Operations Management Module MBA7061
February 2014 Module Resource Book
Operations Management Module Aims: This module provides a comprehensive introduction to Operations Management as practised in organisations. It provides an overview of key aspects of operations management from both manufacturing and service sectors’ perspective within modern organisations. The module considers operations strategy in the broadest sense. The broad aims of the module are:
To develop and introduce and develop a critical understanding operations management for modern organisations in a variety of sectors of activity; To consider operations strategy in its broadest sense and relate this to the internal management and organisation of the production of goods and services within organisations in different sectors of the economy; To examine how to organise resources and operations, and how to improve them using a variety of quality tools and techniques and process improvement activities; To consider the organisation in its wider context; examining how inputs on the supply side can be managed and improved, and on the demand side how customers, and customer satisfaction can be understood.
Module Status:
Core Module run in Semester 2 of the Masters in Business Management Programme and is credit rated at 20 M level credits.
Teaching Staff: Dr Mukul Madahar
[email protected] Tel: 02920416307 Room: O1.41e
Dr John Williams
[email protected] Tel: TBC Room: O1.41f
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Learning Outcomes: After successfully completing the module, you should be able to:
Evaluate the nature, scope and extent of manufacturing and service operations strategy; Critically evaluate the use of quality tools and techniques for a wide range of organisational problems; Solve complex operational problems related to managing capacity and constraints within organisations; Demonstrate the application of strategies, tools and techniques to improve business operations and appraise and select appropriate methods for managing supply bases for a variety of organisations.
Teaching Programme – Lectures and Workshops Lectures: 11:00 to 13:00 on Wednesday
Room O1.01
Workshop sessions: 09:00 to 11:00 on a Monday 16:00 to 18:00 on a Monday 09:00 to 11:00 on a Wednesday 10:00 to 12:00 on a Thursday 14:00 to 16:00 on a Thursday
Room O2.11 (Group 1) Room O1.15 (Group 4) Room O2.08 (Group 2) Room O2.09 (Group 3) Room O2.09 (Group 5)
Please note that you are allocated to a workshop group. In your workshops you will have the opportunity to discuss the topics covered in the lecture further and how it applies to range of organisations through discussions and mini case studies. Attendance is compulsory.
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W/C 10th February
Tutor MM
17th February
MM
24th February
MM
03rd March
MM
10th March
MM
17th March
MM
24th March
JW
31st March
JW
07th April 14th April 21st April 28th April
JW
05th May
JW
12th May
MM
Lecture Introduction to module and Operations Management Operations Performance Operations Strategy Managing Capacity and Scheduling Operations Managing Inventory Managing Processes Introduction to Lean Supply Chain Management EASTER EASTER EASTER Quality and Improvement Operations Decision Making Wrap Up and Drawing it all Together
Seminar No seminar
Seminar Operations Management Seminar Operations Performance Seminar Operations Strategy Seminar Managing Capacity and Scheduling Seminar Managing Inventory Seminar Managing Processes Seminar Lean VACATION VACATION VACATION Seminar Supply Chain Management Seminar Quality and Improvement Seminar Operations Decisions Making
Hand-in date for the Coursework Wednesday 7th May 2014.
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Module Title Operations Management Level (3-8) Credits 7 20 Teaching Period Semester Two Module Leader Mukul Madahar Assessment Type Coursework
ECTS Credit 10
Module JACS Subject Code(s) and Number % of each subject MBA7061 N900 Module Value % Taught in Welsh 1.0 0
ASC Category(ies) 7 Module Type Taught
Pre-requisites None School(s) Campus Cardiff School of Management Llandaff Campus Assessment Methods Duration/Length of Weighting of Assessment Approximate Date of Assessment Type Submission Written assignment (6,000 100% End of Semester words) Aim(s)
To develop and introduce and develop a critical understanding operations management for modern organisations in a variety of sectors of activity; To consider operations strategy in its broadest sense and relate this to the internal management and organisation of the production of goods and services within organisations in different sectors of the economy; To examine how to organise resources and operations, and how to improve them using a variety of quality tools and techniques and process improvement activities; To consider the organisation in its wider context; examining how inputs on the supply side can be managed and improved, and on the demand side how customers, and customer satisfaction can be understood.
