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

Improving Productivity
Leading to business competitiveness.

Answer 4

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 5

Key elements of an operations system
Inputs

Answer 5

are the resources used in the process of production.

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

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

Human resources refers to people involved in the operations function.

Financial resources refers to the funds/money required to commence and continue operations.

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 6

Relationship between Managing Operations and Business Objectives

Answer 6

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

• give examples linking to quality strategies

Question 7

Transformation Process

Answer 7

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

implies physical changes but, today, it also includes the conversion of resources into services.

Question 8

Outputs

Answer 8

are the result of a business’s efforts — the final good or service that is delivered or provided to the consumer.

Question 9

Output differences between manufacturing and service business

Answer 9

Manufacturing businesses transform inputs into tangible products, or goods. Goods are sometimes classed as homogenous, which means that they are basically all the same or similar. Service businesses transform inputs into services. Services tend to be differentiated, that is, they are provided to individual customers and are modified to suit each customer.

Question 10

Processes in a manufacturing business

Answer 10

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

Question 11

Processes in a service business

Answer 11

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 12

Characteristics of operations management within a service business

Answer 12

• Produce services that are intangible
• Services cannot be stored
• 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
• Services tend to be differentiated or tailored to individual customers

Question 13

Characteristics of operations management within a manufacturing business

Answer 13

• 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 14

Automated production Lines

Answer 14

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 15

Advantages of automated production lines

Answer 15

Minimises waste
Can improve standardisation

Question 16

Disadvantages of automated production lines

Answer 16

Robotics can be costly to maintain or replace.
lead to the loss of jobs as fewer employees are likely to be required.

Question 17

Robotics

Answer 17

combination of science, engineering and technology that produces machines, called robots. Used in engineering and specialised areas of research, capable of doing several different tasks.

Question 18

Automated production lines efficiency

Answer 18

can perform at speeds much faster than humans, reducing the amount of time taken to produce
outputs, thus improving productivity.

Question 19

Automated production lines and robotics effectiveness

Answer 19

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 20

robotics efficiency

Answer 20

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

Question 21

robotics advantages

Answer 21

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 22

robotics disadvantages

Answer 22

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

Question 23

Computer aided design

Answer 23

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

Question 24

Computer aided design efficiency

effectiveness

Answer 24

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 25

advantages of CAD

Answer 25

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 26

disadvantages of CAD

Answer 26

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

Question 27

Computer-aided manufacturing (CAM)

Answer 27

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 28

CAM efficiency effectiveness

Answer 28

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 29

advantages of CAM

Answer 29

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.

Question 30

disadvantages of CAM

Answer 30

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 31

AI

Answer 31

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 32

AI efficiency effectiveness

Answer 32

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 33

advantages of Ai

Answer 33

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

Question 34

disadvantages of AI

Answer 34

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

Question 35

Online services

Answer 35

are services that are provided via the internet.

Question 36

efficiency of online services effectiveness

Answer 36

can remove the need for employees to perform certain tasks and enable labour resources to be used more efficiently. Implementing online services can improve convenience for customers, increasing levels of customer satisfaction, sales, and market share.

Question 37

advantages of online services

Answer 37

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.

Question 38

disadvantages of online services

Answer 38

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 39

Materials management

Answer 39

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.

Question 40

Forecasting

Answer 40

This materials planning tool relies on data from the past and present, allowing a business to analyse trends so that it can predict future events.

Question 41

Forecasting explanation

Answer 41

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 42

weaknesses of forecasting

Answer 42

Making use of historical data does not necessarily guarantee that past events will continue into the future — it is always possible that unforeseen or unexpected events will occur. Forecasting, to some degree, will always be inaccurate — this strategy provides a ‘guesstimate’

Question 42

strengths of forecasting

Answer 42

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 43

Master production plan

Answer 43

is a plan that describes what is to be produced, in what quantities, how and when. Inability to meet this schedule may have serious business implications.

Question 44

Materials requirement planning

Answer 44

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

Question 45

Materials requirement planning explanation

Answer 45

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 46

strengths of MRP and MPS

Answer 46

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 47

disadvantages of MRP and MPS

Answer 47

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 48

Inventory Control

Answer 48

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

Question 49

Just in Time

Answer 49

This approach makes sure that the right amount of materials and parts arrive just as they are needed for production.

Question 50

JIT strengths

Answer 50

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.

Question 50

JIT weaknesses

Answer 50

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 51

Quality control

Answer 51

relies on a business setting benchmarks and standards for quality to ensure efficiency and effectiveness.

Question 52

Quality control explanation

Answer 52

- 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 53

Quality control strenghts

Answer 53

Can reduce the number of refunds. Relatively inexpensive.

Question 54

quality control weaknesses

Answer 54

Wastage can reduce profits Qualified individuals may need to be employed

Question 55

quality control efficiency effectiveness

Answer 55

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 56

Quality assurance

Answer 56

involves the use of a system that will assure customers that the products of a business are fit for purpose.

Question 57

Quality assurance explanation

Answer 57

- 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 58

quality assurance efficiency effectiveness

Answer 58

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 59

quality assurance advantages

Answer 59

Reduction in wastage from errors Certification can increase reputation and sales

Question 60

quality assurance disadvantages

Answer 60

Documenting operations system can be time consuming Can be expensive to pay for certification

Question 61

Total quality management

Answer 61

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 62

explanation of TQM

Answer 62

- 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 63

TQM employee empowerment quality circles

Answer 63

fundamental part of TQM about employee involvement 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 64

TQM Continuous improvement

Answer 64

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 65

TQM Customer focus

Answer 65

All employees should aim to satisfy internal customers as well as external customers. 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 66

TQM strengths

Answer 66

Employees can feel valued and empowered Being proactive can prevent errors before they happen

Question 67

TQM weaknesses

Answer 67

Employees may feel confused about their own role Can take a long time as it requires a shift in culture

Question 68

Waste minimisation

Answer 68

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 69

Reduce strategies

Answer 69

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 70

Reduce

Answer 70

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 71

Reuse explanation

Answer 71

is taking old or unwanted items you might otherwise throw away and finding a new use for them. 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 72

Recycle

Answer 72

changing discarded materials into new products in order to avoid using more virgin resources.

Question 73

recycle strategies

Answer 73

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

Question 74

Lean management

Answer 74

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

Question 75

Pull

Answer 75

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 76

One piece flow

Answer 76

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 77

Takt

Answer 77

Refers to the rate of production 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.

Question 78

Zero defects

Answer 78

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 79

Efficiency and effectiveness of lean management

Answer 79

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 80

advantages of lean management

Answer 80

increased worker productivity reduced delays

Question 81

disadvantages of lean management

Answer 81

involve high implementation costs requires good relationship with suppliers

Question 82

Environmental sustainability

Answer 82

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.

Question 83

CSR considerations for inputs

Answer 83

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

Question 84

CSR considerations for processes

Answer 84

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 85

CSR considerations for outputs

Answer 85

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 86

Global sourcing of inputs explanation

Answer 86

acquiring 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 87

Global sourcing of inputs advantage

Answer 87

Can source materials otherwise unavailable. Global materials may be cheaper.

Question 88

Global sourcing of inputs disadvantage

Answer 88

Import restrictions – Governments can have import quotas. Communication - language barriers

Question 89

Overseas manufacture explanation

Answer 89

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 90

advantages of overseas manufacture

Answer 90

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

Question 91

disadvantages of overseas manufacture

Answer 91

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

Question 92

Global outsourcing

Answer 92

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

Question 93

advantages of global outsourcing

Answer 93

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

Question 94

disadvantages of global outsourcing

Answer 94

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