Managing Operations

and Project
Environments
Week 3 Lecture
Attendance Code
Module
structure
Week Dates Themes
Wk 1 W/C 21.07.25 OM and PM Key Concepts, Systems Thinking, Complexity
Wk 2 W/C 25.07.25 Interconnectedness
Wk 3 W/C 04.08.25 Synthesis
Wk 4 W/C 11.08.25 Emergence
Wk 5 W/C 18.08.25 Feedback
Wk 6 W/C 25.08.25 Revision and Assignment Guidance
01.09.25 (by 16:00) Assignment submission
Session structure
Synthesis

• Role of data
• DMAIC
• Matching demand and capacity
Synthesis in Systems Thinking

• Understanding the
relationships between
components and their overall
impact on system outcomes
• Inform decision making
• Alignment with objectives
• Data-information-decision
making
School name here and Presentation Title

Data
Quote Of The Day

William Edwards Deming

“Without data you’re just

another person with an
opinion”
Definitions
Data v.
Information

Raw data from a supermarket checkout counter can be processed and organised to produce meaningful
information, such as the total unit sales of dish detergent or the total sales revenue from dish detergent
for a specific store or sales territory
5 Vs of Data
Key role of
data
• The big difference between Industry 4.0 is that it seeks to reinvent the entire process around the
power of big data which contains greater (as per Oracle and Teradata):
• Volume - have to process high volumes of low-density, unstructured data. This can be data of
unknown value, such as Twitter data feeds, clickstreams on a web page or a mobile app, or sensor-
enabled equipment
• Velocity - the fast rate at which data is received and (perhaps) acted on. Some internet-enabled
smart products operate in real-time or near real-time and will require real-time evaluation and
action
• Variety - many types of data that are available. Traditional data types were structured and fit
neatly in a relational database. With the rise of big data, data comes in new unstructured data
types. Unstructured and semi-structured data types, such as text, audio, and video, require
additional preprocessing to derive meaning and support metadata
• Veracity - quality, accuracy, integrity, credibility and trust we have of data. Gathered data could
have missing pieces, might be inaccurate or might not be able to provide real, valuable insight
• Value - from insight discovery and pattern recognition that leads to more effective operations,
stronger customer relationships and other clear and quantifiable business benefits
Some
examples
Netflix – collects data on 150 million subscribers, tracking people watch, when they watch it, the
device being used, if a show is paused, and how quickly a user finishes watching a series and also
take screenshots of scenes that people watch twice. Feeds into algorithms to create custom user
profiles and tailor the experience by making recommendations and to decide what shows to
commission next or continue with
Amazon - tracks what users buy, how often (and for how long) they stay online, and even things
like product reviews (useful for sentiment analysis). Also, predict people’s income based on their
billing address and so create highly-specialized segmented user profiles and use predictive
analytics to target their marketing based on users’ browsing habits. This is used for suggesting
what you might want to buy next, but also for things like grouping products to streamline the
shopping experience
McDonald’s – uses data from their mobile app, drive-thru experience, and digital menus to collect
vital information about user habits to offer tailored loyalty rewards to encourage repeat business,
to ensure enough staff is on shift to cover demand and offer different options depending on factors
such as the time of day, if any events are taking place nearby, and even the weather
https://careerfoundry.com/en/blog/data-analytics/big-data-examples/
Data Analytics
Mini-Activity
With the different types of
data analytics (i.e.,
prescriptive, predictive,
diagnostic and
descriptive), explore what
these could be for an
organisation of your
choice and the impact of
them on the system
 What Is Decision Making?
SELECTING AMONG ALTERNATIVES RATIONAL THINKING

SUBJECTIVE GOAL ORIENTED

RISKY TIME-BOUND
 Methods of Decision Making

COMMAND CONSULT VOTE CONSENSUS

Less Time, More Risky Divergent Point of Fair but not always More Time, Less Risky
Views correct.
 Decision Making Process
4. WEIGH THE EVIDENCE
Identify potential pitfalls for 5. CHOOSE FROM THE ALTERNATIVE
each of your alternatives, and
weigh those against the possible
03 04
rewards..

