Operations Processes Flashcards
What are inputs?
the physical raw materials and components used to make goods as well as the skills, creativity and knowledge required to provide services
Note the three transformed resources + McDonald’s examples
Materials
The raw ingredients, components, parts and supplies used in operations
McDonald’s purchases more than 430 million hamburger buns each year
Information
Knowledge relevant to the operations process
McDonald’s utilises customer feedback and analysis of sales figures
Customers
Transformed by the consumption of a good/service (unsatisfied to satisfied)
Certain services can transform the appearance or location of a consumer
Note the two transforming resources + McDonald’s examples
Human Resources
Skills, knowledge and labour are applied to materials to convert them into goods & services
McDonald’s employs over 109,000 people in a variety of roles
Facilities
The buildings, land, equipment and technology utilised by a business in operations
McDonald’s invested over US$2.4 billion in capital in 2019, most of which went towards “the experience of future upgrades”
What are the three types of production available to businesses?
Job Production
Batch Production
Flow Production
What is job production?
Outputs are made on demand to suit consumer requests
Suits products and services that require higher quality and customisation
Less capital and higher emphasis on labour content and skill
What is batch production?
Similar to job production, except that products are made in groups or batches
Requires careful planning so that production can be switched between products
Offers variation and can cope with unexpected changes in demand
What is flow production?
Continuous flow of inputs & outputs through operations - associated with assembly lines
Results in a high volume of output and a standardised product
Costs per unit are low due to high levels of automation & economies of scale
How does volume influence a business + McDonald’s example
High-volume operations will demand a large amount of capital, facilities, technology and labour - cost leadership
Low-volume operations will use much less equipment and demand multi-skilled labour for production - product differentiation
McDonald’s tracks the volume of menu items sold in each store (69 million people per day)
How does variety influence a business + McDonald’s example?
Businesses whose customers have diverse needs will rely on sophisticated technology so that it can change production from one product to another
Low-variety operations result in the production of a high volume of low-cost standard goods
McDonald’s offers 21 types of burgers, 40 drinks, 11 deserts and 50 McCafe items
How do variations in demand influence businesses?
Demand can change according to season or trends in consumer tastes
When there is a steady, predictable demand, operations will be routine and use capital
When there is volatility in the pattern on demand, a business will need to be highly flexible
How does visibility influence a business + McDonald’s example
Businesses with high visibility will need to have well-trained, highly skilled adaptable staff who are able to handle the individual needs of customers
Customers in high visibility operations will have a much lower tolerance for waiting
McDonald’s customers can provide feedback using online surveys or a customer service line
How does McDonald’s utilise scheduling?
For McDonald’s, scheduling tools are critical for store-level operations
Computer systems allow orders to be communicated to the kitchen, and the timer on the display changes colour and flashes to draw attention to orders that exceed the lead time
What is a Gantt chart?
Records the number of tasks involved in each particular project and the estimated time needed for each task
Allows business to compare actual progress against originally planned progress
What is critical path analysis?
A CPA flow diagram show the interrelationship between tasks
The critical path time period is the longest path taken to complete the whole project
To calculate the critical path, all the parts of the longest path are added together to give the shortest time without delays
How does McDonald’s organise task design?
The food making process at McDonald’s is standardised and materials are organised in a manner that supports time allotted for each task - every stage has a target completion time
