HO1 - Lecture 3: Operations Management (HO1) Flashcards
What is Operations Management?
- Decision making involving:
- design,
- planning,
- control of many factors that affect operations. - Concerned about balance of inputs, transformations, outputs.
What do operations managers do?
Apply ideas and knowledge to
- increase productivity
- reduce costs
- improve flexibility to meet rapidly changing customer needs
- enhance product quality
- improve customer service
- organisation that achieves this - at competitive advantage.
- need to know there’s subsystems out there - decisions made: influence on sub-systems and up organisation.
List activities covered by operations management (8).
- What products to produce?
- How large a facility to build?
- How many people to employ?
- What methods to use to ensure quality?
- Method to procure material
- Decide on the production schedule
- Select correct layout and have a maintenance plan
- How to improve quality?
What is a system?
Group of items, events, actions where no item, event/ action takes place independently.
What is an example of a system?
Problem: To minimize transportation costs.
Solution: Less frequent, larger shipments of material.
Result in the system: Large shipments require more storage capacity = addition costs MAY exceed savings in transportation.
List different stakeholders within the environment which organisations operate (6).
- Shareholder
- Management
- Employees
- Suppliers
- Customers
- General Public
What are the factors that are part of the larger economic and government system within which organisations operate?
- Wage rates
- Working conditions
- Pollution
- Safety and international competition
- Stockholders’ returns
List external factors that have influenced operating decisions in recent times (i.e. last 50 years) (5).
- Relationships between unions and management
- Changes to law, eg: environmental, health & safety
- Rising power of consumer groups
- More educated consumer esp. in regard to safety and quality
- The realization among companies that high product quality & safety are compatible
with high profits and long-term success.
Discuss Product Quality & International.
- Japan - High quality, low costs.
Discuss the links between operation and strategy.
- Understanding the links between functional areas is important - much interaction between them.
- Linked by:
Common organisational goals, policies = collectively known as Strategy. - Means of implementing and communication strategy = budgeting and planning procedures.
- Operations linked to organisations - develop operating strategy matching w/ organisation’s overall strategy.
- Links between operations & rest of organisation - built into planning process.
What is a plan?
- List of actions that management expects to take.
2. Basis for allocating organisation’s resources to deal w/ opportunities & problems present in environment.
Give an example of a plan.
- Buy raw materials
- Prepare food
- Cook food
- Serve food
= how? Strategy
What is Organisational Structure? Give example.
Formal relationship between different functions/ subsystems.
e.g. marketing function - responsible for investigating demand for services & goods & establishing distribution chain = delivers these products to customers.
Operations function: responsible for producing those goods & services.
How can decisions in operations affect marketing?
- Production costs: covered by the market-selling price w/ enough left over
for profit. - Effective scheduling: helps organisation to make timely delivery.
- Flexibility: permits operations to deliver specially designed products at low cost = marketing job easier.
- High quality - repeat sales and new customer.
What are the eras in the manufacturing sector?
- Craft production
- Mass production
- Lean production
