Business CH3

Operations management Consist of all the activities in which mangers engage to produce a good or service

Operations function produces an originations good and/or by transforming inputs required outputs

Operations is the core function of an organisation, as without operations, there is no product (good or service)

Manufacturing

Transform inputs into identifiable goods (e.g. getting nails done, Tatura Milk)

Goods are:

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Tangible

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Can be stored

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The consumer is not present when they are produced

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Individual item, is not tailored to the consumer \

Services

Organisations (e.g. QANTAS, NAB)

Produce services that are:

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Intangible

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Cannot be stored

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Customer must be presents to receive service

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Can be tailored to individual needs

Generating greater profit or maximising market share, for example, are typical objectives that depend on efficient production in operations

The organisations overall strategy for achieving its objectives will include planning in operations

There is therefore a clear link between an organisations operations and its objectives and strategy

Efficiency:

refers to how well a business uses resources in achieving objectives

Effectiveness:

refers to the degree to which a business has accomplished is stated objectives

Businesses competitiveness:

the ability of a business to sell products in a market

3.2.3 Operations Management

Areas of management responsibility

What is the link to business objectives

How operations strategies can support business objectives:

Business objective

Operations objectives

To make profit

Reduces costs

Increase market share

Improve quality

Provide a return for shareholders

Increase productivity

Introduce automated production lines

Contribute to the wellbeing of the community

Minimise waste

3.4 Key Elements of an Operations System

Inputs  process  outputs (finished products)

Inputs:

Are the resources used in the process of production. Soe resources are owned by the business, while others are from suppliers. There are 5 categories of inputs:

Materials:

Includes raw materials, components and parts consumed of converted by the transformation process

Capital equipment:

Includes the plant, machinery, equipment and property necessary to conduct operations

Labour:

People involved in the operations function

Information from a variety of sources:

Contributes to the transformation process. Businesses do not always account for the value of the resources, because it cannot easily quantified as an asset

Time:

Its efficient use are critical to all businesses. Coordinating resources within appropriate time frames limits costs and wastage.

Processes

The main concept of operations management is transformation – conversion of inputs (resources) into outputs (goods or services)

Outputs

Finished product

The results of a business efforts

Manufacturing business transforms inputs into tangible products or goods.

3.5 Operations management in manufacturing and service businesses

Characteristics of operations management within both manufacturing and service businesses

A manufacturer will transform inputs into tangible products.

The production process and consumption are not linked. There is little customer involvement in production

A service business will transform inputs into services. For example, if you attend a training course, you cannot physically touch it, but you benefit from gaining knowledge and learning new skills

Many businesses today produce a combination of both manufactured goods and services. Products such as cars or electron often come with a warranty, which is an example of a service.

OUT PUT

Goods

Tangibility

Tangible- can be seen and touched

Production/consumption pattern

Production and consumption occur separately

Stored or not stored

Can be easily stored

Production method

Can be standardised and mass produced

Customser contact

Minimal customer contact

Production tequnie

Mainly capital intensive prodication

3.6 Technologies Strategies