Operations Management

Question 1

Operations Management

Answer 1

Is coordinating and organising the activities involved in producing the goods or services that a business sells to its customers.

Question 2

Effectiveness

Answer 2

is the extent to which a business achieves its stated objectives.

Question 3

Efficiency

Answer 3

how productively a business uses its resources when producing a good or service.

Question 4

Efficiency vs. Effectives

Answer 4

Similarity
Give example of specific strategy and say it can be implemented to improve both efficiency and effectiveness

Difference
Efficiency is about the internal processes while effectives relates highly to the completion of business objectives

Efficiency: Total amount of output the business can input with minimal resources
Effectiveness: extent that business complete business objectives, give examples, to increase profit

Question 5

Productivity

Answer 5

Productivity is a measure of performance that indicates how many inputs (resources) it takes to
produce an output (goods or services).

Increasing productivity can allow a business to achieve a competitive advantage by increasing their output , minimising waste and being as low costs as possible to the customer.
Business competitiveness refers to the ability of a business to sell products in a market.

Question 6

Key elements of an operations system
Inputs

Answer 6

are the resources used by the business to produce goods and services

Materials/Natural resources includes raw materials, components and parts consumed or converted by the transformation process.

Capital/Physical resources includes machinery, equipment and property necessary to conduct operations.

Labour/Human resources refers to people involved in the operations function.

Information from a variety of sources contributes to the transformation process.

Time and its efficient use is critical as coordinating resources within appropriate time frames limits costs and wastage.

Question 7

Relationship between Managing Operations and Business Objectives

Answer 7

Operations strategies such as the management of materials, quality, waste and use of technology should reduce costs and improve quality, contributing to the attainment of objectives such as making a profit and increasing sales.

Efficient and effective operations should lead to satisfied customers, sales and, consequently, the achievement of business objectives.

• give examples linking to quality strategies

Question 8

Explain/define the relationships between Operation Management and business objectives

Answer 8

To make a profit
- implementing technology in to the production process
Reduces the number of employees required in the operations system, which can reduce expenses associated with labour and therefore increase profit.

To increase market share
- Checking that products produced are not faulty.
Can improve the quality of a business’s product, increasing customer satisfaction and the business’s proportion of sales within its industry.

To fulfil shareholder expectations
- Creating a website for customers to purchase goods and services online.
Increases online sales, which can lead to higher levels of profit and increase dividends for shareholders.

To fulfil a market need
- Using technology to design to products
Can design innovative products to fulfil customer needs that are currently unmet or underserved in the market.

To fulfil a social need
- Ensuring that any waste is recycled in the production process.
Reduces the amount of waste produced by a business, allowing it to meet the social need of environmental preservation.

To increase efficiency
- Using technology to automate the production process.
Can increase a business’s productivity in terms of production speed, as well as reducing the amount of resources discarded in the production process.

To increase effectiveness
- Implement strategies that improve the quality of the business’s product.
Can improve levels of customer satisfaction, which may increase the business’s sales and revenue. Increased financial performance can assist the business in achieving its objectives.

Question 9

Transformation Process

Answer 9

The main concept of operations management is the processes the inputs (resources) undergo to become the output (goods or services).

Question 10

Outputs

Answer 10

the final goods or services produced as the result of a business operations system which are delivered or provided to customers.

Question 11

differences + similarities
between manufacturing and service business

Answer 11

Differences
- tangible products goods, homogenous
intangible services, provided to individual customers and are modified to suit each customer.
- Manufacturing business rely more on capital and raw materials to achieve business objectives
Service business rely more on labour and information
- Manufacturing: low customer contact → Service: high customer contact

Similarity
- both are working towards business objectives, they both have the same inputs

Question 12

Processes in a manufacturing business

Answer 12

This transformation process converts the inputs into a tangible product (goods that can be touched).

Question 13

Processes in a service business

Answer 13

Service providers rely heavily on interaction with the customer and their processes tend to be more labour intensive; that is, staff are crucial to the operations.

