Operations And Business Objectives

Question 1

Link between operations, strategies and objective

Answer 1

There is an important link between an organisations operations and objectives. Operations is the area of the organisation that produces the good or service. Organisations try to be efficient and competitive and operations is how they can achieve this. Operations can influence the quality, cost and availability of an organisations goods or services. It therefore has a direct impact on them achieving their objectives.

For example if a business has the objective of an increase in sales and they want to achieve this by lowering the costs of products. Operations can allow this to happen by investing in methods that will improve productivity and allow a business to produce the same number of outputs for less inputs. This will mean it cost them less to produce outputs and they are therefore able to offer the output at a cheaper price.

Question 2

Operations Management

Answer 2

The management of resources to efficiently produce goods and/or services. Operations management is responsible for transforming inputs into outputs.

Question 3

Tangible and intangible products, 3 differences between service business and manufacturing business

Answer 3

A manufacturer will transform inputs into tangible products. Tangibles are physical products that can be handled and stored before they are sold to the consumer, such as bread, clothing or a car. The production process and consumption are not linked. That is, there is little customer involvement in production.
A service organisation will transform inputs into services. Services are intangible, which means that they cannot be touched. For example, if you attend a training course, you cannot physically touch it, but you bene t from gaining knowledge and learning new skills. Services cannot be stored and goods can be stored and the customer may actually need to be present when the service is being delivered. For example, the customer must be present when receiving a haircut.

Question 4

How the operations manager use the management roles

Answer 4

The operations manager, like any other manager, uses the four management roles discussed in chapter 2. The operations manager may, for example, lead the way by investigating the purchase of new state-of-the-art machinery that will com- plement the operation rather than compete with the need for labour, therefore cut- ting production costs. Before purchasing new machinery the manager must plan, determining objectives for the operations and how they will be achieved (in this case, by purchasing new equipment) and organise staff to facilitate the process of installing new equipment. Once the new machinery is installed the operations manager may control the quality of the product by monitoring the production run and inspecting the product to ensure it meets standards.

Question 5

Example of operations strategy to improve quality of good or service

Answer 5

Use high quality suppliers that provide high quality resources. Also don’t cut corners in production process and ensure goods are checked before sent to stores.

Question 6

Example of operations strategy to lower costs

Answer 6

Use cheap suppliers that sell cheap resources. Use lower quality machinery that does not do a great job but is very cheap.

Question 7

Increase profit

Answer 7

Find good suppliers that offer good resources at reasonable prices and use adequate machinery that does a good job without being overly expensive. This ensures that there are reasonably low prices and still a good quality product or service.

Question 8

Improve image

Answer 8

Use suppliers that are Ethical and socially responsible and sell sustainable products. Produce products in a way that is ethical and socially responsible, ensure machinery is safe to use and does not produce high levels of greenhouse gas.

Question 9

3 inputs required to bake a cake

Answer 9

Icing sugar
Flour
Chocolate

These are all different resources used in the production of a cake.

Question 10

Productivity, methods to increase productivity

Answer 10

Productivity measures the amount of output compared to the amount of inputs that go into production — it is a measure of ef ciency. Productivity can be improved by reducing the amount of input required to obtain the same level of output or increased output. Alternatively, productivity may rise if input remains the same but output increases, therefore getting more out of the input.

Question 11

Explain how many LSOs are both service businesses and manufacturing businesses.

Answer 11

In reality, many LSOs today produce a combination of both manufactured goods and services. Products such as cars or electronic equipment often come with a war- ranty and other services. When a customer enters a contract with an Internet pro- vider, they will receive a service (their broadband connection), a modem and other goods necessary to enable the connection.

Question 12

Tangible outputs

Answer 12

Goods that can be touched. Manufacturing organisations produce tangible products such as in iPhone.

Question 13

Intangible products

Answer 13

Goods that cannot be touched. A service business produces intangible outputs such as vehicle repairs from a mechanic.

Question 14

The key role and prime concern of an operations manager

Answer 14

• The key role of the Operations Managers is to oversee the operations system and ensure it is operating effectively and efficiently. • The prime concern is to make efficient use of resources to improve productivity and achieve a high quality product. • The Operations manager will make use of the key management roles of planning, organising, leading and controlling

Question 15

Importance of operations management

Answer 15

LSOs rely on sales to customers to satisfy the key objective of making a profit. Operations management refers to the production of the good or service that is being sold to customers, without operations there would be no product to sell to customers. An operations manager has an impact on quality, cost and availability of the product and if operations is managed correctly, customers can be attracted and sales can be boosted.

