U2 - Operations Management Flashcards
Operations - Four main business functions
The business process that involves transformation or more generally production. Applies to both manufacturing and services sector. Turning raw materials into outputs.
Marketing - Four main business functions
The needs and wants of consumers through provision of products at prices that the market is prepared to pay. A highly specialised field that looks at all aspects of buying and selling. Psychologicals of consumers for when and why people buy.
Manufacturing
Provision of services
Other value-adding
May be global or domestic
Finance - Four main business functions
Recording and summarising financial transactions into a series of reports that can be easily interpreted. Providing info for for key decisions into a business. Finance is looking at profitability and how profit margins can be increased.
Human Resources - Four main business functions
All aspects of resourcing, managing, maintaining and motivating staff. Important as people and workers are the most important part of a business. As work changes, so do the skills needed by employees.
Inputs and Outputs
Inputs are resources bought in to go through a transformation process that will be turned into outputs or a finished product that can be sold to a consumer.
Blundstone boots, rubber, leather, steel turned into a boot.
Minimising waste
Also known as lean production is designed to eliminate waste. Things such as underuse of labour, overproduction and errors and defects in the product.
By having no waste and no excess businesses can save costs, minimising waste in the production stage.
Strategic decisions
Refers to long-term broad aims affecting all key business areas.
Planning - Operations managers
What activities need to be performed
What materials and processes will be used
The order in which they are completed
Who is to do each one
When they are to be completed
2 factors used to gain a competitive advantage
Cost leadership
Product differentiation
Cost leadership definition
Involves aiming to have the lowest costs or to be the most price competitive in the market.
Product differentiation def
Standardisation def
Distinguishing goods and services from others in the same market to gain an advantage.
Refers to the making of products that are the same or identical as others.
Differentiation of goods
Varying the actual features of goods
Varying product quality
Varying any augmented features
Differentiation of services
Amount of time spent on the service
A higher level of expertise brought to a service
Developing self service items
Flexibility
Economies of scale
Refers to cost advantages that can be created as a result of an increase in scale of business operations.
Typically the cost savings come from being able to buy purchasing lower cost per unit of input and from efficiencies created through improved use of machinery and technology.
Production efficiency
A business can obtain more efficient production through
- Economies of scale
- Outsourcing
- Improving quality management
- Reducing waste in the production process
- JIT inventory control
- Adopting technology / software to improve efficiency