Question 14

Characteristics of operations management within a service business

Answer 14

Both are working towards business objectives, they both have the same inputs
Service business rely more on labour and information
Service: high customer contact

• Produce services that are intangible
• Services cannot be stored, no inventory
• Customer is involved in production — the consumer typically has to be present when the service is produced
• Production process and consumption typically occur at the same time
• Highly tailored to the individual

Question 15

Characteristics of operations management within a manufacturing business

Answer 15

• Produce goods that are tangible
• Manufactured goods can be stored for later use
• Little customer involvement in production — the consumer is typically not present when the good is produced
• Production process and consumption are not linked
• Manufactured goods tend to be standardised

Question 16

Automated production Lines

Answer 16

consists of machinery (often robotics) and equipment arranged in a sequence, usually on a conveyor belt. As a good passes along the line, the machinery will add components to it.

-does not need employees directly involved
- all or part of the process is automatic

Question 17

Advantages of automated production lines

Answer 17

Reduces labour forces (expenses)
Increases accuracy and consistency (standardisation), thus quality
Faster, save time

Question 18

Disadvantages of automated production lines

Answer 18

Increase expenses, robotics can be costly to maintain or replace.
Lead to the loss of jobs/redundancies, as fewer employees are likely to be required, damaging reputation
When APL breaks down, production is halted

Question 19

Robotics

Answer 19

Robotics are programmable machines that are capable of performance specified tasks.
These specialised machines can be programmed to efficiently complete specialised tasks with high levels of precision and accuracy within a business’s operations.

Question 20

Automated production lines efficiency

Answer 20

can perform at speeds much faster than humans, reducing the amount of time taken to produce outputs, thus improving productivity
reduce materials wasted - less defects
reduce labour costs - decreased employees needed

Question 21

Automated production lines and robotics effectiveness

Answer 21

perform tasks with a high degree of accuracy, which
can reduce errors enhancing the overall
quality of the final product, increasing customer satisfaction, sales, and market share.

Question 22

robotics efficiency

Answer 22

can perform specific tasks quickly and with high levels of accuracy. This can reduce the amount of time and resources wasted in production, therefore resources are used more optimally, improving productivity.

Question 23

robotics advantages

Answer 23

Tasks can be performed much faster than human labour.
The number of employees needed for production can be minimised, which can reduce a business’s wage expenses.

Question 24

robotics disadvantages

Answer 24

high initial setup costs associated with purchasing, programming, and installing robotics.
can be expensive for a business to repair and update robotic technologies
Need a worker with high qualifications to handle and program robot

Question 25

Computer aided design

Answer 25

Computer aided design software generates three-dimensional diagrams from a set of given input data (parameters).

Question 26

Computer aided design efficiency effectiveness

Answer 26

reduce the time and labour needed to design a product, allowing resources to be used more optimally and productively. Use CAD to develop various prototypes and choose the best design to produce. Enables highest quality design, which can increase customer satisfaction, sales, and market share.

Question 27

advantages of CAD

Answer 27

Product designs can be produced at a faster rate, without the need for erasing and redrawing. View a design from multiple angles, assisting both the designer and the end user to visualise what will be produced.

Question 28

disadvantages of CAD

Answer 28

Computer software can crash, resulting in the possible loss of work. Costs of software can be expensive.

Question 29

Computer-aided manufacturing (CAM)

Answer 29

refers to the use of software and machinery that allow computers to direct and control the manufacturing process. tells a machine how to make a product.

Question 30

CAM efficiency effectiveness

Answer 30

CAM can follow specific instructions and complete tasks more accurately than humans which can reduce the amount of waste and optimise resources, improving productivity able to coordinate tasks so they are performed with a high degree of accuracy, enabling the business to achieve a consistent level of quality, which can increase customer satisfaction, sales, and market share.

Question 31

advantages of CAM

Answer 31

Allows a business to produce at faster rates at reduced cost produce with greater consistency (each component/ finished product will be exactly the same) and greater accuracy. CAM allows production to continue for longer periods of time than when the manufacturing process isn’t directed and controlled via computers.

