BUSMAN U3AOS3

key elements

inputs, processes, outputs

inputs

are the raw materials a business uses to create its product or service, suhc as natural resources, labour, plant equipment, human, technology, capital and time

processes

series of procedures or transformation the inputs are put through in order to create the finished good/ service. A series of steps which add value to inputs.

outputs

the finished product that results from the processes in the form of a good or service. This might be a packaged product ready to distribute to stores, or a completed service.

manufacturing firm

one that transforms raw materials into a finished good

service firm

provides in-tangible services to customers

characteristics of manufacturing operations

• product is tangible

• production and consumption occur separately.

• inputs, work in progress and outputs must be stored as inventory

• can be standardized (created exactly the same) with consistent quality

• minimal final customer contact

• capital intensive- requires a higher level of equipment and capital raw materials

characteristics of service businesses

• intangible product (quality difficult to monitor and measure)

• production and consumption often occur at the same time

• labour intensive operations- more wage expenses, HR, training

• no physical storage

• often services are tailored or customised to suit the customer

• high level of customer contact

types of technological developments

automated production lines, robotics, computer aided design (CAD), computer aided manufacturing (CAM), online services, artificial intelligence (AI)

technological developments def’n

refer to new digital or automated systems which can be introduced in an operations system to improve effectiveness and efficiency

2 benefits of technological developments

• improve efficiency: speed of output creation, reducing inputs needed/ wasted

• improve effectiveness: improve quality/ experience, more sales, increase market share, reducing long-term costs, reducing waste

what are automated production lines

a machinery arranged in a sequence so that a product is developed as it moves through each step, with each operation controlled by a computer

robotics

a form of automated technology that is capable of complex tasks

advantages of robotics and automated production lines

• speed (efficiency)

• precision and consistency (quality)

• able to perform dangerous or uncomfortable tasks (CSR)

• cheaper in the long run than labor expenses (efficiency and profit)

disadvantages of robotics and automated production lines

• expensive to set up

• lack of ‘human touch’

• not capable of all tasks

• creates a rigid system

• requires maintenance

• dependent on digital systems

• large space required

computer aided design (CAD) def’n

a software program that designs virtual products before they are made. Most products are designed using CAD software

advantages of computer aided design (CAD)

• accurate design (quality)

• material use can be calculates (efficiency, wastage)

• predicts time needed for production (efficiency)

• flexible

• widely used software

disadvantages of computer aided design (CAD)

• can be costly

• staff may resist change if they prefer traditional methods

• lost production time due to staff needing to be trained

computer aided manufacturing (CAM)

production machines that cut, shape, or perform any number of functions and are controlled by computer.

advantages of computer aided manufacturing (CAM)

• speed (efficiency)

• precision and consistency (quality)

• able to perform dangerous or uncomfortable tasks (CSR)

• cheaper in the long run than labour expenses (efficiency and profit)

• able to customise product for clients

disadvantages of computer aided manufacturing (CAM)

• initial set-up costs, employee training, machine maintenance, space requires

• not efficient for large-scale standardized production

online services

digital platforms or resources accessible through the internet, enabling users to perform tasks, access information, or interact with businesses or individuals.

example of online services

online booking systems, compass, ecommerce, click & collect

artificial intelligence

the stimulation of human thought processes by computer systems to perform tasks like decision-making, speech recognition, and visual perception

advantages of online services and AI

• available 24/7

• additional sales channels

• competitive advantage if done well

disadvantages of online services and AI

• security risks, dependent on digital systems (hacking, power outage)

• costly to set up & maintain

• if poorly done can damage customer relations and competitiveness.

materials management

is the administration of all activities relating to the inputs (reources) required in the production process

how does materials management improve efficiency

• reducing the quantity of products on hand > greater productivity

• less storage space/ energy required for inputs > greater productivity

• avoid over-ordering > less wasteage > greater productivity

how does materials management improve effectiveness

• able to adequetly meet demand > more profit

• avoid over-ordeing > less cost > more profit

• avoid over-ordering > less wasteage > fulfil social need

• avoid under-ordering > fulfil market need > more sales

• reduces costs > compete on price > more market share

4 material management strategies

forcasting, master production schedule, materials requirement plan, Just In Time (inventory management)

quality def’n

in the degree of excellence in a good or service and its ability to satisy the customer

“degree of excellence” meaning

can include many different measureable features, such as consistency, durability, customer satisfaction, ease of use and many more depending on the product.

quality control

checking the raw materials and or work in progress (WIP) against set standards by inspecting inputs, hand-checking on a production line, smapling batches and/ or testing finished products

quality assurance

a system established to ensure that predetermined quality standards are achieved. This standard is certified by a third-party

total quality management

an approach to quality where all members of an organisation aim to participate in ongoing improvement of organisational culture and production process

core concepts of total quality management

• continuous process improvement

• customer focus

• defect prevention

• universal responsibility (everyone is involved in the improvement)

Total Quality Management disadvantages

can be difficult to maintian- ongoing improvements can be uncomfortable, time consuming and expensive