Learning Outcomes On completion of this module, students should be able to: Evaluate the nature, scope and extent of manufacturing and service operations strategy; Critically evaluate the use of quality tools and techniques for a wide range of organisational problems; Solve complex operational problems related to managing capacity and constraints within organisations; Demonstrate the application of strategies, tools and techniques to improve business operations and appraise and select appropriate methods for managing supply bases for a variety of organisations. Learning and Teaching Delivery Methods Lectures/ seminars Independent study Indicative Content The content of this module will focus primarily on the future needs of students and can be tailored to their likely subsequent careers. For those students likely to be entering the service sector the module can primarily be focused on service operations management with manufacturing operations management being taught as the minor component. For those students with a likely career in manufacturing, then manufacturing operations can be the major focus with service operations management taught as the minor component. Operations strategy
Customer service
Managing capacity and demand
Scheduling operations
Waiting, queuing theory and practice 5
Managing inventory
Quality management tools and techniques
Process analysis and improvement
New product and service development
Purchasing and supplier management
Recommended Reading & Required Reading Required reading Hill, A., and Hill, T., (2012), Operations management, Palgrave Macmillan; Basingstoke Johnson, R., and Clark, G., (2012), Service operations management: improving service delivery, FT Prentice Hall; London Recommended reading Cousins, P., Lamming, R., Lawson, B., and Squire, B., (2008), Strategic Supply Management: Principles, Theories and Practice, Prentice Hall; London. Fitzsimmons, J., and Fitzsimmons, M., (2010), Service Management: operations, strategy and information technology, McGraw-Hill Higher Education; Boston MA. Hollins, W., and Shinkins, S., (2006), Managing service operations: design and Implementation, Sage Publications; London. Slack, N., Brandon-James, A., and Johnston, R., (2013), Operations Management, Pearson; London Journals California Management Review Harvard Business Review International Journal of Production Economics International Journal of Operations & Production Management International Journal of Logistics Management International Journal of Physical Distribution and Logistics Management International Journal of Production Economics International journal of Services and Operations Management Journal of Operations Management Production and Operations Management Access to Specialist Requirements
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Module Assessment One of the key aspects of any business (the business being considered in a broad sense) is to provide services and/or products in line with customer demands. Operations Management deals with the design and management of delivery of these products and services including processes and supply chains. The study of Operations Management involves every level i.e. strategic, tactical and operational. You are an Operations Management Consultant. You are required to undertake an individual research project and to prepare a Management Report (6000 words) based on the case studies entitled Heathrow Terminal 5. The key aspects that need to be covered within the report are:
Critically evaluate the key Operations Management issues faced by both the British Airports Authority and British Airways. For each issue identified, critically discuss the most appropriate techniques, methods, models and tools available that you would have possibly identified within the lectures and seminars in class. (I am flexible in you bringing in your knowledge form other modules as well but the issues have to be purely operational.) Relate the findings from first and second points and critically evaluate which of these techniques, methods, models and tools YOU would have chosen and justify your choice with relevant research. Reflect your findings in the light of actions taken by British Airways.
You need to follow a REPORT FORMAT.
Report Structure and Layout:
Cover Page: Your Name and Student Number and the word count. Executive Summary Key issues identified by the two organisations (BAA and BA) [1500 words] Identification of the key approaches, concepts that apply to these issues including the HOW AND WHY [2000 words] Reflecting and relating your findings in point 4 and how they relate to what BA did along with your recommendations. You would be expected to provide justification of every aspect and solution to every issue. [1500 words] Conclusion: Overall comparison of your proposed action(s) when compared with that of the British Airports Authority and British Airways. [1000 words]
Further tips:
Structure within the sections identified can contain further subheadings (such as Techniques, Methods, Models, Tools, Strategies etc.) 7
Although we have provided with you a Case Study but the problems associated with Heathrow Terminal 5 have all been well written in both the practitioner and academic world. I would, therefore expect you to expand on the case study. You might want to bring in examples from other industry or even other airports. The report MUST have a proper reference list in the end of the report.
