Operations Management And The Organization PDF

BM2106 OPERATIONS MANAGEMENT AND THE ORGANIZATION IMPORTANCE OF OPERATIONS MANAGEMENT (Stevenson, 2021) Operations is the part of a business organization that is responsible...

BM2106 OPERATIONS MANAGEMENT AND THE ORGANIZATION IMPORTANCE OF OPERATIONS MANAGEMENT (Stevenson, 2021) Operations is the part of a business organization that is responsible for producing goods and/or services. Goods are physical items that include raw materials, parts, subassemblies such as motherboards that go into computers, and final products such as cell phones and automobiles. Services are activities that provide some combination of time, location, form, or psychological value. The operations function in business can also be viewed as the collective success or failure of companies’ operations functions that impact the ability of a nation to compete with other countries and on the nation’s economy. The ideal situation for a business organization is to achieve an economic match of supply and demand. Excessive supply or capacity is wasteful and costly; having too little means lost opportunity and possible customer dissatisfaction. The key functions on the supply side are operations and supply chains and sales and marketing on the demand side. While the operations function is responsible for producing products and/or delivering services, it needs support and input from other areas of the organization. Business organizations have three (3) basic functional areas, which are the following: Finance – It is responsible for securing financial resources at favorable prices, allocating those resources throughout the organization, budgeting, analyzing investment proposals, and providing funds for operations. Marketing – The business function responsible for assessing consumers’ wants and needs, and selling and promoting the organization’s goods or services. Operations – This is responsible for producing the goods or providing the services offered by the organization. It doesn’t matter whether the business is a retail store, hospital, manufacturing firm, or other business types; all business organizations have these three (3) basic functions. Operations Management is the management of systems or processes that create and/or provide services (Stevenson, 2021). It is chiefly concerned with planning, organizing, and servicing. As such, it is delivery- focused, ensuring that an organization successfully turns inputs to outputs in an efficient manner. The inputs themselves could represent anything from materials, equipment, and technology to human resources such as staff or workers (Dhoul, 2021). To maximize revenues, the business should stock fast-moving items that customers are willing and happy to pay for. The business should also negotiate friendly credit terms with suppliers to get the required products on credit to prevent stock-outs (the situation where an item is out of stock). Operations and supply chains are intrinsically linked, and no business organization could exist without both. A supply chain is the sequence of organizations involved in producing and delivering a product or service. Figure 1. Simple product supply chain Source: Operations Management, (14th ed), p. 4 01 Handout 1 *Property of STI  [email protected] Page 1 of 7  BM2106 The sequence begins with basic suppliers of raw materials and extends all the way to the final customer. Facilities might include warehouses, factories, processing centers, offices, distribution centers, and retail outlets. Functions and activities include forecasting, purchasing, inventory management, information management, quality assurance, scheduling, production, distribution, delivery, and customer service. The essence of the operations function is to add value during the transformation process. Value-added is the term used to describe the difference between the cost of inputs and the value or price of outputs. In nonprofit organizations, outputs (such as highway construction, police and fire protection) are their value to society. Thus, the greater the value-added, the greater the effectiveness of these operations. In for-profit organizations, the value of outputs is measured by the prices that customers are willing to pay for those goods or services. Firms use the money generated by value-added for research and development, investment in new facilities and equipment, worker salaries, and profits. Consequently, the greater the value-added, the greater the amount of funds available for these purposes. Many factors affect the design and management of operations systems. Among these factors are the degree of involvement of customers in the process and the degree to which technology is used to produce and/or deliver a product or service. 1. The greater the degree of customer involvement, the more challenging it can be to design and manage the operation. 2. Technology choices can significantly impact productivity, costs, flexibility, quality, and customer satisfaction. Figure 2. The operations function The operations function starts with the input or the resources mobilized, then proceeds to the transformation or conversion process (where the input is converted into output) and produces the output or the product or service. The output is then marketed to or experienced by the customers (Morato, 2016). Key Benefits of Effective Operations Management (Exeed College, 2021) 1. Product Quality. Operations management sees that the quality of products or goods will suit customers’ standards on and after delivery. When a product is of quality, it gives you an edge compared to your competitors. 01 Handout 1 *Property of STI  [email protected] Page 2 of 7  BM2106 2. Productivity. It is defined as the ratio of input to output and is the only way to verify employees’ input. Operations management ensures appropriate staffing of employees to resources to get maximum results. 3. Customer Satisfaction. One of the best feelings for a manager or retailer is achieving the utmost satisfaction from their customers. Operations management rightly ensures this coupled with a quality product. Customers make an organization thrive, and they must be treated well in every way necessary and possible. 4. Reduced Operating Cost. Through productivity, quality products, and customer satisfaction, the cost incurred on product servicing is maximally reduced. It simultaneously leads to increased revenue. Only operations management can make this possible. Waste reduction, or the practice of preventing waste by decreasing or eliminating the amount of materials initially used (Clinton County, n.d.), is an efficient activity in reducing operating costs. The exact number/size of products is produced as requested via proper operations management. CAREER OPPORTUNITIES AND PROFESSIONAL SOCIETIES (Stevenson, 2021) There are many career opportunities in the operations management and supply chain fields. Among the numerous job titles are the following: Operations Manager Production Analyst Production Manager Inventory Manager Purchasing Manager Schedule Coordinator Distribution manager Supply chain manager Quality Analyst Quality Manager Other titles include: Office Manager Store Manager Service Manager People who work in the operations field should have a skill set that includes people and knowledge skills. People skills are the ability to communicate and deal with people effectively, especially in business. These include political awareness, mentoring ability and collaboration, negotiation, and communication skills. Meanwhile, knowledge skills are necessary for credibility and sound decision-making. These include product and/or service knowledge, process knowledge, industry, global knowledge, financial and accounting skills, and project management skills. Production Supervisor Supply Chain Manager Social Media Product Manager Manage a production staff of Have general knowledge of Identify ways to increase 10-20 materials management, consumer engagement information systems, and basic statistics. 