L1

Module Overview
& L1Teaching

BUSI4490
Managing
Contemporary
Operations
 Presented by
Robin McKenzie

Assistant Professor, Operations Management, Nottingham University

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Available from 11.50
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 Who am I?

Revd Dr Robin McKenzie

L1 LE BUSI4490 Managing Contemporary Operations

 Getting to know each other: About Robin…

Places I have lived…

Winter
Gardens,
Sheffield
Family holidays…

King’s College,
Cambridge

Nottingham
 Getting to know each other: About Robin…

Revd Dr Robin McKenzie

My role: Assistant Professor in Operations Management
My background: Engineering, Industrial Marketing
Priest in Church of England
Other roles: Director of Senior Leader Degree Apprenticeship
(SLDA) MBA Programme
Previous role: Departmental Director of Teaching
Postgraduate Senior Tutor
How to contact me:
Email: robin.mckenzie@nottingham.ac.uk
Office: C21 Si Yuan Building, Jubilee Campus
 Moodle
our Virtual Learning
Envirnonment (VLE) 1
 Moodle page for our module

This is what you should see today

Go there now!
BUSI4490 Managing Contemporary Operations
Getting to know you…

Some questions
About you…

Welcome to Nottingham!
About you…

Where are you from?

• Go to Padlet L1 Student Introduction

What do you do before studying here in Nottingham?

• Go to Padlet L1 Student Introduction

Link
https://padlet.com/robinmckenzie/l1-student-introduction-7w91aizzb42ska7k
About you…

Which programme of study are you following?

MSc?
Industrial Engineering and Operations Management
Information Systems and Operations Management
Logistics and Supply Chain Management
Supply Chain and Operations Management
Food Production Management

• Hands up in the room!

About you…

It is good to capture your thoughts and feelings

at the start of anything new

so…
What does Operations Management mean to you?
• Talk to your neighbour

• Then put this in the Padlet

https://padlet.com/robinmckenzie/l1-operations-management-what-does-it-
mean-pru7gmj0qtkplhpz
 About you…

Final question here…

What are your hopes

for your time with Nottingham?
• Write these down –
1. Your programme of study see how your expectations shape up!

2. Your time in Nottingham

3. Your time in UK • Share with your fellow students?
• With your personal tutor
 Reminder of
information given…
 About our MSc programmes

• Contact Dr Anshuman Chutani, Course Director

• or Dr Altricia Dawson, Deputy Course Director
 Careers Services

1. University Careers Service

2. Our Nottingham University Business School (NUBS) Careers Service

• In Business School North
• Very good!
• Recommend you get to know Julie Blant and her colleagues
 Have you chosen your optional modules?

• Called ‘electives’
• Choose electives for Semester 2, opportunity to change later

One detail
For Industrial Engineering and Operations Management students
You now have the option to take
BUSI4466 Procurement and Purchasing (Semester 2)
You have been notified about this
 If you have difficulties or questions…

First!...
Try to work things out for yourself!

Then, ask your fellow students

• On your programme
• Who you live with

Further concerns, questions and reflections…

 Teaching, something is not clear?

Module related
• Look through the Moodle page carefully
• Contact the Module Convenor (me) or one of our teaching colleagues

With your MSc Programme

• Dr Anshuman or Dr Altricia

General issue or concern

• Contact Dr Luc Muyldermans – Departmental Teaching Director (DTD)
• Prof Thomas Chesney – Head of Department
 How do I make it through the year?

• MSc is a long year

• Continuous and demanding
(this may be different from your undergraduate studies)
• You will feel tired, take breaks or other recreation when you can
 About a personal issue

Something that may affect your ability to study?

• Contact your personal tutor,
• and (or) Our Support and Wellbeing Team
support-socialsciences@nottingham.ac.uk

If you witness anything of concern

• Use Report + Support
https://reportandsupport.nottingham.ac.uk/
• Can do so either…
 I need a reference, who do I ask?

