Upload
kamelliachaichi
View
38
Download
0
Tags:
Embed Size (px)
DESCRIPTION
operation management book chapter 6
Citation preview
Alex Hill and Terry Hill
Lecture outline
• Choosing a LOCATION
• Choosing a LAYOUT
• Critical REFLECTIONS
• SUMMARY
•Size of the INVESTMENT•The FIXED NATURE of the choice•The UNCERTAINTY of the future
DECIDING WHERE TO LOCATE
Choosing a location
Once chosen, many organisations NEVER CHANGE location
The two tasks of deciding location and layout are distinct yet related. They are distinct in that
location concerns where best to site a facility, whereas layout concerns how best to arrange the staff, processes and equipment within that facility. And they are related in that they form two parts of
a key decision – how best to position facilities in order to perform the operations task and meet the
needs of the business.
•CONTINENT or REGION•COUNTRY•AREA or CITY•SITE
Choosing a location
Levels of decision
> KEY IDEA
The number of LEVELS and FACTORS involved differ DECISION
•The ORIGIN of existing location decisions•POLITICALLY based constraints•TECHNOLOGY developments•Market ACCESS or local PRESENCE in large
consumer markets•CURRENCY value fluctuations
Background factors influencing location decisions
•A well developed INFRASTRUCTURE•Proximity to MARKETS•Proximity to SUPPLIERS•Hospitable BUSINESS CLIMATE•Availability of STAFF•Quality of LIFE for employees•COSTS and INVESTMENTS•Favourable GOVERNMENT policies•Proximity to CUSTOMERS
Factors affecting the choice of location
CASE 6.1
GROWTH AT SOFTWARE TECHNOLOGY PARKS OF INDIA
1.What are the REASONS for the rapid growth in Noida’s IT-based services?
2.What FACTORS have affected the choice of continent/region, country and area/city?
CASE 6.1
Question
Answer
REASONS for growth
FACTORS affecting decision
• Well-developed INFRASTRUCTURE• Hospital BUSINESS CLIMATE• Availability of STAFF• Quality of LIFE for employees• Lower VARIABLE COSTS• Favourable GOVERNMENT policies
• IT services EASY to source from abroad
• STPI FACILITATES the transfer• Plentiful supply of English-speaking
STAFF• Lower COSTS to provide service
GROWTH AT SOFTWARE TECHNOLOGY PARKS OF INDIA
•FACILITIES for staff and customers
•Building’s DESIGN•RENTAL costs and local taxes•SPACE•Proximity to SUPPORT SERVICES•Room for EXPANSION•Level of cutsomer TRAFFIC•VISIBILITY to customers•Proximity to CUSTOMERS•Proximity to COMPETITORS
Choosing a locationFactors affecting the choice of site
Choosing a locationFactors affecting the choice of site
CASE 6.2
GROWTH AT PLASTIC OMNIUM
1.How has PLANT LOCATION been central to its growth in the last 25 years?
Question Answer
GROWTH
Impact of LOCATION
• Over last 25 years GROWN:- From 4 factories in France- To 25 factories in 25 countries
CASE 6.2 GROWTH AT PLASTIC OMNIUM
• Decide to locate near CUSTOMER- BMW in Munich• Grew with CUSTOMER
CASE 6.3
HSBC RELOCATES CALL CENTRE OPERATIONS
1.How did it CHANGE its approach in the 1990s?
2.What were the ADVANTAGES and DISADVANTAGES of these changes?
CASE 6.3
Question Answer
Changes
Advantages
Disadvantages
• Lower COSTS• Used profits to REINVEST and grow
sales• Large number of well educated,
English speaking STAFF
• Moved IT services OFFSHORE- 4,000 jobs moved
• Start-up COSTS• Initial RISK
HSBC RELOCATES CALL CENTRE OPERATIONS
Choosing a locationSite location techniques
•WEIGHTED factor•Centre of
GRAVITY
Choosing a locationSite location techniques
Choosing a locationSite location techniques
CASE 6.4
CREATING SPACE ON PASSENGER JETS
1.Why is ELBOW ROOM an increasingly important factor on passenger airlines?
2.Why is LEGROOM often easier to provide than elbow room?
