Unit 3 AOS 3 Flashcards
Operations management
Operations management is coordinating and organizing the activities involved in producing the goods or services that a business sells to customers.
Describe ways of effective operations management
Reducing time taken to produce goods or services, using the least amount of resources, and have the responsibility of implementing strategies that will contribute to the achievement of various business objectives.
Efficiency
Efficiency is how productively a business uses its resources when producing a good or service.
How can operations of management maximize efficiency?
An operations manager will constantly aim to maximize productivity within a business. Operations of management can implement strategies such as technological developments, materials strategies, quality strategies, and waste minimization strategies. Through this operations can improve levels of efficiency optimizing a business’s use of resources, production costs can be minimized, levels of waste may decline and the time taken to produce goods or services can be reduced.
Why may a business want to maximize efficiency?
Maximizing efficiency within a business’s includes the use of resources, production costs can be minimized, levels of waste may decrease and the time taken to produce goods or services can be reduced. Ultimately, improving the level of efficiency in operations can have positive implications on a business’s performance and the achievement of objectives.
Effectiveness
Effectiveness is the extent to which a business achieves its stated objectives.
How can operations management maximize effectiveness?
Operations management can maximize effectiveness by using the most suitable strategies to lower production costs, improve quality, and reduce wastage.
Why may operations management want to maximize effectiveness?
If the management of operations ensures that the highest quality products are produced and the best price, then customers can be satisfied with the product or service and more likely to be regular customers in the future. This directly correlates towards achieving business performance and achieve objectives.
The relationship between operations management and business objectives: Make a profit
Possible operations strategies include implementing technology into production processes which can reduce the number of employees needed to complete business objectives which in turn reduces expenses and increases to make a profit.
The relationship between operations management and business objectives: Meet shareholder expectations
Possible operations strategies include checking products for being faulty which can improve the quality of a business’s product, increasing customer satisfaction and the business’s proportion of
sales within its industry.
The relationship between operations management and business objectives: Increase market share
Possible operations strategies include creating websites, maximizing effectiveness in business operations which can lead to increased sales which in turn can increase dividends and share price.
The relationship between operations management and business objectives: Fulfill a market need
Possible operations strategies include using new technology to design and increase quality of products. This can lead to new products being produced that is needed to meet customers’ needs.
The relationship between operations management and business objectives: Fulfill a social need
Possible operations strategies include using reduced waste, recycling, and fundraisers. Doing so minimising waste can improve the environment and support communities can benefit individuals.
State the relationship between operations management and business objectives
Operations managers can contribute to the achievement of business objectives by improving levels of efficiency and effectiveness in a business’s production process. Additionally, operations managers are in charge of implementing strategies that optimise
operations, improve business performance and achieve business objectives.
Inputs
Inputs are the resources used by a business to produce goods and services.
Processes
Processes are the actions performed by a business to transform inputs into outputs
Outputs
Outputs are the final goods or services produced as a result of a business’s operations system which are delivered or provided to customers.
Manufacturing Business
A manufacturing business is a business type that produces goods to sell to customers. A manufacturing business is typically capital and machine intensive during the processing from inputs to outputs and has minimal interaction with customers.
Service business
Service businesses provide intangible products, usually with the use of specialized expertise.
Similarities between manufacturing and service businesses
- Both service and manufacturing businesses aim to optimize their operations to produce high-quality outputs at a low cost of production.
- Both service and manufacturing businesses have to deal with suppliers during the process of managing operations.
- Both service and manufacturing businesses can utilize forms of technology in their operations systems.
- Both service and manufacturing businesses aim to optimize efficiency and effectiveness in their operations.
Differences between manufacturing and service businesses
Manufacturing businesses:
Capital intensive, Occurs separately, Low degree of customer contact during production, Tangible output. storability of output, standardized production.
Service businesses:
Labour intensive, Occurs simultaneously, High degree of customer contact during production, Intangible output, does not have storability of output, Tailored production
computer-aided design (CAD)
Computer-aided design (CAD) is a digital design tool that enables businesses to generate and modify technical illustrations of a product.
How can Computer-aided design increase efficiency?
It can reduce the time and labour resources used to design a product which improves productivity
How can Computer-aided design increase effectiveness?
A business can use CAD to develop the best designs to produce which can enable the business to manufacturer the highest quality design possible. This can, therefore, meet business objectives such as customer needs and make a profit.
