Operations Management Module

MBA7061







February 2014
Module Resource Book


2
Operations Management


Module Aims:

This module provides a comprehensive introduction to Operations Management as
practised in organisations. It provides an overview of key aspects of operations
management from both manufacturing and service sectors perspective within modern
organisations. The module considers operations strategy in the broadest sense. The
broad aims of the module are:

To develop and introduce and develop a critical understanding operations
management for modern organisations in a variety of sectors of activity;
To consider operations strategy in its broadest sense and relate this to the
internal management and organisation of the production of goods and services
within organisations in different sectors of the economy;
To examine how to organise resources and operations, and how to improve them
using a variety of quality tools and techniques and process improvement
activities;
To consider the organisation in its wider context; examining how inputs on the
supply side can be managed and improved, and on the demand side how
customers, and customer satisfaction can be understood.

Module Status: Core Module run in Semester 2 of the Masters in Business
Management Programme and is credit rated at 20 M level credits.


Teaching Staff:

Dr Mukul Madahar
mmadahar@cardiffmet.ac.uk
Tel: 02920416307
Room: O1.41e

Dr John Williams
jrwilliams@cardiffmet.ac.uk
Tel: TBC
Room: O1.41f


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Learning Outcomes:

After successfully completing the module, you should be able to:

Evaluate the nature, scope and extent of manufacturing and service operations
strategy;
Critically evaluate the use of quality tools and techniques for a wide range of
organisational problems;
Solve complex operational problems related to managing capacity and constraints
within organisations;
Demonstrate the application of strategies, tools and techniques to improve
business operations and appraise and select appropriate methods for managing
supply bases for a variety of organisations.


Teaching Programme Lectures and Workshops

Lectures:

11:00 to 13:00 on Wednesday Room O1.01


Workshop sessions:

09:00 to 11:00 on a Monday Room O2.11 (Group 1)
16:00 to 18:00 on a Monday Room O1.15 (Group 4)
09:00 to 11:00 on a Wednesday Room O2.08 (Group 2)
10:00 to 12:00 on a Thursday Room O2.09 (Group 3)
14:00 to 16:00 on a Thursday Room O2.09 (Group 5)




Please note that you are allocated to a workshop group. In your workshops you
will have the opportunity to discuss the topics covered in the lecture further and
how it applies to range of organisations through discussions and mini case
studies. Attendance is compulsory.
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W/C Tutor Lecture Seminar
10
th
February MM Introduction to
module and
Operations
Management
No seminar
17
th
February MM Operations
Performance
Seminar Operations
Management
24
th
February MM Operations
Strategy
Seminar Operations
Performance
03
rd
March MM Managing Capacity
and Scheduling
Operations
Seminar Operations
Strategy
10
th
March MM Managing
Inventory
Seminar Managing
Capacity and
Scheduling
17
th
March MM Managing
Processes
Seminar Managing
Inventory
24
th
March JW Introduction to
Lean
Seminar Managing
Processes
31
st
March JW Supply Chain
Management
Seminar Lean
07
th
April EASTER VACATION
14
th
April EASTER VACATION
21
st
April EASTER VACATION
28
th
April JW Quality and
Improvement
Seminar Supply Chain
Management
05
th
May JW Operations
Decision Making
Seminar Quality and
Improvement
12
th
May MM Wrap Up and
Drawing it all
Together
Seminar Operations
Decisions Making


Hand-in date for the Coursework Wednesday 7
th
May 2014.

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Module Title
Module
Number
JACS Subject Code(s) and
% of each subject ASC Category(ies)
Operations Management MBA7061 N900 7
Level (3-8) Credits ECTS Credit Module Value % Taught in Welsh Module Type
7 20

10 1.0 0 Taught
Teaching Period Pre-requisites
Semester Two None
Module Leader School(s) Campus
Mukul Madahar Cardiff School of Management Llandaff Campus
Assessment Methods
Assessment Type Duration/Length of
Assessment Type
Weighting of Assessment Approximate Date of
Submission
Coursework Written assignment (6,000
words)
100% End of Semester
Aim(s)

To develop and introduce and develop a critical understanding operations management for modern
organisations in a variety of sectors of activity;
To consider operations strategy in its broadest sense and relate this to the internal management and
organisation of the production of goods and services within organisations in different sectors of the economy;
To examine how to organise resources and operations, and how to improve them using a variety of quality
tools and techniques and process improvement activities;
To consider the organisation in its wider context; examining how inputs on the supply side can be managed
and improved, and on the demand side how customers, and customer satisfaction can be understood.

