U3AOS3

Question 1

Operations Management

Answer 1

Are all the activities that managers engage with to produce goods or services

Question 2

Business Objectives

Answer 2

A desired outcome or specific result that a business intends to achieve

Question 3

The relationship between operations management and business objectives

Answer 3

By effectively managing the operations system, this enables a business to provide higher value products and services for the customer, which can be achieved through the use of strategies such as quality management, technology, materials management and waste minimisation.

By using these strategies, customers are more likely to be satisfied with the higher quality goods and services produced and provided, which can allows a business to therefore increase sales and achieve business objectives

Question 4

Inputs

Answer 4

Materials and resources used to create a good and/or service through the process of production

Materials
Capital Equipment
Labour
Time

Question 5

Processes

Answer 5

All activities used to transform inputs into the final output

• used to improve productivity and quality

Manufacturing businesses = more concerned with materials
Service businesses = more concerned with labour

Question 6

Outputs

Answer 6

The final product produced by the business that is delivered or provided to the consumer.

Manufacturing businesses = transform inputs into tangible products or goods
Service businesses = transform inputs into services and tend to be differentiated services modified to suit customer

Question 7

Characteristics of Manufacturing Business

Answer 7

Produce goods that are tangible (can be touched)
Manufactured goods can be stored for later use
Manufactured goods tend to be homogenous or standardised
Consumer is typically not present when the good is produced
Production process and consumption are not linked

Question 8

Characteristics of Service Business

Answer 8

Produce services that are intangible (cannot be touched)
Services tend to be differentiated or tailored to individual customers
Consumer typically has to be present when the service is produced
Production process and consumption typically occur at the same time
Services cannot be stored

Question 9

Differences Between Manufacturing businesses and service businesses

Answer 9

Manufacturing business products are tangible and can be touched and handled. Whereas a service business products are intangible and cannot be touched or handled.

Manufacturing businesses products can be stored. Whereas a service business is unable to store their products.

In a manufacturing business, there is very little customer involvement during the process of production, Whereas in a service business there is often much more customer involvement during the delivery of the service

Question 10

Efficiency

Answer 10

How well a business uses resources to achieve objectives (a measure of productivity)

Question 11

Effectiveness

Answer 11

Degree to which a business has achieved its stated objectives

Question 12

Automated Production Lines

Answer 12

Machinery and equipment arranged in a sequence with components added to a good as it proceeds through each step, with the process controlled by computers

Question 13

Disadvantages of Automation Process Line

Answer 13

lead to loss of jobs as fewer employees are required
Costly to maintain or replace as machine and robotics can break down
Can break down, halting production
Unaffordable for many small and medium manufacturers
Training is required so employees are familiar with the technology and robotics used

Question 14

Advantages of Automation Process Line

Answer 14

Business produce at faster rates resulting in higher output and productivity therefore increasing efficiency
Reduced need for labour allowing businesses to work at reduced costs and increase productivity
Minimises waste

Question 15

Computer Aided Design

Answer 15

A computerised design tool that allows a business to create product possibilities from a series of input parameters

Question 16

Disadvantages of Computer Aided Design

Answer 16

Computer software can crash, resulting in the possible loss of work.
The costs and time involved in training staff can deter many businesses from the use of CAD
The use of this strategy may lead to the loss of jobs as fewer employees are likely to be required.
Costs of software can be expensive

Question 17

Advantages of Computer Aided Design

Answer 17

• Allows a business to produce at faster rates at reduced cost
• Allows a business to view a design from multiple angles, assisting both the designer and the end user to visualise what will be produced, enabling both to gain a broader sense of the product or object
• Allows a business to generate three-dimensional diagrams from a set of given input data (parameters), allowing the user to inspect a product or object and then alter the design by changing relevant parameters

Question 18

Computer Aided Manufacturing

Answer 18

Use of software to direct and control manufacturing processes

Question 19

Advantages of Computer Aided Manufacturing

Answer 19

• Allows a business to produce at faster rates at reduced cost
• Allows a business to produce with greater consistency (each component or finished product will be exactly the same) and greater accuracy (free of errors)
• Allows a business‘s manufacturing process to become computer-directed by controlling the process – this will lead to greater efficiency as machines controlled by computers will not need to take breaks.

Question 20

Disadvantages of Computer Aided Manufacturing

Answer 20

• Computer software can always crash, resulting in production decreasing
• Costs and time involved in training staff can also deter many businesses from the use of CAM
• Lead to the loss of jobs as fewer employees are likely to be required.

Question 21

Website Development

Answer 21

Provides numerous advantages to businesses - information, e-commerce purchasing/ordering systems for customers and suppliers.

Question 22

Advantages of Website Development

Answer 22

• Can be used to deliver consistent messages to customers and suppliers, and can also be used to gain customer feedback
• Reduces the costs of labour and of leasing or purchasing physical space
• A website means that a business is accessible for sales 24 hours a day, 7 days a week

Question 23

Disadvantages of Website Development

Answer 23

• Designing, registering and publishing a website may initially be expensive and time-consuming.
• Operation of a website may require employees to be trained in website design and maintenance – this training may prove costly to provide
• Lack of the skill set required to work with a website may lead to employees losing their jobs.
• Websites do crash, so the loss of access to the business when there is a malfunction may prevent customers or other stakeholders dealing with the business

Question 24

Materials Management

Answer 24

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

Forecasting
Master Production Schedule
Materials Requirement Planning
Just in Time

Question 25

Forecasting

Answer 25

Materials planning tool that relies on data from the past and present and analysis of trends to attempt to determine future events

Improves efficiency through
- Improved productivity because production does not need to wait
- Reduces overstocking, which reduces waste

Improves effectiveness through
- Can help ensure they have enough materials on hand to meet the production needs, ensuring consumer demand is met

Question 26

Master Production Schedule

Answer 26

A plan that details what is to be produced and when

Improves efficiency through
- Helps the business plan the exact amount of materials needed so the correct materials can be ordered-preventing overproduction and therefore wastage

Improves effectiveness through
- Enabling the business to have a clear picture on what needs to be produced; to help ensure they are able to produce enough to meet the required demand, therefore keeping satisfied customers.

