U3 AOS3 Flashcards
(122 cards)
1
Q
define operations management
A
consists of all the activities in which managers engage to produce goods or services. The coordination of recourses within a business to achieve the efficient and effective output of finished goods and services.
2
Q
Bus objective is to make a profit, what is the operations objective and strategy
A
objective: reduce cost
strategy: through just in time
3
Q
bus objective is to increase market share, what is the operations objective and strategy
A
objective: improve quality
strategy: quality control
4
Q
bus objective is to provide a return for shareholders, what is the operations objective and strategy
A
objective: increase productivity
strategy: introduce automated production lines
5
Q
bus man objective is contribute to the wellbeing of the community what is the operations objective and strategy
A
objective: minimise waste
strategy: establishment of lean management
6
Q
what are tangibles
A
are goods, which can be touched. Goods
7
Q
what are intangibles
A
include services, which cannot be touched. Services
8
Q
what is the difference between manufacturer and service business
A
Manufacturer = transforms, Inputs > tangible products ~ use of machinery
service business = transforms, inputs > intangible products ~ use of labour
9
Q
define quality
A
Good or service that fully meets customer expectations. If your product has better quality than rival, you have a competitive advantage
10
Q
what is an input
A
the resources used in the process of production. Some resources are owned by the business, while others are from suppliers.
11
Q
what are the 6 categories of inputs
A
materials capital equipment labour information from a variety of sources time and its efficient use money
12
Q
example of capital equipment
A
the plant, machinery, equipment and property necessary to conduct operations.
13
Q
what is transformation/process
A
the conversion of inputs into outputs through involving the use of resources to produce the final good or service.
14
Q
example of transformation/process for tangible
A
example, for tangible changes Sony takes plastic, metal, glass and electronic parts, and transforms them through design, manufacturing and assembly into numerous electronic products.
15
Q
example of transformation/process for intangible
A
example of intangible changes school takes its main inputs — students, the syllabus, staff and buildings — and produces educated, employable graduates.
16
Q
what are outputs
A
the end result of a business’s efforts being the service or product that is delivered or provided to the consumer. That can either be to the final end customer, or to another business if the business is producing a component for another business.
17
Q
difference between manufacturing and services, in terms of production
A
Man: product + consumption occur separately
and can be standardised and mass produced
Serv: production + consumption = simultaneously
often customised
18
Q
difference bwteen man and serv, in terms of storability, degree of customer contact and production technique
A
storability:
man: can be easily stored
serv: difficult to store
degree of customer contact:
man: minimal contact
Serv: high degree
Production technique:
man: mainly capital intensive
Serv: mainly labour intensive production
19
Q
similarities between manufacturing and services
A
use technology deal with customers deal with suppliers aim to produce high quality output aim to reduce costs to production aim to reduce waste
20
Q
what is automation
A
involves lines work generally in manufacturing industries where mass production of a standardised product is possible.
Each station performs a specific operation in sequence, preferably with automatic transfer between each station.
However automated production lines can also be used in service related industries e.g. Australia post
21
Q
what is an automated production line
A
is comprised of machinery and equipment arranged in a sequence with components added to the good as it proceeds through each step, with the process controlled by computers.
22
Q
what does automation replace human effort with
A
machinery technology due to advances in engineering mechanics, robotics computer advancements
23
Q
what is robotics
A
is a highly specialised form of technology capable of complex tasks.
24
Q
advantages of an automated production line 5
A
• Productivity rates increase so cost per unit can fall 24/7 production Accuracy / precision increase Remove dangerous or repetitive tasks Reduced wastage
25
disadvantages of an automated production line 4
Initially very expensiveIf system breaks down major suspension to production
Requires technical training
Can lead to large scale redundancy
26
what is computer aided design
computerised design tool that allows a business to create product possibilities from a series of input parameters.