Marking and assessment criteria
Evidence of the level of critical analysis of the issues faced by the organisations in the case study Quality of the definition of the key problems faced by the organisations in the case study Understanding, critical evaluation and application of appropriate techniques, methods, models and tools to the issues discussed Appropriateness and justification of recommended changes and interventions to address the issues identified Clarity and coherence of report (with regard to structure of analysis, diagnosis, correctness of spelling and grammar, appropriateness of language, accuracy of referencing including use of English and Harvard Referencing scheme).
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The grid below indicates typical attributes of student work and the corresponding bands of grades in relation to the assessment criteria. Assessment criteria
Understanding, critical evaluation and application of appropriate techniques, methods, models and tools to the issues discussed Draws on comprehensive range of appropriate techniques, methods, models and tools which show evidence of independent research. Application is effective and critical / creative and shows evidence of synthesis of different models. Draws on extensive range of appropriate techniques, methods, models and tools . Application is effective and shows evidence of synthesis of different models.
Evidence of the level of critical analysis of the issues faced by the organisations in the case study
Quality of the definition of the key problems faced by the organisations in the case study
Appropriateness and justification of recommended changes and interventions to address the issues identified
Clarity and coherence of report , including use of English and Harvard Referencing scheme
Comprehensive, critical and original analysis of the issues, demonstrating excellent ability to synthesise evidence.
Selection of changes and interventions is creative and critical and clearly justified. Recommended interventions are creative and critical and clearly justified through relation to earlier analysis.
Written English style is clear, articulate and persuasive, and report is logically and coherently structured. Referencing is accurate and full.
Selection of changes and interventions is well justified. Recommended interventions are well justified through relation to earlier analysis.
Written English style is clear and effective and report is structured logically. Referencing is accurate.
[Pass] 50%-59%
Draws on range of appropriate techniques, methods, models and tools . Application is effective.
[Pass] 40%-49%
Draws on some appropriate techniques, methods, models and tools. There is some effective application in places.
Relevant critical analysis of issues Key aspects of the situation are identified and analysed. Critical analysis of issues may be partial and not always relevant. Some key aspects of the issues will be identified and described.
The problems are identified, related clearly to the preceding analysis. Problem definition is creative and shows excellent and critical awareness of alternative possible definitions and ability to synthesise these to produce clear definitions. Problems are identified and related clearly to the preceding analysis. Problem definition is thorough and shows some awareness of alternative possible definitions and ability to synthesise these to produce clear definitions. Problems are identified and defined.
Selection of changes and interventions are appropriate and some valid justifications are given. Selection of changes and interventions may be only partly appropriate; justification may be weak.
[Fail] 30%-39%
Draws on limited range of techniques, methods, models and tools. These may not always be appropriate. Application may be flawed in places.
Critical analysis of current situation is limited or flawed. Key aspects of the issues may be ignored.
Problems may not be clearly identified. Definition of the problems may be flawed.
Selection of changes and interventions may be inappropriate and / or not understood.
[Fail] 20%-29%
Inappropriate or / no techniques, methods, models and tools may be selected and/ or not applied to organisation. Knowledge and understanding may be lacking.
Little or no critical analysis of the issues.
No identification of problems or problems identified are irrelevant.
Selection of changes and interventions may be largely absent and / or irrelevant.
Written English style is clear and descriptive and report structure is clear. Referencing is generally accurate. English style is acceptable with minor problems of comprehension or expression. Report structure may lack clarity in places. There may be inaccuracies in referencing. English style may be weak and difficult to understand. The report may be presented poorly with many errors and structure may be unclear. Referencing may be inaccurate. English style may be weak and difficult to understand with some lack of semantic/ grammatical correctness. Report structure may be confused. Referencing may be very limited, inaccurate or largely absent.