01 Handout 1 *Property of STI  [email protected] Page 3 of 7  BM2106 Production Supervisor Supply Chain Manager Social Media Product Manager Ensure the department Direct, monitor, evaluate, Analyze the key performance meets daily goals through the and motivate employee indicators and recommend management of productivity performance. improvements Enforce safety policies Be knowledgeable about Lead cross-functional teams Coordinate work between shipping regulations. to define product departments. Manage budgetary accounts. specifications Have strong problem-solving Manage projects. Collaborate with design and skills, and strong written and technical team to create key oral communication skills product improvements Develop requirements for new website enhancements Monitor the competition to identify the need for changes Table 1. Sample operations management job descriptions SCOPE OF OPERATIONS MANAGEMENT (Stevenson, 2021) 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 products or services. The operations function includes many interrelated activities, such as forecasting, capacity planning, scheduling, managing inventories, assuring quality, motivating employees, deciding where to locate facilities, and more. Illustration: An airline company’s system consists of airplanes, airport facilities, and maintenance facilities, sometimes spread out over a wide territory. The activities include the following: Forecasting weather and landing conditions, seat demand for flights, and the growth in air travel. Capacity planning to maintain cash flow and make a reasonable profit. (Too few or too many planes, or even the right number of planes but in the wrong places, will hurt profits. Locating facilities is according to managers’ decisions on which cities to provide service for, locate maintenance facilities, and locate major and minor hubs. Facilities and layout in achieving effective use of workers and equipment. Scheduling of planes for flights and routine maintenance; scheduling of pilots, flight attendants, ground crews, counter staff, and baggage handlers. Managing inventories such as foods and beverages, first-aid equipment, in-flight magazines, pillows and blankets, and life preservers. Assuring quality where the emphasis is on safety. It is important in dealing with customers at ticket counters, check-in, telephone and electronic reservations, and curb service, emphasizing efficiency and courtesy. Motivating and training employees in all phases of operation. KEY ISSUES FOR TODAY’S BUSINESS OPERATIONS Several issues are considered high priorities of many business organizations. Primary issues involve the following (Stevenson, 2021): 01 Handout 1 *Property of STI  [email protected] Page 4 of 7  BM2106 Economic Conditions. Trade disputes and tariffs have created uncertainties for decision-makers. Innovation. Finding new or improved products or services are only two (2) of the many possibilities that can provide value to an organization. Innovations can be made in processes that reduce costs, increase productivity, expand markets, or improve customer service. Quality problems. The numerous operations failures related to product design and testing, oversight of suppliers, risk assessment, and timely response to potential issues emphasize the need to improve the way operations are managed. Risk management. The need for managing risk is underscored by recent events that include financial crises, product recalls, accidents, global health crises, natural and man-made disasters, and economic ups and downs. Managing risks starts with identifying risks, assessing vulnerability and potential damage (liability costs, reputation, demand), and taking steps to reduce or share risks. Cybersecurity. The need to guard against intrusions from hackers whose goal is to steal the personal information of employees and customers is becoming increasingly necessary. Moreover, interconnected systems increase intrusion risks in the form of industrial espionage or the illegal and unethical theft of business trade secrets for use by a competitor to achieve a competitive advantage (Kenton, 2020). Competing in a global economy. Low labor costs in third-world countries have increased pressure to reduce labor costs. Companies must carefully weigh their options, including outsourcing some or all of their operations to low-wage areas, reducing costs internally, changing designs, and improving productivity. Key Trends in Operations Management in a Post-COVID World (Zamolo, 2021) Times are changing more quickly than individuals can adapt. Operations managers are expected to be flexible and predict some of the emerging trends to help the operations of the organization. Business operations managers, in particular, will be leaned upon more than ever to see companies through their recovery and help them run more efficiently through the aftermath of COVID-19. Here are five (5) key trends every operations manager should know for the post-pandemic period: 1. Information Everywhere A greater reliance on mobile devices will be an integral part of an organization’s IT infrastructure. Companies should prepare for the maximization of all the information generated from these devices. Businesses are also encouraged to invest in an information accessibility program (programs or applications that allow companies to disseminate information to every user ‘on an equal basis with others’) with a superior user-experience design. For instance, STI Education Services, Inc. has websites where employees and students can easily access important information, and these websites can be easily accessed using mobile phones. Data and experience show that digitally enabling the frontline workforce is an impactful investment that can optimize productivity, increase safety, and reduce costs in the current uncertain climate. With access to real-time information, digital empowerment adds to a front liner's capacity to leverage data-driven decision-making and eliminate barriers between employees and managers (Howell, 2021). For example, suppose the staff in operations can access the information about the number of customers who ordered a specific product or availed a particular service. In that case, they might help assess what products should have more stock in a store or how many more staff the team will need to deliver important services. 01 Handout 1 *Property of STI  [email protected] Page 5 of 7  BM2106 Furthermore, this will help employees better utilize the time and the organization’s money by providing a single point of contact for all their communications and tools. For instance, the Microsoft Teams application is used by several companies for managers and employees as a communication tool to update progress in sales and other outputs, equip everyone with the company's current situation, and additional valuable information that might be within the interest of the organization. The platform should provide easy access, be highly user-friendly, and offer security in a single, intuitive interface. 2. Company-Wide Communication/Mobilization Communications will prove more crucial than ever for companies after the pandemic. Hierarchical structures or organizations that consist of several departments will give way to “flatter” models or the organization structures with few middle management levels, or in some cases, no middle management at all. These flatter organizational structures will facilitate the flow of information without continuing dated models that only served the upper management while isolating whole departments to take part in critical decision-making when these departments represent 80% of the global workforce. Moreover, flat organizational structures make the front liners feel involved and hold important conversations in operations (Nouri, 2019). Good operational communication is the core driver of efficiency and productivity in any organization. It technically connects strategic alignment to real-world problem-solving to deliver quality results. Good communication improves efficiency and productivity and impacts how employees perceive the organization, which, likewise, improves satisfaction and workforce retention. 3. Safety First As companies work through and recover from the impact of COVID-19, maintaining the health and safety of both employees and the public will be a top priority for operations managers. It will be necessary for operations managers to look for new ways to reduce health incidents and workplace accidents. This means companies will need to understand new regulations around safety and compliance. It will be up to operations leaders to implement swift changes to internal processes and procedures to remain compliant. 4. Demand in Hand The global health crisis caused rapid shifts in consumer behavior, which has led to huge issues for the supply chain. Many retail physical stores made digital pivots and strengthened their online presence. With this kind of velocity in the changing consumer demand, operations managers will continue to hone and develop demand-responsive supply chains. Operations managers must find ways to be prepared for anything. An agile, highly responsive supply chain can help ensure that production levels can steadily meet demand without creating excess inventory. Maintaining a healthy balance between inventory and meet market demands will be a tricky dance that operations managers will have to master quickly. 