Unit 3 AOS3 Operations Management Flashcards
(137 cards)
1
Q
Operations management
A
concerns with the strategies that are used to create, operate and control the transformation of inputs from a variety of resources into output (goods and services) to satisfy the demand of customers.
2
Q
Operations managers make use of strategies including
A
management of materials, quality, waste and use of technology.
2
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Effectiveness
A
refers to the degree to which a business had accomplished its objectives.
2
Q
Efficiency
A
how well a business uses resources in achieving these objectives.
3
Q
what is a measure of efficiency
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productivity — how many inputs (resources) it takes to produce output (goods or services).
If a business reduces the amount of waste produced while achieving its objectives, then this is considered to be efficient.
4
Q
Relationship Between Operations
A
Decisions made by operation managers have direct impact on the level of business competitiveness* and attainment of business objectives:
5
Q
Business Competitiveness
A
the ability of a business to sell products in a market.
A business will be competitive when it is able to produce goods or services at the same level or better than competitors
6
Q
how can operations managment increases objectives
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Operations managers can contribute to the achievement of business objectives by improving levels of efficiency and effectiveness in a business’s production process.
7
Q
what is the business objective make a profit?
A
profit is what is left after business expenses have been deducted from revenue
8
Q
what is the business objective of Increase market share
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the portion of a market or industry that a business owns. increasing business sales creates a higher amount of the market owned by the company.
9
Q
what is Fulfill a market need:
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find the space in the current market, design new products or make improvements on existing products to meet customer needs.
10
Q
Fulfill a social need
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business activity’s improves society, human wellbeing.
involves production and selling of goods and services for the purpose of making the world a better place.
11
Q
Meet shareholder expectations
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shareholders expect to make a return on investments therefore expect business to make a profit, as they receive a proportion(dividends)
shareholder expectations willl be met by the profit made by company being returned to shareholders or the value of company shares increase
12
Q
what are the key elements of an operation system
A
inputs
processes
outputs
13
Q
what are Inputs
A
The resources used by a business to produce goods and services.
Operations managers are responsible for sourcing inputs that allow a business to produce the highest quality product at the lowest possible cost.
14
Q
Inputs include
A
- labour resources (employees)
- raw materials (unprocessed materials)
- capital resources (physical asset), such as equipment and machinery and property necessary to conduct the operations
- time, a non renewable resource (if wasted will add to production costs and cause productivity to fall.)
-utilities, such as electricity, water, and gas
15
Q
Processes/transformation
A
The actions performed by a business to transform inputs (resources) into outputs(goods or services)
The operation system of manufacturer tends to be highly automated or mechanized. Service provides rely heavily on the interaction with the customer and their process tend to be more labor intensive.
16
Q
Processes include:
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mixing , designing , baking , computing , cutting , washing , assembling constructing.
17
Q
Outputs
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The final goods and services produced as a result of a business’s operations system, that are delivered or provided to customers.
18
Q
characteristics of operations managment with both manufacturing and service business
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- manufacturing
- service
19
Q
Manufacturing business:
A
use resources and raw materials to produce a finished physical/tangible goods
eg: Bottles of Yakult Original and Yakult Light are tangible and can be stored as inventory.
20
Q
service business:
A
provide intangible products, usually with the use of specialised expertise.
eg: Qantas is an Australian airline, (service business)
21
Q
statergies to improve both efficiency and effectiveness of operations reacting to technological development
A
- automated production lines
- robotics
- computer aided design
- computer-aided manufacturing techniques
- artificial intelligence
- online services
22
Q
automated production lines definition and how its used at YAKALT
A
involve machinery and equipment that are arranged in a sequence, and the product is developed as it proceeds through each step.
- method of making Yakult uses an automated one way process to transfer Yakult through a closed system of pipes, and filters. It enables a sterile automated process of blending and fermenting to produce Yakults drink.
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Efficiency of automated production lines
perform at fast speeds compared to humans, reducing amount of time taken to produce outputs, thus improving productivity
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Effectiveness of automated production lines
perform tasks with huge degree of accuracy decreasing number of errors during production. Reducing errors enhances overall quality of final product, increasing customer satisfaction, sales and market share.
