Operations Management: Planning and Control

Hello, we continue with our discussion. So once we have looked at the operations design and other concepts under operations management that we are focusing on or we are building upon is the planning and control. So as operation design tends to look at the organization of the business, as the design tends to determine the physical form and the structure of the process, Here, in terms of the planning and the control, we are interested in looking at putting those processes into action. We are interested in putting those processes into action on a continuous basis so that products can be manufactured or services can be provided to meet the needs of clients. So it is important for us to look at the concept of planning and control. Now, to make a little distinction between the planning and control with the design, Design will basically look at the passive activity that primarily aimed at determining the broad limits of the operations process. But the planning and control, on the other hand, will look at the process, operational process physically so that products can be manufactured or services can be rendered. And we've also talked to the fact that we can also discuss the fact that when you talk of operations planning and control, operation planning and control will... basically try to reconcile two entities, which are these two entities. We have the demand side and the supply side. So the supply side, these are the products manufactured or services provided in the operations business process. And on the demand side, they are the specific needs of actual and potential customers and clients for a product or services. So we are saying that the planning and control. what it tries to do is that it tries to reconcile the activities of both the supply side and the demand side. Sorry for the background noise. Now, in trying to reconcile, there are three dimensions that we can look at. We can look at it in terms of the volume, in terms of the timing, in terms of the quantity, quality. Now, in terms of the volume, so the volume is basically the quantity of products or services. And in terms of timing, when... the goods and services or when the products can be provided. And in terms of the quality, whether it is consistent with consumers'expectation, whether it is consistent with consumers'expectation. So the reconciliation role of planning and control is what I've been discussed here, the supply of product and the demand for product, which is seen in this chart. Now, as we talk about the reconcile nature, then in terms of the first two rules, or in terms of the first two dimensions, volume and timing, we can talk about the fact that they are integrated in three performing tasks. Now, this three performing tasks that we are looking at is the loading tasks, the sequencing of tasks, and the scheduling of tasks. So the loading of tasks here, it refers to the volume or the quantity of work allocated to a particular work center. So if you are a hospital or a doctor, in terms of the number of clients you need to have service, you want to see one client at a particular point in time. So one-on-one consultation. In terms of the sequence of and tax, the sequence of tax refers to the sequence in which tasks are performed. So the sequence in which tasks are performed. So when you go to a bank, maybe we use what we call the first come. approach or first come first serve approach you are in a queue the first person gets this and and service followed by those preceding and followed by those after him so we can also talk about the scaling of tasks and the scaling of tasks here refers to the use of detailed roaster that indicates when a particular specific task should be done and when it should be completed so for example um a roaster that is um you schedule an appointment. So there's a scheduled appointment if you want to see a doctor, if you want to see a practitioner. That tax that is being performed when you schedule it in terms of a roaster is what we have determined as the scheduling tax. So after we've determined or tried to explain what the planning and control does, it's important for us to also look at the capacity in terms of planning and control. So the capacity here is basically interested in how many can be produced. or how much can be produced and in terms of the um for f we know that our machine um has its limits or has its uh uh production level so in terms of the uh capacity so for example in terms of escom what is escom's capacity maybe they are producing about eleven thousand um megawatts of electricity or 20,000 megawatts of electricity, that capacity, that amount that it can produce is what we are trying to look at. So in terms of that capacity, we can also explain this capacity in terms of business management. And in terms of business management, it's what we are saying that is the maximum level of value-added activity over a period of time that the process can achieve under normal operating circumstances. So under normal operating circumstances, in terms of the final goods, in terms of the amount that the firm can produce, is what we are referring to as a capacity. Now, so the nature and capacity is for us to also understand the nature of this capacity. How do we therefore try to understand this capacity? To understand the nature of this capacity, it is important to know that Every machinery, every equipment that I use can be used for maybe a longer period. You must know the nature of the machines that are being installed. So if your machine can produce maybe 10,000 tons of maize, 50,000 tons of maize in a day, you know what it can do and you must know how to run. So in terms of operations management, it is important for you to know the capacity. And the capacity to maybe also be informed by the demand forecast, that is the level of demand that people will be demanding. So you must know the forecast for the demand and the forecast should be accurate. The forecast should be accurate so that you'll be able to minimize regular fluctuations. Because if you know that, for example, the S-com electricity in winter period, the demand is higher compared to in normal circumstances. So they have to increase the capacity. and they have to increase the demand for electricity so that we can be able to meet the demand that comes with it. Now, in terms of the normal days, that is the summer, the demand for electricity reduces because people don't tend to put on their heater or their water heater or their room heater on. They're able to, the demand for that reduces. So you must know the peak. period in which went to increase and this understanding the capacity is basically informed by quantitative data so this quantitative data basically gives us information on the expected demand it also gives us the required capacity to sustain satisfied so the quantitative data give you the and the expected demand and the required capacity to satisfy now in terms of understanding the how to satisfy the expected demand you can look at it in terms of three steps. The first step is the total demand and required the capacity