AAOM Handbook

Those Production work steps that will be implemented through process automation and computer systems must obviously be translated into the hardware and software design of those systems. The underlying theory for the Operating Model design is that process output performance will be delivered if the Right Work is completed at the Right time and in the Right way – and that this output performance will be achieved more consistently, and at lower cost, if the work is planned, scheduled and resourced in advance of its execution. This theory applies equally to the Production, Service and Support work of a process. It follows then that a complete system to implement the Operating Model theory must contain elements to establish what is the right Production work, the right time to execute that work (specified as the sequence and trigger event for the work), and the right way to complete the work. This component of the Operating Model is termed setting the Production strategy. The effect of Production Strategy can be placed in context via the following diagram.

The design and strategy selected for the process define the shape of the performance/effort curve. The asymptote to the initial slope of the curve is defined by the limiting efficiency of the process, and the asymptote to the maximum output is defined by the limiting capability of the process. The execution and resourcing of the strategy will determine the operating point on the curve, i.e. variation in the execution of the strategy, and/or from the input specifications (resourcing), will produce variation in the process output as determined by the shape of the curve.

© McAlear Management Consultants 2006

Operational Planning: Set Production Strategy

Updated: August 2018

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