Unit 5: Operations Management

Operations Management

The process of transforming inputs into outputs to achieve business objectives, involving planning, coordination, and control of processes, quality, and costs.

Job Production

A method involving the customization of individual products tailored to specific client requirements, such as office buildings or wedding dresses.

Advantages of Job Production

Better quality, higher worker motivation, increased flexibility, unique selling points, and more customization options.

Disadvantages of Job Production

Time-consuming, costly, challenges in worker replacement, low economies of scale, and cash flow issues.

Cell Production

A team-based production method where tasks are completed by self-contained units (cells) with a focus on teamwork and multi-skilling.

Advantages of Cell Production

Autonomy in decision-making, responsibility for quality, and higher productivity through teamwork.

Disadvantages of Cell Production

Lower output efficiency, capital-intensive setup, potential team conflicts, and inter-cell delays.

Batch Production

A method where a limited number of identical products are produced simultaneously, with work completed on each batch before switching to another.

Advantages of Batch Production

Better economies of scale, specialization leading to better quality, increased product variety, and possible customization.

Disadvantages of Batch Production

Increased production costs from storage, potential boredom from repetitive tasks, and delays affecting overall production.

Mass/Flow Production

A method focused on the mass production of standardized products, often involving automation and high output volumes.

Advantages of Mass/Flow Production

High economies of scale, better quality through specialization, continuous operation of machinery, and lower labor costs.

Disadvantages of Mass/Flow Production

High inflexibility for customization, potential boredom from repetitive tasks, and high capital investment costs.

Mass Customization

A production method combining the flexibility of job production with the economies of scale of mass production, enabled by technology.

Advantages of Mass Customization

Low unit costs with flexibility to meet diverse customer requirements.

Disadvantages of Mass Customization

High costs for product and machinery design, and expensive flexible capital equipment.

Location Factors

Considerations affecting business location decisions, including sociocultural, technological, economic, environmental, and political factors.

Outsourcing

Hiring an external company to perform tasks that could be done internally, often to reduce costs.

Advantages of Outsourcing

Cost savings, flexibility in managing demand fluctuations, and reduced overheads.

Disadvantages of Outsourcing

Loss of control over production quality and conditions, potential reputational risks, and ethical concerns.

Offshoring

Relocating business functions to another country, often to reduce costs and increase productivity.

Advantages of Offshoring

Lower operational costs and increased efficiency.

Disadvantages of Offshoring

Communication challenges, potential unethical labor practices, and environmental concerns.

Insourcing

Bringing previously outsourced functions back in-house to regain control and improve quality.

Reshoring

Returning production to the home country from abroad to manage supply chains more effectively and reduce risks.