27
eg of computer aided design
For example architects, engineers use these programs to draw and adjust 3D designs based on client requests which can be emailed and reviewed from anywhere in the world e.g. car colour requests by Lamborghini
28
what is computer aided manufacturing
technique that involves the control of machinery, and equipment through a computer. Machines are fed instructions from a computer
29
why is website development important
because it is a connecting point between customers and businesses.
Businesses first contact with the consumer must be a positive one
30
what is procurement
: the process of researching and selecting suppliers, establishing payment terms, negotiating contracts, and the actual purchasing of resources that are vital to the operations of the business.
31
advantages of website development 5
```
24/7 availibility
labour cost reduced
ensures consistent message
easy access to customer feedback survey
saves costs for promotion
```
32
disadvantages of website development 4
initially very expensive
If system breaks down major suspension to production
requires technical training
can lead to large scale redundancy
33
what is computer integrated manufacturing
a method of manufacturing in which the entire production process is controlled by a computer.
34
difference between efficiency and effectiveness
Efficiency - involves using resources to their optimum level. Inputs/outputs
effective - involves meeting company objectives
35
For someone managing materials they also need to take into account: (5
- the raw materials on site
- the time taken to order new supplies, •
- the time required to find the right supplier •
- negotiation of contracts •
- delivery times
36
define forecasting
Forecasting is the predicting what materials
| will be required and in what quantities, in order to produce at an effective level in operations
37
in forecasting, what happens if you make the prediction too high, or too low?
Make the prediction too low and you run out of product and lead to customer dissatisfaction
Make the prediction too high and you order too much stock which either goes out of date and is wasted or takes up storage space.
38
The four things the forecaster needs to consider
Supplier delivery times – global cocoa can take a while to arrive
Prices change – e.g. global exchange rates change
Market conditions change
Special customer demand times “Easter / Christmas”
39
Advantages of forecasting? 2
* Can anticipate seasonal changes and adjust orders to save on costs and wastage
* Can help to prevent overordering taking up storage space
40
disadvantages of forecasting? 2
* The “running backwards looking over your shoulder” principle - unexpected events can still catch you out
* Requires a lot of time to anticipate, track and analyse all potential impacts on supply chain
41
define the master production schedule
a plan that details what is to be produced and when + how.\\
42
what does the master production break down
breaks down the whole production process into stages and determining exactly what is required, what needs to be produced and by when, this document can determine the quantity demand of inputs over time
43
6 specifics that need to be included in the master production schedule
```
Who - staff needed to do the work •
What goods are to be produced •
When production is to take place •
Where production is to take place •
How production will occur – production methods •
Which materials are required
```
44
advantages of the master production schedule (5
Helps determine very accurate ordering quantities and timings – avoid wastage, time and costs •
Very clear to all staff of processes and their sequence •
Very good for standardised production e.g.. cars •
Easy for new staff to learn routine •
Reduced general wastage
45
disadvantages of the master production schedule (3
Initially time consuming and expensive to track, record and write up the “manual” •
Hard to account for every situation •
Not very flexible
46
what does the materials requirement planning involve
involves developing an itemised list of all materials involved in production to meet the specified orders.
47
what does the Materials requirement planing aim to do
aim is to minimise storage costs, wastage and idle machines and order the materials with sufficient time to be delivered. Managers can then consider the benefits of buying in bulk over storage costs, seasonal variations, price variations etc.
48
Materials requirement planing shows
The stock / materials required for the quantity determined in the Master Production Schedule (MPS) •
The stock or materials on hand •
The stock / materials to be ordered
49
advantages of the materials requirement planning (3
Reduction in wastage •
Reduction in storage space taken up
Reduction in idle machines
50
the disadvantage of the Materials requirment plannign
Initially expensive to set up a dedicated system which can accurately track materials through the site
51
define just in time
is a materials management strategy that ensures that the exact amount of material inputs will arrive only as they are needed in the operations process.
