2. What is Operations? Operations is the process of using resources and adding value to them, to make a product or provide a service that consumers will want to buy. It is also known as Production . When producing a good or providing a service, production involves transforming inputs (Factors of Production) into finished goods: INPUT PROCESS OUTPUT
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4. The production managers will find out from the marketing department what the consumers want, and what their competitors are producing. WHAT TO PRODUCE?
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7. JOB PRODUCTION Job production is when each product is made individually, to meet each customer’s specific order. Each order is likely to be different. This is an expensive method of production due to the high skill of the staff required – high wages. EXAMPLES wedding cakes, custom made jewellery, designer dresses
8. BATCH PRODUCTION Batch production is used to produce a number of similar products – a batch. When that order has been completed, another batch is produced. Batches can be changed to meet specific customer requirements, however machinery and workers may sit idle between stages unless there is careful planning. EXAMPLES newspapers, cakes, bread, sweets, chocolates, light bulbs etc
9. FLOW PRODUCTION Flow production involves products moving continuously along a production line through different stages of production. For example, production of a car will start with the shell at the beginning with various parts being added as the shell moves along the production line. Huge quantities can be produced and the process is often automated. However, worker motivation can be low due to the repetitive nature of the job. EXAMPLES Cars, mobile phones, TV’s etc
14. Effective Stock Control To prevent too little stock being held, the production manager will set a minimum stock level , re-order level and a maximum stock level for each item of stock. MINIMUM STOCK LEVEL – the level that stock must not fall below RE-ORDER LEVEL – since it is not wise to let the stock reach the minimum level and then place an order, it is usual for businesses to set a re-order level. When stock reaches this level an order will be placed. The time taken between placing an order and it being delivered is known as the LEAD TIME .
15. MAXIMUM STOCK LEVEL – this stock level is set to keep the costs of holding stocks as low as possible. MANAGING STOCK LEVELS
20. QUALITY CONTROL At certain points in the production process, products are checked to ensure that they meet agreed quality standards. Any unacceptable products are then discarded as waste or sent back for reworking. QUALITY CIRCLES Groups of employees meet regularly to discuss areas where improvements can be made. By involving the employees in the process they can take ownership of the improvements – increasing motivation and productivity.
21. QUALITY ASSURANCE Quality Assurance is provided when a business guarantees the quality of their products. Examples of some common quality assurance indicators are shown below: British Standards Institution kitemark Lion Mark found on Eggs Association of British Travel Agents Using the Internet, see what you can find out about these and other marks used to assure quality.
22. TOTAL QUALITY MANAGEMENT (TQM) Quality Circles is an important part of TQM – employees must take a pride in their work and not accept substandard work. TQM requires everyone in the business to think about quality – not only production teams. It is a system of doing things right first time and no errors are tolerated. TQM also relies upon good relationships with suppliers – all materials received should be subject to the same high quality standards.
