AOS 3 SAC- Unit 3 Busman

3A) Operating management

Involves coordinating and organizing the actives involved in producing the goods or services that a business sells to customers

3A) Efficiency

How productively a business uses its resources when producing a goods/service

3A) Effectiveness

The extent to which a business achieves its stated objectives

3A) Productivity

Number of goods and services that are produced compared to the number of resources used in production

3B) Inputs

The resources used by a business to produce goods/services

• Raw materials, employees, times, electricty

3B) Process

Actions performed by a business to transform inputs into outputs

• Mixing, designing, construct, assemble

3B) Outputs

The final good/service produced that are provided to a customer as a result of a businesses operations systems

3C) Manufacturing

Use resources and raw materials to produce a finished physical good

Production process: Manufacturing businesses tend to have highly automated processes that are capital intensive

Occurrence of prod/crea: Production and created occur as separate times

Customer Contact: Low degree of customer contact during production, as production and consumption stages are different

Tangibility: Outputs are tangible

Storability: Outputs can be stored as inventory

Consistency: Produce standardaised good

3C) Service

Provides intangible products usually within the use of specialized expertise

Production process: Labour intensive production process

Occurrence of prod/crea: Production and created occur simultaneously

Customer Contact: High degree of customer contact during production as it occurs at the same time as consumption

Tangibility: Outputs are intangible

Storability: Outputs cannot be stored as inventory

Consistency: Service isn’t standardized and is tailored for customer needs

3C) Manufacturing & Service SIM/DIFF ***

SIM- Both utilize technology

SIM- Both deal with suppliers

DIFF-

Production Process

Occurrence of production and consumption

Degree of customer contact

Tangibility

Storability

Standardized production

3D) Automated production line

Involves machinery and equipment that are arranged in a sequence and the product is developed as it proceeds through steps. (manufacturing)

Efficiency: Faster than humans, reducing time to produce outputs thus improving efficiency

Effectiveness: Highly accurate, decreasing the number of errors that occur during production.

+ Improves accuracy can reduce errors and the total number of resources wasted in production

+ Tasks can be completed faster than humans

- Can be expensive to repair automated production lines

- Sudden breaks in lines can halt production thus compromising productivity

3D) Robotics

Programable machines that are capable of performing specific tasks (Manu/service)

Efficiency: Performs tasks quickly and accurate, reducing time and waste

Effectiveness: Can perform specified tasks quicky/ precision reducing errors, overall enhancing quality of products and increasing customer satisfaction/ sales

+ Increasing precision in production

+ Removing the need for employees to complete dangerous tasks

- Increase employee redundancy
- High initial set up cost including purchasing, programming and installing

3D) Computed aided design (CAD)

Digital design software that aids the creation, modification and optimization of a design/ design process (manufacture)

Efficiency: Reduces time/ Labour needed to design a product, allowing resources to be used more efficiently

Effectiveness: Business can use CAD to develop various prototypes and choose best design to produce. Enables business to produce to highest quality
+ Greater accuracy in design process

+Speeds up design process

- Timely to train employees to use CAD
- Higher initial set up cost

3D) Computer Aided Manufacturing (CAM)

Involves the use of software that controls and directs production processes by coordinating machinery and equipment through a computer (manufacturing)

Efficiency: Doesn’t require machinery to be manually reset by humans which reduces the amount of time/labour resources

Effectiveness: Software is able to coordinate tasks with a high degree of accuracy
+ Speeds up manufacturing process

+ Less wages expense

- Increases redundancies
- Sudden breakdown can halt prodction

3D) Artificial intelligence

Involves using computerized systems to stimulate human intelligence and mimic human behavior (Both)

Efficiency: Can reduce the time and Labour used to complete complex tasks that would usually require human intelligence, allowing resources to be used more optimally

Effectiveness: Performs complex tasks such as providing good Customer ser. Improving customer satisfaction/sales/ market share

+ Can analyse date with great precision

+ Reduces wages cost

- Increases redundancies
- High initial set up cost

3D) Online services

Services that are provided via the internet

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

Effectiveness: Improves convivence for customers this increasing Customer satisfaction/ sales/ market share
+ Increases customer satisfaction

+ Increases businesses exposure

- Technical difficulties may disrupt business operations
- Time-c to make online services

3E) Forecasting

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

Efficiency: Decreases likelihood of ordering/storing excess materials

Effectiveness: Improves business ability to meet customer demand which can contribute to increased customer satisfaction/ sales/ marketshare

+ Prevents excess ordering of materials

+ Reduce cost of storage

- Time-c to analyze data

- Expensive to higher forecasting specialist

3E) Master Production Schedule (MPS)

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

Efficiency: Having exact amount of materials needed reduces excess stock

Effectiveness: Ensures sufficient materials are available to meet customer demand satisfying increasing satisfaction/ sales

+ Less likely for production to halt due to insufficient materials

+ Avoids excess storage and associated expenses

- time-c to update materials plan

- Incurs additional administration and training costs

3E) Materials Requirement Plan (MRP)

Is a process that itemizes the type and quantities of material to reach production targets set out in the master production schedule

Efficiency: Having exact materials required reduces avoidable halts in production which enhances productivity by allowing operations to flow smoothly

Effectiveness: Ensures sufficient materials to meet customer demand. This thus helps meet the objectives of increasing customer satisfaction/ sales

+ time-s as no production halts due to insufficient materials

+ Saves money by avoiding excess ordering

- time-c to update materials plan

- Incurs additional administration costs

3E) Just in Time (JIT)

In an inventory control approach that delivers the correct type and quanitity of materials as soon as they are needed for production

