BusMan 3-4 4
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BusMan 3-4 4 - Leaderboard
BusMan 3-4 4 - Details
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| 🇬🇧 | 🇬🇧 |
| Effectiveness | Refers to the degree to which a business has accomplished its stated objectives |
| Efficiency | Refers to how well a business uses resources in achieving these objectives. |
| Business competitiveness | Business competitiveness the ability of a business to sell products in a market |
| Result of operation strategy | Be able to satisfy customers and increase profits Objectives of high or increased quality, improved profits, increased productivity and increased market share can be achieved The strategies implemented by the operations function/responsibility area such as acquiring higher quality raw materials improves product standards and boosts overall quality (of product or service). Likely to increase customer satisfaction – more sales and increased market share. |
| Difference Between a Good and a Service | Goods Tangibles are goods which can be touched Handled & stored before sold to the customer The production process & consumption are not linked or occur at the same time They are ‘produced’ Little customer involvement in production Services Services cannot be stored They are performed Customer needs to be present They are ‘performed’ and consumed at the same time |
| Manufacturing Organisations | Manufacturing organizations produce goods which are: Tangible - can be seen and touched. Take up physical space so need to be stored Do not require the customer to be present - goods are usually mass produced and are standardized in their design Are usually machine intensive - involve automated processes Quality is easier to assess as you can check against benchmarks |
| Service Organisations | Service organizations produce services which are: Intangible - cannot be seen and touched. It is something someone else does for you. Unlike a manufacturing organization, no product is actually produced. Cannot be stored - services are consumed in the process of delivering the service The customer needs to be present to receive a service - usually tailor made to suit their needs (ie. think about having a haircut) Are usually labour intensive - usually an employee needs to deliver a service Much more difficult to assess the quality of a service |
| Inputs | Inputs are resources used by an organisation to produce its goods and services. Raw materials Capital equipment/facilities Labour/people Information/ knowledge from a variety of sources Time Money/finance |
| Processes/Transformations | Transformation or processes is the conversion undertaken of inputs (resources) into outputs (goods or services). The term ‘transformation’ implies physical changes, but today includes conversion of resources into services. The operations system of a manufacturer tends to be highly automated or mechanical (ie. cachinery, robots & computers) A service provider relies heavily on interaction with customers & their processes tend to be more labor-intensive (staff are crucial to operations). |
| Outputs | Outputs refer to the end result of an organisation’s efforts – the final good or services that is delivered or provided to the consumer. Many LSOs carry out both types of operation (eg. Mitsubishi Australia – buy a car and receive a warranty/servicing) The Operations Manager must be able to link transformation processes to the activities performed by other areas of the organisation. Output must be responsive to customer demand (otherwise they won’t buy them = no business) |
| Website development | Website development the creation and/or improvement of a connected group of pages on the internet that will be maintained by a business to promote and sell its products Advantages Can be used to deliver consistent messages to customers and suppliers, and can also be used to gain customer feedback A website means that a business is accessible for sales 24 hours a day, 7 days a week. Reduces the costs of labour and of leasing or purchasing physical space Disadvantages Designing, registering and publishing a website may initially be expensive and time-consuming. Websites do crash, so the loss of access to the business when there is a malfunction may prevent customers or other stakeholders dealing with the business. |
| Automated production line | An automated production line is comprised of machinery and equipment arranged in a sequence with components added to the good as it proceeds through each step Advantages Allows a business to produce at faster rates – this will result in higher output and increased productivity Reduced need for human labour allows a business to produce at reduced cost and increased productivity Disadvantages Automated production lines will be costly to maintain or replace. An automated production line can break down, halting production. |
| Computer-aided design | Software generates three-dimensional diagrams from a set of given input data (parameters). Advantages Allows a business to produce at faster rates at reduced cost – for example, designs can be altered without the need to erase and redraw Allows a business to generate three-dimensional diagrams from a set of given input data (parameters), allowing the user to inspect a product or object and then alter the design by changing relevant parameters Disadvantages Costs of software can be expensive. software can cras which may lead to a loss of work |
| Computer-aided manufacturing | (CAM) refers to the use of software and machinery that allow computers to direct and control the manufacturing process Advantages Allows a business to produce with greater consistency (each component or finished product will be exactly the same) and greater accuracy (free of errors) CAM allows a business‘s manufacturing process to become computer-directed by controlling the process – this will lead to greater efficiency as machines controlled by computers will not need to take breaks. Disadvantages Computer software can always crash, resulting in production ceasing. CAM-enabled machinery is generally designed for a specific task, such as milling, routing or lathing, and is typically not versatile. |