• You can approach any academic colleague for a reference

• For example, your dissertation supervisor
• They are at liberty to say ‘no’

• Ask your personal tutor

• This person is required to provide a reference for you
• They will be able to write a better reference if they know you
 ‘I shall be late in submitting an assignment’

• Fill out an Extenuating Circumstances (EC) form, as soon as you can

https://www.nottingham.ac.uk/studentservices/contact-us/extcirc-form.aspx
• You must do this before the deadline
i.e. no retrospective granting of EC
Your are required to provide evidence; this can follow later
(only exception to possible late submission is if you fall ill on the day of an exam)
• Only applies to unforeseen and unavoidable issues
 Moodle
our Virtual Learning
Envirnonment (VLE) 2
 Moodle page for our module

This is what you should see today

Go to Moodle for:
• Module Outline
• Teaching materials
• Assignment details
• Submission of assignments and exam

Make sure you are registered for this module

• Any difficulty, contact Student Services
Welcome and Introduction
 Presentation of teaching on Moodle

Each Teaching Week has 2 sections

 Presentation of teaching on Moodle

Main section Support section

• Link to recording of lecture • Precorded videos (from Covid-19 teaching)

• Slides from lecture Not caption corrected
• Accompanying slides
• Links to online videos
 L1 Support material

L1 V4 OM… Example, Marmalade

L1 V5 OM… Other examples
Lots of examples from different applications
L1 V6 Characteristics of an operation
L1 V7 Performance Objectives/
Competitive Priorities
L1 V8 Structural/infrastructural choices
L1 V9 OM Looking to the future
L1 V10 Operations resilience
L1 V11.1 How does Ryanair compete?
Questions
 Each week for teaching, entries for Moodle

Each week there is a different topic • Number of videos each week to review
• Though a topic may last over two weeks • Some are optional (specified)
• Each are captioned (though not corrected)
Separate section for each week
• Summary is given underneath on Moodle,
with a duration
• Slides from video are provided
• Separate link to videos or other material
mentioned
 Exams are online, what does this mean?

See later slide

 Module overview
summary

L1 BUSI4490 Managing Contemporary Operations

 Module overview

Assessment
11 x 2 hour lectures
• Formative (practice) individual essay
3 formal cases
• Summative (graded) group assessment (30%)
1 visit
More of this in due course
• 24 hour online exam (70%)
 Module Outline

Change to view of Module Outline on

Moodle
 (Teaching) Week by Week 1

• Lecture 1 Fundamentals of Operations Management (OM)

Introduction
• Lecture 2 Process design and analysis I: Products and Services
Case introduction: Zara
• Lecture 3 Resilience, Business Theory
• Lecture 4 Process design and analysis II: Process Mapping
• Teaching Week 4 Seminar 1
Case: Zara
• Lecture 5: Lean: Central paradigm in OM
 (Teaching) Week by Week 2

• Lecture 6 Techniques of Lean

Case introduction: Fernández-Vega Eye Institute, Spain
Case introduction: McDonald’s restaurants
Visit: McDonald’s restaurant
• Lecture 7 Quality and Services Management
Case: McDonald’s restaurants
• Teaching Week 7 Seminar 2
Case: Fernández-Vega Eye Institute, Spain
• Lecture 8 Resilience - Models
• Lecture 9 Challenges in Operations Management
3D Printing, Big data, Industry 4.0, Brexit…
• Lecture 10 Guest speaker, Contemporary example within Operations Management
• Lecture 11 Review of Module, Revision
 Lecture time, What to Expect 1, Before?

In advance, posted on Wednesday on Moodle before teaching on the Friday

• Slides for Lecture
• Videos with accompanying slides
 Lecture time, What to Expect 2, On the Day?

On the day
• We meet for 1 hour 50 minutes; Start at 12noon; Finish at 1.50pm
• Teaching for the week
• Discussion of taught material
• There may be some work set for the following week

Administration
• Lecture recording on Echo 360
• QR code, for logging your attendance
 Lecture Engagement time, What to Expect 3, Afterwards?

