AOS3 Flashcards
what does operations management involve (definition)
involves coordinating and organising the activities involved in producing the goods or services that a business sells to customers
what is efficiency
how productively a business uses its resources when producing a good or service
what can businesses get when they get increased efficiency (3)
- production costs can be minimised,
- levels of waste may decline,
- and the time taken to produce goods or services can be reduced
what is effectiveness
the extent to which a business achieves its stated objectives
how can operations managers optimise a businesses operating system
electing the most suitable strategies to lower production costs, improve quality, and reduce wastage
how can operations management contribute the achievement of business objectives
By improving levels of efficiency and effectiveness in a business’s production process
what are the 3 key elements of an operations system
inputs
processes
outputs
what are inputs
the resources used by a business to produce goods and services
what are 3 examples of inputs
- labour resources (employees)
- raw materials, such as flour and iron
- capital resources, such as equipment and machinery
what are processes
the actions performed by a business to transform inputs into outputs
what are 5 examples of processes
- mixing
- baking
- designing
- assembling
- constructing
what are outputs
the final goods or services produced as a result of a business’s operations system, that are delivered or provided to customers
manufacturing business definition
A manufacturing business use resources and raw materials to produce a finished physical good
service business definition
A service business provide intangible products, usually with the use of specialised expertise
what are the 6 main operations characteristics that a service or manufacturing business can have
- Tangibility
- Storability of the output
- degree of customer contact during production
- Occurrence of production and consumption
- Standardised or tailored product
- Labour or capital intensive
Tangibility for manufacturing business’s
transform inputs into tangible outputs
Tangibility for service business’s
transform inputs into intangible outputs
what is inventory
Inventory includes the resources and finished goods held as stock.
Storability of the output for manufacturing businesses
they can store outputs as inventory and distribute them to customers at a later date.
Storability of the output for service businesses
cannot store the service and sell them later
degree of customer contact during production for manufacturing businesses
requires minimal customer contact in order to produce a good.
degree of customer contact during production for service businesses
There is a high level of customer involvement when producing a service
Occurrence of production and consumption for manufacturing businesses
production and consumption occur separately.
Occurrence of production and consumption for service businesses
Production and consumption happen simultaneously.
what are standardised goods
goods that are produced consistently and are virtually identical to one another.
Standardised or tailored product for manufacturing business
Generally goods can be easily standardised and mass produced
Standardised or tailored product for service business
As customers are directly involved in the production process, services are easily customised for individual client requirements. (so tailored)
what does it mean to be capital intensive
when a business uses a high degree of machinery and equipment during its production process.
what does it mean to be labour intensive
when a business uses a high degree of employee involvement during its production process.
Labour or capital intensive for manufacturing businesses
business are often more capital intensive
Labour or capital intensive for service businesses
Services are performed rather than produced and are often more labour intensive
what are 3 similarities between manufacturing and service businesses
- aim to optimise efficiency and effectiveness in their operations.
- aim to optimise their operations to produce high-quality outputs at a low cost of production.
- have to deal with suppliers during the process of managing operations
what are 3 differences between manufacturing and service businesses (to use for SAC)
- tangibility of each
- capital vs labour
- storability of output
what are the 6 main technological strategies
- automated production lines
- robotics
- computer-aided design
- computer-aided manufacturing techniques
- artificial intelligence
- online services
what are automated production lines
Automated production lines involve machinery and equipment that are arranged in a sequence, and the product is developed as it proceeds through each step.
what are 3 advantages of automated production lines
- Improving accuracy can reduce errors and the number of resources wasted in production. Reduces environmental impact and improve its reputation.
- Technology can complete tasks for extended periods of time
- Removing tasks that may be tedious or dangerous to complete can positively impact employee morale
what are 3 disadvantages of automated production lines
- a poor reputation if it implements technology that makes employees redundant
- Sudden breakdowns of automated production lines can halt production altogether (down productivity)
- It can be expensive for a business to repair and update automated production lines
what is robotics
programmable machines that can perform specified tasks
what are 3 advantages of robotics
- Performing tasks precisely and accurately can ensure products are consistently produced at a high standard (boosting reputation)
- Tasks can be performed much faster than human labour
- Removing the need for employees to complete dangerous tasks can improve workplace safety
what are 3 disadvantages of robotics
- A business may develop a poor reputation if it implements robotic technology that makes employees redundant
- It can be expensive for a business to repair and update robotic technologies
- There are high initial setup costs associated with purchasing, programming, and installing robotics.