52
What is the just in time reliant on
reliant on the relationship with the supplier and the operations manager
53
Eg. of just in time
Eg. CUB delivering fresh barley and hops daily
54
Advantages of just in time 4
No raw material wastage •
The bare minimum of cash “trapped” in raw materials •
No storage space required •
No idle machines
55
disadvantage of just in time
Hugely reliant on suppliers to deliver on time, all of the time – failure to do this very quickly shuts down the whole production line
56
In materials management what happens if one orders too much stock
run out of storage
stock can pass its use by date, go off and waste money
money is tied up, “trapped” in stock
57
In materials management what happens if one orders too little stock
product line grinds to a halt
customer orders remain unfilled
business reputation collapses
58
define materials management
is the strategy that manages the use, storage and delivery of materials to ensure the right amount of inputs is available when required in the operations system.
59
materials management involves (5
receiving materials
storing materials safely
identifying ongoing materials requirements (by forecasting and ensuring timely purchase of materials)
reducing holdings of surplus stock
controlling the release of materials into the production process
60
definematerials handling
handling goods in warehouses and distribution points.
61
define inventory
is the goods and materials held as stock by a business.
62
define inventory control
keep costs down (efficient management of inventory) and good access when needed (effective management)
63
define quality
- Quality refers to the degree of excellence of goods or services and their fitness for a stated purpose.
64
a quality product should be
```
A quality product should be:
reliable •
fit for the purpose for which it were intended •
easy to use •
durable •
well designed •
delivered on time.
```
65
failure to meet quality product standards result in
Customer dissatisfaction = poor sales = poor sales revenue = poor profits •
Poor reputation = lost sales = lower profits •
Product recalls = additional costs and lost sales = lower profits.
66
define quality control
involves the use of inspections at various points in the production process to check for problems, defects and ensure that the goods and services meet predetermined standards.
67
advantage of quality control
• Prevents poor quality goods or services reaching the consumer
68
disadvantages of quality control (3
Is very wasteful as the rejected products involve raw materials, time and processes which are not sold to the customer •
Doesn’t always isolate the cause of the problem •
Unless Quality control is performed on every product some inferior goods may slip through
69
define quality assurance
involves the use of a system so that a business achieves set standards in production aiming to build quality into work processes and thereby avoid errors in the first place.
70
what is the International Organisation for Standardisation (ISO)
= quality certifications is a widely used international standard. is invited into the business to assess the processes of the business against its predetermined standards.
71
what happens when complying with these standards
the business receives certification which it can then use to promote to customers, thereby “assuring” its customers and stakeholders of a certain standard of quality.
72
what do the quality standards usually cover?
Production processes •
Training of staff •
Quality checks
73
Advantages of quality assurance (3
Great for marketing
Gives competitive advantage in domestic and global markets
Reduces wastage as the proactive focus aims to stop errors occurring before the good or service is produced
74
Disadvantages of quality assurance 2
Can be expensive to have the certification •
| Can take additional time preparing documents and processes prior to the inspection
75
define total quality management
an ongoing, business-wide commitment to excellence that is applied to every aspect of the business’s operation through sharing responsibility among all the members of the business.
76
list and explain the three principles behind TQM
employee empowerment = employees in work groups “quality circles” empees getting together and solving issues
Continuous improvement = ongoing commitment to achieving perfection
Customer focus = importance on what the customer receives •
77
advantages if TQM 3
Zero defects •
Greatly reduced wastage – “prevention better than cure” •
Higher customer satisfaction
78
Disadvantages of TQM
Requires a whole business cultural shift which can be time consuming and expensive to implement
can be expensive
79
define waste
is any resource (raw material, labour, time) which is discarded after use, or it is worthless, defective or of no use
80
how can waste affect a business3
Money gets wasted on raw materials •
Company can be fined or prosecuted by the Environmental Protection Agency (EPA) if waste damages the environment
Customer complaints and returns of poor quality goods can damage the reputation of the business
81
define waste minimisation
is a process involving the reduction of the amount of unwanted or unusable resources produced by a business in an attempt to improve the efficiency and effectiveness of operations.