3. IDENTIFY THE ALTERNATIVES

With relevant information now at
your fingertips, identify possible 05 6. IMPLEMENT ACTION
solutions to your problem. 02
Once you’ve made your
decision, act on it! Develop a
2. COLLECT INFORMATION
plan to make your decision
Do an internal assessment, tangible and achievable..
seeing where your organization 06
has succeeded and failed in
01
areas related to your decision.. 7. EVALUATE THE RESULTS
1. IDENTIFY THE PROBLEM
07 Did you solve the problem? Did
you answer the question? Did
To make a decision, you must
you meet your goals?.
first identify the problem you
need to solve or the question
you need to answer. Clearly
What is Automated Decision-making (ADM)

AUTOMATED DECISION-
MAKING
Automated decision-making is the
process of making a decision by
automated means without any human
involvement. These decisions can be
based on factual data, as well as on
digitally created profiles or inferred
data (ICO 2023).
Focus on AI
Definitions (from IBM)
• Technology that enables computers and machines to simulate human intelligence and problem-solving
capabilities
• On its own or combined with other technologies (e.g., sensors, geolocation, robotics) AI can perform
tasks that would otherwise require human intelligence or intervention
• the development of AI algorithms, modelled after the decision-making processes of the human brain,
that can ‘learn’ from available data and make increasingly more accurate classifications or predictions
over time
• ChatGPT - natural language processing (NLP)
Application examples:
• Walmart using AI to automatically negotiate optimal prices with some vendors (Bloomberg, 2023)
• DHL is keen on harnessing ChatGPT, with a vision to automate processes and enhance efficiency in
logistics, from warehouse operations to driver's cabins (DHL, 2023)
• Instacart, a leading grocery delivery service in the USA has collaborated with OpenAI to integrate
ChatGPT to allow customers to efficiently shop, request recipes, and process orders for delivery
(Instacart, 2023)
Do you use AI?
mportance of Data-driven Decision Making
LOWERING OPERATIONAL COSTS

