Business Unit 3 AOS3 - Operations Management

Operations Management

Strategies to create, operate and control the transformation of inputs into outputs.

Effectiveness

The degree to which the business has accomplished it's objectives.

Efficiency

How well a business uses resources in achieving these objectives.

Materials management

Ensures materials are received and stored in the right quantities and time.

Forecasting

Data from past+present used to analyse trends to predict future events.

Qualitative forecasting

Takes info people's opinions, maybe through market research.

Quantitative forecasting

Makes use of numerical data to try to predict future demand for business's goods.

Operations manager

Oversees operations system, ensuring it meets business's needs.

Forecasting strengths

Ensures appropriate level of materials, reduced costs

Forecasting limitations

Unexpected events may occur, can be inaccurate

Materials handling

Handling of goods in a warehouse and at distribution points.

Production plan

Provides basic info for detailed materials management planning.

Master production schedule (MPS)

A plan that describes what is to be produced, in what quantities, how and when.

Materials requirement planning

Itemised list of all materials involved in production to meet the specified orders.

Materials planning MRP & MPS strengths

Avoids overproducing, provides flexibility

Materials planning MRP & MPS limitations

Rely on accurate info, costly

Inventory control

Used to ensure minimum cost for maintaining inventory of materials.

Just in time (JIT)

Ensures right amount of materials+parts arrive when needed for production.

Just in time strengths

Reduces costs, reduced risk of waste

Just in time limitations

Increase transportation costs, supplies must be reliable.

Inputs

Resources used in process of production

Processes

Conversion of inputs, to become outputs.

Outputs

Final good or service, delivered or provided to consumer.

3 Technological Developments

Computer-aided design, online services automated production lines

Automated production line

Machinery and equipment arranged in a sequence, usually on a conveyor belt. Goods passes along the line, the machinery will add components to them.

Advantages of Automated Production Lines

Increased productivity, minimises waste

Disadvantages of Automated Production Lines

Costly, training is required for staff

computer-aided design (CAD)

Generates 3D diagrams from a set of given input data.

computer-aided design (CAD) advs

High production rates, view design from different angles

computer-aided design (CAD) diss

Can crash, high costs

Online Services

Business has a website on internet to sell products.

Artificial Intelligence (AI)

Used by service businesses in production of documents.

Advantages of Online Services and AI

Reduced cost of labour, accessible 24/7

Disadvantages of Online Services and AI

Potential outages, costly to train staff

3 Characteristics of manufacturing businesses

Produce tangible goods, can be stored for later use, production processes and consumption are not linked

3 Characteristics of service businesses

Produce intangible services, services cannot be stored, tailored to individual customers.

3 Elements of Operations Management

Inputs processes, outputs

Efficient and effective operations

Satisfied customers, high sales

Total Quality Management can be achieved by

Quality assurance, continuous improvement

Quality Control

Ensures efficiency and effectiveness in operation systems.

Waste Minimisation

Reducing amount of unwanted/unusable resources from production process

Employee empowerment

Teams of <10 workers meet to solve problems with process, design or quality.

Benefits of Waste Minimisation

Reduced production cost, improves productivity.

Waste Minimisation techniques

Reducing waste at source, recycling waste materials.

Continuous Improvement

Constant evaluation and improvement in, the way things are done in a business.

Customer Focus

Employees should aim to satisfy internal and external customers.

Examples of Quality Assurance

Process checklists, audits, development of standards.

Total Quality Management (TQM)

Improvement in all aspects of a business's operation by sharing responsibility between staff.

4 Lean Management Principles

Pull, One peace flow, Takt, Zero defects

Lean management principle: Pull

Avoiding over production and stockpiling.

Lean management principle: One Peace Flow

Eliminating waste or idle time through smooth production.

Lean management principle: Takt

Rate of production meets consumer demand

Lean management principle: Zero Defects

Errors or defects need to be identified as closely as possible to where they occur.

Operations management Oversight

Inventory management, Manufacturing, Quality, Maintenance and engineering

How a business can reduce, reuse, recycle.

Reduce: Create less waste, reducing costs

Reuse: Repurpose used items

Recycle: Changing discarded materials into new products

Lean Management: Seven Wastes

Transportation, inventory, motion, waiting time, overprocessing, overproduction, defects.

Lean Management strengths

Reduced energy use, reduced delays

Lean Management weaknesses

High implementation costs, workplace stress