AOS 3 - Operations management Flashcards
operations management
coordinating & organizing the activities involved in producing the goods & services that a business sells to customers
efficiency
how productively a business uses its resources when producing a good or service
effectiveness
is the extent to which a business achieves its stated objectives
business objective - possible operations strategy
MAP - implement tech - reduce costs
IMS - check that products aren’t faulty - increase customer sat
FMN - using tech to design new products - fulfill unmet needs
FSN - ensure waste is recycled - minimize business’s impact on the environment
Inputs
The resources used by a business to produce goods & services
- labor, time, electricity, equipment, info
Processes
The actions performed by a business to transform inputs into outputs
- mixing, designing, constructing
Outputs
Are the final goods & services produced as a result of a business’s operations system which is delivered or provided to customers
Production process
MB - tends to have highly automated processes that are capital intensive
SB - tend to have production processes that are labour intensive
Occurrence of production & consumption
MB - prodcution & consumption occur at different times
SB - production and consumption occur simultaneously
Customer contact
MB - tend to have low degree of customer conduct during production as production stage separated during production
SB - tend to have high degree of customer conduct during production as the production stage occurs simultaneously
Tangibility
MB - outputs are tangible
SB - outputs intangible
Storability
MB - outputs can be stored as inventory
SB - aren’t able to be stored as inventory
Consistency
MB - produce goods that can be standardised through mass production
SB - usually aren’t standardised & instead tailored specifically to individual customer needs
Computer-aided design
A digital design tool that enables businesses to generate & modify technical illustrations of a product
Computer-aided design - E & E
effieciency - can reduce time & labour resources used to design a product which improves productivity
effectiveness - can use CAD to develop various prototypes & choose best design. choosing best option enables business to manufacture highest quality design can meet objective of increasing customer sat & sales
Computer-aided design - A & D
A
- greater accuracy = constistent level of quality, improving business rep
- removes tedious processes involved in design process which can be boring for emps
- speeds up process
D
- business can develop bad rep if CAD makes employees redundant
- expensive in short term
- constant updates can be expensive
Computer-aided manufacturing
Is software used to control & direct the production process by controlling machinery & equipment through a computer
Computer-aided manufacturing - E & E
efficiency - doesn’t require machinery to be manually reset by humans reducing amount of time & labour resources used in operations improving productivity
effectiveness - the increased accuracy of CAM creates products with a consistent level of quality which can meet the objective of increasing customer satisfaction & sales
Computer-aided manufacturing - A & D
A
- greater accuracy results in consistent level of quality improving business rep
- speeds up manufacturing process as machinery doesn’t have to be manually operated
- improved accuracy can improve quality & increase customer satisfaction can increase sales
D
- develop poor rep if makes employees redundant
- sudden breakdowns can halt production & compromise productivity
- expensive in short term
Automated production lines
machinery & equipment which are arranged in a sequence & the product is developed at it proceeds through each step
Automated production lines - E & E
effciency - can perform at a speed which is usually much faster than humans improving productivity
effectiveness - allows for high decree of accuracy decreasing number of errors, enhances overall quality improving sales
Automated production lines - A & D
A
- increased accuracy provides a consistent level of quality of products which can improves business rep
- production can run 24/7
- improvements in accuracy can enhance overall quality of product can add to increase in sales
D
- business can develop poor rep if CAD makes employees redundant
- sudden breakdowns of tech can halt production altogether & compromise productivity
- high initial set up costs
Website development
The creation & improvement of online web pages controlled by a business that customers can use to discover information about the business & purchase their goods & services at any time
Website development - E & E
efficiency - providing information about the business online such as return policies can save customer service staff time & improve productivity
effectiveness - website development allows a business to reach a wider audience nationally & globally which can meet objective of increased sales
Website development - A & D
A
- establishes a platform that enables easy access to customer feedback
- can publish info on a website which can reduce amount of time customer service staff spend on answering commonly asked questions
- customers can purchase g & s at their convenience which can increase a business’s number of sales
D
- can develop poor business rep if makes employees redundant
- time consuming
- incur costs to start and maintain
Forecasting
Is a materials planning tool that predicts customer demand for an upcoming period using data & market trends
Forecasting - E & E
effieciency - forecasting decreases likelihood of ordering & stroring excessive stock which can optimise use of resources reducing wastage
effectiveness - forecasting increases a business’s ability to meet customer demand which can meet objective of increasing customer satisfaction & sales
Forecasting - A & D
