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Business Management > Operations Management > Flashcards

Operations Management Flashcards

1
Q

Operations Management

A

Is coordinating and organising the activities involved in producing the goods or services that a business sells to its customers.

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2
Q

Effectiveness

A

is the extent to which a business achieves its stated objectives.

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3
Q

Efficiency

A

how productively a business uses its resources when producing a good or service.

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4
Q

Improving Productivity
Leading to business competitiveness.

A

Increasing productivity can allow a business to achieve a competitive advantage by increasing their output , minimising waste and being as low costs as possible to the customer.

Business competitiveness refers to the ability of a business to sell products in a market.

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5
Q

Key elements of an operations system
Inputs

A

are the resources used in the process of production.

Natural resources includes raw materials, components and parts consumed or converted by the transformation process.

Physical resources includes machinery, equipment and property necessary to conduct operations.

Human resources refers to people involved in the operations function.

Financial resources refers to the funds/money required to commence and continue operations.

Information from a variety of sources contributes to the transformation process.

Time and its efficient use is critical as coordinating resources within appropriate time frames limits costs and wastage.

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6
Q

Relationship between Managing Operations and Business Objectives

A

Efficient and effective operations should lead to satisfied customers, sales and, consequently, the achievement of business objectives.

  • give examples linking to quality strategies
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7
Q

Transformation Process

A

The main concept of operations management is the processes the inputs (resources) undergo to become the output (goods or services).

implies physical changes but, today, it also includes the conversion of resources into services.

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8
Q

Outputs

A

are the result of a business’s efforts — the final good or service that is delivered or provided to the consumer.

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9
Q

Output differences between manufacturing and service business

A

Manufacturing businesses transform inputs into tangible products, or goods. Goods are sometimes classed as homogenous, which means that they are basically all the same or similar. Service businesses transform inputs into services. Services tend to be differentiated, that is, they are provided to individual customers and are modified to suit each customer.

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10
Q

Processes in a manufacturing business

A

This transformation process converts the inputs into a tangible product (goods that can be touched).

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11
Q

Processes in a service business

A

Service providers rely heavily on interaction with the customer and their processes tend to be more labour intensive; that is, staff are crucial to the operations.

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12
Q

Characteristics of operations management within a service business

A
  • Produce services that are intangible
  • Services cannot be stored
  • Customer is involved in production — the consumer typically has to be present when the service is produced
  • Production process and consumption typically occur at the same time
  • Services tend to be differentiated or tailored to individual customers
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13
Q

Characteristics of operations management within a manufacturing business

A
  • Produce goods that are tangible
  • Manufactured goods can be stored for later use
  • Little customer involvement in production — the consumer is typically not present when the good is produced
  • Production process and consumption are not linked
  • Manufactured goods tend to be standardised
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14
Q

Automated production Lines

A

consists of machinery (often robotics) and equipment arranged in a sequence, usually on a conveyor belt. As a good passes along the line, the machinery will add components to it.

-does not need employees directly involved
- all or part of the process is automatic

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15
Q

Advantages of automated production lines

A

Minimises waste
Can improve standardisation

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16
Q

Disadvantages of automated production lines

A

Robotics can be costly to maintain or replace.
lead to the loss of jobs as fewer employees are likely to be required.

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17
Q

Robotics

A

combination of science, engineering and technology that produces machines, called robots. Used in engineering and specialised areas of research, capable of doing several different tasks.

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18
Q

Automated production lines efficiency

A

can perform at speeds much faster than humans, reducing the amount of time taken to produce
outputs, thus improving productivity.

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19
Q

Automated production lines and robotics effectiveness

A

perform tasks with a high degree of accuracy, which
can reduce errors enhancing the overall
quality of the final product, increasing customer satisfaction, sales, and market share.

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20
Q

robotics efficiency

A

can perform specific tasks quickly and with high levels of accuracy. This can reduce the amount of time and resources wasted in production, improving productivity.

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21
Q

robotics advantages

A

Tasks can be performed much faster than human labour.
The number of employees needed for production can be minimised, which can reduce a business’s wage expenses.

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22
Q

robotics disadvantages

A

high initial setup costs associated with purchasing, programming, and installing robotics.
can be expensive for a business to repair and update robotic technologies.

