Key Elements

Question 1

Inputs

Answer 1

Inputs are the resources used in the process of production. Some resources are owned by the organisation, while others are from suppliers.

Question 2

6 categories of inputs

Answer 2

1 Materials includes raw materials, components and parts consumed or converted by the transformation process.
2 Capital equipment includes the plant, machinery, equipment and property necessary to conduct operations.
3 Labour refers to people involved in the operations function.
4 Information from a variety of sources contributes to the transformation process. Organisations do not always account for the value of this resource, because it
cannot be easily quanti ed as a business asset.
5 Time and its ef cient use are critical to all organisations. Coordinating resources
within appropriate time frames limits costs and wastage. Operational planning may involve achieving production tasks ranging in duration from one year to merely hours.
6 Money is generally considered to be the most exible of all resources, because it can easily be converted into any quantity or combination of materials, capital or labour.

Question 3

How inputs differ between a service business and a manufacturing business

Answer 3

Inputs differ between manufacturing organisations and service organisations. Manu- facturers tend to make more use of capital equipment and materials and use less labour and information. A hospital is an example of an organisation that provides medical services. The inputs to provide these services involve medical equipment and products such as tape, injections, sheets, towels and hand-wash solutions. Labour, in the form of medical supervision by nurses and doctors, is also required. For a service provider such as a hospital, information is a very important input. For example, information about medical practices and patients are combined with
the other inputs in the transformation process to improve patient health.

Question 4

Transformation

Answer 4

The main concept of operations management is transformation — conversion of inputs (resources) into outputs (goods or services). Sony, for example, takes plastic, metal, glass and electronic parts, and transforms them through design, manufac- turing and assembly into numerous electronic products.

Question 5

How transformation differed between service businesses and manufacturing businesses

Answer 5

It is important to understand that the transformation process differs between manufacturing organisations and service organisations. A manufacturer transforms inputs into tangible products (goods which can be touched). A service organisation transforms inputs into intangible products (services which cannot be touched). The operations system of a manufacturer tends to be highly automated or mechanised. Manufacturers use machinery, robots and computers to transform inputs into out- puts. Service providers rely heavily on interaction with the customer and their pro- cesses tend to be more labour-intensive; that is, staff are crucial to the operations.

Question 6

Outputs

Answer 6

Essentially, outputs are the result of an organisation’s efforts — the nal good or service that is delivered or provided to the consumer. Goods tend to be homogenous, which means that they are basically all the same or similar. Services tend to be differentiated, that is, they are provided to individual customers and are modi ed to suit each customer.

Question 7

How many organisations provide both a good or a service

Answer 7

So far, we have drawn a distinction between service and manufacturing oper- ations, but, in many cases, organisations carry out both types of operation. Toyota Australia, for example, separates its vehicle manufacturing operation from its cus- tomer service operation, although both elements are critical to the organisation’s overall success. All organisations carry out many activities that can be isolated from direct involvement with the customer. Insurance companies employ mathematicians called actuaries who use formulas to determine risk and probability in setting the level of insurance premiums. Actuaries never deal directly with the public, but are instrumental in forming parameters or boundaries in which operations will occur.

Question 8

What is the operations system

Answer 8

In order for a product to be produced, it needs to go through an operations system. The operations system is the transformation of inputs into a final output (good or service)

Question 9

3 steps of operations system

Answer 9

Inputs > Processes > Outputs

Question 10

Processes

Answer 10

Processes are all the activities that help convert the inputs into the final outputs. Organisations aim to use their resources efficiently. Often it is the processes that enable this to happen.

Question 11

4 areas processes can impact

Answer 11

Quality, speed of delivery, amount of wastage, safety

Question 12

Using the process of completing homework as
an example, draw a diagram that describes the operations component (that is, the transformation from no homework done to all homework completed).

Answer 12

INPUTS: PEN, CALCULATOR, TIME, WORK FROM SCHOOL, THOUGHTS, OURSELVES
PROCESSES: THINKING, WRITING, CALCULATING, READING, ANSWERING
OUTPUT: FINISHED HOMEWORK

Question 13

Identify the inputs, processes and outputs of the following organisations:
(a) Coles supermarkets

Answer 13

An example of an input at Coles supermarket are its employees as they are a resource used to create the output of goods being available to buy.
An example of a process is stocking, as this is an activity done to convert inputs into the final output of goods being available to buy.