[Distinction] 70% +
[Merit] 60%-69%
Extensive and effective critical analysis of the issues demonstrating ability to synthesise evidence.
Problem are identified. Definition of the problems may lack focus and clarity.
Supporting information Case 1 THE INDEPENDENT Terminal 5 fiasco: The new 'Heathrow hassle' Disappearing bags, 30 cancelled flights and passenger delays are not the way that British Airways wanted to open its new terminal at Heathrow. By Danny Fortson Friday, 28 March 2008 It was not the most auspicious of beginnings. By most measures it was a complete disaster. On the first day of operation from its new home at Heathrow's Terminal 5 – the gleaming, £4.3bn building that was nearly two decades in the making – British Airways was forced to cancel more than 30 flights due to what it termed a "staff familiarisation" issues. Check-in was temporarily suspended. The first flight to land in Paris arrived without luggage – one of three that took off sans baggage. Billed as a beginning of a new era for British aviation and a major step towards the banishing of the infamous "Heathrow hassle", this was not the way it was supposed to be. Complaints of hours-long waits and disappearing luggage were rife. The airline did its best yesterday to put a positive spin on the chaos, classifying the issues as inevitable teething problems, especially for the labyrinthine baggage system snaking through the Hyde Park-sized structure. Indeed, going from operating zero flights one day to 380 the next, there were going to be some hiccups. Yet critics, and there are many, seized on the delays and other complications as clear evidence that BA's shiny new building, with its sweeping views of London, wide open spaces and rows of luxury shops, will change little at the carrier, recently given the dubious distinction of losing more passenger bags than almost every other European airline. BA desperately needs Terminal 5 to work. So does its chief executive, Willie Walsh, who will rely heavily on the airline's new state-of-the-art base – it will ultimately be home to 90 per cent of BA's 550 daily flights from the airport – as he attempts to steer it through a gathering storm of rising oil prices and slowing economies on either side of the Atlantic. Earlier this month, the carrier issued a profit warning due to the skyrocketing price of jet fuel. Any hope of relief on that front was eliminated yesterday after the sabotage of a major oil-exporting pipeline in Iraq pushed the oil price back to more than $107 per
barrel, perilously close to the $120 per barrel level at which the airline has warned that it will lose all profitability. An economic slowdown in the UK and America – the latter its most important foreign market – has added to the gloom descending over the prospects for the company. Its share price has halved in the past year. The inauguration of a trademark hub on par with other major international airports is, it would seem, just what BA needed; a ballast against the strengthening headwinds. T5 is designed to handle up to 30 million passengers a year. But with its swish departure lounges, high-end shops such as Tiffany's and a Gordon Ramsey restaurant, it is clearly aimed at one client segment more than any other: business and first class passengers. Premium passengers, as they are called – those willing to pay several thousand pounds on top of the basic fare for some extra leg room and in-airport pampering – are the profit generators for BA. The airline just about breaks even on its economy fares, which have been forced down by no-frills carriers such as EasyJet and Ryanair. But premium customers have in recent years begun switching to ultra-modern European hubs like Amsterdam and Frankfurt for transfer flights to avoid the queues, drab surroundings, and risk of lost bags at Heathrow. Douglas McNeill, an analyst at Blue Oar Securities, said that T5 could get those passengers to come back. "One of BA's great strengths in recent months has been that premium traffic has remained very strong. Moving into Terminal 5 positions them more strongly in that market," he said. Indeed, since security was heightened in August 2006 after a plot to used liquid bombs to blow up airliners was foiled, Heathrow's infamy has reached new heights. Security queues have grown ever longer, giving passengers extra time to contemplate their shabby surroundings. With the Open Skies treaty set to take effect next week, a new era of increased competition for trans-Atlantic business from Heathrow will begin. T5 will give BA a timely leg up on rivals, who, stuck operating from Heathrow's older terminals, will look poor by comparison. Mr McNeill said: "Being associated with the 'Heathrow hassle' wasn't doing BA any favours. I suspect we'll now hear a lot less about that, except from the airlines that are still using the shabbier, older terminals." The airy new space will increase on-the-ground capacity, but it does nothing