bus man - the operations management function

materials planning (production plan)

- a production plan is an outline of the activities undertaken to combine resources (inputs) to create goods or services (outputs). This plan provides the basic information necessary for detailed materials management planning - modern large organisations typically complete materials planning by using software; such planning includes master production scheduling and materials requirements planning

how to improve productivity

- can be improved by reducing the amount of input required to obtain the same level of output or increased output - alternatively, productivity may rise if input remains the same but output increases, therefore getting more out of the input improved communication between management and employees can boost production - management styles that involve the employee in the decision-making process can increase worker productivity, as can human resources strategies such as recognition and reward programs aimed at improving worker motivation - improving the design and layout of facilities in a workplace can also enhance productivity levels

process layout

- deals with high varieties of product by grouping activities, equipment and machinery of similar function together - best suited to organisations that deal with a variety of products - in service organisations, a process layout is used to deal with the different needs of customers - a disadvantage of this layout is that the work can be monotonous for staff, if they are involved only in one stage of the process - a process layout often uses work cells; rather than having the straight production line, operations and people can be arranged into cells, such as the U-shape. - the team working on a product or components, in this cell would be able to solve problems together as communication is improved

fixed position layout

- deals with large-scale processes, such as the construction of bridges, ships, aircraft or buildings - this layout is used when it would be too difficult to move the product - more efficient to bring materials to the site; workers and equipment come to the one work area - disadvantage: storage; materials needs change constantly, and it can be hard to find space to store them safely

product layout

- deals with the manufacturing of goods in mass volume using an assembly line - machinery and equipment are arranged in line and components are added to the product in a sequence of steps - cost is reduced because of the use of technology and staff only complete specialised tasks - disadvantages: can be very expensive to set up a capital-intensive, automated assembly line and the staff can become bored with repetitive, low-skilled activities - a problem on the production line can sometimes mean that the whole factory needs to be shut down

office layout

- efficient movement of information and proximity to resources (photocopier, computers, printers and storage areas) are priorities for the layout of an office - in a manufacturing organisation, the office layout is often informal and may overlook the factory floor, so managers can easily supervise - for a service provider, such as a accountant or a doctor, clients need to feel welcome, but privacy is a concern, so the layout of the office should reflect this - an office might also need to provide a space that enables employees to take a break from the work environment if required - office layout is often open plan or in pods - with staff working closely together, a code of conduct is often adopted called 'cubicle etiquette'; staff that work in close proximity to each other are expected to be considerate

inventory control

- ensures the costs are minimised and that the operations system has access to the right amounts of inputs when required - costs can be minimised by not allowing materials to remain idle and by making sure that inputs are available for the operations system when needed. An operations system that runs out of materials will not perform at optimal level

retail layout

- exposure is a critical consideration to the layout of retail stores - stores such as Kmart and Big W guide customers through departments or sections - customers are exposed to other aisles or sections as they move from one point to another - retailers such as Coles and Woolworths use approaches such as: * locating high-impulse or high-margin products in prominent locations - often at the end of aisles or near checkouts * locating high-draw items such as bread and dairy products on opposite sides of the store * locating power items (high-priority items for most shopping trips) at intervals throughout a series of aisles

materials planning (materials requirements planning (MRP))

- involves developing an itemised list of all materials involved in production to meet the specified orders - completed after the organisation has a clear understanding of the quantities to be produced and the time frame involved - such planning must consider: * lead times required by suppliers; that is, whether items need to be ordered weeks or months in advance * the exact number of inputs to complete the task * the amount of stock (inventory) on hand * purchasing procedures; for example, whether the organisation wishes to take advantage of bulk purchasing discounts offered by suppliers

facilities design and layout

- involves planning the layout of workspace to streamline the production process - facilities or plants that are arranged in order will achieve the highest levels of efficiency in production - when choosing the best layout, an operations manager needs to consider whether or not there is: * enough physical space for the anticipated volume of production * effective use of production equipment and technology * an adequate location of stock and warehousing requirements * an efficient flow of the goods or services through the system * conformity with legal regulations (such as site and building constraints and occupational health and safety standards)

