Business Management: Unit 3 Sac Flashcards
Operation Management
How the operation management function is carried out will directly affect an organisation competitive position, as it will show the quality level of the goods and services. The ability of an organisation to meet these business objectives will depend on its ability to produce goods and services.
e.g.
- if operation management is managed effectively, the business is more likely to possess a larger market share and become more competitive in their area of expertise leading to high levels of profits and success.
Technology developments
Technology development is one of the ways for organisations to improve their operational competitiveness is to increase their efficiency by implementing new methods of technology within their business.
e.g.
- this will allow them to lower their costs and still increase their level of output at the same time, meaning they can make more money.
Automated production line
The automated production line is comprised of machinery and equipment arranged in a sequence. Human interaction with the good is minimal, and each stage of production is as simplified as possible. Thereby reducing the change of human error and ultimately producing better quality goods.
e.g.
- however, the disadvantage is the upfront cost of these machines which can be quite financially taxing on the business.
Robotic
Robotics allows a degree of precision and accuracy unmarked by human labour, and can replace human labour in certain areas of production lines to reduce the cost of the organisation.
e.g.
- robotic can be used for repetitive tasks that employees would become bored with, or dangerous tasks that employees should not or cannot perform.
CAD/CAM
CAD and CAM are usually used together, and are computerise tools that are either used to design something (which can reduce the cost of using materials to run test designs) or create something (CAD software is software that controls the manufacturing process). This means that design time and effort is reduced, and numerous alternative designs can be tested (CAD), as well as the savings that can be made with computers assisting in the running of the production line (CAD).
e.g
- CAD/CAM is 3D printing, which allows companies to make prototypes of new products out of cheaper plastic to see if there are any defects or aspects to be improved before they spend money on proper material in production.
Artificial intelligence (AI)
Online services
This is a broad term that refers to any services offered online through website format by a company. Businesses can increase sales by setting up an online store where everyone in the world can purchase their goods. A business may also develop its website to provide detailed information to its consumers, such as a frequently asked questions page or a returns policy
e.g
- this will increase the knowledge the customer has of the business itself and possibly increase the amount of trust they have resulting in higher levels of sales and profits.
Material Management
Material Management is the strategy that manages the use, storage, and delivery of material to ensure that the right amounts of inputs are available when require in the operations systems. The stock that is available for organisations to use is referred to as their inventory, and a large inventory can be held by the business to ensure that they never run out of stock.
e.g.
- inventory can cost the organisation a lot of money, because their money becomes tied up in the stock and if kept for too long, materials can become unusable.
Forecasting
Forecasting is a materials planning tool that relies on data from the past and present, and analysis of trends, in order to attempt to determine future levels of demand. Once a business has forecasted the level of demand, they can use this to match the level of supply, thus theoretically increasing effectiveness in production.
e.g.
- companies can look up things such as past demand, seasonal trends and (e.g. ice cream stores in winter compared to summer) or market research that companies has conducted.
Master production scheduling
A Master production schedule (MPS) is the plan that describes what is to be produced, in what quantities, and when. It must to what are called ‘lead times,’ which are specific delivery dates of materials.
e.g.
- a business must have the correct productive capacity in order to have an accurate MPS
Material requirement planning
Material requirement planning (MRP) is the next stage in process, and is directly linked to the MPS. The MRP is an itemised list of all the materials involved in production, including lead times that are required by supplies, the exact number of inputs that would be required to complete the orders, and the amount of stock currently held in the business.
e.g.
- developing an itemised and ordered list of all materials involved in the production to meet specific orders, including lead times needed by supplies - lead times refers to the amount of times that a company has to give to a supplier in order to ensure the material can be delivered on times.
‘Just In Time’ approach
JIT approach is a sub-section of what is known as inventory control. Inventory control is a system that is used to ensure a business is keeping the costs associated with their stock levels at a minimum. When a company pruchase input or stock that they have not then sold to the end consumer, that is money that is ‘sitting in stock.’ therefore money that the company is losing
e.g.
- therefore, approaches such as the JIT approach allow a company to minimise the amount of stock that they have in the business that they are not suing, therefore reducing the amount of money that have ‘sitting of stock’ and subsequently increasing their profit.
Quality management
Quality management refers to the degree of excellence of goods and services and their fitness for the purpose for which they are designed. Quality products should be easy to use, reliable, and durable and delivered on time
Quality Control
This involves the use of inspections at various points in the production process to check for problems and defects. Quality control is completely internal (only the people/management within the company are working to ensure the quality of the end product or service).
e.g.
- therefore, this is also the cheapest option. However, it is also been a ‘reactive’ option, because often you are fixing problems after they have arisen and been seen within the company
Quality assurance
Quality arrurance is involves the use of an external audit, which then sets stardards for the company. This mean that management achieves set standards in their production. Quality assurance is external, and therefore more reliable. It is also a more ‘proactive’ methods of quality management, becuase the company can highlight potential issues with quality before they occur. However, because of the emphasis on ducumentation, it is often time-consuming.
