VCE Business Management Unit 3 Outcome 3 Operations Management

Operations Management

The process of effectively coordinating the inputs, processes and output of finished goods or services to meet customer needs and generate a profit for a business

Elements of the OM system

The three key components that make a complete operations management system including inputs processes and outputs

Inputs

The resources used in the operations process such as raw materials, labour, equipment, information, premises, entrepreneurship etc

Transformation process

The sequence of activities and techniques involved in converting inputs into finished outputs.

Outputs

These are the finished goods or services from the operations management process that are ready to be used by the final consumer

Effectivness

Measures how well a business is achieving its objectives

Efficiency

Measures how well a business is achieving its objectives while minimising resources use and costs

Productivity

The number of outputs for a given number of inputs over a period eg. vehicles per employee or actual vs available passenger km giv

Competitiveness

Ability of a business to produce goods or services at a lower costs, higher quality or increased speed of delivery than its rivals and so achieve its objective

Technological development

The ongoing increase in the practical application of science to achieve business objectives

Automated production line

A method of manufacturing where the transformation process is broken down into small steps carried out in sequence mostly by machines

Computer aided design

The use of software to improve the creation, development and improvement of products

Computer aided manufacturing

The use of specialised software and equipment to control and monitor all aspects of the transformation process

Website

A central place where a business hosts its information, communication and trade presence on the internet

E commerce

The process of buying and selling goods or transferring funds or data over an electronic network usually the internet

Materials management

The techniques employed by the business to ensure it has the right number of the right type of inputs in the right place in the transformation process to achieve business objectives

Forecasting

The process of identifying the future materials needs of the business and the likely availability of those materials in order to make effective ordering decisions.

Master production schedule

A document containing plans about what a business intends to produce, over a particular time frame taking into account forecast demand and production costs and availability of resources.

Materials requirement plan

document containing details of components and raw materials required to produce the finished goods.

Inventory

the holding or storage of raw materials, component parts or stock of goods for resale. It also includes work in progress and stock of finished goods.

Inventory management

The process f planning how much and where inventory is stored to minimise cost and maximise efficiency and flexibility

Just in Time

A method of materials management where components or raw materials are delivered to the operations location a short time before they are required in the process

Quality

The extent to which a product or service consistently achieves design specifications and meets customer expectations

Quality management

The process of coordinating inputs, processes and outputs in the production process to ensure that all outputs consistently meet design specifications, miniimse rejects and waste.

Quality control

A quality management approach that detects faults and errors by inspection and testing before they reach the consumer

Quality assurance

A business gains certification from a third party to confirm to customers that its products and processes meet certain industry quality standards

Total quaity Management

An approach that aims to create a culture of quality throughout the business leading to zero defects and ongoing improvement

Customer focus

Ensuring that at every stage f the production process the product is in the best possible condition to be processed- internal and external customer

Kaizen

Continuous improvement The belief that there is always an opportunity to improve the production process no matter how small and that all employess should be involved in the process

Quality circles

Groups of employees who meet regularly to identify ways of improving the standard of the production process and minimising waste

Waste management

Identifying and removing all activities in the operations management system that do not add value to a product as it is being produced

Muda

Japanese term for waste. Oyota recognise 7 wastes including Transport, Inventory, Motion, Waiting, Overproduction, Overprocessing and Defects

Lean Production

Identifying and removing all activities in the operations management system that do not add value to a product as it is being produced. Focuses on JIT, Kaizen, Automation, Cell production

Cell production

Having a carefully designed workstation or team dedicated to a particular activity and commitment to reducing waste and improvement

Corporate Social Responsibility

The extent to which business considers its impact on wider stakeholders including the environment and communities as well as profit when making decisions

Sustainability

The ability to continue to consume a resource in the present without affecting our ability to continue doing so in the future

Globalisation

The increased sourcing of inputs, producing and selling finished goods internationally as a way of minimising costs and achieving business objectives

Outsourcing

The contracting out of a particular part of the transformation process to another business, this can be international or national

International manufacturing

When a business chooses to produce its goods and services in a country other than where its headquarters are based. Note the business is still the one making the product unlike in outsourcing

Supply Chain

the sequence of suppliers a business relies on to be able to purchase and produce resourcess and in order to create a finished goods or services