Business Management AOS3-Operations Management Flashcards

operations management

the coordination of resources to efficiently and effectively produce goos and services, to meet market needs

efficiency

how productively a business uses its resources when producing a good or service (making more with less)

Effectiveness

the extent to which a business achieves its stated objectives . (lowers costs improve quality, reduce waste)

Input

resources used by a business to produce goods and services

6 types of resources

Materials

Capital equipment

labour

information

time

money

Processes

the actions performed by a business to transform inputs into outputs

examples of processes

Mixing, designing, baking, computing, assembling, constructing.

outputs

final goods or service produced as result of business operations system

Manufacturing business

businesses that use their operations system to produce physical goods

Characteristics of a manufacturing business

production process

occurrence of production and consumption

customer contact

tangibility

storability

consistency

production process for a manufacturing business

businesses have highly automated process that us a high degree of machinery

occurrence of production and consumption for a manufacturing business

production and consumption of the goods occur at operate times

customer contact for a manufacturing business

low degree of customer contact during production

Service Business

business that utilise their operations system to produce intangible products

Characteristics of a service business

production process

occurrence of production and consumption

customer contact

tangibility

storability

consistency

production process for a service business

service businesses tend to have a production process that is labour intensive

occurrence of production and consumption for a service business

service businesses production and consumption occur simultaneously

customer contact for a service business

service businesses have high customer contact

Technology as an operational strategy

helps maximise efficiency

helps improve effectiveness and quality of output

helps achieve goals

creates a competitive advantage

Benefits of technology in a manufacturing businesses

improvement of precision

reduction

savings on labour costs

improvements in quality

ability to perform complex tasks

ability to work of longer periods

Benefits of technology in a service businesses

-an organisations is able to sell their product or services globally online

-customers can receive more information about -the product via a website

-improved customer service

Drawbacks of technology

cost(tech can be expensive)

loss of jobs

requires training

may need repairs

Technology statergies

Automated production Lines

Robotics

Computer Aided Design

Computer Aided Manufacturing

Online Services

Ai

Automated Production lines

involves machinery and equipment that are arranged in a sequence where the product is developed though each stage

Pros and Cons of a Automated Production lines

Pros:

-high accuracy and precision leading to better quality

-less waste

-saves labour costs

-runs 24/7

Cons:

-very expensive

-loss of jobs

-training required

Robotics

assists humans in production, eg: used to help carry heavy items or for repetitive jobs

Pros and Cons of Robotics

Pos:

-High accuracy & precision

-better quality

-increase productivity and less labour costs

Cons:

-very expensive to set up

-training

-loss of jobs

Computer-Aided Design (CAD)

design software that enables businesses to generate and modify technological illustrations of a product

Pros and Cons of Computer-Aided Design (CAD)

Pros:

-High accuracy and precision

-flexibility for customers

-lower costs

-reduced wastage

Cons:

-very expensive to start

-training

-loss of jobs

Computer-Aided Manufacturing (CAM)

involves using software to control and direct the production process by coordinating machinery though a computer

Pros and Cons of Computer-Aided Manufacturing (CAM)

Pros:

-High accuracy and precision

-flexibility for customers

-lower costs

-reduced wastage

Cons:

-very expensive to start

-training

-loss of jobs

Artificial Intelligence (AI)

system that's used to manipulate human intelligence and behaviour

Pros and Cons of ai

Pros:

-High accuracy and precision

-assist production

-reduce waste

Cons:

-very expensive

-training

-job loss

Online Services

web pages, apps that allow business to provide their service to customer through the internet

Pros and Cons of Online service

Pros:

-using the cloud and increase flexibility

-customer can access it everywhere

-24/7

-reduce labour costs

Cons:

-expensive

-loss of jobs

-training

Materials management

managing the way materials are received and stored to ensure the right amount of materials are available

materials Management strategies

forecasting, master production schedule, materials requirement planning, just in time

Forecasting

predicts customer demand for an upcoming period using past data and market trends

Forecasting effect on efficiency

decreases the likelihood of fording and storing too much materials, reducing waste

Forecasting effect on effectiveness

improves a business ability to meet customer demand which can contribute to increased customer satisfaction

Pros and Cons of Forecasting

Pros:

-informed decisions about quantity of materials

-prevents excessive stock

-reduce storage costs

Cons:

-if too reliant can result it a lack of stock

-time consuming

-increased labour costs

Master production schedule (MPS)

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

Master production schedule (MPS) effect on efficiency

prevents a business from producing excessive amounts of product and promotes and organised system

Master production schedule (MPS) effect on effectiveness

more likely to produce the correct quantity of products, which improves customer satisfaction and can increase sales

Pros and Cons of Master production schedule (MPS)

Pros:

-improves a business reputation

-provides a clear schedule

-business can meet customer demand easier

Cons:

