business unit 3- aos 3

• Operations management


  Coordinating and organising the activities involved in producing the goods or services that a business sells to customers
• Efficiency


  How productively a business uses its resources when producing a good or service
• Effectiveness


  The extent to which a business achieves its stated objectives
• Operations management and business objectives


  Operations managers can contribute to the achievement of business objectives by improving levels of efficiency and effectiveness in a business's production process
• Examples of how the implementation of operations strategies can assist with the achievement of business objectives

  • To make a profit
  • To increase market share
  • To meet shareholder expectations
  • To fulfil a market need
  • To fulfil a social need
  • To improve efficiency
  • To improve effectiveness
• Improving efficiency in operations will not always directly correspond to an improvement in effectiveness
• Implementing strategies that allow a business to optimally use its resources

  Can reduce production costs, increase profit, and increase dividends paid to investors, thus allowing a business to meet shareholder expectations
• Implementing strategies to reduce the number of faulty products in production

  Can improve customer satisfaction and sales, allowing a business to increase market share
• Utilising advanced technology in the production process can enable a business to innovate new product designs, allowing it to fulfil a market need
• Implementing operations strategies that improve efficiency and minimise waste can improve customer satisfaction and overall business performance
• Inputs


  The resources used by a business to produce goods and services
• Inputs


  • Labour resources (employees)
  • Raw materials, such as flour and iron
  • Capital resources, such as equipment and machinery
  • Time
  • Utilities, such as electricity, water, and gas
  • Information
• Processes


  The actions performed by a business to transform inputs into outputs
• Outputs


  The final goods or services produced by a business
• Operations managers are responsible for ensuring that the operations system can function both efficiently and effectively
• Operations managers have the responsibility of implementing strategies that improve a business's operations system and contribute to the achievement of various business objectives
• Manufacturing businesses


  Use resources and raw materials to produce a finished physical good
• Service businesses


  Provide intangible products, usually with the use of specialised expertise
• Characteristics of operations management at a manufacturing business

  • Highly automated, capital intensive production process
  • Production and consumption occur at separate times
  • Low degree of customer contact during production
  • Outputs are tangible
  • Outputs can be stored as inventory
  • Produce standardised, consistent goods
• Characteristics of operations management at a service business

  • Labour intensive production process
  • Production and consumption occur simultaneously
  • High degree of customer contact during production
  • Outputs are intangible
  • Outputs cannot be stored as inventory
  • Services are usually tailored to individual customer needs
• Manufacturing businesses utilise their operations system to produce physical goods
• Service businesses utilise their operations systems to produce intangible products
• Manufacturing business


  • Yakult Honsha
• Service business


  • Qantas
• Automated production lines


  Machinery and equipment arranged in a sequence, where the product is developed as it proceeds through each step
• Automated production lines


  • Perform tasks at speeds much faster than humans, improving productivity
  • Perform tasks with a high degree of accuracy, decreasing errors and enhancing quality
• Advantages of automated production lines

  • Performing tasks precisely and accurately can ensure consistent high-quality products, improving business reputation
  • Reducing errors and wasted resources can reduce environmental impact and improve business reputation
  • Removing tedious or dangerous tasks can positively impact employee morale
  • Tasks can be performed much faster than human labour
  • Minimising employees needed can reduce wage expenses
  • Increased accuracy can enhance product quality and generate more sales revenue
  • Increased accuracy can reduce wasted resources that need to be repurchased
• Disadvantages of automated production lines

  • Can cause employee redundancies, damaging business reputation
  • Sudden breakdowns can halt production and compromise productivity
  • High initial setup costs
  • Expensive to repair and update
  • Expenses associated with training employees
• Robotics


  Programmable machines capable of performing specified tasks
• Automated production lines often involve the use of robotics, where autonomous robots are programmed to perform various tasks along a production line</b>
• Robotics


  • Can reduce the need for human labour within a business's operations system, often replacing tasks previously performed by employees
• Robotics can efficiently complete specialised tasks with high levels of precision and accuracy within a business's operations
• Automated production lines and robotics are fundamental for maximising efficiency and effectiveness within a business's operations system
• Automated production lines


  • Increase the overall quality of the product
  • Allow a business to generate more sales revenue
• Increased accuracy in production

  • Reduce the number of wasted resources that have to be repurchased by the business
• There are high initial setup costs associated with purchasing and installing automated production lines
• It can be expensive for a business to repair and update automated production lines
• There may be expenses associated with training employees to use automated production lines
• Robotics


  Programmable machines that are capable of performing specified tasks
• Robotics


  • Can perform specific tasks quickly and with high levels of accuracy
  • Can minimise the number of errors that occur during production