Unit 3 A.O.S. 3: The operations management Function: SAC 3A and 3B Flashcards
Explain the relationship between operations management and business objectives.
Operations is the area of the organisation that produces goods and/or services which can enable the organisation to achieve its objectives. Organisations try to be as efficient and competitive as possible when achieving objectives and as operations management involves the production of goods and/or services it obviously has a huge role in this. Operations can influence the price, quantity and quality of an organisations goods and services and therefore has a direct impact on them achieving their objectives.
Explain and describe differences between manufacturing and and service organisations.
There are a variety of differences between manufacturing and service organisations, these include, whether the product is tangible or intangible, whether the product can be stored or not, and level of customer involvement. Manufactured products are tangible, meaning they can be touched and held, where as services are intangible and cannot be touched or held. Manufactured products can be stored and handled whereas services cannot be stored and sold at a later date. Manufactured products have very little customer involvement in production, where as with a service there is a high level of customer involvement and you quite often need to be present for the service to be performed.
Define inputs.
Inputs are the resources used in the production process. There are six categories of inputs, which are materials, facilities and equipment, employees, information, time, and money.
Define Processes.
Processes are all the activities the inputs are put through in order to transform them into outputs. Organisations aim to produce outputs as efficiently as possible and along with inputs chosen the processes used have sole control over this.
Define outputs.
Outputs are the final good or service that is produced. The quality of the outputs directly depends upon the inputs and processes used.
Define productivity.
Productivity is a measure of efficiency. Productivity looks at the amount of outputs produced compared to the number of inputs used in production.
Define competitiveness.
Competitiveness is the ability of an organisation to sell its products in the market place. The more competitive an organisation is, the more likely they are to sell there products.
Explain and describe the importance for and impact of productivity and competitiveness on the operations system.
Both productivity and competitiveness are very important and have an impact on the operations system. If an organisation is very productive they are producing more products and using less resources, this shows the organisation is correctly managing their inputs, processes and outputs, therefore correctly managing operations. If an organisation is productive they will also be competitive in the market place. If they are not being productive it shows the operations system has not been correctly managed and will likely not be very competitive in the market place.
Explain lean manufacturing.
Lean manufacturing involves producing as many outputs as possible from as little resources as possible. To truly take advantage of a lean manufacturing attitude the organisation must be as efficient as possible in sourcing inputs, implementing correct procedures depending on the situation and producing an output that has been produced in an efficient a manner as possible
Define operations management.
Operations management is the coordination of the key elements of the operations system (inputs, processes and outputs) along with all that goes along with it (lean manufacturing, materials management, quality management) to be as efficient and productive as possible in producing quality goods and/or services.
Define and give two advantages and disadvantages of a product layout, process layout and fixed position layout.
A Product layout involves goods being moved from workstation to workstation in sequential order along an assembly line. The product layout allows for mass volume with minimal variation, meaning lots of output is produced but with little variation. For example a large scale organisation like Toyota will only produce 2-4 models at a single production facility.
Advantages of the product layout include:
- High speed of production, which allows the organisation to compete on high speed of delivery leading to improved competitiveness.
- Reduced price for consumers. By implementing an assembly line through 3”!.3a product layout companies can produce outputs in bulk which can lead to lower prices.
Disadvantages of the product layout include:
- High set up costs, due to how expensive the technology and robotics in an assembly line are.
- Low level of variety and customisation. Because you are producing in large volumes actually trying to customise or produce a large amount of variety can really slow production down.
A Process layout involves equipment and work centres are arranged into similarity of function. A process layout is used for mostly services but also products that require a large degree of variety and are only produced in small volumes. Which is quite the opposite of the product layout. Hospitals and banks will often use this layout.
Advantages of the process layout include:
- Greater flexibility to customise products. Unlike a product layout where the product will travel through an assembly line with the same procedures being carried out at each stage of the assembly line, the process layout allows for greater flexibility by giving each area the opportunity to have a specialised input into the product or service being produced.
- Less stoppages compared to a product layout. Unlike in a product layout, if something breaks down production is still able to continue.
Disadvantages of the process layout include:
- If they are only involved in the one are, work can be monotonous for staff and can lower staff morale.
- Due to the increased variety/customisation there is longer production time.
The fixed position layout involves the product being stationary while materials and labour are taken to the product. This layout is best for products that are too large to move around, like buildings, planes and ships.
Advantages of the fixed position layout include:
- Allows for high variety and customisations of the product.
- Allows for high quality finishing, by the product being stationary and being the only focus at the one time, a lot of time is spent on the one product, allowing for high quality finishing.
Disadvantages of the fixed position layout include:
- Long production times when compared to a product layout.
- Often space restrictions for storage, due to the product being produced being so large.
Define materials managements.
Materials management is defined as coordinating the way in which materials are received and stored to ensure the right amount of materials are available when required. The are many strategies to managing materials including: the production plan, master production schedule, just in time and materials requirement planning.
Define and explain the strategies that are used in materials management.
The production plan is an outline of what is to be produced, how it will be produced and in what quantity.
The master production schedule is a detailed outline of what is to be produced and how it is going to be produced. It breaks down the production plan into quantity and type of each product and service. How when and where, the production will take place. As well as labour requirements.
Just in time is a strategy that ensures the exact amount of materials arrive only as they are needed in the operations process. This aims to reduce costs through minimising the amounts of inventory held at the one time and therefore also reducing waste.
Supply chain is the range of suppliers from which the organisation purchases materials and resources. Supply chain covers the entire flow of materials (both goods and services) from suppliers through the workplace (offices, factories and warehouses) to the end customer.
Define quality management and explain the three quality management strategies .
Quality management is the coordination of the operations system that ensures the outputs produced are reliable, durable and meet pre-established quality standards.
Quality control involves the checking of products at various stages of the operations system in order to ensure that they meet pre-established quality standards. Products that do not meet these standards are usually sold as seconds.
Quality assurance aims to build quality into work processes in order to avoid defects before they occur. This may involve the use of an external agency that audits the organisation against pre-established quality standards, such as ISO 9001. If an organisation meets these quality standards, it is then entitled to use the certification of that external agency, which can provide a competitive edge.
Total quality management is a continuous, organisation wide commitment to excellence in the area of quality. Employees are placed in work groups known as quality circles. Each quality circle is required to work as a team to achieve quality improvement on an ongoing basis. TQM aims to improve performance and quality at every level of the organisation.
The most effective quality management strategy is TQM. while quality control leads to the improvements in quality through the retrospective checking of products at different areas of the operations system, TQM is a more holistic, proactive program of quality management that can be applied not only to product quality but also to other areas of business operation.
Define and explain the use of technology in the operations management system.
Technology is the use of machinery, robotics and computers within an organisation to enhance productivity, efficiency and consistency. One of the best ways to improve productivity levels is through the implementation of technology.
Technology can be used for a variety of reasons in the operations system including:
- Goods and services can be produced at a faster pace, using less labour and therefore cutting costs as well as increasing productivity.
- Fewer errors may be made.
- The quality of the goods or services being produced can increase, leading to increased profitability.
- Can result in less waste.
- Can reach more customers through technology, by using phones and Internet.
- Increase business competitiveness by finding ways to produce far superior products and/or producing them faster than competitors can.
