business unit 3 aos 3

operations management

involves coordinating and organising the activities involved in producing the goods or services that a business sells to customers.

efficiency

how productively a business uses its resources when producing a good or service.

effectiveness

 the extent to which a business achieves its stated objectives.

business objectives examples

make a profit

increase market share

fulfill a marker/social need

improve efficiency/effectivenesss

manufacturing business key features

capital intensive

production and consumption occur separately

tangible output that can be stored

standardised production

service business key features

labour intensive

production and consumption occur simultaneously

intangible output that cannot be stored

tailored production

similarities between manufacturing and service businesses

both aim to optimise their operations to produce high quality outputs at a low cost of production

both have to deal with suppliers during the process of managing operations

inputs

all the resources that a business uses to create its goods or services.

e.g. clay, water, energy, labour, machinery

types of inputs

labour e.g. human effort

capital e.g. machinery and tech

materials e.g. physical resources

information e.g. data and knowledge

time

processes

the activities and operations that convert inputs into finished outputs.

e.g. clay bending, extrusion, drying, firing

types of processes

manufacturing e.g. assembling a car

service delivery e.g. dental treatment

storage e.g. storing goods

outputs

the finished goods or services produced by the operations system and delivered to customers

automated production lines

where a series of machines and workstations are arranged in sequence to perform tasks automatically with little to no employee involvement. automated packing robots introduced

how APL achieve efficiency

APL enables faster production rates as machines can work continuously, increasing overall output

APL minimise chances of errors that are made by humans reducing wastage and the no. of products needing to be reworked

APL operate for extended hours without drop in performance, maintaining high efficiency

How APL achieves effectiveness

improved quality means meeting customer demand

APL can be quickly reprogrammed to respond to changing market demands

decrease human resources therefore decrease cost as wages are no longer needed

advantages of APL

increase speed of production, meeting customer demands

machinery is more accurate than humans, improving the consistency of each product

machinery is able to work longer hours which can help to increase production

disadvantages of APL

high initial cost

takes time to set up which could interrupt production while setup occurs

loss of jobs

CAM

the use of software and computer-controlled machinery to manufacture products.

CAM efficiency

automate manufacturing process, allowing for faster production of goods

cam offers high precision, reducing waste

resources like materials and energy are used more efficiently reducing costs

cam effectiveness

consistent, reliable processes, leading to improved reputation and customer satisfaction

easy customisation of products, enable business to respond to market trends.

advantages of CAM

machines are consistent, improving quality of end product because when the software reads the design the product will normally turn out exactly as specified in the design

improved efficiency by producing products quicker

disadvantages of cam

computer errors can occur, slowing down production

training employees is expensive

initial set up cost can be expensive

CAD

a software system that enables a product to be created in digital form, modified, analysed and tested before it is put into production

customises brick sizes to ensure consistency

CAD efficiency

allows rapid alterations and modifications to designs without redrawing plans from scratch, reducing the time involved in design phase

need for physical prototype is minimised as designs are digital, reducing resource use and waste

allow business to understand exact number of resources required to make a product helping to reduce wastage

CAD effectiveness

enables greater creativity in design, allowing more complex and innovative products developed, meeting marker expectations

3D visualization provides realistic view of final product allowing better feedback in the design process

through detailed analysis and tests, design flaws are identified and corrected before production, enhancing the overall quality of product

advantages of CAD

design processes completed quicker

adjustments to designs made easily as they are digital

3D visual provides realistic view of end product helping others to provide feedback

disadvantages of CAD

cost can be high

employees need to undergo training to learn how to use the software- taking time and increasing costs

more prone to being hacked, requiring significant investment into cyber security

AI

refers to computer systems that aim to mimic human intelligence.

software systems imply AI assisted production through monitoring cameras in the kiln

adv of AI

reduction of human error

can perform repetitive jobs allowing employees to take on more complex tasks
ability to speed up processes as data can be analysed and tasks performed quicker than humans

disadv of ai

initial cost very high

program can make errors as it relies on the human data that is being implemented

possibility of job losses

robotics

programmable machines that can operate tasks automatically

packing system uses robots to reduce labour costs and increase speed

robotics efficiency

robotics operate continuously without breaks, increasing volume of output using fewer resources leading to lower costs

reduce error rates in tasks, leading to reduced wastage

robotics adv

decreasing labour costs

improved safety as the robots can perform dangerous tasks rather than the employees

longer hours without as many breaks as humans, improving the amount of work being performed

robotics disadv

initial cost can be high for some robots

loss of jobs and unemployment may occur

training may need to occur, increasing costs

online services

services that are provided via the internet

optimise the customer ordering system will reduce the delays between ordering and production

online services efficiency

remove the need for employees to perform certain tasks and enable labour resources to be used more efficiently

online services effectiveness

Improve convenience for customers increasing levels of customer satisfaction, sales, market share

online services adv

increased speed of the service being delivered

ability to meet increased customer demand as the online service often allows more customers access to the products without significantly increasing the costs

online services disadv

increased need for cybersecurity as having the service online opens the potential to be hacked

potential for computers or internet connection fail from time to time, making it challenging to service customers

materials management

the planning, organizing and controlling of business materials required for production

forecasting

is a materials planning tool that predicts customer demand for an upcoming period using past data and market trends.

