Design for Six-Sigma in the School of Computing, Engineering and Physical Sciences

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Design for Six-Sigmain the School of Computing,
Engineering and Physical Sciences
Operational management functions by Dr J. Whitty
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Lessons structure

• The lessons will in general be subdivided in to
  eight number of parts, viz.
• Statement of learning objectives
• Points of orders
• Introductory material (Functionality)
• Concept introduction (Operational functionality)
• Development of related principles (Business
  activates)
• Concrete principle examples via reinforcement
  examination type exercises
• Summary and feedback
• Formative assessment, via homework task

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Learning objectives
By the end of the session, are you able to

• Define label the product life cycle
• Classify products within the product life cycle
• Describe the three types of business activities
• Classify products into these business activities
• Answer Examination/Assignment type questions
  involving product lives and business sectors.

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Point of order
Draw a graph of the product life cycle and plot
the Following critical points 5 (D) Decline,
(G) Growth, (I) Introduction, (M) Maturity and
(S) Saturation.
Manufacturing systems technology Examination
Tameside College Feb 2003
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Management functionality
As the company get bigger different
departments need to be created to assume
responsibility of certain cluster of processes.
Often departments are organised around functional
areas. Each function is specialised and requires
own knowledge and set of skills, primary
responsibilities, processes and decision
domains. Regardless of how functions are
separated they must remain interrelated (and many
processes cut across boundaries). Coordination
and effective communication are critical andare
required to achieve the companys goals.
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Functionality of scale

• In large companies OM is usually responsible for
  transforming inputs into products and services.
• Accounting collects, summarises and
  interprets financial information.
• Distribution - deals with movement, storage and
  handling of inputs and outputs.
• Engineering - develops products and services.
• Human resources - hires and trains people
• Marketing - generates demand for the companys
  outputs.

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Small operational scale...

• Some companies never need to perform certain
  functions, others save money by subcontracting
  out e.g. legal services or engineering.
• In other companies such as small business owners
  might manage more than one function.
• OM managers draw on many skills to do their job.
  It is good career path to move o the ladder in
  many companies.

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Operations function management
The analogous here is the old form or function
when designing a specific product or service.
This will be covered in a later lecture show it
is worth pausing to discuss this a little further
here...
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Skill areas
From an OM viewpoint functionality is usually
described in terms of skill-sets, thus
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Business Activies
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Types of industrial sectors

• Primary Industry extractive industry
  extracting raw materials e.g. coal, fish
• Secondary Industry manufactured and
  construction industries processing raw
  materials into finished goods
• Tertiary Industry providing a direct
  commercial service
• Direct service offered direct to the public
  e.g. hairdressing, police service
• Commercial service offered to other businesses
  e.g. recruitment service

Some services can be both direct and
commercial. Within the UK there is a high
proportion of business in the tertiary sector
than the primary and especially the secondary
sector.
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Deindustrialisation
Class Activity

• Using the internet if required try to find a
  meaning to of the word Deindustrialisation in
  terms of the sectors we have just discussed.

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Deindustrialisation

• A long term reduction in the manufacturing
  sector.
• Why is this?
• Less Government support given to manufacturing
• Increase in imported products
• Importance of leisure time services increase
• Increase in small businesses service sector
  popular for business start ups

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• The chain of production the process of goods
  from primary industry through secondary and
  tertiary industry until the end product reaches
  the final consumer.
• Factors of production the resources needed for
  the production of goods and services.
• They include
• Land natural resources I.e. from the earth or
  ocean e.g. wood, fish
• Labour mental and physical effort e.g.
  employees
• Capital money available to invest in the plant
  and machinery
• Enterprise the business idea brings the other
  factors of production together.
• All of these resources are sold to be scarce thus
  businesses have to decide how to make best use of
  these resources.
• There is always an opportunity cost to the
  decision made.
• Opportunity cost the alternative that is
  scarified when a particular decision is made. For
  example if you have 25 to spend and you have a
  choice of a shirt or jumper. If you buy the
  jumper the opportunity cost is the shirt.

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Types of Economy
Class Activity

• Deindustrialisation coupled with the activates of
  a business just outlined enable generally THREE
  types of economy to be set up in your Buzz
  groups try to decide what these are.

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Types of Economy

• All countries operate in an economic system.
  There are 3 economic systems
• Market Economy
• An economy where there is NO Government
  intervention. Goods and services are provided in
  response to demand. Price is decided by supply
  and demand. The profit motives is very important
  to businesses. The problem can be that certain
  products and services may not be provided if they
  do not generate a profit. No real example, USA is
  the nearest
• Planned / Command Economy
• An economy where all decisions are government.
  They decide what to produce, how to produce it
  and in what quantities. All businesses are owned
  by the government. There can be a shortage of
  luxury products and services. E.g. Cuba
• Mixed Economy
• An economy where there is government (public) and
  private organisations operating together. Most
  economies are mixed economies but the production
  of that mix does vary. E.g. UK, France, Germany
  e.t.c.

