4Vs - Influences on Operations Process

The quantity of goods / services produced. The higher volumes of production, the more standardised the product or service is.  Higher volumes result in low costs of production per unit due to economies of scale. Higher volume production uses;

• a ‘product’ layout for mass-production (single track linear production line), 

• expensive, single use, inflexible automation technology, and 

• basic, narrow, highly routinized task design (Coke Factory).

There is a volume-variety continuum. High volume production results in low costs per unit enabling firm to set lower Prices to the end-consumer.

The level of customisation of an operations output. Higher levels of customisation leads to low volumes and higher costs per unit. Operations systems that produce output with high levels of variety uses; 

• a ‘process’ or ‘fixed position’ layout (open spaces, functional sections),

• flexible, small-scale technology with low degree of automation, and

• open-ended, high decision-making and specialised task design (custom furniture)

Operations processes that have high levels of customisation typically produce items that are of a higher quality, and are ‘positioned’ against competitors with higher Prices.

The change in demand  due to daily / seasonal factors. Operational processes that experience high level of variation in demand need to be flexible, manage inputs effectively, and accurately forecast output levels to minimise wastage. 

Some businesses experience daily variation in demand: public transportation, airports / airlines, restaurants, call centres, nightclubs, ambulance response.

Some businesses experience seasonal variation in demand: ski resorts, ice cream manufacturers, clothing manufacturers and retailers, summer water parks, taxation accountants, fruit growers, gas suppliers (winter), electricity (summer), Christmas… Easter,  cold and flu medicine, sunscreen, bushfire emergency operations...

The extent to which customers can view or are present within a firm’s operational system. Manufacturing businesses typically have low levels of visibility; whereas service firms have high levels of visibility (hence importance of Physical Evidence, Processes and People).

Service-based businesses must consider the ‘service-scape’ of their operations; this refers to the overall impression or psychological impact experienced by customers as they enter into the operations process. 

Interior decorations / layout and the appearance / attitude of staff are all critical in highly visible operational processes. These must be financed and implemented prior to customer entry.