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advantages of automated production lines
- tasks performed accurately and consistently at a high standard, = improve business rep
- decreased errors reducing waste and its environmental impact + costs of materials aren’t wasted
- Reduced need for human labour
- increased productivity as no breaks are needed, tasks performed faster
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disadvantages of automated production line
- Robotics are high-cost forms of technology that can be unaffordable
- can be costly to maintain or replace.
-Training is required so that employees are familiar with using robotics, this will cost the business
- lead to the loss of jobs as fewer employees are likely to be required.
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Robotics definition and how its used at YAKALT
Robotics the combination of science, engineering and technology that produces machines, called robots. They are highly specialised form of technology capable of complex tasks
using a robotic arm to move slabs of Yakult onto a pallet and are stored chilled.
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Efficiency of robotics
- perform specific tasks quickly and with high levels of accuracy. This reduces the amount of time and resources wasted in production, therefore resources are used more optimally, improving productivity
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effectiveness of robotics
perform specific tasks quickly with high levels of precision, which can minimise the number of errors that occur during production. This can enhance the overall quality of the final product and increase customer satisfaction, sales and market share.
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advantages of robotics
- performing tasks precisely and accurately ensure products are consistently produced at a high standard, improve business reputation
- improved accuracy reduces errors and the number of resources wasted in production, assist business in minimised impact on the environment
- removes need for employees to complete dangerous tasks, improve workplace safety
- tasks performed faster than human labour = productivity
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disadvantages if robotics
- may cause employee redundancy
- high initial setup costs associated with purchasing, programming and installing robotics
- expensive repair
- expensive to train
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Computer-aided design (CAD) definition and how used at YAKALT
a digital design software that generates 3 dimensional diagrams from a set of given input data (parameter). Once the design has been created, it can be viewed from multiple angles, assisting both the designer and the end user to visualise what will be produced
Yakult use CAD to design their bottles with triple food grade recyclable pellets and the specifications are then fed straight to the machinery that creates the bottles to improve the accuracy and quality.
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Efficiency: CAD
can reduce the time and labour needed to design a product, allowing resources to be used more optimally and productively
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Effectiveness: CAD
develop various prototypes and choose the best design to produce. Choosing the best option enables the business to manufacture the highest quality design, which can increase customer satisfaction, sales and market share
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advantages of CAD
- Product designs can be produced at a faster rate, without the need for erasing and redrawing.
- Changes can be made to this before a prototype is made. Material choices and associated costs can be explored at this stage.
- Allows a business to view a design from multiple angles, assisting both the designer and the end user to visualise what will be produced.
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disadvantages of CAD
- possible loss of work.
- Costs of software can be expensive
- The costs and time involved in training staff
- Computer software can crash, resulting in the
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Computer – aided manufacturing techniques definition and how its used at YAKULT
Involves the use of software that controls and directs production processes by coordinating machinery and equipment through a computer.
the computers control the temperature during the sterilisation phase where the milk drink is heated to high temperatures to kill any bacteria before the bacteria is added. Without the precision of the computers, it would be difficult to manage the different temperatures required during the process.
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Advantages of Computer – aided manufacturing techniques
Producing at faster rates at reduced cost
Producing with greater
consistency and accuracy Allows a business to produce with greater consistency
greater accuracy (free of errors)
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Disadvantages f Computer – aided manufacturing techniques
Computer software can crash, resulting in production stopping
Expensive: upfront investment, training of staff
Can lead to the loss of jobs
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Efficiency: CAM
doesn’t require machinery to be manually reset by humans which reduces the among of time and labour resources used in the production process, thus improving productivity
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Effectiveness: CAM
is 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
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Artificial intelligence definition
ability of a computer or a robot controlled by a computer to do tasks that are usually done by humans because they require human intelligence and discernment.
- Involves using computerised systems to simulate human intelligence and mimic human behaviour.
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Efficiency: AI
reduce the time and labour used to complete complex tasks that would usually require human intelligence. This can allow resources to be used more optimally and improve productivity
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Effectiveness: AI
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.
