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Chapter 1 Operations management 19
Figure 1.6 The television and video company divided into two ‘end-to-end’ business
processes, one dedicated to producing programmes and the other dedicated to producing
music videos
Operations processes have different characteristics
Volume
Variety
Variation
Visibility
Although all operations processes are similar in that they all transform inputs, they do differ
in a number of ways, four of which, known as the four Vs, are particularly important:
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The volume of their output;
The variety of their output;
The variation in the demand for their output;
The degree of visibility which customers have of the production of their output.
Repeatability
Systematization
The volume dimension
Let us take a familiar example. The epitome of high-volume hamburger production is
McDonald’s, which serves millions of burgers around the world every day. Volume has
important implications for the way McDonald’s operations are organized. The first thing
you notice is the repeatability of the tasks people are doing and the systematization of the
work where standard procedures are set down specifying how each part of the job should be
carried out. Also, because tasks are systematized and repeated, it is worthwhile developing
specialized fryers and ovens. All this gives low unit costs. Now consider a small local cafeteria
serving a few ‘short-order’ dishes. The range of items on the menu may be similar to the
larger operation, but the volume will be far lower, so the repetition will also be far lower and
the number of staff will be lower (possibly only one person) and therefore individual staff are
likely to perform a wider range of tasks. This may be more rewarding for the staff, but less
open to systematization. Also it is less feasible to invest in specialized equipment. So the cost
per burger served is likely to be higher (even if the price is comparable).