After Lecture
• Recording will be posted on Moodle
• Review your notes, and material on Moodle
• Prepare any work for the following week
 Module Learning Objectives

• See Module Outline

 How to ‘do’ case studies…

We will… You will…

• Provide a copy of the case • Read case study prior to the seminar

• Introduce the case study • Make notes and questions as you read
and questions to be addressed • Analyse and problem-solve
• Introduce relevant theory in in in the seminar
engagement sessions • Engage with the seminar, by asking
• Provide an environment for discussion questions or raising points of interest
• Highlight learning points
 Case studies…

Case
Seminar 1: Zara
Studies
• Clothing retailer
• Find out how it is so good at delivering ‘fast fashion’
• Teaching Week 4

Seminar 2: Fernández-Vega Eye Institute, Spain

• Provides specialist eye care in Spain
• Case looks at how Operations Management principles can be
applied to this service setting
• Teaching Week 7

Both case studies are provided beforehand

 Visit & Case

McDonald’s
• World’s largest chain of restaurants 36000
• Serves 3.5 million people a day in UK

• You will need to go to a MacDonald’s

• At your own expense!

• Lecture 7
 Exam

• Set within the Assessment period,

University Weeks 17 & 18 (second half of January 2023)
• 24 hour on-line exam
• This could be over a Saturday
• Question paper is provided at the start of the time
• You only have one opportunity to submit
• The penalty for late submission is zero marks

Much more nearer the time

 Set text

Nigel Slack, Alistair Brandon-Jones, Nicola Burgess (2022),

Operations Management, 10th edition, Pearson
• 3 electronic versions available
• 10 print versions in Business Library

Standard text set for OM

• 1st edition published 1995
• Recommended text if you are involved with OM

Plenty of previous editions

9th edition Nigel Slack and Alistair Brandon-Jones (2019)
• Limited change in content
 Background Reading

Matthias Holweg, Jane Davies, Benn Lawson,

Arnoud De Meyer, Roger Schmenner, (2018), Process Theory,
The Principles of Operations Management, Oxford
• Summary of theory within OM
• Introduces 10 Principles of OM
• From OM people at Cambridge University

Other texts will be suggested

 Feedback

L1 BUSI4490 Managing Contemporary Operations

 Feedback on your learning 1?

• Lecture
• Space for you to participate, contribute and engage
• In-class and before class questions
• Feel free to ask questions!
• Seminars
• Read the case beforehand
• Come prepared
• Mid-term feedback
• Formative assessment
• Verbal feedback on Moodle
• Revision session at the end of term
• Teaching Week 11
• From each other!
• Discuss your queries with each other!
• Create informal study groups to discuss the Review Questions outside of lectures
 Feedback on your learning 2?

More formal ways

• Feel free to email myself with suggestions

• Let me know during the Lecture if something is not working
• My details are on the slides here

• Talk to your course representative - or become one!

• They can present your feedback to the Course Director
• They can present your feedback at the Learning Community Forum (LCF) meetings
(scheduled once a semester)

• End of module evaluation SEM

• You will be given time to do this in class
• Previous cohorts of students have helped you
• Your turn to help students who come next year and in the years following
Teaching for
this week
An example…
 Food - Marmalade…

Seville oranges
bitter to taste

Seville

First made Dundee, 1760s Marmalade jar

Seville orange trees in the courtyard of Seville Cathedral
 Food - Marmalade…

Number of people using jam, honey and spreads in the United Kingdom
(UK) between 2013 and 2017, by product type (in 1,000)

Marmalade: 10M people, approximately 65M

equivalent to 15% UK population

Paddington Bear statue

Paddington station
 Food – Marmalade products: how things used to be…

Women peeling oranges

at marmalade factory, Dundee Machine for cutting
and separating oranges
Queen visits
marmalade factory, Dundee 1955
 Food – Marmalade products: today…

Duerr’s
Marmalade
pre-processed 2013

Fill single machine Lid machine MacKays, Arbroath, near Dundee

170 jars a minutes 2013
 Food - Marmalade…

Marmalade home making China 2014 European market channels for

jams, jellies, purées and marmalades, 2017

McKays: zero exports in 1998

Now produce 25million jars of all types
30% is exported to 84 countries
Characteristics of Operations…

58
 Characteristics of Operations…

Part, area, section, department of any organisation

which ‘delivers’ the core product or service

The Process

Inputs

Outputs

The Operation 59
 Characteristics of Operations…

Each of these activities can be an Operation

The Process

Inputs Outputs

The Operation
60
Characteristics of OM
 Operations Management

• The design, operation, and improvement of all processes required to

create and deliver a product (or service)to the end customer
• A product can be a manufactured good or a service, but generally is a
hybrid of both
• Operations is concerned with the transformation of inputs into goods
and services desired by customers
• Is a primary business function
• Involves the greatest portion of the company's employees and capital
assets (70-80%)
• And often forgotten:
but determines the day-to-day service level for the customer!
The Process