REDUCTION OF PERSONNEL IMPROVED CUSTOMER

SATISFACTION

ORGANISATIONA
IMPROVED OPERATIONAL AUTOMATION OF PROCESSES
EFFICIENCY L

PROACTIVELY MONITORING &

MANAGING INCREASED NETWORK INCREASING CUSTOMER
COMPLEXITY SATISFACTION
INCREASING DEMAND FOR ROI ON INFRASTRUCTURE DPEND

Gerhard Greeff and Ranjan Ghosha

School name here and Presentation Title

DMAIC
DMAIC
A data-driven improvement cycle used for optimising and stabilising business
processes and designs.
1.Define: In this phase, synthesis involves integrating diverse perspectives and
information to clearly define the problem. By synthesising input from stakeholders,
historical data, and current conditions, you create a comprehensive understanding
of the issue at hand.
2.Measure: Synthesis is used to combine data from various sources to establish a
baseline. This holistic data integration helps in understanding the full scope of the
problem and ensures that all relevant factors are considered.
3.Analyse: During analysis, synthesis helps in identifying relationships and
interactions between different variables. By synthesizing data and insights, you can
uncover root causes and understand how different elements of the system
contribute to the problem.
4.Improve: In the improvement phase, synthesis is crucial for developing and
integrating solutions. By combining innovative ideas with insights gained from
analysis, you can create comprehensive solutions that address the problem
holistically.
 DMAIC Case Study Example
Company Background: A mid-sized manufacturing company, XYZ Manufacturing, specializes in producing high-quality
electronic components. Recently, the company has faced significant challenges with high defect rates in its final products,
leading to customer dissatisfaction and increased operational costs.
Define: The problem was identified when customer complaints about defective products increased by 20% over the past
quarter. The project goal was to reduce the defect rate to below 2% within six months. Key stakeholders included the
production team, quality assurance department, and senior management.
Measure: To quantify the problem, the company collected data on defect rates over the past six months. The data revealed
an average defect rate of 8%, with the highest rates occurring during peak production periods. Additional data on machine
performance, operator shifts, and environmental conditions were also gathered to provide a comprehensive view of the
production process.
Analyse: A root cause analysis was conducted using tools such as fishbone diagrams and Pareto charts. The analysis
identified two primary causes of defects:
1.Inconsistent Machine Calibration: Machines were not calibrated regularly, leading to variations in product quality.
2.Operator Errors: Lack of standardized training and unclear operating procedures resulted in frequent mistakes by
operators.
Improve: To address these issues, the company implemented several improvement measures:
3.Regular Machine Maintenance: A maintenance schedule was established to ensure machines were calibrated weekly.
This included detailed checklists and logs to track maintenance activities.
4.Operator Training: A comprehensive training program was developed for all operators, focusing on standard operating
procedures (SOPs) and quality control techniques. The training was mandatory and included both theoretical and practical
components.
Pilot tests of these improvements showed a significant reduction in defect rates, dropping from 8% to 3%. The improvements
were then rolled out across the entire production line.
Control: To sustain the improvements, the company established new SOPs and integrated them into the daily workflow.
Continuous monitoring was implemented using real-time data analytics to track defect rates and machine performance.
Regular audits and feedback loops were also set up to ensure ongoing compliance and to identify any emerging issues
School name here and Presentation Title

capacity
Matching
demand and
Importance of forecasting
•Departments throughout the
organisation depend on
forecasts to formulate and
execute their plans
•Finance needs forecasts to
project cash flows and capital
requirements
•Human resources need
forecasts to anticipate hiring
needs
•Production needs forecasts to
plan production levels,
workforce, material
requirements, inventories, etc.
•Projects need resourcing
Resource
planning PLANT EXPANSION EQUIPMENT NEW PRODUCT
DESIGN

influenced
by
forecastin
g HUMAN RESOURCES TRANSPORT MATERIALS STOCK/PRODUCTION
(SUB/IN-HOUSE) (LEAD TIME
CONSIDERATE)
Types of Forecasts by Time
Horizon
Quantitative
methods

• Short-range forecast
• Usually < 3 months Detailed
use of
• Job scheduling, worker assignments
system
• Medium-range forecast
• 3 months to 2 years
• Sales/production planning
• Long-range forecast
• > 2 years Design
• New product planning of system
Qualitative
Methods
 Qualitative Forecasting
Methods Qualitative
Forecasting

Panel Delphi Scenario

approach method planning

• When little information is available, it is often necessary to forecast, this

often happens because the company is launching a new product, and
need to know the likely demand
• installing new design of automated production line and need to know
its reliability
Extrapolative
Methods
• Take no account of external factors
• They look at a series of past values
to predict what will happen in the
future
• Types of Extrapolative methods:
• Naive averaging
• Simple moving average
• Weighted moving average
• Exponential smoothing
Aggregate demand
and capacity

• Planning and control concerned with

setting capacity levels over the medium
and short terms in aggregated terms in
response to demand and forecasts

• Aggregate: Making overall, broad capacity

decisions about different products and
services that are bundled together in order
to get a broad view of demand and
capacity

• Some degree of approximation, especially

if the mix of products or services being
produced varies significantly

32
The objectives of planning
and control
To provide an “appropriate” amount of capacity at
any point in time.
The “appropriateness” of capacity planning in any
part of the operation can be judged by its effect
on…...

