Year 12 Business Studies

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Transcript Year 12 Business Studies

Year 12 Business Studies
Role of Operations Management
 Operations is the key business function concerned with
the transformation of inputs into outputs
 What is the role of the operations manager?
Planning production
Organising inputs
Motivating employees
Monitoring and controlling outputs
 How does effective operations management add to the
Increasing productivity
Reducing costs and improving quality
 To achieve strategic competitive advantage through
lower costs and differentiated goods.
Role of Operations Management
 What is a cost leadership strategy?
 A business aims to be the lowest cost manufacturer
 What is a differentiated product?
 One that has unique features and commands a higher price
 There is significant interdependence between the
key business functions and a constant flow of
information between them.
 In a customer-focused business, operations must
produce a product that satisfies the needs and
desires of the target market.
 What is a globalisation?
 Integration and interdependence through trade, technology,
deregulation and global businesses of the economies of
different countries, creating a global economy
 How does globalisation influence business
Different currencies
Trade agreements
Global consumers
Different cultures
 What do legal regulations aim to ensure?
 Business operations are safe
 Negative impact on the environment is minimised
 Product quality and safety standards are met
 What are business ethics?
 The rules and principles a business follows to be a good
corporate citizen
 Socially responsible business decisions include
promoting human rights, not engaging in corruption,
being consultative and improving living standards
 Businesses are increasingly being held accountable.
Operations Processes
 Inputs are the materials, people and facilities used to
make goods or provide services plus time and finance
 Transformed resources are the materials, information
and customers that are changed by the operations
 What are transformation processes?
Activities that add value to the inputs
 Businesses that produce in high volumes, low variety and
experience little variation in demand will use a high level
of capital equipment, technology and materials
 Low-volume operations will need to have a highly flexible
operations process using more skilled labour.
Operations Processes
 What does visibility of operations refer to?
How ‘open’ the operations process is to customers
More visible the operations, the more customer focused
 What are scheduling and sequencing tools used for?
To identify all steps in the operations process and organise them into
the most efficient order to complete (eg. Gantt charts and critical
path analysis)
 Process technology is the improvements in the machines,
equipment and devices used to transform inputs into
 Monitoring, control and improvement to operations are
essential if the business is to achieve its performance
Operations Strategy
 What sort of effect does effective and efficient operations
management have?
Reduces costs
Increases revenue
Improves profit
 What are operations strategies?
Objectives, plans and policies used to give the business a competitive
advantage and how this advantage will be sustained.
 Performance objectives for operations strategies are
quality, high speed, durability, flexibility in production,
low costs and opportunity for customisation.
Operations Strategy
 What is process innovation?
The development of the operations function itself to bring benefits to
the business
 What are the aims of supply chain management?
Reduce inventory costs
Reduce waste
Enable faster delivery
More satisfied customers
 What are the three stages of quality management?
Quality controls are established
Establishment of procedures that will prevent problems or errors
Improving quality through TQM.
Operations Strategy
 Overcoming resistance to change in operations
requires strategies and management skills to
emphasise the long-term contribution to lower costs
and better quality.
 What are the global factors that can influence
business operations?
Opportunity to source inputs from cheaper sources overseas
Opportunity to expand and achieve economies of scale
Development of new products for an international market.