Learning Outcomes
On completion of this module, students should be able to:
Evaluate the nature, scope and extent of manufacturing and service operations strategy;
Critically evaluate the use of quality tools and techniques for a wide range of organisational problems;
Solve complex operational problems related to managing capacity and constraints within organisations;
Demonstrate the application of strategies, tools and techniques to improve business operations and appraise
and select appropriate methods for managing supply bases for a variety of organisations.
Learning and Teaching Delivery Methods
Lectures/ seminars
Independent study
Indicative Content
The content of this module will focus primarily on the future needs of students and can be tailored to their likely
subsequent careers. For those students likely to be entering the service sector the module can primarily be focused
on service operations management with manufacturing operations management being taught as the minor
component. For those students with a likely career in manufacturing, then manufacturing operations can be the
major focus with service operations management taught as the minor component.
Operations strategy
Customer service
Managing capacity and demand
Scheduling operations
Waiting, queuing theory and practice
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Managing inventory
Quality management tools and techniques
Process analysis and improvement
New product and service development
Purchasing and supplier management

Recommended Reading & Required Reading
Required reading
Hill, A., and Hill, T., (2012), Operations management, Palgrave Macmillan; Basingstoke
Johnson, R., and Clark, G., (2012), Service operations management: improving service delivery, FT Prentice
Hall; London

Recommended reading
Cousins, P., Lamming, R., Lawson, B., and Squire, B., (2008), Strategic Supply Management: Principles,
Theories and Practice, Prentice Hall; London.
Fitzsimmons, J., and Fitzsimmons, M., (2010), Service Management: operations, strategy and information
technology, McGraw-Hill Higher Education; Boston MA.
Hollins, W., and Shinkins, S., (2006), Managing service operations: design and Implementation, Sage
Publications; London.
Slack, N., Brandon-James, A., and Johnston, R., (2013), Operations Management, Pearson; London

Journals
California Management Review
Harvard Business Review
International Journal of Production Economics
International Journal of Operations & Production Management
International Journal of Logistics Management
International Journal of Physical Distribution and Logistics Management
International Journal of Production Economics
International journal of Services and Operations Management
Journal of Operations Management
Production and Operations Management

Access to Specialist Requirements





7
Module Assessment

One of the key aspects of any business (the business being considered in a broad
sense) is to provide services and/or products in line with customer demands.
Operations Management deals with the design and management of delivery of these
products and services including processes and supply chains. The study of Operations
Management involves every level i.e. strategic, tactical and operational.

You are an Operations Management Consultant. You are required to undertake an
individual research project and to prepare a Management Report (6000 words) based
on the case studies entitled Heathrow Terminal 5.

The key aspects that need to be covered within the report are:

Critically evaluate the key Operations Management issues faced by both the
British Airports Authority and British Airways.
For each issue identified, critically discuss the most appropriate techniques,
methods, models and tools available that you would have possibly identified
within the lectures and seminars in class. (I am flexible in you bringing in your
knowledge form other modules as well but the issues have to be purely
operational.)
Relate the findings from first and second points and critically evaluate which of
these techniques, methods, models and tools YOU would have chosen and
justify your choice with relevant research.
Reflect your findings in the light of actions taken by British Airways.


You need to follow a REPORT FORMAT.


Report Structure and Layout:

Cover Page: Your Name and Student Number and the word count.
Executive Summary
Key issues identified by the two organisations (BAA and BA) [1500 words]
Identification of the key approaches, concepts that apply to these issues
including the HOW AND WHY [2000 words]
Reflecting and relating your findings in point 4 and how they relate to what BA did
along with your recommendations. You would be expected to provide justification
of every aspect and solution to every issue. [1500 words]
Conclusion: Overall comparison of your proposed action(s) when compared with
that of the British Airports Authority and British Airways. [1000 words]

Further tips:

Structure within the sections identified can contain further subheadings (such as
Techniques, Methods, Models, Tools, Strategies etc.)
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Although we have provided with you a Case Study but the problems associated
with Heathrow Terminal 5 have all been well written in both the practitioner and
academic world. I would, therefore expect you to expand on the case study.
You might want to bring in examples from other industry or even other airports.
The report MUST have a proper reference list in the end of the report.

