2.3 operations

• Three main ways of production covered at the GCC are job production, batch production, and flow production
• Job production:

  • One-off production of a single unique item
  • Requires skilled labor and often involves a personal touch
• Batch production:

  • Limited quantity of identical products made in batches
  • More efficient and reduces waste compared to one-off production
• Flow production:

  • Continuous production used for high-demand products
  • Often heavily machine-based for consistency
• The purpose of operations is to create or provide goods and services efficiently
• Productivity is the quantity produced over a period of time, while efficiency is making the most out of resources
• Productivity example: Shooter A makes 7 out of 10 shots, while Shooter B makes 5 out of 7 shots. Shooter A is more productive, but Shooter B is more efficient
• Technology and production: Labor-intensive is more human-based, while capital-intensive is more machine-based
• Benefits of machines: No wages, consistent results, but expensive upfront and maintenance costs

  Drawbacks: Risk of breakdowns
• Benefits of humans: Lower upfront costs, flexibility, but require wages and breaks
• Many products use a combination of labor-intensive and capital-intensive production methods
• Working with suppliers involves understanding the bargaining power of suppliers
• Key concept: Bargaining power graph helps analyze the relationship between buyers and suppliers
• In managing stock levels, businesses need to consider the maximum stock level, which is the highest amount of stock a business can hold at any one time
• The maximum stock level is determined by factors like storage space, product size, and other storage needs
• Businesses also have a minimum stock level, known as buffer stock, which is the level below which they do not want to go to avoid running out of stock and disappointing customers
• The reorder level is the point at which a business needs to make a new order to replenish stock before it runs out
• Lead time is the time between placing an order for stock and receiving it, influenced by factors like supplier location and relationship
• Just in time is a stock management approach where businesses order less stock but more frequently to reduce storage costs and buffer stock levels
• Procurement involves finding the right suppliers, ordering the right quantities, ensuring timely delivery, and maintaining quality standards
• Logistics focuses on the delivery of stock throughout the supply chain, ensuring timely delivery to customers and maintaining efficient stock flow
• Quality in business can vary depending on the type of business, such as food quality in a restaurant, treatment quality in a beauty spa, and service quality in a hotel
• Quality control involves checking the quality of products at the end of the production process to ensure they meet standards
• Quality assurance involves checking for quality throughout the production process
• Quality assurance aims to identify faults earlier in the production process
• Quality assurance requires trained staff to identify weaknesses and test for quality
• A quality culture in an organization means that every person within the organization cares about the level of quality in the business
• Kaizen is a term that means continuous improvement, focusing on making small improvements consistently
• Quality is important for a business as it can provide a competitive advantage
• High quality and a quality system can impact a business's image, reputation, and customer loyalty
• Quality can also help control costs by avoiding waste and identifying faults early
• The sales process involves stages like product knowledge, speed and efficiency of service, customer engagement, response to feedback, and post-sales care
• Customer service involves understanding what the customer wants, being accessible, and providing effective communication
• Good customer service can lead to loyalty, repeat sales, added value, and potentially a higher price point for products
• Sole trader - one person who owns the whole business
• Partnership - two or more people owning the business together
• Limited company - separate legal entity owned by shareholders with limited liability
• Public limited company (plc) - shares are traded on stock exchange