UNIT 3 BUSINESS MANAGEMENT AREA OF STUDY 3 OPERATIONS MANAGEMENT “DISCUSS AND ANALYSE STRATEGIES RELATED TO OPERATIONS MANAGEMENT.”

YEC0 2015

STUDY DESIGN OVERVIEW

The operations management function

In area of study 3, students investigate the operations management function from both a manufacturing and service perspective, and its objective to efficiently and effectively transform inputs into outputs.

The study of operations management enables students to consider the best and most responsible use of all the available resources for the production of a quality final good or service in a competitive, global environment.

The elements of an operations system are clearly stipulated as inputs, processes and outputs, and the strategies adopted to optimise operations include facilities design and layout, materials management, management of quality and extent of the use of technology.

KEY KNOWLEDGE

¨  the operations function and its relationship to business objectives and business strategy;

¨  characteristics of operations management within large-scale manufacturing and service organisations;

¨  key elements of an operations system (inputs, processes and outputs) in different types of large-scale organisations;

¨  productivity and business competitiveness, their importance for and impact on the operations system;

¨  strategies adopted to optimise operations, including: ¤  facilities design and layout ¤  materials management

¤  management of quality ¤  extent of the use of technology;

¨  ethical and socially responsible management of an operations system.

KEY SKILLS

¨  accurately use relevant management terms; ¨  research aspects of operations management using

print and online sources; ¨  analyse business information and data; ¨  apply operations management knowledge and

concepts to practical and/or simulated situations; ¨  discuss key aspects of operations management; ¨  analyse strategies that arise through practices within

operations management.

RECAP

¨ Effectiveness is …

¨ Efficiency is …

RECAP

¨ Effectiveness is how well an orgaisation meets its previously set goals and objectives.

¨ Efficiency is how well an organisation uses its resource to achieve objectives. Resource can include time, money, labour and materials

Questions to address

1.  What are some of the factors an organisation might have to consider when producing goods or services?

2.  List four differences between an organisation that produces goods and an organisation that provides a service.

3.  Identify three factors that you think determine how productive an organisation is.

4.  Explain why quality management is important for all organisations.

5.  What current ethical dilemmas could you envisage for operations managers in large-scale organisations?

DEFINITIONS

Operations management: ¨  The design and operation of the system within an

organisation that creates the goods and provides the services.

¨  The management of resources to achieve efficient output of goods and services

¨  Operations system: the part of the organisation that produces goods or services by processing and transforming inputs into outputs

Note: There is a difference is definitions between Operations Management and Operations System

Operations System

INPUT TRANSFORMATION PROCESS OUTPUT

This process is critical to reaching many of the organisational objectives that were set down in the planning stages.

GLOSSARY WORDS

1.  Operations system

2.  Inputs

3.  Outputs

4.  Transformation process

5.  Operations manager

6.  Productivity ratio

7.  Material management

8.  Quality management

9.  Facilities layout

10.  Production plan

11.  Quality control

12.  Quality assurance

Operations management & key management roles

¨  Operations management encompasses all the management functions of: ¤ Planning – Objectives and courses of action or

strategies ¤ Organising – Resources to product goods and / or

services ¤ Leading – Motivating and coaching employees

through change ¤ Controlling – Organisational processes and systems

INPUTS

¨  Resources such as raw materials, labour, plant, equipment, capital, information used in any organisational production system.

¨  The resources that are used to produce goods or services

INPUTS

¨  People – Stakeholders are considered input (employees in particular). Customer needs must be considered to determine its final goods or services.

¨  Facilities & Equipment – Buildings, machinery and technology (man made object, tool or machine). These resources can ensure a business operates as efficiently as possible.

¨  Materials – Raw materials, parts, components and service supplies used up in the transformation process.

¨  Finance - $$$$$ (To pay employees, pay for the transformation process and purchase initial inputs)

¨  Information – E.G. Patient records for Doctors ¨  Time – Time efficiency

Production / Transformation Process

¨ The process of transforming resource inputs into finished goods and services

¨ An activity undertaken to transform the inputs into outputs

Transformation Process

¨  Making the most efficient use of the inputs to create the best outputs.

¨  These processes are many and varied (depending on the output, available resources and size of the organisation)

¨  The Operations Manager (and personnel) are responsible for the transformation process.

OUTPUTS

¨  The outputs are simply the finished product or service that the organisation offers to its customers.

¨  The outputs are the end result of the transformation process.

¨  The quality of the final goods and services produced is determined by the inputs used and the transformation processes undertaken.

Activities

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