Question 27

Materials Requirement Planning

Answer 27

Involves developing an itemised list of all materials involved in production to meet the specified orders

Improves efficiency through
- Prevents overstocking, therefore reducing wastage

Improves effectiveness through
- Ensures production has a continuous flow without waiting for materials-less waiting times for materials to arrive
- Enough materials on hand to meet demand

Question 28

Just in Time

Answer 28

Improves efficiency through
- Reduced storage costs
- Reduced wastage

Improves effectiveness through
- Aims for a continuous flow of production as materials arrive on time
- Allows the business to use their space to maximise production, as less space is now used for storage
- Less money being used through the purchasing of large quantities of stock, allowing the business to use this money elsewhere in the business, which can be used to try and maximise operations

Question 29

Waste Minimisation

Answer 29

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.

Question 30

Strategies for reducing waste

Answer 30

Recycling materials
Procurement of materials made from recycled materials
Obtaining higher quality materials
Implementing quality strategies to reduce the amount of defects
Manage materials effectively
Make deals with suppliers that allow returns on unwanted stock
Redesigning products and packaging
Exchanging waste with other businesses
Introducing “all systems approaches” like Lean Production

Question 31

Lean Management

Answer 31

an approach that improves the efficiency and effectiveness of operations by eliminating waste and improving quality

Question 32

Lean Management aims to reduce wastage and inefficiencies through 7 Principles….TIMWOOD

Answer 32

1. Transportation –reducing inefficient and unnecessary movement of machines
2. Inventory – Minimising storage required
3. Motion – Reducing unnecessary movement of workers, materials, machines, products within process
4. Wait times – Eliminating any idle time waiting between stages and
5. Overproduction – producing more than consumers demand
6. Over-processing – Not adding more value to a product than customers want
7. Defects – defective products or errors that need to be fixed or go to waste

Question 33

Lean Management Efficiency and Effectiveness

Answer 33

Lean Management Improves Efficiency by
- Removing wastage by using less resources to produce outputs, helps to improve productivity and therefore efficiency

Lean Management Improves effectiveness by
- Producing products that customers value, increase sales and reputation
- Becoming more competitive because they can pass any cost savings onto consumers, and implement into purchasing high quality materials.

Question 34

Lean management strengths and weaknesses

Answer 34

Strengths
Improved reputation
Increase customer satisfaction

Weaknesses
good relationships with suppliers
requires committed and experienced employees

Question 35

Quality control

Answer 35

Use of inspections at various points in the production process to check for problems and defects

To do this effectively:
1. Benchmarks must be set
2. Physical inspections conducted regularly
3. Comparisons made between the product (output) and the benchmark ie does it meet them
4. Corrective action taken if it is below the benchmark.

Adv
Increased sales from increase customer satisfaction
Dis
expensive and time consuming

Question 36

Quality Assurance

Answer 36

the use of a system so that a business achieves set standards in production

Advantages
Increases sales because of increased customer satisfaction
Disadvantages
Expensive and time-consuming

Question 37

Total Quality Management

Answer 37

An ongoing, business-wide commitment to excellence that is applied to every aspect of the business’s operation

3 key Principles
- Continuous improvement
- Employee empowerment
- Customer focus

Adv
Increases sales because of increased customer satisfaction
Dis
Can be expensive and time consuming

Question 38

Distinguish between ‘quality control’ and ‘quality assurance’

Answer 38

The main difference between the two terms is that quality control is a reactive strategy that detects defects in goods and services that have already been produced, whereas quality assurance is a proactive strategy that prevents quality issues before they occur.

Question 39

Corporate Social Responsibility

Answer 39

are the obligations a business has over and above its legal obligations to the wellbeing of employees and customers, shareholders and the community as well as the environment.

Advantages of being socially responsible
improves business reputation, improve efficiency and reduce costs in the long term
Disadvantages of being socially responsible
It can be expensive and time consuming to manage an operations system in a socially responsible way.

Question 40

Global sourcing of inputs

Answer 40

Practice of seeking the most cost-efficient materials and other inputs, including from countries overseas

Adv
Reduces costs
Increasing capacity of total supply
Dis
Long lead times
Difficult to monitor the quality of inputs

Question 41

Overseas Manufacture

Answer 41

Production of a good in a country that is different to the location of the business’s headquarters

Adv
Reduces production costs
Increased speed and cost of delivery
Dis
Difficult to monitor the quality of production
Long lead times

Question 42

Global outsourcing

Answer 42

Contracting of a specific business operation to an external person or business in another country

Adv
Reduced costs
The business is able to focus on its core activities.
Dis
It may be difficult to maintain quality.
Communication issues

Question 43

Supply Chain Management

Answer 43

management of flow of supplies from supplier, through the operations system (IPO) all the way to the end consumer

Adv
Improved efficiency through reduced cost, wastage, transportation
Production processes less likely to be interrupted
Dis
Requires preparation and training of staff
Management of supply chain expensive to implement