AOS 3A Flashcards
Operations Management
Applies specifically to the production or transformation process
Operation managers use strategies to achieve this including (4)
Management of materials
Quality management processes
Waste
Use of technology
Relationship between operations management and business objectives
The core objective of a business is to maximise profit
This means businesses need to maximise efficiency and effectively use resources, to produce goods and services at the lowest possible price
Inputs
A resource used in the production process - May be owned by the business or come from supplier
Types of input (manufacturing and service business) (6)
- Materials
- Capital equipment
- Labour
- Information from many sources
- Time
- Money
Capital Resources
Are goods made and used to produce other goods and services. Examples include buildings, machinery, tools and equipment.
Transformation Process
The conversion of inputs into outputs
Outputs
The final result of a businesses efforts - the final good or service that is delivered or provided to the customer
Manufacturing Business traits
- Transforms inputs into tangible products (can be stored)
- The production process and the consumption process are not linked they occur separately
- Little customer involvement in production
Service business traits
- Services are always intangible -can’t be touched/stored
- Sometimes customer may need to be present when the service is being delivered for example a haircut
- Production and consumption often occurs simultaneously.
An operations manager’s goals is
To make sure they extract the maximum productivity and standards of quality from the operating system, while also achieving ethical and social responsibility objectives.
Introducing technology does (2)
Introducing technology to an operating system can improve efficiency and overall production quality
Can reduce costs
Automation
This is the replacement of human effort by machinery and computer (technology)
Humans can be involved
Advantages and disadvantages of automation
Advantages
- Increases/improved production speed
- Decrease in the cost of human labour
- More consistent and improved final output
Disadvantages
- Security threats - computers may be hacked and virus’ downloaded
- Development costs can be huge and unaffordable
- Impact on social responsibility due to job loss
automated production lines
- A series of workstation that are controlled by technology, all linked by a transfer system
Advantages and Disadvantages of an automated production line
Advantages
- Improved productivity through a decreased in labour costs
- Reduced production time (improving efficiency
Improved production reliability and accuracy
Improved workplace safety
- A decrease in boring, repetitive jobs
Disadvantages
- Huge initial cost
- Ongoing maintenance which may increase some labour costs
- A decrease in employment opportunities for unskilled workers
CAD - Computer Aided Design
Its computer “software” that is driven by human labour to show the machinery at a 3D level
CAM - Computer Aided Manufacturing
- Involves the control of machinery, tools and equipment via a computer
- Machines on the production line are set instructions from a central computer and it generally means there is a lesser margin for error
- Human runs production
CIM - Computer Integrated Manufacturing
CIM combinds CAD and CAM and is a computer program that controls the production process from start to finish
It can help with planning, cost estimate, inventory planning, control and quality control systems
Robotics
- Programmable machines that have the ability to detect changes in the environment
- They help with costs savings and efficiencies, reduce the cost of labour and do not suffer human error
Artificial intelligence - If one machine fails the whole production is stopped (a sequence)
- Replace real with robots.
Forms of introduction of technology in the service industry (9)
Online booking, intranets, scanners, tablets/mobile phones, apps, internet, skype/conference calls, email, cloud data.
Ecommerce
The buying and selling of goods and services, or the transmitting of funds or data over an electronic network - generally the internet
Benefits of ECommerce
Cheaper than setting up a store from
Reduction in marketing costs
Your product/service is available 24/7
The job of the materials manager includes
To provide the right materials in the right quantities, and the right levels of quantities at the right time at the right place from the right source
master production schedule
A MPS (master production scheduler) shows what will be produced in what time frame - it helps the operations manager analysis the production capacity an allocate additional resources as needed
Materials requirement schedule
MRS is a computer based inventory management system which helps the operations manager schedule and place orders for materials
How MRS helps productivity (3)
It makes sure the correct number of inputs are on site to meet production requirements
Minimises inventory costs
Helps with the planning of operational activities, delivery schedules and purchasing activities
Inventory
Is the storage/management of
Raw material
Unfinished production
Finished goods ready for distribution
The aim of inventory management
Make sure the correct quantities of parts and materials are available to keep the operations running
JIT (Just in time inventory)
An inventory management system which aims to avoid holding any stock (either inputs or finished goods)
Supplies arrive just as they are needed for production, and finished products are dispatched immediately or sold to customers
Advantages and Disadvantages of JIT
Advantages
As small quantities of inputs are delivered frequently, large stockpiles are avoided
Inventory is replaced as it is used
Employees work together to identify wasteful practices and try to eliminate these regularly
Disadvantages
If there are factors that affect delivery it can cause problems and possibly shut down the production process
JIT allows for less time to check the quality of materials as they arrive
There may be an increase in ordering and admin costs as you have to buy more frequently
Examples of businesses that use JIT
Toyota
ALDI
McDonalds
Quality can include (4)
Durability
Maintainability
Speed of service
Design
Quality management
Quality is the degree of excellence in a good or service and the ability to satisfy the customer
Quality management programs aim to (3)
- cReduce waist and defect waste in production which maximises productivity
- Make sure a high standard of quality is established at every stage of production
- Achievement of high quality benchmarks (list of what we have to achieve)
Quality control
The process of checking the quality standards of work done, or the process of checking raw material and components parts
Quality Assurance
Is a system that is establish to ensure predetermined benchmarks are achieved
Benchmarks are usually set by someone outside of your business (external organisation, eg Australian standards)
The quality assurance standards cover… (3)
- Specific processes in terms of customer satisfaction, continuous improvement, production process
- Training of staff
- Documentation of process - controls, correct action, auditing
Total Quality Management (TQM)
Is a holistic approach to quality where all staff in the organisation aim to participate in the ongoing improvement in both the organisations culture and production process
Quality circle
A group of employees who meet on a regular basis to discuss quality issues in an organisation
Production, development, finance, marketing, factory
Core TMQ concepts (4)
- Continuous process and improvementsContinuous improvement happens in small incremental steps → it never stops
Teams are established to analyse problems, processes and implement solutions - Customer Focus
External customers → person who purchases the final product
Internal customers → those that use what our work group provide - Defect prevention
Identify where the business may have defects, problems
Fix them before it becomes a problem - Universal responsibility
Everyone in the workplace is responsible for the final product
Deemings definition of quality
Meeting or exceeding the expectations of customers
The 4 ways to reduce waste
Reduce
The way you use resources
Reuse
If waste is produced, if possible it should be used: cheese slices
Recycle
To recycle waste material into usable products
Recovery
If possible recover material/energy from waste that cannot be reused, reduced or recycled
Lean management
companies identify and remove all activities and processes that do not add value to a product during the production process → this increases productivity levels
Lean production is based on(3 ways we can implement lean production)
Just in time
- Materials are delivered Just In Time for the production process so inventory costs are kept to a minimum
Kaizen concept of continuous improvement
- Notion of continuous improvement. All employees work together to productively achieve incremental improvements
Use of automation
- Robotics
- CAD, CAM, CIM
FMS
A flexible management. A method for producing goods that is readily adaptable to changes in the product being manufactured.
Helps to implement changes strait away
Forecasting
Data is used to identify trends so that they can predict what materials will be required and in what quantities
Types of materials management
- Master Production Schedule
- Materials Planning Requirements
- Forecasting
Types of Quality Control
- Quality assurance
- Quality control
- Total quality management
elements of operations management
- Inputs
- Transformation process
- Outputs
efficiency
The best use of resources in the production of goods and or services.
effectiveness
the degree to which a business achieves it’s stated objects doing the right thing
