Higher Business Management - Operations

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Higher Business Management - Operations

  1. 1. 1 Introduction to Operations Management Higher Grade Business Management 2006
  2. 2. 2 Lesson Objectives:  Understanding of Operations Management as an system of inputs, processes and outputs  Understanding of why different types of production may be chosen by managers
  3. 3. 3 Operations  A memory aid!  Think of what happens in an operating theatre
  4. 4. 4 Operating System  An Operating System is a configuration of resources to provide a product or service  Raw Materials  Machinery  Workers
  5. 5. 5 Operating System  What could we make?  Paper, Scissors, People
  6. 6. 6 Operating System  We need to be organised  We need to develop procedures
  7. 7. 7 Operations Management  Operations Management is a transforming process turning inputs (resources) into outputs (goods and services)  The key here is efficient management of resources
  8. 8. 8 Operations Management  A Transformation Process PROCESSINPUT OUTPUT Information Finance People Materials Machinery Goods Services Customer/Employee Satisfaction
  9. 9. 9 Some Product Thoughts  Deluxe Double Chocolate Chip Cookies  Freddie’s Fish  Collette’s Computer Manufacture  Krazzy Kazz’s Cars
  10. 10. 10 Input Issues  Best Price  Reliability of Suppliers  Delivery Times  Quality  Quantities Available  Storage Space (Raw Materials)
  11. 11. 11 Process Issues  Average Demand per Week  Production Capacity Available  Working Procedures (eg H&S)  Storage Space (Finished Product)  Efficiency/Productivity  Payment Systems  Quality  Stock Control
  12. 12. 12 Output Issues  Packaging Individual/Groups of Items  Nature/Size of Containers  Storage Space (Before Despatch)  Organising Customer Orders  Transportation (Storage/Customers)  Customer Requirements
  13. 13. 13 A Complicated Function  Operations Management is a complex area which can be further broken down into the following key areas: A) planning B) production C) purchasing D) storage and stock control E) distribution/logistics
  14. 14. 14 Planning  To be most efficient production should take place at a constant level
  15. 15. 15 Planning  In reality this is not possible:  Consumer Demand  Staff Shortages  Machinery Breakdowns  Maintenance
  16. 16. 16 Production Systems  How will the manufacturer produce goods?  Start with the factory layout - where will each part of production take place? Who will complete?  The splitting up of production into a number of different jobs is called the division of labour  A successful system will need a flow of stocks from one job to another to make sure that there are no delays due to shortages or bottlenecks
  17. 17. 17 What Production System?  The Nature of the Product  Washing Machines  Bread  House  Atlas  Farming  New Bridge
  18. 18. 18 What Production System?  Market Size  Where the firm is producing large numbers of standard products the production can be simplified eg Irn Bru  Customised products for individual clients need a great deal of client input eg customised software or stained glass windows
  19. 19. 19 What Production System?  Resources  Materials  People  Buildings  Machinery/Tools  Finance  Time
  20. 20. 20 What Production System?  Business Development  Small firms, small productions, production system limited eg Wallace & Gromit Cheese  As firms grow they can increase their capacity and produce a greater variety of goods
  21. 21. 21 What Production System?  Labour Intensive Systems  A labour intensive system is one which relies more heavily on its workforce than machinery  ‘Tattie Holidays’  Strawberry Picking  Clothing Promotion
  22. 22. 22 What Production System?  Labour Intensive Systems  Labour is cheaper than machinery  Skill in craftsmanship required  Can’t use machinery - working environment  Ability required to think/reason/use initiative/make decisions  Flexibility in production
  23. 23. 23 What Production System?  Capital Intensive Systems  A Capital Intensive System is most common when:  Supply of labour is limited  Production benefits from machine efficiency and consistency  Production is routine and repetitive
  24. 24. 24 Automation  CAM (Computer Aided Manufacture)  CAD (Computer Aided Design)  Robotics  Allows firms to design, develop and produce products with high quality  Ability to make a wider range of similar products to appeal to different segments of the market
  25. 25. 25 Automation  Advantages  Complicated tasks completed quickly  High accuracy  Less waste  Quality consistent  Disadvantages  Machinery is more likely to break down  Narrow range of tasks
  26. 26. 26 Sony Walkman At present, Sony has at least 12 different versions of the Sony Walkman on the market. Each has the same basic features, all of which are made on the same production line. Using technology in the design and production of the Walkman can add different features to each models to appeal to different consumers. Prices vary as more advanced features are added.
  27. 27. 27 Activities Student Activity 1
  28. 28. 28 Activities Wallace & Gromit - Stinking Bishop  Research and produce a short report on the production of the cheese Stinking Bishop and the Wallace & Gromit effect
  29. 29. 29 Activities Sony Walkman Research  The Sony Walkman has evolved over the years resulting in products unconceivable 20 years ago  Create a short report detailing the current range of ‘Walkmans’, their features and what market they would appeal to

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