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23
Q

Computer aided design

A

Computer aided design software generates three-dimensional diagrams from a set of given input data (parameters).

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24
Q

Computer aided design efficiency

effectiveness

A

reduce the time and labour needed
to design a product, allowing resources to
be used more optimally and productively.

Use CAD to develop various
prototypes and choose the best design to
produce. Enables highest quality design, which can increase customer satisfaction, sales, and market share.

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25
Q

advantages of CAD

A

Product designs can be produced at a faster rate, without the need for erasing and redrawing.
View a design from multiple angles, assisting both the designer and the end user to visualise what will be produced.

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26
Q

disadvantages of CAD

A

Computer software can crash, resulting in the possible loss of work.
Costs of software can be expensive.

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27
Q

Computer-aided manufacturing (CAM)

A

refers to the use of software and machinery that allow computers to direct and control the manufacturing process.

tells a machine how to make a product.

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28
Q

CAM efficiency
effectiveness

A

CAM can follow specific instructions and
complete tasks more accurately than humans
which can reduce the amount of waste and optimise resources, improving productivity

able to coordinate tasks so they are performed with a high degree of accuracy, enabling the business to
achieve a consistent level of quality, which can increase customer satisfaction, sales, and market share.

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29
Q

advantages of CAM

A

Allows a business to produce at faster rates at reduced cost
produce with greater consistency (each component/ finished product will be exactly the same) and greater accuracy.

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30
Q

disadvantages of CAM

A

Computer software can crash, resulting in production stopping.
The costs and time involved in training staff can also deter many businesses from the use of CAM.

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31
Q

AI

A

the ability of a robot controlled by a computer to do tasks that are usually done by humans because they require human intelligence and discernment.

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32
Q

AI efficiency
effectiveness

A

reduce the time and labour used to complete complex tasks that would usually require human intelligence and improve productivity

can perform complex tasks, such as providing timely and high-quality customer assistance. This can improve customer satisfaction levels, and allow for increases in sales and market share.

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33
Q

advantages of Ai

A

may remove tedious tasks for employees, improve job satisfaction.
can perform functions much faster than humans.

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34
Q

disadvantages of AI

A

may develop a poor reputation if artificial intelligence
makes numerous employees redundant
costly to recalibrate and maintain artificial intelligence.

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35
Q

Online services

A

are services that are provided via the internet.

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36
Q

efficiency of online services
effectiveness

A

can remove the need for employees to perform certain tasks and enable labour resources to be used more efficiently.
Implementing online services can improve convenience for customers, increasing levels of customer satisfaction, sales, and market share.

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37
Q

advantages of online services

A

allow a business to gain exposure to more
customers, which can increase the size of its customer base.
A website means that a business is accessible for sales 24 hours a day, 7 days a week.

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38
Q

disadvantages of online services

A

Designing, registering and publishing a website may initially be expensive and time-consuming.

Websites and applications can ‘go down’. This can be very frustrating for customers and a business may lose sales or have its reputation affected.

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39
Q

Materials management

A

materials are received and stored in the right quantities and at the right time, so that they are available in the operations system as required.

40
Q

Forecasting

A

This materials planning tool relies on data from the past and present, allowing a business to analyse trends so that it can predict future events.

41
Q

Forecasting explanation

A

needs to forecast the quantity and timing of demand for its good/ service and then match supply with demand. This will allow the business to decide what goods or services to produce, how to produce them and in what quantity.

42
Q

weaknesses of forecasting

A

Making use of historical data does not necessarily guarantee that past events will continue into the future — it is always possible that unforeseen or unexpected events will occur.

Forecasting, to some degree, will always be inaccurate — this strategy provides a ‘guesstimate’

42
Q

strengths of forecasting

A

prevention of underproducing , resulting in a loss of customers and possibly a decline in market share

maintains an appropriate level of materials for the operations system without overproducing increasing costs for the business.

43
Q

Master production plan

A

is a plan that describes what is to be produced, in what quantities, how and when. Inability to meet this schedule may have serious business implications.

44
Q

Materials requirement planning

A

involves producing an itemised list of all materials involved in production to meet the specified orders.

45
Q

Materials requirement planning explanation

A

needs to consider:
lead times required by suppliers
the exact number of inputs to complete the task
the amount of stock on hand
purchasing procedures

typically software based but is able to be conducted manually.
completed after business has clear understanding of quantities produced and time frame.