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Private and Public Sector
Within the UK organisations can operate in the
public and / or private sector. That is why we
have a mixed economy.
Private sector Public sector
Sole trader Nationalised industries
partnership Central Government
Limited companies Plc and Ltd Local Government
Franchises
Co-operatives
All of these organisations operate in a market.
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Market

• Where buyers and sellers come together to
  exchange goods and services for a price.
• Types of market these buy and sell the
  following
• Consumer durable long lasting goods e.g.
  washing machines
• Consumer non durable goods consumed quickly
  e.g. food, clothes
• Industrial goods and services to other
  businesses
• Labour the use of people skills
• Capital - money

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Class discussion timeManufacturing and services

• The differences between manufacturing and service
  operations fall into seven categories, these
  being
• Physical nature
• Inventories
• Customer contact
• Response time
• Location
• Size
• Quality
• In your buzz groups discuss these and indentify
  any similarities that may exist between these
  types of business activities also.

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Continuum of characteristics
Intangible, perishable product Output that
cannot be inventoried High customer contact
Short response time Local markets Small
facilities Labour intensive Quality not
easily measured
Physical, durable product Output that can be
inventoried Low customer contact Long
response time Regional, national,
or international markets Large facilities
Capital intensive Quality easily measured
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Examination Type Questions

1. Carlton Press Ltd is a small publishing company
   specialising in educational books. Draw a diagram
   showing the typical stages of production and
   distribution of one of its books.

(5)
The stages in producing and distributing the
educational Books may be as follows
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(b) There are three kinds of business activity
involved in the production and distribution of
the books primary, secondary and
tertiary. Describe each kind of business activity
and give an example.
Kind of business activity Description Example
Primary
Secondary
Tertiary
(9)
Bolton Institute June 2000
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Summary and feedback
Have we met the following learning objectives?

• Define label the product life cycle
• Classify products within the product life cycle
• Describe the three types of business activities
• Classify products into these business activities
• Answer Examination/Assignment type questions
  involving product lives and business sectors.

By which slide did you achieve each on?
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Further Examination Type Questions
1. The table below shows the values of output and
levels of employment for the secondary and
tertiary sector in town of Woolford during the
period 1988 to 1994.
Year Output m Secondary sector employment Tertiary sector employment Total employment
1988 1800 28 500 46 500 75 000
1989 1836 28 860 49 140 76,000
1990 1876 29 520 52 480 82 000
1991 1848 27 150 50 850 78 000
1992 1820 25 160 48 840 74 000
1993 1836 24 750 50 250 75 000
1994 1844 24 320 51 680 76 000
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• How many people were employed in the secondary
  sector in 1988? (1)
• What was the total number of people employed in
  the town of Woolford in 1989? Show your working.
  (2)
• During the period 1990 to 1992 what happened to
• The value of output? (2)
• The total level of employment? (2)
• Using the figure in the table, describe what
  happened between 1990 and 1994 to each of the
  following
• Employment in the secondary sector (2)
• Employment in the tertiary sector (2)

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• Suzanne Hart had worked for Tastybread Bakeries
  ltd. In Woolford for eight years. She worked as a
  baker and later moved into the marketing
  department where she worked for three years
  before being made redundant.
• What is meant by being made redundant? (2)
• Give TWO reasons why Suzanne may have been made
  redundant. (2)
• After being unemployed for some time, Suzanne
  decided to start her own bakery, Aunt Sues,
  selling braed and confectionery from a small
  shop.
• (i) How might her experience with Tastybread
  Bakeries Ltd. Help her to start the new bakery?
  (4)

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Another Examination Type Question
2. Give one example of a business activity in
each of the following sectors. (3)
Sector Example
Primary
Secondary
Tertiary
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1. The graph below shows the values of output by
   sector in 1968 and 1998 in the economy of the
   town of Bowton.

Value of Output by Sector Economy of Bowton 1968
- 1998
Output (m at 1968 prices)
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• Describe the main changes that have taken place.
  (4)
• What are the reasons for the changes in the
  tertiary sector? (4)
• (c) The table below shows the levels of
  employment by sector, in 1968 and 1998, in the
  economy of the town of Bowton.

Working Population by sector Economy of Bowton
1968 1998
Primary sector 1 000 500
Secondary sector 9 000 4 000
Tertiary sector 10 000 16 000
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1. Describe the main changes in the levels of
   employment by sector that have taken place
   between 1968 and 1998. (4)
2. Explain, why the changes in employment in the
   secondary sector may have occurred. (4)
3. Are the changes in employment that have taken
   place a problem for the people of Bowton? Give
   reasons for your answer. (8)