Question 32

disadvantages of CAM

Answer 32

Computer software can crash, resulting in production stopping. The costs and time involved in training staff can also deter many businesses from the use of CAM.

Question 33

AI

Answer 33

the ability of a robot controlled by a computer to do tasks that are usually done by humans because they require human intelligence and discernment.

Question 34

AI efficiency effectiveness

Answer 34

reduce the time and labour used to complete complex tasks that would usually require human intelligence and improve productivity can perform complex tasks, such as providing timely and high-quality customer assistance. This can improve customer satisfaction levels, and allow for increases in sales and market share.

Question 35

advantages of Ai

Answer 35

may remove tedious tasks for employees, improve job satisfaction. can perform functions much faster than humans.

Question 36

disadvantages of AI

Answer 36

may develop a poor reputation if artificial intelligence makes numerous employees redundant costly to recalibrate and maintain artificial intelligence.

Question 37

Online services

Answer 37

are services that are provided via the internet.

Question 38

efficiency of online services/website development effectiveness

Answer 38

can remove the need for employees to perform certain tasks and enable labour resources to be used more efficiently decrease the amount of money a business needs to spend on materials by creating a system in which the business’ goods are only manufactured after an order has been placed, thereby reducing waste WD can increase a business’ profits by increasing the revenue through more sales by analysing online feedback it receives from its customers about the business’ products to improve it, resulting in more sales occurring cdue to higher quality Implementing online services can improve convenience for customers, increasing levels of customer satisfaction, sales, and market share.

Question 39

advantages of online services

Answer 39

allow a business to gain exposure to more customers, which can increase the size of its customer base. A website means that a business is accessible for sales 24 hours a day, 7 days a week. WD can result in a business needing to spend less money on capital resources, one of the inputs in a business’ operations system.

Question 40

disadvantages of online services

Answer 40

Designing, registering and publishing a website may initially be expensive and time-consuming. Websites and applications can ‘go down’. This can be very frustrating for customers and a business may lose sales or have its reputation affected.

Question 41

Materials management

Answer 41

materials are received and stored in the right quantities and at the right time, so that they are available in the operations system as required. Materials management relates to organising and monitoring the use, storage and delivery of raw and component materials to ensure that the right amount of inputs is available when required by the business’ production process

Question 42

Forecasting

Answer 42

is a materials planning tool that predicts customer demand for an upcoming period using past data and market trends

Question 43

Forecasting explanation

Answer 43

needs to forecast the quantity and timing of demand for its good/ service and then match supply with demand. This will allow the business to decide what goods or services to produce, how to produce them and in what quantity.

Question 44

weaknesses of forecasting

Answer 44

Making use of historical data does not necessarily guarantee accuracy, it is always possible unexpected events will occur Underproduction - unable to meet customer demand and customers buy from competitors instead or business reputation is affected negatively Overproduction - excess inventory and thus increase business expenses High level specialists needed to use forecasting and analyse data are expensive to hire

Question 45

strengths of forecasting

Answer 45

If the business’ forecasting is accurate, the business will be able to meet customer demand for business products (not losing sales = increasing revenue and profit and meeting customer demand) If forecasting is accurate, the business will be able to save money by decreasing the amount of excess inventory prevention of underproducing , resulting in a loss of customers and possibly a decline in market share maintains an appropriate level of materials for the operations system without overproducing increasing costs for the business.

Question 46

Master production plan

Answer 46

a plan that outlines what a business intends to produce, in its specific quantity within a specific period of time Inability to meet this schedule may have serious business implications.

Question 47

Materials requirement planning

Answer 47

involves producing an itemised list of all materials involved in production to meet the specified orders.

Question 48

Materials requirement planning explanation

Answer 48

needs to consider: lead times required by suppliers the exact number of inputs to complete the task the amount of stock on hand purchasing procedures typically software based but is able to be conducted manually. completed after business has clear understanding of quantities produced and time frame.