5. Customers Are Always Right Operations managers must understand the factors that influence buying decisions and optimize the business accordingly. The role of an operations manager and the entire operational management team is evolving beyond simply acting as an agent of cost control. Operations are increasingly tied to global performance objectives encompassing product quality and delivery time to customer service. Going forward, operations managers will work closely with customer service departments to better understand their end-users. Relationship management is more important in running a successful 01 Handout 1 *Property of STI  [email protected] Page 6 of 7  BM2106 business than ever, so it’s no surprise that operations managers will find new ways to optimize the process. Strengthening customer relationships will be critical as the world begins the long and steady road to recovery from the impact of the pandemic. Thus, being customer-centric is now everyone’s job — including operations managers. References Exeed College. (2021). Importance of operations management in business organizations. In Exceedcollege.com. https://exeedcollege.com/blog/importance-of-operations-management-in- business-organizations/ Dhoul, T. (2021, April 20). What is operations management? Top MBA. https://www.topmba.com/mba- programs/what-operations-management Howell, D. (2021). Harvard business review report reveals the importance of empowering frontline workers with real-time data. Beekeeper. Retrieved July 13, 2021 from https://www.beekeeper.io/blog/empower-frontline-workers-digital-enablement/ Kenton, W. (2020, September 24). Industrial espionage. https://www.investopedia.com/terms/i/industrial-espionage.asp MITSDE. (2020, February 28). Role of retail operations management in retail. MIT school of distance education. Retrieved July 12, 2021 from http://blog.mitsde.com/role-of-retail-operations- management-in-retail/ Morato, E. (2016). Entrepreneurship. Rex Bookstore. Nouri, C. (2019, November 4). Hierarchical vs. flat organizational structure and benefits of each. Pingboard. Retrieved July 13, 2021 from https://pingboard.com/blog/hierarchical-vs-flat- organizational-structure-and-benefits-of-each/ Stevenson, W. (2021). Operations management (14th ed.). McGraw Hill Zamolo, A. (2021, May 23). 7 key trends in operations management in a post-covid world for 2021. Beekeeper. Retrieved June 23, 2021 from https://www.beekeeper.io/blog/trends-operations- management/ 01 Handout 1 *Property of STI  [email protected] Page 7 of 7  BM2106 PRODUCT AND SERVICE DESIGN INTRODUCTION TO PRODUCT AND SERVICE DESIGN (Stevenson, 2020) The essence of a business organization is the products and services it offers, and every aspect of the organization and its supply chain are structured around these products and services. The primary focus of product or service design should be on customer satisfaction. The various activities and responsibilities of product and service design include the following: 1. Translate customer wants and needs into product and service requirements (marketing, operations) 2. Refine existing products and services (marketing) 3. Develop new products and/or services (marketing, operations) 4. Formulate quality goals (marketing, operations) 5. Formulate cost targets (accounting, finance, operations) 6. Construct and test prototypes (operations, marketing, engineering) 7. Document specifications 8. Translate product and service specifications into processes specifications (engineering, operations) The secondary considerations of product and service designs are cost or profit, quality, ability to produce a product or provide a service, ethics and safety, and sustainability. Reasons for Product and Service Design or Redesign Product and service design typically has strategic implications for the success and prosperity of an organization. Organizations become involved in product and service design or redesign for a variety of reasons, and the factors that give rise to market opportunities and threats are as follows: Economic factors involve low demand, excessive warranty claims (a claim for the repair or replacement of products manufactured by the business (Law Insider, n.d.)), and the need to reduce costs. Socio-demographic factors include variables such as age, sex, education, migration background and ethnicity, marital status, household, employment, and income. Political, liability, or legal include government changes, safety issues, and new regulations incorporated in the production department. Competitivity involves the new or changed products or services of the production and also includes new advertising and promotions in marketing. Cost or availability contains information about the prices of raw materials, labor, water, energy, and other components needed in the production and how easily the operations department can avail these. Technological factors involve the systems and processes used as components of the company’s products and services, such as the use of smaller microprocessors in smartphones or the production of inverter air conditioner units. PRODUCT DESIGN OVERVIEW (Stevenson, 2020) Product Design describes the process of imagining, creating, and iterating products that solve users’ problems or address specific needs in a given market (Product Plan, 2021). Phases in Product Design and Development (Stevenson, 2020) Product design and development generally proceeds in a series of phases: 02 Handout 1 *Property of STI  [email protected] Page 1 of 14  BM2106 1. Feasibility analysis. It entails market analysis (demand), economic analysis (development cost and production cost, profit potential), and technical analysis (capacity requirements and availability, and the skills needed). This phase requires collaboration among marketing, finance, accounting, engineering, and operations. 2. Production specification. It involves detailed descriptions of what is needed to meet (or exceed) customer wants and requires collaboration among legal, marketing, and operations. 3. Process specifications. Once product specifications are set, attention turns to specifications for the processes needed to produce the product. Alternatives must be weighed in terms of cost, availability of resources, profit potential, and quality. These involve collaboration between accounting and operations. 4. Prototype development. With product and processes specifications complete, a few units are made to see if there are any problems with the product or process specifications. 5. Design review. At this stage, any necessary changes are made, or the project is abandoned. Marketing, finance, engineering, design, and operations collaborate to determine whether to proceed or abandon. 6. Market test. It is used to determine the extent of consumer acceptance. If unsuccessful, the product returns to the design review phase. The marketing group handles this. 7. Product introduction. The new product is promoted. The marketing group handles this. 8. Follow-up evaluation. Based on user feedback, changes may be made or forecasts refined. The marketing group handles this. Design Techniques for Production (Stevenson, 2020) The following are the design techniques that have greater applicability for the design of products than the design of services. 1. Concurrent Engineering. It means bringing people from the design and manufacturing departments together early in the design phase to simultaneously develop the product and the processes for creating the product. 2. Computer-Aided Design (CAD). This technique uses computer graphics for product design. The designer can modify an existing design or create a new one on a monitor using a light pen, a keyboard, a joystick, or a similar device. Once the design is entered into the computer, the designer can maneuver it on the screen. 3. Production Requirements. The design needs to understand the capabilities of production clearly. When opportunities and capabilities do not match, management must consider the potential for expanding or changing capabilities to take advantage of those opportunities. It is crucial to consider the following production requirements: a. Future demand forecasts can be useful in supplying information on the timing and volume of demand and information on demands for new products and services. b. Manufacturability is a key concern for manufactured goods; it is the capability of an organization to produce an item at an acceptable profit. This also refers to the ease with which products can be fabricated and/or assembled. c. Design for manufacturing (DFM) is used to indicate the design of products that are compatible with an organization’s capabilities. d. Design for assembly (DFA) focuses on reducing the number of parts in an assembly and the assembly methods and sequence that will be employed. 