Costs
Revenue
Working Capital
Service Level
Speed of response
Dependability of supply
The objectives of planning and
control
• Costs: Capacity levels in excess of demand could mean under-utilization
of capacity and therefore high unit cost
• Revenues: Capacity levels equal to or higher than demand at any point in
time will ensure that all demand is satisfied and no revenue lost
• Working capital will be affected if an operation decides to build up
finished goods inventory prior to demand. This might allow demand to be
satisfied, but the organization will have to fund the inventory until it can
be sold
• Quality of goods or services might be affected by a capacity plan which
involved large fluctuations in capacity levels, by hiring temporary staff for
example
• The new staff and the disruption to the routine working of the operation
could increase the probability of errors being made
• Speed of response to customer demand could be enhanced, either by the
build-up of inventories (allowing customers to be satisfied directly from
the inventory rather than having to wait for items to be manufactured) or
by the deliberate provision of surplus capacity to avoid queuing
• Dependability of supply will be affected by how close demand levels are
to capacity
• The closer demand gets to the operation’s capacity ceiling, the less able it
is to cope with any unexpected disruptions and the less dependable its
deliveries of goods and services could be

34
 Demand fluctuations in four
operations

Woollen knitwear: climatic patterns (cold winters, warm summers)

Hotel: demand from business people, who take vacations from work at Christmas and
in the summer.
Retail supermarket: A little less seasonal, but is affected by pre-vacation peaks and
reduced sales during vacation periods.
Aluminium producer: Virtually no seasonality, but is showing a steady growth in
sales over the forecast period.
ekly and daily demand fluctuations

• Seasonality of demand occurs over a year,

but similar predictable variations in demand
can also occur for some products and
services on a shorter cycle
• The daily and weekly demand patterns of a
supermarket will fluctuate, with some degree
of predictability
• Demand might be low in the morning, higher
in the afternoon, with peaks at lunchtime
and after work in the evening
• Demand might be low on Monday and
Tuesday, build up during the latter part of
the week and reach a peak on Friday and
Saturday
• What are the demand fluctuations for your
organisations?
36
 What is
capacity?
• Capacity in the static, physical sense means the
scale of an operation
• But this may not reflect the operation’s
processing capability
• So we must incorporate a time dimension
appropriate to the use of assets
• For example 24,000 litres per day.

• 10,000 calls per day.

• 57 patients per session.

Thus the definition of the capacity of an operation is

the maximum level of value-added activity over a
period of time that the process can achieve under
normal operating conditions
Measuring capacity - Output

Measuring capacity: The main problem is the

complexity of most operations. Only when the
operation is highly standardized and repetitive its
capacity easy to define unambiguously.

 If a television factory produces only one basic

model, the weekly capacity could be described as
2,000 Model A televisions.

Output capacity measure: Is the most appropriate

measure when the output from the operation does
not vary in its nature.

38
Measuring capacity - Input

• Input capacity measure: It is used when a much wider range of

outputs places varying demands on the process.

• The hospital measures its capacity in terms of its resources,

partly because there is not a clear relationship between the
number of beds it has and the number of patients it treats.
• If its patients required relatively minor treatment with only
short stays in hospital, it could treat many people per week.
• Alternatively, if most of its patients required long periods of
observation or recuperation, it could treat far fewer.
• Output depends on the mix of activities in which the hospital is
engaged and, because most hospitals perform many different
types of activities, output is difficult to predict.
• Almost every type of operation could use a mixture of both
input and output measures, but in practice, most choose to use
one or the other.

39
 Capacity depends on activity mix
Operation Output measure of capacity
Input measure of capacity

Air- Number of units per week

Machine hours available
conditioner
plant
Hospital Number of patients treated per
Beds available
week
Theatre Number of customers
Number of seats
entertained per week
University Students graduated per year
Number of students
Retail store Number of items sold per day
Sales floor area
Airline Number of passengers per week
Number of seats
available on the sector
Electricity Megawatts of electricity
Generator size
company generated
Note: The most Brewery Litres per week
commonly used Volume of fermentation
measure is shown in
bold. tanks
Capacity measures

Slack et al. (2022)

 Ways of reconciling capacity
and demand

Demand Demand Demand

Capacity Capacity Capacity

Demand
Level capacity Chase demand
management

Ignore the fluctuations Adjust capacity to

Attempt to change
and keep activity reflect the fluctuations
demand to fit capacity
levels constant (level in demand (chase
availability (demand
capacity plan) demand plan)
management)
School name here and Presentation Title

you!!
Thank