82
6 waste minimisation strategies
• redesigning products and packaging
•
procurement of materials made from recycled materials
•
reusing scrap material
•
improving quality control
• exchanging waste with other businesses
• introducing all systems approaches, such as lean production.
83
4 Rs of waste minimisation
Reduce • Reuse • Recycle • Recovery
84
Ways reducing waste can lead to achievement in business objectives
Help reduce raw material costs -> increase profits
Reduce waste treatment costs -> market share^
Prevent EPA fines -> fulfil social need
Increase marketing opportunities from being more sustainable -> shareholder exp + market need
85
define lean management
is an approach that improves the efficiency and effectiveness of operations by eliminating waste and improving quality.
86
the process of lean management involves
business carefully analyses each stage of the operations system and remove any inefficiencies that do not add value to the product.
87
lean production focuses on
Avoiding excess motion = reducing unnecessary motion
avoiding over production = no overworking
avoiding excess inventory = minimising storage required
Eliminating waiting time = overall to wait and produce
Avoiding over processing = no more adding unnecessary value to product
reducing excess transport
88
lean management aims to
increase efficiency, effectiveness and quality of processes •
Lower costs of production •
Improve customer satisfaction •
Improve employee satisfaction
89
advantages of lean management
```
Reduced energy and resource consumption
Reduced delays
Increased worker
productivity
Reduced uncertainty
Increased customer
satisfaction
```
90
disadvantages of lean management
Requires committed and experienced employees
Employees may resent the
change to lean or may prefer not to provide any input
The constant focus
on improvement and elimination of waste can result in workplace stress
Requires good relationships with suppliers
Can involve high implementation costs
91
define corporate social responsibility
management’s awareness of the social and environmental consequences of its actions, taking into account an approach that is both ethical and socially responsible.
92
The aspects of corporate social responsibility that would concern an operations manager include: (4
Managing inputs appropriately
Managing suppliers appropriately:
Managing staff appropriately Managing customer relationships appropriately
93
what should be done when Managing inputs appropriately:
| CSR
use inputs that do not have a serious impact on the environment.
94
what should be done when Managing suppliers appropriately: CSR
work with sustainable supplies and workplaces that are free of exploitation.
95
what should be done with the Managing staff appropriately CSR
Ensure business’s facilities and technology contribute to the health and welfare of staff, above and beyond what is required by legislation.
96
what should be done with Managing customer relationships appropriately
CSR
goods produced are of the required quality, that they are safe and reliable.
97
advantage of CSR
Behaving in a socially acceptable manner can improve the reputation of a business, improve efficiency and reduce costs in the long term.
98
Disadvantage of CSR
It can be expensive and time consuming to manage an operations system in a socially responsible way.
99
CSR expresses concern for how a businesses practices affect: 3
the environment
society’s health and welfare
ethical concern for its workforce and their families
100
Examples of CSR behaviour in operations management 7
The environmental sustainability of inputs
Reducing a business’s carbon footprint
Using only fair trade inputs
Lessening noise pollution from a factory
Ensuring the supply chain is also using a CSR approach
Using renewable energy, Eg. green technology
Waste minimisation schemes, such as recycling
101
what is the potential influence/impact in social responsibility of waste minimisation 5
```
Reduction of operating costs through:
reduced landfill
reduced the use of materials/inputs
Need for special equipment and procedures to handle toxic wastes
improved reputation
```
102
what is the potential influence/impact in social responsibility of recycling of materials 3
Reduced costs through lower use of materials means:
improved reputation
lower landfill costs
103
what is the potential influence/impact in social responsibility of recycling of lean manufacturing 4
```
improvements in:
productivity
quality
employee motivation through empowerment
competitiveness
```
104
what is the potential influence/impact in social responsibility of recycling of inventory management systems
Greater efficiency and productivity through:
reduced waste
productivity improvements
105
Define global sourcing
the practice of seeking the most cost efficient materials and other inputs, including from countries overseas.