02 Handout 1 *Property of STI  [email protected] Page 2 of 14  BM2106 4. Component Commonality. This refers to a situation in which one component is common to more than one (1) item (Baker, 1985). Companies often have multiple products or services with a high degree of similarity of features and components. For example, car manufacturers employ component commonality by using internal components such as water pumps and engines. Meanwhile, as an example for services, commonality and substitutability of parts are typical in appliance repair. SERVICE DESIGN OVERVIEW (Stevenson, 2020) Service refers to an “act” done to or for a customer. It is provided by a service delivery system, which includes the facilities, processes, and skills needed to provide the service. Many services are not pure services but part of a product bundle that combines goods and services provided to a customer. For example, when a customer buys an air conditioner unit from Abenson, s/he can also avail of their installation service. The ability to create and deliver reliable customer-oriented service is often a key competitive differentiator. Successful companies combine customer-oriented service with their products. System design involves the development or refinement of the overall service package. A service package is a bundle of explicit and implicit benefits performed with a supporting facility and using facilitated goods. For instance, when you eat at a fast-food restaurant (supporting facility), you may purchase a hamburger (facilitating good) cooked (service) by someone else. Service packages involve the following: Physical resources needed Accompanying goods that are purchased or consumed by the customer or provided with the service Explicit services are benefits readily observable by the senses or the essential features of a service, such as the quality of food in a restaurant and on-time departure of flights. Implicit services are the “extra” features of a service, such as privacy features of a loan office and the security of a well-lighted parking lot. Differences between Service Design and Product Design Service operations managers are faced with issues that may be insignificant or nonexistent to managers in a production setting. As such, below are the differences between service and product design. 1. Products are generally tangible, while services are generally intangible. 2. In many instances, services are created and delivered simultaneously, which lessens the chances of spotting and correcting errors before the customer sees them. Thus, training, process design, and customer relations are given high importance in service design. 3. Services cannot be inventoried, which poses restrictions on flexibility and makes capacity issues very important. 4. Services that are highly visible to consumers and must be designed with high visibility add an extra dimension to process design, usually not present in product design. 5. Some services have low barriers to entry and exit, which places additional pressures on service design to be innovative and cost-effective. 6. Design of services and choice of location are often closely linked. 7. Service systems from those with little or no customer contact to those with a very high degree of customer contacts such as production line and personalized service. 02 Handout 1 *Property of STI  [email protected] Page 3 of 14  BM2106 8. Demand variability (the complexity of demand in general) alternately creates customer waiting times, which sometimes leads to loss of sales or idle service resources. A significant aspect of perceived quality in services relates to the intangibles that are part of the service package. Designers must be cautious because attempts to achieve a high-efficiency level tend to depersonalize service and disrupt customer’s perception of quality. Such attempts may involve the following: Reducing consumer choices makes service more efficient, but it can be frustrating and irritating for the customer. An example would be a cable company that bundles channels rather than allowing customers to pick only the channels they want. Simplifying certain service elements can reduce the cost of providing a service, but it risks eliminating features that some customers value, such as personal attention. Incorporating flexibility in capacity management by employing part-time or temporary staff may involve less-skilled or less-interested people, and service quality may suffer. Design objectives based on customer perspective require understanding the customer experience and focusing on maintaining control over service delivery to achieve customer satisfaction. The customer- oriented approach involves determining consumer wants and needs to understand relationships between service delivery and perceived quality. Phases in the Service Design Process (Stevenson, 2020) The following are the phases in the service design process: 1. Conceptualization involves idea generation, assessment of customers’ needs and wants, and assessment of demand potential. 2. Identification of service package components needed. 3. Determining performance specifications—the requirements of a component that tells the contractor what the final installed product must be capable of doing; and 4. Translation of performance specifications into design and delivery specifications. Service Blueprinting A service blueprint is a method used in service design to describe and analyze a proposed service. Figure 1. Sample restaurant blueprint 02 Handout 1 *Property of STI  [email protected] Page 4 of 14  BM2106 Figure 1 illustrates a sample blueprint of a restaurant. At the top of the figure are the customer actions, and just below are the related activities of the direct contact service people. The next line includes “backstage contacts,” which in the given example are the kitchen staff, and below those are the support or “backroom” operations. In this example, support operations include the reservation system. The following are the major steps in service blueprinting: 1. Establishing boundaries for the service and decide on the level of detail needed. 2. Identifying and determining the sequence of customer and service actions and interactions. 3. Developing time estimates for each phase of the process, as well as time variability. 4. Identifying potential failure points and developing a plan to prevent and minimize these failure points and ways to respond to service errors. Characteristics of a Well-Designed Service System There are several characteristics of well-designed service systems, which are as follows: Consistently aligned with the organization’s mission User-friendly Well-built Sustainable Cost-effective Having a value that is obvious to the customers Efficient linkages between back- and front-of-the-house operations or no contact to direct contact with customers Having unifying themes such as convenience and speed Having design features that are reliable and of high quality Guidelines for a Successful Service Design 1. Define the service package in detail in which service blueprint may be helpful. 2. Focus on the operation from the customer’s perspective. 3. Consider the image that the service package will present both to existing customers and potential customers. 4. Recognize that the designer’s familiarity with the system may be different from customer’s perspective, and take steps to overcome this. 5. Make sure that managers are involved and will support the design once it is implemented. 6. Define quality for both tangibles and intangibles. Intangible standards are more difficult to define, but they must be addressed. 7. Make sure that recruitment, training, and reward policies are consistent with service expectations. 8. Establish procedures to handle both predictable and unpredictable events. 9. Set up systems to monitor, maintain, and improve service. 02 Handout 1 *Property of STI  [email protected] Page 5 of 14  BM2106 PRODUCT AND SERVICE DESIGN CONSIDERATIONS (Stevenson, 2020) Legal and Ethical Considerations Designers must be careful to consider a wide array of legal and ethical considerations mandatory in general. Moreover, if there is a potential to harm the environment, then those issues also become important. This is why most organizations are subject to numerous government agencies that regulate them. Designers are aware that product liability can be a strong incentive for design improvements. Product liability can be a strong incentive for design improvements; it is the responsibility of a manufacturer for any injuries or damages caused by a faulty product because of poor workmanship or design. The suits and potential suits have increased legal and insurance costs, expensive settlements with injured parties, and costly recalls. Moreover, increasing customer awareness of product safety can adversely affect product image and subsequent demand for a product. It is important for managers to be aware of these issues and for designers to adhere to ethical standards because designers are often under pressure to speed up the design process and cut costs. These pressures often require them to make trade-off decisions that mostly involve ethical considerations. Generally, organizations want designers to adhere to guidelines such as the following: Produce designs that are consistent with the goals of the organization. For example, if the company has a goal of high