must be determined. So you might determine the total demand and the required capacity must also be determined. Now in the second step is for you to also identify alternative capacity plans. You must have alternative capacity plans must be determined. So in having alternative capacity plans to be determined is which gives us three levels of um levels of plans. So we have the A level capacity plan, a chase demand plan, and a demand management plan. So determine the alternative capacity under the A level capacity plan. Here, what happens is that the capacity levels are kept at constant and demand fluctuations are ignored. Now, under the chase demand plan, under these circumstances here capacity levels are adjusted according to fluctuations in demand. Under the Chase demand plan capacity levels are adjusted according to the fluctuations in demand and the demand management plan here demand is adjusted to tie in with the available capacity. Demand are adjusted to tie in with available capacity. So the third step in terms of the In terms of satisfying the expected demand, the most suitable approach to capacity planning and controls must be selected. So now the three steps is when we determine the total demand and required capacity, we identify the alternative plans, and now we need to select the suitable approach in terms of capacity planning and control. must be selected. Now, once we are able to determine the nature of the capacity, we should also understand certain techniques and methods that are used in capacity planning and control. So some of these methods include what we call the moving average demand forecasting technique. And with the moving average demand forecasting technique, basically, you base your current consumption or the current demand on the previous in demand on the previous demand. And, or you can also have what you call the cumulative representation of demand and capacity. So with the cumulative demand representation capacity, basically you tend to evaluate the effect of different capacity plans graphically. So you tend to use graphs to show how capacity tends to operate. Then you can also have, I mean, inventory. And inventory, I've also talked about the fact that the supply chain must be controlled. So inventory is basically the stocks and the stock of either the raw materials and the raw materials, the finished goods, those that are being kept, you must also take notice of them. Now we move to discuss the quality of planning and control. Now this is also one important aspect in terms of the capacity or in terms of planning and control. Now in terms of quality, quality basically is interested in the value that has been added to the product. Is it conforming to customers'expectations? So when it is being conforming to the customers'expectations, that is the good. I mean, the customers are really satisfied with the goods that are being produced. Then it means that the good is of high quality. And as a firm, you should be responsible, you should be concerned about the quality. So the quality... and another responsibility is for you to reduce this quality gap and the quality gap is the expected quality and the perceived quality so the expected quality is what the consumers basically may be expecting and what they perceive you should be able to try to reduce this quality gap so operations management in conjunction with other functional areas should endeavor to eliminate any quality gap so which means that it is not just the role of the operations management but in terms of operations management, should work with other functional areas. And with those other functional areas, they tend to improve the quality of the product. In improving the quality of the product, what are the steps that must be considered? So the first step is defining the quality characteristics. So you must define the quality characteristics. What are some of the quality characteristics? You must define the performance ability, appearance, how it appears, reliable, reliability. continuous performance capabilities that is the product is reliable how durable it is um the serviceability what what it can do or the contact convenience for interaction so for example a product like iphone now you can talk about the you must define the qualities in the and define the qualities of an iphone you must look at the functional the performance ability what they can do so if iphone testing comes there is something that it can do that maybe the 12 cannot do. So that is the quality that people expect. So in terms of the appearance, it's going to have a different look than the other. In terms of reliability, you realize that there's always an upgrade and there's the performance that the 12 can do, 13 can do, and there's an upgrade. So the reliability, the life expectancy, how long can you use it? Then that serviceability. and contact, so convenience for interaction. So that is the first part of determining the product quality. Now, another second step is measuring the quality characteristics of the product or services. So in measuring the quality characteristics of the product or services, they should put in place some measurement control so that it can be able to determine what the individuals perceive. or what the possible firms can want. So what are they? How do you therefore measure this quality? You can, first of all, maybe break the product into seven qualities, certain aspects that you can measure them in terms of the, for example, a motor car. You can break it into different aspects. What is the fuel consumption? What is the road ability? Even in terms of my household appliances such as refrigerator, you can measure the quality by looking at in terms of the energy consumption of the fridge, in terms of the carbon emission, in terms of the other aspects. So these are some of the things in measuring the quality. You can also look at the setting standards for each quality. So setting standards for each quality, then there should be, I mean, you should have a request for zero defects. That is, you set certain standards so that there will be no zero effects. The standards that are being set, the quality standard of the characteristic standard. You have to set up a high grading standard. So that standard should not go below the settings that you are standing. It should not go below the settings you are standing. Then the first step is controlling the quality against set standard. So in controlling the quality against standard, one thing that you should be able to look at is where is the pricing process should once checked and should each individual product or services provided to be checked. or determine where the standards are met and then also you the whether the services that are being rendered so you must put in place certain control mechanisms to ensure that the qualities and the quality standard are i mean set or close to their the standard another thing that you can also do in terms of the steps of equality is identifying and rectifying the cause of poor quality then there's always a chance for there to be some error and for you to have, you must rectify the