The Four V’s

The main characteristics of the processes that transform the resources into outputs are generally categorised, into four dimensions Volume, Variety, Variation and Visibility.

The heartbeat of operations management lays in the ability to manage core activities that transform key resources into deliverable products or services.  The process of creating the products and services are based fundamentally on converting original input resources through a conversion process that creates value by eventually outputting transformational products and services.

Volume

Denotes the process of managing volume output dimensions.  If the volume of an operation demands it, a streamlining of the processes to create a uniform system will provide the quality of goods being common and offers an opportunity for an increase in the speed of production.  If significant volumes can be met, with bespoke equipment, will produce a uniformed result, the operation ultimately will lead to lower unit costs. A biscuit factory is a perfect example of this.

Variety

Denotes the dimension that clarifies the differences between standardised goods and services V’s non-standardised, providing flexibility.  Providing services that are standardised, attracts the lower costs and creation of profitability as, flexibility and additional goods and services increase the core transformational costs.

Variation

Variation dimension addresses the contrasts in the business model and the impact on costs and volume as the businesses address the variation. The advantages of a low variation of business allow predictability as a strong consideration for lowering costs.

Visibility

Allows the amount of visibility to the customer, of its operations, as most manufacturing operations have very little visibility to the customer.

The role of operations is to transform the original resources to goods and services that create value.  The characteristics of the four V’s confirm that there are many clear principles to monitor processes.  By understanding the holistic processes this opens up opportunities for management to address and change the operation, to become a far more efficient business that gains lower unit costs and more profitability, which goes some way to claw back the advantage over the competition.