Operations Management (Outcome 3) Flashcards
Define Operations Management?
All activities related to the production of a good or service.
The core objective of all organisations is to efficiently produce goods and services - operations management is the strategy used to achieve this.
What are the key elements of an operations system?
Inputs (resources), Processes, Outputs (finished products).
What are the 3 areas of competitiveness for a manufacturing business?
Speed + Delivery
Cost
Quality
Name the 4 operations strategies?
Quality (QC, TQM)
Facilities, Design and Layout (product, process, office, retail)
Materials Management (JIT, MPS)
Technology (CAD, Automation)
Explain the positive and negative aspects of JIT?
Just In Time is a materials management strategy which involves resource inputs arriving Just in Time or as needed to manufacture a product or service. JIT is perfect for businesses which deal with perishable inputs such as food (especially meat, vegetables, dairy etc).
A positive aspect of JIT is that it can minimise storage costs of inputs.
A negative aspect of JIT is the high transport costs of regular delivery and the environmental damage from increased transport.
If material costs are variable - it may be a better alternative to stock up on them. Especially if the price is prone to excessive fluctuation.
What are the elements of Competing on Cost? (Areas of Competitiveness)
- Eliminating/Selling Waste (recycling etc)
- Achieving economies of Scale
- Producing standardised products
- Making use of latest tech
What are the elements of Competing on Quality? (Areas of Competitiveness)
- Reliability (doesn’t break down)
- Durability
- Fashion / Trend
- Tailored to needs
- Strong relationship with customers.
Examples of business which compete on quality are Rolex, BMW (Luxury brands are good examples)
What are the elements of Competing on Speed of Delivery? (Areas of Competitiveness)
- Efficient Supply Chain
- Quickly identify consumer trends
Examples of businesses which compete on Speed of Delivery are Nike, McDonalds, Aldi, Apple, Ripcurl.
What are the aims of Operations Management?
- Increase Productivity (Level of output obtained from a set amount of input)
- Efficiency (The way the org uses resources to achieve goals/objectives
- Effectiveness (degree to which objectives are achieved)
Explain Materials Management? (Strategy of Operations Management)
Materials Management is an Operations Management strategy which is used to achieve operations objectives.
Materials Management is the system implemented to ensure that the right materials are available in the right numbers for the right cost when required.
Managers Responsibility: Ensuring that there is adequate supply of materials on hands to meet production and customer demands.
What are the methods in which Materials Management can be implemented into a businesses operations management?
- Master Production Schedule
- How do we meet customer demand through allocation of resources?
- Materials Requirement Plan
- Meeting customer demand through allocation and organisation of raw materials
- Relates to 3rd party suppliers
How JIT can be used to increase a businesses efficiency?
Just In Time requires no storage of inputs, as they are ordered and arrive as needed.
A Kanban is a visual signal, first implemented by Toyota, that indicates it is time to replenish stock and possibly reorder.
Just in Time allows for high customer responsiveness, meaning Customer’s demand can be monitored.
By applying JIT, a business can continually monitor and make improvement to the production process.
Describe Economic Order Quantity? (Materials Management Strategy)
Economic Order Quantity is a system, often used in retail environments, where employees scan products in and out as they are sold. The EOQ system will automatically reorder once stock is low.
Advantages:
- Economically Efficient.
- Doesn’t tie up monetary resources in excessive stock.
Disadvantages:
- Mishandled Stock
- Pre-determined limit may not be enough stock for all year round.
Explain PVASL?
PVASL = Product (What is to be made? Specs?) Volume (Quantity to be produced?) Activities (What resources are required? in what quantities?) Size (What facilities are required?) Layout (based on requirements)
Describe the Fixed Position Layout?
Used for big project production. Deals with large-scale, bulky activities such as the construction of bridges, ships, aircraft or buildings. Used when it is more efficient to bring materials to the site, rather than move the product around.