poor quality. So even in terms of if you take an Uber, you need to rate it. If an online package, you realize that they are just trying to rectify poor services or poor qualities that are being rendered to customers. Then the sixth step is continuously improving the quality. And this is, I mean, a very important thing about business that the improving of a quality is very, it's continuous and it's not just a one day step. It's not just a one-day step. Now we are going to look at how to improve the concept of improvement and operations improvements. Now, operations improvements, we are going to look at the techniques, approaches and techniques involved. And basically, we are going to talk about it in terms of this angle. We are going to look at it from the preventing and the processes of becoming worse, the failures and prevention. The top quality management and the processes of making. the system better. So these are the things we are going to look at in terms of how to improve operations. So before you can improve your operations, then it is important to determine the current performance. So performance management is a prerequisite for any improvement. So in measuring performance managers, ascertain the extent to which the present operations processes are satisfied. Do the current operations processes are satisfied? As far as quality, services, adaptability, lead time, cost, variability are all concerned. So there are different types of performance standards. So in terms of the performance standards that we are talking about, in terms of how to improve upon the quality, you must first of all, we are saying that before you improve the quality, you must be able to... ascertain the performance of current performance. So you must have a performance measurement and the performance measurement is going to guide you as to how to improve upon. So there are four different types of performance standards. And these four different types of performance standards, we have the historical performance standards, we have the target performance standards, we have the competitor performance standards, and we have the absolute performance standards. What is the historical performance standard? So the historical performance standard is when The present performance is compared with the particular business-owned previous year's performance. So what you produce today, you compare it with what you produced yesterday, and check whether it has been a better system. So, for example, on an iPhone, the iPhone product, iPhone 4X came. iPhone 4 came, iPhone 4X came. Today, we are in iPhone 30. It tends to improve upon what was previously. produce and that is i mean the standard of iphone 12 is going to be higher than that of iphone 4x you tend to prove upon what you have produced then we have the target performance standard so target performance standard here um present performance is compared with predetermined standards so which indicates the accessibility or visibility level of of performance so the predetermined standard so which means that we try to set up our own standard we set up um the uh a standard and we try to see how what we have produced basically match up with what we intended to so that what we intended to gives you the target performance standard then we also have the competitor's performance standard basically clear here you compare yourself with people who are in the same businesses with you so maybe iphone compares itself with Samsung. They are both producing phones. How Samsung features in terms of the latest Samsung, how its features differ from that of the latest iPhone and that performance standard. So you're trying to improve upon your performances by comparing people within the same competitors so that there needs to be a benchmark for you in terms of what you want to do in terms of the near future. You also have the absolute performance standard and here current performance is compared with the theoretical. maximum achievable performance standard. So here you compare the current performance with the theoretical maximum achievable standard. So we need to improve the priority areas to improve. Now one thing we should know is that it is not everything, all areas of business that we improved but there are areas that are actually important to the customers and basically you must find means of trying to elicit information from customers to know the particular areas in which needs to be improved. So those particular areas needs to be improved are basically what we are terming as the priority for improvement needs to be determined or priority areas need to be determined. Now when we determine these priority areas basically we can have two divergent views. we can have the breakthrough improvement or the continuous improvements. So the breakthrough improvement here we are saying that large scale changes occur. It's a dramatic large and it's dramatic and the large scale changes occur in the functioning of operations but not very regular. So a dramatic and a large scale changes that occur and may not occur on a large scale and the changes will occur on the large scale but not a regular thing. So for example, whenever maybe there's a change in technology, you realize that there's a large scale change and which may not occur regularly. And we can also look at the continuous improvement. So continuous improvement is also termed as the occasion improvement. Here, it is more regular, but there's a small and an incremental change that takes place in the functioning of the operation process. So it is the change is not regular, but there's a small and a regular change that occurs. So what are the small regular changes? So for example, like what happens in an iPhone, you realize that there have been continuous change and there have been small increments. So you realize that the difference between an iPhone 12 and 11 is just something small that they may add, just maybe the looks or something, then it just cancels, something small. So that is what we call the continuous improvement concept, the continuous improvement approach. In undertaking your business or in running the transformation or in terms of the field activity, one thing that may occur and we need to identify and recover is the concept of failure prevention and recovery. Machines are machines, they're automated, they can shut at any time and realize that a fault may happen and when that happens it can illustrate a halt in business. these breakdowns keep occurring and we need to identify and make sure that we limit the breakdown that occurs in this functional process. So we have different types of failures that may occur and these failures may be as a result of a design failure. And when we talk of design failures, for example, iPhone Galaxy Note 7 was withdrawn due to a design error. then a new Galaxy M7 had a designing error. So this occurs when the design of the process is found to be wrong or inadequate. So when you design something and you realize that there's a defect on that design in terms of how it may and the functionality of that product, you need to withdraw it from the market and