Slack, Chambers and Johnston, Operations Management, 6

th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.1
2.1
Chapter 2
Operations performance
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.2
2.2
Design
Planning and
control
Operations
performance
Operations
strategy
Improvement
Operations
management
Operations
strategy
Slack et al.s model of operations management
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.3
2.3
In Chapter 2 Operations performance Slack et al. identify
the following key questions:

Why is operations performance important in any
organization?
How does the operations function incorporate all
stakeholders objectives?
What does top management expect from the operations
function?
What are the performance objectives of operations and
what are the internal and external benefits which derive
from excelling in each of them?
How do operations performance objectives trade off
against each other?
Key operations questions
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.4
2.4
Operations management can make or break any organization
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.5
2.5
Shareholders
Directors / top
management
Staff
Staff representative
bodies
Regulatory
bodies
Government
Suppliers
Lobby / interest
groups
Customers
Stakeholder groups with a legitimate interest in the
operations activities
Society
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.6
2.6
Operations and
processes
excellence
Operations and process management contribution to strategy
Enhanced
service
Secure
revenue
Lower
costs Process
efficiency
Reduced errors,
better resilience
Lower operational risk
Higher capacity
utilization
Lower capital
requirements
Capabilities for future
innovation
Opportunities for
process learning
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.7
2.7
The five competitive objectives
Quality Being RIGHT
Speed
Being FAST
Dependability Being ON TIME
Cost
Being PRODUCTIVE
Being ABLE TO CHANGE
Flexibility
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.8
2.8
Minimum cost,
maximum value
Minimum price, highest value
Fast
throughput
Quick
delivery
Reliable
operation
Dependable
delivery
Error-free
processes
Error-free
products and
services
Ability to
change
Frequent new
products, maximum
choice
The benefits of excelling at the five objectives
Dependability
Cost
Speed
Quality
Flexibility
Internal
benefits
External
benefits
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.9
2.9
What does Quality mean in
Patients receive the most appropriate treatment.


a hospital ?
Treatment is carried out in the correct manner.


Patients are consulted and kept informed.









Staff are courteous, friendly and helpful.






Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.10
2.10
an automobile plant?
All assembly is to specification.

Product is reliable.


All parts are made to specification.






The product is attractive and blemish-free.






What does Quality mean in (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.11
2.11
a bus company?
The buses are clean and tidy.


The buses are quiet and fume-free.


The timetable is accurate and user-friendly.






Staff are courteous, friendly and helpful.






What does Quality mean in (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.12
2.12
a supermarket?
The store is clean and tidy.


Dcor is appropriate and attractive.


Goods are in good condition.






Staff are courteous, friendly and helpful.






What does Quality mean in (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.13
2.13
Quality
Two common meanings of Quality
Quality as the specification of
a product or service
e.g. Lower Hurst Farm
produces organic meat raised
exclusively on its own farm.
Quality as the conformance
with which the product or
service is produced
e.g. Quick service restaurants
like McDonalds may buy less
expensive meat, but its
conformance must be high.
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.14
2.14
Irrespective of a product or services specification quality, producing it in a
way that it conforms to its specification consistently brings benefits to any
operation
Externally it enhances the product or service in the market, or at least
avoids customer complaints.
Internally it brings other benefits to the operation.
It prevents errors slowing down throughput speed.

It prevents errors causing internal unreliability and low
dependability.

It prevents errors causing wasted time and effort, therefore saving
cost.
External and internal benefits of conformance quality
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.15
2.15
Quality
External and internal benefits of conformance quality
(Continued)
On-specification
products and
services
Internal
benefits
External
benefits
Dependability
Cost
Speed
Quality
Flexibility
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.16
2.16
The time between requiring treatment and receiving
treatment is kept to a minimum.


a hospital ?
What does Speed mean in
The time for test results, X-rays, etc. to be returned
is kept to a minimum.


Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.17
2.17
What does Speed mean in (Continued)
an automobile plant?
Time between dealers requesting a vehicle of a
particular specification and receiving it is minimized.

Time to deliver spares to service centres is minimized.


Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.18
2.18
a bus company?
The time between customer setting out on the
journey and reaching his or her destination is kept
to a minimum.
What does Speed mean in (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.19
2.19
a supermarket?
The time for the total transaction of going to the
supermarket, making the purchases and returning
is minimized.


The immediate availability of goods.


What does Speed mean in (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.20
2.20
Speed again has different interpretations externally and internally
Externally it means the elapsed time between a customer asking for a
product or service and getting it (in a satisfactory condition).
It often enhances the value of the product or service to customers.
Internally it brings other benefits to the operation.
It helps to overcome internal problems by maintaining dependability.

It reduces the need to manage transformed resources as they pass
through the operation, therefore saving cost.
External and internal benefits of speed
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.21
2.21
Quality
External and internal benefits of speed (Continued)
Internal
benefits
External
benefits
Dependability
Cost
Speed
Quality
Flexibility
Quick
delivery
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.22
2.22
What does Dependability mean in (Continued)
Proportion of appointments that are cancelled is
kept to a minimum.


a hospital ?
Keeping appointment times.

Test results, X-rays, etc. are returned as promised.

Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.23
2.23
an automobile plant?
On-time delivery of vehicles to dealers.


On-time delivery of spares to service centres.


What does Dependability mean in (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.24
2.24
a bus company?
Keeping to the published timetable at all points on
the route.

Constant availability of seats for passengers.


What does Dependability mean in (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.25
2.25
a supermarket?
Predictable opening hours


Proportion of goods out of stock kept to a minimum

Keeping to reasonable queuing times

Constant availability of parking.