A process…

…is the sequence of operations and involved events,

taking up time, space, expertise or other resources,

which lead/(should lead) to the production of some outcome

 Input-Transformation-Output Model

Management System
Filter

Transformation
Value-added
(Supply Chain) Inputs Outputs (Market)

Examples:
manufacturer; food
Context producer
hairdresser;
Transformed Resources Transforming Resources Goods and Services insurance broker;
Materials Facilities transport business
Information Staff
Customers
Transforming Resources 2

The two main types of transforming resources are:

1. Facilities
 Such as buildings, machines/ equipment and
process technology

2. Staff
 All the people involved in the operations process
 In services the customer may well be involved as a
transforming resource
 Transformed Resources

(Supply Chain) Inputs

Materials
• physical (e.g. manufacturing)
• location (e.g. transportation)
• ownership (e.g. retail)
• storage (e.g. warehousing)
Customers
Information • physical (hairdresser)
• property (e.g. accountants) • storage (e.g. hotels)
• possession (e.g. market research) • location (e.g. airlines)
• storage (e.g. libraries) • physiological state (e.g. hospitals)
• location (e.g. telecommunications) • psychological state
(e.g. entertainment)
 V6 Goods versus Services Outputs (Market)

Pure Goods Pure Services

• Tangible • Intangible
• Can be stored • Cannot be stored
• Production precedes • Production and consumption are
consumption simultaneous
• Low customer contact • High customer contact
• Can be transported • Cannot be transported
• Quality is evident • Quality difficult to judge

A product can be a manufactured good or service,

but is generally a hybrid of both
 Continuum Goods and Services

PURE GOODS PURE SERVICES

COAL MINING

AUTOMOBILE MANUFACTURE

TAKEAWAY FOOD

RESTAURANT

DENTIST

MANAGEMENT CONSULTANCY

PSYCHOTHERAPY

David Barnes, 2008, Operations HAIRDRESSER, LAWYER

Management, p. 9, adapted
 Operations Management
Other Examples…

L1 V5 BUSI4490 Managing Contemporary Operations

Operations in manufacturing…
Operations in a restaurant..
Operations in Hospital Accident & Emergency
 Manufacturing, making things…

Washing machines

Automotive assembly line

Grand pianos…

Semiconductor
production
machines Metal press
 Food… bakery, and ready meals
Pork pies Baking biscuits

Bread making
Warburton’s Enfield bakery, London

Ready meals Handling croissants

 Logistics, moving things

Rail

Road

Shipping Ever Act, Evergreen Marine

World’s largest container ship
23992 containers 235579 tonnes, length 400m

Flight

Boeing’s 787 Dreamliner

The ‘last mile’ supply chain
Warehousing, storing things…

Tesco
Amazon

Packages Grain storage, UK farm

from distributor RS Components Ikea
Services…
Arsenal verses
Birmingham City 1933

Flights
Imperial Airways 1935

Nottingham workhouse c1906

Designed for 1791 inmates

Lyons Corner House 1942

Services…
Flights
Heathrow
airport

Glastonbury Music Festival

135000 tickets sold
How many people are flying at any one time?
(Pre-Covid-19)
500000, conservative estimate
about twice population of Nottingham
https://www.quora.com/How-many-people-are-in-the-air-flying-at-any-given-time

Hospitals

McDonald’s
 Retail…Tesco!...

From the air, this one is

at Osterley, Brentford, nr London

1 hour delivery service, London,

from this Reading distribution centre
Large things…
Shard, London
2009-2012 310m

The City of London

Akashi Kaikyō Bridge

Olympics World’s longest suspension bridge
3911m opened 1998
New products and services…
New credit card
Chase Sapphire
Reserve

A14 upgrade
34km (21mile)
costing up to £1.8billion

30% reduction
in sugar 2018

Enko running shoe,

launched 2016
Performance Objectives
 Question for you to consider…

Think of a product or service you have bought or used recently…

…why did you choose your supplier and not others?

…did you have a choice of supplier?

