UNIT 3 AOS 3 BUSINESS MANAGEMENT

• Differences between operations at manufacturing vs service businesses

  
• Similarities between characteristics of operations and manufacturing and service business

  
• Waste that may occur in a business's operations system


  • Time can be wasted when transporting resources or products
  • Time can be wasted from delays between production stages
  • Labour can be wasted when employees have little or no work to complete during production
  • The labour of highly experienced employees can be wasted when they are assigned tasks that can be completed by less experienced employees
  • Materials can be wasted when current inventory is not used by production
  • Product are wasted when they are defective and cannot be sold
  • Products can be wasted when a business produces too much and is unable to sell them
• TIMWOOD


  • Transportation
  • Inventory
  • Motion
  • Waiting
  • Overproduction
  • Overprocessing
  • Defects
• The effect of zero defects on effectiveness 


  -The zero defects strategy aims for continuous improvement and may lead to customers receiving high quality products that have no defects, improving their satisfaction and increasing the business's sales. This can consequently allow a business to better fulfil a market need.
• Advantages of lean management


  • Improve reputation by reducing and managing waste which benefits the environment
  • Quality is improved as processes are supposed to add value to the final product and customer expectations are met
  • Employees may experience greater job satisfaction as they positively impact the environment and reduce waste in operations
  • Products are produced at a faster rate
  • Reduce the amount of time wasted in between tasks
  • Reduces the overall use of materials which leads to fewer production costs
  • The quality of a business's products can improve to greater customer satisfaction and sales
• Disadvantages of lean management 


  -If suppliers do not deliver materials on time, a business may be unable to meet customer demand

  -Employees may be reluctant to commit to an attitude of zero defects due to the effort and commitment required

  -It may be overwhelming for employees to implement lean management

  -It may be time-consuming to train inexperienced employees

  -It can be costly to implement for new policies, procedures and training employees
• Operations system


  Corporate social responsibility considerations for an operations system, including the environmental sustainability of inputs and the amount of waste generated from processes and production of outputs, and global considerations for operations management including global sourcing of inputs, overseas manufacture and global outsourcing
• CSR considerations


  • Managing inputs appropriately
  • Managing suppliers appropriately
  • Managing staff appropriately
  • Managing the customer relationship appropriately
• Why should businesses participate in CSR?
• CSR strategies for inputs


  • Sourcing inputs locally, rather than from overseas suppliers
  • Sourcing inputs from suppliers that use environmentally-sustainable methods
  • Implementing operations strategies
  • Purchasing energy-efficient machinery
  • Installing reusable, renewable and/or clean energy sources
• CSR strategies for processes


  • Using technology that performs tasks in a precise and consistent manner
  • Developing methods to capture and recycle unused or excess input materials
  • Implementing operations strategies
  • Disposing of any harmful waste that cannot be treated, in a responsible and safe manner
  • Developing policies that promote the efficient use of energy in the workplace
  • Training employees on how to minimise waste
• CSR strategies for outputs


  • Developing an alternative product that is more environmentally friendly
  • Creating products that have recyclable or biodegradable elements
  • Eliminating as much plastic as possible in the packaging
  • Delivering products to retailers in bulk
  • Offering customers incentives for returning the product
  • Providing clear labelling on a product about appropriate methods of disposal
• Global considerations


  • Competitiveness
  • Efficiency
  • Effectiveness
  • Global sourcing of input
  • Overseas manufacture
  • Global outsourcing
• Inputs - global considerations


  • To minimise expenses to reduce cost (efficiency and effectiveness)
  • Source materials not available in the country of operations
  • Higher quality materials leading to better outputs (effectiveness)
  • CSR considerations such as environmental impacts and exploitation of workers
  • Tariffs and Quotas
• Processes - global considerations


  • Cheaper labour costs and establishment costs
  • Highly skilled employees with expertise improving efficiency
  • Poor CSR practices
  • Redundancies locally
  • Time consuming and communication breakdown due to differences in language and regulations and practices
• Outputs - global considerations


  • Can result in cheaper prices for consumers
  • Can result in the better production of goods and services (output) - i.e. quality