Transformation Processes

The transformation process involves the conversion of inputs (resources) into outputs (goods and services)

The 4 Vs

Volume

• Volume refers to how much of a product is made. 

• Volume flexibility refers to how quickly the transformation process can adjust to increases or decreases in demand. This responsiveness to the required changes in volume is essential to effectively managing lead times.

• Lead time is the time it takes for an order to be fulfilled from the moment it is made. If businesses cannot quickly adjust to changes in market demand, they can over produce, which may lead to wastage and increased inventory costs. Alternatively, if back orders cannot be quickly fulfilled, it can lead to lost sales.

Variety

The mix of products made, or services delivered, through the transformations process is sometimes called mix flexibility. 

Mix flexibility is known by consumers as product range or variety of choice. The influence of variety on transformation processes is: the greater the variety made, the more the operations process needs to allow for variation. 

Example

While Coca Cola produces a variety of drinks e.g. Sprite, Fanta, Coca Cola, Diet all come in a very similar packaging form.

Variation in demand

An increase in demand will require increased inputs from suppliers, increased human resources, increased energy use and increased use of machinery and technology. However, increased demand may be hard to meet if:

•  Suppliers cannot supply quickly enough

•  Labour is not flexible enough, skilled or available

•  The adopted machinery cannot adjust to increased capacity quickly, either because it is not designed to or because it breaks down

•  Increased energy and power are not able to be readily sourced.

A decrease in demand will also require operational flexibility as staff may need to have their hours reduced, production may need to slow to avoid inventory build up and suppliers may put on pressure due to contractual agreements.

Example Coca Cola

• • The furnace

  • The supplies of cans/bottles

  • Mostly robots can be switched off

  • Robots allow for greater flexibility but hard to increase supply if suddenly increased with no additional bottle suppliers. 

Visibility (Customer Contact)

Customer contact or ‘feedback’ can directly affect transformation processes. This is because customers and their preferences can shape what businesses make. Customer contact may be direct or indirect. 

• Direct contact takes the form of customer feedback given through surveys, interviews, warranty claims, letters, wikis and blogs and verbal contact. 

• Indirect feedback comes through a review of sales data that gives an indication of customer preferences and market share data, through an observation of peoples’ decision-making processes and through consumer reviews.

Customer contact is essential for maximising sales and ultimately shapes the transformation processes.

Gantt charts

 The Gantt chart outlines the activities that need to be performed, the order in which they should be performed and how long each activity is expected to take. Gantt charts are used for any process that has several steps and involves a number of different activities that need to be performed. 

They can be used to schedule the work activities of one employee or a team of employees

There are 2 main advantages of using Gantt charts. 

1. They force a manager to plan the steps needed to complete a task and to specify the time required for each task. 

2. They make it easy to monitor actual progress against planned activities.

Critical Path Analysis

Critical path analysis (CPA) is a scheduling method or technique that shows what tasks need to be done, how long they take and what order is necessary to complete those tasks.

(1) day + (15) days + (1) day + (2) days + (1) day + (1) day = 21 days 

The critical path will be the longest path through a process. You will see that some tasks can be performed simultaneously (for example, painting and testing components, or making the circuitry and assembling the components). Because each activity on the schedule must be completed to make the final product, the critical path is the path through the process that ensures all tasks have been completed. In this case, the critical path is 21 days

Manufacturing technology

Key manufacturing technologies are robotics, computer-aided design (CAD) and computer-aided manufacturing (CAM).

Robotics applies to highly specialised forms of technology, capable of complex tasks. Robots are used in engineering and specialised areas of research, as well as on assembly lines where a programmable machine capable of doing several different tasks is required. Robotics can shape transformation processes so that they are very high quality, of a consistently high standard, efficient and minimise waste.

Task Design

Task design involves classifying job activities in ways that make it easy for an employee to successfully perform and complete the task. Task design overlaps the employment relations functions of job analysis, job description and person specification. 

Skills audit is a formal process used to determine the present level of skilling and any skill shortfalls that need to be made up either through recruitment or training

Process Layout

The  process layout is the arrangement of machines such that the machines and equipment are grouped together by the function (or process) they perform. The process layout is sometimes called functional layout. This type of layout is typical of hospitals, for example, where areas are dedicated to particular types of medical care, such as maternity wards and intensive care units

Process production deals with high-variety, low-volume production. In this process, each product has a different sequence of production and the production is intermittent, moving from one department to another. The necessary machinery is arranged according to this sequence. This approach also lends itself to ‘job lots’ — that is, the manufacture of parts in small quantities. Many small to medium-sized manufacturers employ this process. In service businesses, such as banks or insurance companies, process layout is used to accommodate the handling of customers with different needs. A feature of this approach, often used by businesses, is the creation of work cells or work teams 

Product production (mass production) is characterised by the manufacturing of a high volume of constant quality goods.

An assembly line is the most common layout for this type of production because it aims to achieve the best possible combination of personnel and machine use — ‘assembly line balancing’. This type of layout is referred to as product layout where the equipment arrangement relates to the sequence of tasks performed in manufacturing a product. Work stations are arranged to match the sequence of operations, and work flows from station to station. Operations managers must set times for the assembly task, which requires an understanding of not only the nature of the task but also the tools and skills required.