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advantages of AI
has the ability to provide prompt customer service 24/7, can improve customer satisfaction and business reputation
- AI can perform functions much faster than humans
-Tasks previously required human labour can be removed, reducing wage expenses
- Improved accuracy can enhance product quality, increase customer satisfaction and increase sales revenue
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disadvantages of AI
- Employees may be made redundant
- Business may develop poor reputation if AI makes numerous employees redundant
- High initial setup costs
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Online services
are services that are provided via the internet.
that a business can utilise to improve its operations, including booking platforms, online marketplaces, food ordering platforms, price comparison platforms, or cloud-based storage.
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Advantages of online services
- can process orders accurately and faster
- Can be used to deliver consistent messages to
customers and suppliers, and can also be used to
gain customer feedback
- A website means that a business is accessible for sales 24 hours a day
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disadvantage of online service
Designing, registering and publishing a website may initially be expensive and time-consuming.
Websites and applications can suffer outages or ‘go down’. This can be very frustrating for customers and a business may lose sales
can require highly skilled staff, who may be expensive to employ or train.
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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.
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materials handling
the physical handling of goods in warehouses and at distribution points.
If done correctly, it can lead to less waste and lower costs, lower the price, increase competitive advantages. Lower costs can also allow more investment in technology which will leads to productivity and lower costs even further.
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Strategies to improve both efficiency and effectiveness of operations relating to materials
- Forecasting
- Master production schedule
- Materials requirement planning
- Just in time
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Forecasting and how its used at YAKULK
a materials planning tool that relies on data from the past and present and analysis of trends to attempt to determine future events
- decisions relating to the quantities of materials needed to meet predicted customer demand.
- ensure that it maintains an appropriate level of materials for the operations system
At YAKULT: uses forecasting for upcoming months, to determine the amount of milk powder and bacteria and sugar, to meet customer demands.
Yakult reduces the cost of storage as it prevents it's need for large spaces to store excess materials such as milk powder, and bottles etc….
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Oversupplying = overproducing
too much inventory or finished product = too much inventory/outputs would remain in storage = higher cost: storage, damage items while in storage, theft, etc
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Undersupplying = underproducing
Not meeting customer demands
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Efficiency of forecasting
decreases the likelihood of ordering and storing excessive amounts of materials which optimises the use of resources by reducing wastage.
- Having enough materials minimises halts in production process, improves productivity.
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Effectiveness: of forecasting
improves a business’s ability to meet customer demand which can contribute to increased customer satisfaction, sales, and market share
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advantages of forecasting
- Informed decisions about the quantity of materials required can improve a business’s ability to meet customer demand.
- Forecasting prevents the excessive ordering of materials that may go to waste if unneeded.
- Can reduce the cost of storage
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disadvantages of forecasting
- If a business is too reliant on forecasting, it is unable to meet unexpected increases in customer demand.
- Quantity of materials ordered may be incorrect as past data and market trends may not reflect future demand.
- It can be time consuming to analyse
- Businesses may need to hire forecasting specialists, which increases training and wage costs.
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Master production schedule
plan that describes what is to be produced, in what quantities, how and when. and it creates a detailed plan of the exact materials needed to meet production targets.
Yakult: they use a plan that outlines the specific quantity's of milk powder in specific time periods.
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Efficiency: Master production schedule
Prevents a business from producing an excessive amount of products, which optimises the use of resources by reducing wastage.
Promotes an organised operations system and minimises the number of avoidable errors that occur, which improves productivity by reducing the number of interruptions to production.
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Effectiveness: Master production schedule
A business is more likely to produce the correct quantity of products to meet customer demand, which can improve customer satisfaction and increase sales and market share.
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Materials Requirement planning
A process that itemises the types and quantities of materials required to meet production targets set out in the master production schedule.
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Efficiency: Materials Requirement planning
Having the exact materials required reduces avoidable halts in production which enhances productivity by allowing operations to flow smoothly.
Having the exact materials needed for production reduces the amount of excess stock that expires or becomes damaged in storage which optimises resources by reducing waste.