Advantages and disadvantages of computer-aided design: Business
Advantages:
• Greater accuracy in the design process
results in a consistent level of quality which
can improve the business’s reputation.
• Customers have the flexibility to
modify a design to suit their needs. This
customization can attract more customers
for the business.
Disadvantages: If Computer-based designs replace employees it can cause a negative reputation to the company due to redundancies.
Advantages and disadvantages of computer-aided design: Employee
Advantages:
• Removes tedious processes involved in the
the design process which could be boring for
employees and mind straining.
• Allows employees to be more creative in the workplace.
Disadvantages:
• Employees may be made redundant due to replacement by CADs.
Advantages and disadvantages of computer-aided design: Time
Advantages:
Decreases design process times
Disadvantages:
N/A
Advantages and disadvantages of computer-aided design: Money
Advantages:
• Improved accuracy results in a consistently high-quality product which can increase customer satisfaction and may increase the number of sales.
Disadvantages:
• Expensive in the short term due to
purchasing and installing this technology.
• Updating software for technology can be expensive
• There can be expenses associated with
technical employee training on how to use
CAD.
Computer-aided manufacturing (CAM)
Computer-aided manufacturing (CAM) is a software used to control and direct the production process by controlling machinery and equipment through a computer.
How can Computed aided manufacturing (CAM) increase efficiency
• CAM does not require machinery to be manually reset by humans which reduces the amount of time and labour resources used in operations which
improves productivity.
• CAM is generally more accurate than humans which reduces the amount of waste that occurs during production which is optimal use of resources.
How can Computed aid manufacturing (CAM) increase effectiveness?
• The increased accuracy of CAM creates products with a consistent level of quality which can meet the
the objective of increasing customer satisfaction and sales.
Advantages and disadvantages of computer-aided manufacturing: Business
Advantages:
• Greater accuracy results in a consistent level of quality which can improve the business’s reputation.
Disadvantages:
• The business can develop a poor reputation if CAM makes numerous employees redundant.
Advantages and disadvantages of computer-aided manufacturing: Employee
Advantages:
• Removes tedious processes involved in
the manufacturing process which could be
boring and hard for employees.
Disadvantages:
• Employees may be made redundant by this
technology.
Advantages and disadvantages of computer-aided manufacturing: Time
Advantages:
• Speeds up the manufacturing process as machinery does not have to be manually reset by humans.
Disadvantages:
• As CAM is a machine if it breaks or malfunctions it can halt production altogether and reduce productivity.
Advantages and disadvantages of computer-aided manufacturing: Money
Advantages: • Improved accuracy can improve quality and increase customer satisfaction which can increase the number of sales. • Can remove many roles completed by employees which reduce wage expenses.
Disadvantages:
• Expensive in the short term due to
purchasing and installing this technology.
• Updates in software can be
expensive.
• There may be expenses associated with
technical employee training on how to use
CAM.
• If repairs are required on CAM equipment,
it can be expensive.
Automated production lines
Automated production lines are machinery and equipment which are arranged in a sequence,
and the product is developed as it proceeds through each step.
How do automated production lines improve efficiency?
Can perform at a speed which is usually much faster than humans, improving productivity
How can automated production lines improve effectiveness?
It allows for a high degree of accuracy in production. Reducing the number of errors enhances the overall quality of the completed product which can meet the objective of increasing customer satisfaction and sales maximizing effectiveness within the buisness.
Advantages and disadvantages of automated production lines: Buisness
Advantages:
• Increased accuracy provides a consistent
level of the quality of products which can
improve the business’s reputation.
• Improved accuracy can reduce waste from
errors which can improve the business’s
reputation for minimizing its impact on the
environment.
Disadvantages:
• The business can develop a poor reputation if automated production lines make numerous
employees redundant.
Advantages and disadvantages of automated production lines: Employee
Advantages:
• Allows employees to avoid mundane,
repetitive and potentially dangerous tasks.
Disadvantages:
• Employees can be made redundant due to
this technology replacing their role.
Advantages and disadvantages of automated production lines: Time
Advantages:
• Usually performs tasks much faster than
human labour.
• Production can run 24/7.
Disadvantages:
• Malfunctions of technology can halt production and compromise productivity.
Advantages and disadvantages of automated production lines: Money
Advantages: • Improvements inaccuracy can enhance the overall quality of a product which can lead to an increase in sales. • Minimises the number of employees needed which reduces wage expenses.