extensive use for demand and supply planning is critical @ selkirk

forecasting adv

improve business ability to meet customer demand as they are informed about quantity of materials needed

prevents excessive ordering of materials that go to waste minimising business impact on environment, increasing reputation
reduced cost of storage as it prevents need for large space to store materials

forecasting disadv

may be unable to meet unexpected increases in customer demand

time consuming to analyse past data and market trends

inaccurate predictions can lead to production halts due to insufficient materials

forecasting efficiency

decreasing likelihood of ordering and storing excessive amounts of materials, optimising the use of resources by reducing wastage

having enough materials minimises halts in the production process which improves productivity

forecasting effectiveness

improves business ability to meet customer demand contributing to increased customer satisfaction

master production schedule

is a plan that outlines what a business intends to produce, in specific quantities, within a set period of time.

brick production runs in large batches which aligns with long term scheduling

MPS advs

prevents business from producing an excessive amount of products, reducing amount of wastage

less likely that production will be brought to a halt and time is wasted as specific details about how production will occur are determined.

determining production targets, businesses are more likely to meet customer demand, increasing sales

MPS disadv

businesses that are constantly changing the details of their operations may find a mps unhelpful as it is inflexible

time consuming to map out details of production

implementing and maintaining this plan can be expensive

MPS efficiency

prevents business from producing excessive amounts of products, optimises use of resources by reducing wastage

minimises the number of avoidable errors that occur, which improves productivity by reducing the number of interruptions to production

MPS effectiveness

business more likely to produce the correct quantity of products to meet customer demand, increasing market share

materials requirement planning

An itemised list of the types of and quantities of materials needed as set out in the MPS.

MRP advs

decreasing waste generated in production, minimises business impact on the environment improving reputation

determining the exact materials required, less likely production will halt due to insufficient materials

MRP disadv

time consuming to constantly update the materials plan

implementing and maintaining the materials plan can incur additional administrative and training costs

just in time

A system where materials are delivered just as they are needed in the production process.

JIT adv

eliminates idle stock, limiting stock wasted from expiry or damage in storage. minimise business impact on environment and improve reputation

reduces storage costs, meaning money can be used in other areas

business can switch to produce a different product without wasting resources as there are minimal materials on hand to go through

JIT disdv

may fail to meet customer demand from lack of reserved stock may damage reputation

less time to check quality as stock needs to be used as soon as it arrives, could lead to error

if suppliers unreliable and fail to deliver correct materials at the right time, halt production

JIT efficiency

holding minimal stock frees up areas in the workspace that can be utilised to increase production

minimising amount of stock stored can prevent resources from becoming damaged or expiring, allowing resources to be used optimally

JIT effectiveness

costs saved from reducing storage can be used in other areas such as sales and marketing which can meet the objective of increasing sales

quality

a good or service’s ability to satisfy a customer’s need

quality control

checks for defects by performing inspections at various points in the production process to check for defects in the product. reactive strategy

advantages of QC

ensures products meet the desired stamdards before making it to the customer, improving customer satisfaction

identify errors early so they can be rectified quickly

reduce wastage as errors are identified

QC disadv

slow down production if checks occur at regular intervals

may be expensive if extra employees need to be employed to perform the checks

QC efficiency

results in less waste being created due preventing errors from reoccurring, resulting in less waste, allowing business to optimise use of resources.

reduces number of potential errors that could halt production, enabling system to flow continuously without interference and increasing productivity.