Question 49

strengths of MRP and MPS

Answer 49

If a business’ MRP is accurate, the business will be able to meet customer demand for the business’ products. not losing sales, thereby increasing its revenue and profits Both can be used to make adjustments to production in response to fluctuations in demand. Both allow schedule changes when new products are introduced allowing flexibility.

Question 50

disadvantages of MRP and MPS

Answer 50

If an inaccurate MPS is created and followed, the business may underproduced their products unable to meet customer demand and customers buy from competitors instead or business reputation is affected negatively. Both strategies rely on accurate information — if incorrect information is used, it is likely that errors will occur in the materials planning process. Once materials are ordered and employees are scheduled to work, it can be difficult to interrupt the process and make changes.

Question 51

Inventory Control

Answer 51

is a system used to ensure that costs associated with maintaining an inventory of materials are kept to a minimum.

Question 52

Just in Time

Answer 52

This approach makes sure that the right amount of materials and parts arrive just as they are needed for production. an inventory control approach that delivers the correct type and quantity of materials as soon as they are needed for production

Question 53

JIT strengths

Answer 53

If JIT is used successfully, the business will be able to save money by decreasing the amount of excess inventory the business has as holding less stock reduces storage costs Less of the business’s finances are tied up in stock as materials are only obtained as needed. If JIT is used successfully, the business will be able to meet customerdemand for the business’ products. not losing sales, thereby increasing its revenue and (probably) profits.

Question 54

JIT weaknesses

Answer 54

Need highly reliable suppliers as materials must be received at the appropriate time — failure to do so can bring a production line to a halt. Can increase transportation costs as orders are arriving in smaller quantities more regularly

Question 55

Quality control

Answer 55

Quality: is a good or service ability to satisfy a customer's need. QC involves a business using inspections at various points in the production process to ensure that the business’ products meet predetermined standards, with unsatisfactory products being reworked or discarded. relies on a business setting benchmarks and standards for quality to ensure efficiency and effectiveness.

Question 56

Quality control explanation

Answer 56

- relies on inspections or checks on goods and services. - Quality control is considered a **reactive** approach to quality, as it detects faults in products, goods and services that have already been produced. - not possible to check every product; instead **inspections are carried out randomly**

Question 57

Quality control strenghts

Answer 57

QC reduces the likelihood of a business’ customers being provided with faulty products. o In doing so, QC helps maintain or improve a business’ reputation for having consistently high-quality products, a reputation that tends toincrease a business’ sales, and thus profits. Can reduce the number of refunds and relatively inexpensive.

Question 58

quality control weaknesses

Answer 58

In QC, a selection of random samples tends to be subjected to inspections so it’s possible that low-quality products will still be provided to a business’ customers. QC costs time because identifying and fixing the cause of errors in a business’ production process can be time-consuming.

Question 59

quality control efficiency effectiveness

Answer 59

Fixing the cause of an error prevents the error from reoccurring, which results in reduced waste allowing optimised use of resources. Removing defective products prevents customers from receiving faulty goods or services. Allow achievement of objectives of increasing sales and market share.

Question 60

Quality assurance

Answer 60

By using a proactive system, a business achieves a certified standard of quality in its production after an independent body assesses its operations system. involves the use of a system that will assure customers that the products of a business are fit for purpose.

Question 61

Quality assurance explanation

Answer 61

- **It does this by achieving set standards throughout the production process, thereby preventing quality issues before they occur** - quality assurance is said to be a proactive strategy and is process oriented. - quality systems, include process checklists, audits and the development of standards.

Question 62

quality assurance efficiency effectiveness

Answer 62

Preventing errors before they occur can reduce the number of production halts and reduce the amount of time wasted in the production process more inclined to purchase from a business with certified quality standards. increase its sales and meet the objectives of increasing profit and market share.

Question 63

quality assurance advantages

Answer 63

A reduces the likelihood of a business producing faulty products in the first place improves reputation as the business is more likely to consistently provide its customers with high-quality products. Customers see a certified product more positively, increasing sales

Question 64

quality assurance disadvantages

Answer 64

Organising an external independent body to assess a business’ operations system can be expensive. Even when QA is used, a business is likely to produce some faulty products. If these products are provided to consumers, they can have a negative impact on the business’ reputation, and thus future sales. Documenting operations system can be time consuming

Question 65

Total quality management

Answer 65

is a commitment to excellence that emphasises continuous improvement in all aspects of a business’s operation by sharing responsibility among all the members of the business.

