SAC 3 - operations management

Question 1

Inputs

Answer 1

Inputs are the resources that will be transformed and become a finished product or service offered to the customer for sale.

Question 2

examples of inputs

Answer 2

• natural recourse
• capital
• materials
• equipment
• human labour
• time
• money
  Inputs that a manufacturing organisation such
  as Rip Curl would use to make a T-shirt include materials such as fabric and thread.

Question 3

Processes

Answer 3

Process are a series of procedures that transform inputs into goods or services.

Question 4

Example of processes

Answer 4

• cutting
• baking
• teaching
• transporting
• packaging
  Rip Curl would use processes such as cutting the fabric or sewing the fabric together to make the T-shirt.

Question 5

Outputs

Answer 5

Outputs refer to the end result of an organisation’s efforts. Outputs are the goods or services that are available to consumers.

Question 6

Outputs examples

Answer 6

• provision of a service
• sale of a good
  Rip Curl’s output is the finished T-shirt that is delivered to stores for sale.

Question 7

operation manager

Answer 7

A person in charge of the planning and execution of the routine functions and activities of an organisations.
An operations managers would be aiming to increase productivity, so that the organisation can become competitive

Question 8

the relationship between operations manager and business objectives

Answer 8

Operations management refers to overseeing the transformation of inputs into outputs while aiming to maximise efficiency by increasing productivity making it more likely that the business will achieve its objectives.
For example, if a business has an objective to make a profit, the operations manager would implement technology into the production process, as it would reduce the number of employees required in the operations system, which can reduce the overall expenses associated with labour and increase the profit of the business.

Question 9

manufacturing process

Answer 9

The manufacturing process involves the transformation of inputs into tangible outputs, also known as GOODS.
- goods can be stored
- tangible goods
- production and consumption rarely linked
- customer doesnt need to be present during production
- often more capital/machinery intensive

Question 10

service businesses

Answer 10

• SERVICES are intangible products that cannot be stored or used later.
• Production of a service is usually more labour intensive as a person often performs the task.
• The customer is present when the transformation of inputs into the outputs takes place

Question 11

similarities between service and manufacturing

Answer 11

• both aim to optimise their operations to produce high quality outputs at low cost of production
• both, can utilise forms of technology in their operations systems
• both have to deal with suppliers during the process of managing operations
• both aim to optimise efficiency and effectiveness in their operations.

Question 12

Corporate social responsibility

Answer 12

CSR takes into account an approach that is both ethical and socially responsible. It is where a business goes above and beyond legal expectations required by regulators, to express concern for how its practices impact on the environment, societies’ health and welfare, and demonstrates an ethical concern for its workforce.

Question 13

Enviornmental sustainability of inputs

Answer 13

whether the resources that are used in production are from a sustainable source.

Question 14

CSR considerations for inputs

Answer 14

Managers need to identifying how the business can improve the environmental sustainability of its natural resources
eg. sourcing from local suppliers instead of overseas suppliers to reduce transport emissions
nude licy, orgabic cotto yarn

Question 15

CSR considerations for processes

Answer 15

Managers need to identifying how the business can improve the processes to reduce the amount of waste generated from processes.
eg. Using technology that performs processes in a precise and consistent manner to reduce waste generated from errors

Question 16

CSR considerations for outputs

Answer 16

Any output produced the business needs to ensure that there is minimal waste and environmental damage.
eg. Developing an alternative product that is environmentally friendly
- Creating products that have recyclable elements at the end of their lifestyle (mars bar paper packaging)
- cadbry recycable packaging

Question 17

global considerations

Answer 17

business often operate in a global market that transcends traditional geographical boundries

Question 18

global sourcing of inputs

Answer 18

the practice of seeking the most cost-efficient materials and other inputs, including from countries overseas, this can be because of cost, quality, speed and reliability

Question 19

strengths of global sourcing of inputs

Answer 19

• reduce costs
• opportunity to learn how to do business in potential market
• increase capacity of total supply
• developing alternative suppliers/sources of inputs
• accessing skills or recources that are unavailable domestically

Question 20

weaknesses of global sourcing of inputs

Answer 20

• hidden costs with different cultures and time zones
• exposure to potential high risk, financially
• long lead times
• the risk of parts shutting down
• difficult to monitor the quality of inputs

Question 21

example of global sourcing of inputs

Answer 21

SUNRISE: adds to its locally produced inventory of rice by purchasing rice from global sources in order to meet the demand for its rice products

Question 22

overseas manufacturing

Answer 22

the production of a good in a country that is different to the location of the business’ headquarters.

Question 23

advantages of overseas manufacturing

Answer 23

• business can focus on other areas, such as product development and marketing
• lower production costs with cheaper unskilled and skilled labour
• goods can be produced in large volumes

Question 24

disadvantages of overseas manufacturing

Answer 24

• issues with language barriers may prevent operations being carries out smoothly
• risk of intellectual property
  increased costs
• delays and blockage in the supply chain can cause delays

Question 25

example of overseas manufacturing

Answer 25

RESMED: headquarters are in sydney but have manyfacturing operations in singapore and US, allows access in asian market

Question 26

global outsourcing

Answer 26

the contracting of a specific business operation to an external person or business in another country
- Businesses simply need to provide the data or information, and the outsourced vendor will deliver as required.
- Global outsourcing provides access to an overseas talent pool who are skilled to manage the work assigned.

Question 27

strengths of global outsourcing

Answer 27

• improved quality because of access to expert knowledge and high quality service
• the business is able to focus on its core activities
• costs can be reduced
• production may be quicker as the outsourced provider should be able to focus on the task they specialise in.

Question 28

weaknesses of global outsourcing

Answer 28

• management may have less control over the production process
• it may be difficult to maintain quality
• loss of local jobs
• there may be security and confidentiality
• there may be communication issues that lead to customer service problems

Question 29

example of global outsourcing

Answer 29

TELSTRA: outsources a range of services such as, customer service operations, software development to other countries such as india, phillipines
this allows them to access specialist skills, reduce operating cost and focusing on their core actvities

Question 30

efficiency

Answer 30

Efficiency is how productively a business uses its resources when producing a good or service.

Question 31

effectiveness

Answer 31

Effectiveness is the extent to which a business achieves its stated objectives.

Question 32

7 principles of waste (TIMWOOD)

Answer 32

transport
inventory
motion
waiting
over producing
over processing
defects

Question 33

compare the characteristics of operations management with a manufacturing and service business (eg. chocYum and hairdresser)

Answer 33

The characteristics of operations management of a manufacturing business such as ChocYum Pty Ltd and a service business such as a hairdresser have many similarities and differences. A point of similarity for both ChocYum and the hairdresser is that both businesses use the three key elements, inputs, processes and outputs. Both businesses also have a similarity in objectives, which is to reduce costs of their operations in the aim that they can increase the overall profit of the business. The point of difference between ChocYum and the hairdresser, is that they both use different resources as their inputs. ChocYum would use cocoa and milk as inputs to produce their chocolate product, whereas the hairdresser would use scissors, to complete the service of cutting the consumer’s hair.

Question 34

discuss

Answer 34

advantages and disadvantages

Question 35

Evaluate

Answer 35

advantages and disadvantages and conclusion

Question 36

Describe

Answer 36

definition and example
eg. key elements - describe what the key elements are, (inputs - what are they)

Question 37

waste generated from the processes

Answer 37

The inputs used in a production process create waste. In the desire to keep down the costs of production, businesses should not be tempted to use cheaper, illegal waste disposal methods.

Question 38

waste generated from the production of outputs

Answer 38

Businesses also need to consider how outputs are produced, packaged and marketed.