computer-aided design definition
is digital design software that aids the creation, modification, and optimisation of a design and the design process.
what are 2 advantages of computer-aided design
- Customers have the flexibility to modify a design to suit their needs. Attracting more customers
- Can speed up the product design process as designs can be created and modified faster
what are 3 disadvantages of computer-aided design
- Can develop a poor reputation if the CAD software makes numerous employees redundant
- It may be costly to continuously update or repair
- There are high initial setup costs associated with purchasing and installing
computer-aided manufacturing techniques definition
Computer-aided manufacturing (CAM) techniques involve the use of software that controls and directs production processes by coordinating machinery and equipment through a computer.
what are 3 disadvantages of computer-aided manufacturing techniques
- The business may develop a poor reputation if the CAM software makes numerous employees redundant
- Sudden breakdowns can cause production to halt altogether and compromise productivity
- It may be costly to continuously update or repair CAM software
what are 3 advantages of computer-aided manufacturing techniques
- Improved accuracy allows for high quality products to be consistently produced (improves reputation)
- Removing tasks that may be tedious or dangerous to complete may positively impact employee morale
- Can speed up the manufacturing process as machinery does not have to be manually reset by humans
Artificial intelligence definition
Artificial intelligence (AI) involves using computerised systems to simulate human intelligence and mimic human behaviour.
what are 3 advantages of artificial intelligence
- Artificial intelligence can provide prompt customer service 24/7. Boosting satisfaction and reputation
- Artificial intelligence may remove tedious tasks for employees(boosts job satisfaction)
- Artificial intelligence can perform functions much faster than humans
what are 3 disadvantages of artificial intelligence
- The business may develop a poor reputation if artificial intelligence makes numerous employees redundant.
- There are high initial setup costs associated with purchasing and installing artificial intelligence
- It may be costly to recalibrate and maintain artificial intelligence
Online services definition
Online services are services that are provided via the internet
what are 3 advantages of online services
- Online services, such as food ordering platforms, can process orders accurately and provide increased customer convenience (boosts reputation)
- Online services can process bookings faster than employees (for example)
- Employees get increased job satisfaction if the online service removes tedious or boring tasks from their workload
what are 3 disadvantages of online services
- If the platform providing the online service experiences technical difficulties it may disrupt the business’s operations
- The process of a business developing its own platform that provides online services may be time consuming
- There may be high initial establishment costs for a business that develops its own platform to provide online services
what are the 4 main materials strategies
- forecasting
- master production schedule
- materials requirement planning
- Just in time
forecasting definition
a materials planning tool that predicts customer demand for an upcoming period using past data and market trends.
what are 2 advantages of using forecasting
- Prevents the excessive ordering of materials that may go to waste if unneeded
- Can reduce the cost of storage as it prevents the need for a large space to store materials
what are 2 disadvantages of using forecasting
- It can be time consuming to analyse historical data and market trends
- Production halts may occur if the business has insufficient materials due to inaccurate predictions
Master Production schedule definition
A master production schedule (MPS) is a plan that outlines what a business intends to produce, in specific quantities, within a set period of time.
what are 2 advantages of master production schedule
- Improves a business’s reputation by having a reduced impact on the environment. (not buying excessive stuff)
- Clear rostering can allow employees to develop a positive work-life balance.
what are 3 disadvantages of master production schedule
- May find a master production schedule unhelpful as it is not a flexible program.
- It can be time consuming to map out details of production
- Implementing and maintaining this plan can be expensive.
Materials requirement planning definition
Materials requirement planning (MRP) is a process that itemises the types and quantities of materials required to meet production targets set out in the master production schedule
what are 2 advantages of materials requirement planning
- Ensures a business only has the exact materials it needs, decreasing waste generated in production
- It is less likely that production will halt due to insufficient materials or organisational errors.
what are 2 disadvantages of materials requirement planning
- It can be time consuming to constantly update the materials plan.
- Implementing and maintaining the materials plan can incur additional administrative and training costs.