| Material management | The strategy which manages the use, storage and delivery of materials to ensure the right amount of inputs is available when required in the operations system. |
| Materials Management Links to Profitability (Effectiveness) | Organisations do not want to have too much stock or inventory on hand as this means that capital (finances) is tied up in stock when it could be used elsewhere. Overstocking of perishable materials such as food can lead to waste. More waste means a higher cost price for the product or service and less profit for the organisation. The aim of materials management is to ensure that the correct amount of stock or raw materials is available at the right price and at the right time to allow a smooth production process. |
| Forecasting | Use historical data and seasonal fluctuations to try and predict demand for a business’s products, this allows them to prepare to meet the forecasted demand Strength Ensures that a business maintains an appropriate level of materials for the operations system without overproducing Ensures that a business does not find itself underproducing. resulting in a loss of customers, and possibly a decline in market share Limitations Making use of historical data does not necessarily guarantee that past events will continue into the future Forecasting, to some degree, will always be inaccurate |
| Materials Planning | The production plan is an outline of the activities undertaken to combine resources (inputs) to create goods /services (outputs). Master Production Scheduling (MPS) is a description of what is to be produced and when. Materials Requirements Planning (MRP) is completed after the organisation has a clear understanding of the quantities to be produced and the time frame involved. |
| Advantages and disadvantages of MPS and MRP | Strengths Both strategies allow a business to avoid overproducing or underproducing Both MPS and MRP can be used by a business to make adjustments to production in response to fluctuations in demand Limitations Both strategies rely on accurate information — if incorrect information is used, it is likely that errors will occur in the materials planning process. While MPS and MRP can both provide a business with flexibility, the use of each strategy may potentially have the opposite effect |
| Advantages and disadvantages of Just In Time | Strengths Holding less stock in storage reduces storage costs — improves efficiency and effectiveness. Less of the business’s finances are tied up in stock as materials are only obtained as needed. Limitations Supplier deliveries must be reliable — a limited amount of materials will be held in inventory so a supplier failing to deliver can hold up production. Materials must be received at the appropriate time failure to do so can bring a production line to a halt. |
| Just In Time | Just in Time (JIT) is a materials management strategy that ensures that the exact amount of material inputs arrive only as they are needed in the operations process. This greatly reduces the need for storage as the materials are not left idle and going straight into production. |
| Quality Control | Quality control involves the use of inspections at various points in the production process to check for problems and defects To implement an effective QC system an organisation must 1) identify required standards 2)determine how they will be tested and how often 3) collect data 4) take corrective action as necessary. |
| Positive and negatives of quality control | POSITIVE Good quality products Trust from customers Reduce waste Increase competitiveness NEGATIVE Takes time Might cost money If the quality is not there the trust from customers could be lost. |
| Quality Assurance | Quality assurance is the use of a system so that an organisation achieves set standards in production ISO 9001 is a series of standards, developed and published by the International Organization for Standardization (ISO), that define, establish, and maintain an effective quality assurance system for manufacturing and service industries. |
| Positive and negatives of quality assurance | POSITIVES Customers trust that there will be a high standard and that quality is assured, confidence of customers increase Keeps the reputation strong as there is a quality assured product Symbol can be added to the product (may improve likelihood of purchase) NEGATIVES Takes time to ensure quality, more documentation and employees requiring greater training about level of quality required A high expectation (must be maintained) Costs money to keep the quality high More expensive than QC |
| Total Quality Management | TQM is a way of thinking about goals, organisations, processes and people to ensure that the right things are done right first time. This thought process can change attitudes, behaviour and hence results for the better Continuous improvement Constant evaluation of, and continuous improvement in the way things are done in a business. Customer focus Quality should be the responsibility of every employee TQM considers the important question: ‘What does the customer require?’ All teams need to realise that they are serving the customer whether their roles have direct contact to customers or not. Employee empowerment through participation & teamwork A belief that quality problems would be best solved with an emphasis on employee involvement Many LSOs use ‘quality circles’ which are groups of workers who meet to solve problems relating to quality |
| Positive and negatives total quality management | POSITIVES Defect-free production process Customer focus Increase competitiveness NEGATIVES - Employees under major stress as they cannot compromise quality - Cost as every good and service must be to perfection at set quality standard |
| Waste minimisation | Waste minimisation is a process involving the reduction of the amount of unwanted or unusable resources produced by a business in an attempt to improve the efficiency and effectiveness of operations. |
| Waste minimisation strategies include: | Redesigning products and packaging Procurement of materials made from recycled materials Reusing scrap material |
| Lean Management | An approach that improves the efficiency and effectiveness of operations by eliminating waste and improving quality (maximise customer value). Aims to increase the value for customers while reducing wastage throughout the business’s operations – the quality must not suffer in the process. |
