National 5 Business Management 2.2 Operations
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  • The ISO 9000 family of standards is related to quality management systems and designed to help organizations ensure that they meet the needs of customers and other stakeholders.Six Sigma is a set of strategies, techniques, and tools for process improvement. It was developed by Motorola in 1986.Six Sigma became famous when Jack Welch made it central to his successful business strategy at General Electric in 1995.Today, it is used in many industrial sectors.

National 5 Business Management 2.2 Operations Presentation Transcript

  • 1. Operations N5 Business Management
  • 2. Role of Operations  Operations is about ensuring the right resources are bought and used to make a finished product. Purchasing  Stock Control  Production  Quality Management  Distribution 
  • 3. Advantages of Operations Management  Lower Costs  Improved Quality  Customer Satisfaction
  • 4. TASK  Question Bank  1-5
  • 5. Stock  Stock exists in 3 types: Raw materials  Works in progress  Finished goods 
  • 6. Stock Management Holding too much stock Not having enough stock   Stock ready to go when ordered Money can be invested elsewhere in business Stock can go out of fashion or spoil  Can‟t fulfil orders   Production may stop  Poor reputation
  • 7. TASK  Question Bank  6-11
  • 8. Stock Control
  • 9. TASK  Question Bank  12-18
  • 10. Purchasing Mix Price  Reliability  Quality of raw materials  Quantity  Location  Delivery Time Working with  Suppliers
  • 11. TASK  Question Bank  19
  • 12. Factors of Production  Land – all natural resources used in production  Labour – all people used in production  Capital - all items used to make other things in production  Enterprise – the art of bringing together the other factors of production and being successful
  • 13. Methods of Production  Job  Batch  Flow Added Value
  • 14. How do we select a method of production?  The nature of the product itself  Is it labour or capital intensive?  Projected sales?  Finance available  Technology available
  • 15. TASK  Question Bank  20-23 In Pairs Describe the Factors of Production for:  Shell Oil  Royal Bank of Scotland  Apple  EasyJet 
  • 16. Job Production  Job Production concentrates on producing one product from start to finish. Once one product is complete, another can begin.  It is extremely labour intensive Some examples: Wedding dress  Painting  House extension 
  • 17. Job Production +/High quality product  Can customise orders  Workers involved in entire production process from start to finish  Production costs likely to be high  Production time may be longer  Investment in machinery may be higher as specialist equipment may be needed 
  • 18. TASK  Question Bank  24-25
  • 19. Batch Production  Batch production enables items to be created in bulk („a batch‟)  General purpose equipment and methods are used to produce small quantities of items that will be made and sold for a limited time only  Commonly used in food production   Big Macs Gregg‟s Rolls
  • 20. Batch Production +/Allows flexible production  Stocks of partfinished goods can be held and completed later  Production runs of small batches can be expensive to produce  If production runs are different there may be extra costs and time delays in setting up different equipment 
  • 21. TASK  Question Bank  26-27
  • 22. Flow Production  Aka continuous production, flow production enables products to be created in a series of steps.  Large amounts of goods produced and is highly capital intensive (machinery, automation)  Cars are massed produced for a large market using flow production
  • 23. Flow Production +/Economies of scale  Standard product produced (opposite  Automated of customised) production lines save time and money  High set-up costs of automated lines  Quality systems can be built into the  Repetitive and production boring work 
  • 24. TASK  Question Bank  28-31 N5 Bus Man – 2.2: Operations © BEST Ltd 25
  • 25. ICT Task Prepare a presentation which compares the different methods of production:  Job  Batch  Flow     Ensure you have appropriate text, images & examples Include some advantages & disadvantages Also include a short quiz to test other learners
  • 26. Quality  What is quality?  Why is quality important?
  • 27. Definitions of Quality  “The standard of something as measured against other things of a similar kind; the degree of excellence of something.” – Oxford English Dictionary  "Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for.“ - Peter Drucker  "Degree to which a product/service fulfils customer requirements.“ - ISO 9000:  "Number of defects per million opportunities.“ - Six Sigma
  • 28. “Quality is everyone‟s responsibility” - W. Edwards Deming
  • 29. Quality Methods  Employees – Investors in People  Raw Materials – GIGO  Quality Control  Quality Assurance  TQM - Quality Management
  • 30. Total Quality Management  Commitment - Everyone is involved in quality  Get it right first time - aims for zero defects & wastage  Quality Circles  Kaizen – continuous improvement
  • 31. Other Quality Methods  BSI Kitemark  Benchmarking  ISO 9000
  • 32. ISO 9000 ISO 9000 is an international standard. Inspectors check if the company: can answer these questions.          Does it have a quality policy? Is the policy understood by employees? Does it make decisions about quality systems based on recorded data Are the Quality systems regularly evaluated? Do they have records of where raw materials & products were sourced? Does it communicate with customers about product information, inquiries, orders, feedback, and complaints? Does it plans new product development, with appropriate testing at each stage? Does it regularly review performance? Does it deal with past & potential problems?
  • 33. TASK  Question Bank  32-38 Homework  As part of Literacy across learning, you will prepare and present a solo talk on this question:   “What does Quality mean to you?”
  • 34. Ethical and Environmental  Firms now have to socially responsible. They can do this by: Recycling  Less waste  Biodegradable packaging  Low pollution levels  Fair employee working conditions  Pay workers a fair wage 
  • 35. N5 Bus Man – 2.2: Operations © BEST Ltd 36
  • 36. N5 Bus Man – 2.2: Operations © BEST Ltd 37
  • 37. TASK  Question Bank  39-42  Go Further Research the following events/issues:  Exxon Valdez  Bhopal – Union Carbide  Deepwater Horizon  Walmart in China
  • 38. Distribution By road, rail, air or sea?  Or pipeline?  Decided by: Cost  Infrastructure  Product/service type 
  • 39. An Oil Pipeline in Saudi Arabia
  • 40. TASK  Question Bank  43-48
  • 41. Operations is affected by:  Internal Factors Finance Labour Technology  Political External Factors Economic Social Technological Environmental Competitive
  • 42. TASK  Question Bank  49-54