Bus Man U3AOS3

• Inputs are the resources used to create a good or service. It is important that a business is able to obtain the right quality of inputs for the right price to ensure they are able to achieve their objectives. There are five main resources that businesses use to create goods or services. Materials, Capital, Human resources, Time and Information
• Processes are all the activities used to transform inputs into the final output.
• Outputs are the final product produced by the business. The quality of the output is a direct reflection of the inputs and processes. Outputs can be classed as either goods or services. Goods are a tangible product, whilst a service provides an intangible product. To remain competitive and achieve business objectives the output needs to meet the needs and wants of the market. Quality, price and delivery expectations.
• A manufacturing business will transform its inputs into a tangible output. Tangible outputs are physical products that can be touched or handled. They can be stored and sold at a later date. Production process and consumption are not linked. Very little customer involvement during production and the processes used in a manufacturing business are often more capitol intensive.
• A service business transforms inputs into services that are intangible and these cannot be stored. Often the production of a service is closely linked with its consumption, therefore the consumption often occurs at the same time as the processes are being performed. So the customer often needs to be present. Service operations are more labour intensive where humans are typically performing the bulk of the service.
• Efficiency is a measurement of how well a business is using its resources (inputs). In operations these inputs can involve elements such as materials, capitol, machinery and equipment, information and time. If the business is able to make the best use out of these resources, it can lead to them using fewer resources to produce the good or service. The use of fewer resources means that the business is able to produce each good or service at a lower cost.
• Effectiveness is the ability of the business to achieve its set objectives. The more effective a business is, the greater its ability to achieve business objectives. While business are looking to make a profit, they may also have other objectives such as improving customer satisfaction, increasing market share or reducing waste.
• Automated production lines is where a series of machines and workstations are arranged in sequence to perform tasks automatically with little to no employee involvement. They improve efficiency through the speed of production, reduction in human error, consistent operation and resource optimisation. They improve effectiveness through improved quality, customisation, reduced labour costs and by meeting market demand.
• Robotics are programmable machines that can operate tasks automatically. Robotics are used to perform repetitive tasks which can streamline the overall workflow in a businesses operations. They can improve efficiency through increased productivity, precision and consistency, increased speed and resource optimisation. They can improve effectiveness through quality enhancement, adaptability to market needs, improved safety and reduced operations costs.
• Computer aided design is a software system that enables a product to be created in digital form, modified, analysed and tested before it is put into production. They can improve efficiency through streamlined design processes, reduction in prototype development and improved materials management. They improve effectiveness through enhanced creativity, improved visualisation, analysis and testing and market responsiveness
• Artificial Intelligence refers to systems or machines that mimic human intelligence to perform tasks that are traditionally done by humans. It can improve efficiency through process optimisation, predictive maintenance and automation of repetitive tasks. It can improve effectiveness through quality, customisation, enhanced customer experience and reduced labour costs.
• Online services allow businesses to connect with their customers in some way over an internet connection. This can be through websites and apps, software as a service, online education and social media
• Materials management is the planning, organising and controlling of a businesses supplies. There are three main types of materials that must be managed, raw materials, unfinished goods and finished goods
• Forecasting is a materials management strategy that involves predicting future demand for products based on historical data., market trends and seasonal variations. It minimises inventory costs associated with storing large quantities of materials that may not be used, improving efficiency. It maintains a continuous flow in production which improves effectiveness as it helps meet customer demand.
• Advantages of forecasting

  • Ensures the business has the right amount of materials on hand so production can continue without needing to wait for materials to arrive
  • Improves effectiveness as the business can meet customer demand
  • Helps to prevent overstocking of materials which can improve efficiency in the business as materials are not idle for long periods of time
• Disadvantages of forecasting

  • Unforeseen changes in market demand can render the forecasts useless
  • An unexpected spike or drop can cause the business to over or under produce, reducing efficiency
  • It can be inaccurate
• a master production schedule details what is to be produced, the quantities of each product and when they are going to be produced. It can improve effectiveness because it enables the business to ensure it has enough materials on hand to meet the demand. It improves efficiency by enabling production to flow continuously, improving productivity along with reducing wastage
• Advantages of MPS

  • it can determine its ideal level of materials that are required to meet the customer demand
  • a clear plan on how many employees will be required and on which days
  • can assist with ensuring there are no out of stock periods
• Disadvantages of MPS

  • using software for MPS can come at a significant cost to the business
  • the number of products required to be produced is often forecast which can be inaccurate and not as flexible to meet demand changes
• Materials requirement planning is an inventory control system that provides an itemised list of materials needed to produce specific forecasts or orders. It ensures the business is never under stocked with supplies so production is continuous, improving effectiveness as it allows the business to meet customer demands. Efficiency can be improved as it ensures the business isnt overstocked where money is tied up with idle stock
• Advantages of MRP