quality, it won’t be a good idea to cut corners of the product to save on costs, even in areas where it won’t be noticeable to the customer. Give customers the value they expect. Make health and safety a primary concern. The people who are at risk are the employees who will produce goods or deliver services, workers who will transport the products, customers who will use the products or receive the services, and the general public, which the products or services might endanger. Human Factors Safety and liability. These are two (2) critical issues in many instances. Producers must ensure that products are not harmful to consume; in any case, producers must be liable for any form of negligence. Adding product/service features. Most companies believe that adding new features to the product or service gives them a competitive edge. This idea has its obvious benefits; however, anything too much is not good and might become a source of customer dissatisfaction. For instance, handheld devices that continue to offer new features and more complexity while shrinking in size may result in low consumer ratings regarding “ease of use.” Cultural Factors These factors encompass the set of beliefs, moral values, traditions, language, and laws (or rules of behavior) held in common by a nation, a community, or other defined group of people, which must be taken into consideration the effects of cultural differences on product design (IGI Global, 2021). This can result in different designs for different countries or regions. For example, McDonald’s has regionalized its menu items to conform to local culinary preferences, laws, and religious traditions; wherein, the 02 Handout 1 *Property of STI  [email protected] Page 6 of 14  BM2106 Philippines has spaghetti and cheesy butter French fries in their menu; while South Korea has shrimp and pork burger, and affogato (vanilla gelato with a shot of hot espresso). Environmental Factors Product and service design is a focal point in the quest for sustainability. Key aspects include the following: Cradle-to-Grave Assessment. This is also known as life cycle analysis; it assesses the environmental impact of a product or service throughout its useful life, focusing on factors such as global warming, smog (smoke and fog) formation, oxygen depletion, and solid waste generation. End-of-Life (EOL) Programs. These deal with products that have reached the end of their useful lives. The products include both consumer products and business equipment. The purpose of these programs is to reduce the dumping of products, particularly electronic equipment, in landfills or third-world countries, as it has been the common practice—burning wastes which converts materials into hazardous air and water emissions and generates toxic ash. The 3Rs: Reduce, Reuse, Recycle. Designers often reflect on three (3) particular aspects of potential cost savings and reducing environmental impact: o Reduce: Value Analysis. Value analysis refers to examining the function of parts and materials to reduce the cost and/or improve the performance of a product. o Reuse: Remanufacturing. Remanufacturing refers to refurbishing used products by replacing worn-out or defective components and reselling products. o Recycle. Recycling means recovering materials for future use. This applies not only to manufactured parts but also to materials used during production. Companies recycle for a variety of reasons, such as cost-saving and environmental concerns and regulations. Other Design Considerations Aside from legal, ethical, environmental, and human considerations, designers must also consider the following (Stevenson, 2020): 1. Product or Service Life Stages Products, like people, have life cycles. A product begins with an idea. Within the confines of modern business, it isn’t likely to go further until it undergoes research and development (R&D) and is feasible and potentially profitable. At that point, the product is produced, marketed, and rolled out. There are four (4) stages in the product life cycle which are as follows (Kopp, 2020): Figure 2. Product/service life stages 02 Handout 1 *Property of STI  [email protected] Page 7 of 14  BM2106 a. Introduction: This phase generally includes a substantial investment in advertising and a marketing campaign focused on making consumers aware of the product and its benefits. b. Growth: If the product is successful, it then moves to the growth stage. This is characterized by growing demand, an increase in production, and expansion in its availability. c. Maturity: This is the most profitable stage, while the costs of producing and marketing decline. d. Decline: A product takes on increased competition as other companies emulate its success— sometimes with enhancements or lower prices. The product may lose market share and begin its decline. 2. Standardization This refers to the extent to which variety is absent in a product, service, or process. Advantages Products are immediately available to customers. Product parts are interchangeable; therefore, standardization greatly lowers the cost of production while increasing productivity and making replacement or repair easier than customized parts. Reduces time and cost in training employees and designing jobs. Scheduling, inventory handling, and purchasing and accounting activities become much more routine. Thus, quality is more consistent. Disadvantages A reduction in variety can limit the range of customers to whom a product or service appeals, giving competitors a window of opportunity to seize a competitive advantage. Manufacturers may freeze (standardize) a design prematurely and find reasons to resist modification once the design is frozen. 3. Mass Customization This is a strategy of producing standardized goods but incorporating some degree of customization. Customers prefer more variety in the products they purchase or services they avail of even though they like the low cost. Producers become conflicted about whether to resolve these issues without losing the benefits of standardization and incurring a host of problems that are often linked to variety which are possible through mass customization. Mass customization is possible through: Delayed differentiation. This is the process of producing, but not quite completed, a product or service until customer preferences are known. For example, furniture makers can create dining sets but not apply stain to allow customers to choose their preferred color; and Modular design. This is a form of standardization in which parts are grouped into modules that are easily replaced or interchanged. For instance, Dell has successfully used modular design to become a dominant force in the PC industry by offering consumers the opportunity to configure modules according to their specifications. 4. Reliability It measures the ability of a product, a part, a service, or an entire system to perform its intended function under a prescribed set of conditions. Its potential buyers emphasize reliability in comparing alternatives and by the seller as a determinant of price. It impacts repeat sales which reflect on the product’s image, and if it’s too low, legal implications might be needed. Reliability is also considered 02 Handout 1 *Property of STI  [email protected] Page 8 of 14  BM2106 for sustainability: The higher the reliability of a product, the fewer the resources that will be needed to maintain it, and the less frequently it will involve the three Rs—research, relevance, and rewards. Reliability can be improved through the following: Enhance component and system design Improve production and/or assembly techniques Enhance testing Use backups Improve preventive maintenance procedures Enhance user education 5. Robust Design These designs result in products or services that can function over a broad range of conditions. The more robust a product or service, the less likely it will fall due to a change in the environment. For example, fine leather boots are not made for mud, while heavy rubber boots are designed for it; therefore, the rubber boots have a design that is more robust than that of fine leather boots. Taguchi’s Approach by Genichi Taguchi, a Japanese engineer, is based on robust design. It is easier to design a product that is sensitive to environmental factors, either in manufacturing or use, than to control the environmental factors. This approach’s central feature is parameter design which involves determining the specification settings for both the product and the process that will result in robust design in terms of manufacturing variations, product deterioration, and conditions during use. 6. Degree of Newness Product or service design change can range from the modification of an existing product or service to an entirely new product or service: a. Modification of an existing product or service b. Expansion of an existing product line or service offering c. Clone of a competitor’s product or service d. New product or service The degree of change affects the: (1) newness to the organization where a low level can mean a fairly quick and easy transition to producing the new product; while a higher level indicates slower, more difficult, and more costly transition; and (2) the newness of the market where a low level would mean little difficulty with market acceptance, but possibly low profit potential. 