Operations involves ensuring the right resources are used to produce finished products. It includes purchasing, stock control, production, quality management, and distribution. Operations management aims to lower costs, improve quality, and increase customer satisfaction. There are three types of stock: raw materials, works in progress, and finished goods. Companies must balance holding too much versus too little stock. The document then discusses various operations management topics like purchasing, factors of production, production methods, quality, ethics, and distribution. Operations is influenced by internal factors like finance, labor, and technology, as well as external factors such as economic, political, social, technological, environmental, and competitive conditions.
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
7. 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
13. 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
15. 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
17. 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
18. 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
20. 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
21. 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
23. 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
24. 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
26. 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
28. 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
30. Quality Methods
Employees – Investors in People
Raw Materials – GIGO
Quality Control
Quality Assurance
TQM - Quality Management
31. Total Quality Management
Commitment - Everyone is involved in
quality
Get it right first time - aims for zero
defects & wastage
Quality Circles
Kaizen – continuous improvement
33. 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?
34. 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?”
35. 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
42. Operations is affected by:
Internal Factors
Finance
Labour
Technology
Political
External Factors
Economic
Social
Technological
Environmental
Competitive
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.