that happens to the Galaxy Note 7. So it has been withdrawn. Sometimes the failures can be factored in. a facility failure. So in terms of the facility failure, such as we are talking about the component of the facility itself, that is the machines, equipment, when any of them breaks down, it's an example of what we are determining as the facility failure. Or sometimes maybe a failure resulting from lightning strike put all the computers or the service providers out of action, then it means that there's a facility failure. Sometimes there's also going to be staff failures and the staff failures here is basically when there's a mistake or a meet. when mistakes are made or procedures are not followed. So workers are not properly trained or their jobs, they don't have the required skills. It can lead to some staff failures. We can also talk about suppliers'failures. So whenever maybe the supplier do not provide products or services according to the agreements, it can affect their business process and leads to failure in their job. And we can also have customer or client failures. So customer or client failures is when the supplier fails to provide the right services use of a product or services incorrectly. So when the customers use the services or products incorrectly or do not use it for the purpose for which it was designed for. So in terms of African setting, you realize the rice cooker, people use it for cooking of other food. And other food, they use it to cook other food. They don't use it for cooking just rice. And when that can lead to some failure in the activity. So when there's a failure, then they tend to blame that. oh the 10 is not of quality it's not of the needed or because the rice cooker for example has certain temperatures that you use i've seen people who are using um their heaters to and they are cooking he tries to cook and they put egg in it to cook their egg it will cook and all right but i mean it has its limit or it has a data functional and failures with this failure detection it is also important for you to to put in mechanisms to identify this system. You should also put in operations to determine the cause of the failure. You should also, because one causes and the consequences of one failure can be established, operations should try to prevent them in the first place. So if you can be able to detect these consequences, if you're able to determine these failures, you should be able to prevent it at all costs. Then you should also put in place certain contingency plans. should be put in place so that it can be able to minimize the potential and effects that will be on customers because some if you don't prevent this you may end up losing your customers so it is important for us to put in place to minimize the potential detrimental effects so This brings us to the concept of the total quality management, which we are going to be the final concept we are discussing under the operations management. So this is another important aspect in the sense that the primary aim of satisfying the needs and expectations of consumers or customers by means of high quality products. So the total quality management is basically a philosophy that ensures that high quality products or goods are being produced. And in terms of. ensuring that you have to put in place quality teams, quality systems, quality technical measures, so that all of them, when they work in tandem, then we ensure that high quality goods are produced. So in defining the total quality management aspect, in terms of defining total quality management, primarily we aim at looking at the meeting. meeting the needs and expectations of our consumers and clients. We aim at also covering all parts of the businesses, regardless of how small or seemingly insignificant they are. We also aim at making each and every employee in the business quality cautious and holding him or her responsible for his or her contribution to the achievement of the total quality management. We must also aim at identifying an accountant for all costs and quality, both... prevention and failure as cost doing things right the first time we were muscle mass we do things right the first time and developing the implementing systems and procedures for quality and the improvement thereof and also establishing a continuous process for quality improvement establishing a continuous process for quality improvement we can go on to try to look at the the the iso 9,000 quality management standards, quality management system standards. Now, with this quality management system standard, we can first of all even look at the SAFs, that is the South African Bureau of Standards, the South African Bureau of Standards, which is a leading African standardization body which tries to, I mean, benefit South Africans in the global market, trying to ensure that high-quality goods are produced and integrated into other business functions. So we have the international standard for quality. management that is used throughout the world and laid down the requirement for the top quality management system. It's what we refer to as the ISO 9000 series. So it has internationally standard requirements that are laid down to ensure that only quality goods are produced. Now, in terms of these quality goods, we can look at it in terms of five main headings, the documentation requirement, the management responsibility, the resource management, the product realization, and the measurement analysis improvement. Now, in the implementation of the total quality management, there are factors that should be taken into consideration. That is the integration of the TQM in all overall business strategy, so that everybody who is involved in the business strategy will be cautious of the quality of goods, of ensuring quality standard. Top managers and employees support their involvement. Top managers and employees should also be involved in teamwork in terms of improvement initiatives. There should be some teamwork in terms of improvement initiatives, feedback on the quality success that has been achieved. In terms of what you give in, there should be feedback. In fact, there has been achieved communication. There should be some form of communication. in the creation of quality awareness so there should be a creation of quality awareness and there should also be training of employees in quality techniques and methods so you train employees in quality techniques and method and all of this is aimed to ensure the quality standards so once the good is of quality standard then they are i mean guaranteed of the needed market you have the the trust of customers and they are having their you ability to expand and let your business grow. So far in terms of the concept of business management, we have looked at the operations management, we have looked at the operations design, we have also looked at the planning and control, we have also looked at the detection errors. failures and how to recover. We have looked at in terms of what should go in to ensure the quality of the product. On that note, we end our lecture for today and we'll gather on the end.