Just in time definition
Just in Time (JIT) is an inventory control approach that delivers the correct type and quantity of materials as soon as they are needed for production.
what are 2 advantages of just in time
- Eliminates idle stock, therefore limiting the amount of stock wasted from expiry or damage in storage
- Reduces expenses associated with waste
what are 3 disadvantages of just in time
- may fail to meet customer demand from a lack of reserves stock (damage reputation)
- If suppliers are unreliable and fail to deliver the correct materials at the right time, production may be brought to a halt.
- Delivery costs may increase due to more frequent deliveries
quality definition
a good or service’s ability to satisfy a customer’s need.
what are 3 main quality strategies
quality control
quality assurance
total quality management
quality control definition
Quality control involves inspecting a product at various stages of the production process, to ensure it meets designated standards, and discarding those that are unsatisfactory.
what are 3 advantages of quality control
- Prevents faulty/unsafe products from reaching the customer.
- Inexpensive to implement, as it is controlled internally by the business
- good reputation for the business and potential higher revenue from having more satisfied customers
what are 3 disadvantages of quality control
- Defects may be missed
- Errors are eliminated after they occur, usually when the product has already been created. Costs with waste
- It can be time consuming to identify and address the causes of errors in production
quality assurance definition
Quality assurance involves a business achieving a certified standard of quality in its production after an independent body assesses its operations system.
what are 3 advantages of quality assurance
- it is a proactive process –errors are detected and avoided BEFORE they occur.
- Costs are reduced because there is less wastage and re-working of faulty products
- improve a business’s competitiveness as customers are likely to have increased confidence in the business and its products.
what are 3 disadvantages of quality assurance
- It can be expensive to organise an external body to assess the operations system of a business.
- It is a medium to long-term process; quality assurance systems cannot be implemented quickly.
- May need continual monitoring to ensure that the standards are met.
total quality management defintion
Total Quality Management (TQM) is a holistic approach whereby all employees are committed to continuously improving the business’s operations system to enhance quality for customers.
what are 2 advantages of total quality management
- The system eliminates defects and waste, thereby reducing production costs and effectively increasing profits.
- TQM helps in understanding customer needs and meeting their expectations –adds to areas of competitiveness.
what are 2 disadvantages of total quality management
- Employees may feel confused about their role in improving quality if managers fail to communicate the TQM strategy clearly
- Often takes many years and significantly planning to implement.
what is waste
Waste refers to any resource (e.g. raw material, labour, time) that is discarded because it cannot be further used in the production process.
what is waste minimisation
Waste minimisation is the process of reducing the amount of unused material, time, or labour within a business.
what are the 3 waste minimisation strategies
- reduce
- reuse
- recycle
what is reduce
Reduce is a waste minimisation strategy that aims to decrease the amount of resources, labour, or time discarded during production.
what is reuse
Reuse is waste minimisation strategy that aims to make use of items which would have otherwise been discarded.
what is recycle
Recycle is waste minimisation strategy that aims to transform items which would have otherwise been discarded.
example of reduce implementation
adjusting production based on customer demand and optimising transport routes
examples of reuse implementation
reusing storage items, parts of defective products, and collecting packaging from customers.
examples of recycle implementation
Technologies can be implemented for recycling various resources like glass, paper, metals, plastics, etc
what is lean management
Lean management is the process of systematically reducing waste in all areas of a business’s operations system whilst simultaneously improving customer value.
what are the 4 lean management strategies / principles
pull
one-piece flow
takt
zero defects
what is the pull strategy / principle
Pull is a lean management strategy that involves customers determining the number of products a business should produce for sale.
how does the pull strategy/principle improve efficiency
Can reduce overproduction and minimise the number of wasted materials, time, and labour generated (increasing productivity)
how does the pull strategy / principle improve effectiveness
Can enable a business to minimise the amount of discarded materials and resources in its production process, allowing it to reduce its expenses (profit)
what is one-piece flow
lean management strategy that involves processing a product individually through a stage of production and passing it onto the next stage of production before processing the next product, continuing this process throughout all stages of production.
how does the one-piece flow strategy / principle improve efficiency
Can reduce the number of errors in a business’s operations process by only producing one unit at a time (productivity)
how does the one-piece flow strategy / principle improve effectiveness
Can allow a business to produce higher quality products at a faster rate improving customer satisfaction (leads to improved fulfil market need and market share)
What is the takt strategy/principle
Takt is a lean management strategy that involves synchronising the steps of a business’s operations system to meet customer demand.
