Operations Management - Chunk 1

Operations Management - Chunk 1

• Operations function is the core, main purpose of the business
• Influences are factors that affect achieving operational goals
• Operational processes are steps/activities a business takes to operate effectively
• Operation strategies are tools a business uses to execute its operations
• Operations management aims to make decisions efficiently, ensure quality, and keep costs down.
• Manufacturing operations involves turning raw materials into finished goods.
• Service operations involve carrying out services using technology, predicting consumer demand, and making decisions about capacity, location, and layout.
• Effective operations management adds value, increases productivity, reduces costs, and improves quality.
• This gives a business a competitive edge.
• Strategic operations management designs, implements, and improves processes for resources into products.
• Cost leadership is a business strategy to keep operational costs low while maintaining quality.
• Strategies to achieve cost leadership include: economies of scale, standardisation, using efficient technology and waste minimization.

Operations Management - Chunk 2

• Differentiation approach is a business strategy that distinguishes a business from rivals.
• Differentiation can come from product design, quality, brand reputation, customer service, technology, or unique features.
• Business's operations are shaped by the types of goods and services produced.
• Producing goods vs services: Goods are tangible objects, services are intangible experiences. Goods can sometimes be stored, but services usually cannot. Production of goods can be location dependent for raw materials or labor, but service locations are often customer-focused.
• Interdependence means key business functions rely on each other to meet goals.
• Influences on operations includes internal (in the company) and external (outside of company) factors
• Globalisation is a key influence effecting operations, which includes removing barriers to trade and increasing interconnectedness of economies.

Operations Management - Chunk 3

• Operations processes are the steps involved in transforming inputs into outputs.
• Inputs are the resources used in the transformation process
• Types of inputs are transformed resources (materials, information, customers)
• Transformed resources are changed or converted through operational processes.
• Three types of resources: materials, information, and customers.
• Materials include raw materials and intermediate goods; these can come from mines, forests, oceans, and recycled waste.
• Information is knowledge gained from research, investigation and instruction from external sources (government stats, media, academic papers, customer feedback, etc) and internal sources (financial reports, internal research etc).
• Customers are also transformed resources because their needs and desires drive operations processes.

Operations Management - Chunk 4

• Outputs are the good/service provided or created at the end of a production process intended for sale to customers.
• Customer service involves supporting and aiding customers before, during, and after a purchase. Poor quality in products or services (defects), long wait times or returns / warranty claims require review of processes.
• Warranties are guarantees that faulty products will be repaired or replaced. Meeting the demands of warranties shows positive operations process management. Compliance with the Fair Trading Act and Customer Act 2010 is critical.
• Performance objectives (quality, speed, dependability, flexibility, customisation, cost) measure the efficiency and efficacy of operations. These are targets/goals.
• Quality measures how well a product or service meets customer expectations. Includes measures (quality of design, fit for purpose, durability) and consistently reliable outputs.
• Speed describes the rate of delivery of goods/services. Faster delivery times are better.
• Dependability shows how consistently reliable the output's quality is. Measured by things like warranty claims (KPIs).
• Flexibility is how responsive operations processes are to changes in market demand. Using technology can improve market responsiveness.
• Customisation is tailoring products/services to individual customer needs.
• Cost is how cheaply operations processes can be completed without sacrificing quality.

Operations Management - Chunk 5

• New product or service design and development process. Research, conceptualization, design, production of new products/services.
• Supply chain management is the integration of inputs and transformation to best meet customer needs.
• Logistics (distribution) is managing the movement and storage of goods/materials from origin to customer.
• E-commerce involves buying and selling goods/services online. Includes order taking, inventory management, efficient delivery.
• Global sourcing means sourcing supplies/services without limits on locality.

Operations Management - Chunk 6

• Global sourcing benefits include cost and expertise advantages and access to new technologies.
• Challenges include relocation of operations, logistics costs, and managing different regulatory conditions.
• WH&S – Work Health and Safety Act 2011 requires businesses to ensure good safety practices (eg equipment, training).
• Environmental considerations are important and include reducing waste, using sustainable resources.
• Corporate Social Responsibility (CSR) involves respectful actions about community and environment. Businesses are increasingly required to not just meet legal requirements but show respect for people, community, and environment. Benefits of CSR like improved branding, customer loyalty and attraction of employees.
• There’s a difference between legal compliance and ethical responsibility. Businesses should operate legally and morally/ethically.

Operations Management - Chunk 7

• Process layout is a way of arranging equipment, machinery, and staff.
• Process layout can be functional or product layout.
• It is also dependent on the tasks performed.
• Monitoring involves collecting and analyzing information about tasks and processes to make improvements. Critical performance indicators (KPI) show if targets are being met.
• Control is comparing the planned target against the actual result, and taking action if needed.
• Improvement is the ongoing process of removing inefficiencies and waste in operations.

Dive into the fundamentals of operations management with this quiz. Explore key concepts like operational processes, strategies, and the differences between manufacturing and service operations. Understand how effective management impacts quality, costs, and productivity, providing a competitive edge to businesses.