to address the bottleneck in the air. Heathrow is Europe's busiest airport but has just two runways. For a comparison, Amsterdam's Schipol is looking at putting in its seventh, despite handling just two-thirds of the traffic that Heathrow does. The upshot is that planes destined for the airport are much more likely to be stuck doing circles for half an hour over west London while they wait for their turn in the landing queue. The Government has expressed support for the construction of a third runway, but a fierce campaign by environmental protesters and local authorities means that it surely remains years in the offing, if it's ever built at all. The issues have greatly complicated Mr Walsh's efforts to streamline the business and increase its profitability. At the investor day earlier this month, he was forced to abandon his prediction that the carrier would achieve a 10 per cent profit margin next year. T5 will help on that account. Though BA will have to absorb an estimated £36m in costs 12
associated with the opening of the terminal this year, it will begin to realise cost benefits from 2009. Automation and greater efficiency will mean a reduction of about 700 jobs at the airport. Yesterday's opening was the end of an odyssey which began in the late Eighties, when the new terminal was mentioned for the first time in a government planning document. BAA, the airport operator, made its first planning application 15 years ago. After the longest public inquiry in UK history – four years – approval was finally given in 2001. Construction began in 2003.
CASE 2: Financial Times Heathrow Terminal 5 opening turns to farce By Kevin Done, Aerospace Correspondent. March 27, 2008. The opening of the showcase £4.3bn Terminal 5 at Heathrow airport on Thursday descended into chaos as mounting problems with the baggage system forced British Airways by early evening to turn away all passengers with check-in bags. The airline was forced to cancel 33 short-haul flights during the afternoon after having despatched some early morning flights without any of the passengers’ checked-in bags. As the problems grew the airline took even more drastic action in the early evening and at 6pm was forced to issue the highly embarrassing statement that flights from T5 would depart with hand baggage only “due to problems associated with processing customers’ baggage”. Passengers with check-in baggage were turned away on Thursday night and offered only refunds or a chance to rebook their flights to another date. For many months Willie Walsh, BA chief executive, has claimed that the opening of T5 would mark a turning in the airline’s fortunes and a “once-in-a-lifetime” opportunity to transform the passenger experience at Heathrow and restore its tarnished reputation. Instead BA was on Thursday night forced yet again to apologise to passengers for “the problems during Terminal 5’s first day of operations following one of the most complex and largest airport moves in history”. Neither the airline nor BAA, the airport operator, offered any explanation for the calamitous breakdown of the baggage systems at T5, and Mr Walsh’s reputation faces serious damage, if the airline’s planning is shown to be to blame for the debacle. 13
Privately one BAA official claimed that, apart from short-lived BAA system problems early in the day that led to three flights departing without any checked-in bags on board, its baggage systems had been functioning “perfectly”. He laid the blame on the airline’s lack of preparedness and staff shortages. Some BA ground staff at T5 confirmed this view and said that baggage services staff were spread much too thinly across the airport, where the airline was still continuing operations at the other terminals, chiefly T1 and T4, ahead of the transfer of the rest of the operations to T5 and some to T3. BA passengers using flights from T1 and T4 were unaffected by the events at T5. One passenger at T5, whose flight had just been cancelled, said on Thursday night that “gates were not available for some incoming aircraft. Staff were not properly trained, security systems were breaking down. It’s an absolute shambles.” Another passenger seeking to rebook a flight said: “BA has been saying for so long that this is a new beginning and it would solve all the problems. It seems to be worse than ever.” Heathrow is BA’s global hub and both the airline and BAA, the airport operator, have faced an avalanche of criticism for failing service standards during the past year, in which the airport and the airline have been the worst performers for service standards in terms of flight delays and misplaced bags in Europe. The disastrous launch of T5 is only the latest in a series of hugely problematic airport openings around the world, including the notorious Chek Lap Kok in Hong Kong, where severe baggage problems took several months to solve. END of Assessment.
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