4.1 Operational Objectives Flashcards
Operational management
The management of the entire process that turns inputs into outputs
Inputs (raw materials, machinery, people)
Outputs (product or service )
Define productivity
How much output is produced. The higher the productivity, the lower the productivity costs are per unit
Define efficiency
Minimising waste and costs when producing goods or services. Utilising the least amount of resource whilst still maximising output
Operational objectives (7)
Reduce costs
Improve quality
Flexibility
Environmental
Speed of response
Add value
Sales and retention
How will the business reduce costs (operational objectives)
Greater capacity utilisation
Improve productivity
Negotiate supplier terms
How/why will the business be more flexible (operational objectives)
Adapt quickly
Improve sales and reputation
Expand on improving quality as an operational objective
Less returns
Reduce waste
Lean
Few complaints
Expand on environmental as an operational objective
Minimising packaging
Reduce waste
Sustainability
Pollution control
Why is improve speed of response a good operational objective
Get order out quicker
Better reputation
Competitive
Why is adding value a good operational objective
Improves profitability
Why is sales and retention a good operational objective
Keep customers coming back
Repeat purchases and loyal customers
Internal influences on setting operational objectives
Finance- the budget and availability
Marketing - they will have an insight into demand
HR - labour skill available impacts what can be produced
External influences of setting operational objectives
PESTLE
Political and legal - business has to be compliant with changes
Economic - may impact demand then operations will need to adjust production
Technology - CADCAM improves quality and productivity
Competitors - pressure to reduce costs whilst maintaining quality