A
- informed business’s ability to meet customer deman which improves its rep
- improves rep by having minimal impact on environment
- can reduce costs of storage
D
- may be unable to meet unexpected increases in customer demand which may damage their rep
- can be TC to analyse data
- may need to hire employees specifically for forecasting
Master production schedule
A plan that outlines what a business needs to produce in its specific quantities within a set period of time
Master production schedule - E & E
efficiency - prevents a business from producing an excessive amount of products which optimizes the use of resources by reducing wastage
effectiveness - business is more likely to produce an amount that meets customer demand which meets the objective of meeting customer satisfaction & sales
Master production schedule - A & D
A
- can provide emps with clear schedule of operations that includes the timeline & quanityt of production targets
- by determining specific details about how production will occur its less likely production will be brought to a halt & time is wasted due to an organisation error
D
- can be TC to map out details of production
- implementing & maintaining this plan can be expensive
Materials requirement planning
Is a process that itemises the types & quantities of materials required to meet production targets set out in the master production schedule
Materials requirement planning - E & E
efficiency - having the exact materials required reduces avoidable halts in production which enhance productivity by allowing operations to flow smoothly
effectiveness - ensures there is sufficient materials to meet customer demand. meeting customer demand helps meet the objective of increasing customer satisfaction & sales
Materials requirement planning - A & D
A
- by determining the exact materials required its less likely that production will halt due to insufficient materials or organisational errors
- accurate wondering of the quantities of materials required avoids excess storage & thus reduces associated expenses
D
- can be TC
- implementing & maintaining the materials plan can incur costs
Just in time
Is an inventory control approach that delivers the correct type & quantity of materials as soon as they’re needed for production
Just in time - E & E
efficiency - holding a minimal stock can free up space that can now be optimized to increase production
effectiveness - a reduction in idle stock and reduce expenses associated with waste which can meet the objective of increased profits
Just in time - A & D
A
- able to switch to the production of a different product without high wastage as there is minimal material on hand to go through
- reduces storage costs & costs associated with waste meaning this money can
D
- business may fail to meet customer demand from a lack of reverse stock & damage a business’s rep
- discounts from bulk buying supplies may be reduced
quality control
Inspections at various stages of the production process to ensure products meet designated standards & unsatisfactory products are discarded
quality control - E & E
efficiency - identifying & fixing cause of an error prevents the error from reoccurring, resulting in less waste being created during production. reducing waste is an optimal use of resources
effectiveness - eliminating errors prevent customers receiving faulty products
quality control - A & D
A
- preventing customers from receiving a faulty good or service can improve a business’s rep for having consistently high-quality products
- relatively inexpensive
D
- business can develop a poor rep as environmentally harmful as this strategy doesn’t actively attempt to reduce waste
- can be TC to identify the cause of errors
quality assurance
if a business achieves a certified standard of quality in its production after an independent body assesses its operations system
quality assurance - E & E
efficiency - preventing errors before they occur reduces the number of halts to production occurring due to finding & fixing causes of faulty products
effectiveness - customers are more likely to purchase a good or service with a certified standard of quality that can meet the objective of increasing a business’s sales
quality assurance - A & D
A
- reduces waste from errors which improve the environmental rep of a business rep
- the practice of prevention of errors can reduce waste & its associated expenses
D
- documenting the operations system for the external body to check could be time consuming
- can be excessive to organise an external body to assess an operations system
total quality management
is a holistic approach where all employees are committed to continuously improving a business’s operations system to enhance the quality for customers
total quality management - E & E
efficiency - continuously improving the quality of the production system to prevent errors reduce the number of faulty products that go to waste
effectiveness - by determining the needs & wants of a customer TQM can meet the objectives of improving customer satisfaction & increasing sales
total quality management - A & D
A
- Businesses can adapt TQM to suit their specific business requirements
- employees may feel valued & satisfied by being empowered in the process of improving quality
D
- can take a long time for a business to enjoy the benefits of TQM as it requires a shift in culture
- may incur costs as employees have to be trained to continuously identify methods to improve quality
waste minimization
is the process of reducing the amount of unused materials time or labour within a business
waste minimization - E & E
efficiency - by only using the required amount of materials time etc a business can produce items faster increasing their rate of production
effectiveness - reducing waste lowers operational costs which can allow for a business to offer lower prices to customers.
