2. business management- management process Flashcards
what are the 4 key business functions
Operations
Marketing
Finance
Human Resources
what is operations
*Refers to the business processes that involve transformation or, more generally, ‘production’.
*Operations refers more specifically to the processes involved in turning raw materials and resources into outputs of finished goods or products.
operations functions
- manufacturing
- provision of services
- other value adding
- supply chain management
- inventory management
interdependence between the functions/
Interdependence refers to the mutual dependence that the key functions have on one another. This means that the various business functions work best when they work together.
what are standardised goods
are those that are mass produced, usually. Standardized goods are on an assembly line uniform in quality and meet a predetermined level of quality.
types of goods
- standardised goods
- customised goods
- intermediate goods
- non-perishable goods
- perishable goods
intermediate goods
are finished goods that have been manufactured and but are then used in further manufacturing or processing.
what are customised goods
are those that are varied according to the needs of customers.
what are perishable goods
have only a short life span as they are consumed quickly
Operations must manage:
very short lead times (distribution that is as quick and effective as possible)
appropriate and robust packaging and cold storage processes both through production and distribution.
what are non-perishable goods
are that are durable and unlikely to decay or ‘go off’.
Operations must manage:
implement effective inventory management strategies and be highly responsive to market demand in order not to overproduce.
what are services
*Services are intangible products and only exist while thy are being performed, although the effects may endure for long after the competition of the service.
*A service organisation will transform other businesses inputs into services.
*Services cannot be stored, and the customer may need to be present when the service is being delivered.
production process
- inputs
- process/transformation
- outputs
types of inputs
Types of inputs include:
*Material
*Capital equipment.
*Labour
*Information from a variety of sources
*Time
*Money
transformed resources
Transformed resources are those inputs that are changed or converted in the operations process; they are transformed by the operations process.
Transformed resources include:
*materials: the basic elements used in the production process.
*information: the knowledge gained from research, investigation, and instruction, which results in an increased understanding.
*customers: customers become transformed resources when their choices shape inputs.
Transforming resource
Transforming resources are those inputs that carry out the transformation process. They enable the change and value adding to occur.
The two main transforming resources are:
*human resources: the people that are employed by the business.
*facilities: the plant (factory or office) and machinery used in the operations process.
transformation process
The term ‘transformation’ implies physical changes, but today it also includes the conversion of resources into services.
*the transformation process varies from business to business.
*It is often useful to look at the transformation process in a manufacturing business separately from the process in a service-based business because the transformation processes in manufacturing are far more visible and more easily quantified.
how does the transformation process differ between manufacturing and service businesses?
*Outputs of the services cannot be physically held in stock.
*Service businesses rely heavily on interaction with the customer in determining the output.
Example: a service of tutoring – cannot hold stock and relies on interactions of things like knowledge/expertise
Compared to a clothing manufacturing store, can be stocked of things like t shirts, jeans. Does not reply on customer interaction
outputs
*Are the end result of the operations process
*For manufacturing operations, outputs are represented by finished goods (tangible) example: finished water bottle
*For service operations, outputs are not as visible (intangible) and take into consideration
Factors useful in assessing outputs:
- The quality of customer service on delivery E.g is the education good
- The guarantees or warrantees provided by the business
- The amount of warranty claims on a good
- The after sales service delivered by the business
customer service
Customer service refers to how well a business meets and exceeds the expectations of customers in all aspects of its operations.
How the business communicates and interacts with the customers
‘pre-sale’ when sales staff can answer queries and provide advice before purchase
‘post-sale’ when a business can follow up a customer to ensure they are satisfied.
*The personal relationship between the buyer and the seller
*Based on product knowledge and expertise and the interaction between personalities
*Bad customer service can result in customers not wanting to go there. May go to a different branch
warranties
A warranty is an agreement and a period of time when a manufacturer must repair or replace a product that has broken down after purchase
It is the legal obligation of the business to either repair the item or refund its cost to the consumer
It is an extension of the service offered by the business. Once the financial transaction has occurred, the warranty ensures the relationship still exists
If the product doesn’t do what it is supposed to, the customer is entitled to inform the manufacturer and have the problem fixed.
quality managament (refers to? its role? approaches?)
Refers to those processes that a business undertakes to ensure consistency, reliability, safety and fitness of purpose of product.
The process of measuring the quality of a product or service during the operations process.
Its role is to determine any issues that need to be rectified and how improvement can be achieved
Approaches include:
1. quality control — inspection, measurement and intervention
2. quality assurance — process to ensure quality and application of international quality standards
3. quality improvement — total quality management and continuous improvement
sequencing and scheduling
Scheduling and sequencing tools are used to identify all steps in the transformation process and organise them into the most efficient order to complete.
Sequencing refers to the order in which activities in the operations process occur
Scheduling refers to the length of time activities take within the operations process
Two tools to determine the most efficient and effective sequence of tasks are:
- critical path analysis (sequencing)
- Gantt charts (scheduling)
Gantt charts (scheduling)
*Gantt charts are used for any process that has several steps and involves a number of different activities that need to be performed
*They help a manager to plan the steps needed to complete a task and to specify the time required for each task
They outline:
-the activities that need to be performed
-the order in which they should be performed
-(in relation to the other activities)
-how long each activity is expected to take
- how long the whole project should take
*They are easy to understand and quick for managers to read
critical path analysis (sequencing)
*A network diagram or critical path diagram is used to show the order and sequence of tasks that need to be completed for one certain project
It shows:
-What tasks need to be done
-How long they take and;
-What order is necessary to complete those tasks
*It helps to prioritise tasks that are happening simultaneously
what is critical path analysis
*The critical path is the path that takes the longest time because it is the minimum time it takes to fully complete the job (all tasks/steps)
what is finance
*Is concerned with recording and summarizing financial transactions into a series of reports that can be easily interpreted.
*Determines the amount of money the business has earned after its expenses have been paid and how much money can be allocated to spending.
*Construct financial reports and budgets. These reports provide crucial information about the past, current and future financial position.
what is marketing
*Is about meeting the needs and wants of consumers through provision of products (both goods and services) at prices that the market is prepared to pay.
*Looks at all aspects of buying and selling e.g. analysis of why people buy, to pricing, product development, promotion and distribution.
*Marketers attempt to maximize the earning capacity of their businesses through sales.