At YAKULT: Specific amount of ingredients for Yakult are required on hand to produce the probiotic milk drink. Powdered skim milk which arrives when needed and therefore this needs to be very accurate.
The bacteria strain is grown at Yakult and must be available for every batch.
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Effectiveness: Materials Requirement planning
Ensures there are sufficient materials to meet customer demand. Meeting customer demand helps meet the objective of increasing customer satisfaction and sales.
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advantages Materials Requirement planning
- ensures business only has the exact materials needed, decreasing waste
- Accurate ordering of the quantities of materials required avoids excess storage and reduces expenses
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disadvantages of Materials Requirement planning
time consuming to constantly update the materials plan.
- Implementing and maintaining the materials plan can incur additional administrative and training costs.
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Just In Time
An inventory control approach that delivers the correct type and quantity of materials as soon as they are needed for production.
- Strategies to improve both the efficiency and effectiveness of operations related to quality, including quality control, quality assurance and Total Quality Management.
At YAKULT: by having there bacteria delivered right before production. This is important for Yakult, as their products contain live cultures that are sensitive to temperature and storage conditions.
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Efficiency: just in time
Holding minimal stock can free up areas in the workspace that can be utilised to increase production.
Minimising the amount of stock held can prevent resources from becoming damaged or expiring, allowing resources to be used optimally.
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Effectiveness: just in time
Costs saved from reducing storage space can be used in other areas of the business, such as sales and marketing, which can meet the objective of increasing sales.
A reduction in idle stock can reduce expenses associated with waste which can meet the objective of increased profits.
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advantages just in time
- JIT eliminates excess stock, therefore limiting the amount
of stock wasted from expiry or damage in storage. This can help minimise the business’s impact on the environment and improve its reputation and improved profits by reducing expenses.
- Allows a business to switch to the production of a different product without wasting resources as there are minimal materials on hand to go through.
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disadvantages of just in time
- A business may fail to meet customer demand from a lack of reserves stock which may cause
damage to a business’s reputation.
- If suppliers are unreliable and fail to deliver the correct materials
at the right time, production may be brought to a halt.
- Delivery costs may increase due to more frequent deliveries.
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strategies to improve both effectincy and effectiveness of opporations relating to quality
- Quality control
- Quality assurance
- Total quality management
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why do businesses uses quality managment
to make sure that their products meet customer expectations.
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define Quality
the steps taken by a manager to insure its outputs meet the decree of excellence of goods and services and their fitness of the purpose.
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define Quality control
Involves inspecting a product at various stages of the production process to identify if there is any problems or defects to ensure it meets designated standards, and discarding those that are unsatisfactory.
at YAKULT:
Yakult samples, tests and inspects the finished product.
During these tests Yakult examines the microbiological quality, composition and taste of the probiotic milk drink.
Randomly chosen bottles along
production line are inspected for incorrect printing, and quality of seals on the lid.
100 - 200 product samples are inspected each day
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Efficiency quality control
: Identifying and fixing the cause of an error prevents the error from reoccurring, which results in less waste
- Reducing waste allows a business to optimise its use of resources.
-fixing the cause of an error reduces the number of potential errors that could halt production, enabling the operations system to flow continuously without interference and increasing productivity.
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Effectiveness of quality control
Removing defective products prevents customers from receiving faulty goods or services. This can allow a business to meet the objectives of increasing sales and market share.
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advantages of quality control
- Providing customers with consistently high-quality products, =improve a business’s reputation.
- minimise the number of refunds
- The strategy is relatively inexpensive to implement, as it is controlled internally by the business and no external parties are required to carry out the quality checks.
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disadvantage of quality control
- Unless every product is inspected, defective goods may still reach a customer, decreasing customer satisfaction.
- It can be time consuming to identify and address the causes of errors in production.
- Errors are eliminated after they occur, usually when the product has already been created. This may cause a business to incur costs associated with waste.
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define Quality assurance
Involves a business achieving a certified standard of quality in its production after an independent body assesses its operations system.
- Quality assurance is a proactive strategy as it aims to improve the quality of the operations system as a whole to avoid errors entirely.