106
why do businesses globally source inputs 4
low-cost skilled labour
low-cost raw materials
lower taxes
low trade tariffs due to free trade agreements.
107
When global sourcing of raw materials occur a number of issues need to be considered:
5
1. Growing conditions – Drought / flood
2. Sustainable production / environmental damage
3. Political / economic stability of region
4. Labour market conditions / child labour
5. Duration of delivery – shipping time
108
Advantages of globally sourcing shit 6
Access to cheaper materials •
Access to materials not occurring in the domestic country •
Can specialise in production not sourcing
Reduce costs
Creating potential market
Accessing skills or recourses that are unavailable domestically
109
disadvantages of globally sourcing inputs 6
Can lengthen delivery / supply times •
Exposed to changes in exchange rates •
Language barriers in dealing with suppliers •
Suppliers country ethical, environmental and legal standards may be different •
Risk of damage in shipping increases with distance
difficult to monitor the quality of inputs
110
Globalisation affects operations management in a number of ways businesses now have access to:
Lower costs of production
Resources (natural, machinery & labour) the local country doesn’t have
New consumer markets
Greater competition from overseas
111
define overseas manufacture
The production of a good in a country that is different to the location of the business’s headquarters. also referred to as offshoring, meaning a good is produced in a country that is different to the location of the business’s headquarters.
112
what is sweatshop labour
a generic term for a workplace that has poor, socially unacceptable working conditions. The work may be difficult, dangerous, or underpaid. Workers in sweatshops may work long hours with low pay, regardless of laws mandating overtime pay or a minimum wage, and child labour laws may also be violated
113
Advantages of overseas manufacturing 5
Access to cheaper labour rates, cheaper costs of protection •
Access to large pool of employees •
Business not directly responsible for factory operation •
Works well with large volumes of simple assembly manufacture where delivery times are not too important •
Access to new export markets
114
disadvantages of overseas manufacturing 6
Lost jobs in domestic manufacturing •
Can lengthen delivery / supply times • Language barriers in dealing with manufacturing
suppliers •
Suppliers country corporate social responsibility, environmental and legal standards may be different •
Concern for Sweatshop labour •
Risk of damage in shipping increases
115
define global outsourcing
Global Outsourcing involves the contracting out of a business process (e.g. payroll processing, claims processing) and non-core functions (e.g. IT, call centre support) to another business around the world
116
advantages of global outsourcing 3
Access to cheaper labour rates
Business not directly responsible for non-core services and their employees and entitlements
Works well with IT based services where internet and phone developments mean they could be based anywhere in the world
117
disadvantages of global outsourcing 3
Language barriers in dealing with overseas businesses sometimes translates into customer frustration
Reliance on internet connections
Suppliers country corporate social responsibility and legal standards may be different
118
define supply chain management 2
the management of the movement and storage of raw materials, of work-in-progress inventory, and of finished goods from point of origin to point of consumption.
involves meeting consumer demands for goods and services while making the most efficient use of input resources in both the production process and the distribution of the finished product.
119
how does a typical supply chain look
A typical supply chain starts with the sourcing of natural resources, followed by manufacturing activities such as component construction and assembly.
120
why is supply chain management critical?
| 3
If materials are not on hand, nothing can be produced.
If materials are of inferior quality, it is difficult or costly to produce quality products.
If the right quantity of materials is not available, the business cannot meet demand.
121
advantages of supply chains 5
Access to cheaper materials
Access to cheaper labour rates
Business not directly responsible for factory production
Works well with large volumes of simple assembly manufacture where delivery times are not too important
Can take advantage of global variations in tax rates
122
disadvantages of supply chains5
```
• Can be very complicated to
manage
• Can lengthen delivery / supply
times
• Exposed to changes in exchange
rates
• Language barriers in dealing with
suppliers
• Suppliers country corporate
social responsibility,
environmental and legal
standards may be different
• Risk of damage in shipping
increases
```
