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Yr 12 VCE Business Management U3 AoS 3

Yr 12 Business Management U3 AoS3 Operations Management
by

Glenn Lovegrove

on 14 August 2013

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Transcript of Yr 12 VCE Business Management U3 AoS 3

Operations Management
Consists of all the activities in which managers engage to produce a good or a service.
Importance
Operations management will:
establish the level of quality
influence the cost of production
determine whether sufficient products are available to meet consumer demand
Key Elements
Productivity
Competitiveness
Strategies
Ethical and Socially Responsible Management
Inputs
Processes
Outputs
Are resources used in the process of production.
Raw materials
Capital Equipment
Labour
Information
Time
Money
Transformation process is the conversion of inputs (resources) into outputs (goods and services.
Manufacturer:
transforms inputs into tangible products

Service organisations:
transforms inputs into intangible products
Refers to the end result of an organisation's efforts - the service or product that is delivered or provided to the consumer.
Is the measure of efficiency - the amount of output produced compared to the amount of input required in production
Efficiency: making good, thorough, or careful use of resources; not consuming extra. Especially, making good use of time or energy.
Is the ability of an organisation to compete with others in the market.
Cost
Quality
Speed of Delivery
Achieve economies of scale
Buy in bulk
Eliminate waste
Produce high volume of output
Use automated production systems
Immediately respond to customer needs
Reduce defect rates in production processes
Strictly comply with design specifications
Reduce human variables
View quality as a competitive weapon
Promote a sense of urgency within the organisation
Respond quickly to changes in demand
Establish efficient supply chains
Develop effective feedback mechanisms
Facilities Design and Layout
Materials Management
Management of Quality
Use of Technology
Involves the planning of the workspace layout to streamline the production process.
Need to consider:
physical space for production
effective use of equipment and technology
adequate location of stock and warehouse requirements
efficient flow of the good or service through the systems
Manufacturing Layouts
Other Layouts
Fixed Position Layout
Deals with large-scale processes, such as the construction of bridges, ships, aircraft or buildings.
Product Layout
Deals with the manufacturing of goods in mass volume using an assembly line
Process Layout
Deals with high varieties of products by grouping activities, equipment and machinery of a similar function together
Retail Layout
The interior layout of the store for the ease of user movement through the store to provide maximum exposure of good and attractive display.
Office Layout
To maximise the interrelationships among three primary factors: employees, flow of work through the various work units, and equipment.
Is the strategy which manages the use, storage and delivery of materials to ensure the right amount of inputs is available when required in the operations system.
Involves:
Receiving materials
Safely storing materials
Forecasting material requirements
Reducing holdings of surplus stock
Controlling the release of materials in the production process
Materials Planning
Relates to the decisions made on the future quantity of components that are required and the quantities to be ordered. The materials planning is based on the production planning.
Supply Chain Management
Is the range of suppliers from which the organisation purchases materials and resources from.
Inventory Control
Ensures that costs are minimised and that the operations system has access to the right amount of inputs when required.
Just in Time
Is an inventory control approach which ensures that the exact amount of material inputs will arrive only as they are needed in the operations process.
Refers to the degree of excellence of a good or service and it fitness for a stated purpose.
Quality Control
Quality Assurance
Total Quality Management
Management of quality will:
minimise waste and defects
strictly conform to standards
reduce variance of final output
Involves the use of inspections at various points in the production process to check for problems and defects.
Involves the use of a system so that an organisation achieves set standards in production.
e.g. ISO 9000 series.
Is an ongoing, organisation-wide commitment to excellence that is applied to every aspect of the organisations operation.
Continuous Improvement
Customer Focus
Involves an ongoing commitment to achieving perfection.
Getting all the employees of the organisation in meeting the consumers needs and wants.
Organisations use technology to gain a competitive advantage as it can:
speed up production processes
reduce labour costs
improve quality
improve communication
increase profitability
increase productivity
improve customer service
Ethical Management
Socially Responsible Management
Is the application of moral standards to management behaviour and decision making.
Refers to the managers awareness of its actions in regards to the community and the environment.
Involves:
dealing with suppliers appropriately
handling staffing issues appropriately
treating the consumers fair and equitable
Involves:
ensuring that the inputs do not impact negatively on the environment
ensuring that the operation do not affect the community negatively
ensuring that the end product does not harm the consumer or the environment
disposing of waste in a responsible manner
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