YAKULT
Yakult uses HACCP principles of Quality Assurance, an international standard of meeting food and public health specifications. this certificate is internationally recognised and YAKULT upholds this buy requiring all employs to wear hair nets and maintain hygiene standards.
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Efficiency of quality assurance
Preventing errors before they occur reduces number of faulty products produced, reducing a business’s waste, and therefore optimise its use of resources.
can reduce the number of production halts, can promote seamless operations and reduce the amount of time wasted
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Effectiveness of quality assurance
Customers are more inclined to purchase from a business with certified quality standards. This can allow a business
to increase its sales and meet the objectives of increasing profit and market share.
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advantages of quality assurance
- proactive approach, reduce the number of defective products produced =less waste= better business reputation
- Workplace standards implemented in order to achieve external certification are likely to subsequently improve the safety of the workplace for employees.
- Gaining external certification
can be harnessed as a marketing tool by the business, allowing it to increase sales.
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disadvantages of quality assurance
- Employees may have to be trained to comply with new procedures.
- Completing documentation required for the external body to check the operations system can be time consuming.
- It can be expensive to organise an external body to assess the operations system of a business.
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define what Total quality management
A holistic approach whereby all employees are committed to continuously improving the business’s operations system to enhance quality for customers.
YAKULT
The continuous improvement of Raw materials (such as skim Milk powder) can be discussed through quality circles. Employees may discuss how to improve the sourcing of these products, to ensure the suppliers (farmers) are improve the quality of the Skim Milk.
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TQM is a proactive strategy for quality and includes three key features:
1. Customer focus involves identifying and fulfilling the customers’ exact needs and wants.
2. Continuous improvement involves engaging in the process of constantly evaluating business processes and identifying methods to achieve a higher standard.
3. Employee empowerment involves fostering team work and employee participation within the business environment to ensure employees are involved in developing solutions to improve quality.
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efficencey of total quality managment
improving the quality production system reduces errors and reduce the number of discarded products allowing for optimise its use of resources.
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Effectiveness of total quality managment
By determining the needs and wants of a customer, TQM can improve levels of customer satisfaction and allow a business to meet the objectives of increasing sales and profit.
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advantages of total quality managment
- a flexible strategy, can adapt TQM to suit its specific business requirements.
- The proactive prevention of errors can reduces waste generated, improving its reputation.
- Employees may feel increasingly valued if they are involved in the process of improving quality.
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disadvantages of total quality managment
- It may take time for a business to enjoy the benefits of TQM as it requires a shift in culture.
- Introducing TQM can be costly for a business as employees may have to be trained so they can continuously identify methods to improve quality.
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strategies used to improve the effecincey and effectiveness if operations through base minimisation in the production process
- Reduce
- Reuse
- Recycle
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Waste minimisation
The process of reducing the amount of unused material, time or labour within a business. Waste is any resource that is discarded because it cannot be further used in the production process.
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what does wast minimisation include
* Redesigning products and packaging
* Procurement of materials made from recycled materials
* Reusing scrap material
* Improving quality control
* Exchanging waste with other businesses
* Introducing all system approaches, such as lean production
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examples of waste minimsalisation
* Time can be wasted when transporting resources or products.
* Inputs can be wasted or easily damaged, especially if they are lower-quality inputs.
* Labour can be wasted when employees have little or no work to complete during production.
* Time can be wasted from delays between production stages.
* Products can be wasted when a business produces too much and is unable to sell them.
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Efficiency of wast minimisation
produces goods and services at a quicker rate, increasing efficiency
Reducing the number of materials discarded, the business can optimise its use of resources and increase efficiency
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Effectiveness was minimisation
lowers operational costs which allows the business to offer lower prices to customers. This can increase number of sales and meet objective of increasing market share. Increase in sales will also increase revenue, assist in achievement of making a profit.
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Reduce
Reduce is a waste minimisation strategy that aims to decrease the amount of resources, labour, or time discarded during production.
- Can significantly improve business operations system
- can be detrimental to a businesss operations system as it increases costs and diminish a business profit margin.
YAKULT
Just in time for the milk powder (reduce storage costs)
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Ways businesses can reduce the amount of waste they generate:
1. Just in Time (JIT) system when arranging the delivery of materials – JIT makes sure that the right amount of materials and parts arrive just as they are needed for production.