What does Dependability mean in (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.26
2.26
Externally it enhances the product or service in the market, or at least
avoids customer complaints.
Internally it brings other benefits to the operation.
It prevents late delivery slowing down throughput speed.

It prevents lateness causing disruption and wasted time and effort,
thereby saving cost.
External and internal benefits of Dependability
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.27
2.27
Quality
External and internal benefits of Dependability (Continued)
Internal
benefits
External
benefits
Dependability
Cost
Speed
Quality
Flexibility
Dependable
delivery
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.28
2.28
Flexibility has several distinct meanings but is always
associated with an operations ability it change
Change what ?
The products and services it brings to the market
Product/service flexibility
The mix of products and services it produces at any one
time Mix flexibility
The volume of products and services it produces Volume
flexibility
The delivery time of its products and services Delivery
flexibility
Flexibility What does it mean?
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.29
2.29
What does flexibility mean in
Introducing new treatments


. a hospital ?
A wide range of treatments


The ability to adjust the number of patients treated


The ability to reschedule appointments.

Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.30
2.30
an automobile plant?
The introduction of new models

A wide range of options

The ability to adjust the number of vehicles
manufactured

The ability to reschedule manufacturing priorities.


What does flexibility mean in (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.31
2.31
a bus company?
The introduction of new routes and excursions

A large number of locations served

The ability to adjust the frequency of services
The ability to reschedule trips.

What does flexibility mean in (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.32
2.32
a supermarket?
The introduction of new goods

A wide range of goods stocked

The ability to adjust the number of customers served
The ability to get out-of-stock items.

What does flexibility mean in (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.33
2.33
Depend-
ability
Flexibility
Quality
Speed
Cost
External and
internal benefits
External and internal benefits of flexibility
External and
internal benefits
Depend-
ability
Flexibility
Quality
Cost
On-specification
products and
services
Short delivery
lead-time
Reliable
delivery
Speed
Frequent new
products/services
Wide range
Volume and delivery
changes
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.34
2.34
Quality
External and internal benefits of flexibility (Continued)
Internal
benefits
External
benefits
Dependability
Cost
Speed
Quality
Flexibility
Frequent new
products/services
Wide range
Volume and delivery
changes
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.35
2.35
a hospital ?
Staff
costs
Technology
and facilities
costs
Bought-in
materials
and
services
What does Cost mean in
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.36
2.36
an automobile plant?
Technology
and facilities
costs
Staff
costs
Bought-in
materials
and
services
What does Cost mean in (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.37
2.37
a bus company?
Staff
costs
Technology
and facilities
costs
Bought-in
materials
and
services
What does Cost mean in (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.38
2.38
a supermarket?
What does Cost mean in (Continued)
Staff
costs
Technology
and facilities
costs
Bought-in
materials
and
services
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.39
2.39
The cost of producing products and services is obviously
influenced by many factors such as input costs, but two
important sets are
The 4 Vsvolume
variety
variation
visibility
The internal performance of the operation at
quality
speed
dependability
flexibility
Cost
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.40
2.40
Quality
External and internal benefits of performance objectives
Dependability
Cost
Speed
Quality
Flexibility
External
benefits
On-specification
products and
services
Short delivery
lead-time
Reliable
delivery
Frequent new
products/services
Wide range
Volume and delivery
changes
Low price, high
margin, or both
Internal
benefits
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.41
2.41
Polar diagrams
Polar diagrams are used to indicate the relative
importance of each performance objective to an operation
or process.
They can also be used to indicate the difference between
different products and services produced by an operation or
process.
Cost
Quality
Flexibility
Dependa-
bility
Speed
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.42
2.42
Polar diagrams for a taxi service versus a bus service
Cost
Quality
Flexibility
Dependability Speed
Taxi
service
Bus
service
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.43
2.43
Reassurance
Crime
reduction
Crime
detection
Working with
Criminal justice
agencies
Efficiency
Actual
performance
Required performance
Polar diagrams for a proposed police performance method
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.44
2.44
Cost
Quality
Flexibility
Speed
Newspaper collection
service
General recycling
service
Dependability
Polar diagrams for newspaper collection and general
recycling services
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.45
2.45
Trade-offs
Do you want it good, or do you want it Tuesday?
No such thing as a free lunch.
You cant have an aircraft which flies at the speed of sound,
carries 400 passengers and lands on an aircraft carrier.
Operations are just the same. (Skinner)
Trade-offs in operations are the way we are willing to
sacrifice one performance objective to achieve excellence in
another.
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.46
2.46
A
X
C
D
Cost efficiency
V
a
r
i
e
t
y

B
The new efficient
frontier
B1
X
V
a
r
i
e
t
y

A
C
D
B
The efficient
frontier
Cost efficiency
The efficient frontier view of trade-offs
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.47
2.47
Cost efficiency
V
a
r
i
e
t
y

Improvement through
increasing focus on
cost efficiency
Q
Q1
Improvement
through increasing
focus on variety
P
P1
Improvement through
overcoming the trade-
off between variety
and cost efficiency
Improvement through focus
or improvement through overcoming trade-offs
The efficient frontier view of trade-offs (Continued)
Slack, Chambers and Johnston, Operations Management, 6
th
Edition,
Nigel Slack, Stuart Chambers, and Robert Johnston 2010
2.48
2.48
Cost efficiency
V
a
r
i
e
t
y

Focus strategies can
change the trade-off
curve from convex to
concave
The efficient frontier view of trade-offs (Continued)