how does the takt strategy/principle improve efficiency
Can allow a business to optimise its flow of materials between the stages of the production process (reduced wasted time and increase productivity)
how does the takt strategy/principle improve effectiveness
Can improve the flow of processes and optimise the speed at which products are delivered to customers, improving their satisfaction (increase sales and profit)
what is the 0 defects strategy/principle
lean management strategy that involves a business preventing errors from occurring in the operations system by ensuring there is an ongoing attitude of maintaining a high standard of quality for the final output.
how does the 0 defects strategy/principle improve efficiency
involves continuously aiming to minimise errors and, therefore, can reduce the number of materials that are discarded during the production process, increasing productivity
how does the 0 defects strategy/principle improve effectiveness
Aims for continuous improvement and may lead to customers receiving high-quality products that have no defects, improving their satisfaction (sales increased and fulfil market need)
what are 3 advantages of using lean management strategies/principles
- A business can improve its reputation as it is actively reducing and managing waste, which benefits the environment.
- Reduces the overall use of materials, which leads to fewer production costs.
- A business can reduce the amount of time that is wasted between tasks.
what are 2 disadvantages of using lean management strategies/principles
- It can be costly to implement lean management as implementing new policies, procedures, and training employees can come at a high expense.
- It may be time-consuming to train inexperienced employees and provide them with the knowledge to commit to lean production methods.
Corporate social responsibility definition
Corporate social responsibility (CSR) is the ethical conduct of a business beyond legal obligations, and the consideration of social, economic, and environmental impacts when making business decisions.
what are 3 examples of how CSR can be used in inputs
- Using environmentally-sustainable inputs
- Using renewable energy to power facilities and equipment
- Using local suppliers
what are 3 examples of how CSR can be used in processes
- Minimising level of wastage (e.g. using technology)
- Disposing of waste appropriately
- Reducing or eliminating packaging
what are 3 examples of how CSR can be used in outputs
- Ensuring finished products are of an acceptable quality and must be safe and reliable (e.g. no defective or harmful products)
- developing an alternative product that is more environmentally friendly
- Ensuring ethical dealings with customers regarding returns and making repairs/replacements for defective goods
global sourcing of inputs definition
Global sourcing of inputs involves a business acquiring raw materials and resources from overseas suppliers.
what are 2 advantages of global sourcing of inputs
- Higher quality materials can be sourced, allowing a product to better meet customer expectations.
- There is greater access to cheaper raw materials and resources, allowing reduced operating costs
what are 3 disadvantages of global sourcing of inputs
- difficult to communicate with suppliers (language barriers)
- Delivery may be time-consuming depending on where the supplies are being sent from
- If resources are damaged during the transportation process, they may need to be discarded, (more expenses)
overseas manufacture definition
Overseas manufacture involves a business producing goods outside of the country where its headquarters are located.
what are 3 advantages of overseas manufacture
- greater access to highly skilled employees who have expertise in production
- greater access to labour resources, (reduce business costs)
- Production speeds can be improved through the use of highly skilled and experienced overseas employees.
what are 3 disadvantages of overseas manufacture
- Manufactured goods may be damaged during the transport process
- Delivery is time-consuming (compared to home)
- Poor communication and language barriers leads to production and delivery delays
global outsourcing definition
Global outsourcing involves transferring specific business activities to an external business in an overseas country.
what are 3 examples of global outsourcing jobs
- data entry
- packaging and distribution
- call centres
what are 3 advantages of global outsourcing
- can allocate more resources and focus on its own areas of expertise.
- Productivity increases as the external business has the expertise to complete specified tasks more efficiently
- able to decrease labour costs (no local emps)
what are 3 disadvantages of global outsourcing
- reduced control over some of its activities (not in the business)
- difficult to communicate with external, overseas businesses (language)
- Local employees from the business’s main operating country lose their jobs.
what are 2 similarities between overseas manufacture and global outsourcing
- Both involve the execution of business activities in a location away from the business’s main headquarters.
- Both allow the business to reduce operational expenses.
what are 2 differences between overseas manufacture and global outsourcing
- A business retains full control of its operations when implementing manufacturing overseas.
- A business that implements global outsourcing retains little control over the transferred activities.
