Study Notes: DOM 511/6117 - Operations Management Practice (Part 1)

Based on the University of Nairobi MBA Course Outline (2023) and reference texts by
Nigel Slack et al., David Walters, and Owino Okwiri.

1. Overview of Operations Management

Definition: Operations Management (OM) is the business function responsible for

designing, operating, and continuously improving the systems that produce and deliver
the firm’s primary goods and services.

Core Concepts:

●​ OM involves the transformation process: Inputs → Transformation → Outputs.​

●​ Applicable in manufacturing, service, and hybrid systems.​

●​ OM aims to optimize the Five Performance Objectives: Cost, Quality, Speed,

Flexibility, and Dependability.​

Types of Transformation:

●​ Physical (Manufacturing)​

●​ Locational (Transport)​

●​ Exchange (Retailing)​

●​ Storage (Warehousing)​

●​ Physiological (Healthcare)​

●​ Informational (Telecommunications)​

OM vs Other Functions:

●​ Collaborates with marketing, finance, HR, and strategy.​

●​ Central to value creation and operational execution.​

Key Terminology:

●​ Input/Output Model​

●​ Operations Strategy​

●​ Process Hierarchy​

●​ High-contact vs Low-contact operations​

Example: A hospital transforms medical expertise and equipment (inputs) into health
services (outputs). Success depends on reliability, quality of care, and speed.

Summary:

●​ OM is foundational to organizational performance.​

●​ Affects strategic, tactical, and operational levels.​

2. Operations Strategy and Competitiveness

Definition: Operations Strategy is the long-term plan that determines how the operations
function contributes to business strategy by configuring resources and processes.

Strategic Perspectives (Slack et al.):

●​ Top-down (driven by corporate strategy)​

●​ Bottom-up (emerges from day-to-day operations)​

●​ Market requirements (external focus)​

●​ Operations resources (internal capabilities)​

Competitive Priorities:

●​ Cost: Efficiency, lean systems​

●​ Quality: Product and process excellence​

 ●​ Speed: Fast delivery and responsiveness​

●​ Flexibility: Range and volume adaptability​

●​ Dependability: Reliability in delivery​

Key Models:

●​ Hill’s Framework: Links marketing strategy to operations processes​

●​ Walters’ Value Strategy Model: Aligns value creation with market needs​

Jargon:

●​ Order Qualifiers: Minimum criteria to compete​

●​ Order Winners: Attributes that win business​

Examples:

●​ Amazon leverages speed and flexibility.​

●​ Toyota exemplifies quality and lean cost structures.​

Summary:

●​ A sound operations strategy aligns resources with market demands.​

●​ Enables sustainable competitive advantage.​

3. Product/Service Design Issues

Definition: Design determines the appearance, functionality, and production of goods or

services. It directly affects customer satisfaction and operational efficiency.

Design Process Stages:

1.​ Idea generation​

 2.​ Feasibility analysis​

3.​ Design and development​

4.​ Testing and refinement​

5.​ Launch​

Design Objectives:

●​ Match customer expectations​

●​ Optimize for manufacturing or service delivery​

●​ Minimize costs and environmental impact​

Jargon:

●​ DFM (Design for Manufacture)​

●​ DFSS (Design for Six Sigma)​

●​ Co-creation (customer involvement in design)​

Example: Dyson designs vacuum cleaners focusing on usability and advanced

engineering, reflecting both functionality and aesthetic appeal.

Summary:

●​ Good design aligns with market needs and operational capabilities.​

●​ Affects quality, cost, and speed of delivery.​

4. Facilities Location

Definition: Facility location is the strategic decision about where to situate operations to
optimize performance and costs.

Factors Influencing Location:

 ●​ Proximity to markets​

●​ Supply chain access​

●​ Infrastructure​

●​ Labor availability and cost​

●​ Legal and environmental regulations​

Location Techniques:

●​ Factor Rating Method​

●​ Center of Gravity Method​

●​ Break-even Analysis​

Example: Amazon locates fulfillment centers near major urban hubs to enable fast
last-mile delivery.

Summary:

●​ Location decisions have long-term financial implications.​

●​ Directly impact customer service levels and operational efficiency.​

5. Capacity Management

Definition: Capacity Management ensures that the operation has the ability to meet
demand.

Key Decisions:

●​ Design capacity: Maximum output under ideal conditions​

●​ Effective capacity: Realistic output considering constraints​

●​ Actual output: What is produced​

Formulas:

●​ Utilization = Actual Output / Design Capacity​

●​ Efficiency = Actual Output / Effective Capacity​

Capacity Strategies:

●​ Lead (ahead of demand)​

●​ Lag (after demand)​

●​ Match (incremental adjustments)​

Example: A hospital might expand operating rooms ahead of anticipated flu season.