We are interested in putting those processes into action on a continuous basis so that products can be manufactured or services can be provided to meet the needs of clients. So it is important for us to look at the concept of planning and control. Now, to make a little distinction between the planning and control with the design, Design will basically look at the passive activity that primarily aimed at determining the broad limits of the operations process. But the planning and control, on the other hand, will look at the process, operational process physically so that products can be manufactured or services can be rendered.

And we've also talked to the fact that we can also discuss the fact that when you talk of operations planning and control, operation planning and control will... basically try to reconcile two entities, which are these two entities. We have the demand side and the supply side. So the supply side, these are the products manufactured or services provided in the operations business process. And on the demand side, they are the specific needs of actual and potential customers and clients for a product or services.

So we are saying that the planning and control. what it tries to do is that it tries to reconcile the activities of both the supply side and the demand side. Sorry for the background noise. Now, in trying to reconcile, there are three dimensions that we can look at.

We can look at it in terms of the volume, in terms of the timing, in terms of the quantity, quality. Now, in terms of the volume, so the volume is basically the quantity of products or services. And in terms of timing, when... the goods and services or when the products can be provided. And in terms of the quality, whether it is consistent with consumers'expectation, whether it is consistent with consumers'expectation.

So the reconciliation role of planning and control is what I've been discussed here, the supply of product and the demand for product, which is seen in this chart. Now, as we talk about the reconcile nature, then in terms of the first two rules, or in terms of the first two dimensions, volume and timing, we can talk about the fact that they are integrated in three performing tasks. Now, this three performing tasks that we are looking at is the loading tasks, the sequencing of tasks, and the scheduling of tasks.

So the loading of tasks here, it refers to the volume or the quantity of work allocated to a particular work center. So if you are a hospital or a doctor, in terms of the number of clients you need to have service, you want to see one client at a particular point in time. So one-on-one consultation.

In terms of the sequence of and tax, the sequence of tax refers to the sequence in which tasks are performed. So the sequence in which tasks are performed. So when you go to a bank, maybe we use what we call the first come. approach or first come first serve approach you are in a queue the first person gets this and and service followed by those preceding and followed by those after him so we can also talk about the scaling of tasks and the scaling of tasks here refers to the use of detailed roaster that indicates when a particular specific task should be done and when it should be completed so for example um a roaster that is um you schedule an appointment. So there's a scheduled appointment if you want to see a doctor, if you want to see a practitioner.

That tax that is being performed when you schedule it in terms of a roaster is what we have determined as the scheduling tax. So after we've determined or tried to explain what the planning and control does, it's important for us to also look at the capacity in terms of planning and control. So the capacity here is basically interested in how many can be produced.

or how much can be produced and in terms of the um for f we know that our machine um has its limits or has its uh uh production level so in terms of the uh capacity so for example in terms of escom what is escom's capacity maybe they are producing about eleven thousand um megawatts of electricity or 20,000 megawatts of electricity, that capacity, that amount that it can produce is what we are trying to look at. So in terms of that capacity, we can also explain this capacity in terms of business management. And in terms of business management, it's what we are saying that is the maximum level of value-added activity over a period of time that the process can achieve under normal operating circumstances. So under normal operating circumstances, in terms of the final goods, in terms of the amount that the firm can produce, is what we are referring to as a capacity. Now, so the nature and capacity is for us to also understand the nature of this capacity.

How do we therefore try to understand this capacity? To understand the nature of this capacity, it is important to know that Every machinery, every equipment that I use can be used for maybe a longer period. You must know the nature of the machines that are being installed. So if your machine can produce maybe 10,000 tons of maize, 50,000 tons of maize in a day, you know what it can do and you must know how to run. So in terms of operations management, it is important for you to know the capacity.

And the capacity to maybe also be informed by the demand forecast, that is the level of demand that people will be demanding. So you must know the forecast for the demand and the forecast should be accurate. The forecast should be accurate so that you'll be able to minimize regular fluctuations. Because if you know that, for example, the S-com electricity in winter period, the demand is higher compared to in normal circumstances. So they have to increase the capacity.

and they have to increase the demand for electricity so that we can be able to meet the demand that comes with it. Now, in terms of the normal days, that is the summer, the demand for electricity reduces because people don't tend to put on their heater or their water heater or their room heater on. They're able to, the demand for that reduces. So you must know the peak. period in which went to increase and this understanding the capacity is basically informed by quantitative data so this quantitative data basically gives us information on the expected demand it also gives us the required capacity to sustain satisfied so the quantitative data give you the and the expected demand and the required capacity to satisfy now in terms of understanding the how to satisfy the expected demand you can look at it in terms of three steps.

The first step is the total demand and required the capacity must be determined. So you might determine the total demand and the required capacity must also be determined. Now in the second step is for you to also identify alternative capacity plans. You must have alternative capacity plans must be determined.