46
Q

strengths of MRP and MPS

A

Both can be used to make adjustments to production in response to fluctuations in demand.

Both allow schedule changes when new products are introduced allowing flexibility.

47
Q

disadvantages of MRP and MPS

A

Both strategies rely on accurate information — if incorrect information is used, it is likely that errors will occur in the materials planning process.

Once materials are ordered and employees are scheduled to work, it can be difficult to interrupt the process and make changes.

48
Q

Inventory Control

A

is a system used to ensure that costs associated with maintaining an inventory of materials are kept to a minimum.

49
Q

Just in Time

A

This approach makes sure that the right amount of materials and parts arrive just as they are needed for production.

50
Q

JIT strengths

A

Holding less stock in storage reduces storage costs — improves efficiency and effectiveness.

Less of the business’s finances are tied up in stock as materials are only obtained as needed.

50
Q

JIT weaknesses

A

Materials must be received at the appropriate time — failure to do so can bring a production line to a halt.

Can increase transportation costs as orders are arriving in smaller quantities more regularly

51
Q

Quality control

A

relies on a business setting benchmarks and standards for quality to ensure efficiency and effectiveness.

52
Q

Quality control explanation

A
  • relies on inspections or checks on goods and services.
  • Quality control is considered a reactive approach to quality, as it detects faults in products, goods and services that have already been produced.
  • not possible to check every product; instead inspections are carried out randomly
53
Q

Quality control strenghts

A

Can reduce the number of refunds.

Relatively inexpensive.

54
Q

quality control weaknesses

A

Wastage can reduce profits

Qualified individuals may need to be employed

55
Q

quality control
efficiency
effectiveness

A

Fixing the cause of an error prevents the error from reoccurring, which results in reduced waste allowing optimised use of resources.

Removing defective products prevents customers from receiving faulty goods or services. Allow achievement of objectives of increasing sales and
market share.

56
Q

Quality assurance

A

involves the use of a system that will assure customers that the products of a business are fit for purpose.

57
Q

Quality assurance explanation

A
  • It does this by achieving set standards throughout the production process, thereby preventing quality issues before they occur.
  • quality assurance is said to be a proactive strategy and is process oriented.
  • quality systems, include process checklists, audits and the development of standards.
58
Q

quality assurance
efficiency
effectiveness

A

Preventing errors before they occur can reduce the number of production halts and reduce the amount of time wasted in the production process

more inclined to purchase from a business with certified quality standards. increase its sales and meet the objectives of increasing profit and market share.

59
Q

quality assurance advantages

A

Reduction in wastage from errors
Certification can increase reputation and sales

60
Q

quality assurance disadvantages

A

Documenting operations system can be time consuming
Can be expensive to pay for certification

61
Q

Total quality management

A

is a commitment to excellence that emphasises continuous improvement in all aspects of a business’s operation by sharing responsibility among all the members of the business.

62
Q

explanation of TQM

A
  • aim of TQM is to create a defect-free production process, and maintain a customer focus in operations.
  • proactive strategy (focuses on preventing quality issues before they occur)
63
Q

TQM employee empowerment
quality circles

A

fundamental part of TQM about employee involvement

Quality circles; Teams of up to ten workers meet regularly to solve problems related to process, design or quality. The groups often make presentations to management with their ideas, in order to improve the performance of the business.

64
Q

TQM
Continuous improvement

A

is a process that involves a constant evaluation of, and improvement in, the way things are done in a business. Higher and higher standards are set in the continual pursuit of improvement.

65
Q

TQM Customer focus

A

All employees should aim to satisfy internal customers as well as external customers. Each employee improves a product and passes it along to their customer, the next employee in the process, until the finished product is sold to the external customer.

66
Q

TQM strengths

A

Employees can feel valued and empowered
Being proactive can prevent errors before they happen

67
Q

TQM weaknesses

A

Employees may feel confused about their own role
Can take a long time as it requires a shift in culture

68
Q

Waste minimisation

A

a process that involves reducing the amount of unusable resources created by the business’s production process in an attempt to improve the efficiency and effectiveness of operations.

69
Q

Reduce strategies

A

Implement a quality management system which reduces the amount of waste generated and rectify issues in production to further reduce waste in the future.