Fixed position layout - Project production deals with layout requirements for large-scale, bulky activities such as the construction of bridges, ships, aircraft or buildings. With project production, it is more efficient to bring materials to the site; workers and equipment come to the one work area.A fixed position layout is where a product remains in one location due to its weight or bulk

Monitoring

Typical KPIs

Control

Control occurs when KPIs are assessed against predetermined targets and corrective action is taken if required.

Control requires operations managers to take corrective action. That is, the operations manager will make changes to the transformation process such as redesigning the facilities layout or adjusting the level of technology in order to correct.  Improvements in processes are often framed around quality.

Improvement

Improvement refers to systematic reduction of inefficiencies and wastage, poor work processes and the elimination of any bottlenecks. 

A bottleneck is an aspect of the transformation process that slows down the overall processing speed or creates an impediment leading to a backlog of incompletely processed products. Improvement typically is sought in time, process flows, quality, cost and efficiency. 

Continuous improvement

The concept of continuous improvement involves an ongoing commitment to achieving perfection. Although the goal of perfection will never be reached, striving for improvement is important to the business culture. The process becomes one of setting higher and higher standards in the continual pursuit of improvement. Japanese business culture applies the term kaizen to describe this process. ‘Zero defects’ is also a term used by some businesses

2012

Q2 A factory manager is deciding the best order in which to complete tasks.

Which operations process is being carried out?

(A) Monitoring

(B) Scheduling

(C) Sequencing

(D) Task design

Q7 In winter, the number of beach lifeguards employed by a local council is reduced.

What has influenced the transformation process in this situation?

(A) Variation in demand

(B) Variation in visibility

(C) Variety

(D) Volume

2012

Q14 The diagram below shows a critical path analysis for a project

What is the minimum number of days needed to complete the project? 

(A) 10 

(B) 12 

(C) 17

 (D) 33

2013 

Q8

What does a critical path identify?

(A) The lowest cost path to complete all tasks in a project 

(B) The highest cost path to complete all tasks in a project 

(C) The longest time required to complete all tasks in a project 

(D) The shortest time required to complete all tasks in a project

Q14

Which of the following includes two examples of transforming resources?

(A) Materials and energy 

(B) Information and customers 

(C) Task design and technology 

(D) Human resources and facilities

14 What is the length of the critical path for this project?

(A) 9 days

(B) 14 days

(C) 18 days

(D) 27 days

15 If activity EC is delayed and takes 6 days, by how long will the project be delayed?

(A) 0 days

(B) 3 days

(C) 6 days

(D) 17 days

2014 

Q18 A Gantt chart for Sam’s Chocolate Shop is shown.

Q21 (b)

Analyse the use of sequencing and scheduling to improve business operations. 6 marks 

2017

Q9 Which operations process uses a Gantt chart?

A. Customisation

B. Input

C. Output

D. Transformation

Q21 

A recently established bank has branches in Australian capital cities and online customers across Australia. The management of this bank wants to focus on improving operations processes.

b) Explain how improving operations processes may lead to better customer service. 4 marks 

23 b) North Coast Manufacturing is currently planning a new factory.

Explain TWO factors that it should consider when designing the process layout. 4 marks

c) Recommend a method of monitoring the effectiveness of the process layout.

2017

Q9 Which operations process uses a Gantt chart?

A. Customisation 

B. Input 

C. Output 

D. Transformation

2019

19 Which tasks need to be completed prior to completing Task D? 

A.  A, B only 

B.  A, B, C only 

C.  A, B, E, F only 

D.  A, B, C, E, F only 

20 An improvement in technology reduces the time between Task C and Task D to one day. What is the new length of the critical path?  

A. 3 days 

B. 5 days 

C. 6 days 

D. 10 days 

2021

10 A manufacturing business is a cost leader in their industry. Which combination of features of the transformation process are they most likely to demonstrate? 

A. Low volume, low variety 

B. High volume, low variety 

C. Low volume, high variety 

D. High volume, high variety

12 A manager at a fast-food business wants to change the operations process in response to the influence of corporate social responsibility. Which action would achieve this objective? 

A. Providing cash donations to a local hospital 

B. Increasing the visibility of the cooking process 

C. Offering a wider variety of healthy options on their menu 

D. Ensuring that injured workers receive access to compensation payments

Question 21 (10 marks) A building company has been contracted to build a new home for a customer. The contract requires the home to be completed within six months and within budget. 

(a) Outline how this customer can be considered an input in the construction of the new home. 2 marks

(b) How could a Gantt chart help the building company meet the terms of the contract? 4 marks

2022

Question 21 (continued) 

(c) Michael is considering which process layout would be the most efficient for this restaurant. Compare each layout in terms of efficiency and profitability. 4 marks

2023

17 Which tasks could be occurring at the same time? 

A. AB, BC and CD 

B. AB, BF and FC 

C. BE, BF and BC 

D. BE, BF and EC

18 Task EC is delayed and takes an additional 7 days. By how many days will the length of the critical path change? 

A. 0 days 

B. 2 days 

C. 4 days 

D. 6 days