…are you happy with your decision? Why?

…if there was a problem, on which of the Performance Objectives did this fail?

Padlet
https://padlet.com/robinmckenzie/product-or-service-6g9mxazbm04wxct0
 In OM, can we do everything equally well?

For example?…
• Have local sourcing versus global sourcing
(be responsive, or low cost)
• Having low operational cost v. high inventory
(what are the optimal lot sizes in production?)
• Have high inventory v. low ordering cost
(what are the optimal order quantities?)
• Have high capacity utilisation v. low inventory cost
(loss of set-up v. cost of inventory)
• Have high customer service v. low operational cost
(response time v. order fulfilment)
Answer…

No!

We have to choose!

How do we choose?
 Operation’s Strategic Objective and Performance Objectives

‘The first responsibility of any operations management team is to understand

what it is trying to achieve. This involves two sets of decisions.
1. The first (of these) is to develop a clear vision of what role the operation is to
play in the organization, that is broadly how should the operations contribute to
the organization achieving its long-term goal.
2. The second is to translate the organization’s goals into their implications for
the operations’ performance objectives.’
(Slack et al. 1995, italics in original)
 Performance Objectives/ Competitive Priorities

Why two names for the same set of attributes?

Focuses on different aspects:

Performance Objectives
• Focuses on the internal aspects of the organisation

Competitive Priorities (Holweg et al. 2018)

• Relates these internal aspects to the competition and wider environment
 Performance Objectives/ Competitive Priorities

The overarching or fundamental aspect of how any company competes

Performance…
• Because these are a critical self-evaluation of how the organisation is performing
Objectives…
• Because these provide an explicit outcome for both the continuing processes within the
operation and the final output

Competitive…
• Because these signal how operations relate to the competitive positioning of the organisation
Priorities…
• Because these are fundamental choices, whether they are made consciously or not
 Performance Objectives

Cost Quality
▪ Efficiency ▪ Product quality (how good?)
▪ Process quality
(as good as promised?)

Flexibility (Variety) Delivery: Speed & Dependability

▪ Customer heterogeneity ▪ Delivery speed
▪ Ability to change ▪ On-time delivery
(volume/product mix / ▪ Availability
design) ▪ To the correct location
 Quality

Both:
• Quality of the design of the product or service,
• Quality of the process that delivers the product or service

• From a customer perspective quality characteristics

include reliability, performance and aesthetics

• From an operations viewpoint quality

how closely the product or service
meets the specification required by the design,
termed the quality of conformance
 Delivery I: Speed

Speed
is the time delay
between a customer request for a product or service and
then receiving that product or service

• Advantage of speed
• reduces costs,
eliminates costs associated with make-to-stock systems
• reduces delivery time, leading to better customer service
 Delivery II: Dependability

Dependability
• consistently meeting a promised delivery time
for a product or service to a customer
• Increase in delivery speed may not lead to customer satisfaction
if not produced in a consistent manner
• Dependability can be measured
% customers that receive
a product or service within the delivery time promised
• Customers sometime want specified time of delivery, not speed
e.g. wet concrete for construction
• Leads to better customer service
customer can trust that the product or service will be delivered as expected
 Flexibility

• Being able to change what the operation is able to do

The following types of flexibility can be identified:
o product or service - to be able to quickly act in response to changing
customer needs with new product or service designs
o mix - to be able to provide a wide range of products or services
o volume - to be able to decrease or increase output in response to changes
in demand
o delivery - this is the ability to react to changes in the timing of a delivery
• Flexibility can be measured in terms of:
range (the amount of the change) and
response (the speed of the change)
 Cost

• The finance required to obtain the inputs

(i.e. transforming and transformed resources)
and manage the transformation process
which produces finished goods and services

• All companies (and organisations) much attend to cost

• About 20% (roughly) in any industry or sector

compete primarily on cost
 Question for you to consider…

Think of a product or service you have bought or used recently…

…if there was a problem, on which of the Performance Objectives did this fail?

