SAC 3 Flashcards
Definition of operations management
- task of managing the process that transforms resources finished goods/services
- effective operations will allow a business to get more done in less time, use fewer resources, produce goods/services at desire quality
Definition of business objective
- goals the business wishes to achieve
relationship between operations management and business objectives
- the more efficient and effective a business is the more productive the operations system becomes
- leads to achievement of overall business objectives
Definition of efficiency
- how well the organisation uses its resources to achieve objectives
best use of resources
Definition of effectiveness
- how well the business achieves its objectives
- extent to which a business chooses appropriate objectives and achieves them
- being effective means ‘doing the right things’
Definition of operations system
- a series of procedures and processed an organisation undertakes in order to create its outputs
List key elements of an operations system
- inputs
- processes
- outputs
Operations system: inputs
- inputs are resources used in the process of production
- like the ingredients
- the resources necessary to make the product or service
- e.g. raw materials, facilities, equipment, time, money, utilities, Human Resources
Operations system: processes
- known as the transformation
- processing of inputs into an output
- any activity the organisation undertakes that transforms the inputs into outputs
- actions performed on the inputs
- businesses aim to use their resources efficiently. often it is the processes that enable this to happen
Operations system: outputs
- final product, finished good/service
- quality of outputs is a reflection of the inputs and processes used
- two types of outputs: service (service provider) and a good (manufacturing organisation)
Characteristics of a manufacturing system
- tangible (can be touch)
- can be stored for later use
- no/minimal customer contact
- consistent from one customer to the next
- consumption occurs separately from the purchase
Characteristics of a service provider
- intangible (cannot be touched)
- cannot be stored
- high level of customer contact
- individualised for each customer
- consumption usually occurs with the purchase
Definition of Corporate Social Responsibility
- businesses ongoing commitment to operate in an economically, socially and environmentally sustainable manner
- keeps in mind the considering interests of diverse stakeholders
- going above and beyond what is legally required
CSR and inputs
- ensuring suppliers incorporate CSR
- purchase local suppliers: support local economy, may also decrease transport pollution
- environmentally sustainable inputs: green/renewable energy, energy efficient facilities, environmentally sustainable materials
CSR processes
- waste minimisation: reducing impact on environment, decrease landfill and Co2 emissions, waste is disposed of in an ethical manner
- recycling resources: reuse materials in the operations system, leads to lower material costs and landfill
- OH&S: going above and beyond legal requirements, treating staff fairly and with respect
training: investing in additional training - implementing quality systems: e.g. quality control, quality assurance or TQM. helps deliver product free from harm to the customer
CSR outputs
- quality: create good quality products that add real value for money, fir for purpose, operations system should have procedures in place where customers can return product or have their issues resolved.
- packaging: packaging that minimises the impact on the environment e.g. biodegradable, recyclable
- honest marketing: truthful information given, not misleading about good/service
CSR advantages
- providing a valued workplace
- reducing long-term costs
- improved efficiency, new machinery use less energy, work faster
- improved public image and reputation
CSR disadvantages
- costly to implement CSR practices
- if new technology is used may result in job losses
- may slow down production because people may need to learn
Global considerations: global sourcing of inputs
- uses suppliers from different countries
- seeking the most cost efficient materials
Advantages of global sourcing of inputs
- improves access to cheaper raw materials
- able to source materials which are not readily available in the country of operations
Disadvantages of global sourcing of inputs
- may be difficult to communicate with suppliers due to language barriers
- materials may be damaged during delivery
Global considerations: overseas manufacture
- production of good in a different country
- offshoring
- consideration is overseeing that working conditions of manufacturers/producers a monitoring process , should check that no child labour is used, decent working conditions, people making the products are paid adequately
Advantages overseas manufacturing
- can improve access to skilled workers
- can improve access to chapter labour and reduce business costs
Disadvantages overseas manufactoring
- finished product may be damaged upon during delivery
- delivery may be time consuming depending on where manufacturing occurs
Global considerations: global outsourcing
- business hands over parts of its non-core activities to another person or business
Advantages of global outsourcing
- can improve the quality of business activities as external business may be experts in the area
- able to save on costs associated with labour by reducing the need for local employees
Disadvantages of global outsourcing
- reduced control Ove business as some activities have been transferred to another person/business
- poor communication and language barriers with external business may lead to delays
Definition of supply chain
- range of suppliers from which the business purchases materials and resources
definition of supply chain management
- takes in concepts of distribution, logistics and materials management
- encompasses the planning and management of all activities involved in sourcing and procurement, storage of materials and development of partnership with suppliers
- managing supply chain efficiently ensures that there is enough materials on hand for production, with the right quality and price
- can also allow the business to get their products to customers faster than their competitors
Strategies to improve efficiency and effectiveness of operations related to technology: computer aided manufacture
- manufacturing process is controlled by computers
- computers are used to design, control and manage manufacturing machinery
- often used in conjunction wth CAD
Computer aided manufacture advantages technology
- reduced wage expenses
- speeds up manufacturing process as machinery does not have to be manually set up by humans
