Business Management Unit 3 AOS3 (Operations Management)

Operations Management

involves the coordinating and organising activities involved in producing the goods and services a business sells to its customers

How effectiveness relates to operations management

The extent to which a business achieves its stated objectives

How efficiency relates to operations management

how productively a business uses its resources when producing a good or service

What do improvements in efficiency and effectiveness cause for a business

The business will become more competitive and have a competitive advantage over its competition

Productivity

the amount of outputs in relation to the inputs used measured over a period of time

Three key elements of an operations system

- Inputs

- Processes

- Outputs

Input

are the resources used by a business to produce goods and services

Processes

are the actions done by the business to transform inputs into outputs

Output

the final goods and services produced as a result of a business’s operations system, that is delivered or provided to customers

Six Strategies related to Tech development

- Automated production lines

- Robotics

- Computer-aided design

- Computer-aided manufacturing techniques

- Artificial Intelligence

- Online Services

Automated Production Lines

refers to a process where raw materials enter, and finished products leave with little or no human intervention

Robotics

are programmable machines that are capable of performing specified tasks

computer-aided design (CAD)

a digital design software that aids the creation, modification, and optimisation of a design and the design process

Computer-Aided Manufacturing

involve the use of software that controls and directs production processes by coordinating machinery and equipment through a computer

Artificial Intelligence

involves using computerised systems to simulate human intelligence and mimic human behaviour

Online Services

are services that are provided via the internet

4 Material Management Stratagies

- Forecasting

- Master Production Scheduling

- Material Requirement Planning

- Just in Time

Forecasting

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

Master Production Schedule

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

Material Requirement Planning

ìs a process that itemises the types and quantities of materials required to meet production targets set out in the master production schedule

Just-In-Time

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

Quality

a good or service’s ability to satisfy a customers need

Three Quality Management Strategies

- Quality Control

- Quality Assurance

- Total Quality Management

Quality Control

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

Quality Assurance

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

Total Quality Management

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

Waste Minimisation

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

Reduce

is a waste minimisation strategy that aims to decrease the amount of resources, labour or time discarded during production

Reuse

is a waste minimisation strategy that aims to make use of items which would have otherwise been discarded

Recycle

is a waste minimisation strategy that aims to transform items which would have otherwise been discarded

Lean Management

is the process of systematically reducing waste in all areas of a business’s operations system whilst simultaneously improving customer value

Four Principles of Lean Management

- Pull

- One Piece Flow

- Takt

- Zero Defects

Pull

involves customers determining the number of products a business should produce for sale

One Piece Flow

involves processing a product individually through a stage of production and passing it onto the next stage of production before processing the next product, continuing this process throughout all stages of production

Takt

involves synchronising the steps of a business’s operations system to meet customer demand

Zero Defects

involves a business preventing errors from occurring in the operations system ensuring there is an ongoing attitude of maintaining a high standard of quality for the final output

Corporate Social Responsibility

is the ethical conduct of a business beyond legal obligations and the consideration of social, economic, and environmental impacts when making business decisions

Environmental Sustainability

involves making an effort to ensure natural resources are not permanently depleted or damaged by business activities

3 Global Considerations in Operations

- Global Sourcing of Inputs

- Outsourcing

- Overseas Manufacturing

Global Sourcing of Inputs

involves a business acquiring raw materials and resources from overseas suppliers

Overseas Manufacturing

involves a business producing goods or services outside of the country where its headquarters are located

Global Outsourcing

involves transferring specific business activities to an external business in an overseas country