  • Ensures there are enough materials on hand to meet the production numbers in MPS
  • leads to continuous flow in production to ensure that there are no stops to wait for materials to arrive
  • if software is used it can often track the materials through supply chain to improve production planning
• Disadvantages of MRP

  • heavy reliance on accurate data to ensure the correct materials are available
  • lacks flexibility to meet a spike or drop in customer demand
  • initial cost can be high
• Just in time is where materials are delivered just as they are needed in the production process.
• Advantages of Just in Time

  • minimises the amount of idle inventory, reducing the amount of money tied up in materials
  • enables the business to make better use of space
  • results in less wastage from materials perishing, becoming obsolete or being damaged while being stored
  • allows a continuous flow of production
  • if the materials are perishable, the materials are fresher than if they are being stored - improving quality
  • reduces costs of storage
• Disadvantages of just in time

  • can be difficult to meet an unexpected spike in demand as there is not enough buffer in materials on hand
  • there may be unforeseen delays on the suppliers end which can delay the delivery of materials
  • increased transportation costs as materials are arriving more frequently
• Quality control checks for defects by performing inspections at various points in the production process to check for defects in the product. There must be: benchmarks, inspections, comparisons and corrective action. This allows the business to manage quality more effectively because defects are identified early in production process. It also reduces wastage which improves efficiency.
• Advantages of quality control

  • ensures products meet the desired standards before making it to the customer
  • can identify errors early so they can be rectified quickly
  • can reduce wastage as errors are identified
  • improves customer satisfaction
• Disadvantages of quality control

  • can slow down production if checks occur at regular intervals
  • may be expensive if extra employees need to be employed to perform the checks
  • can be deemed reactive as defects are identified rather than proactively looking to prevent them from the outset
• Quality assurance is where a business achieves a high standard of quality in the production of a good or service as assessed by an independent body. Businesses will be assessed against a cycle known as PDCA, Plan, Do, Check, Act. It helps the business to become more effective because it ensures that the operations system meets an independent standard, resulting in better quality, an improved reputation and higher profits. Improves efficiency because it results in errors being rectified early, resulting in less wastage.
• Advantages of quality assurance

  • improved quality of end product being produced
  • proactive approach that reduces the chances of errors actually occurring, leading to greater efficiency
  • provides customers with assurance that the product is of good quality by meeting an independent standard
• Disadvantages of quality assurance

  • can be costly to obtain the certificate
  • takes time to train employees to new standards
• Total quality management is a whole organisation approach to achieving quality based on continuous improvement in the area of quality. It is based on 3 key principals, continuous improvement, employee empowerment and customer focus. It can improve customer satisfaction and boost customer loyalty which will result in a higher level of effectiveness. It will improve efficiency as fewer resources go to waste
• Advantages of total quality management

  • employees are empowered to find new ways to achieve quality, which can improve morale within the business
  • quality of products is continually improving, helping to achieve a competitive advantage
• Disadvantages of total quality management

  • employees may be more focused on improving quality than performing work
  • can be difficult to gain a business wide commitment from all employees
  • quality circles can be time consuming
• Reduce is a waste minimisation strategy that reduces consumption of resources. This improves efficiency of the business as fewer resources are being used as well as reduce the impact on the environment. Improves effectiveness as it can lead to increased profits as well as help the business to achieve objectives relating to sustainability.
• Reuse is a waste minimisation strategy where businesses reuse resources again for the same purpose or repurpose the resource for a different purpose. It can improve efficiency as the business is using fewer resources, this can lead to improved profits and greater sustainability which helps the business be more effective.
• Recycling is a waste minimisation strategy that takes a used resource and processes it and remanufactures it into a new product.
• Lean management is where a business establishes systems that aim to eliminate waste and inefficiencies in the operations system and maximise customer value. (aims to create more value for customers while using fewer inputs). 7 typical areas waste can occur are transportation, inventory, motion, wait times, overproduction, over processing and defects (TIMWOOD). Improvement in efficiency through effective use of resources can reduce operating costs, leading into improved profits.
• Pull is where customer demand dictates the rate at which goods or services are produced. Rather than a business producing as much as possible and trying to push these products to the market, the pull concept is where the business only produces the amount that the market demands. This minimises wastage as it reduces large amounts of completed stock in storage that either needs to be discounted in order to sell or discarded completely. It also ensures that money is not tied up in idle inventory that cannot be sold, allowing the business greater flexibility.
• One piece flow is where the focus is on 'one piece at a time' minimising interruptions within the operations system. One piece being focused on at a time during production reduces waiting times as the product has continuous flow through production. This reduces the amount of errors and speeds up the processes.