1

What is Operations Management and what 3 elements make up Operations Management?

Consists of all the activities in which managers engage to produce goods and services. Operations Management consists of the management of: Inputs The transformational process Outputs - Establishes the quality of goods and services produced - Influences the overall cost of production, given that the operations function is responsible for the largest part of an organisations capital and human expenses - Determine whether sufficient products are available to satisfy consumer demand A manufacturing organisation produces tangible products, whilst a service organisation produces intangible products, so the nature of what operations management involves in each of these types of businesses differs, for example a manufacturing firm would be more concerned with the production process. Nonetheless both types of businesses operations managers still deal with inputs, transformational processes and outputs.

Operations Management is important to all LSOs because:

How does operations management differ from a manufacturing to a service organisations?

Planning

How does the POLC roles of Operations managers in a service firm differ from one in a manufacturing firm?

Bank Operations Manager Plans strategically to improve customer service within all branches Organises human and physical resources to be used most effectively across all branches Leads the process of retraining staff to improve customer service Collects data and feedback from customers to ensure that the strategies in place are working effectively

Manufacturing Operations Manager Plans for the purchase and implementation of new equipment to improve the manufacturing process Organises training for staff and how the equipment will be implemented

Organising

Leading

Leads the investigation into possible new equipment that can improve efficiency Controls how the equipment is being used to meet outcomes and objectives

What are the 6 types of inputs?

-Raw Materials consumed or converted by the transformation process -Capital Equipment plant, machinery and property necessary to conduct operations -Labour people involved in the operations function

Controlling

-Information from a variety of sources Contributes to the production process but is often not measured as it is difficult to put a $ value on -Time Efficient use of time limits costs and wastage and increases productivity -Money Most liquid of all resources / assets, can be used to purchase all of the above 6 7 What is the transformational process? What is the definition of an output? Is the conversion of inputs (resources) into outputs (goods and services) Refers to the end result of an organisations effort the service or product that is delivered or provided to the consumer. Productivity and competitiveness can be improved when operations managers: - reduce costs - improve quality and - delivers goods and services on time Includes the range over which the organisation intends to compete. It may be narrow or broad. Cost or Differentiation providing customers with a superior value in terms of service (flexibility, speed, quality) or added features compared to lower priced products. (Think of the airline industry and QANTAS Vs. Tiger Airways) Tiger competes on cost, QANTAS does try to reduce cost, but they also compete based on quality of the service they provide. 1) 2) 3) 4) Achieve economies of scale Bulk buy inputs Eliminate waste Produce standardised products for larger markets 5) Produce high volume output 6) Use automated production. service systems 1) Market themselves as a quality business (branding) 2) View quality as a competitive weapon 3) Respond to customer needs immediately (quality service) 4) Communicate / market your commitment to quality 5) Reduce defect rates in production process 6) Strictly comply with design specifications 7) Tailor products to customers 8) Use technology to produce large numbers

How can operations managers improve productivity and competitiveness?

9 10

What does the term competitive scope mean? In what two ways can businesses compete?

11

How do businesses compete on cost?

12

How do businesses compete on quality?

of customised products to varying specifications 13 How do businesses compete on speed of delivery? 1) Have flatter management structures 2) Maintain a corporate culture expecting ongoing and radical change 3) Promote a sense of urgency within the organisation 4) Reduce the problems associated with bureaucracy 5) Identify and act on trends quickly Involves planning the layout of workspace to streamline the production process 1) Enough physical space for the anticipated volume of production 2) Effective use of production equipment and technology 3) An adequate location of stock and warehousing requirements 4) An efficient flow of goods and services through the system 5) Conformity with legal regulations (such as site and building constraints and OHS standards) Fixed Position Layouts Deals with large scale processes, such as the construction of bridges, ships, aircrafts or buildings. (This layout applies specifically to manufacturing) Product Layouts deals with the manufacturing of goods in mass volume using an assembly line. (Also applies specifically to manufacturing) Process Layout deals with high varieties of products by grouping activities, equipment and machinery and function together. Retail Layout Exposure is the critical consideration for stores such as supermarkets, Kmart etc. Office Layout Efficient movement of information and proximity to resources are priorities for the layout of an office. Is used by operations managers to optimise operations. Materials Management is the strategy that managers the use, storage and delivery of materials to ensure the right amount of inputs are

14 15

What does facilities design and layout involve? When considering the best design and layout what should an operations manager consider?

