Business Management

Operations Management

Operations management is the coordination of resources within a business to achieve the efficient and effective output of finished goods and services.

Efficiency

how productively a business uses its resources (time, raw materials, labour, machinery, technology) when producing a good or service

Effectiveness

the extent to which a business achieves its stated objectives

business objectives

business objectives are specific goals the business is aiming to achieve in a specified period of time.

manufacturing business characteristics

-tangible

-can be stored as inventory easily

-produce goods that can be standardized through mass production.

-minimal customer contact

-mainly capital intensive production (when business uses high degree of machinery and equipment during production process

service business characteristics

-intangible

-production and consumption occur simultaneously

-difficult to store

-customised

-high degree of custom contact

-labour intensive

similarities

-uses technology

-deal with customers

-deal with suppliers

-aim to produce high quality output

-aim to reduce waste

Inputs

raw, all the resources that go into producing a good or service

resources in inputs

•labour resources- humans, employee skills and effort

•natural resources- from land such as raw materials

•capital resources- facilities, buildings, machinery, equipment

•entrepreneurial ideas- suppliers, stakeholders

Time=quality

processes

what is done to the inputs to transfer them into the finished outputs

eg

melting, mixing, blending, pouring, senting, checking, packaging

outputs

end, the final product presented to the customer, either as goods (tangible) or services (intangible)

-can be delivered to either the end consumer or another business (if its a component of another good or service)

technology

refers to any tool used by business to assist in designing, producing and setting of good/service

technological development

refers to advancement in these tools/equipment used to perform tasks ans create products

types of technology

automated production lines, robotics, computer aided design, computer aided manufacturing, AI, online services

automated production lines

involve machinery and equipment that are arranged in a sequence, where the product is developed as it proceeds through each step.

-replaces human effort by machinery and technology due to advanced in engineering and robotics

strengths of automated production lines

-increased speed of production>greater levels of productivity

-efficiency, reduction in human labour costs

-24/7 productiom

weaknesses of automated production lines

-high initial set-up costs, requiring significant capital

-machines and systems require ongoing maintenance and may need to train | up skill staff (costly) ^break down - effectiveness X

robotics

design, construction, operation, robotics- programmable(repetitive tasks) that are capable of performing specific tasks

strengths of robotics

-high accuracy and precision, which may lead to an increase in quality

-productivity rates increase, cost per unit can fall

weaknesses of robotics

-high initial set-up costs

-technical training is needed to operate and maintain machinery

-if the system fails, the production process could see majot disruptions

computer aided design

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

-allow for creation of 3d designs

computer aided manufacturing

use of software that controls and directs production processes by coordination machinery and equipment through a computer

-machines are fed instructions from a computer which thrn manufacture the product

strengths of CAD and CAM

-increased speed of productions , greater productivity

-customers have the flexbility to adapt designs without higher producion costs

-reduced wastage, a physical prototypes do mot need to br manufactured and clever designs can reduce raw material waste, eg. t shirt cut out templates

-high accuracy, precision which hopefully leads to an in quality

weaknesses of CAD and CAM

-may be expensive to pay for design and maintenance of website

-can expose customers to the risk of theft of online fraud (security and private information important)

-redudancy of employees lsot of skills because too much time used to learn new technology

online services

webs, apps, platforms that allow business to provide their service to customers, through the internet

eg. travel services

strengths of online services

-can reach customers around the world, at any time

-can increase business sales through online avenues and track customer behaviour

weaknesses of online services

-may be expensive to pay for design and maintenance of website

Artificial Intelligence (AI)

intelligence demonstrated by machines as opposed to the naturuak intelligence displayed by humans

-advanced web search engines (google)

strengths of ai

-provides acess to a "big data" pool of info so technology can make quick and informed decisions

-high accuracy and precisions in anticipating, assessing and responding to customer needs

weaknesses of ai

-high initial set up and testing costs

-can lead to a large scale redundancy of employees

managing materials

involves organising and monitoring the delivery, storage and use of raw materials required for production

-too little> stop production, dusrupt deliveries and anger customers

-too much> waste money(tie up capitial) , waste, storage space, and risk raw materials perishing or getting damaged

forecasting

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

-quantities not too low or high prediction

materials requirement planning

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

master production schedule

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

-document

-helps determines when u order materials and what quanities and to perceive demands in future, insight of materials that must he ordered.

how, what, when, where, who, which

-accurate

inventory management

takes up storage space, therefore a cost.

just in time

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

-acquires complex tracking of supplies, often using computer monitoring system

strengths of jit

-inventory (stock on hand) minimised, reducing materials and storage costs for the business

-reduced space requirements, lowering rent of other costs.

-no storage soace required

weaknesses of jit

-ordering and administration fees may apply with frequent orders

-less time available for checking and inspecting quality of materials

-hugely reliabt on supppiers to deliver on time, all the time, if this fails the entire production line us disrupted

Qualility

is a good or services ability to satisfy a customers needs. if your product or seevice has better quality than a rival, then you will have a competitive advatange over them

-reactive approach to quality (respondimg to situation after something has occured)

Quality control

involves the use of a series of checks at different stages at the production process to ensure that goods and services meet predetermined standards

-reactive process, aims to detect and reject the faults once they have occurred, rather than to prevent them from

happening in the first place.

factors determining quality

durability, maintainability, speed and service, performance

quality control strengths and weaknesses

Strengths:

• employee performance should improve knowing their work is being checked.

-prevents poor quality goods or services reaching customers

weaknesses:

-wasteful, rejected products involve raw materials, time and processes which are not sold to customers