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