Summary:

●​ Effective capacity management balances cost, demand, and service quality.​

6. Facilities Layout and Production Flows

Definition: Facility layout refers to the physical arrangement of resources within an

operation. The goal is to optimize flow, minimize waste, and ensure safety.

Types of Layouts:

●​ Fixed-position layout: Product remains stationary (e.g., shipbuilding)​

●​ Process layout: Similar processes grouped (e.g., hospitals)​

●​ Product layout: Sequential steps (e.g., car assembly line)​

●​ Cellular layout: Mini production units (e.g., machine cells)​

Flow Patterns:

●​ Straight-line​
 ●​ U-shaped​

●​ S-shaped (serpentine)​

Jargon:

●​ Throughput time: Total time to move an item through a process​

●​ Work-in-process (WIP): Inventory in the system​

Example: Fast food chains use product layouts to streamline food prep and service.

Summary:

●​ Effective layout improves productivity, safety, and customer satisfaction.​

7. Work Design

Definition: Work design involves structuring jobs to improve productivity, quality of life,
and employee motivation.

Job Design Strategies:

●​ Job enlargement​

●​ Job enrichment​

●​ Job rotation​

Work Study:

●​ Method study: Analyze how tasks are done​

●​ Work measurement: Determine standard time for tasks​

Ergonomics: Focuses on designing jobs that fit human capabilities.

Jargon:
 ●​ Standard time: Time allowed for a task, including rest​

●​ Therbligs: Basic motion elements used in work study​

Example: Call centers may rotate employees through tasks to reduce fatigue.

Summary:

●​ Smart work design enhances efficiency, safety, and morale.​

8. Operations Planning and Control

Definition: Operations planning and control (OPC) ensures that resources are used
effectively to meet demand.

Planning Horizons:

●​ Long-term: Facility decisions​

●​ Medium-term: Aggregate planning​

●​ Short-term: Scheduling and sequencing​

Key Activities:

●​ Forecasting​

●​ Loading​

●​ Scheduling​

●​ Monitoring​

●​ Rescheduling​

Jargon:

●​ MRP (Material Requirements Planning)​

 ●​ ERP (Enterprise Resource Planning)​

●​ Gantt Chart: Visual schedule tool​

Example: Airlines use OPC to assign crews, gates, and aircraft efficiently.

Summary:

●​ Effective planning and control balance supply and demand.​

9. Supply Chain Management (SCM)

Definition: SCM is the coordination of production, inventory, location, and transportation

among supply chain participants.

SCM Objectives:

●​ Improve customer service​

●​ Reduce costs​

●​ Enhance responsiveness​

SCM Activities:

●​ Sourcing and procurement​

●​ Inventory management​

●​ Logistics and transportation​

Types of Supply Chains:

●​ Push (forecast-driven)​

●​ Pull (demand-driven)​

Jargon:
 ●​ Bullwhip effect: Amplified demand variation​

●​ 3PL: Third-party logistics provider​

Example: Zara uses a fast fashion model with integrated supply chain visibility.

Summary:

●​ SCM is crucial for operational efficiency and competitiveness.​

10. Quality Management

Definition: Quality Management involves policies, processes, and procedures that ensure
products and services meet customer expectations.

Key Concepts:

●​ TQM (Total Quality Management)​

●​ Six Sigma: Data-driven approach to reduce defects​

●​ Continuous Improvement (Kaizen)​

Tools:

●​ Control charts​

●​ Cause-and-effect diagrams​

●​ Pareto analysis​

Jargon:

●​ Defect rate​

●​ Process capability​

●​ ISO 9001: International standard for quality systems​

Example: Toyota's production system is built on a foundation of quality.

Summary:

●​ Quality improves customer satisfaction and reduces cost.​

11. Project Management

Definition: Project Management applies tools and techniques to manage temporary,

unique endeavors.

Phases of Project Management:

1.​ Initiation​

2.​ Planning​

3.​ Execution​

4.​ Monitoring and control​

5.​ Closure​

Key Tools:

●​ Gantt Charts​

●​ Critical Path Method (CPM)​

●​ Program Evaluation and Review Technique (PERT)​

Jargon:

●​ Scope creep​

●​ Milestone​

●​ Slack time​

Example: Construction of a new plant follows structured project management phases.

Summary:

●​ Structured project management ensures timely, cost-effective delivery.​

12. Operations Revision and Continual Improvement

Definition: This involves evaluating and improving operations processes to enhance

performance over time.

Improvement Approaches:

●​ PDCA Cycle (Plan-Do-Check-Act)​

●​ Benchmarking​

●​ Six Sigma & Lean​

Organizational Enablers:

●​ Training​

●​ Culture​

●​ Leadership​

Jargon:

●​ Kaizen: Continuous, incremental improvement​

●​ Root Cause Analysis (RCA)​

Example: A telecom company uses benchmarking to identify best practices.

Summary:

●​ Continual improvement is essential for staying competitive and responsive.​