbox
● Torchbox is a successful web design and development company based in Oxfordshire.
● They provide high-quality, cost-effective, and ethical solutions primarily for clients in the
charity, non-governmental organizations, and public sectors.
● Co-founder Tom Dyson emphasizes the advantages of being a relatively small and
flexible operation while maintaining the resources and skills for a creative and
professional service.
● Torchbox values environmental sustainability and responsible, ethical business
practices, and chooses to work with clients who share these commitments.
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, ● Operational effectiveness is crucial for Torchbox, ensuring projects run on time and
within budget while providing an enjoyable and stimulating experience for both
customers and staff.
● They prioritize high standards of product and service, focusing on accessibility, usability,
performance, and security in web designs.
● Torchbox employs a feature-driven development process using the kanban project
management methodology, derived from car manufacturers like Toyota, to ensure
efficiency and value delivery to clients.
● Their measured and controlled approach aims to maximize the productivity and value
generated from their work for clients and themselves.
Does the business take a process perspective?
● The idea of a "process perspective" is central to successful operations and process
management in a business.
● A process perspective recognizes that all parts of a business can be seen as processes
and can be managed using operations management principles.
● Various perspectives can be used to describe organizations, including organizational
structure, decision-making processes, culture, and power relationships.
● The process perspective analyzes businesses as a collection of interconnected
processes that contribute to fulfilling strategic aims.
● Operations and process management is relevant to all functions within an organization,
as processes exist everywhere and all managers are to some extent operations
managers.
● Operations and process management involve transforming inputs into outputs, and
these inputs and outputs can be materials, information, customers, facilities, and people.
● Operations and process management serve both internal and external customers, with
external customers having the freedom of choice.
● SIPOC analysis (Suppliers, Inputs, Process, Outputs, Customers) can be used to
formalize and understand processes, prompting important questions and improvements.
● Operations and process management can be analyzed at three levels: the business
level, the level of the supply network, and the level of individual processes.
● Operations produce both products and services, and the distinction between them is
becoming less significant.
● Supply networks can be complex, with operations having multiple suppliers and
customers, and relationships between operations can be collaborative or competitive.
● Understanding supply networks is crucial, and boundaries must be set to focus on
immediate operations in the network.
Example 3: The programme and video division (PVD)
● The broadcasting company has several divisions, including multiple television and radio
channels (entertainment and news).
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