Marking and assessment criteria

Evidence of the level of critical analysis of the issues faced by the organisations in
the case study
Quality of the definition of the key problems faced by the organisations in the case
study
Understanding, critical evaluation and application of appropriate techniques,
methods, models and tools to the issues discussed
Appropriateness and justification of recommended changes and interventions to
address the issues identified
Clarity and coherence of report (with regard to structure of analysis, diagnosis,
correctness of spelling and grammar, appropriateness of language, accuracy of
referencing including use of English and Harvard Referencing scheme).


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The grid below indicates typical attributes of student work and the corresponding bands of grades in relation to the assessment criteria.
Assessment criteria Understanding, critical
evaluation and application of
appropriate techniques,
methods, models and tools to
the issues discussed
Evidence of the level of critical
analysis of the issues faced by
the organisations in the case
study

Quality of the definition of the
key problems faced by the
organisations in the case study


Appropriateness and
justification of recommended
changes and interventions to
address the issues identified

Clarity and coherence of report
, including use of English and
Harvard Referencing scheme
[Distinction] 70% + Draws on comprehensive range
of appropriate techniques,
methods, models and tools which
show evidence of independent
research. Application is effective
and critical / creative and shows
evidence of synthesis of different
models.
Comprehensive, critical and
original analysis of the issues,
demonstrating excellent ability
to synthesise evidence.
The problems are identified,
related clearly to the preceding
analysis. Problem definition is
creative and shows excellent
and critical awareness of
alternative possible definitions
and ability to synthesise these
to produce clear definitions.
Selection of changes and
interventions is creative and
critical and clearly justified.
Recommended interventions are
creative and critical and clearly
justified through relation to
earlier analysis.
Written English style is clear,
articulate and persuasive, and
report is logically and coherently
structured. Referencing is
accurate and full.
[Merit] 60%-69% Draws on extensive range of
appropriate techniques,
methods, models and tools .
Application is effective and shows
evidence of synthesis of different
models.
Extensive and effective critical
analysis of the issues
demonstrating ability to
synthesise evidence.
Problems are identified and
related clearly to the preceding
analysis. Problem definition is
thorough and shows some
awareness of alternative
possible definitions and ability
to synthesise these to produce
clear definitions.
Selection of changes and
interventions is well justified.
Recommended interventions are
well justified through relation to
earlier analysis.
Written English style is clear and
effective and report is
structured logically. Referencing
is accurate.
[Pass] 50%-59% Draws on range of appropriate
techniques, methods, models and
tools . Application is effective.
Relevant critical analysis of
issues Key aspects of the
situation are identified and
analysed.
Problems are identified and
defined.
Selection of changes and
interventions are appropriate
and some valid justifications are
given.
Written English style is clear and
descriptive and report structure
is clear. Referencing is generally
accurate.
[Pass] 40%-49% Draws on some appropriate
techniques, methods, models and
tools. There is some effective
application in places.
Critical analysis of issues may be
partial and not always relevant.
Some key aspects of the issues
will be identified and described.
Problem are identified.
Definition of the problems may
lack focus and clarity.
Selection of changes and
interventions may be only partly
appropriate; justification may be
weak.
English style is acceptable with
minor problems of
comprehension or expression.
Report structure may lack clarity
in places. There may be
inaccuracies in referencing.
[Fail] 30%-39% Draws on limited range of
techniques, methods, models and
tools. These may not always be
appropriate. Application may be
flawed in places.
Critical analysis of current
situation is limited or flawed.
Key aspects of the issues may
be ignored.
Problems may not be clearly
identified. Definition of the
problems may be flawed.
Selection of changes and
interventions may be
inappropriate and / or not
understood.
English style may be weak and
difficult to understand. The
report may be presented poorly
with many errors and structure
may be unclear. Referencing
may be inaccurate.
[Fail] 20%-29% Inappropriate or / no techniques,
methods, models and tools may
be selected and/ or not applied
to organisation. Knowledge and
understanding may be lacking.
Little or no critical analysis of the
issues.
No identification of problems or
problems identified are
irrelevant.
Selection of changes and
interventions may be largely
absent and / or irrelevant.
English style may be weak and
difficult to understand with
some lack of semantic/
grammatical correctness. Report
structure may be confused.
Referencing may be very
limited, inaccurate or largely
absent.