quality assurance

- involves the use of a system so that an organisation achieves set standards in production - ISO stands for International Organisation for Standardisation - meeting these international standards is voluntary, but many organisations comply with ISO requirements to remain competitive locally and internationally - the ISO provides guidelines on how organisations should establish quality assurance systems by adopting specific procedures, controls, and recording and documentation measures

quality control

- involves the use of inspections of various points in the production process to check for problems and defects - competitiveness increases as the costs associated with waste and faulty products are reduced

total quality management

- is an ongoing, organisation-wide commitment to excellence that is applied to every aspect of the organisations operation - quality becomes both a commitment and the responsibility of every employee in the organisation - the aim of TQM is to create a defect-free production process and maintain a customer focus in operations - the adoption of TQM can improve price competitiveness of an organisation but can also improve product quality, allowing the business to attain competitive advantage

operations function and its relationship to business objectives and strategies

- operations management is the function that combines the roles of planning, organising and controlling, in order to ensure that the organisation produces goods and services - operations management is responsible for transforming inputs into outputs

business competitiveness

- refers to the ability of an organisation to sell products in a market - organisations that can improve productivity will become more competitive because they are able to produce more outputs at lower cost - competitive advantage occurs when an organisation is able to produce goods or services better than its competitors - organisations essentially compete in two ways: * cost * differentiation

quality

- refers to the degree of excellence of goods or services and their fitness for a stated purpose - a quality product should be reliable, easy to use, durable, well designed and delivered on time - when managing quality, LSOs will: * minimise waste and defects * strictly conform to standards * reduce variance in final output

use of technology

- technology can improve operations. Organisations need to acquire up-to-date technology in order to compete effectively. - technology is used in the manufacturing sector to speed up processes and enable fuller utilisation of raw materials. This improves productivity and makes the operations process more cost effective. Office and communications technology have enabled new markets to open up, costs to be cut and productivity to be improved. - robotics is a highly specialised form of technology that replaces something usually done by humans. Robots often undertake tasks that are too risky for employees to undertake

inventory

- the goods and materials held as stock by an organisation - a large inventory is held by an organisation to ensure that materials do not run out; however, this represents a cost to the organisation. Stock taking up storage space for lengthy periods can mean that the organisation misses the opportunity to invest money in other places - materials can also have a 'use-by date' which means that they could become unusable after a period

materials handling

- the physical handling of goods in warehouses and at distribution points - adequate materials handling procedures and techniques can result in a more efficient production process and cost savings. Proper handling can also reduce accidents, breakage and spoilage

customer relationship management

- the systems that organisations are introducing to maintain customer contact - CRM software can be used to improve customer service and increase competitiveness, because it stores information about existing and potential customers

aspects of ethics and social responsibility that would concern an operations manager

1 - managing inputs appropriately: An operations manager should attempt to use inputs that do not have a serious impact on the environment. The inputs used in a production process also create waste. In the desire to keep down the costs of production, organisations should not be tempted to use cheaper, illegal waste disposal methods 2 - managing suppliers appropriately: Many organisations work with their suppliers to ensure that they follow guidelines on ethical and socially responsible behaviour. It is also not appropriate for organisations to provide preferential treatment to suppliers that offer gifts such as free meals, trips or entertainment, or to select suppliers based on personal friendships 3 - Managing staff appropriately Operations managers must make sure that the organisation's facilities and technology contribute to the health and welfare of staff. Irregular or incomplete maintenance of production facilities can result in detrimental consequences. Toxic production processes can threaten the health of employees, as has been the case with asbestos mining and manufacturing. 4 - Managing the customer relationship appropriately An operations manager needs to make sure that the goods produced are of the required quality, that they are safe and reliable. Dangerously defective or harmful products can result in the injury or death of consumers. The delivery of a product can raise issues around the ethical and socially responsible behaviour of managers, such as fair and equitable treatment of customers.

computer aided design

a computerised design tool that allows a business to create product possibilities from a series of input parameters