Padlet
https://padlet.com/robinmckenzie/li-performance-objectives-h53t8pzwfnolqra5
 Performance Objectives: Trade-offs…

• Traditional thinking is that these Performance Objectives are mutually exclusive

in other words…
…You can have some and not others

• Called trade-offs…

Whilst trade-offs still exist,

our understanding today is more nuanced…
 Distinguish Order Winners from Order Qualifiers

Order Qualifiers: ‘hygiene factor’, needed to be considered by customer

Order Winners: distinguishing factors that drive customer choice

Order
winning
criteria
Number of orders

Order
qualifying
criteria

Specification - features
 Are Trade-offs Binding? - Cumulative Capabilities

The Sandcone Model (Ferdows & DeMeyer, 1991)

• Trade-offs are not symmetrical: capabilities build on one another
• Such firms asked a new question - What capabilities can we use to attack new markets?
• Implications for role of operations within the firm

Key Lesson - Tradeoffs between performance variables can be shifted, but never disregarded
 Unseen importance of Operations Decisions

‘What appears to be routine [operations] decisions

frequently come to limit the corporation’s strategic options, binding it
with facilities, equipment, personnel, and basic controls and policies
to a non-competitive posture which may take years to turn around.’
-- Wickham Skinner, HBR, May-June 1969

Kodak:
Nokia: missed the Smartphone missed electronic photography On-line v. bricks & mortar
 Structural/
Infrastructural
 Strategic to Operations Decisions

Specific operations requirements have two general categories:

• Structural –
Decisions related to the delivery process, such as characteristics of
facilities used, selection of appropriate technology, and the flow of goods
and services

• Infrastructural –
Decisions related to planning and control systems of operations
 Structural & Infrastructural: Main Characteristics

Structural Infrastructural

‘Hardware’ of the operations ‘Software’ of the operations

Decisions based on… Decisions based on

• High capital
• Shorter term
• Long term (less frequent) • More frequent

• Less capital

- But no less difficult to change!

 Structural & Infrastructural: Main Areas…

Structural Infrastructural

• Location • Workforce

• Capacity • Quality management

• Technology • Organisational structure

• Network Relations • Policies/ Procedures

Adapted from Hayes & Wheelwright (1984)

 The Concept of “Strategic Fit”

• Companies within the same industry have different

strengths/weaknesses, and choose to compete in different ways
• Each production system embodies different operating characteristics,
and a different set of priorities and trade-offs
• Operations strategy aims for a reconciliation between the operations
capabilities, competitive situation, and business strategy

• No one operating system is

universally superior under all
competitive situations and for all
companies
 Operations Strategy Framework

Functional Strategies
Competitors How these concepts fit
Operations
Customers Management into company strategy?
Financing
Marketing Structural
Location
Performance
Objectives: Capacity
Performance

Processes
Cost Product Technology
Business Measures:
Corporate Quality
Unit Price Network Relations
Strategy Design Flexibility
Strategy Efficiency
Vol Flexibility
Effectiveness
Delivery Place Infrastructural
Service
Promotion Quality Mgt.
Tradeoffs exist! Org Structure
Workforce
Policies /Proc.
Feedback loop
 Operations Strategy is …

“… the decisions which shape

the long-term capabilities
of the company’s operations
and their contribution to overall strategy
through
the on-going reconciliation
of
market requirements and operations resources …”
- Slack and Lewis, 2002
 Role of Operations Director/Manager

• Develop operations capability in

alignment with market position
(strategic, operational and routine)
• needs to influence Corporate
Strategic decision making
• Select initiatives and manage their
implementation
• Maintain and continuously improve
existing operations
 Preparation
for next week
 V11.1 How does Ryanair compete?

Questions to answer…

1. What is Ryanair’s competitive position in the market?

2. What is its Performance Objectives within its Operations?

How does it achieve these in practice?

3. List Ryanair’s Structural and Infrastructural aspects of its operation

We will go through answers to these next week

L1 What we have
learnt?
 L1 Fundamentals of Operations Management

• Transformation Process

• Goods and Services: what are they? How do they differ?

• Performance Objectives, also called Competitive Priorities

• Quality, Delivery (Speed & Dependability), Flexibility, Cost
• Have to choose, trade-offs
• Build one on another
• Order Qualifiers and Order Winners

• Structural and Infrastructural

• OM, fit within the business

Next week…
 Next week…

Process Analysis 1

• Much more on Products and Services!

Good luck with your time here in Nottingham!

Robin McKenzie