7. Quality Function Deployment (QFD) This is a structure approach for integrating the “voice of the customer” into both the product and service development process. The structure of QFD is based on a set of matrices which is illustrated below: 02 Handout 1 *Property of STI  [email protected] Page 9 of 14  BM2106 Figure 3. The Main QFD Matrix Figure 3 provides a structure for data collection. The main matrix relates customer requirements (what) and their corresponding technical requirements (how). Additional features are usually added to the basic matrix to broaden the scope of analysis. Figure 4. The house of quality Figure 4 shows the house of quality where typical additional features include important weightings (a technique that statisticians use for data to represent whatever it is designed to represent (MBN, 2021) and competitive evaluations. A correlation matrix is usually constructed for technical requirements; this can reveal conflicting technical requirements. 02 Handout 1 *Property of STI  [email protected] Page 10 of 14  BM2106 Figure 5. Example house of quality Figure 5 is an example of the house of quality. The data relates to a commercial printer (customer) and the company that supplies the paper. A key part is the list of customer requirements on the left side of the figure. Next, note the technical requirements listed vertically near the top. o The key relationships and their degree of importance are shown in the center of the figure. o The circle with a dot inside indicates the strongest positive relationship; it denotes the most important technical requirements for satisfying customer requirements. Third, the “importance to customer” numbers are shown next to each customer requirement (three (3) is the most important). Designers will consider the “importance values” and the strength of correlation in determining where to focus the greatest effort. Next, consider the correlation matrix at the top of the “house.” Of special interest is the strong negative correlation between “paper thickness” and “roll roundness.” Designers will have to find some way to overcome that or make a trade-off decision. On the right side of the figure is a competitive evaluation comparing the supplier’s performance on the customer requirements with each of the two (2) key competitors (A and B). For example, the supplier (X) is worst on the first customer requirement and best on the third. The line connects the X performances. Ideally, the design will cause all of the Xs to be in the highest positions. Across the bottom of the figure are the importance weightings, target values, and technical evaluations. The technical evaluations can be interpreted similarly to that of the competitive 02 Handout 1 *Property of STI  [email protected] Page 11 of 14  BM2106 evaluations (note the line connecting the Xs); the target values typically contain the technical specifications; the importance weightings are the sums of values assigned to the relationships. The three (3) in the first column is the product of importance to the customer, 3, and the small (Δ) weight, 1. The importance weightings and target evaluations help designers focus on desired results. In this example, the first technical requirement has the lowest importance weighting, while the next four (4) technical requirements all have relatively high importance weightings. Figure 6. The house of quality sequence Figure 6 illustrates the house of quality approach, which involves a sequence of “houses,” beginning with design characteristics, leading to specific components, production processes, and finally, a quality plan. Figure 7. The Kano model Figure 7 portrays how the definitions of quality influence customer satisfaction and dissatisfaction relative to the degree of implementation. The Kano Model is a theory of product and service design developed by Dr. Noriaki Kano, a Japanese professor, who offered a perspective on customer perceptions of quality that is different from the traditional view that “more is better.” Instead, he proposed different quality categories and posited that understanding them would better position designers to assess and address quality needs. This model employs three (3) definitions of quality which are as follows: 02 Handout 1 *Property of STI  [email protected] Page 12 of 14  BM2106 Basic quality refers to customer requirements that have only a limited effect on customer satisfaction if present but lead to dissatisfaction if not present. For instance, putting a very short cord on an electrical appliance will likely result in customer dissatisfaction, but beyond a certain length (e.g., 3 feet), adding more cord will not lead to increased levels of customer satisfaction. Performance quality refers to customer requirements that generate satisfaction or dissatisfaction in proportion to their level of functionality and appeal. For example, increasing the tread life of a tire or the amount of time house paint will last will add to customer satisfaction. Excitement quality refers to a feature or attribute that was unexpected by the customer and causes excitement, such as a voucher for dinner at a hotel when checking in. Figure 8. Sample changes in the definitions of quality as time passes Figure 8 represents that as time passes, excitement factors become performance factors, and performance factors become basic factors. IDEA GENERATION (Stevenson, 2020) Idea generation or ideation is a creative process that encompasses generating, developing, and communicating new thoughts and concepts, which become the basis of your innovation strategy (Hunnam, 2019). Ideas for new or redesigned products or services can come from a variety of sources which include the following: Customers. Customers’ inputs can come from surveys, focus groups, complaints, and unsolicited suggestions for improvement. Input from suppliers, distributors, and employees can be obtained from interviews, direct or indirect suggestions, and complaints. Competitors. One of the strongest motivators for new and improved products or services is competitors. An organization can obtain many ideas by studying a competitor’s products or services and how the competitor operates, such as pricing policies, return policies, warranties, location strategies, etc. Beyond that, some companies use reverse engineering or the act of purchasing a competitor’s product and then carefully dismantling and inspecting it, searching for ways to improve their own product. 02 Handout 1 *Property of STI  [email protected] Page 13 of 14  BM2106 Suppliers. They are still another source idea, and with increased emphasis on supply chains and supplier partnerships. Research and Development. This refers to organized efforts that are directed toward increasing scientific knowledge and product or process innovation. R&D efforts may involve the following: o Basic research. This aims to advance the state of knowledge about a subject without any near- term expectation of commercial applications. o Applied research. In contrast to basic research, applied research aims to achieve commercial applications. o Developmental research. This research converts the results of applied research into useful commercial applications. References Baker, K. (1985). Safety stock and component commonality. Journal of operations management, volume 6, issue 1, 13-22. https://doi.org/10.1016/0272-6963(85)90031-2 Hunnam, O. (2019, August 15). Innovation management. Idea drop. Retrieve July 22, 2021 from https://ideadrop.co/innovation- management/top-five-favourite-idea-generation-techniques/ Kopp, C. (2020, December 27). Product life cycle. Investopedia. https://www.investopedia.com/terms/p/product-life-cycle.asp Product Design. (2021). In Productplan.com. Retrieved July 22, 2021 from https://www.productplan.com/glossary/product- design/ Stevenson, W. (2020). Operations management (14th ed). McGraw Hill. Ultriva. (2021). How to meet the challenge of demand variability in your supply chain. Upland. Retrieved July 23, 2021 from https://uplandsoftware.com/ultriva/resources/blog/how-to-meet-the-challenge-of-demand-variability-in-your- supply-chain/ Warranty Claim. (n.d.). In Law insider. https://www.lawinsider.com/dictionary/warranty-claim What is cultural factors. (2021). In IGI Global. Retrieved August 2, 2021 from https://www.igi-global.com/dictionary/innovation- cultural-factors-australian-business/6388 02 Handout 1 *Property of STI  [email protected] Page 14 of 14  BM2106 HUMAN RESOURCE AND JOB