16

Manufacturing layouts: Define Fixed position layout

17

Manufacturing layouts: Define Product Layout

18

Manufacturing layouts: Define Process Layout

19

Manufacturing layouts: Define Retail Layout

20

Manufacturing layouts: Define Office layout

21

What is materials management?

22 23

What is inventory? What does materials management involve?

available when required in the operations system. Is the goods and materials held as stock by an organisation 1) Reducing holdings of surplus stock 2) Controlling the release of materials into the production process 3) Receiving materials 4) Storing materials safely 5) Identifying ongoing materials requirements by: a. Ensuring timely purchase of materials b. Forecasting Is the physical handling of goods in warehouses and at distribution points Production Plan Is an outline of the activities undertaken to combine resources (inputs) to create goods or services (outputs) Master Production Scheduling details what is to be produced and when

24 25

What is materials handling? Strategies to ensure efficient materials handling: Developing a Production Plan. Define Production Plan Strategies to ensure efficient materials handling: Developing a Master Production Schedule. Define Master Production Schedule Strategies to ensure efficient materials handling: Define Materials Requirement Planning

26

27

Materials requirements planning Involves developing an itemised list of all materials involved in production to meet the specific orders. Such planning must consider: - lead times required by suppliers (do items need to be ordered in advance) - the exact number of inputs to complete the task - the amount of stock (inventory) on hand - purchasing procedures (do you want to take advantage of bulk buying discounts) Inventory Control Ensures that costs are minimised and that the operations system has access to the right amounts of inputs when required Just in Time Is a material management strategy that ensures that the exact amount of material inputs will arrive only as needed in the operations process Supply chain Is the range of suppliers from which the organisation purchases materials and resources

28

Materials Handling: Define Inventory Control

29

Materials Handling: Define JIT

30

Materials Handling: Define Supply Chain

31

What are three strategies used to manage quality?

Quality control Quality assurance and Total quality management (including employee empowerment, continuous improvement and improved customer focus)

32

What does quality refer to?

Quality Refers to the degree of excellence of goods and services and their fitness for a stated purpose. Quality control Involves the use of inspections at various points in the production process to check for problems and defects Quality Assurance Involves the use of a system so that an organisation achieves set standards in production Quality control uses inspections to ensure quality, where as quality assurance uses documented set standards that have to be met. Total Quality Management Is an ongoing, organisation wide commitment to excellence that is applied to every aspect of the organisations operation. - Continuous improvement - Customer focus - Employee empowerment Quality Circles Are groups of workers who meet to solve problems relating to quality (this is about employee empowerment) The acquisition of up to date technology is one strategy which operations managers use to optimise operations. Customer Relationship Management Refers to the systems that organisations use to maintain customer contact. Manufacturing Technology (Robotics) Are highly specialised forms of technology capable of complex tasks. Used in complex manufacturing during the transformation process e.g car manufacturing. CAD Computer Aided Design Is a computerised design tools that allows a business to create product possibilities from a series of input parameters

33

What is quality control?

34

What is quality assurance?

35

What is the difference between quality control and quality assurance? What are the three elements of TQM?

36

37

What are quality circles?

38

Why is technology used by operations managers?

39

What is customer relations management?

40

What are robotics primarily used for in operations management?

41

What is CAD, CAM and CIM? Think AutoCAD program used in Design Tech.

CAM Computer Aided Manufacture Is software that designs and controls manufacturing processes Computer Integrated Manufacturing CIM- Is a method of manufacturing in which the entire production process is controlled by a computer. 42 Operations managers must act ethically and socially responsible in relation to which of their job tasks? 1) 2) 3) 4) Manage inputs appropriately Manage suppliers appropriately Manage staff appropriately Manage the customer relationship appropriately Facilities design and layout The use of technology The quality of the final output Materials handling

43

Operations managers can improve efficiency and effectiveness by improving what? OR (SAME QUESTION ANOTHER WAY) How can operations managers improve the competitiveness of the oprganisation?