Computer aided manufacture disadvantages technology
- initially can be expensive
- employees may become redundant
Computer aided manufacturing business example technology
- amazon
- uses robotics
Strategies to improve efficiency and effectiveness of operations related to technology: automated production line
- machinery and equipment are arranged in sequence with components added to the good as it proceeds through each step
- controlled by a computer
- series of work stations linked by a electronic control system e.g. conveyer belt
Advantages of automated production line technology
- production can run 24/7
- minimises the number of employees needed which reduces wage expenses
Disadvantages of automated production line technology
- high initial set up
- employees can be made redundant
- halt production if theres a sudden break down
Automated production line business example technology
- cocacola
- the bottle, fills the bottle, labels, boxed and conveyer belt between each station
Automated production line efficiency and and effectiveness technology
efficiency: can perform at a speed that is much faster than humans, improving productivity
effectiveness: allows for a high degree of accuracy which decreases the number of errors that occur during production, enhances overall quality of final product
Computer aided manufacturing efficiency ad effectiveness technology
efficiency: generally more accurate than humans, reduces the amount of waste, optimal use of resources
effectiveness: increased accuracy which creates products with a consistent level of quality, this can lead to increased customer satisfaction and sales
Strategies to improve efficiency and effectiveness of operations related to technology: computer aided design
- CAD is a software system that allows for product to be designed and tested on the computer before production
- using computers enables a designer to experiment with variations of the design with less effort and time required
Advantages of computer aided design technology
- speeds up design process
- allows employees to be more creative
Disadvantages of computer aided design technology
- expensive initial set up
- employees may be made redundant by CAD
Computer aided design efficiency and effectiveness technology
efficiency: can reduce time and labour resources used to design a product which improves productivity
effectiveness: choose the best design to be produced. this enables a business to manufacture the highest quality design which can increase customer satisfaction and sales
Strategies to improve efficiency and effectiveness of operations related to technology: website development
- where a business creates an online presence
- enables a business to communicate or provide information to customers
- can make it easier for customer to purchase products
Advantages of website development technology
- establishes a platform that enables easy access to customer feedback
- can publish information on the website which reduces the amount of customer service employees needed to answer questions
Disadvantages of website development technology
- high initial set up and to maintain
- employees may be redundant
Website development efficiency and effectiveness
efficiency: providing information online can save customer service staff time which can improve their productivity
effectiveness: website development allows a business to reach a wider audience nationally and globally which can meet the objective of increased sales
Strategies to improve efficiency and effectiveness of operations related to materials management: forecasting
- planning strategy where past data and trends are used to predict future demand so informed decisions can be made around materials
- two types
- qualitative: gathers information based on people
- quantitative: makes use of data in numerical form
Advantages of forecasting materials management
- can reduce cost in storage as it prevents the need for a large space to store materials
- informed decisions about materials can be made which improves a businesses ability to meet customer demands which improves reputation
Disadvantages of forecasting materials management
- can be time consuming to analyse historical data nd market trends
- increased cots as businesses may need specifically for forecasting or training
Efficiency and effectiveness in forecasting materials management
efficiency: decreases the likelihood of ordering and storing too much stock which optimises the use of resources, reduces waste
effectiveness: increases a business ability to meet customer demand which can meet the objective of increasing customer satisfaction ad sales
Strategies to improve efficiency and effectiveness of operations related to materials management: master production schedule
- document that shows what the business plans to produce, where and how they plan to do it within a given period of time
- helps a business plan for required materials
- what, how, where and when
- helps business manage the logistics
Advantages of master production schedule materials management
- provides employees with a clearer schedule
- by determining production target businesses are more likely to meet customer demand, meeting customer demand can increase sales and net profit figures
Disadvantages of master production schedule materials management
- can be time consuming to map out details of production
- implementing and maintain the plan can be expensive
Master production schedule efficiency and effectiveness
efficiency: prevents a business form overproducing which optimises the use of resources and reduces waste
effectiveness: a business is more likely to produce an amount that meets customer demand which meets the objective of meeting customer satisfaction and increasing sales
Strategies to improve efficiency and effectiveness of operations related to materials management: materials requirement planning
- document that outlines all f the materials that will be required to complete the production targets that have been set out in the MPS
- itemised list of all materials required in production to meet specific orders
- specific materials, in exact quantities and when they should be delivered
Advantages of materials requirement planning materials management
- bette robustness reputation by having a minimal impact on the environment. this is achieved as MRP ensures a business only has the exact materials required which prevents the amount of stock wastage
- by determining the exact materials required, its less likely that production will haunt due to insufficient materials or organisation errors
Disadvantages of materials requirement planning materials management
- can be time consuming to constantly update and maintain materials plan
