The forecasted physical capacity requirements could compel managers to change the operations system to meet future demand. Capacity changes might be brought about by either short run or long run modifications, or both. Short run capacity changes include scheduling over time work, shifting existing personnel, subcontracting and using inventories for back orders. Long run capacity changes involve adding or removing capacity by physical facility expansion (more press hammers more lawyers) or contraction (fewer press hammers, fewer lawyers). Long run capacity changes can be very expensive for Boeing, because producing aircraft is quite complex.
Alternative capacity plans, each of which fits the required demand but through different means (more press hammers, subcontracting) can be analyzed. The costs of each and all of their strategic effects can be weighted and compared. The alternative with the lowest cost could run out to result in lost sales and lost market share, which might (or might not) be inconsistent with organizational strategy. A subcontracting slowdown might cause delays in delivery and thus loss of market to a competitor. Costs, risks, and strategic effects must be thoroughly weighted by managers.
In recent years, greater use has been made of automated guided vehicle systems (AGVS) which employ driverless battery operated vehicles to move back and forth between pickup and delivery points. Currently, this is achieved by placing a wire guide path in the floor that can be sensed by the vehicle’s antennas. Research is now in process to do away with the wire and to combine AGVS with robotics to create mobile robots. Some managers have extended this approach to automate their warehouse and loading facilities.
Greater use of computer networking is another recent development that has enabled manufacturers to work more closely with people at other organizations who supply components for the organization’s product. In fact, General Motors management now requires suppliers to link up to a GM network. Not only is product quality improved through greater communication about component specifications and design, but administrative efficiency is gained too. Far fewer paper transactions mean lower input costs for GM and the suppliers.
In service systems, process selection depends on the nature of the system. Service systems with low customer contact, such as the check clearing operation of a bank, can carry out process selection by following the four phases outlined above. In systems with high customer contact, such as retail establishments, the processes or procedures for interacting with the customer must also be selected. For standardized service, these processes can be specific and allow for little variability – for example, the cash dispensing function of an automated teller machine (ATM) at a bank. For customized services, variable procedures must be designed – for example, the evaluation of a personal loan application at the same bank. There are specialized computer systems designed to assist bank, department store, and other service industry managers in performing customized evaluations.
For commuter airlines such as City Flyer Express in the United Kingdom, “how to produce” becomes in part a question of how to coordinate route schedules with British Airways., City Flyer is a “code-sharing” partner of British Airways. This means that City Flyer flights into and out of London’s Gatwick Airport are listed on British Airways’ reservation system. This enables passengers of both carriers to make easier connections on British Airways trans-Atlantic flights. Operations at City Flyer always depend, in part in operations at British Airways and on communications between people at both organizations.
Comfort for the workstation Dwellers:
Consistency is an important driver of the hoteling system at Ernst & Young the layout of work areas is the same on every floor to facilitate writing and design and to make the transient workstations dwellers feel as at home and comfortable with the surroundings as possible. As hoteling developed they quickly learned that people would need a sense of place, recalled Maureen Durack, network manager of the facility. When they walk onto one of the floors, regardless of what office they have, they know that there is a printer here, and here, and here; they know its name and what kind of paper it has in it. It really simplifies their approach to know that everything is exactly the same on every floor.
The goal, according to the managers of Sverdrup interiors, the firm that designed the projects, was an international universal crisp professional image. Instead of the coveted “corner offices” there are corner conference rooms, available for all to use. In addition, etched glass in walls and partitions helps to bring in light. Wood accents are confined to public areas where the greatest number of people can enjoy them.
Technology is the driving force behind this office. Management had the determination to make this an office wide technology plan. They have been very focused in making sure that technology the goal of cohesion throughout the office.