BUSINESS OPERATIONS

• Job production


  Each product is made individually to the customer's specification
• Flow production


  Products are manufactured in a continuous process
• Lean production


  A production system that aims to eliminate waste and improve efficiency
• Just in time (JIT)


  A stock control system where goods are produced or delivered just as they are required, rather than being made or held in stock in advance
• Just in case (JIC)

  A stock control system where businesses hold buffer stocks to ensure they can meet demand
• The benefits of reduced costs from JIT must be balanced against the cost of more frequent deliveries and lost purchasing economies of scale
• Factors affecting choice of suppliers

  • Price
  • Quality
  • Reliability
• Procurement


  The process of acquiring goods and services from suppliers
• Logistics


  The process of planning, implementing and controlling the efficient, effective flow and storage of goods, services and related information from the point of origin to the point of consumption
• The benefits of reduced costs from effective procurement and logistics must be balanced against the quality of service
• Supply chain


  The network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services delivered to the ultimate consumer
• Total quality management (TQM)


  A management approach that aims to embed awareness of quality in all organizational processes
• Costs and benefits of maintaining quality

  • Additional sales
  • Image/reputation
  • Higher price
  • Inspection costs
  • Staff training
  • Product recalls
  • The provision of services
• Methods of good customer service

  • Product knowledge
  • Customer engagement (creating a positive experience for the customer)
  • Post sales services (eg user training, help lines, servicing)
• Benefits of good customer service

  • Increase in customer satisfaction

  Customer loyalty

  Increased spend

  Profitability
• Dangers of poor customer service

  • Dissatisfied customers

  Poor reputation via word of mouth

  Reduction in revenue
• Advances in ICT have allowed customer services to develop through websites, e-commerce and social media
• Organisational structure


  The way in which a business organizes its management and operational roles
• The appropriate organisational structure depends on the size, nature and objectives of the business
• Consequences of poor customer service

  • Dissatisfied customers
  • Poor reputation via word of mouth
  • Reduction in revenue
• Students should understand the sales process
• Students should be able to understand the importance of providing good service to customers and analyse the techniques businesses use to provide good customer service
• Ways in which advances in ICT have allowed customer services to develop

  • Websites
  • E-commerce
  • Social media
• Students should understand the interdependent nature of business operations, human resources, marketing and finance
• Students should be able to give examples of how business objectives would be split into functional plans with clear links throughout