Operations Management Functions Flashcards
Operations Management
Operations management is concerned with converting materials and labor into goods and services as efficiently as possible to maximize the profit of an organisation. For example they seek to improve productivity in the workplace to insure the good and or service it is being produced efficiently.
Operations relationship to business objectives and business strategy
Operations is the area of the business that produces their good and or service. The organisation seeks to do this as efficiently as possible whilst still being competitive. Operations can influence the quality, cost and quantity. This therefore has a direct impact on whether or not the business meets its required objective.
Characteristics of operations management within large scale manufacturing organisations.
Manufacturing organisations seek to transform inputs into tangible outputs and these tangible outputs have the ability to be stored within the business facilities. Manufacturing Organisations also have very little customer involvement with the production process of the goods or service
Characteristics of operations management within large scale service organisations.
The service organisations seek to transform inputs into intangible outputs, these intangible outputs cannot be stored in the facilities of the business. Service organisation do although involve a very high level of customer involvement when the service is delivered.
Operations system
In order for a product to be produced, it needs to go through a operations system. The operations system is the transformation of an input into an output (final product). There are three stages in the operations system that include inputs, processes and outputs.
Inputs
Inputs are resources such as people, raw materials, energy, information, or finance that are used in the process of production. An example of an input would be the ingredients that are used in the production of cake the cake being the output of the business.
Process
Processes are all the activities that help convert the inputs into the final output. An organisations aim is to uses their resources efficiently and it is often processes that enable this to happen. Processes can also impact things such as quality, speed of delivery and amount of wastage. An example of process would be the use of cake ingredients to produce the output.
Output
Outputs are the final good or service that is produced. The quality of the final output is a reflection of the inputs and processes. An example of an output would be the cake, after the ingredients are processed they produce the final product or output.
Productivity
Productivity is a measure of efficiency that looks at the amount of outputs produced compared to the number of inputs used in the production. This states that businesses seek to produce their good or service by using the least amount of resources on offer in the fastest way possible without compromising on quality.
Competitiveness
Is the ability of an organisation to sell its good or service in the market place. The more competitive the organisation is the more likely they are to sell their good or service to the market or consumers.
The relationship between business productivity and competitiveness
Being more productive means we are making more for less. This can allow the organisation to become more competitive in the market. Being more productive in turn allows us to compete on things such as price, product and speed and therefore can make our good or service more competitive against rival organisations.
Completing on cost
Competing on cost means being able to reduce the cost of making the product or providing the service or being able to generate more outputs using machinery or technology. Also by eliminating the amount of wastage the organisation can use less of some resources which will than lower cost of the product in a manufacturing business. The affective use of staff to perform certain services can also lower the cost of the service as less money is being spent on employees and more can go into being competitive on cost
Quality
Competing on quality means proving the best product or service to satisfy customer demand. This can happen by using quality inputs from suppliers, attempting to reduce defects and put in quality checks throughout the processes.
Importance of operations management
LSOs rely on sales to customers to satisfy key business objectives of profit, market share and return on owners investment. The operations manager is ultimately responsible for the product or service that is offered on sale to the customer. The operations manager has a considerable influence on the cost, quality and quantity and speed of production.
What is lean Manufacturing
One of the practical ways LSOs can improve productivity is using Lean Manufacturing. Lean Manufacturing refers to the systems put in place aimed to eliminate waste at every stage of production it also involves analysing each stage of the production process and detecting were inefficiencies are and correcting them. This can help to reduce cost and maximise productivity.
