THE INSTITUTE OF LEADERSHIP & MANAGEMENT Spotlight on Operational Management Approaches and Techniques The rate of change in operational capabilities is redefining what companies can do. Operations is becoming a strategic role. Operations is where change is going to happen. It is the leader of operations that has a 360 degree view of the scope of change..and the tools to lead the organization through this change. Deloitte (2017) Operations Management In the latter decades of the 20th Century, the strategic value of operations management was often overlooked in favour of more prominent business trends. Today, operations strategy is back in the spotlight This is hardly surprising, given that operations is where and how organisations create value for customers: "Operations management uses resources to appropriately create outputs that fulfill defined market requirements." (Slack et al, 2010) This process is typically represented by the 'transformation process model': SUPPLIERS TRANSFORMATION INPUTS PROCESS OUTPUTS CUSTOMERS Every aspect of any operation can be rolled-up into this simple but versatile model, which represents the backbone for all operational processes and can be used to define and analyse operations at all levels. Examples of inputs, transformation processes and outputs - Adapted from Stevenson ( 2015): Inputs Transformation processes Outputs Land, Human labour, Capital, Raw Cutting/drilling, Transporting, Products materials, Equipment, Facilities Teaching, Farming, Mixing, Packing. Houses, Automobiles, Clothing. Energy, Information, Time, Legal Copying, Analysing, Developing Computers, Machines, Televisions, constraints, Government regulations |Searching, Researching, Repairing, Food products, Textbooks, CD Innovating, Debugging, Selling players Services Health care, Entertainment, Car repair, Legal, Banking, CommunicationHistorically, operations management was defined by a focus on mass production, but alternative approaches have emerged over time. For example: Flexible specialisation: focusing on component networks within the value chain Lean production: focusing on the elimination of Inefficiency, or waste" Mass customisation: focusing on offering variety in mass production Agile manufacturing: focusing on being able to shift market-driven objectives (The Open University, 2018) The Operations Management Toolbox The role of the operations manager spans several key areas of responsibility: developing operations strategy; shaping operational outputs and processes; planning and controlling the operation; improving operational performance; and social/sustainable considerations. (Slack et al, 2010) Fundamentally, however, the operations manager is a planner, problem solver and decision maker. A broad range of philosophies, methodologies, devices and techniques - or management tools - have been developed and accumulated to provide essential support. Management tools are often grouped in rigid hierarchies (e.g. policies, standards, standard operating procedures and key performance indicators) or fluid families (e.g. methodology-aligned clusters of process Improvement tools), from the long term and strategic to the short term and tactical. From their annual executive survey, management consultants Bain & Company Identified the most popular management tools globally in 2017: Change Customer Mergers and Advanced Analytics Management Satisfaction Systems Acquisitions Strategic Alliances Programs Agile Management Complexity Customer Mission and Vision Strategic Planning Reduction Segmentation Statements Digital Organisational Time Supply Chain Balanced Scorecard Core Competencies Transformation Management Management Customer Journey Employee Price Optimisation Total Quality Benchmarking Engagement Analysis Models Management Systems Customer Scenario and Business Process Zero-Based Relationship Internet of Things Contingency Reengineering Management Planning Budgeting To maximise tool benefits, Bain (2018) recommends: Understanding the strengths, weaknesses and Championing realistic objectives and viewing tools effects of each tool as an ald, not a panacea Combining the right ones In the right ways at the Taking a rational, needs-based approach to right times selecting and implementing tools Adapting tools to the organisation, not vice versa (Rigby and Bilodeau, 2018) Closer to front line concerns than strategic devices, organisational systems and operational methodologies, the operations management toolbox contains a wealth of invaluable tactical alds and solutions. References Deloitte (2017). The Fourth Revolution is now: are you ready? PWC (2015). Reimagining Operations www.pwc.com/gx/en/operations/reimagining-operations.pdf Rigby, D. (2017). Management Tools 2017 Bain & Company Rigby, D. and Bilodeau, B. (2018). Management Tools & Trends Bain & Company Slack, N. Chambers, S. and Johnston, R. (2010). Operations management Pearson Education Stevenson, W. (2015). Operations Management McGraw-Hill Education The Open University (2018). Understanding operations management www.open.edu/openlearn/money-business/leadership- management/understanding-operations-management Learning Cluster 22.5 . Published by The Institute of Leadership & Management 2018 @ The Institute of Leadership & Management The Institute of Leadership & Management, Pacific House, Relay Point, Tamworth 877 SPA . www.InstituteLM.com - +44 (0) 1543 266886THE INSTITUTE OF Delivering Outcomes: LEADERSHIP Operations Management & MANAGEMENT Approaches and Techniques One of The Institute's worksheets series, to help you improve your leadership skills and capability, making you a better leader This worksheet, based on the Spotlight 'Operations Management Approaches and Techniques,' will help you focus on the meaning of Operations Management and using the Transformation Process to add value to customers. You should take approximately two hours to complete this worksheet and read the accompanying Spotlight What is Operations Management? "Operations management relates to the management of those activities that create the core services or products provided by an organisation."* Do you agree? Is anything missing from this definition? Now write your own definition of Operations Management, taking into account your response to the previous task: Use the spaces below to explain the differences between Operations Management, Production Management and Project Management: Operations Management Production Management Project Management The Transformation Process This model is used to demonstrate how an activity, or group of activities, takes one or more inputs and transforms them to add value and provide outputs for customers. Use the template on the next page to show how the transformation process can be applied to your organisation to add value. "Association for Project Management (No date) Operations management www.apm.org.uk/body-of-knowledge/context/setting/operations-managementWorksheet Delivering Outcomes: Operations Management Approaches and Techniques SUPPLIERS INPUTS TRANSFORMATION PROCESSES OUTPUTS CUSTOMERS The Transformation Process and Performance Measures The Transformation Process Model can also be used to provide performance measures for Economy, Efficiency and Effectiveness (Three Es). Using your organisation's transformation process above: What measures of Economy are used, or could be used, for the costs associated with the Inputs for the transformation process? What measures of Efficiency are used, or could be used, for the conversion of the Inputs to Outputs? What measures of Effectiveness are used, or could be used, for measuring the extent to which the Outputs meet Customers' expectations? Review How would you start a conversation to explain how the transformation process 'adds value'? All references are cited in The Institute of Leadership & Management (2018) 'Spotlight on Operations Management Approaches and Techniques' Achievement - Delivering Outcomes - Operations Management Approaches and Techniques Published by The Institute of Leadership & Management 2020 @ The Institute of Leadership & Management The Institute of Leadership & Management, Pacific House, Relay Point, Tamworth 877 SPA . www.InstituteLM.com - +44 (0) 1543 266886