Business operations

• Business operations refer to the part of the business that provides customers with goods or services that they ordered
• Operations take resources like raw materials, finance, and the business' workforce to create finished goods or services, ensuring they arrive on time and meet quality standards
• For goods, operations include everything from making to delivering goods in a factory, while for services, the processes a business uses are known as operations
• Businesses providing goods can choose from three different types of production process:

  • Job production: individual products made one at a time to meet specific customer needs
  • Batch production: a set quantity of identical products made at the same time
  • Flow production: continuously making identical products on an assembly line
• Job production requires highly skilled staff, is tailored to customer preferences, and is not as flexible as batch production
• Batch production allows for a variety of sizes or flavors, can be partially automated, and can produce more products than job production
• Flow production enables making larger quantities, ensures consistency in production, and is highly automated but can have low profit margins in competitive markets
• Businesses compete with rival businesses, and production costs must be kept low so that products can be priced competitively
• The ability to keep production costs low is affected by production methods and technology
• Businesses often use a combination of production methods:

  • Job production: individual products are made one at a time to meet specific customer needs
  • Batch production: where one group of identical products is made at the same time before moving onto producing the next group
  • Flow production: where identical, standardized products are produced on an assembly line
• One major reason a business might choose one production process over another relates to productivity, which is the amount of work produced by a person in a given time
• Productivity can be measured in products produced per worker, per day, month, or year
• Ways to improve productivity include:

  • Investing in up-to-date machinery
  • Providing incentives to encourage workers to work harder and faster
  • Providing training to staff to improve their skills
  • Encouraging staff to come up with time-saving ideas
• Being more productive enables businesses to keep their costs per unit as low as possible, allowing them to price their goods or services more competitively or increase their profit margins
• Technology has a big impact on businesses, allowing them to produce higher quantities, make products more consistent, and be more cost-effective
• Businesses balance technology to ensure its advantages outweigh its disadvantages, considering costs, productivity, quality, and flexibility
• Costs:

  • Technology costs money to purchase but reduces the cost of producing products
  • Using machinery for dangerous tasks reduces wage costs and improves employee health
• Productivity:

  • Mechanizing or automating parts of the production process increases productivity, enabling businesses to reduce prices or increase profit margins
• Quality:

  • Consistency in product quality is crucial for businesses, and mechanizing or automating production processes can help achieve this
• Flexibility:

  • Businesses balance technology with human flexibility, as automation is suitable for mass production but not for personalized products