Disadvantages:
• high setup costs in purchasing and installing automated production lines.
• Can be expensive to repair and update this
technology.
• There may be expenses associated with
training employees to use this technology
Website development
Website development is the creation and improvement of online web pages controlled by a business that customers can use to discover information about the business and purchase their goods or services at any time.
How does website development improve efficiency?
Website development can provide information regarding the business such as policies which in turn can save customer service times and improve business productivity.
How do website development improve effectiveness?
Online business is less expensive in comparison to a physical store which therefore reduces expenses and increases profits. Website development also allows for a business to reach a wider audience such as globally which can cause increased sales and meet business objectives such as making a profit.
Advantages and disadvantages of website development: Business
Advantages:
• Website development establishes a
a platform that enables easy access to
customer feedback.
• Websites can ensure information is consistent
business-wide, such as their prices, sales
and policies.
Disadvantages: • The business can develop a poor reputation if website development makes numerous employees redundant. • Websites are susceptible to allowing a customer’s private information to be leaked which can irreversibly damage a business’s reputation.
Advantages and disadvantages of website development: Employees
Advantages:
• Businesses can publish information on its
a website which can reduce the amount of
customer service staff spend on answering
commonly asked questions.
Disadvantages:
• Employees may be made redundant by this
technology.
Advantages and disadvantages of website development: Time
Advantages:
• Information, such as a business’s return
policy is readily available for customers
to access on a website, such as return
policies, saving customer service staff
time.
Disadvantages:
• Time consuming to develop and maintain website
Advantages and disadvantages of website development: Money
Advantages:
• Having an online website reduces the need
for a business to establish a physical store
presence, reducing expenses.
• Customers can purchase goods or services
at their convenience which can increase a
the business’s number of sales.
• Website development can reduce the
number of sales employees needed which
reduces labor costs.
Disadvantages: • Website development can incur costs to develop and maintain. • There may be expenses associated with training employees on how to create and maintain a website.
Forecasting
Forecasting is a materials planning tool that predicts customer demand for an upcoming period using past data and market trends.
How does forecasting improve effiencey?
Forecasting decreases the chance of ordering and storing excessive stock which optimizes the use of
resources by reducing wastage. And through forecasting, it can ensure enough materials are supplied to minimize halts to production which
improves productivity.
How does forecasting improve effectiveness?
Forecasting increases a business’s ability to meet customer demand which can meet the objective of
increasing customer satisfaction and sales as it ensures the business has necessary stock.
Advantages and disadvantages of forecasting: Business
Advantages: • Informed decisions about materials can improve a business’s ability to meet customer demand which improves its reputation.
• Improves a business’s reputation by having
a minimal impact on the environment by preventing exessive waste whilst also gaining a reputation for always being properly supplied with stock.
Disadvantages:
• A business may be unable to meet
unexpected increases in customer demand
which may damage their reputation.
• Amount of materials ordered may be
incorrect as historical data and market
trends may not reflect current
business demand.
Advantages and disadvantages of forecasting: Money
Advantages:
• Can reduce the cost of storage as it prevents
the need for a large space to store materials.
Disadvantages:
• Businesses may need to hire employees
specifically for forecasting which incurs
training and wage costs.
Advantages and disadvantages of forecasting: Time
Disadvantages:
• It can be time-consuming to analyze
historical data and market trends.
• Production may be brought to a halt if the
the business has insufficient materials due to
inaccurate predictions.
Master production schedule (MPS)
A master production schedule (MPS) is a plan that outlines what a business intends to produce, in its specific quantities, within a set period of time.
How does master production schedule affect efficiency?
• Prevents a business from producing
an excessive amount of products
which optimises the use of resources
by reducing wastage.
• Promotes organized operations system and minimizes the number of avoidable errors that occur which improves productivity by reducing the number of interruptions to production.
How does master production schedule effect 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.
Advantages and disadvantages of master production schedule: Business
Advantages: • Improves a business’s reputation by having a minimal impact on the environment. This reputation is achieved as master production schedules prevent the business from producing an excessive amount of products, therefore reducing the amount of stock wasted from expiry or damage in storage.
Disadvantages:
• Businesses that are constantly changing
details of their operations system may find
a master production schedule unhelpful as
it is not a flexible program.