So in having alternative capacity plans to be determined is which gives us three levels of um levels of plans. So we have the A level capacity plan, a chase demand plan, and a demand management plan. So determine the alternative capacity under the A level capacity plan.

Here, what happens is that the capacity levels are kept at constant and demand fluctuations are ignored. Now, under the chase demand plan, under these circumstances here capacity levels are adjusted according to fluctuations in demand. Under the Chase demand plan capacity levels are adjusted according to the fluctuations in demand and the demand management plan here demand is adjusted to tie in with the available capacity. Demand are adjusted to tie in with available capacity.

So the third step in terms of the In terms of satisfying the expected demand, the most suitable approach to capacity planning and controls must be selected. So now the three steps is when we determine the total demand and required capacity, we identify the alternative plans, and now we need to select the suitable approach in terms of capacity planning and control. must be selected.

Now, once we are able to determine the nature of the capacity, we should also understand certain techniques and methods that are used in capacity planning and control. So some of these methods include what we call the moving average demand forecasting technique. And with the moving average demand forecasting technique, basically, you base your current consumption or the current demand on the previous in demand on the previous demand.

And, or you can also have what you call the cumulative representation of demand and capacity. So with the cumulative demand representation capacity, basically you tend to evaluate the effect of different capacity plans graphically. So you tend to use graphs to show how capacity tends to operate.

Then you can also have, I mean, inventory. And inventory, I've also talked about the fact that the supply chain must be controlled. So inventory is basically the stocks and the stock of either the raw materials and the raw materials, the finished goods, those that are being kept, you must also take notice of them.

Now we move to discuss the quality of planning and control. Now this is also one important aspect in terms of the capacity or in terms of planning and control. Now in terms of quality, quality basically is interested in the value that has been added to the product. Is it conforming to customers'expectations?

So when it is being conforming to the customers'expectations, that is the good. I mean, the customers are really satisfied with the goods that are being produced. Then it means that the good is of high quality. And as a firm, you should be responsible, you should be concerned about the quality.

So the quality... and another responsibility is for you to reduce this quality gap and the quality gap is the expected quality and the perceived quality so the expected quality is what the consumers basically may be expecting and what they perceive you should be able to try to reduce this quality gap so operations management in conjunction with other functional areas should endeavor to eliminate any quality gap so which means that it is not just the role of the operations management but in terms of operations management, should work with other functional areas. And with those other functional areas, they tend to improve the quality of the product. In improving the quality of the product, what are the steps that must be considered?

So the first step is defining the quality characteristics. So you must define the quality characteristics. What are some of the quality characteristics?

You must define the performance ability, appearance, how it appears, reliable, reliability. continuous performance capabilities that is the product is reliable how durable it is um the serviceability what what it can do or the contact convenience for interaction so for example a product like iphone now you can talk about the you must define the qualities in the and define the qualities of an iphone you must look at the functional the performance ability what they can do so if iphone testing comes there is something that it can do that maybe the 12 cannot do. So that is the quality that people expect.

So in terms of the appearance, it's going to have a different look than the other. In terms of reliability, you realize that there's always an upgrade and there's the performance that the 12 can do, 13 can do, and there's an upgrade. So the reliability, the life expectancy, how long can you use it? Then that serviceability.

and contact, so convenience for interaction. So that is the first part of determining the product quality. Now, another second step is measuring the quality characteristics of the product or services. So in measuring the quality characteristics of the product or services, they should put in place some measurement control so that it can be able to determine what the individuals perceive. or what the possible firms can want.

So what are they? How do you therefore measure this quality? You can, first of all, maybe break the product into seven qualities, certain aspects that you can measure them in terms of the, for example, a motor car.

You can break it into different aspects. What is the fuel consumption? What is the road ability?

Even in terms of my household appliances such as refrigerator, you can measure the quality by looking at in terms of the energy consumption of the fridge, in terms of the carbon emission, in terms of the other aspects. So these are some of the things in measuring the quality. You can also look at the setting standards for each quality. So setting standards for each quality, then there should be, I mean, you should have a request for zero defects.

That is, you set certain standards so that there will be no zero effects. The standards that are being set, the quality standard of the characteristic standard. You have to set up a high grading standard. So that standard should not go below the settings that you are standing.

It should not go below the settings you are standing. Then the first step is controlling the quality against set standard. So in controlling the quality against standard, one thing that you should be able to look at is where is the pricing process should once checked and should each individual product or services provided to be checked. or determine where the standards are met and then also you the whether the services that are being rendered so you must put in place certain control mechanisms to ensure that the qualities and the quality standard are i mean set or close to their the standard another thing that you can also do in terms of the steps of equality is identifying and rectifying the cause of poor quality then there's always a chance for there to be some error and for you to have, you must rectify the poor quality. So even in terms of if you take an Uber, you need to rate it.