2. Implement a quality management system (TQM or quality assurance) or during production (quality control), the business can reduce the amount of waste generated and rectify issues in production to further reduce waste in the future.
3. Introduce robotics or automated production lines to remove human involvement in repetitive, dangerous and/or precision tasks so that defective products aren’t generated - more accurate and less errors, and so waste is reduced at its source.
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Reuse
Reuse is a waste minimisation strategy that aims to make use of items which would have otherwise been discarded.
YAKULT
Cleaning waste is processed In an online water treatment facility
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Recycle
Recycle is a waste minimisation strategy that aims to transform items which would have otherwise been discarded.
- Involves transforming discarded resources and turning them into new products or materials that can be utilised
- YAKULT
- Yakult bottles are collected and recycled and added to resin to make plastic furniture - table and chairs
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Lean management definition
The process of systematically reducing waste in all areas of a businesses operations system whilst simultaneously improving customer value.
- Yakult bottles are collected and recycled and added to resin to make plastic furniture - table and chairs
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how lean managment can be applied
four strategies of pull, one-piece flow, takt and zero defects.
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advantages of lean managment
- improve its reputation
- Employees may experience greater job satisfaction as they are actively involved in reducing
- The quality of a business’s products can improve, leading to greater customer satisfaction and sales
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disadvantage of lean managment
- It may be time-consuming to train employees and provide them with the knowledge to commit to lean production methods.
- It can be costly to implement lean management (new policies, procedures, and training employees
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Pull
a lean management strategy that involves customers determining the number of products a business should produce for sale.
ensures no resources are wasted on unwanted products that would later be discarded e.g. a bakery would only make a cake once they get an order for it
YAKULT
Yakult's process contains machinery (automated production lines) sealing the bottles and producing the liquids. The machinery makes sure to use all of the remaining liquid, and seal the bottles equally consistently. By them using all the excess liquid, will reduce the amount of wasted products.
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Efficiency of Pull
-reduce overproduction
-minimise the number of wasted materials, time, and labour generated by a business’s production process, increasing productivity
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Effectiveness of Pull
-minimise the amount of discarded materials and resources
-reduce expenses.
-allows a business to better achieve its objective of making a profit.
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One-piece Flow
processing a product individually through a stage of production and passing it onto the next stage of production before processing the next product, continuing this process through all stages of production.
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Efficiency of one-piece flow
reduce the number of errors in a business’s operations process by only producing one unit at a time, increasing productivity.
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Effectiveness of one pice flow
-produce higher quality products at a faster rate, improving customer satisfaction.
-This can enable a business to achieve the objectives of fulfilling a market need and increasing market share.
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Define Takt
Takt is a lean management strategy that involves synchronising the steps of a businesses operations system to meet customer demand.
Takt time is a calculation of the available production time divided by customer demand.
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Efficiency of Takt
- allow a business to optimise its flow of materials between the stages of the production process, reducing wasted time and increasing productivity.
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Effectiveness
-improve the flow of processes and optimise the speed at which products are delivered to customers, improving their satisfaction. This can enhance increase sales and make a profit
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Zero defects
lean management strategy, involves a business preventing errors from occurring in the operations system by ensuring there is an ongoing attitude of maintaining a high standard of quality for the final output.
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Efficiency of Zero defects
involves continuously aiming to minimise errors and, therefore, can reduce the number of materials that are discarded during the production process, increasing productivity.
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Effectiveness of Zero defects
aims to make continuous improvement and may lead to customers receiving high-quality products that have no defects, improving their satisfaction and increasing the business’s sales. This can consequently allow a business to better fulfil a market need.
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Corporate social responsibility
the ethical conduct of a business beyond legal obligations and the consideration of social, economic and environmental impacts when making business decisions.
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CSR considerations for inputs
When sourcing materials and resources, should consider how the business can improve the environmental sustainability of its inputs. A manager may sacrifice cheap production costs in order to source inputs from ethical and sustainable suppliers, allowing the business to minimise its environmental impact.