Just in time

a materials management strategy that ensures that the exact amount of material inputs will arrive only as they are needed in the operations process - can reduce storage costs and reduce the risk of any waste occurring in storage, thus increasing competitiveness. However, supplier deliveries must be reliable, and materials must be received at the appropriate time

productivity

a measure of efficiency - the amount of output produced compared to the amount of input required in production

computer integrated manufacturing

a method of manufacturing in which the entire production process is controlled by a computer

six sigma

a quality management approach that seeks to identify and remove the causes of problems in the operations process, achieving virtually defect-free production the six sigma DMAIC problem-solving process: - define (project goals that will satisfy customer demand) - measure (and identify CTQs (characteristics that are Critical To Quality) such as production capabilities and processes, and risks) - analyse (the cause of defects) - improve (the process by proposing ways to reduce defects) - control ( the performance of the process so that defects are reduced or eliminated)

lean manufacturing

aims to eliminate waste at every stage of production. It involves analysing each stage of the production process, detecting where inefficiencies are and correcting them

tangible

are goods, which can be touched physical products that can be handled and stored before they are sold to the consumer there is little consumer involvement in production

quality circles

are groups of workers who meet to solve problems relating to quality

inputs

are resources used in the process of production some resources are owned by the organisation, while others are from suppliers there are 6 categories of inputs: 1 - materials: raw materials, components and parts consumed or converted by the transformation process 2 - capital equipment: includes the plant, machinery, equipment and property necessary to conduct operations 3 - labour: refers to people involved in the operations function 4 - information from a variety of sources: contributes to the transformation process 5 - time: and its efficient use are critical to all organisations. Proper time management reduces costs and wastage 6 - money: generally considered to be the most flexible of all resources, because it can easily be converted into any quantity or combination of materials, capital or labour

operations management

consists of all the activities in which managers engage to produce goods or services

materials planning (master production scheduling (MPS))

details what is to be produced and when - a schedule linked to specific delivery dates or contracts for delivery in the future

differences/similarities between service and manufactured operations

differences: - manufacturers transforms inputs into tangible products - a service organisation transforms inputs into intangible products

ethical management

ethical management is about the application of moral standards to management behaviour

intangible

include services, which cannot be touched cannot be stored and the customer may actually need to be present when the service is being delivered

continuous improvement

involves an ongoing commitment to achieving perfection

characteristics of operations management within large-scale manufacturing and service organisations

operations management differs from other forms of organisational management, because it applies specifically to the management of the productive or transformational process coordinating this process is a management activity today, operations managers carry out a wide range of tasks

outputs

refer to the end result of an organisations efforts - the service or product that is delivered or provided to the consumer

socially responsible management

socially responsible management refers to management's awareness of the social and environmental consequences of its actions

computer aided manufacture

software that designs and controls manufacturing processes

role of the operations manager in senior management

the operations manager is part of the senior management team. A large-scale organisation will most likely have many managers under the operations manager, such as the production manger, warehouse manager and quality manager

supply chain

the range of suppliers from which the organisation purchases materials and resources - the supply chain moves on to storage facilities before reaching the consumer - it is from this range of suppliers that the organisation purchases materials and resources - the supply chain needs to be well managed because an operations system depends on the inputs. - supply chain management is critical for the following reasons: * if materials are not on hand, nothing can be produced * if materials are of inferior quality, it is difficult or costly to produce quality products * if the right quantity of materials is not available, the organisation cannot meet demand - supply chain management involves not only assessing the location in terms of distance to suppliers, but also considering the efficiency of delivery, the stock use rate, the uniformity of quality, and pricing and comparisons with other sup- pliers of similar product, to identify whether they can better meet the organisation's needs

materials management

the strategy that manages the use, storage and delivery of materials to ensure the right amount of inputs is available when required in the operations system

processes/transformation

transformation: the conversion of inputs (resources) into outputs (goods or services) the transformation process differs between manufacturing organisations and service organisations manufacturers transforms inputs into tangible products a service organisation transforms inputs into intangible products