Question 14

Four en twenty pies, I P O

Answer 14

An example of an input is the meat as this is one of the resources used to crest the output of a pie.
An example of a process is preparing pies as this used to convert the inputs into the final output of a pie ready to be sold.
An example of an output is a pie ready to be sold as this is the result of the organisations efforts, it is the final good that has been produced.

Question 15

Identify an explain the key elements of a manufacturing organisations operations management system.

Answer 15

One of the key elements of operations management are inputs. Inputs are the resources used in production to produce a good or a service. An example of an input that rip curl would use could be fabric as fabric is a resource they use to produce the output of a t shirt.
Another one of the key elements of operations management are processes. Processes are a group of procedures that transform inputs into an output (good or a service). An example of a process rip curl would use is sewing, this is a process undertaken by rip curl to transform fabrics and other inputs into the output of a t shirt.
The final key element of operations management are outputs. Outputs
are the end result of an organisations efforts, the good or service that is available to consumers. An example of an output that rip curl produces are t-shirts as this is the end result of their efforts, it is good that they have produced using inputs and processes.

Question 16

Identify an explain the key elements of a service organisations operations management system.

Answer 16

One of the key elements of operations management are inputs. Inputs are the resources used in production to produce a good or a service. An example of an input that Mercure hotels would use could be the furniture in the rooms as furniture is a resource they use to produce the output of an occupied room as rooms need to be furnished before someone will stay in them.
Another one of the key elements of operations management are processes. Processes are a group of procedures that transform inputs into an output (good or a service). An example of a process Mercure hotels would use is cleaning rooms, this is a process undertaken by mercure hotels to transform furniture and other inputs into the output of an occupied room as rooms need to be cleaned before someone can stay in them.
The final key element of operations management are outputs. Outputs
are the end result of an organisations efforts, the good or service that is available to consumers. An example of an output that mercure hotel produces are occupied rooms as this is the end result of their efforts, it is a service that they have produced using inputs and processes.

Question 17

Identify and describe the key elements of the operations management function in a mobile phone service organisation.

Answer 17

The key elements of the operations management function are the inputs which are the resources used in the production of outputs such as raw materials and equipment, the processes which are the activities undertaken to transform inputs into outputs, and the outputs which are the end result of the production process. In respect to a mobile phone service organisation the inputs are the pre made mobile phones, the employees, the retails stores and the individual customers entering the store. The process is the provision of customer service, attending to the customers individual needs and coming up with a mobile phone plan that best meets their needs. The output will hopefully be a happy and satisfied customer leaving the store with their new mobile phone and its accompanying plan.

Question 18

Outline three differences between the operations management of service and manufacturing organisations.

Answer 18

Manufacturing organisations transform inputs into tangible products that can be touched and stored, whereas service
organisations transform inputs into intangible services.
In a service, production and consumption usually occur simultaneously, for example getting a haircut, whereas in the production of a good they are quite separate.
A service allows for a high degree of customer interaction as it is often tailored to a customers needs, whereas a good is often standardised and mass produced.

Question 19

The Charity Foundation is a service organisation assisting children who have been affected by natural disasters. It aims to raise money and collect goods to distribute to children in need.Identify and explain the key elements of The Charity Foundation’s operations management system. In your answer provide one example of each key element.

Answer 19

The Operations System of an organisation consists of inputs, the transformation process and outputs. Inputs refer to the resources used to create the final good or service. They can include raw materials, labour, capital, time, money and information from a variety of sources.The inputs at The Charity Foundation are its volunteers, managers, the goods donated and the money raised.The transformation process is the process of converting the input resources into the final output good or services. Since The Charity Foundation is a service providing organisation, its transformation process is likely to be more labour intensive, as staff and volunteers need to carry forward the service. The transformation process would involve giving the children who have been affected by natural disasters the goods and money donated earlier.Finally, outputs are the final product that the organisation sells or provides. In the case of The Charity Foundation, the output is a service. The output at The Charity Foundation is improving the living conditions of the children affected by natural disasters.

Question 20

Describe how an organisation could adopt an ethical and socially responsible
approach to one key element of the operations system.

Answer 20

One key element is inputs. Inputs are the resources used in production to produce an output. One way to be ethically and socially responsible in terms of inputs is procurement. This is when a business sources its supplies from an ethical and socially responsible supplier. This ensures that all the goods a business use come from ethical and socially responsible sources.