Question 16

How an operations manager might use the three levels of planning 2 for each level

Answer 16

STRATEGIC Makes decisions on what products to provide. Quantity and scope of production.
TACTICAL Decisions about quality of products. Sourcing of technology being used in production.
OPERATIONAL Rostering of operations. Production scheduling.

Question 17

Emma is the operations manager at AutoApp, a mobile application software creating company. Most of the employees she supervises are experienced, driven and self-directed IT specialists who often work from home and correspond with Emma through the internet.

Define operations management and explain how good operations management assists organisations in achieving business objectives and strategies.

Answer 17

Operations is the part of the business that actually produces the good or service. It involves managing the transformation process, that is using processes to transform inputs into outputs.

Good operations management is vital if an organisation is to achieve its objectives and strategies, because the operations function ultimately is what creates and delivers the goods or services of the company. It is arguably the most important function, and the core function, because an organisation’s reason for existence lies within the operations function. Good operations management will lead to an increase in productivity and competitiveness, ultimately leading to an increased level of profits, therefore achieving the goals and objectives of an organisation.

Operations management has an effect on the cost, quality and availability of the good or service and therefore has a direct effect on objectives. For example if a business has the objective of an increase in number of sales, the operations department might use a quality control procedure to improve quality and thus attract more customers.

Question 18

Emma is the operations manager at AutoApp, a mobile application software creating company. Most of the employees she supervises are experienced, driven and self-directed IT specialists who often work from home and correspond with Emma through the internet.

Suggest and justify one management style Emma should adopt in her position as senior manager. Discuss three management skills that Emma could utilise for this style of management.

Answer 18

Emma should adopt a laissez-faire management style, which is one where the manager has little interaction and control of workplace operations is by employees. It has decentralised decision making as decisions are made by the employees.

Employees that are highly talented, creative and knowledgeable respond well to a laissez-faire management style, such as those Emma supervises, as they are “self-direction IT specialists”.

Laissez-faire managers do not provide direction and instruction to their employees, so the control is decentralised. This would work best with employees at AutoApp since they are all “experienced” and “driven”

Communication skills are a skill Emma may need in this management style. It refers to the transfer of information between a sender and a receiver. She needs to know how to communicate organisational goals and objectives while having minimal face time with her employees.

Team building skills can be employed by Emma to create productive, complementary work groups. Emma should ensure that these groups can brainstorm together, as well as rely, motivate and assist each other since she will not be intervening.

Time management skills are important, as Emma is still in charge of getting Apps developed in a particular timeframe. She needs to inform her employees of deadlines so that they can endeavour to meet them, since she will not be there to make sure that they do.

Question 19

How will the management style from the previous question (laissez faire) impact on corporate culture.

Answer 19

Corporate culture refers to the values, behaviours and beliefs shared by the employees of an organisation.

A laissez-faire management style signifies a work relationship between employer and employee built on respect and trust. Employees will more likely feel highly-valued by the manager. Giving employees creative time and space which is both flexible and private may help them be more productive and appreciative of the workplace and its policies. This leads to a good corporate culture, which results from a satisfied faculty, a relaxed environment, and a sense of pride and ownership within the employees.

Question 20

Emma is the operations manager at AutoApp, a mobile application software creating company. Most of the employees she supervises are experienced, driven and self-directed IT specialists who often work from home and correspond with Emma through the internet.

Explain how two strategies of the operations function, materials management and technology, can assist operations managers such as Emma in improving business competitiveness with regards to cost and quality.

Answer 20

Materials management works to ensure that the right type and quantity of inventory is available in the production process, so as to maximise efficiency. Technology refers to using computers, machinery or robotics to improve productivity and efficiency.

Business competitiveness is the ability of an organsiation to attract customers and sell products better than their competitors.

One materials management strategy that could be used to improve business competitiveness in regards to costs and quality is the just in time approach. This is when the organisation receives their inputs just before they are needed in the production process. Thus means that their are decreased storage costs. This can improve business competitiveness in regards to cost as because the business is spending less on storage they can afford to sell their products at a cheaper price, thus attracting more customers and increasing sales and competitiveness. It can also improve quality as the business should use good quality suppliers that offer good quality materials that can produce a better quality product.

One technology strategy that could be used to improve competitiveness is computer aided design. They could use computers to design the applications with much more precision then a human could thus improving the quality of the product. It can also be used to produce software at a much faster rate meaning the organisation can produce more outputs at a quicker rate which means less inputs (time) were used therefore they are making savings. They can use these savings to offer the products at a lower price and compete on cost.

