Posted by Lancing Farrell
Image from Operations Management, 6th Edition, Slack, Chambers and Johnston.
In this third post in this series, I look at the concept of the operations strategy. Every organisation has one. Your organisation does, but do you know why or what it is? And how does it relate to the business model?
This series of posts is intended to make the case that local government needs a theory of value creation – a clear explanation of what local government does to create public value. That theory will require a reappraisal of the operations strategy and the role that operational capability can play in supporting the business model and strategy execution.
Hayes and Wheelwright describe operations strategy as guiding decisions about vertical integration (i.e. the extent to which the council owns the value chain), capacity planning (i.e. how variation in demands will be met), facilities planning (i.e. the facilities needed to deliver services), services technologies (e.g. information systems) and process technologies (e.g. batch or make-to-order).
The academics Nigel Slack, Stuart Chambers and Robert Johnston in their text Operations Management talk about strategy and the connection to operations Continue reading
Posted by Colin Weatherby 1300 words
The first post on improving service operations covered service action planning. Both posts have followed a discussion about service improvement with a colleague in which he described a process he has been using with operational staff to work out how their work can be improved. This post discusses redesigning services when that has been an action identified in the service action plan.
If the need to redesign services has been identified in the service action plan there is a good chance that all team members are on board and prepared to discuss some big changes. This is really a prerequisite for significant change in local government, otherwise there is a risk that you are just ‘revolutionising’ people and will have no long term effect.
Stage 2 – Service redesign.
The first step is to separate the services with different demands, operations typology and performance objectives (this has been the subject of an earlier post). Then related services are grouped together. The last step is to redesign services to integrate similar services and plan implementation of the new service. This includes risk analysis of key aspects of the service and planning the new supervisory role required to make the service design work. Continue reading
Posted by Lancing Farrell 570 words
Some basic tools are needed to redesign operations to improve performance. Many people charged with responsibility for managing services have limited skills in how to redesign and improve them. Here is a simple and effective approach – just separate, relate and integrate.
The separate bit is about understanding the different demands being placed on the system. Usually, a performance problem is masked by a mess of different demands that have been mixed in one or two delivery processes. The important characteristics of services demand are the expectations of people creating the demand and how the demand is presented. It is essential to separate each type of demand according to its performance objectives and characteristics. Continue reading
Posted by Lancing Farrell 1100 words
Image from Operations Management, 1998.
Some time ago I posted on high performance job design using four characteristics or spans; control, accountability, influence and support. At the time I linked the concept to the operations typology describing four characteristics of design of operations for high performance. This post picks up that discussion to look at the characteristics of demands that it is essential to understand if you want to design and manage your operations for high performance or excellence in local government.
A number of recent books on public sector management have discussed demands and how it is essential to understand them in public services because payment is not made at the time of service consumption and, therefore, price does not directly influence the amount and nature of demands placed on the system.
In his Vanguard Method John Seddon describes the importance of fulfilling purpose if failure demand is to be avoided. He also talks about understanding flow in relation to how work enters a system. Both of these ideas relate to demands. If purpose (i.e. the value sought by someone or their demand on the system) is not correctly understood the work system will not meet their need. They will come back.
Mark H. Moore includes operational capacity in his ‘strategic triangle’ concept linking decisions from the authorising environment to the public value provided. An organisation must have the operating capacity (or capability as Moore describes it in his earlier book Creating Public Value) to deliver on the political commitment to create particular public value. Continue reading
Posted by Lancing Farrell 600 words
In a recent discussion with a colleague she mentioned that in her previous employment outside local government they had set organisational performance goals for leadership, finances, relationships, safety and operational excellence. Each area of performance was rated equally. It started me thinking about how little you hear about operational excellence in local government. Is that because it doesn’t matter?
I am sure that operational performance matters. Whether councils want to be excellent or not, I am less sure. I think that the reason it is seldom discussed is that few people have a real understanding of operations management or what excellence would look like or how to achieve it. Continue reading
Posted by Lancing Farrell 1000 words
In the first post I discussed a tool that you can use to test your current job design to see whether it has been designed for high performance. In the second post I elaborated on the theory behind the tool. In this post (another long one I am afraid) I will attempt to apply it to design three local government management positions that I am familiar with. Continue reading
Posted by Colin Weatherby 950 words
In the previous post, I discussed economies of scale and the cost savings possible through shared services. This post continues the discussion, starting with the implications of front and back office separation.
The history of ‘back office’ and ‘front office’ separation is worth some discussion. According to Seddon, it began with an article by Richard Chase in the Harvard Business Review in 1978. In the article, Chase recommends separating the ‘high customer contact’ and ‘low customer contact’ elements of the service system because of the different operations involved. Low customer contact operations are more efficient and, as a result, have lower costs and it makes sense to isolate them from the disruptive effects of customer interactions if it can be done without sacrificing service effectiveness. However, service effectiveness is exactly what Seddon believes has been lost in many of the cases he cites. Continue reading