Operational Management Flashcards
What is operations management?
The planning organising and controlling of activities involved in the production and delivery of a firms product or service. It is a management of the whole process that transforms it put into output and adds value.
What is added value?
The process of increasing the worth of resources by modifying them. It is the difference between the cost of making the product and the selling price it can be.
What are example examples of how to add value?
Design of product
Materials used within product
Branding and marketing
Customer service
Unique selling point
What do decisions and operations include?
Level of output
Quality of output/level of customer service to provide
Range of products to provide – can be flexible to changes in demand
How to promote e.g. labour intensive/intensive
Which supplies to use
Describe 4V in nature of operations
Volume: for example making wedding cakes versus Mars bars
Variability of demand: is it static or variable/seasonal?
Visibility: how visible our staff to the final customer.
Variety: is it every product’s different or identical?
What are the challenges/implications of high / low volume?
High
Low unit costs (economies of scale)
Need to be capital intensive
Need identical products?
Division of labour repetitive tasks.
Low
Higher unit cost
Perhaps more labour intensive as employees need to be multiskilled as tasks won’t be repetitive
What are the challenges/implications of a high and low variability in demand?
High
Need to try to predict the demand so that stock is available
Must be flexible
Changing levels of capacity utilisation
Low
Predictable demand
High levels of capacity utilisation
What are operational objectives?
These are objectives of the operations management function
What are examples of operational objectives
Volume targets, environmental objective
speed of response
flexibility range
added value
quality
efficiency: unit cost
What are the implications/challenges of high and low visibility?
High
Need good customer service
Communicate well with customers
Low
Customer service can be limited
Likely to be manufacturer
What are the implications/ challenges of high/ lowvariety ?
High
Need to be flexible
Complex to manage
Cost
Satisfying needs
Low
Identical products : easier processes to manage
Lower unit costs
What are some ethical/environmental decisions that the operations department could make?
Should we locate in a developing country where wage rates are low?( exploitation)
Should additional features be added to make product safer?
Should we use the supply who uses a sustainable supplies?
Should we recycle?
Should we produce in daytime to low noise pollution?
Should we also production methods in order to become greener?
What does competitiveness depend on?
The benefits of the firm can offer relative to its price compared to rivals
What does operations account for?
The majority of the cost and therefore affects the selling price. They also produce the goods/service and so effect of the benefits the customer receives therefore operations is very vital to competitiveness.
What should the operations function do in the presence of competitors?
The operations function needs to watch their competitive environment. If competitors are launching new products then they need to be innovative too