Supporting information
Case 1
THE INDEPENDENT
Terminal 5 fiasco: The new 'Heathrow hassle'
Disappearing bags, 30 cancelled flights and passenger delays are not the way
that British Airways wanted to open its new terminal at Heathrow.
By Danny Fortson
Friday, 28 March 2008
It was not the most auspicious of beginnings. By most measures it was a complete
disaster. On the first day of operation from its new home at Heathrow's Terminal 5 the
gleaming, 4.3bn building that was nearly two decades in the making British Airways
was forced to cancel more than 30 flights due to what it termed a "staff familiarisation"
issues. Check-in was temporarily suspended. The first flight to land in Paris arrived
without luggage one of three that took off sans baggage.
Billed as a beginning of a new era for British aviation and a major step towards the
banishing of the infamous "Heathrow hassle", this was not the way it was supposed to
be.
Complaints of hours-long waits and disappearing luggage were rife. The airline did its
best yesterday to put a positive spin on the chaos, classifying the issues as inevitable
teething problems, especially for the labyrinthine baggage system snaking through the
Hyde Park-sized structure.
Indeed, going from operating zero flights one day to 380 the next, there were going to
be some hiccups. Yet critics, and there are many, seized on the delays and other
complications as clear evidence that BA's shiny new building, with its sweeping views of
London, wide open spaces and rows of luxury shops, will change little at the carrier,
recently given the dubious distinction of losing more passenger bags than almost every
other European airline.
BA desperately needs Terminal 5 to work. So does its chief executive, Willie Walsh,
who will rely heavily on the airline's new state-of-the-art base it will ultimately be home
to 90 per cent of BA's 550 daily flights from the airport as he attempts to steer it
through a gathering storm of rising oil prices and slowing economies on either side of
the Atlantic.
Earlier this month, the carrier issued a profit warning due to the skyrocketing price of jet
fuel. Any hope of relief on that front was eliminated yesterday after the sabotage of a
major oil-exporting pipeline in Iraq pushed the oil price back to more than $107 per
12
barrel, perilously close to the $120 per barrel level at which the airline has warned that it
will lose all profitability. An economic slowdown in the UK and America the latter its
most important foreign market has added to the gloom descending over the prospects
for the company. Its share price has halved in the past year.
The inauguration of a trademark hub on par with other major international airports is, it
would seem, just what BA needed; a ballast against the strengthening headwinds. T5 is
designed to handle up to 30 million passengers a year. But with its swish departure
lounges, high-end shops such as Tiffany's and a Gordon Ramsey restaurant, it is clearly
aimed at one client segment more than any other: business and first class passengers.
Premium passengers, as they are called those willing to pay several thousand pounds
on top of the basic fare for some extra leg room and in-airport pampering are the profit
generators for BA. The airline just about breaks even on its economy fares, which have
been forced down by no-frills carriers such as EasyJet and Ryanair.
But premium customers have in recent years begun switching to ultra-modern European
hubs like Amsterdam and Frankfurt for transfer flights to avoid the queues, drab
surroundings, and risk of lost bags at Heathrow. Douglas McNeill, an analyst at Blue
Oar Securities, said that T5 could get those passengers to come back. "One of BA's
great strengths in recent months has been that premium traffic has remained very
strong. Moving into Terminal 5 positions them more strongly in that market," he said.
Indeed, since security was heightened in August 2006 after a plot to used liquid bombs
to blow up airliners was foiled, Heathrow's infamy has reached new heights.
Security queues have grown ever longer, giving passengers extra time to contemplate
their shabby surroundings. With the Open Skies treaty set to take effect next week, a
new era of increased competition for trans-Atlantic business from Heathrow will begin.
T5 will give BA a timely leg up on rivals, who, stuck operating from Heathrow's older
terminals, will look poor by comparison. Mr McNeill said: "Being associated with the
'Heathrow hassle' wasn't doing BA any favours. I suspect we'll now hear a lot less about
that, except from the airlines that are still using the shabbier, older terminals."
The airy new space will increase on-the-ground capacity, but it does nothing to address
the bottleneck in the air. Heathrow is Europe's busiest airport but has just two runways.
For a comparison, Amsterdam's Schipol is looking at putting in its seventh, despite
handling just two-thirds of the traffic that Heathrow does. The upshot is that planes
destined for the airport are much more likely to be stuck doing circles for half an hour
over west London while they wait for their turn in the landing queue. The Government
has expressed support for the construction of a third runway, but a fierce campaign by
environmental protesters and local authorities means that it surely remains years in the
offing, if it's ever built at all.
The issues have greatly complicated Mr Walsh's efforts to streamline the business and
increase its profitability. At the investor day earlier this month, he was forced to abandon
his prediction that the carrier would achieve a 10 per cent profit margin next year. T5 will
help on that account. Though BA will have to absorb an estimated 36m in costs
13
associated with the opening of the terminal this year, it will begin to realise cost benefits
from 2009. Automation and greater efficiency will mean a reduction of about 700 jobs at
the airport.
Yesterday's opening was the end of an odyssey which began in the late Eighties, when
the new terminal was mentioned for the first time in a government planning document.
BAA, the airport operator, made its first planning application 15 years ago. After the
longest public inquiry in UK history four years approval was finally given in 2001.
Construction began in 2003.