Question 21

Describe one low-risk and one high-risk practice an organisation might use to introduce
change successfully in an organisation.

Answer 21

One low risk practice for change an organisation might utilise to introduce change effectively is two way communication. This involves explaining to employees why the changes are necessary and answering any queries employees might have about the change. This ensures that employees understand why the changes are happening and that they know what is required from them. It can also help them to accept the decision if they understand why it is happening. This is a low risk practice as while it is time consuming it helps strengthen the relationships with employees and encourage them to work productively towards the changes.

One high risk practice for change is threats. Threats are statements of inflicting some form of suffering to people unless they accept what the threatener wants. It could involve threatening mass redundancies unless employees accept the change. It is a high risk practice as while it may be a quick and easy method of getting employees to accept the changes, it can lower morale, lead to industrial action and increase staff turnover.

Question 22

Grantley Mining is a public company that mines iron ore and coal in Western Australia, Queensland and the
Northern Territory. It has over 1000 employees at its numerous mining sites and at its head office in Sydney.
It exports minerals to India and China. Recently the mining boom has started to slow down as demand for
minerals has declined; therefore Grantley’s profits are falling. The CEO, Peter Portello, is very concerned
and disappointed with his senior management team as they have been slow to devise and propose strategies
to turn around the company’s decline.

Identify and explain one characteristics that indicates Grantley Mining is a large-scale organisation.

Answer 22

One characteristic of a large scale organisation is that they employee over 200 people. As Grantley Mining employs 1000 employees they are a large scale organisation.

Question 23

Grantley Mining is a public company that mines iron ore and coal in Western Australia, Queensland and the
Northern Territory. It has over 1000 employees at its numerous mining sites and at its head office in Sydney.
It exports minerals to India and China. Recently the mining boom has started to slow down as demand for
minerals has declined; therefore Grantley’s profits are falling. The CEO, Peter Portello, is very concerned
and disappointed with his senior management team as they have been slow to devise and propose strategies
to turn around the company’s decline.

Explain one positive and one negative contribution Grantley Mining could make to the
Australian economy.

Answer 23

One positive contribution to the economy Grantley Mining is making is the contribution. As they export goods to India and China it means that foreign income is entering Australia without any major costs to Australia. This injects more money into the Australian economy.

One negative contribution they may make is downsizing. As the mining boom has slowed down and profit is decreasing, they may wish to make redundancies to reduce costs. This will result in fewer jobs for Australians which means people are earning less money and are unable to spend as much thus decreasing living standards.

Question 24

Custom Removals is a large-scale organisation that provides a furniture removal service for customers who want to move house without having to do the move themselves. The organisation provides local and interstate removal services, which involve the packing, transport and unpacking of goods. The organisation has found that demand for this service has increased significantly during the past five years. Custom Removals has a strong focus on improving productivity and business competitiveness.

Describe the key elements of the operations system of custom removals.

Answer 24

Inputs are the resources used in the process of production. An example of inputs at Custom Removals are its transport vehicles as this is a resource used in the process of production to produce the output of satisfied customers who have had their goods moved and unpacked at their new home. Processes are all the activities undertaken to transform the inputs into the final outputs. An example of a process at Custom Removals is packing customers goods as this is an activity undertaken to transform inputs into the output of satisfied customers who have had their goods moved and unpacked at their new home. Outputs are the end result of an organisation’s efforts, the final good or service that is delivered or provided to the consumer. An example of an output at Custom removals is satisfied customers who have had their goods moved and unpacked at their new home.satisfied customers who have had their goods moved and unpacked at their new home as this is the end result of their efforts.

Question 25

Malview Hospital is a private company offering healthcare services across Melbourne.

Outline the key elements of the operations system at malview and compare these elements to those of a manufacturing organisation.

Answer 25

Inputs are the resources used in production to produce an output. An input at Malview would be information on how to complete surgeries. This is a resource used by them to produce an output. It differs to manufacturing organisations inputs as manufacturing organisations inputs are usually tangible such as machinery unlike the many of Malview’s inputs which are largely intangible such as information.

