U3 AOS3 Outcome 1 Flashcards
Operations Management
Running of systems to efficiently produce goods and or services
Operations
A series of processes and procedures undertaken in order to create output
Value
Customers want quality products at the best price possible
Effective operations enable a business to provide value for the customer
Objectives
If the operations team is able to work efficiently and effectively and provide value it can help achieve business objectives
Operations System
The operations system is the transformation of inputs into a final output (Good or service)
Input –> Process –> Output
Inputs
Are the resources used in the process of production.
Resources include:
Raw materials
Facilities and equipment
Employees
Processes
Are all activities that help transform the inputs into the final outputs
Processes can also impact areas such as:
Quality
Delivery Speed
Outputs
Finished good or service that is produced
Quality of output i a reflection of the inputs and processes used
Manufacturing
Transforms inputs into tangible outputs
Products can be stored
Little customer involvement in the production
Services
Transforms inputs into intangible outputs
Services cannot be stored
Often high level of customer involvement when service
Technology
Businesses look for ways to improve their operations system via the adaptation of technology to improve effectiveness and efficiency
Strategies to Improve Efficiency and Effectiveness in relation to technology
Automated Production Lines Computer-Aided Design (CAD) Computer-Aided Manufacturing (CAM) Website Development Other Technologies
Automated Production Lines
Where equipment and machines are arranged in a sequence and controlled by systems to perform tastes automatically
Improves:
Accuracy, Efficiency, Safety
Impacts:
High setup costs and slows or halts production
Computer-Aided Design (CAD)
Software that creates product possibilities from a series of parameters
Allows the business owner to view the end product and test or assess
Computer-Aided Manufacturing (CAM)
Software used to allow the manufacturing process to be directed by computers, controlling the production process
Often used with CAD
Website Development
Easier for the customer to purchase
Enables easier communication
Helpful for service businesses
Don’t need a physical presence
Materials Management
Refers to managing the way materials are received and stored within the business
Businesses need to ensure they have the right amount of materials so production can meet demand
Role of Operations Manager in relation to Materials Management
Assures materials: Arrive on time Correctly Right quantities Sufficient Quality
Decides how much to purchase based on:
Materials on hand
Cost
Storage required
Materials Decisions
A business that does not have enough materials to meet demand may lose sales
Materials cost the business money
Money spent on materials can therefore not be used in any other area
Storing materials for long periods can lead to damage, theft, wastage
Strategies to help manage materials effecively
Forecasting
Master Production Schedule (MPS)
Materials Requirement Planning (MRP)
Just in Time (JIT)
Forecasting - Define, Effectiveness, Efficiency
Planning strategy where past data and trends are used to predict future demand so informed decisions can be made
Effectiveness:
Assure enough materials on hand to meet production needs
Efficiency:
Improves productivity because production doesn’t wait
Reduces overstocking
Master Production Schedule - Define, Effectiveness, Efficiency
Outlines what is going to be produced, in what quantities, and when
Elements in MPS:
Each good or service that will be produced
Exact quantities
How, when where
Effectiveness:
Gives business clear picture on what needs to be produced
Efficiency:
Helps the business plan for what is required so correct orders can be made, preventing waste and over production
Materials Requirement Planning - Define, Effectiveness, Efficiency
An itemised list of all materials needed for specific orders
To successfully plan the required materials the operations manager must:
Consider stock held
Lead Times
Materials required
Effectiveness:
Ensures production has a continuous flow without waiting for materials
Enough materials on hand to meet demand
Efficiency:
Prevents overstocking, reducing wastage
Just in Time - Define, Effectiveness, Efficiency
A strategy that ensures the right amount of materials arrive only as they are needed for production
Adv- Saves money on storage and minimizes issues
Dissadv- If the supplier does not deliver production will slow or halt
Effectiveness:
Continuous flow, money saved on storage
Effienciny:
Reduce waste, reduce storage cost