If an online package, you realize that they are just trying to rectify poor services or poor qualities that are being rendered to customers. Then the sixth step is continuously improving the quality. And this is, I mean, a very important thing about business that the improving of a quality is very, it's continuous and it's not just a one day step.

It's not just a one-day step. Now we are going to look at how to improve the concept of improvement and operations improvements. Now, operations improvements, we are going to look at the techniques, approaches and techniques involved.

And basically, we are going to talk about it in terms of this angle. We are going to look at it from the preventing and the processes of becoming worse, the failures and prevention. The top quality management and the processes of making. the system better.

So these are the things we are going to look at in terms of how to improve operations. So before you can improve your operations, then it is important to determine the current performance. So performance management is a prerequisite for any improvement.

So in measuring performance managers, ascertain the extent to which the present operations processes are satisfied. Do the current operations processes are satisfied? As far as quality, services, adaptability, lead time, cost, variability are all concerned.

So there are different types of performance standards. So in terms of the performance standards that we are talking about, in terms of how to improve upon the quality, you must first of all, we are saying that before you improve the quality, you must be able to... ascertain the performance of current performance. So you must have a performance measurement and the performance measurement is going to guide you as to how to improve upon.

So there are four different types of performance standards. And these four different types of performance standards, we have the historical performance standards, we have the target performance standards, we have the competitor performance standards, and we have the absolute performance standards. What is the historical performance standard?

So the historical performance standard is when The present performance is compared with the particular business-owned previous year's performance. So what you produce today, you compare it with what you produced yesterday, and check whether it has been a better system. So, for example, on an iPhone, the iPhone product, iPhone 4X came. iPhone 4 came, iPhone 4X came.

Today, we are in iPhone 30. It tends to improve upon what was previously. produce and that is i mean the standard of iphone 12 is going to be higher than that of iphone 4x you tend to prove upon what you have produced then we have the target performance standard so target performance standard here um present performance is compared with predetermined standards so which indicates the accessibility or visibility level of of performance so the predetermined standard so which means that we try to set up our own standard we set up um the uh a standard and we try to see how what we have produced basically match up with what we intended to so that what we intended to gives you the target performance standard then we also have the competitor's performance standard basically clear here you compare yourself with people who are in the same businesses with you so maybe iphone compares itself with Samsung. They are both producing phones.

How Samsung features in terms of the latest Samsung, how its features differ from that of the latest iPhone and that performance standard. So you're trying to improve upon your performances by comparing people within the same competitors so that there needs to be a benchmark for you in terms of what you want to do in terms of the near future. You also have the absolute performance standard and here current performance is compared with the theoretical.

maximum achievable performance standard. So here you compare the current performance with the theoretical maximum achievable standard. So we need to improve the priority areas to improve.

Now one thing we should know is that it is not everything, all areas of business that we improved but there are areas that are actually important to the customers and basically you must find means of trying to elicit information from customers to know the particular areas in which needs to be improved. So those particular areas needs to be improved are basically what we are terming as the priority for improvement needs to be determined or priority areas need to be determined. Now when we determine these priority areas basically we can have two divergent views. we can have the breakthrough improvement or the continuous improvements.

So the breakthrough improvement here we are saying that large scale changes occur. It's a dramatic large and it's dramatic and the large scale changes occur in the functioning of operations but not very regular. So a dramatic and a large scale changes that occur and may not occur on a large scale and the changes will occur on the large scale but not a regular thing.

So for example, whenever maybe there's a change in technology, you realize that there's a large scale change and which may not occur regularly. And we can also look at the continuous improvement. So continuous improvement is also termed as the occasion improvement. Here, it is more regular, but there's a small and an incremental change that takes place in the functioning of the operation process.

So it is the change is not regular, but there's a small and a regular change that occurs. So what are the small regular changes? So for example, like what happens in an iPhone, you realize that there have been continuous change and there have been small increments.

So you realize that the difference between an iPhone 12 and 11 is just something small that they may add, just maybe the looks or something, then it just cancels, something small. So that is what we call the continuous improvement concept, the continuous improvement approach. In undertaking your business or in running the transformation or in terms of the field activity, one thing that may occur and we need to identify and recover is the concept of failure prevention and recovery. Machines are machines, they're automated, they can shut at any time and realize that a fault may happen and when that happens it can illustrate a halt in business.

these breakdowns keep occurring and we need to identify and make sure that we limit the breakdown that occurs in this functional process. So we have different types of failures that may occur and these failures may be as a result of a design failure. And when we talk of design failures, for example, iPhone Galaxy Note 7 was withdrawn due to a design error.

then a new Galaxy M7 had a designing error. So this occurs when the design of the process is found to be wrong or inadequate. So when you design something and you realize that there's a defect on that design in terms of how it may and the functionality of that product, you need to withdraw it from the market and that happens to the Galaxy Note 7. So it has been withdrawn.

