Transcript Year 12 Business Studies

Year 12 Business Studies
OPERATIONS REVIEW
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?
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Planning production
Organising inputs
Motivating employees
Monitoring and controlling outputs
 How does effective operations management add to the
business?
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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.
Influences
 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
operations?
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Different currencies
Trade agreements
Global consumers
Technology
Different cultures
Influences
 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
process
 What are transformation processes?
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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?
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How ‘open’ the operations process is to customers
More visible the operations, the more customer focused
 What are scheduling and sequencing tools used for?
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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
outputs
 Monitoring, control and improvement to operations are
essential if the business is to achieve its performance
objectives.
Operations Strategy
 What sort of effect does effective and efficient operations
management have?
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Reduces costs
Increases revenue
Improves profit
 What are operations strategies?
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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?
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The development of the operations function itself to bring benefits to
the business
 What are the aims of supply chain management?
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Reduce inventory costs
Reduce waste
Enable faster delivery
More satisfied customers
 What are the three stages of quality management?
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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?
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Opportunity to source inputs from cheaper sources overseas
Opportunity to expand and achieve economies of scale
Development of new products for an international market.