Question Answer
ELBOW ROOM important
LEG ROOM easier
• Increasing LEG ROOM will remove:- 1 or 2 rows (4 to 12 seats)• Increasing ELBOW ROOM will remove:- 1 or 2 seats per room (30 to 60 seats)
• COMFORT is important for customers:- Leg room, elbow room and seat
cushioning• ELBOW room is shared with other
passengers
CASE 6.4 CREATING SPACE ON
PASSENGER JETS
Choose a LAYOUT
Chosen a LOCATION
Choosing a layout
Choosing a layoutFactors influencing layout
•Core TASK•Available SPACE•Making space for future
EXPANSION and layout changes•HEALTH and SAFETY
Choosing a layoutBasic types of layout
•FIXED position•PROCESS or
FUNCTIONAL•SERVICE or PRODUCT
> KEY IDEA
The BASIC TYPES of layout are:• FIXED POSITION,• PROCESS or FUNCTIONAL and• SERVICE or PRODUCT
Choosing a layoutBasic types of layout
Choosing a layoutBasic types of layout
Choosing a layoutBasic types of layout
Choosing a layoutBasic types of layout
CarBirdGovernment Pit stop
Choosing a layoutService or product type, process and layout
Ikiru(1952)
A Bug’s Life
(1998)
Le Mans
(1971)
GungHo
1986)
Film clip Government
FilmTitleDirector (year)
Ikiru (Living)Kurosawa (1952)
ClipStartFinish
00:58:58Duration 00:03:07
What clip showsA group of slaves who are served (unsuccessfully) by a government department
Key learning objective
The characteristics of a:•Process or functional layout•Repeat high-volume service delivery system
Choosing a layoutService or product type, process and layout
Film clip Bird
FilmTitleDirector (year)
A Bug’s LifeJohn Lasseter and Andrew Stanton (1998)
ClipStartFinish
00:47:0000:51:22
What clip showsThe bugs building a bird to protect their community
Key learning objective
The characteristics of a:•Fixed position layout•Project manufacturing process
Choosing a layoutService or product type, process and layout
Film clip Factory
FilmTitleDirector (year)
Gung HoRon Howard (1986)
ClipStartFinish
01:33:1301:34:31
What clip shows Cars being manufactured on a production line
Key learning objective
The characteristics of a:•Product layout•Line manufacturing process
Choosing a layoutService or product type, process and layout
Film clip Pit stop
FilmTitleDirector (year)
Le MansLee H. Katzin (1971)
ClipStartFinish
00:47:4000:50:43
What clip showsThe pit crew decide to bring in the racing cars to put on new tyres that will drive better in the rain
Key learning objective
The characteristics of a:•Cell layout•Repeat low-volume service delivery system
Choosing a layoutService or product type, process and layout
Low VOLUME High
Hig
hV
AR
IET
YLo
w
Choosing a layoutService or product type, process and layout
QuestionGovernme
ntBird Car Pit stop
Service or product
Process
Layout
Choosing a layoutService or product type, process and layout
Low VOLUME High
Hig
hV
AR
IET
YLo
w
Choosing a layoutService or product type, process and layout
Car
Bird
Government
Pit stop
QuestionGovernme
ntBird Car Pit stop
Service or product
Process
Layout
Repeathigh-volume delivery system
Project manufacturing process
Process or functional
Fixed position
Mass product
Product
Service shop
Special productMade on-site
Line manufacturing process
Repeat low-volume delivery system
Cell
Service shop
Choosing a layoutService or product type, process and layout
Choosing a layoutDetailed layout design
Choosing a layoutDetailed layout design
CASE 6.5
FUNCTIONS AT A TELECOMMUNICATIONS COMPANY CALL CENTRE
1.How did the ORIGINAL call centre result in delays?
2.How did the CELL-BASED redesign reduce delays?
3.What other ADVANTAGES could a cell-based structure offer this company?
CASE 6.5
Question Answer
Causes of delays
Cell reduced delays
Other advantages
• SERVICE based teams handle a customer• ELIMINATED hand offs
• Customers HANDED OFF between different departments
• BACKLOGS become more visible• Can introduce friendly COMPETITION between
teams• Common GOALS and TARGETS within cells• Identify and share BEST PRACTICE between
cells
FUNCTIONS AT A TELECOMMUNICATIONS COMPANY CALL CENTRE
Critical reflections
• The choice of location and layout significantly impacts COSTS and SALES
• Therefore, they must clearly reflect the NEEDS of
- CUSTOMER and MARKET (external)- BUSINESS (internal)
• In particular, the CHOICE of location is:- DIFFICULT to change- LARGE and FIXED investment
Summary• TASKS of deciding location and layout- Distinct, but related
• Decisions need to be made at a number of LEVELS
- Continent/region, country, area/city and site
• Various FACTORS impact the choice of location
- Exiting sites, proximity, political, economic, etc
• Three basic TYPES of layout- Fixed position, process or functional, service or
product
Revision questions
1 Organisations:
a) Frequently change location
b) Often never change location
c) Are not concerned about their location
Revision questions
1 Organisations:
a) Frequently change location
b) Often never change location
c) Are not concerned about their location
Revision questions
2 The choice of location needs to reflect that:
a) It is a fixed and large investment
b) The uncertainty of the future
c) Both a) and b)
Revision questions
2 The choice of location needs to reflect that:
a) It is a fixed and large investment
b) The uncertainty of the future
c) Both a) and b)
Revision questions
3 Choosing a location concerns decisions around:
a) Continent/region, country and area/city
b) Site
c) Both a) and b)
Revision questions
3 Choosing a location concerns decisions around:
a) Continent/region, country and area/city
b) Site
c) Both a) and b)
Revision questions
4 Factors affecting the choice of site include:
a) Proximity to customers, staff and suppliers
b) Proximity to competitors
c) Both a) and b)
Revision questions
4 Factors affecting the choice of site include:
a) Proximity to customers, staff and suppliers
b) Proximity to competitors
c) Both a) and b)
Revision questions
5 The basic types of layout are:
a) Jobbing, batch and line
b) Non-repeat, repeat low volume and repeat high volume
c) Fixed position, process or functional and service or product
Revision questions
5 The basic types of layout are:
a) Jobbing, batch and line
b) Non-repeat, repeat low volume and repeat high volume
c) Fixed position, process or functional and service or product
CASE FOR TUTORIALMcDONALD’S AND
McCAFE