Introduce robotics or automated production lines to remove human involvement so that defective products aren’t generated, and so waste is reduced at its source.

70
Q

Reduce

A

Achieved by creating less waste. Stops the problem of waste generation at its source so less waste needs to be cleaned up or disposed of.

71
Q

Reuse

explanation

A

is taking old or unwanted items you might otherwise throw away and finding a new use for them.

saves money that would normally be used to dispose of waste. If input can be reused it can generate a second income stream for the business.

72
Q

Recycle

A

changing discarded materials into new products in order to avoid using more virgin resources.

73
Q

recycle strategies

A

purchasing inputs that can be recycled
inventing new ways to recycle different items.
avoiding buying hazardous materials that could be difficult to recycle.

74
Q

Lean management

A

is the process of systematically reducing waste in all areas of a business’s operations system whilst simultaneously improving customer value.

75
Q

Pull

A

This relates to avoiding overproduction and stockpiling.
By enabling customer demand to dictate the rateof product delivery, a business is more likely to minimise waste as it will only be producing the outputs that will be sold.

76
Q

One piece flow

A

this largely relates to eliminating waiting time or idle time.
Involves a piece of production moving through the operations process one at a time. All steps focused on adding value, one piece at a time, removing all wasteful and unnecessary activities.

77
Q

Takt

A

Refers to the rate of production needed to meet customer demand.

Takt time is the average time between production starting on one product and the start of the next unit, in order to meet demand.
Takt helps the business to establish a consistent workflow following a smooth pattern that is flexible and easy to regulate as demand rises or falls.

78
Q

Zero defects

A

This is all about the business striving for perfection. Errors or defects need to be identified as closely as possible to where they occur.

79
Q

Efficiency and effectiveness of lean management

A

it reduces costs that may lead to an improvement in profit. Increased customer satisfaction result in increased sales and, subsequently, an fulfillment of BO.

as a business reduces the amount of waste produced while working towards achieving objectives, productivity increases and resources should be used more efficiently.

80
Q

advantages of lean management

A

increased worker productivity
reduced delays

81
Q

disadvantages of lean management

A

involve high implementation costs
requires good relationship with suppliers

82
Q

Environmental sustainability

A

refers to a business making decisions that will allow it, and the rest of society, to interact with the environment both now and into the future.

83
Q

CSR considerations for inputs

A

Sourcing from local suppliers to reduce emissions.

Sourcing from suppliers who use environmentally
sustainable methods of production.

Installing reusable and clean energy sources.

84
Q

CSR considerations for processes

A

Using technology to increase precision to reduce wastage.

Develop methods to recycle excess to be used again.

Facilities and technology should contribute to the health and welfare of staff.

85
Q

CSR considerations for outputs

A

Delivering products in bulk to retailers to reduce the businesses carbon emissions from transportation.

make use of environmentally friendly packaging

Creating products which have recyclable elements at the end of their lifecycle.

86
Q

Global sourcing of inputs
explanation

A

acquiring raw materials and resources from overseas suppliers.

exploit efficiencies that can be gained from the global delivery of products, including low-cost skilled labour, low-cost raw materials and other economic factors

87
Q

Global sourcing of inputs advantage

A

Can source materials otherwise unavailable.
Global materials may be cheaper.

88
Q

Global sourcing of inputs disadvantage

A

Import restrictions – Governments can have import quotas.
Communication - language barriers

89
Q

Overseas manufacture

explanation

A

Producing goods or services in a location outside of a business’s headquarters country.
‘
can produce a high quantity of goods at a low price, whilst still maintaining complete control of production.

90
Q

advantages of overseas manufacture

A

Quality – Improve access to skilled employees.
Prices – Can reduce production costs, prices and increase sales.

91
Q

disadvantages of overseas manufacture

A

Delivery may be time consuming.
Local employees may lose their jobs.

92
Q

Global outsourcing

A

means that some part of a business’s operations is transferred to an external person or business in another country.

93
Q

advantages of global outsourcing

A

Quality – Can improve quality as external businesses may be experts.
Efficiency – Can produce goods more efficiently.

94
Q

disadvantages of global outsourcing

A

Reduced control over some activities.
Local employees may lose their jobs.

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