DESIGN Human Resource Strategy for Competitive Advantage (Heizer, et. al., 2017) Good human resource strategies are expensive, difficult to achieve, and hard to sustain. Many companies have demonstrated that sustainable competitive advantage can be built through a human resource strategy. The objective of a human resource strategy is to manage labor and design jobs, so people are effectively and efficiently utilized. Focusing on a human resource strategy, it should be ensured that people: 1. Are efficiently utilized within the constraints of other operations management decisions; and 2. Have a reasonable quality of work-life in an atmosphere of mutual commitment and trust. Quality of work life means a reasonably safe workplace, equitable pay, and the achievement of physical and psychological requirements. Mutual commitment means that both management and employee strive to meet common objectives. Mutual trust is reflected in reasonable, documented employment policies that are honestly and equitably implemented to both management and employee satisfaction. When management has genuine respect for its employees and their contributions to the firm, establishing a reasonable quality of work-life and mutual trust is not particularly difficult. Constraints on Human Resource Strategy Figure 1. Constraints on human resource strategy Source: Operations management: Sustainability and supply chain management (12th ed.), 2017, pp. 449 Figure 1 suggests that many decisions made about people are constrained by other decisions such as: 1. The product mix may determine seasonality and stability of employment. 2. Technology, equipment, and processes may have implications for safety and job content. 3. The location decision may have an impact on the ambient environment in which the employees work. 4. Layout decisions, such as assembly line versus work cell, influence job content. 03 Handout 1 *Property of STI  [email protected] Page 1 of 9  BM2106 DECISION AREAS OF HUMAN RESOURCE STRATEGY (Heizer, et. al., 2017) There are three (3) distinct decision areas of human resource strategy. I. Labor Planning Labor planning is the act of determining staffing policies that deal with the following: A. Employment-Stability Policies 1. Follow demand exactly: Following demand exactly keeps direct labor costs tied to production but incurs other costs. These other costs include hiring and layoff costs, unemployment insurance, and premium wages to entice personnel to accept unstable employment. This policy tends to treat labor as a variable cost. 2. Hold employment constant: Holding employment levels constant maintains a trained workforce and keeps hiring, layoff, and unemployment costs to a minimum. However, with employment held constant, employees may not be utilized fully when the demand is low, and the firm may not have the human resources it needs when the demand is high. This policy tends to treat labor as a fixed cost. These policies are only two (2) of many that can be efficient and provide a reasonable quality of work life. Firms must determine policies about employment stability. B. Work Schedules The standard work schedule in the Philippines is still five (5) 8-hour days. Although, many variations exist. 1. Flextime: This allows employees, within limits, to determine their own schedules. This policy might allow an employee to be at work at 8:00 a.m. plus or minus two (2) hours with proper notification; thus, allows more autonomy and independence. 2. Flexible workweek: This plan often calls for fewer but longer days, such as four 10-hour days, or 12-hour shifts. Working 12-hour shifts usually mean working three (3) days one (1) week and four (4) days next; this is called compressed workweeks. 3. Part-time status. This option means shorter rather than lower days. This is particularly attractive to service industries, where staffing for peak loads is necessary. Fast food restaurants often hire part-time workers. Also, many firms reduce labor costs by reducing fringe benefits for part-time employees. The problem from the operations management perspective is that much production work requires full staffing efficient operations. Moreover, some industries find that their process strategies severely constrain their human resource scheduling operations. For example, a machine that needs three (3) people cannot run at all if only two (2) show up or having a waiter show up to serve lunch at 1:30 p.m. rather than 11:30 a.m. won't bring much help either. Another example is paper manufacturing; it requires around-the-clock staffing except for maintenance and repair shutdown. C. Job Classifications and Work Rules Many organizations have strict job classifications and work rules that specify who can do the tasks, schedule, and under what conditions they can do it, often due to union pressure. These job classifications and work rules restrict employee flexibility on the job, which reduces the flexibility of the operations function. However, part of an operations manager's task is to manage the unexpected. Therefore, the more flexible a firm is in staffing and establishing work schedules, the more efficient and responsive it can be. 03 Handout 1 *Property of STI  [email protected] Page 2 of 9  BM2106 II. Job Design Job design is an approach that specifies the tasks that constitute a job for an individual or a group. There are five (5) components of job design: A. Labor (Job) Specialization It is the division of labor into unique or "special" tasks. This component can be accomplished in several ways: 1. Development of dexterity and faster learning by the employee because of repetition 2. Less loss of time because the employee would not be changing jobs or tools 3. Development of specialized tools and the reduction of investment because each employee has only a few tools needed for a particular task In the 19th century, British mathematician Charles Babbage determined that a fourth consideration was also important for labor efficiency. Because pay and skill have a high correlation, Babbage suggested paying exactly the wage needed for the particular skill required. Therefore, if the entire job consists of only one (1) skill, the organization has to pay for that skill. For example, the assembly line is considered a very efficient system that may require employees to do short, repetitive, mind-numbing jobs. The wage rate for many of these jobs, however, is good. B. Job Expansion Figure 2. Sample job enlargement (horizontal job expansion) and job enrichment (vertical job expansion) Source: Operations management: Sustainability and supply management (12th ed.), 2017, pp. 451 Moving from labor specialization toward more varied job design may improve the quality of work life. Jobs can be modified through the following: 1. Job enlargement is the grouping of a variety of tasks about the same skill level; horizontal enlargement. 2. Job rotation is a system in which an employee is moved from one (1) specialized job to another. 3. Job enrichment gives an employee more responsibility that includes some of the planning and control necessary for job accomplishment; vertical expansion. A popular extension of job enrichment is employee empowerment, which enlarges employee jobs so that the added responsibility and authority are moved to the lowest level possible. 03 Handout 1 *Property of STI  [email protected] Page 3 of 9  BM2106 Limitations of Job Expansion There are job designs that are not universally used because of its costs. The following are the few limitations of expanded job designs: 1. Higher capital cost: Job expansion may require additional equipment and facilities 2. Individual differences: Some employees opt for the less-complex jobs 3. Higher wage rates: Expanded jobs may well require a higher average wage 4. Smaller labor pool: Because expanded jobs require more skill and acceptance of more responsibility, job requirements have increased. 5. Higher training cost: Job expansion requires training and cross-training. Therefore, training budgets need to increase. C. Psychological Components of Job Design These components focus on how to design jobs that meet some minimum psychological requirements. The Hawthorne studies introduced psychology to the workplace, which was initiated to determine the impact of lighting on productivity. In the process, they found the dynamic social system and distinct roles played by employees to be more important than the intensity of the lighting. They also found that individual differences may dominate what an employee expects from the job and what the employee thinks her/his contribution to the job should be. In 1980, Richard Hackman, a Social and Organizational Psychology professor, and Greg Oldham, an American economist, presented five (5) desirable job design characteristics. 