Question 66

explanation of TQM

Answer 66

- aim of TQM is to create a defect-free production process, and maintain a customer focus in operations. - proactive strategy (focuses on preventing quality issues before they occur)

Question 67

TQM employee empowerment quality circles

Answer 67

Employee empowerment involves a business creating a corporate culture in which employees work in teams to develop solutions that will improve the quality of a business’ products. Quality circles; Teams of up to ten workers meet regularly to solve problems related to process, design or quality. The groups often make presentations to management with their ideas, in order to improve the performance of the business.

Question 68

TQM Continuous improvement

Answer 68

is a process that involves a constant evaluation of, and improvement in, the way things are done in a business. Higher and higher standards are set in the continual pursuit of improvement.

Question 69

TQM Customer focus

Answer 69

All employees should aim to satisfy internal customers as well as external customers, by exceeding customer expectations. Each employee improves a product and passes it along to their customer, the next employee in the process, until the finished product is sold to the external customer.

Question 70

TQM strengths

Answer 70

Employees can feel valued and empowered, increasing motivation and job satisfaction, leading to higher employee turnover. Being proactive can prevent errors before they happen resulting in a reduced number of refunds a business needs to provide to its customers due to the business producing fewer faulty products.

Question 71

TQM weaknesses

Answer 71

Employees may feel confused about their own role For TQM to be implemented effectively, a business’ employees may require extensive training in customer service and problem solving, which can be expensive. costs time because it will require significant changes to a business’ corporate culture

Question 72

Waste minimisation

Answer 72

a process that involves reducing the amount of unusable resources created by the business’s production process in an attempt to improve the efficiency and effectiveness of operations.

Question 73

Reduce strategies

Answer 73

a waste minimisation strategy that aims to decrease the amount of resources, labour, or time discarded during production - JIT - Implement a quality management system which reduces the amount of waste generated and rectify issues in production to further reduce waste in the future. - Introduce robotics or automated production lines to remove human involvement so that defective products aren’t generated, and so waste is reduced at its source.

Question 74

Reduce

Answer 74

Achieved by creating less waste. Stops the problem of waste generation at its source so less waste needs to be cleaned up or disposed of.

Question 75

Reuse explanation

Answer 75

is taking old or unwanted items you might otherwise throw away and finding a new use for them. A waste minimisation strategy that aims to make use of items which would have otherwise been discarded. saves money that would normally be used to dispose of waste. If input can be reused it can generate a second income stream for the business.

Question 76

Recycle

Answer 76

A waste minimisation strategy that aims to transform items which would have otherwise been discarded changing discarded materials into new products in order to avoid using more virgin resources.

Question 77

recycle strategies

Answer 77

purchasing inputs that can be recycled inventing new ways to recycle different items. avoiding buying hazardous materials that could be difficult to recycle.

Question 78

Lean management

Answer 78

is the process of systematically reducing waste in all areas of a business’s operations system whilst simultaneously improving customer value.

Question 79

Pull

Answer 79

Customers determining the amount of products a business should producefor sale This relates to avoiding overproduction and stockpiling. By enabling customer demand to dictate the rateof product delivery, a business is more likely to minimise waste as it will only be producing the outputs that will be sold.

Question 80

One piece flow

Answer 80

The business produces its products by moving a single product through each stage of the business’ production process one at a time, with this stage adding value to the product. - this largely relates to eliminating waiting time or idle time Involves a piece of production moving through the operations process one at a time. All steps focused on adding value, one piece at a time, removing all wasteful and unnecessary activities.

