Operations
- Created by: Meganallam
- Created on: 30-12-18 22:18
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- Operations
- Operations Objectives
- Operations objectives are the targets set for the operations activities of a business
- Cost and volume objectives are set to ensure the cost-effectiveness of the business.
- Quality objectives mean that a business can develop a reputation to create an advantage
- Speed of response and flexibility is linked closely to cost targets and looks at how effectively the costs of the business are being utilised.
- Dependability objectives are important as if they have a good reputation they are more likely to be used.
- Environmental objectives are increasingly more important as customers have more options and are more concerned about the environment
- Operations objectives are the targets set for the operations activities of a business
- Operations Data
- Labour productivity measures output per employee
- Labour productivity = total output / number of employees
- Unit costs measure the costs per unit
- Capacity measure the maximum a business can produce given its existing resources
- Capacity utilisation measures the existing output as a percentage of the maximum possible output
- Capacity utilisation = existing output / maximum possible output X 100
- Labour productivity measures output per employee
- Efficiency
- Efficiency is the ability to use fewer inputs to produce a given output
- Labour productivity is the amount of output per employee
- The optimal resource mix is the combination of resources used by a business.
- Efficiency is the ability to use fewer inputs to produce a given output
- Lean Production
- Lean production aims to reduce waste by improving quality of the product and process
- Kaizen puts emphasis on the value of continuous improvement
- Andon ensures that everyone learns from the process and the mistakes
- Changes to layout can make the process more efficient and effective
- Just-in-time avoids storage and labour costs for unnecessary waiting
- Lean production aims to reduce waste by improving quality of the product and process
- Quality
- Quality is measured by the extent to which an operation meets its customer requirements
- Quality is important to remain competative
- Poor quality can result in a loss of customers and wasted material
- Poor quality can be a source of competitive disadvantage
- Quality is measured by the extent to which an operation meets its customer requirements
- Quality Management
- Quality assurance - is maintenance of target quality by attention at every stage
- Quality control - a system of maintaining standards through testing
- Total quality management - is a philosophy of continuous improvement
- Improving operational performance
- Speed of response - in order to become more competitive.
- Dependability- starting and finishing at the stated time
- Flexibility- large scale production with individual adaptations to increase satisfaction
- Inventory
- Inventory refers to the goods that the business holds
- Holding inventory uses up resources and has a high opportunity cost
- Inventory refers to the goods that the business holds
- Matching supply and demand
- Outsourcing - giving parts of production to other businesses
- Temporary staff - enable them to increase or decrease the workforce as required
- Producing to order - reduces the risk of being left with unsold stock
- The supply chain
- This is all the provides of resources at all the stages in production
- Operations Objectives
- Maximising efficiency by lowering operating costs whilst maintaining efficiency
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