KEY ENVIRONMENTAL FACTORS AFFECTING OPERATIONS MANAGEMENT

Volume Variation Variety Customer Contact

VOLUME

Volume refers to the number of times that anoperation has to deliver a service of product.

An operation dealing with high volume should bedesigned to process the demands placed upon itmore speedily than the operation meeting lowerVolume

The combination of specialization, standardization

and high volume opens up the possibility of using technology to perform the task.

VARIATION

Variation describes the pattern of the volumedemands.

If there are many peaks and troughs in demand the

situation is said to be one of high variation.

Carrying extra capacity in the times of low demand is inherently expensive, involving under-utilization of key resources such as staff, technology and facilities.

VARIETY

Variety is the term applied to the number ofdifferent types of service or product demand

Coping with high variety is a more challengingmanagerial task than dealing with low variety

An operation facing high variety has to be designed to provide the appropriate level of flexibility

CUSTOMER CONTACT

The customer contact dimension is concerned with

how much time the personnel of the operation have

to spend with their customer.

The more that customer get involved therefore, the

greater is the challenge to the planning and control

of the operation manager.

TASK

What are the implications for the McDonald’s operation if its customer move towards low

volume, high variation, high variety and high customer contact features?

TO REFRESH YOUR KNOWLEDGEWHAT IS VALUE CHAIN?

A value chain is a chain of activities.

The goal is to analyze the activities through which firms can create a competitive advantage, it is useful to model the firm as a chain of value-creating activities.

VALUE CHAIN ANALYSIS

VALUE CHAIN ANALYSIS

The operations manager have to know how theoperation’s activities fare under this calculation.

The way in which the inbound logistics effect the

value structure of operations have to be analysed.

VALUE CHAIN ANALYSIS

The effects of the supporting activities of thecompany structure, human resource

management,technology development and purchasing have to

beassessed.

The effect of operational activities on the valuecalculations of the downstream functions ofoutbound logistics, marketing and sales andcustomer service have to be evaluated.