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Strategies for considerations for CSR inputs
- sourcing inputs from suppliers that use environmentally-sustainable methods
- implementing operations strategies, such as forecasting and Just in Time, to reduce the risk of over-ordering inputs
- purchasing energy-efficient machinery for production.
YAKULT
The milk powder bags are recycled
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CSR considerations for processes
A business should always aim to be as efficient and effective as possible when performing its operations processes. By implementing processes that are socially responsible, a business can reduce waste and enhance its overall reputation, therefore improving both efficiency and effectiveness
YAKULT
99% of inputs are used in the production of Yakult.
Cleaning waste is processed in an online water treatment facility
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Strategies for CSR considerations of processes
- developing policies that promote the efficient use of energy in the workplace, such as switching off all machinery and lights after use.
-implementing operations strategies, such as Just in Time and lean management, to reduce the number of materials being unnecessarily wasted.
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CSR considerations for outputs
All businesses should ensure that the goods and services they produce generate customer value without causing harm to the wider community. One of the most important CSR considerations is that any output produced by a business’s operations system creates minimal waste and environmental damage.
YAKULT
Yakult bottles are collected and recycled and added to resin to make plastic furniture - table and chairs
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strategies for CSR considerations of outputs
-creating products that have recyclable or biodegradable elements at the end of their lifecycle.
-eliminating as much plastic as possible in the packaging and creation of the final product.
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global considerations for operation management
- global sourcing of inputs
- overseas manufacture
- global outsourcing
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Global sourcing of inputs
involves a business acquiring raw materials and resources from overseas suppliers
- obtain resources that are only available in other countries
- use global sourcing of inputs to minimise its expenses by obtaining resources at a reduced cost
- overseas suppliers, offer cheaper price compared to domestic supplies as they have lower operating costs including wages and rent
YAKULT
Shirota strain – Japan
Equipment - Japan
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when choosing its inputs businesses should consider several factors that may affect its expenses and reputation including:
- how the price of materials and resources differs in each country.
- how the delivery costs vary when supplies are travelling different distances between countries.
- how the environment is impacted by different methods used by suppliers to extract inputs.
- how suppliers treat and pay their workers and whether they operate in an ethical and socially-responsible manner.
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advantages of Global sourcing of inputs
- greater access to cheaper raw materials and resources from overseas, allowing a business to reduce its operating costs
- able to source materials that may not be readily available in its country of operation
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disadvantages of Global sourcing of inputs
- It may be difficult to communicate with suppliers due to language barriers, potentially leading to miscommunications.
- Materials may be damaged during transport, and then may need to be discarded, increasing a business’s expenses.
- Delivery may be time-consuming depending on where the supplies are being sent from.
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overseas manufacture
Overseas manufacturing involves a business producing goods or services outside of the country where its headquarters are located.
YAKULT
One area where Yakult outsources is in the manufacturing and production of its beverages. Yakult has production facilities in multiple countries, such as Japan, Brazil, Mexico, and the Netherlands.
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overseas manufacture advantages
- Cheaper labour costs can allow a business to lower its product prices, increasing customer satisfaction and sales.
- Production speeds can be improved through the use of highly skilled and experienced overseas employees
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overseas manufacture disadvantages
- Local employees may lose their jobs if a business moves its manufacturing overseas.
- Delivery is time-consuming compared to manufacturing goods in a domestic location.
- Poor communication and language barriers may lead to production and delivery delays.
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global outsourcing
Global outsourcing involves transferring specific business activities to an external business in an overseas country
YAKUKT
The company partners with logistics providers to transport its products to various markets globally, and with packaging manufacturers to create packaging for its beverages
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advantages of outcasting
- Productivity may increase as the external business has the expertise to complete specified tasks more efficiently.
- The business has more time available to focus on its own areas of expertise, increasing its productivity.
- A business is able to decrease labour costs, as global outsourcing reduces the need for local employees.
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disadvantages of outcasting
- A business has reduced control over activities as they have been transferred to an external business.
- It may be difficult to communicate with external, overseas businesses due to language barriers.
- Poor corporate social responsibility practices performed by the external business = low business’s reputation.