| The four principles of lean management: | Pull — this relates to avoiding overproduction and stockpiling. By enabling customer demand to dictate the rate at which products are delivered, a business is more likely to minimise waste as it will only be producing the outputs that will be sold.In this way, customers ‘pull’ value through the production process, leading to efficiency and effectiveness. One piece flow — this largely relates to eliminating waiting time or idle time. One piece flow involves a piece of production moving through the operations process one at a time.By producing in a smooth, uninterrupted manner, idle time is minimised. This improves efficiency, as costs are reduced and waste minimised. Quality is improved, enabling the business to be more effective. Takt — this refers to the rate of production needed to meet customer demand. Takt time is the average time that passes between production starting on one unit of a product and the start of production of the next unit, in order to meet demand. Takt helps the business to establish a consistent workflow following a smooth pattern that is flexible and easy to regulate as demand rises or falls. Zero defects — this is all about the business striving for perfection. and by not accepting or passing on defects, issues will be resolved quickly and levels of waste will be reduced. This improves efficiency, as resources are utilised with minimum waste, and avoids quality issues, leading to increasing profitability. |
| Strengths and weakness of lean management | Strengths reduced energy and resource consumption increase workers productivity weakness requires committed and experienced employees the constant focus on improvement and elimination of waste can result in workplace stress |
| TIMWOOD | T=Transportation, reducing unnecessary movement of machines and production between the processes I= Inventory ,minimize storage required M=motion, reducing unnecessary movement of workers and products within the process W= waiting time, eliminate any idle time between stages and process O=over processing, not adding more value to a product than customers want O=overproduction, not making more than what is required or earlier than required D=Defects, reducing errors that require time to fix |
| CSR Concerns/Issues in Operations | Managing Inputs Appropriately – environmentally friendly? How much waste is created from them? Avoid using cheap inputs or illegally disposing of inputs. Managing Suppliers Appropriately – are supplies sourced from socially responsible means? Child labour or exploitation being used? Avoiding biased selection of suppliers. Managing Staff Appropriately – think about the health and welfare of employees using materials, equipment, in the process stage of the operations system – is the workplace safe at all times? Managing the Customer Relationship Appropriately – goods/services sold must be fit for purpose (high quality and safe), treating all customers with respect. Managing the Key Elements – Inputs, Processes/Transformations, and Outputs - thought should be given for CSR in all key elements. |
| Role of the Operations Manager in CSR | Operations managers try to keep costs down and the decisions they make are not easy to balance between improving quality, reducing costs, and meeting social responsibilities. Operations managers are responsible for minimizing the negative impact (their production or processes have) on the environment and society in general. Operations managers need to ensure across the global supply chain that employees are treated fairly, products are made using sustainable practices, greater focus on renewable resources in production and develop strategies to minimise the impact/cost to the environment once the product has ended its life span (usually becomes waste/landfill) In short, operations mangers are focused on the 'triple bottom line' – economic, social and environmental impact. |
| CSR Linked to Elements of Operations System | Inputs =use local suppliers, using renewable energy to power facilities Process=efficient use of resources, ethical disposal of waste Outputs= packaging decision(biodegradable), ethical dealing with customers(sale return) |
| Global Sourcing | The practice of seeking the most cost effective materials (MRP) and other inputs, including from countries overseas. Advantages reduces cost accessing skills or resources that are unavailable domestically Disadvantages difficult to monitor the quality of inputs hidden costs associated with different cultures and time zones |
| Overseas Manufacture | Overseas manufacture refers to the production of a good in a country that is different to the location of the business’s headquarters. Reduces cost long-term – as labour, raw materials and taxes are potentially cheaper in another country If the manufacturing can be completed cheaper overseas then the selling price in Australia can be kept low – allows them to remain competitive and increase profits. Initial cost can be high, need to conform to countries laws/regulations. Harder to control quality, production process, wages and conditions of the workers overseas. |
| Global Outsourcing | Outsourcing is the contracting of a specific business operation to an external person or business. advantages improved quality because of access to expert knowledge and high quality services the business is able to focus on its core activities Disadvantages management may have less control over the production process it may be difficult to maintain quality |
| Supply Chain Management | A supply chain is the range of supplies from which the business purchases materials and resources. It is the active management of the activities that result in the flow of materials and goods and services to maximise customer value. It involves all of the businesses (the supply chain) who participate in getting a product to the end user. A critical management role in operations. If there are not enough materials on hand – production slows or stops. If quality of materials is poor – reflects in end product and will affect sale |
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