QC effectiveness

remove defective products prevents customers from receiving faulty foods, allowing business to meet the objective of increasing sales and market share

quality assurance

where a business achieves a standard of quality in the production of a good or service as assessed by an independent body

adv QA

improved quality of the end product

proactive approach that reduces the chances of errors actually occurring, leading to greater efficiency

provides customers with assurance that the product is good quality by meeting an independent standard

disadv QA

can be costly to obtain the certificate

takes time to train employees in the new standards

QA efficiency

reduces number of faulty products by proactive approach reducing a business’s waste, allowing optimal use of resources

reduce the number of production halts related to errors, reducing the amount of time wasted in the production process, improving efficiency

QA effectiveness

customers more inclined to purchase from business with certified quality standards. allow business to increase sales and meet objective of increasing profit and market share

total quality management

a holistic approach whereby all employees are committed to continuously improving the business’s operations system to enhance quality for customers. This strategy relies on three key features: customer focus, continuous improvement, and employee empowerment.

continuous improvement- TQM

involves ongoing efforts to raise service standards in which business will continue to set higher standards that it aims to achieve

employee empowerment- TQM

employee given responsibility to improve quality of business. quality circles where employees discuss new ways to improve quality

customer focus- TQM

ensure that business has what the customer wants at the forefront of all improvements, with all employees understanding their role in meeting or exceeding customer satisfaction

TQM adv

employees are empowered to find new ways to achieve quality, which can improve morale within a business

the quality of the products is continually improving, helping to achieve a competitive advantage

disadv TQM

employees may become more focused on improving quality than performing work

it can be difficult to gain a business wide commitment from all employees.

quality circles can be time consuming

waste minimisation

the process of reducing the amount of unused material, time, or labour within a business.

timwoods

transport- moving items or info

inventory- items that customer has not received

motion- excessive movement within workplace

waiting- waiting for info or items to arrive

overprocessing- doing more work than neccessary

overproduction- doing work before it is needed

defects- mistakes and errors that need to be reworked

skills- not using workers to fullest of abilities

reduce- methods of reducing waste

decreasing the number of resources, labour or time discarded during production

reuse- methods of reducing waste

making use of item that would have otherwise been discarded

recycle- methods of reducing waste

transform items that would have otherwise been discarded

lean management

a systematic process for the elimination of all forms of waste and inefficiencies in a business

pull-lean management

focusies on producing goods based on customer demand

pull efficiency and effectivenes- lean management

reduce overproduction and minimise number of wasted materials, time, and labour from a business’s production process, increasing productivity

enable business to eliminate discarded ,materials in [production process allowing business to reduce expenses and achieve BO of making a profit

one piece flow-lean management

focuses on minimizing batch sizes and performing one task at a time on each product.

one piece flow efficiency and effectiveness

reduce errors in operations process by only producing one product at a time, increasing productivity

takt

synchronizing the pace of production process with the rate of customer demand, thus reducing bottlenecks and ensuring that there are enough goods produced or service provided to meet consumer demand.

takt efficiency and effectiveness

allow business to have flow of materials between the stages of the production process, reducing wasted time and increasing productivity

improve flow of processes and optimise the speed at which products are delivered to customers, improving customer satifaction

zero defects

principle aims to identify errors and when they occur from the production process so they don't get passed on to the next stage of production

zero defects efficiency and effectiveness

aiming to minimise errors can reduce the number of materials that are discarded during the production process, increasing productivity

leads to customers receiving high quality products that have no defects, improving customer satisfaction and increasing sales, allowing business to better fulfill a marker need

Corporate social responsibility- CSR

a corporation's initiatives to assess and take responsibility, beyond legal requirements, for its effects on environmental and social wellbeing

adv of CSR

increases chances of attracting and retaining quality staff as people want to work for socially responsible business
reduce costs when reducing waste
attractive for customers therefore increasing sales

disadv of CSR

cost of introducing the change can be high (changing suppliers and training programs)

the time taken to introduce the change can result in loss of productivity

global sourcing of inputs

Sourcing inputs (manganese from SA, german machinery) from businesses across the globe

adv global sourcing of inputs

reduced production costs as cheaper raw materials lowers overall expenses

access to state-of-the-art machinery improves output quality, improving productivity

lower prices through saving costs enable competitive pricing against imports

disadvantages of global sourcing of inputs

creates unemployment for aus workers in the short term (not demonstrating CSR)

a weak AUD can dramatically increase the cost of imported inputs

must ensure overseas suppliers meet acceptable workplace standards and quality

overseas manufacture

businesses manufacture their products in a foreign country

not current practice for Selkirk, could produce specialised bricks in India to take adv of Indian clay, cheaper wages, energy costs.

disadv overseas manufacture

reduced control as cannot monitor quality when operating in foreign country

moving manufacturing overseas reduces local employment opportunities

long shipping times, potential delays at ports

adv overseas manufacture

reduced labour and compliance costs allow products sold at lower costs

manufacturing near key markers enables faster delivery and better response to local demand

lower costs enable businesses to compete more effectively against foreign manufacturers

global outsourcing

a business uses organisations from around the globe to undertake some of its business functions

may be explored for admin or specialist roles to reduce labour costs

adv global outsorucing

leverage the skills of highly experienced external organisations who complete tasks faster and to a higher standard

reduces labour and operating costs compared to performing tasks in house