INDG 401 Lecture Notes - Lecture 9: Scotiabank, Operations Management, Starbucks
9 Jun 2018
School
Department
Course
Professor
MGCR 472 – Operations Management
Introduction to OM
*Please note that these are complement notes to the slides.
Overcome Inefficiencies
Company A
• Highest responsiveness (better service)
• Hire more representatives
o Higher cost as a result
Company B
• Lowest responsiveness
• Lower cost
Company C
If we compare ourselves, competitor C are more responsive
And have higher labor productivity.
• There is something wrong with my process/design because my competitor can do much
better in terms of responsiveness and labor productivity.
• Therefore, there is a need to analyse my operations and fix them.
Process Views of Organizations
What is a Process?
The output needs to have a higher value than the input in order for the customers to buy the
product.
Example: The main materials for Honda cars are steel, rubber and plastic. They assemble and
process the materials to transform them into a car in order to sell them to customers.
General representation of any organization
The process view can define any activity of any organization that wishes to increase their value.
Defining a Process Scope
Identify if a process is efficient or not by defining the scope of the process.
Example: If you analyze the mortgage department of Scotia bank, you analyze the mortgage
applications.
When you define the process, you can go into details and find sub-processes.
If you identify any inefficiency, it is much better to go into the details in the analyses and focus
in the smaller departments rather than the big departments.
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The inputs: Mortgage applications
The outputs: Approved or Rejected loans
Between the inputs and outputs: Detailed sub-processes
Defining a Process’ Flow Unit
1. The boundaries of the analysis of a process
• If you want to assess the platform of any hospital unit, do you acssess one department
only or the whole hospital?
Ex: For the Starbucks coffee shop, are you going to focus on one coffee shop or the food and
sandwich section of the coffee shop?
2. Inputs and Outputs of the process
3. Defining a Process' Flow Unit
• Define one unit and follow it through the process to be able to assess the platforms of this
process
• They are generally defined by the products.
• If you analyze the process of any emergency department while assessing the platform of
this emergency department, what do you follow? How do you collect data?
Ex:
Flow Unit
Once you choose a flow unit, it must be consistant through the whole process.
Emergency Department
Output
Cured patient (or
still sick)
How do you assess a process?
Flow Rate/Throughput rate R
• Define the process with the number of units sold (coffees, sandwiches, etc.) at Starbucks
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find more resources at oneclass.com
o The flow unit would be a good.
o The output rate would be the measure of a process.
• Related with the total revenue.
Flow Time T
• Define the time that a customer spends in a coffee shop or the different steps of the
coffee shop.
o How long it takes to get the order?
o How long it takes to prepare the order?
o What is the total time that the customer spends in a Starbucks?
• Define the flow unit for Zara
o If the flow unit is a customer, the flow time would be how much time an average
customer spends in one Zara store?
o If the flow unit is an item, the flow time would be how much time does an average
good spends in the store before they are sold?
• Related with the cost.
• Make a comparison with the resources (input).
Inventory I
• Average number of customer at a Zara store at any time point
• Related with the cost
It is necessary to define the area to assess a performance measure.
Whenever we assess the performance, we always collect data for a long-time period.
In these types of analyses, we always use the AVERAGE.
Example from the Radiology Clinic
Input: Person (patient)
Radiology Clinic
1. Registration (reception area)
2. Wait
3. Change
4. Wait
5. Scan
6. Change
7. Reception area
Output: Person (patient) leaving
Assess the platform(performance) of the radiology clinic
• Boundaries: Radiology Clinic
• Flow Unit: Patient
o The patient goes through some activities in the radiology clinic.
• Input: Patient who needs a scan
• Output: Patient with scan
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
*please note that these are complement notes to the slides. Company a: highest responsiveness (better service, hire more representatives, higher cost as a result. If we compare ourselves, competitor c are more responsive. And have higher labor productivity: there is something wrong with my process/design because my competitor can do much better in terms of responsiveness and labor productivity, therefore, there is a need to analyse my operations and fix them. The output needs to have a higher value than the input in order for the customers to buy the product. Example: the main materials for honda cars are steel, rubber and plastic. They assemble and process the materials to transform them into a car in order to sell them to customers. The process view can define any activity of any organization that wishes to increase their value. Identify if a process is efficient or not by defining the scope of the process.
