Business 5.1

Question 1

What is operations management

Answer 1

process of transforming factors of production (or inputs) into outputs to achieve business objectives.

To produce goods and services, businesses need to combine human, physical and financial resources in an effective way. These resources are collectively known as the factors of production:

Question 2

What are the two types of production focuses

Answer 2

Two types of production focuses:

1. Labour-intensive: A production process that uses more human labour relative to capital machinery. Wages being a significant part of the costs.→ Teachers, tailors, etc.
2. Capital-intensive: A production process that uses relatively more capital machinery than human labour. Purchase of machines being majority of the costs.→ Energy industry.

Question 3

What are the different ways operations management can be used in a business

Answer 3

Therefore, operations management is an integral part of an organization’s decision-making process as it directly impacts the other functional areas of the business. Some example are provided below:

Certain operations methods (methods of production) or decisions may require higher or lower levels of staffing. For example, flow production and capital-intensive output require the approval from the finance department because of the large amount of money needed for mass production.

Producing exclusive, one-off products using job production (customized production) enables the marketing department to sell these goods or services at a premium price.

Market research is required prior to the operations management department producing the goods or providing the services to meet the needs and wants of customers.

The organization’s goods and services need to be promoted by the marketing department so that customers are informed and persuaded to purchase these. In addition, the products need to be made available to customers using an appropriate range of distribution channels.

Funds needed for research and development expenditure, including finance for creating and testing prototypes, need approval and support from the finance department.

Production managers are held accountable for their budgets and the organization’s various items of expenditure.

Production operatives need to be recruited, trained, and developed to work effectively, irrespective of what goods or services are being provided. Similarly, supervisors and quality control inspectors may also need to be hired with the support of the human resources department.

A crisis management team might need to be created and trained appropriately.

Essentially, the production department cannot function effectively without the support of all other sections of the organization. Production managers are in charge of working with other managers from the organization to ensure their teams achieve the overall goals of the business.