CASE 2:
Financial Times

Heathrow Terminal 5 opening turns to farce

By Kevin Done, Aerospace Correspondent.
March 27, 2008.

The opening of the showcase 4.3bn Terminal 5 at Heathrow airport on Thursday
descended into chaos as mounting problems with the baggage system forced British
Airways by early evening to turn away all passengers with check-in bags.

The airline was forced to cancel 33 short-haul flights during the afternoon after having
despatched some early morning flights without any of the passengers checked-in bags.

As the problems grew the airline took even more drastic action in the early evening and
at 6pm was forced to issue the highly embarrassing statement that flights from T5 would
depart with hand baggage only due to problems associated with processing customers
baggage.

Passengers with check-in baggage were turned away on Thursday night and offered
only refunds or a chance to rebook their flights to another date.

For many months Willie Walsh, BA chief executive, has claimed that the opening of T5
would mark a turning in the airlines fortunes and a once-in-a-lifetime opportunity to
transform the passenger experience at Heathrow and restore its tarnished reputation.
Instead BA was on Thursday night forced yet again to apologise to passengers for the
problems during Terminal 5s first day of operations following one of the most complex
and largest airport moves in history.

Neither the airline nor BAA, the airport operator, offered any explanation for the
calamitous breakdown of the baggage systems at T5, and Mr Walshs reputation faces
serious damage, if the airlines planning is shown to be to blame for the debacle.

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Privately one BAA official claimed that, apart from short-lived BAA system problems
early in the day that led to three flights departing without any checked-in bags on board,
its baggage systems had been functioning perfectly.

He laid the blame on the airlines lack of preparedness and staff shortages. Some BA
ground staff at T5 confirmed this view and said that baggage services staff were spread
much too thinly across the airport, where the airline was still continuing operations at the
other terminals, chiefly T1 and T4, ahead of the transfer of the rest of the operations to
T5 and some to T3.

BA passengers using flights from T1 and T4 were unaffected by the events at T5. One
passenger at T5, whose flight had just been cancelled, said on Thursday night that
gates were not available for some incoming aircraft. Staff were not properly trained,
security systems were breaking down. Its an absolute shambles.

Another passenger seeking to rebook a flight said: BA has been saying for so long that
this is a new beginning and it would solve all the problems. It seems to be worse than
ever.

Heathrow is BAs global hub and both the airline and BAA, the airport operator, have
faced an avalanche of criticism for failing service standards during the past year, in
which the airport and the airline have been the worst performers for service standards in
terms of flight delays and misplaced bags in Europe.

The disastrous launch of T5 is only the latest in a series of hugely problematic airport
openings around the world, including the notorious Chek Lap Kok in Hong Kong, where
severe baggage problems took several months to solve.

END of Assessment.