Sometimes the failures can be factored in. a facility failure. So in terms of the facility failure, such as we are talking about the component of the facility itself, that is the machines, equipment, when any of them breaks down, it's an example of what we are determining as the facility failure.

Or sometimes maybe a failure resulting from lightning strike put all the computers or the service providers out of action, then it means that there's a facility failure. Sometimes there's also going to be staff failures and the staff failures here is basically when there's a mistake or a meet. when mistakes are made or procedures are not followed. So workers are not properly trained or their jobs, they don't have the required skills. It can lead to some staff failures.

We can also talk about suppliers'failures. So whenever maybe the supplier do not provide products or services according to the agreements, it can affect their business process and leads to failure in their job. And we can also have customer or client failures. So customer or client failures is when the supplier fails to provide the right services use of a product or services incorrectly. So when the customers use the services or products incorrectly or do not use it for the purpose for which it was designed for.

So in terms of African setting, you realize the rice cooker, people use it for cooking of other food. And other food, they use it to cook other food. They don't use it for cooking just rice.

And when that can lead to some failure in the activity. So when there's a failure, then they tend to blame that. oh the 10 is not of quality it's not of the needed or because the rice cooker for example has certain temperatures that you use i've seen people who are using um their heaters to and they are cooking he tries to cook and they put egg in it to cook their egg it will cook and all right but i mean it has its limit or it has a data functional and failures with this failure detection it is also important for you to to put in mechanisms to identify this system.

You should also put in operations to determine the cause of the failure. You should also, because one causes and the consequences of one failure can be established, operations should try to prevent them in the first place. So if you can be able to detect these consequences, if you're able to determine these failures, you should be able to prevent it at all costs. Then you should also put in place certain contingency plans. should be put in place so that it can be able to minimize the potential and effects that will be on customers because some if you don't prevent this you may end up losing your customers so it is important for us to put in place to minimize the potential detrimental effects so This brings us to the concept of the total quality management, which we are going to be the final concept we are discussing under the operations management.

So this is another important aspect in the sense that the primary aim of satisfying the needs and expectations of consumers or customers by means of high quality products. So the total quality management is basically a philosophy that ensures that high quality products or goods are being produced. And in terms of.

ensuring that you have to put in place quality teams, quality systems, quality technical measures, so that all of them, when they work in tandem, then we ensure that high quality goods are produced. So in defining the total quality management aspect, in terms of defining total quality management, primarily we aim at looking at the meeting. meeting the needs and expectations of our consumers and clients.

We aim at also covering all parts of the businesses, regardless of how small or seemingly insignificant they are. We also aim at making each and every employee in the business quality cautious and holding him or her responsible for his or her contribution to the achievement of the total quality management. We must also aim at identifying an accountant for all costs and quality, both... prevention and failure as cost doing things right the first time we were muscle mass we do things right the first time and developing the implementing systems and procedures for quality and the improvement thereof and also establishing a continuous process for quality improvement establishing a continuous process for quality improvement we can go on to try to look at the the the iso 9,000 quality management standards, quality management system standards.

Now, with this quality management system standard, we can first of all even look at the SAFs, that is the South African Bureau of Standards, the South African Bureau of Standards, which is a leading African standardization body which tries to, I mean, benefit South Africans in the global market, trying to ensure that high-quality goods are produced and integrated into other business functions. So we have the international standard for quality. management that is used throughout the world and laid down the requirement for the top quality management system.

It's what we refer to as the ISO 9000 series. So it has internationally standard requirements that are laid down to ensure that only quality goods are produced. Now, in terms of these quality goods, we can look at it in terms of five main headings, the documentation requirement, the management responsibility, the resource management, the product realization, and the measurement analysis improvement.

Now, in the implementation of the total quality management, there are factors that should be taken into consideration. That is the integration of the TQM in all overall business strategy, so that everybody who is involved in the business strategy will be cautious of the quality of goods, of ensuring quality standard. Top managers and employees support their involvement. Top managers and employees should also be involved in teamwork in terms of improvement initiatives. There should be some teamwork in terms of improvement initiatives, feedback on the quality success that has been achieved.

In terms of what you give in, there should be feedback. In fact, there has been achieved communication. There should be some form of communication.

in the creation of quality awareness so there should be a creation of quality awareness and there should also be training of employees in quality techniques and methods so you train employees in quality techniques and method and all of this is aimed to ensure the quality standards so once the good is of quality standard then they are i mean guaranteed of the needed market you have the the trust of customers and they are having their you ability to expand and let your business grow. So far in terms of the concept of business management, we have looked at the operations management, we have looked at the operations design, we have also looked at the planning and control, we have also looked at the detection errors. failures and how to recover.

We have looked at in terms of what should go in to ensure the quality of the product. On that note, we end our lecture for today and we'll gather on the end.

Transcript for:Operations Management: Planning and Control

Transcript for:
Operations Management: Planning and Control