Operations management

Question 1

Operations Management:
Definition

Answer 1

Operations management is the business function involved in the utilization of resources to manufacture products or provide services

Question 2

Importance of operations management

Answer 2

Cost reduction
- creates efficiency and waste reduction

Increasing revenue
- profitability improves as products are superior and are returned less

Source of new innovation
- new products and services can be developed due to increased skills and knowledge

Profitability improvement
- reduction of errors and resources are effectively used

Effective customer service and delivery
- products and services proved are quality

Brand image and reputation
- high quality products and services improves brand image

Question 3

Operations managers

Answer 3

Role:
responsible for managing the operations function

Operations management function:
-operations manager’s activities, decisions and responsibilities

Key tasks:
-operations planning
-operations scheduling
-operations control

Question 4

Operations management model

Answer 4

Key elements:

-Operations-management strategies and objectives

-Operations-management activities

Question 5

Operations-management strategies and objectives

Answer 5

Focuses on the needs of customers and continually formulates strategies to maintain and expand customer base

Six main elements of customer needs:
-higher quality
-lower costs
-shorter lead time
-greater adaptability
-lower variability
-high level of service

Question 6

Higher quality

Answer 6

Do things right the first time
Main focus:
=> Error-free products & services
=> High quality image in the market

Question 7

Lower costs

Answer 7

2. Do things cost effectively
   Main focus:
   => efficiency and waste reduction

Question 8

Shorter lead time

Answer 8

3. Do things quickly
   Main focus:
   => Timely to meet market demand
   => Reduce equipment/plant downtime
   => Just-in-time raw material delivery

Question 9

Greater adaptability

Answer 9

4. Make changes quickly
   Main focus:
   => Flexibility to meet increasing customer demand
   => Respond to new customer tastes

Question 10

Lower variability

Answer 10

5. Do things right every time
   Main focus:
   => Maintain consistent levels of product quality
   => Maintain consistent levels of service delivery

Question 11

High level of service

Answer 11

6. Do things better
   Main focus:
   => Provide better total products or services packages than competitors
   => Total Quality Management (TQM) approach

Question 12

Transformation model

Answer 12

Three main components:

-inputs
-transformation process
-outputs

Question 13

Inputs:

Answer 13

Comprise both the resources to be transformed and the resources needed to make the transformation possible

Resources to be transformed include:
-material
-customers
-information

Resources required to make transformation possible:
-human resources
-equipment and facilities
-technology

Question 14

Transformation process

Answer 14

Converts inputs into outputs

Question 15

Outputs

Answer 15

Products or services that conform to specifications

Question 16

Characteristics of different operations

Answer 16

Volume of output:
- no. of items produced over a given period of time

Variety of output:
- range of different items produced over a goven period of time

Variation of output:
- demand pattern for the output ranges from highly regular, non-routine and unpredictable

Visibility of output:
- operation activities customers can directly observe

Question 17

Process types for manufacturers

Answer 17

Five main categories are identified:

Project processes
- large individual and unique projects, e.g. construction projects

Jobbing processes
- small-scale, low volume processes, e.g. jewelry making

Batch processes
- manufacturing limited range of products in batches, e.g. fridges

Mass processes
- high volume production with little variety

Continuous systems
- high volume production of same product, little variety without a break

Question 18

Operations-management activities

Answer 18

-operations design
-operations planning and control
-operations improvement

Question 19

Operations design

Answer 19

Purpose:
- provide products, services and processes that satisfy customer needs

Key characteristics:
- design of products and services
- design of operations product or service processes to manufacture or provide the services

Question 20

Operations planning and control

Answer 20

Reconciling the supply of products or services with demand by means of planning and control

Three dimensions:
- volume
- timing
- quality

Question 21

Reconciliation of volume and timing dimensions

Answer 21

Three different integrated activities are performed:

• loading tasks
• sequencing tasks
• scheduling tasks

Question 22

Capacity planning and control

Answer 22

The focus on the provision of manufacturing or service capacity of a particular operations process

Capacity:
- maximum level of activity over a period of time that the process can achieve under normal operating circumstances

Question 23

Quality planning and control:

Answer 23

Quality:
- consistent conformity to customer expectations
- one of the main methods of adding value to products or services

Difference between expected quality and perceived quality is known as the quality gap

Question 25

Steps in quality planning and control

Answer 25

Step 1: Defining the quality characteristics of the product or service

Step 2: Measuring the quality characteristics of the product or service

Step 3: Setting standards for each quality characteristic of the product or service

Step 4: Controlling quality against set standards

Step 5: Identifying and rectifying the causes of poor quality

Step 6: Continuously improving quality

Question 26

Operations improvement:
Different types of performance standards

Answer 26

Four types of performance standards:
- historical performance standards
- target performance standards
- competitors’ performance standards
- absolute performance standards

Question 27

Operations improvement:
Priorities for improvement

Answer 27

• Breakthrough improvement
• Continuous improvement

Question 28

Operations improvement:
Failure prevention and recovery

Answer 28

Types of failures include:
- design failures
- facility failures
- staff failures
- supplier failures
- customer failures

Question 29

Operations improvement:
Failure detection and analysis

Answer 29

• Operations managers should have mechanisms in place to detect failures
• There should be procedure to determine the cause of failure
• Operations managers should try to prevent failures once causes of failure has been identified
• There should be recovery procedures and contingency plans to minimize negative effects on customers

Question 30

Operations improvement:
Definition of total quality management

Answer 30

The continual process of detecting and eliminating errors in manufacturing to improve customer experience by ensuring that every employee in the organization is quality conscious

Question 31

ISO 9000

Answer 31

International quality management system

Question 32

Operations improvement:
The implementation of TQM

Answer 32

• include TQM in the business strategy
• involve the support of top managers and employees
• use teams in improvement initiatives
• provide feedback on quality successes
• train employees in quality techniques and methods