Operations Management study 3 unit 3 Flashcards
operations system
is the process used the transfrom inputs into outputs . For example inputs to processes to outputs
operations management
consits of managing resources and activities to produce a good or service for sale, with the purpose of generating profit as efficiently as possible
effectiveness
degree to which a business has achieved its stated objectives
efficiency
how well a business uses its resources to achieve its objectives
key business objectives
increase profit
increase market share
contribute to the wellbeing of the community
why is operations management so important
it is the function most central to these objectives due to their involvement in quality, cost and avaliabilty of goods and services. without a good or service to sell businesses are unable to achieve any of the main objectives
what are operations management responsible for
-production of goods
-provisions of services
quality of good or service
-cost of good or service
links between operations management and business objectives
- increase of quality=customers more likely to buy products=more profit
- reduce cost and price remains the same=higher profit/reduce cost and reduce price is more market share
- operations management are careful with their generation disposal of waste=benefit the community
what are goods
tangible, quality and productivity is easy to measure
production and consumption occur seperately
stored as inventory
easily standardised and mass produced, ensuring consistent quality
minimal customer contact
capital intensive production process
what are services
intangible
production and consumption often occur simultaneously
difficult to store
often specialised to meet customer needs
high degree of customer contact
labour intensive
similar things in manufactoring and service businesses
- both utilise technology
- both deal with customers and suppliers
- both plan and develop organisational objectives
- both aim to produce high quality products or services at low cost.
what are inputs
refers to the resources that are used to produce the organisations goods or services
-raw materials,captial equipment, human resources, information
what are processes
-transfroms the inputs into the finished product
for example any action that relates to creating the final product
what are outputs
refers to the finished products of the goods or service
for example hair cut is the final output
key performance indicators
- rate of productivity
- level of waste
- profit
- customer satisfaction
what can a busines do if the operations system is not working efficently or effectively
- technological developments
- materials management
- quality management
- waste management
technology strategies for improving efficiency in manufactoring
automated production lines
website development
computer aided design (CAD)
computer aided manufactoring
Automated production lines
-machinery and equipment arranged in a sequence with components added to the good as it proceeds through each step. controlled by computers.
eg standardised goods such as cars
website development
-the creations and maintenance of an accesible and easily locatable business webiste is vital to competitive ness. -very important avenue of sales through ecommerce
computer aided design
refers to the use of computer and software to prepare 3d product designs
- can be reviewed, examined, evalutated and changed
- cad saves time and money and improves the quality and reliabiltly of the production
computer aided manufactoring
refers to the use of computer software in the control and design of the manufactoring process
benefits of technology
- improves the precision
- reduction in margin of error
- savings on labour costs
- improvements in quality
- ability to perform complex tasks
- ability to work for long periods without break
disadvantages of technology
- COST, technology can be expensive and be come obselete
- pressure to use, if a competitor adopts new tech, there will be pressure
- lose of jobs
- training
- repairs
materials management
manages
use
storage and delivery of materials to ensure the right amount of inputs are avaliable when required in the operations system
why are materials management so import
too much stock is bad as money could be spent other places
overstocking can lead to waste, more waste = higher price
if the stock reaches too low then the business may not be able to meet orders
strategies for materials management
forecasting
master production schedule
materials requirements planning
just in time
forecasting
uses historical data and seasonal fluctuations to try and predict demand for a busiess’ products
mps master production schedule
a plan that shows the quantity and type of each product the organisation will produce. when used effectively, materials will be produced and delivered in time to meet the schedule and satisfy orders/ customer demand
materials requirements planning
a plan that sets out the exact materials needed to fulfil the scheduling set out in the master production schedule
just in time
ensuring materials arrive just as they are required in the production process. large stockpiles are therefore avoided . Highly dependant on the suppilers
quality
the degree of excellence of a good or service
qualilty management
the management of the production process to ensure outputs are consistently reliable, durable and free from defect
quality control
-refers to a process where products and services are regularly inspected and evaluated udring production/delivery to ensure they meet acceptable standards
advantages of quality control
- defects are quickly identified and rectified reducing waste
- improves customer satisfaction as errors found before it gets to them
what effects does the advantages of quality control have
reducing waste improves efficiency
better customer satisfaction improves effectiveness
disadvantages of quality control
takes time to conduct inspections, slowing down the overall process
quality assurance
refers to an organisation receiving certification that its systems and processes meet accepted quality standards by an external organisation
what is the iso
international standards organisation’s main standard is ISO 9001.
Business must follow this to be quality assured
advantages of quality assurance
- leads to improved reputation and sales
- qa provides a guarantee to customers that the organisatoin is providing a quality guarantee to customers
- its voluntary to meet standards .’. differentitiate from competitors
disadvantages of qa
- time consuming and costly to set up
- staff training and extensive documentation required
distinguish between qc and qa
quality control is reactive
quality assurance is preventative
-qc has standards and processes set interally whereas qa assured by an independent body
total quality management
is when the whole organisation approach to achieving and maintaining quality at every stage of the production process through continuous improvement
3 central principles of tqm
1: continuous improvement - striving for perfection in every aspect of its operations system
2: customer focus
3. employee empowerment/ participation. employees are given the responsibility to improve the quality of the business
waste minimisation
a process involvoing the reduction of the amount of unwanted or unusable resources .
in an attempt to improve efficency and effectiveness of operations
common waste minimisation techniques
reduce
resuse
recycle
benefits of waste management
- lower waste disposal costs
- lower energy costs
- lower waste treatment costs
- lower storage costs
- cost recovery through sales
what is lean management
involves a systematic process for the elimination of waste in the manufactoring system.
-improve efficiency and effectiveness
what does it actually mean for lean mangement be specific
lean refers to no excess
-involves identifying and removing all activities and processes that do not add value to a product.
-according to the lean principles, waste is anything that reduces the speed of production.
waste is reduced, production times and costs are cut
what is lean production based on (strategies)
- just in time
- continuous improvement
- use of automation
benefits of lean management
- reduced energy and resource consumption
- reduced delays
- increased worker productivity
- increased customer satisfaction
disadvantages of lean management
- requires committed and experienced employees
- can involve high implementation costs
- requires good relation with suppilers
corporate social responsibility
taking into consideration the impact the business has on the environment, society and the stakeholders above and beyond the required law
what should an operations manager consider to ensure they are socially responisible
- materials (environment)management
- employee(health and wellbeing) management
- supplier (ethically sourced) management
- customer (safe products) management
Global sourcing of inputs
the practise of seeking the most cost efficient materials and other inputs from overseas
strenghts of global sourcing of inputs
- reduces costs
- opportunity to learn how to do business in a potential market
- access skills or resources not avaliable domestically
Disadvantages of global sourcing of inputs
- hidden costs associated with different cultures and time zones
- exposure to potential high risk, both financial and political
- hard to monitor quality
- long lead times
overseas manufactoring
known as offshoring is when the process stage of the operations system is conducted overseas
advantages of offshoring
-reduction in overall costs, labour and materials may be cheaper
-specialist manufactoring,
head office can focus on what they are good at
disadvantages of offshoring
- potential loss of control
- negative impact on reputation if seen exploting workings or reduction of local jobs
- hidden costs from operating in foriegn countries
- increased carbon emissions due to increased transport.
global outsourcing
when a business contracts another business overseas to perform some of its roles and functions
global outsourcing strenghts
- improved quality because of access to expert knowledge and high quality service
- costs can be reduced
global outsourcing disadvantages
- management may have less control over the production process
- security and confideniality issues
- loss of local jobs