Efficiency: Frees up area in the workplace that can be utilized to increase production

Effectiveness: Cost-s due to reduced storage space that can be used in other areas of the business

+ reduce storage space

+ Allows business to switch to production of a different product without wasting resources

- No discount recieved from bulk buying

- Higher delivery cost as there is more frequent deliveries

3F) Quality

A good/service ability to satisfy a customer

3F) Quality control

Involves spectating a product at various stages in the production process to ensure it meets designated standards and discarding those that are deemed unsatisfactory

Efficiency: Identifying/fixing the cause of an error prevents error from reoccurring resulting in less waste

Effectiveness: Prevents customers from receiving faulty goods/services

+ Provides customers with consistently high quality product

+ Reduces refunds due to faults

- Tedious for employees to constantly check production line for defects

- Errors are only eliminated after they occur, generally after the item has been created, this leads to incurred costs associated with waste.

3F) Quality assurance

Involves a business achieving a certified standard of quality in its production after an independent body assess its operating system.

Efficiency: Preventing errors before they occur reduces the number of faulty products produced, reducing waste

Effectiveness: Customers are more inclined to purchase from a business with a certified quality standard thus increasing sales/profit/ market share

+ Business flows more smoothly with less errors

+ External certification can be used as a marketing tool

- Employees have to be trained to deal with procedures

- Expensive to hire external body

3F) Total Quality Management (TQM)

Is a holistic approach whereby all employees are committed to continuously improving the business operations system to enhance quality for customers

Efficiency: Continuously improving the quality of the production system can prevent errors from occurring and reduce the number of discarded products. This a

Effectiveness:

+ A business can adapt its TQM to suit its specific business requirements

+ Employees feel increasing valued if they are involved in process of improving quality

- Employees may feel confused about their role in improving

- Takes time for a business to enjoy benefits of TQM as it requires a shift in culture.

3G) Waste minimization

Efficiency: By minimizing the amount of time wasted in operations a business produces goods and services at a quicker rate, increasing efficiency

Effectiveness: Reducing waste lowers operations costs which can allow for a business to offer lower prices to customers. This increases sales and meets the objective of increasing market share. The increase in sales will also increase revenue which can assist in achievement of making a profit

3G) Reduce

A waste minimization strategy that aims to decrease the amount of resources, Labour or time discarded during production

• Adjust the number of goods produced each month based on predicted customer demand

• Review and select the optimal transport routes for product distribution

• Organize the number of employees required for each day based on work completion requirements.

3G) Reuse

Waste minimization strategy that aims to make use of items which would have otherwise been discarded

• Reusing natural resources

• Reusing functional parts of defective products

• Collecting packaging from customers

3G) Recycle

A waste minimization strategy that aims to transform items which would otherwise been discarded

• Glass

• Batteries

• Plastics

3H) Lean management

The process of systematically reducing waste in all areas of a business operations system whilst simultaneously determining the number of products a business should produce for sale.

+ Business reduces time wasted between tasks

+ Quality of business products can improve

- Costly to implement lean management as new polices/ procedures

- Time-c to train employees to employ lean management production methods

3H) Pull *** Applications+ efficiency/effectiveness

A lean management strategy that involves customers determining the number of Products a business should produce for sale.

3H) One piece flow***

A lean management strategy that involves processing a product individually through a stage of production before processing the next product continuing this process throughout all stages of production.

3H) Takt ***

A lean management strategy that involves synchronizing the steps of a business operations system to meet customer demand.

3H) Zero Defects***

A lean management strategy that involves a business preventing errors from occurring in the operations system by ensuring there attitude of maintaining a high standard of quality for the final outcome.

3I) Corporate Social Responsibility (CSR)

The ethical conduct of a business beyond legal obligations and the consideration of social, economic and environmental impacts when making decisions (express concern)

3I) CSR considerations for inputs

• Using energy efficient machinery for products

• Sourcing from suppliers that use environmentally sustainable methods when harvesting natural resources

  • Sourcing locally as opposed to overseas to reduce carbon footprint

3I) CSR considerations for processes

• Developing methods to capture and recycle unused or excess input materials, allowing them to be reused in the operations system.

• Training employees to minimize waste when completing production tasks

• Using technology that works in precise and consistent manners to reduce the amount of defective products discarded in production

3I) CSR considerations for outputs

• Providing clear labelling on a product about appropriate methods of disposal

• Creating products that have recyclable or biodegradable elements

• Eliminating as much plastic as possible in the packaging and creation of final product

3J) Global sourcing of inputs

Involves a business acquiring raw materials and resources from overseas suppliers

+ High quality materials can be sourced

+ Greater access to cheaper raw materials

- Materials may be damaged in transport

- Delivery may be time-c

3J) Overseas manufacture

Involves a business producing goods outside of country where is headquarters are located

+ Overseas workers are provided with employment and an income to support their families

+ Greater access to highly skilled employees who have expertise in production

- Local employees may lose their jobs if business moves manufacturing overseas

- Goods may be damaged during transportation

3J) Global Outsourcing

Involves transferring specific business activities to an external business in an overseas country (think UBank call center)

+ Quality of business activities can be improved as external business may be experts

+ Business can allocate more resources and focus on its own area of expertise

- May have reduced control over some of its activities as

- Language barriers may lead to delays

3A) Operations management and business objectives

1) Define operations management

2) Define Business objectives

3) Link “operations management is directly linked to achieving business objectives”

4) Substitute “implementing strategies such as ___ improve product quality”

5) Outcome “this leads to ___ “ Mention Objective listed in question