-time consuming

-can be expensive to implement

Materials Requirements Planning (MRP)

a process that helps businesses make sure they have the right materials, in the right amount, at the right time for production

Materials Requirements Planning (MRP) effect on efficiency

reduces halts in production, enhances productivity, reduces wastage

Materials Requirements Planning (MRP) effect on effectiveness

ensures there are sufficient materials to meet customer demand, helps increase sales and market share

Pros and Cons of Materials Requirements Planning (MRP)

Pros:

-business has the exact number of materials

-less likelihood of production halts

-avoids excess storage

Cons:

-time consuming

-additional costs

Just In time (JIT)

a strategy which ensures the right amount of materials arrive just as they are need. (purchasing material just in time before production)

Just In time (JIT) effect on efficiency

can free up area in the workplace and therefore increase production and also prevent resources from getting damaged.

Just In time (JIT) effect on effectiveness

costs saved for reduced storage can be used elsewhere, reduced expenses can result it more profit

Pros and Cons of Just in time (JIT)

Pros:

-less storage

-reduces storage costs

Cons

-could result in errors

-increased delivery costs

-if a business fails to order production will halt

quality management

management of the production process that ensures the outputs produces are consistently reliable and durable

Quality

degree of excellence of goods or services and if their fit for purchase

quality management strategies

quality control, quality assurance, total quality management

Quality control

inspecting a product at various stages of the production process to ensure it meets the standards and discarding any that are unsatisfactory

Pros and Cons of Quality Control

Pros:

-reduces the number of faults/defects

-less waste

-inexpensive to implement

Cons:

-time consuming

-defects could still reach customers

-could become boring for employees

Quality Assurance

a business achieving a certified standard of quality in its production after and independent body assesses its operations system

pros and cons of quality assurance

Pros:

-improves customer confidence

-improves reputation

-improves customer satisfaction

Cons:

-expensive to obtain

-requires training

Total Quality Management (TQM)

ongoing business-wide commitment to excellence that is applied to every aspect of the business operations system

Pros and Cons of Total Quality Management

Pros:

-defect free process

-maintain a customer focus in operations

-improve quality of goods

Cons:

-expensive

- time consuming

-training

Similarities of quality control and quality assurance

both reduce the number of fault products, both require a good/service to meet standards

differences of quality control and quality assurance

-quality control is reactive as it identifies and eliminates error after they occur, Quality assurance is proactive as it prevents errors from happening

-quality control does not require external certification, quality assurance does

Similarities of quality control and total quality management

both improve quality of output and both improve employees quality

differences of quality control and total quality management

-quality control focuses on setting standards of quality, TQM focuses on developing and improving standards

quality control identifies and eliminates error, TQM prevents errors

Similarities quality assurance and Total quality management

both prevent errors, both improve the process of producing goods/services

differences quality assurance and Total quality management

-quality assurance focuses on meeting standards, TQM focuses on developing and improving standards

-Tqm does not involves external certifications, quality assurance does

Waste minimisation

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

types of waste (T.I.M.W.O.O.D)

T- transportation

I - inventory

M - motion

W - waiting

O - overproduction

O - over-Processing

D - defects

Types of waste: Transportation

unnecessary transport can waste time and money

Types of waste: inventory

excess inventory of products and materials can waste storage space

Types of waste: motion

unnecessary movement of employees can waste time

Types of waste: overproduction

producing too much can lead to excess inventory and waste

Types of waste: over processing

doing more work than necessary leading to a decrees in productivity and wasting time and money

Types of waste: defects

Products that have error that are discarded, wasting time, money and materials

Waste strategies

Reduce reuse recycle

reduce

decreasing the amount of products, labour or time discarded during production

reuse

making use of items which would have otherwise been discarded

recycle

transforming discarded items into products

how the Waste strategies impact efficiency

only using the required amount go materials, a business can produce times faster

how the Waste strategies impact effectiveness

reducing waste Lowers costs, which allowed the business to provide lower prices to customers, meeting the objective of increasing customer satisfaction

lean management

The process of systematically reducing waste in all areas of a business's operations system whilst simultaneously improving customer value.

key objectives of lean management

-deliver customer value

-elevate waste

-strive for continuous improvement

4 principles of lean management (POTZ)

P-Pull

O-One-peice-flow

T-Takt

Z-Zero Defects

Pull in POTZ

production of the goods or service it only started when the customer places and order

one price flow in POTZ

the operation process focuses on one good or service at a time

Takt in POTZ

the rate at which operations complete a product or service to satisfy customer demand

Zero Defects in POTZ

ensuring that any error in the production process are files immediately before another task is performed on the product

Pros and Cons of lean management

Pros:

-reduced uncertainty

-reduced energy and resource consumption

-increased worker productivity

Cons:

-requires commitment and experienced employees

-high implementation costs

-can be stressful

What is CSR