lean management
the process of systematically reducing waste in all areas of production while improving customer value
pull
is customers determining the amount of products a business should produce for sale
one-piece-flow
is a single product moving through all stages of production one at a time
takt
is synchronising production steps to meet customer demand
zero defects
is preventing defects from occuring in the production process
lean management - Efficiency
efficiency -
pull - reduces overproduction
one-piece-flow - reduces the number of errors in production
takt - optimizes flow of materials between stages & production reducing time being wasted
zero defects - employees & the business aims to continuously reduce waste & encouraged to anticipate
lean management - effectiveness
pull - gain products at right quality which ensures customer needs & expectations of value are met
one-piece-flow - only maintains processes that add value to customers improving their satisfaction
takt - improves the flow of processes & optimizes the production of goods
zero defects - aiming for continuous improvement may lead to customers receiving products with no defects & of quality improving their satisfaction
lean management - A & D
A
- business rep is improved as actively reducing & managing waste
- reduces overall use of materials leads to less production costs
D
- employees may be redundant to commit to an attitude of zero defects due to effort & commitment required
- can be costly to implement as employees may need to be trained when production processes are altered
supply chain management
the coordination of the flow of goods & services from raw materials to delivering final products to customers
global sourcing inputs
is acquiring raw materials or resources from overseas suppliers
global sourcing inputs - A & D
A
- able to source materials which aren’t readily available in the country of operations
- improves access to cheaper raw materials reducing cost of production
D
- may be difficult to communicate with suppliers due to language barriers
- materials may be damaged during delivery
overseas manufactures
producing goods or services in a location outside of a business’s headquarters country
overseas manufactures - A & D
A
- can improve access to skilled employees who have enterprise in production
- can improve production speed due to exterpise of overseas employees
D
- finished goods may be damaged during delivery
- poor communication & language barriers may lead to multiple delays
global outsourcing
is transferring specific business activites to an external business in an overseas country
global outsourcing -A & D
A
- can improve quality of a business activities at the external business may be experts in the area
- productivity may increase as the external business has expertise to complete tasks efficiently
D
- reduced control over the business as some activities transferred to external business’s
- local employees from the business’s main operating country are likely to lose their jobs
GSI vs GSO
GSI - acquires supplies overseas for manufacturing
- allocate certain business tasks to external businesses
GSO - certain business activities such as IT services are completed
GSI vs OM
GSI - acquire supplies overseas for manufacturing
- ensure that the correct materials of right quality are acquired
OM - manufacturing phase occurs overseas
GO vs OM
GO - business has little control over transferred activity
- produce good or activity in a location separate away from business’s main office
OM - business retains control over operations
Corporate social responsibility
is the ethical conduct of a business beyond legal obligations to improve the social, economic & environmental outcomes of stakeholders
CSR considerations for inputs
managers may have to consider sacrificing the cheapest production costs & purchase inputs that reduce the business’s impact on the environment instead
CSR considerations for processes
implementing CSR in operations processes can make a business more efficient & effective by reducing waste & improving its reputation
CSR considerations for outputs
While the output of a business is meant to create value to the customer it’s socially responsible to ensure that goods & services produced doesn’t cause harm to the wider community.
google CSR example
Google is a huge business with over 135 thousand employees. Howeverthey still make an effort to go above and beyond in CSR
Currently, google is carbon neutral which means for every carbon dioxidemetrictonne(co2e) they will plant trees or use renewable power sourcesto offset their carbon usage
By 2030 they aim to be completely carbon neutral using completelyrenewable energy in their offices.
global sourcing of inputs
is acquiring raw materials or resources from overseas suppliers