Processes are activities undertaken to transform inputs into outputs. A process at malview would be performing surgery as this is an activity undertaken by them to produce outputs. This is different to manufacturing organisations as the service is being consumed at the same time it is being produced, the service received is surgery which is being consumed by the patient at the same time the surgery is taking place. This is different to most manufacturing organisations where usually the good is produced in a warehouse a long time before it is consumed by a customer.

Outputs are the end result of an organisations efforts, the good or service produced by an organisation. At malview, this would be treated patients as this is the end result of their efforts. This is an intangible output which is different to manufacturing organisations which produce tangible outputs.

Question 26

Articles Ltd manufactures clothing.

Answer 26

One of the key elements of operations management are inputs. Inputs are the resources used in production to produce a good or a service. An example of an input that rip curl would use could be fabric as fabric is a resource they use to produce the output of a t shirt.
Another one of the key elements of operations management are processes. Processes are a group of procedures that transform inputs into an output (good or a service). An example of a process rip curl would use is sewing, this is a process undertaken by rip curl to transform fabrics and other inputs into the output of a t shirt.
The final key element of operations management are outputs. Outputs
are the end result of an organisations efforts, the good or service that is available to consumers. An example of an output that rip curl produces are t-shirts as this is the end result of their efforts, it is good that they have produced using inputs and processes.

Question 27

Samuel Jones is the newly appointed Operations Manager at ‘ABN Holdings’, a large manufacturer of dairy products. Part of the strategic plan of the organisation is to expand into new markets and focus on improving the quality of their yoghurt range. Samuel is also investigating a new training program for employees that would ensure minimal waste and improved productivity. In order to expand into new markets the organisation will need to employ extra staff.

Describe the key elements of the operations management system and provide an example of each element as it relates to `ABN Holdings’.

Answer 27

One of the key elements of operations management are inputs. Inputs are the resources used in production to produce a good or a service. An example of an input that ABN would use could be the raw materials of milk as milk is a resource they use to produce the output of dairy products.

Another one of the key elements of operations management are processes. Processes are a group of procedures that transform inputs into an output (good or a service). An example of a process ABN would use is mixing ingredients, this is a process undertaken by ABN to transform milk and other inputs into the output of dairy products.

The final key element of operations management are outputs. Outputs are the end result of an organisations efforts, the good or service that is available to consumers. An example of an output that ABN produces are dairy products as this is the end result of their efforts, it is good that they have produced using inputs and processes.

Question 28

Samuel Jones is the newly appointed Operations Manager at ‘ABN Holdings’, a large manufacturer of dairy products. Part of the strategic plan of the organisation is to expand into new markets and focus on improving the quality of their yoghurt range. Samuel is also investigating a new training program for employees that would ensure minimal waste and improved productivity. In order to expand into new markets the organisation will need to employ extra staff.

Describe one quality strategy that Samuel Jones could implement to support the new strategic plan of ABN Holdings.

Answer 28

One quality strategy that could be used is quality control. This refers to the retrospective checking of products at different stages of the production process to ensure that they meet predetermined standards. This would improve quality as it would ensure that there are no elected products making it to consumers. This would assist in expanding into new markets as people in different markets who are trying the product and discovering that it is of high quality would encourage them to purchase the products again thus increasing the success of the launch of the products in other markets.

Question 29

Samuel Jones is the newly appointed Operations Manager at ‘ABN Holdings’, a large manufacturer of dairy products. Part of the strategic plan of the organisation is to expand into new markets and focus on improving the quality of their yoghurt range. Samuel is also investigating a new training program for employees that would ensure minimal waste and improved productivity. In order to expand into new markets the organisation will need to employ 50 extra staff.

Outline three elements of the Establishment phase of the employment cycle which ABN Holdings would implement to successfully gain new employees

Answer 29

One practice they would implement is human resource planning. This involves planning for current and future employee needs. It involves determining what types of employees, how many they need, and when they will need them to achieve objectives.

Another practice is recruitment. This involves finding the best qualified pool of applicants for the job. As Samuel needs to find 50 extra staff he could use external recruitment. This involves finding new applicants from outside the job. He could use an online recruitment index to attract more employees. This is more expensive but there is a much larger pool of applicants making it easy to find 50 new employees.

Another practice is selection. This involves choosing the candidate that best matches the organisations needs and wants. Samuel should use job interviews to interview the applicants and determine if they will be able to work productively and produce a high quality product which is a focus under the new strategic plan.