- implementing and maintaining the materials plan can incur costs
Materials requirement planning efficiency and effectiveness materials management
efficiency: having the exact materials required reduces avoidable haunts in production which enhances productivity by allowing smooth flow of operations
effectiveness: ensures there is sufficient materials to meet customer demand. meeting customer demand helps meet the objective of increasing customer satisfaction
Strategies to improve efficiency and effectiveness of operations related to materials management: just in time
- JIT aims to reduce costs through minimisation of inventory
- inventory is replaced as it is used
- small quantities of inputs are delivered more frequently with a view to meeting immediate requirements
- employee participation is required to identify wasteful work practices ad eliminate these on a continuous basis
Advantages of just in time materials management
- reduces storage costs
- reduces business reputation by having minimal impact on the environment, this is achieved as JIT helps eliminate idle stock
Disadvantages of just in time materials management
- discounts from bulk buying may be reduced
- delivery costs may increase due to more frequent deliveries
Just in time efficiency and effectiveness materials management
efficiency: holding minimal stock can free up space that now can be optimised to increase production
effectiveness : reduction in idle stock an reduce expenses associated with waste which can meet the objective increased profit
Strategies to improve efficiency and effectiveness of operations related to quality management: quality control
- aim to ensure that product/service meets standards or satisfaction
- to do this the business sets a standard, inspects outpour for performance, compare actual performance against standards and to take necessary action if needed to ensure the standard is met
Advantages of quality control quality management
- can reduce the number of refund required for faulty goods or services
- the strategy is relatively inexpensive as it is initially controlled by the business
Disadvantages of quality control quality management
- it can be the consuming to identify errors
- errors are eliminated after they happen which can incur costs associated with waste
Efficiency and effectiveness of quality control quality management
efficiency: identifying and fixing errors/the cause which reduces the number of potential errors that could halt production, enables the operations system to flow continuously without interference
effectiveness: eliminating errors prevents customers from receiving faulty products which can meet the objectives of satisfying customers and increasing the number of sales
Strategies to improve efficiency and effectiveness of operations related to quality management: total quality management
- ongoing, holistic approach to quality
- where all members of the organisation aim to participate in ongoing improvement of organisational culture and production processes
- quality is embedded into culture
- focused on continuous improvement in the quality of all processes, goods and services of an organisation
- culture - defect free production process
Advantages of total quality management quality management
- employees may feel valued and satisfied by being empowered in the process of improving quality
- being proactive prevents errors from occurring which reduces waste and its associated expenses
Disadvantages of total quality management quality management
- employees may feel confused about their role in improving quality if managers don’t communicate the TQM strategy clearly
- may incur costs as employees have to be trained to continuously identify methods to improve quality
Efficiency and effectiveness of total quality management quality management
efficiency: continuous improvement in the production system to prevent errors reduces the number of faulty products that go to waste. reducing waste leads to optimal use of resources
effectiveness: by determining the needs, wants of a customer, TQM can meet the objective of improving customer satisfaction and increasing sales
Strategies to improve efficiency and effectiveness of operations related to quality management: quality assurance
- methods of measuring the quality against a standard
- system established to ensure that predetermined quality standards are achieved
- system set to ensure predetermined standards are met
Advantages of quality assurance quality management
- can be used as a marketing tool to increase sales
- reduces waste from errors which improves the environment of a business
Disadvantages of quality assurance quality management
- can be expensive to involve an external body to assess an operations system
- documenting the operations system for the external body could be time consuming
Quality assurance efficiency and effectiveness
efficiency: preventing errors before they occur, which reduces the number of faults to production occurring due to finding and fixing causes of faulty products
effectiveness: customers are more likely to purchase a good/service with a certified standard of quality which can meet the objective of increasing a business number of sales
Strategies to improve efficiency and effectiveness of operations related to waste minimisation
- process that involves reducing the amount of unwanted or unusable resources created by the business’ production process
- attempt to improve efficiency in an operations
- by minimising the amount of waste the business is able to make the best use possible of its resources
Strategies to improve efficiency and effectiveness of operations related to waste minimisation: types of waste
- Transportation
- Inventory
- Motion
- Waiting
- Overproducing
- over processing
- Defects
Waste minimisation efficiency and effectiveness
efficiency: it reduces the costs of production of the business and increases productivity across operations area
- effective: can lead to better reputation of the business because the business demonstrates concern for the natural environment
Strategies to improve efficiency and effectiveness of operations related to waste minimisation: lean management
- attempts to improve efficiency by eliminating all types of waste and inefficiencies in production
- 5s is a process that can be used to apply the principles of lean management
Strategies to improve efficiency and effectiveness of operations related to waste minimisation: lean management 5s’?
- sort: sort what you have get rid of whaat you don’t ned
- set: give everything a home, set in place so operations can flow
- shine: keep it clean, everything is returned to ‘nearly new’
- standardise: set up routines and processes
- sustain: maintain, housekeeping, become part of business culture