Question 21

Describe how a good relationship between an organisation and its supply chain can lead to many benefits for an organisation. Describe two ways of purchasing supplies in an ethically or socially responsible way.

Answer 21

Supply chain management refers to the management of the flow of goods and services from suppliers to the various distribution points and warehouses and finally to the customer.

One benefit of keeping a good relationships with suppliers are better prices. Often suppliers have loyalty discounts, that is discounts for the suppliers after long periods of time using that supplier. Business’s can then get inputs for cheaper prices while maintaining their selling prices thus getting more profit from each sale and improving profitability.

Maintaining a positive relationship with a supplier can also lead to more flexible credit terms. As the supplier knows that the business is loyal they are more willing to adjust their credit terms and allow business’s to pay at a much later date. This means a business can buy supplies and be given more time to earn enough money to pay for the supplies.

One way to purchase supplies ethically and socially responsible is through procurement. That is only purchasing supplies from ethically and socially responsible suppliers that do not exploit labour or generate their supplies in a way that damages the environment. This ensures that a business is not making its products using ethical and socially responsible supplies.

To be E&SR a business could purchase supplies locally. This helps support the local economy and it generates jobs which means more people are earning money and more money is being injected into the economy. This is being socially responsible as it is going above and beyond legal and moral obligations to give back to stakeholders, in this case the community.

Question 22

Production Process

Answer 22

Another name for transformation process.

Question 23

Explain the key elements of a photo frame manufacturing business.

Answer 23

Inputs refer to resources such as raw materials, labour, capital, equipment and information used in the production process. For example, in the case of Felicitous Frames, inputs may include the raw materials such as plastic, timber and glass.

Processes refer to the acts of transforming resource inputs into finished goods and services. For example, in the case of Felicitous Frames, transformational processes would include taking the raw materials and physically modifying them in order to create the final product.

Outputs refer to the final products or services available to the external environment which have come about from transformed inputs. For example, in the case of Felicitous Frames, outputs are the tangible final products of frames and other accessories.

Question 24

Wally Wristing plans to open a new branch of his large-scale organisation, Felicitous Frames. The organisation manufactures and sells a significant range of photo frames and other accessories. The main operations of the organisation involve having resources (plastic, timber and glass) delivered using those resources to produce attractive, affordable frames. Felicitous Frames aims for a high level of quality in its products and services, but has recently had numerous complaints about defects in its products. Mr. Wristing thinks that this may be due to staff members feeling disempowered as they feel that they are not responsible for the end product; and because Felicitous Frames still makes their products by hand.

Mr. Wristling wishes to optimise the efficiency of operations in the new branch of Felicitous Frames. Using the information provided, name and define, then justify a quality management strategy that Mr. Wristling could accept.

Answer 24

Mr. Wristling could adopt Total Quality Management (TQM). TQM refers to a holistic approach to quality where all members of an organisation are responsible for quality.
TQM has three main aspects: continuous process improvement; customer focus; and teamwork and employee participation (which encompasses defect prevention and universal responsibility). As such, TQM would be perfect for Mr. Wristling to implement into the operations of Felicitous Frames as:
‐ There have recently been some defects in the products of Felicitious Frames, and TQM emphasises defect prevention through the operations process rather than attempting to fix them after they have already occurred.
‐ Some employees feel disempowered as they don’t feel as if they are responsible for the end product, and TQM emphasises universal responsibility, whereby all employees are responsible for the quality of the outputs.

Question 25

Wally Wristing plans to open a new branch of his large-scale organisation, Felicitous Frames. The organisation manufactures and sells a significant range of photo frames and other accessories. The main operations of the organisation involve having resources (plastic, timber and glass) delivered using those resources to produce attractive, affordable frames. Felicitous Frames aims for a high level of quality in its products and services, but has recently had numerous complaints about defects in its products. Mr. Wristing thinks that this may be due to staff members feeling disempowered as they feel that they are not responsible for the end product; and because Felicitous Frames still makes their products by hand.

Explain an appropriate technology strategy that could enhance efficiency in operations of Felicitous Frames.

Answer 25

One strategy that could be used to enhance efficiency is robotics. Robotics is the use of highly specialised forms of technology that are capable of completing complex tasks.

As Felicitous Frames produces their product by hand which is undoubtedly a slow process the use of robotics would greatly increase efficiency. Robotics can produce products at a faster rate and usually with less waste than humans. This would allows the business to produce more outputs for the same inputs thus increasing productivity and time efficiency. It would also mean inputs are being used with less waste thus increasing efficiency.

It would also help address the quality issues at the organisation. Robotics can usually produce products at a better quality as they have more precision than humans.