topic 3 - business operations

Operation management

Refers to all activities in managing the transformation process

Production

Is the process of changing inputs such as labour services into goods and services that can be sold

Job production

A method of production in which a product is supplied to meet the exact requirements of a customer

Benefits and drawbacks of job

Benefits :

Higher quality , higher prices, monopoly, higher satisfaction

Drawbacks:

Unit cost higher, labour-intensive, more skill required, higher wage pays

Flow production

Occurs when an item moves continuously from one stage of production to another

Benefits and drawbacks of flow production

Benefits:

You can produce a larger scale, less labour-intensive, can specialise, production line operate 24 seven, consistent quality, lower unit cost

Drawbacks:

Repetitive, high initial course, breakdowns

Specialisation

Individual focuses on one types of task

Technical economies of scale

cost per unit falls as a result of of businesses using machinery

Unit cost

Average cost per unit

Efficiency

How well a business uses its resources to produce products

Lean production

An approach to production that aims to minimise wasted resources

Waste

Unwanted materials from production

Types of waste

Over production

Transport

Motion

Waiting time

Out of date

Defects

Procurement

The wholes process of managing the ordering and r of the goods or services in the business

Just in time production

Minimum amount of stock of raw materials and finished goods are held by the business

Benefits and drawbacks of just in time production

Benefits:

Stock levels are minimum, reduced storage, less waste

Drawbacks:

Reliant on manufacturers/ suppliers, vulnerable to transport, benefits from bulk buying reduces

Kaizen

Continuous improvement

Just in case

The business hold buffer stock of raw materials/ finished goods just in case there is a problem with delivery

Benefits and drawbacks of just in case

Benefits:

Stock is available to meet sudden increases in demand, less reliant of suppliers, spare finished products

Drawbacks:

Highest stock holding means more storage, stock may go out of date, buildup of unsold finish products

Supplier

A business or an individual that provides goods or services to a business

Supply chain

Refers to all the businesses people and activities that take part in the production process from the start until it gets to the customer

Choosing supplier

Cost

Quality

Speed of delivery

Reliability

Reputation

Quality

Product is a good quality if it meets the needs and months of a customer

Quality includes:

Design, functionality, reliability, consistency, durability, sales service, price for value

Consequences of quality issues

Loss of customers, negative brand awareness, cost of recalling, cost of replacing, cost of reducing prices, legal action

How to measure quality and identify problems?

Level of product returns, mystery shoppers, customer loyalty, customer complaints,, reviews, reject rates

Quality control

All samples of product are checked at the end of production process

benefits : put standard quality 100% check

Drawbacks: wasteful, errors, high cost for inspection, time-consuming,

Total quality management

A quality assurance approach where all employers have a target of zero defect and therefore responsible for quality

Benefits: qualities embedded into organisation, average unit cost down, improve motivation

Customer service

Part of businesses activities that is concerned with meeting customers needs as fully as possible

Good customer service

Meeting customers wants and needs before during snd after

Methods of good customer service - product

Quality of the product themselves, can provide high-quality customer services by making sure that the goods or service they supply meets the needs of customers. This depends on numbers of factors

Methods of good customer service - Reliability

Good should be reliable and exactly what is expected of them

Methods of good customer service - Safety

Customers worry about safety so making sure They r safe

Methods of good customer service - Customer engagement

building relationships with customers

Methods of good customer service -Good product information

Staff being trained and informed before they try and sell goods and services that’s what they can pass these information on to customers

Methods of good customer service - Post sales

Is an impulsive feature of customer service including: dealing quickly and fairly with complaints, delivering products without delay, exchanging goods that are faulty, repairing goods

Methods of good customer service - Different methods of payment

Variety of accessible payments methods

Benefits of good customer service

Increase sales

Customer loyalty

Word mouth promotion

Enhance public image

More effective workforce

Lower cost