1. Skill variety. This requires the worker to use a variety of skills and talents 2. Job identity. This allows the worker to perceive the job as a whole and recognize a start and a finish 3. Job significance. This provides a sense that the job has an impact on the organization and society. 4. Autonomy. This offers freedom, independence, and discretion. 5. Feedback. This provides clear and timely information about performance. D. Self-Directed Teams Self-directed teams represent a group of individuals working together to achieve a common goal. These teams may be organized for long- or short-term objectives. Teams are effective primarily because they can easily provide employee empowerment, ensure core job characteristics, and satisfy many of the psychological needs of individual team members. 03 Handout 1 *Property of STI  [email protected] Page 4 of 9  BM2106 Figure 3. Job design continuum Source: Operations management: Sustainability and supply chain management (12th ed.), 2017, pp. 452 Figure 3 shows a job design continuum that emphasizes that increasing reliance on the employee's contribution can increase the responsibility accepted by the employee. Moreover, this also explains that job design's five (5) ingredients are consistent with job enlargement, job enrichment, and employee empowerment. E. Motivation and Incentive Systems Incentive systems based on individual or group productivity are used throughout the world in various applications to contribute to job satisfaction and motivation. Production incentives often require employees or crews to produce at or above a predetermined standard. The standard can be based on a "standard time" per task or number of pieces made. Both systems typically guarantee the employee at least a base rate. Incentives need not be monetary as they can be in the form of awards, recognition, and other kinds of preferences such as a preferred work schedule. With the increasing use of teams, various forms of team-based pay are also being developed. Many are based on traditional pay systems supplemented with some form of bonus or incentive system. However, because many team environments require cross-training, knowledge-based (or skill-based) pay systems have been developed where a portion of the employee's pay depends on demonstrated knowledge or skills. III. Labor Standards Labor standards are the amount of time required to perform a job or part of a job, and they exist, formally or informally, for all jobs. Effective manpower planning is dependent on a knowledge of the labor required. Effective operations management requires meaningful standards that help a firm determine the following: 1. Labor content of items produced (the labor cost) 2. Staffing needs (how many people it will take to meet required production) 3. Cost and time estimates prior to production (to assist in a variety of decisions, from cost estimates to make-or-buy decisions) 4. Crew size and work balance (who does what in a group activity or on an assembly line) 5. Exceed production (so that both manager and worker know what constitutes a fair day's work) 6. Basis of wage-incentive plans (what provides a reasonable incentive) 7. Efficiency of employees and supervision (a standard is necessary against which to determine efficiency) 03 Handout 1 *Property of STI  [email protected] Page 5 of 9  BM2106 Properly set labor standards represent the amount of time that it should take an average employee to perform specific job activities under normal working conditions. Labor standards are set in four (4) ways: 1. Historical Experience. This is based on the number of labor hours required in doing a task the last time it was performed. 2. Time Studies. This involves timing a sample of a worker's performance and using it to set a standard. 3. Predetermined Time Standards. This is a division of manual work into small basic elements that have established and widely accepted times. 4. Work Sampling. This is an estimate, via sampling, of the percentage of a worker's time on various tasks. Ergonomics and the Work Environment (Heizer, et. al., 2017) Ergonomics is the study of the human interface with the environment and machines. Understanding ergonomic issues help to improve human performance. Adults come in limited configurations and abilities; therefore, the design of tools and the workplace depends on the study of people to determine what they can and cannot do. The design of the workplace can make the job easier or impossible. In addition, through the use of computer modeling, analyzing human motions and efforts is possible. Major Issues in Ergonomics and Work Environment 1. Operator Input to Machine. Operations managers need to ensure that operators have the strength, reflexes, perception, and mental capacity to provide the necessary control. For instance, problems such as carpal tunnel syndrome may result when a tool as simple as a keyboard is poorly designed. 2. Feedback to Operators. This is provided by sight, sound, and feel; it should not be left to chance. Accurate feedback is necessary to avoid mishaps in the operations. For example, America's worst nuclear experience was largely due to poor feedback to the operators about reactor performance. 3. The Work Environment. This is the physical environment in which employees work affects their performance, safety, and quality of work life. Illumination, noise and vibration, temperature, humidity, and air quality are work-environment factors under the control of the organization and the operations manager. The manager must approach them as controllable. Methods Analysis and the Visual Workplace (Heizer, et. al., 2017) Methods analysis is a system that involves developing work procedures that are safe and produce quality products efficiently. Methods techniques are used to analyze the following: 1. Movement of individuals or material. The analysis is performed using flow diagrams and process charts with varying amounts of detail. 2. Activity of human and machine, and crew activity. This analysis is performed using activity charts. Activity charts. These are used to study and improve the utilization of an operator and a machine or some combination of operators (crew) and machines. 03 Handout 1 *Property of STI  [email protected] Page 6 of 9  BM2106 Figure 4. Sample activity chart for a two-person crew Source: Operations management: Sustainability and supply chain management (12th ed.), 2017, pp. 457 3. Body movement (primarily arms and hands). This analysis is performed using operations charts. Operations charts are charts depicting right and left hand motions. Figure 5. Sample operations chart (right-hand/left-hand chart) Source: Operations management: Sustainability and supply chain management (12th ed.), 2017, pp. 457 Four (4) Most Common Tools of Methods Analysis 1. Flow Diagrams. These are schematics (drawings) used to investigate the movement of people or material. 03 Handout 1 *Property of STI  [email protected] Page 7 of 9  BM2106 Figure 6. Sample flow diagrams and process chart of axle-stand production at Paddy Hopkirk Factory Source: Operations management: Sustainability and supply chain management (12th ed.), 2017, pp. 457 Legends: (a) Old method; (b) New method; and (c) Process chart of axle-stand production using PHF's new method (shown in (b)) Paddy Hopkirk Factory, which manufactures auto parts, demonstrates one version of a flow diagram in Figure 6. Hopkirk's old workflow is shown in Figure 6 (a), and a new method, with improved workflow and requiring less storage and space, is shown in Figure 6 (b). Process charts use symbols, as in Figure 6 (c), to help employees and the OM understand the movement of people or material. A process chart is used to supplement the flow diagrams in the given figure. 2. Process chart. This is a graphic representation that depicts a sequence of steps for a process. (See Figure 6 (c)). 3. Activity chart 4. Operations chart The Visual Workplace A visual workplace uses a variety of visual communication techniques to communicate information to stakeholders rapidly. This uses low-cost visual devices to share information quickly and accurately. 03 Handout 1 *Property of STI  [email protected] Page 8 of 9  BM2106 Figure 7. The visual workplace Source: Operations management: Sustainability and supply chain management (12th ed.), 2017, pp. 457 The visual workplace can eliminate non-value-added activities by making standards, problems, and abnormalities visual, as seen in Figure 7. The visual workplace needs less supervision because employees understand the standard, see the results, and know what to do. References Heizer, J., Render, B. and Munson, C. (2017). Operations management: Sustainability and supply chain management (12th edition). Pearson Peakon Post. (2018, March 14). What Hackman & Oldham's job characteristics model means for workplaces. In peakon.com. Retrieved September 8, 2021 from https://peakon.com/blog/employee-success/hackman- oldham-job-characteristics-model/ 03 Handout 1 *Property of STI  [email protected] Page 9 of 9