Unit 3 Outcome 3a Flashcards
Why is operations management so important?
LSOs rely on sales of products to satisfy key objectives of profit, market share and return on owners investment. The operations manager os ultimately responsible for the product or service that is offered on sale to customer. The operations manager has considerable influence on the quality, cost and availability of the goods and/or services.
What is operations management?
. This consists of the activities undertaken by managers to produce goods and services based on business objectives.
. It is concerned with creating, operating and controlling a transformational process that takes inputs from a variety of resources and produces outputs of goods and services, to satisfy customer demand.
Explain the relationship between the operations function and business objectives and business strategy.
Operations management refers to managing all the inputs and processes that go into producing a good or service. The aim of operations management is to complete these tasks as efficiently and effectively as possible, using strategies to improve productivity. If this can be achieved and your productivity rates are better than your competitors’ when benchmarked, you will have a competitive edge in terms of price, quantity and quality of output.
What are the characteristics of operations management within large-scale manufacturing and service organisations?
. These characteristics differ according to whether the organisation is a manufacturer of goods or provider of a service.
. Manufacturers produce tangible products while service organisations produce services which are intangible.
. Most modern organisations produce a combination of both manufacturing goods and services.
Explain strategic planning for operations management.
Strategic planning for operations management includes decisions about:
. what products to make or what services to provide
. process and layout
. facilities
. location
. quantity of production
Explain tactical planning for operations management.
Tactical planning for operations management includes decisions about:
. material resourcing
. supply chain management
. labour resourcing
. layout and process design or reengineering
. sourcing of technology
. decisions about quality management
Explain operational planning for operations management.
Operational planning for operations management includes decisions about:
. what to process and when (scheduling)
. order to be taken to process requirements
. amount of work to be placed onto resources
. who does what work and when (rostering)
What is the role of the operations manager?
. to ensure the operations system meet the operational strategy and objectives of the organisation
. decisions relating to planning and designing an operations system
. operating the systems
. eg. stock levels, work rosters
What are appropriate performance indicators for operations management?
Profit and level of wastage.
Explain the PI level of wastage.
. This measures the amount of excess resources created by the production process.
. When an organisation manages resources more efficiently through reducing waste it can cut production costs.
Explain the PI profit. (Net profit figures)
. This is what remains when expenses are deducted from the revenue earned.
. An organisation that makes a profit is considered to have performed successfully
. and in turn low profit or negative profit (referred to as a loss) suggests that an organisation could be experiencing problems such as reduced sales, poor customer service or inadequate management of expenses.
What is the difference between goods and services?
GOODS
. tangible
. production and consumption occur separately
. can be stored as inventory
. can be standardised/consistent quality
. minimal customer contact
SERVICES
. intangible
. production and consumption often occur simultaneously
. difficult to store, however record is maintained
. often specifically provided to meet individual requirements/quality levels are difficult to measure
. high degree of customer contact established
. performed
What are tangibles?
. Tangibles are goods transformed by manufacturers from inputs.
. They can handled and sold and stored before being sold to the consumer.
. eg. bread, clothing or a car.
. Production and consumption aren’t linked, meaning there is little costumer involvement in production.
What are intangibles?
. Intangibles include services which are transformed by service organisations from inputs.
. They cannot be touched and therefore cannot be stored.
. eg. if you attend a training course, you cannot physically touch it, but you benefit from gaining new skills.
. The customer may actually need to be present when the service is being delivered.
. eg. when receiving a haircut.
What are the key elements of an operations system in large-scale organisations.
. inputs
. processes
. outputs
What are inputs?
. They are resources used int the production process.
. There are 6 categories of inputs, being materials, capital equipment, labour, information from a variety of resources, time and money.
What is an example of a manufacturing organisations inputs?
Inputs which RipCurl use to make t-shirts includes
. fabrics, cotton and ink which are materials,
. and the various machines such as the automated welting machine and computer based pattern system which fall under capital equipment.
. Furthermore, labour involved to make these t-shirts rangers from designers and sewers to packers to drivers
. and the information required involves specifications in the measurement of the fabric depending on the size of the t-shirt, this means there is consistency
What is an example of a service organisations inputs?
Inputs required in Frankston Hospital to produce their services
. include materials consisting of medical equipment such as needles and foods for employees, patients and visitors.
. The capital equipment used includes X-ray and MRI machines
. Furthermore, the labour involved ranges from the doctors and nurses who care for patients to the cleaners and cooks.
. The information required involves the specifications in the dosages in terms of medication for patients.
What is an example of a manufacturing organisations processes?
RipCurl has a long process to get from the starting inputs to the t-shirt.
. First the t-shirt is designed,
. then the materials are cut and sewed together.
. After this, the t-shirts are screen printed
. and logos are put on them.
. Finally the t-shirts are quality checked,
. tags are placed
. and then they are taken to warehouse
. before being distributed to stores
What are processes?
. This is where inputs are transformed into outputs.
. A manufacturer transforms inputs into tangible products whilst a service organisation transforms inputs in intangible products.
What are outputs?
. They refer to the goods and services or end result of an organisation’s efforts, being the result of the transformed inputs.
. Goods tend to be similar whilst services tend to be differentiated.
What is an example of a manufacturing organisations outputs?
. The output from RipCurl would be it’s t-shirt.
What is an example of a service organisations processes?
. Franskton Hospital would offer many services, therefore everyday processes range from
. consulting patients, to cleaning equipment and taking the correct steps when operating.
What is an example of a service organisations outputs?
. The output for Frankston Hospital would be a healthy patient.
What is operations, productivity and business competitiveness?
. Operations management function influences quality, cost and availability of an organisations goods and services,
. which affects how the organisation achieves its other main objectives (profitability, market share, return for investors and social responsibility).
. therefore operations, productivity and business competitiveness are important because they affect the operation function’s influences.
What is productivity?
. This is the measure of efficiency, which is the amount of output produced compared to the input required in production.
. Productivity improves if the level of inputs is reduced to obtain the same level of output, or if more output is produced from the sae, input.
. An organisation which can improve productivity will become more competitive.
What is business competitiveness?
. This refers to the ability of an organisation to sell products in a market.
. Organisations can compete in two ways, being cost and differentiation.
Explain the areas of operational competitiveness?
. Areas of operational competitiveness impact the operations strategy adopted by an organisation.
What are the areas of operational competitiveness?
Competing on cost and competing on differentiation (quality and/or delivery).
Explain the following area of operational competitiveness: competing on speed of delivery.
. When organisations delivers products faster than competitors for the same price.
. Operational managers can make this happen by ensuring faster transformation processes.
Explain the following area of operational competitiveness: competing on quality.
. When organisations deliver excellent products for the same price as competitors they are omoeting on quality
. Operational managers can do this by making decisions with a strong emphasis on the aim to produce the best product or service available in the market place.
Explain the following area of operational competitiveness: competing on cost.
. When organisations provide costumers with the same products as competitors, but at a lower price.
. Operational managers can make sure this happens by prioritising decision making based on reducing costs and improving productivity.
What is lean manufacturing?
. This aims to eliminate waste at every stage of production.
. It involves analysing each stage of the production process, detecting where inefficiencies are and correcting them.
What are ways an organisation can compete on speed of delivery?
. promote a sense of urgency within the organisation
. identify and act on trends quickly
. respond quickly to changes in demand
. have flatter management structure
What are ways an organisation can compete on quality?
. ‘tailor’ products to costumers
. market themselves as a quality business
. view quality as a competitive weapon
What are ways an organisation can compete on cost?
. bulk buy items
. eliminate waste
. use automated production systems