Question 81

Takt

Answer 81

Takt is the rate of production that’s needed to meet customer demand. Takt time is the average time between production starting on one product and the start 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. allocate enough labour, raw material and time to each stage to maximise the capacity of each stage and ensure no wait time

Question 82

Zero defects

Answer 82

The business strives for perfection by identifying and fixing errors and defects as close as possible to where they occur, rather than passing on these errors and defects to the next stage in production. - staff checks the process routinely and randomly, reactive - This is all about the business striving for perfection - Errors or defects need to be identified as closely as possible to where they occur.

Question 83

Efficiency and effectiveness of lean management

Answer 83

effecient Pull: reduces overproduction and minimises waste of materials, time and labour One piece flow: reduces the number of errors in production by only producing one unit at a time Takt: optimises the flow of materials between stages and production, reducing time being wasted Zero defects: employees and the business aims to continuously reduce waste and encourage to anticipate fault effective Pull: increases profit and helps fulfil environnmental and social responsibilities One-piece-flow: only maintains processes which add value to customers, improving their satisfaction improves product quality and speed to market Takt: improves the flow of processes and optimising the production of goods, improving customer satisfaction Zero defects: aiming for continuous improvement may lead to customers receiving products with no defects and of quality, improving their satisfaction ## Footnote it reduces costs that may lead to an improvement in profit. Increased customer satisfaction result in increased sales and, subsequently, an fulfillment of BO. as a business reduces the amount of waste produced while working towards achieving objectives, productivity increases and resources should be used more efficiently.

Question 84

advantages of lean management

Answer 84

fewer defects, more consistent output faster production and delivery reduced costs from less waste and inventory increased worker productivity reduced delays

Question 85

disadvantages of lean management

Answer 85

staff need training, cost time + money zero defect expectations may cause staff stress requires reliable suppliers to avoid halts in production

Question 86

Environmental sustainability + CSR

Answer 86

refers to a business making decisions that will allow it, and the rest of society, to interact with the environment both now and into the future CSR is the concept that a business should conduct itself in an ethical manner that goes beyond its legal obligations in order to improve the economic, social and environmental outcomes of the business’ stakeholders.

Question 87

CSR considerations for inputs

Answer 87

Sourcing from local suppliers to reduce emissions. Sourcing from suppliers who use environmentally sustainable methods of production. Installing reusable and clean energy sources.

Question 88

CSR considerations for processes

Answer 88

Using technology to increase precision to reduce wastage. Develop methods to recycle excess to be used again. Facilities and technology should contribute to the health and welfare of staff.

Question 89

CSR considerations for outputs

Answer 89

Delivering products in bulk to retailers to reduce the businesses carbon emissions from transportation. make use of environmentally friendly packaging Creating products which have recyclable elements at the end of their lifecycle.

Question 90

Global sourcing of inputs explanation

Answer 90

acquiring the most cost effective raw materials and resources from overseas suppliers. exploit efficiencies that can be gained from the global delivery of products, including low-cost skilled labour, low-cost raw materials and other economic factors

Question 91

Global sourcing of inputs advantage

Answer 91

Can source materials otherwise unavailable/higher quality Global materials may be cheaper.

Question 92

Global sourcing of inputs disadvantage

Answer 92

Import restrictions – Governments can have import quotas. Communication - language barriers Delivery – Can be time consuming and result in damage. Money – May have tariffs.

Question 93

Overseas manufacture explanation

Answer 93

Producing goods or services in a location outside of a business’s headquarters country. ' can produce a high quantity of goods at a low price, whilst still maintaining complete control of production.

Question 94

advantages of overseas manufacture

Answer 94

Quality – Improve access to skilled employees. Prices – Can reduce production costs, prices and increase sales.

Question 95

disadvantages of overseas manufacture

Answer 95

Delivery may be time consuming. Local employees may lose their jobs.

Question 96

Global outsourcing

Answer 96

means that some part of a business’s operations is transferred to an external person or business in another country.

Question 97

advantages of global outsourcing

Answer 97

Quality – Can improve quality as external businesses may be experts. Efficiency – Can produce goods more efficiently.

Question 98

disadvantages of global outsourcing

Answer 98

Reduced control over some activities. Local employees may lose their jobs.