U3 AOS3 Flashcards
SAC
define operations management
all the activities in which managers engage to produce goods or services
- concerned with the strategies used to create, operate and control the tranformation of inputs from a variety of sources into outputs
- make use of strategies including management of materials, quality, waste and use of technology
- focuses on effectiveness and efficiency
define effectiveness
measures how well a business is meeting its stated objectives, which in operations management generally means how well a business is meeting customers’ expectation in terms of quality, features and delivery
define efficiency
how well a business is using its resources, which essentially measures how many outputs are produced with each unit of input to achieve its stated objectives
explain the relationship between operations and business objectives
- operations management is responsible for determining business objectives
- the core objective of all businesses is to maximise profit
- require businesses to efficiently use resources to produce goods or services at the lowest possible cost
- focus on management of materials, quality, waste minimisation and technological development
- needs to ensure that the strategies being used within operations align with the objectives and strategies of the entire business
- effective and efficient operations should lead to satisfied customers, sales and subsequently, the achievement of business objectives
state the key elements of an operations system
what is needed > how it is made > result
inputs
processes
outputs
define inputs
the resources used in the process of production
six categories of inputs:
- natural resources and materials
- physical resources
- human resources
- financial resources
- information from a variety of sources
- time
explain the differences between the inputs of manufacturing and service businesses
manufacturing:
- tend to make more use of capital equipment and materials
- use less human resources and information
e.g. yakult uses natural resources of milk, water, sugar and a specific bacteria strain to make its product, as well as physical resources such as equipment, builidings/factories (to complete its processes), fermenting vats and conveyor belts
service:
- tend to make more use of human resources and information
- use less capital equipment and materials
e.g. commonwealth bank uses human resources in the form of bank tellers, mobile lenders, financial advisers, managers and lawyers as well as buildings (bank branches) and computers where information can be stored and retrieved
- information provided by market research companies to assist in product design and delivery
define processes
the conversion of inputs (resources) into outputs (goods or services)
explain the differences between the processes of manufacturing and service businesses
manufacturing:
- converts the inputs into a tangible product (goods that can be touched)
- processes are highly automated and mechanised
- uses machinery, robots and computers
e.g. yakult uses mixing (of milk, bacteria, sugar and water), fermentation of the mixture using machinery, quality control and packaging processes
e.g. sony uses design, manufacturing and assembly processes
service:
- converts the inputs into a intangible product (services that cannot be touched)
- rely heavily on interaction with the customer
- processes tend to be more labour intensive (human resources are crucial to operations)
e.g. commonwealth bank ensures good customer service, the computer systems work and establishes bank systems and procedures
define outputs
the end result of a business’s efforts - the good or service that is delivered or provided to the consumer
explain the differences between the outputs of manufacturing and service businesses
manufacturing:
- goods are sometimes classed as homogenous, which means that they are all basically the same or similar
e.g. yakult’s output is fermented milk drink
service:
- services tend to be differentiated, that is, they are provided to individual customers and are modified to suit each customer
e..g. commonwealth bank’s output is the delivery of financial services to customer
inputs, processes and outputs of a doctor’s office
CFT example
at a doctor’s office the inputs would be the building, the medical equipment and the labour of doctors and nurses
at a doctor’s office the processes would be assessing patients, doing medical tests, prescribing medication and billing
at a doctor’s office the output would be patients whose needs have been diagnosed and who are healthier than before
differences between the characteristics of manufacturing and service businesses
manufacturing
- produce goods that are tangible (can be touched)
service
- produce services that are intangible (cannot be touched
-
manufacturing
- little customer involvement in production (the consumer is typically not present when the good is produced)
service
- customer is involved in production (the consumer typically has to be present when the service is produced)
-
manufacturing
- manufactured goods tend to be homogenous or standardised
service
- services tend to be differentiated or tailored to individual customers
-
manufacturing
- production process and consumption process are not linked
service
- production process and consumption process typically occur at the same time
distinguish characteristics between a doctor’s office and car manufacturer
CFT example
a manufacturing business produces tangible goods, meaning they can be touched and stored, such as a car. the outputs of a service businesses on the other hand cannot be touched or stored, such as a doctor’s visit
manufactured goods are often standardised, such as finished cars which are all identical, whereas services are often tailored to individual customers, such as treating a patient with a bad back and another with a cold
manufactured goods required no customer input, such as cars which are produced overseas in a factory, while services require the customer to be present as part of the production process, such as the patient being with the doctor so they can be examined
state the six technological development strategies
ARC CAO
automated production lines
robotics
computer-aided design (CAD)
computer-aided manufacturing techniques (CAM)
artificial intelligence
online services