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5
Product and Service Problems: Operations and Production
Risk
It’s all a bit of a mess. Some employees are sitting around, reading magazines. Others seem
overworked. ‘It’s a scheduling issue,’ shrugs Blake, the departmental manager. ‘The work is
unpredictable, so we can never get it exactly right.’
‘But the clients complain that tickets aren’t being answered,’ you say. ‘Yes, but it’s not a fully
integrated system,’ says Blake. ‘Things fall between the cracks.’ You pause. Should you mention the
problem about clients not being invoiced on time? Maybe you’ll keep that for another time.
Somehow you have to clean up the mess. It needs better process automation, better reports, maybe
a dashboard. Looks like you’ll be home late again .
Causes of Production Problems
Production and service problems have many causes, some of which are shown in Figure 5.1. Whatever
their origin, they give rise to product and service failings – whether in terms of cost, reliability or human
interaction.
When the product or service gets to the market, the problems can become real, which result in loss
of customers and other problems.
The solution, as shown in Figure 5.1, is to effectively manage all the elements of production – the
people, suppliers, equipment and systems. It is the systems in particular that we emphasize in this
chapter. Effective information, auditing and feedback will identify problems and suggest solutions long
before they become a threat to the business.
The Consequences of Mundane Failures
Most operational and production failure is banal – a lack of staffing, lack of stock availability and
communication failures. The results are equally banal – products that has to be sent for re-work, a
patient who has to be booked in again or a customer who defects to another store.
Yet these failures matter cumulatively. For commercial companies, they can make the difference
between profit and loss. For the public sector, it can mean a cons
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